Alabama Great Southern R. Co. v. Chicago & NW Ry. Co.

• Decision Date: 12 March 1974
• Docket Number: No. 73-1569.,73-1569.
• Citation: 493 F.2d 979
• Parties: The ALABAMA GREAT SOUTHERN RAILROAD COMPANY, Appellant, v. CHICAGO & NORTHWESTERN RAILWAY COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

493 F.2d 979 (1974)

The ALABAMA GREAT SOUTHERN RAILROAD COMPANY, Appellant, v. CHICAGO & NORTHWESTERN RAILWAY COMPANY, Appellee.

No. 73-1569.

United States Court of Appeals, Eighth Circuit.

Submitted January 15, 1974.

Decided March 12, 1974.

Rehearing Denied April 10, 1974.

COPYRIGHT MATERIAL OMITTED

Doris J. Banta, St. Louis, Mo., for appellant.

John C. Shepherd, St. Louis, Mo., for appellee.

Before VAN OOSTERHOUT, Senior Circuit Judge, and LAY and STEPHENSON, Circuit Judges.

VAN OOSTERHOUT, Senior Circuit Judge.

This is an action by The Alabama Great Southern Railroad Company (AGS) against the Chicago & Northwestern Railway Company (Northwestern) seeking to recover sums which it paid to settle a claim asserted against it by one of its employees, for which AGS asserted Northwestern was obliged to indemnify it. Diversity of citizenship and the jurisdictional amount under 28 U.S.C. § 1332 were asserted and established. After trial to a jury and a verdict for the defendant, the plaintiff filed alternative motions for a judgment n. o. v. or for a new trial, which motions were denied by Judge H. Kenneth Wangelin of the United States District Court for the Eastern District of Missouri. The plaintiff appeals from the judgment entered pursuant to the jury verdict and from the order denying the motions for a judgment n. o. v. or a new trial. The judgment and order are affirmed.

FACTS

AGS and Northwestern are both engaged in the railroad business as interstate carriers of freight, pursuant to authority from the Interstate Commerce Commission. AGS is owned by the Southern Railway Company and is a part of the Southern Railroad System.

Early on March 10, 1969, a train operated by the plaintiff made a switching stop near Dragon, Mississippi, while on a normal run from New Orleans, Louisiana. While attempting to reboard the train during switching operations, Murray Loy, an employee of the plaintiff and road foreman for this particular train, was struck by a protruding piece of metal on one of the cars, was thrown to the ground under the wheels of the train, and suffered serious and permanent injuries.

Inspection of the car showed a defect consisting of a torn and bent portion of a side rail which extended out from the side of the car near the grab iron which Loy was attempting to grab to enable him to mount the car. The particular car in question, a piggyback or trailer car numbered TTX 600118, had suffered damage to the side sill in a derailment on November 28, 1968, while in the possession of the defendant. Northwestern had partially repaired the defect by cutting away a portion of the side sill, leaving a stub which was later found to be bent down, causing the protruding safety defect. Northwestern returned the car to service on December 5, 1968. The car was in and out of the custody of Northwestern, being interchanged with several other railroads, until January 30, 1969, when Northwestern last had custody of it. The car was used by several other railroads until March 8, 1969, when it came into the custody of AGS.

Northwestern, AGS, and every other principal railroad in the United States are members of the Association of American Railroads (AAR), and subscribe to the AAR Code of Interchange Rules. This code requires that a thorough inspection be made on each interchange of cars between railroads to determine if the equipment is safe for operation and that no defects in safety appliances exist. The facts show that AGS had the New Orleans Terminal, another constituent part of the Southern Railroad System, conduct its interchange inspections on trains out of New Orleans. On March 8, 1969, the New Orleans Terminal, AGS's agent in this regard, had inspected this train and either had not discovered the defect in question or had not considered it to be sufficiently dangerous to warrant removing the car from service.

Loy brought an action for $500,000 against the AGS and the Southern Railway System under the provisions of the Federal Employers' Liability Act, 45 U.S.C. § 51 et seq. (FELA). AGS made demand on Northwestern to assume responsibility for the accident and to defend the action. After Northwestern's refusal, AGS settled Loy's claim for $100,000, and demanded that Northwestern reimburse AGS for the settlement plus its expenses. On Northwestern's refusal, AGS brought the instant action.

PROCEEDINGS BELOW

At trial, AGS claimed that it was entitled to indemnity from Northwestern in the amount which it paid to Loy in settlement of his claim plus its expenses in the matter. Its claim for indemnity was based on charges that the defective condition of the car was caused by the active negligence of Northwestern which had created the hazardous condition and permitted the railroad car to be placed in active railroad service in such damaged and defective condition, thereby exposing AGS to liability to its employee for his injuries under FELA, caused by its passive negligence in failing to have discovered such defective condition. Its theory of recovery was based on the principle of law codified in § 95 of the Restatement of Restitution (1937). That section reads as follows:

Where a person has become liable with another for harm caused to a third person because of his negligent failure to make safe a dangerous condition of land or chattels, which was created by the misconduct of the other or which, as between the two, it was the other\'s duty to make safe, he is entitled to restitution from the other for expenditures properly made in the discharge of such liability, unless after discovery of the danger, he acquiesced in the continuation of the condition.

The principle embodied in this section allows one joint tortfeasor to recover indemnity against another if the claimant was guilty only of passive negligence such as a negligent failure to discover a dangerous condition created by the active negligence of the other joint tortfeasor.

It is now settled that a railroad's right to recover indemnity or contribution from a third party for liability incurred under FELA depends entirely on state law. See, e. g., Grunenthal v. Long Island R.R. Co., 388 F.2d 480, 482 (2d Cir. 1968); Ratigan v. New York Cent. R.R. Co., 291 F.2d 548, 553 (2d Cir.), cert. denied, New York Cent. R.R. Co. v. Interstate Commodities, Inc., 368 U.S. 891, 82 S.Ct. 144, 7 L.Ed.2d 89 (1961); Chicago, Rock Island & Pac. R.R. Co. v. Chicago & Northwestern Ry. Co., 280 F.2d 110, 114 (8th Cir. 1960), cert. denied, 364 U.S. 931, 81 S.Ct. 378, 5 L.Ed.2d 364 (1961); Chicago Great W. Ry. Co. v. Casura, 234 F.2d 441, 449 (8th Cir. 1956); Waylander-Peterson Co. v. Great N. Ry. Co., 201 F.2d 408 (8th Cir. 1953); Brenham v. Southern Pac. Co., 328 F.Supp. 119, 123 (W.D.La. 1971); Annotation, Right of Railroad, Charged with Liability for Injury to or Death of Employee under Federal Employers' Liability Act, to Claim Indemnity or Contribution From Other Tortfeasor, 19 A.L.R.3d 928, 931 (1968). The principle of law found in § 95 of the Restatement of Restitution (1937) has been recognized in Mississippi, the state whose law would apply because it was the situs of the accident. Home Ins. Co. v. Atlas Tank Mfg. Co., 230 So.2d 549 (Miss.1970); Bush v. City of Laurel, 215 So.2d 256 (Miss.1968). See McPhee v. Oliver Tyrone Corp., 353 F.Supp. 601, 605-606 (N.D.Miss.1972).

Many facts germane to plaintiff's theory were in dispute. Most relevant were whether Northwestern actually caused the defective condition or so weakened the side sill by improper and incomplete repair such that later damage resulted, and whether AGS knew by inspection or should have known of the defective condition such that it acquiesced in the continuation of the condition. Evidence was received from both parties as to these and other facts. AGS filed a motion for a directed verdict at the close of all the evidence, which was overruled. Counsel for plaintiff objected to one of the proposed jury instructions, which objection was overruled, and then submitted a supplemental instruction, which was given by the court. After the jury was duly charged with these instructions, a verdict was returned for the defendant and judgment entered accordingly. Plaintiff thereafter filed a motion for judgment n. o. v. in accordance with its motion for a directed verdict, or, in the alternative, for a new trial. After oral argument on these motions, Judge Wangelin denied the same in an order filed August 3, 1973.

DIRECTED VERDICT

AGS appeals from the order of August 3, 1973, denying the motion for judgment n. o. v., which motion claimed the evidence in the case established defendant's liability as a matter of law. In reviewing questions relating to the sufficiency of the evidence, both the federal courts and the courts of Mississippi follow the "substantial evidence" test, which requires appellate courts to take that view of the evidence which tends to support the jury's verdict and to give the party having the verdict the benefit of every favorable inference reasonably justified by the evidence. Duncan v. St. Louis-San Francisco Ry. Co., 480 F.2d 79, 83 (8th Cir. 1973); Meyer v. Bankers Dispatch Corp., 471 F.2d 1290, 1292 (8th Cir. 1973); Marshall v. Humble Oil & Ref. Co., 459 F.2d 355, 359 (8th Cir. 1972). Accord, Hubbard v. Morris, 275 So.2d 858, 860 (Miss.1973); Ramage v. Kelly, 253 Miss. 582, 176 So.2d 324, 325 (1965).

As mentioned previously, Mississippi recognizes the principle of law that one who is liable because of his passive negligence in failing to discover a defect may recover indemnity from one who created the dangerous condition, thereby being actively negligent. See Home Ins. Co. v. Atlas Tank Mfg. Co., 230 So.2d 549 (Miss.1970); Bush v. City of Laurel, 215 So.2d 256 (Miss. 1968). However, where the injury resulted from the concurring negligence of two parties, such that both were guilty of equal degrees of negligence, no right of contribution or indemnity will lie. Id.

In the instant case, the...