Burns & Roe, Inc. v. Central Maine Power Co.

• Decision Date: 27 April 1987
• Docket Number: Civ. No. 86-0326-P.
• Citation: 659 F. Supp. 141
• Parties: BURNS & ROE, INC., Plaintiff, v. CENTRAL MAINE POWER COMPANY and Hartford Steam Boiler Inspection and Insurance Company, Defendants.
• Court: U.S. District Court — District of Maine

659 F. Supp. 141

BURNS & ROE, INC., Plaintiff, v. CENTRAL MAINE POWER COMPANY and Hartford Steam Boiler Inspection and Insurance Company, Defendants.

Civ. No. 86-0326-P.

United States District Court, D. Maine.

April 27, 1987.

Harrison L. Richardson, Elizabeth G. Stouder, Portland, Me., for plaintiff.

James D. Poliquin, Jotham Pierce, Jr., Portland, Me., F. Timothy McNamara, Hartford, Conn., for defendants.

MEMORANDUM OF DECISION AND ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

GENE CARTER, District Judge.

This action for declaratory judgment has been brought by Plaintiff Burns & Roe, Inc. (BRI) against Defendants Central Maine Power Company (CMP) and Hartford Steam Boiler Inspection and Insurance Company (Hartford). CMP has filed a cross-claim for declaratory judgment against Hartford, and all three parties have filed motions for complete or partial summary judgment on the claims set out in Counts I and II of the original complaint. In addition, BRI recently filed a motion to amend the complaint to add Count III naming Foster Wheeler Corporation (Foster Wheeler) as an additional defendant in this suit and setting out an indemnification claim against it. That claim has a basis distinct from those pleaded in Counts I and II against CMP.

This action arises out of the desire of the various parties to clarify their rights as they relate to another lawsuit scheduled to be tried by this Court in June. That suit is being litigated by CMP and its insurer, Hartford, against Foster Wheeler for damages that resulted from the intrusion of salt water into the feedwater cycle of a condenser at CMP's Wyman IV Power Station in Yarmouth, Maine. In that action, Foster Wheeler has filed a cross-claim against BRI seeking contribution, indemnification, or apportionment for any responsibility BRI shares for the damage incurred by the plaintiffs in that suit.¹ BRI provided engineering services and managed the construction of the generating unit in question; Foster Wheeler participated in the construction of the condenser for the generating unit.

I. BRI's Motion to Amend Its Complaint to Add Foster Wheeler as a Defendant in its Action for Declaratory Judgment

Under Federal Rule of Civil Procedure 15(a), leave to amend a pleading shall be freely given when justice so requires. This mandate is to be heeded. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962). However, motions to amend are not to be mechanically approved; they may be denied in order to avoid undue delay, prejudice to the opposing party, or for a variety of other reasons enumerated in Foman.

BRI has argued that the Court should address its motion for summary judgment and clarify the rights of the various parties as far in advance of the June trial as possible. The Court has difficulty reconciling BRI's pursuit of "expeditious action" by the Court with BRI's own languid conduct in bringing this motion before the Court on the very eve of the Court's expedited action, jointly sought by all parties, including BRI, on Counts I and II. BRI's motion to amend is based on language contained in a contract document dated December 7, 1973.² The underlying litigation has been before the Court since 1983. BRI filed its complaint in this action on October 15, 1986. BRI has offered no explanation as to why it is at this late date asserting, for the first time, a claim based on contract language that it has been familiar with for more than a decade.

Notwithstanding these concerns, the Court concludes that it should grant the motion to amend. The Court finds that the issues posed by the new Count III are primarily legal ones, and that little or no additional discovery will be necessary to posture them for adjudication. That being the case, the motion can be granted without causing delay or prejudice to the opposing parties. The motion is allowed only because the Court is fully satisfied that BRI's motion raises new issues, distinct from those previously postured by the motions now ripe for decision by the Court herein, and that the motion may be granted without impeding the Court's ability to immediately address the other issues now pending for decision, as previously requested by all the parties.

II. BRI's Assertion That CMP is Contractually Obligated to Indemnify It for Damages, Expenses, Legal Fees, Judgments or Approved Settlements Arising Out of the Condenser Action

Section 16(D)(xiii) of the contract between CMP and BRI provides that CMP will pay the following expenses incurred by BRI:

All losses, damages and expenses, including legal fees (but not including losses, damages and expenses due to the negligent or wrongful acts of Engineer's officers, Engineer's Project Manager or Engineer's Resident Construction Manager, and lawsuits, if any, between the parties hereto), and payment of all judgments or settlements (as approved by Owner), which are actually suffered by Engineer in the course and directly as a result of performing the services, to the extent that such losses, damages and other expenses are not compensated for by insurance; provided that Engineer shall have maintained in full force and effect the insurance coverage required under Section 7 hereof.

BRI has argued that under this clause, CMP is required to indemnify it for any judgments against it plus attorneys' fees. Under Maine law, which is here applicable, clauses which purport to indemnify a party for damages incurred due to its own negligence are looked upon with disfavor and are construed strictly against reaching such an interpretation. Emery Waterhouse Co. v. Lea, 467 A.2d 986, 993 (Me.1983).

It is only where the contract on its face by its very terms clearly and unequivocally reflects a mutual intention on the part of the parties to provide indemnity for loss caused by negligence of the party to be indemnified that liability for such damages will be fastened on the indemnitor, and words of general import will not be read as expressing such an intent and establishing by inference such liability.

Id.

The clause in question in Emery-Waterhouse required indemnification against "any and all claims" arising out of "any occurrence," and yet the Law Court found that because indemnification for a party's own negligence was not specifically included, such an intendment would not be ascribed despite the facially all-encompassing nature of the clause. Id.

The provision in question in the current case does not contain any clear and unequivocal statement that CMP will indemnify BRI for damages arising out of BRI's own negligence. In fact, it specifically excludes any indemnification for expenses arising out of negligence on the part of named employees of BRI. Under Emery Waterhouse, it is clear that anything less than an explicit statement clearly manifesting an intent to indemnify against the indemnitee's own negligence will not be sufficient to...