Microtek Med., Inc. v. 3M Co.
| Docket Number: | 2005-CA-01860-SCT Linked Case(s): 2005-CA-01860-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 10-05-2006 Opinion Author: CARLSON, J. Holding: ON DIRECT APPEAL: AFFIRMED; ON CROSS-APPEAL: AFFFIRMED |
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| Additional Case Information: |
Topic: Contract - Indemnification of attorney’s fees - Reasonableness of fees - Prejudgment interest Judge(s) Concurring: SMITH, C.J., WALLER, P.J., DIAZ, GRAVES AND RANDOLPH, JJ. Non Participating Judge(s): COBB, P.J., AND EASLEY, J. Dissenting Author : DICKINSON, J. DISSENTS IN PART Concur in Part, Dissent in Part 1: Dickinson, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 08-31-2005 Appealed from: LOWNDES COUNTY CHANCERY COURT Judge: Kenneth M. Burns Disposition: Granted Summary Judgment in favor of Appellee Case Number: 2003-0906 |
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| Party Name: | Attorney Name: | |||
| Appellant: | MICROTEK MEDICAL, INC. |
BRENDA B. BETHANY, C. MICHAEL ELLINGBURG |
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| Appellee: | 3M COMPANY | MELODY McANALLY, W. WAYNE DRINKWATER, JR. |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Indemnification of attorney’s fees - Reasonableness of fees - Prejudgment interest |
| Summary of the Facts: | Microtek and 3M entered into a contract wherein Microtek agreed to manufacture the ArthroSteri surgical drape for resale by 3M. 3M marketed the product as its own. The contract contained an indemnification clause which provided that Microtek would indemnify 3M for losses incurred due to any accident or injury sustained by a third party as a result of Microtek’s breach of warranty or negligence. Furthermore, the contract provided that Microtek would conduct all of the required safety inspections of the surgical drapes and warrant them for fitness. After Microtek and its insurer refused to defend 3M in a suit concerning the surgical drapes filed in Pennsylvania, 3M retained counsel at its own expense to defend the suit. After the Pennsylvania trial court granted summary judgment in favor of 3M, 3M filed suit against Microtek for indemnification according to the contract. The court granted summary judgment in favor of 3M and awarded 3M in excess of $223,000 in attorneys’ fees; however, the chancellor refused to award prejudgment interest in 3M’s favor. Microtek appeals, and 3M cross-appeals. |
| Summary of Opinion Analysis: | Issue 1: Indemnification Microtek argues that the plain language of the contract requires that Microtek be held liable for breach of warranty or negligence before it is responsible for indemnification; therefore, summary judgment does not trigger indemnification because there was no finding of wrongdoing on the part of Microtek. The parties stipulated in the contract that Minnesota law would control substantive issues. Based upon the plain language of the contract, and giving every part meaning as required by Minnesota law, the phrase “responsible for” in the contract is synonymous with “defend.” This avoids an interpretation that would render part of the contract meaningless. The chancellor correctly ruled that the purpose of the contract, as a whole, was to hold 3M harmless in all claims of negligence and strict liability concerning the surgical drapes. Microtek also argues that 3M is equitably estopped from seeking indemnity because 3M received summary judgment in its favor in the Pennsylvania suit, and thus there was no finding of liability for which Microtek was responsible. However, the doctrine of equitable estoppel is wholly inapplicable to today’s case. The issue in today’s case is whether Microtek is liable for attorneys fees based on the language of the contract between Microtek and 3M. The issues in the Pennsylvania suit were negligence and strict liability. Microtek argues that 3M was sued for its own negligence; therefore, under the specific contract language, Microtek cannot be held liable for 3M’s own negligence. It is clear from the contract that the parties intended for Microtek to have sole control of and responsibility for the safety of the surgical drapes. 3M was the named party in the Pennsylvania suit because its name, not Microtek’s name, appears on the surgical drapes. Therefore, it is apparent that the allegations are not based on 3M’s own negligence, even though 3M was the party named in the suit rather than Microtek. Because the parties intended Microtek to be responsible for warranties and inspections of the surgical drapes, 3M should not be held liable because the allegations do not stem from 3M’s own negligence. Therefore, 3M did not have a duty to defend itself in this suit. Issue 2: Reasonableness of attorney’s fees Microtek argues that the amount of attorney’s fees awarded by the chancellor is unreasonable. 3M clearly provided evidence on the issue of the appropriate amount of attorneys fees to be awarded, and the chancellor painstakingly addressed the relevant factors. Thus, the amount of the chancellor’s award of attorneys fees was based on substantial evidence. Issue 3: Prejudgment interest 3M argues that the chancellor abused his discretion by not awarding 3M prejudgment interest on the award of attorneys’ fees. The trial judge has discretion to award prejudgment interest if the amount of damages is fixed and liability is undisputed. Since Microtek hotly disputed not only the amount of attorneys’ awarded but also whether 3M was even entitled to an award of attorneys’ fees, and since the award of prejudgment interest, even where otherwise appropriate, is in the sound discretion of the trial judge, the chancellor did not abuse his discretion in denying 3M’s request for prejudgment interest on his award of attorneys’ fees. 3M also argues that the chancellor abused his discretion by not stating a reason in the order for denial of prejudgment interest. By 3M’s own admission in its brief, a trial court does not abuse its discretion per se by not stating reasons for decisions that are within its discretion. The Court can assume that the chancellor made determinations of fact sufficient to support the court’s judgment entered in favor of 3M. |
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