Black Warrior Electric M. Corp. v. Mississippi Power Co.

• Citation: 413 F.2d 1221
• Decision Date: 03 July 1969
• Docket Number: No. 25979.,25979.
• Parties: BLACK WARRIOR ELECTRIC MEMBERSHIP CORPORATION, Appellant, v. MISSISSIPPI POWER COMPANY, Appellee. MISSISSIPPI POWER COMPANY, Appellant, v. R. B. STOVALL CONSTRUCTION CO. et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

413 F.2d 1221 (1969)

BLACK WARRIOR ELECTRIC MEMBERSHIP CORPORATION, Appellant, v. MISSISSIPPI POWER COMPANY, Appellee.

MISSISSIPPI POWER COMPANY, Appellant, v. R. B. STOVALL CONSTRUCTION CO. et al., Appellees.

No. 25979.

United States Court of Appeals Fifth Circuit.

July 3, 1969.

Jack B. Porterfield, John W. Clark, Jr., Dunn, Porterfield, McDowell & Scholl, Birmingham, Ala., for Black Warrior Electric.

Harold Bowron, Jr., Martin, Balch, Bingham, Hawthorne & Williams, Birmingham, Ala., for Miss. Power Co.

James E. Clark, London, Yancey, Clark & Allen, Birmingham, Ala., William S. Lawson, Tupelo, Miss., for R. B. Stovall, and others.

Before WISDOM and GODBOLD, Circuit Judges, and HUGHES, District Judge.

GODBOLD, Circuit Judge:

We again consider whether an indemnity provision in a contract requires the indemnitor to save harmless the indemnitee from the consequences of the indemnitee's negligence. On April 9, 1965 Black Warrior Electric Membership Corporation (Black Warrior or indemnitee), an Alabama corporation, entered into an agreement with Mississippi Power Company (Mississippi Power or indemnitor) permitting Mississippi Power to construct, operate and maintain poles, wires and appliances for the transmission of electric energy across Black Warrior's transmission lines and rights-of-way at twenty-two locations in three counties of the State of Alabama.¹ The agreement states no consideration given by Mississippi Power for the rights other than the agreements undertaken on its part, which the contract describes as covenants. One of these is an indemnity agreement which reads as follows:

The Grantee shall and will at all times hereafter, indemnify, protect and save harmless Grantor from any and all claims, loss, damage, expense, and liability which Grantor may incur, suffer, sustain, or be subjected to, resulting from or in any way arising out of the construction, maintenance, or use of the wires, poles, and appliances of Grantee at such crossings.²

In December, 1965 Mississippi Power entered into a contract with R. B. Stovall Construction Company under which Stovall agreed to install approximately 51 miles of transmission line, which included wires and towers, from the Alabama-Mississippi state line to Mississippi Power's electric generating plant in Greene County, Alabama. A little more than a year after the Black Warrior-Mississippi Power agreement Walker, an employee of Stovall, brought suit against Black Warrior. He alleged that he was injured while working for Stovall on a job site³ where he was a business invitee, when a crane which he was operating came in contact with an uninsulated high voltage wire of Black Warrior suspended from poles or towers and fifteen to twenty feet above the ground. In Count One he charged simple negligence; in Count Two, wanton injury.

Black Warrior, relying on the indemnity provision, filed a third-party action against Mississippi Power. Mississippi Power had entered into an indemnity agreement with Stovall and in reliance thereon, it filed a fourth-party complaint against Stovall. Mississippi Power moved for summary judgment against Black Warrior and Stovall. The trial court granted summary judgment in favor of Mississippi Power against Black Warrior, and overruled as moot the motion of Mississippi Power for summary judgment against Stovall. Black Warrior appeals, contending that summary judgment for Mississippi Power was improper. Though Black Warrior filed no motion for summary judgment it urges that this court direct entry of summary judgment in its favor.

Mississippi Power has appealed the overruling of its motion for summary judgment against Stovall. If Black Warrior's appeal is successful Mississippi Power may become liable, and wishes to preserve its opportunity to seek indemnity under its contract with Stovall.

Under Erie⁴ we must examine Alabama law governing the contract between Mississippi Power and Black Warrior.⁵ The Alabama contract law governing indemnification for the indemnitee's negligence was considered by this court in Batson-Cook Co. v. Industrial Steel Erectors, 257 F.2d 410 (5th Cir. 1958). We there held that:

* * * unless the intention is unequivocally expressed in the plainest of words, the law will consider that the parties did not undertake to indemnify one against the consequences of his own negligence.

257 F.2d at 412.

The agreement in Batson-Cook contained a broad indemnity provision:

Subcontractor assumes entire responsibility and liability for losses, expenses, demands and claims in connection with or arising out of any injury, or alleged injury (including death) to any person, or damage, or alleged damage, to property of Contractor or others sustained or alleged to have been sustained in connection with or to have arisen out of or resulting from the performance of the work * * * and agrees to indemnify and hold harmless Contractor, his agents, servants, and employees from any and all such losses, expenses, damages and claims, * * *. Id. at 412 n. 4 (Original emphasis.)

Nevertheless this court held that an intent to impose the extraordinary liability of insuring against the indemnitee's negligence was not "spelled out in unmistakeable terms." 257 F.2d at 413.⁶ Much blood has been shed on many battlefields about the holding and the approach of Batson-Cook. See Jacksonville Terminal Co. v. Railway Express Agency, Inc., 296 F.2d 256, (5th Cir. 1961), cert. denied, 369 U.S. 860, 82 S.Ct. 949, 8 L.Ed.2d 18 (1962); Crescent Towing & Salvage Co., v. Dixilyn Drilling Corp., 303 F.2d 237 (5th Cir. 1962), rev'd, 372 U.S. 697, 83 S.Ct. 967, 10 L.Ed.2d 78 (1963); Southern Natural Gas Co. v. Wilson, 304 F.2d 253 (5th Cir. 1962); American Agricultural Chemical Co. v. Tampa Armature Works, Inc., 315 F.2d 856 (5th Cir. 1963) (see especially the concurring opinion); Miller and Co. of Birmingham v. Louisville & N.R.R., 328 F.2d 73 (5th Cir. 1964); United States v. Seckinger, 408 F.2d 146 (5th Cir. 1969).⁷

Jacksonville Terminal characterized Batson-Cook as inconsistent with the later Alabama case of Republic Steel Corp. v. Payne, 272 Ala. 483, 132 So.2d 581 (1961).⁸Crescent Towing applauded Jacksonville Terminal⁹ and said that the strict rule appeared to be giving way to the modern practice of providing liability insurance and bargaining as to which party would bear the expense thereof, 303 F.2d at 244, a practice recognized again in American Agricultural Chemical, 315 F.2d at 860. In Miller this court referred to the repeated criticisms of Batson-Cook but did not find it necessary to decide whether it was still a sound holding under Alabama law, 328 F.2d at 76. In Seckinger the draftsman of the Batson-Cook opinion has recognized that it "may have been superseded" by Republic Steel, 408 F.2d at 151, n. 11. These characterizations and predictions now reach actuality. The post-Batson-Cook decisions of the Alabama Supreme Court require us to conclude that the specificity of language which Batson-Cook required no longer accords with Alabama law.

In Republic Steel the Alabama court held that an exculpatory clause in a deed was sufficient to protect the grantor against his own negligence.¹⁰ Republic conveyed land by a deed containing elaborate provisions against assertion of claims by the grantees, and those holding under them, against the grantor, which was engaged in mining operations on land adjacent or near to that conveyed. The lessees of the grantees sued the grantor for injuries allegedly suffered as the result of inhaling fumes and gases emanating from grantor's mining operations. The provision in the Republic Steel contract was similar to the one in the Black Warrior-Mississippi Power contract. It did not specifically provide for exoneration of the grantor from his own negligence, but purported to relieve grantor "from any and all claims for damages and all liability by reason of damages either to persons or property which may in any way be caused or occasioned at any time. * * *" 132 So.2d at 583. The court stated:

Apparently, the trial court took the position, as do appellees, that since the exculpatory provisions of the deed make no mention of "negligence", it was not intended to exonerate Republic from liability for its negligence, particularly in view of the rule that such provisions should be strictly construed against exoneration. Although the word "negligence" is not used, it seems to us it was clearly intended to release Republic from liability for its negligence. Otherwise, most of the exculpatory provisions, including the covenant not to sue, would be without meaning. It is difficult to see how such provisions could have been more comprehensively drafted to relieve Republic from liability for damages, whatever might be the basis therefor, except, perhaps, by specifically using the word "negligence." But failure to use such word is not alone determinative of the intention of the parties. To say it was intended to relieve Republic only from liability for damages based on a nuisance (cf. Terrell v. Alabama Water Service Co., 245 Ala. 68, 70-71, 15 So.2d 727), would be to disregard the plain and unambiguous wording of those provisions exonerating Republic "from any and all claims for damages and all liability by reason of damages either to persons or property which may in any way be caused or occasioned at any time," and the covenant not to sue.

132 So.2d at 585-586 (original emphasis).

Appellees urge that United States Fidelity & Guar. Co. v. Mason & Dulion Co., 274 Ala. 202, 145 So.2d 711 (1962), represents a retreat from Republic Steel and an adherence to the Batson-Cook rationale. We do not agree. True, the contract in Mason & Dulion contained a broad indemnity provision, and the court held that the contract did not provide for indemnity against the negligence of the prime contractor. But the court based its holding on the theory that the contract contained an additional provision inconsistent with the indemnity section,...