Jones v. Shoji

WELLS, Judge. We note initially that the appellant has failed to comply with Rule 10 of the North Carolina Rules of Appellate Procedure. While appellant properly excepted to a large number of the court’s findings of fact and the resulting conclusions of law and also correctly referenced the assigned errors to the excepted findings, it failed to direct this Court to specific findings it challenges, instead arguing the general denial of its claim for contribution and indemnification. Concrete Service Corp. v. Investors Group, Inc., 79 N.C. App. 678, 340 S.E.2d 755, cert. denied, 317 N.C. 333, 346 S.E.2d 137 (1986). This “broadside” attack renders individual exceptions and assignments of error ineffective to challenge particular findings of fact. Therefore, the only question left for our review is whether the findings of fact support the conclusions of law and the conclusions support the judgment. Id. N.C.R. App. P. 10(a). In the present case, the trial court found that the Church and the YMCA were engaged in a joint venture, and as such were both derivatively negligent in causing plaintiff’s injuries. The court also determined that the Church was not entitled to indemnity or contribution from the YMCA for settlement sums paid by the insurance carrier. The Church assigns error to this latter conclusion, arguing various legal theories in support thereof. Because the Church does not assign error to the court’s finding that the parties were engaged in a joint venture, we need only address the issues of indemnity and contribution as they relate to the facts in this case. A joint venture or joint enterprise is a business association like a partnership but narrower in scope and purpose. Reuschlein and Gregory, Handbook on the Law of Agency and Partnership, 442 (1979). “A joint [venture] is in the nature of a kind of partnership, and although a partnership and a joint [venture] are distinct relationships, they are governed by substantially the same rules.” Pike v. Trust Co., 274 N.C. 1, 161 S.E.2d 453 (1968). See also Rushing v. Polk, 258 N.C. 256, 128 S.E.2d 675 (1962) (applying law as to partnerships and joint enterprises interchangeably). As in the case of partnerships, the nature of a joint venture is such that any negligence on the part of one party may be imputed to the other. Slaughter v. Slaughter, 93 N.C. App. 717, 379 S.E.2d 98 (1989), disc. rev. improvidently allowed, 326 N.C. 479, 389 S.E.2d [52] 803 (1990). We find partnership law, as codified in the Uniform Partnership Act, and North Carolina case law to be instructive. Under the Uniform Partnership Act (UPA), G.S. § 59-48(2), the general rule regarding a partner’s right to indemnity is as follows: The partnership must indemnify every partner in respect of payments made and personal liabilities reasonably incurred by him in the ordinary and proper conduct of its business, or for the preservation of its business or property. Thus, if an individual partner satisfies a judgment out of his own pocket or his personal assets, then he has a right to indemnification from the partnership. See Handbook, supra, at 270. Likewise, where a party to a joint venture satisfies a claim against the joint venture with individual assets, he is entitled to indemnity from the joint venture assets. If, however, a partner’s individual assets are not used to pay the obligation, then no right of indemnity accrues. Id. If the partnership, or the joint venture, has insufficient assets to satisfy a claim against it or to indemnify the partner satisfying the judgment, then that partner has a right of contribution against his co-partners; that is, he may force them to share in the loss. See id. Where there are sufficient resources in partnership or joint venture funds to meet a claim against the venture, there will be no contribution between partners, absent an agreement to the contrary. Here, the Church and the YMCA entered into a written contract in which each party agreed to pool their resources and assume certain responsibilities in furtherance of the mutual goal of establishing an after school day care program. In this joint venture case, the issue of whether the Church is entitled to indemnification or contribution from the YMCA hinges upon the question of source of the settlement funds: were the Aetna insurance policy proceeds, used to pay the settlement, assets of the Church or the joint venture? Under the UPA, G.S. § 59-38, all property purchased on account of the partnership is partnership property unless a contrary intention appears. Potter v. Homestead Preservation Assn., 330 N.C. 569, 412 S.E.2d 1 (1992). Partnership property may be bought, held, and conveyed by fewer than all partners in a partnership. Id. See also Ludwig v. Walter, 75 N.C. App. 584, 331 S.E.2d 177 (1985) (recognizing that parties to a contract may allocate risk through insurance or indemnity agreements). Similarly, property purchased [53] by one partner, but which is agreed to be used for partnership purposes, may be deemed partnership property. See Handbook, supra, at 392. Under the agreement, the Church assumed responsibility for purchasing insurance “for the YMCA,” which the circumstances clearly show included liability insurance. The insurance was purchased pursuant to the agreement and on account of the voluntary association between the parties. It is clear that in a joint venture arrangement, the parties may agree to shift the allocation of risk or liability by a promise to insure or indemnify the other party. See McLean Trucking Co. v. Occidental Casualty Co., 72 N.C. App. 285, 324 S.E.2d 633, cert. denied, 313 N.C. 603, 330 S.E.2d 611 (1985) (recognizing that parties to a contract may allocate risk through insurance or indemnity agreements). The benefit of having insurance, as bargained for in the agreement, naturally accrued to both parties and it was obtained for the purpose of insuring the YMCA and its personnel who would be using the Church’s vans in furtherance of the joint venture. These circumstances compel the conclusion that such insurance was purchased on account of the joint venture and was therefore an asset of the joint venture. Because the sums paid to plaintiff by Aetna insurance were paid out of an asset of the joint venture and not out of assets of the Church, following the UPA mandate, we hold that the Church is not entitled to indemnity or contribution from the YMCA. Affirmed. Judge GREENE dissents in a separate opinion. Judge MARTIN concurs.