Kmart Corp. v. Footstar, Inc. – Businesses Battle over Liability for Injury Lawsuit


One would think if an injury occurred as a result of an unsafe condition in a store, the store would be the correct entity to name as a defendant. However, in cases where workers or companies are subcontracted to work within those stores, the case may end up being a bit more complicated.

Such was the situation in Kmart v. Footstar Inc., a dispute before the U.S. Court of Appeals for the Seventh Circuit between two partnering companies that stemmed from the injury of a customer in Hollywood, FL.

The store contracted with another company to carry out operations within its shoe department. The workers employed by the subcontractor in the shoe department could only work in the shoe department. As the panel of justices would later describe it, the subcontractor operations were run as though those departments were “islands.” The only way a shoe department worker could cross over into work in another department was if the store expressly granted permission to do so.

On the day in question, a woman requested assistance from a worker in the footwear department to help her reach an infant carrier off the shelf. It makes sense that she would ask this employee, likely assuming they all worked for the same company. But that was not the case.

As the footwear department worker was assisting the woman, the carrier fell on top of the woman and struck her in the face.

The incident occurred in the infant/stroller department, which was totally outside of the footwear department.

She later sued the store for negligence. Initially, she did not mention the footwear subcontractor in her lawsuit. When her counsel discovered during the course of litigation that the worker who helped his client was actually an employee of the footwear company. The complaint was later amended.

The store formally sought indemnification from the subcontractor, per the business agreement the two had worked out prior to the incident. The insurance company for the footwear company refused, saying its insured was not responsible for the claim because it wasn’t an incident of product liability.

Several months later, the store reached an out-of-court settlement agreement with plaintiff for $300,000 in damages, plus $10,000 in store gift cards.

Subsequently, the store sought indemnification from the footwear company and its insurer for legal costs and the cost of the settlement. A magistrate granted this request, but a jury determined the footwear company and its insurer were only 15 percent at-fault.

The store appealed and the footwear company cross-appealed.

Ultimately, the federal appeals court affirmed, finding the insurer had not denied coverage in bad faith, and the store didn’t breach any relevant provisions of the contract such that the insurer or the footwear company had a right to withhold costs for defense or indemnification.

Although the injured party in this case was compensated before the issue of indemnification was hashed out, it’s imperative for those exploring a premises liability lawsuit to secure competent legal advice. There are often many competing interests in these cases, and it’s our goal to ensure yours are protected.

If you have been injured in an accident, contact the Hollander Law Firm at (561) 347-7770 for a free and confidential consultation. There is no fee unless we win.

Additional Resources:

Kmart v. Footstar Inc., Feb. 4, 2015, U.S. court of Appeals for the Fourth Circuit

More Blog Entries:

Nucci v. Target – Social Media Target of Slip-Fall Defense Strategy, Jan. 25, 2015, Fort Myers Slip-Fall Injury Lawyer Blog