Chicago & NWR Co. v. Chicago Packaged Fuel Co.
| Citation | 183 F.2d 630 |
| Decision Date | 11 September 1950 |
| Docket Number | No. 10125.,10125. |
| Parties | CHICAGO & N. W. R. CO. v. CHICAGO PACKAGED FUEL CO. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Lowell Hastings, Drennan J. Slater, Edgar Vanneman, Jr., all of Chicago, Ill., for appellant.
Joseph H. Hinshaw, Oswell G. Treadway, Chicago, Ill., for appellee.
Before KERNER, FINNEGAN, and SWAIM, Circuit Judges.
Plaintiff appeals from an order granting defendant's motion to dismiss and dismissing its complaint for judgment under an indemnity agreement on the ground that the complaint did not state a claim on which relief could be granted for the reason that the liability against which indemnity was demanded was caused solely by plaintiff's negligence which was not covered by the contract on which the claim was based.
According to the allegations of the complaint, the parties entered into a contract in October, 1947, a copy of which was attached to the complaint, licensing defendant to construct, maintain and use a coal hopper under a spur track which was a part of plaintiff's system. The contract contained the following provision for indemnity: "The Licensee assumes and agrees to pay for all loss or damage to property and injury to or death of persons, including costs and expenses incident thereto, arising, wholly or in part, from or in connection with the existence, construction, maintenance, repair, renewal, reconstruction, operation, use or removal of said facility or any defect therein or failure thereof, causing same or contributing thereto; and the Licensee shall forever indemnify the Railway Company against and save it harmless from all liability for any such loss, damage, injury and death, including all costs and expenses incident thereto."
The complaint, after referring to the license agreement and particularly to the indemnity clause set forth above, alleges that the hopper was constructed according to the terms of the contract and that on February 16, 1948, while it was being used by one Frank Drews for dumping screening coal, an engine belonging to plaintiff struck a truck left standing nearby by Drews, pushing it against him and seriously injuring him, which accident, the complaint alleges, was caused "in whole or in part by or in connection with the existence, maintenance, operation and use of said facility, and that, accordingly, under the provisions of the * * * contract * * * it became and was the duty of defendant to assume and pay for all injury and damages to said Frank Drews, and forever to indemnify plaintiff against and save it harmless from all liability for such injury and damages * * *."
The complaint further recites the fact of plaintiff's notice to defendant of the accident three days thereafter, and request for indemnity against any liability arising from it, and defendant's reply to the effect that neither of the parties was in a position at that time to determine the applicability of the indemnity provision since no claim had been made against either of them; that on April 14, 1948, Drews filed suit for $150,000 against plaintiff for his injuries, and plaintiff duly notified defendant of the filing of the suit and requested that it take over the defense or make settlement of the claim; that on June 4, 1948, it removed the suit to the federal court and again unsuccessfully requested that defendant or its insurance carrier take over the defense or settle the claim; that it finally succeeded in obtaining a settlement figure of $55,000 in August, 1949, which settlement it considered a fair and reasonable one in view of the very serious and permanent nature of Drews' injuries, the extent of which was described in the complaint; that plaintiff notified defendant of such proposed settlement and of its intention to consummate it and demand...
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