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Harley Davidson Motor Co.6/28/1996
The opinion of the court was delivered by DREIER, P.J.A.D.
Harley Davidson Motor Company appeals from the dismissal of its indemnification suit against defendants Advance Die Casting, a component parts manufacturer, and its insurer, Northbrook Property and Casualty Insurance Company (Northbrook). The court's dismissal was based upon plaintiff's alleged failure to comply with the entire controversy doctrine. We reverse.
In an underlying action, an injured motorist brought suit against Harley Davidson for defective design or manufacture of a motorcycle or its component parts. In March 1993, as the suit neared trial, Harley Davidson sent a letter to Advance Die Casting notifying it that Harley Davidson intended to produce expert testimony that the motorcycle clutch chain cover manufactured by Advance Die Casting was defective and was the cause of the motorist's injuries. The letter also included a demand that Advance Die Casting defend and indemnify Harley Davidson in the underlying litigation. Advance Die Casting referred the letter to Northbrook, which refused Harley Davidson's demand, indicating that Northbrook, on behalf of Advance Die Casting, "is currently, not in a position to assume the defense or indemnify Harely Davidson, Inc." Harley Davidson sent another request to Northbrook on July 14, 1993, five days before trial, advising Northbrook of the trial date and location, expenses incurred to date, and Harley Davidson's intent to seek indemnification and judgment for all expenses as against Northbrook on behalf of Advance Die Casting. Approximately one week later, Harley Davidson sent another letter to Northbrook, advising it that Harley Davidson was willing to contribute towards settlement of the dispute, however, since Northbrook, on behalf of Advance Die Casting, had expressed an unwillingness to make any contribution, Harley Davidson would seek indemnification and recovery of all defense costs from Northbrook.
The case was tried in July and August 1993, and the jury found the motorcycle's clutch chain cover was defectively manufactured but determined that the defect was not the proximate cause of the motorist's injuries. In October 1994, we reversed and remanded the case for a new trial on the issue of proximate cause and damages. The Supreme Court later denied certification.
On November 20, 1994, Harley Davidson sent Northbrook another letter, advising of the nature of the jury verdict and the Appellate Division decision, the intention to file a petition for certification, and a continuing request for indemnification and defense costs. By letter dated January 4, 1995, Northbrook responded to Harley Davidson's earlier letters and stated in part that Northbrook would not assume the defense or indemnification of Harley Davidson because Northbrook (and Advance Die Casting) were never directly brought into the suit, Harley Davidson accepted and altered the clutch cover, the cover was not the cause of the accident, and the year the cover in question was made was undetermined.
On March 10, 1995, a month before the underlying action was to be retried, Harley Davidson filed this separate suit against Advance Die Casting and Northbrook for common law indemnification. By letter dated April 28 Harley Davidson informed counsel for Advance Die Casting of the retrial date of the underlying litigation, but then on May 1, 1995, advised Advance Die Casting of a proposed settlement between Harley Davidson and the injured motorist. Counsel for Northbrook, on behalf of Advance Die Casting, appeared in court and agreed to the fairness and reasonableness of the settlement amount. A stipulation of dismissal with prejudice was entered in the underlying action on Ju
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