Boston and Maine Railroad v. Bethlehem Steel Co., 6032.

• Decision Date: 04 January 1963
• Docket Number: No. 6032.,6032.
• Citation: 311 F.2d 847
• Parties: BOSTON AND MAINE RAILROAD, Plaintiff, Appellant, v. BETHLEHEM STEEL COMPANY, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

311 F.2d 847 (1963)

BOSTON AND MAINE RAILROAD, Plaintiff, Appellant, v.BETHLEHEM STEEL COMPANY, Defendant, Appellee.

No. 6032.

United States Court of Appeals First Circuit.

January 4, 1963.

Lawrence R. Cohen, Boston, Mass., for appellant.

Charles F. Barrett, with whom Robert W. Meserve and Nutter, McClennen & Fish, Boston, Mass., were on brief, for appellee.

Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.

ALDRICH, Circuit Judge.

This is an action for indemnity removed from the Massachusetts Superior Court.Plaintiffappellant, Boston and Maine Railroad, is a Massachusetts corporation; defendantappellee, Bethlehem Steel Company, is of Pennsylvania.Railroad maintains a spur track on Massachusetts premises of Bethlehem under a so-called sidetrack agreement, the legality of which is not questioned.New York Central R. R. v. William Culkeen & Sons Co., 1924, 249 Mass. 71, 144 N.E. 96.This agreement contains provisions for indemnity, portions of which are as follows:

"The Shipper Bethlehem hereby releases the Railroad from and indemnifies and saves it harmless against all loss, cost, damage or expense, and against any and all claims or suits for property damage, personal injury or death, arising out of or in any way referable to the operation of the Railroad for the benefit of the Shipper over the crossing at grade of the said sidetrack and a driveway as shown marked `Driveway\' on said plan attached unless due to the sole negligence of the Railroad, its agents or servants.

* * * * * *

"The Shipper also agrees to indemnify and hold harmless the Railroad for loss, damage or injury from any act or omission of Shipper, its employees or agents, to the person or property of the parties hereto and their employees, and to the person or property of any other person or corporation, while on or about said sidetrack; and if any claim or liability other than from fire shall arise from the joint or concurring negligence of both parties hereto it shall be borne by them equally."

In November 1957 one Stevens, an employee of Bethlehem, was injured while unloading a freight car upon the sidetrack covered by the agreement, as a result of which he received workmen's compensation payments from Bethlehem.In addition he sued Railroad, alleging that his injuries were the result of Railroad's negligence.Railroad notified Bethlehem of the suit, but made no attempt to vouch it in to defend.Subsequently Railroad settled with Stevens.The settlement required, and received, the approval of the Massachusetts Industrial Accident Board, pursuant to Mass.G.L. c. 152, § 15, and of Bethlehem as a self-insurer.Bethlehem, as self-insurer, received a portion of the proceeds in reimbursement of sums paid by it to Stevens.Thereafter Railroad demanded of Bethlehem indemnification of the amount paid in settlement, plus its costs incurred in handling the claim.Upon Bethlehem's denial of liability, Railroad brought this suit, in four counts.All counts alleged the foregoing facts.Count 1, in addition, alleged that Stevens' injuries were due to Bethlehem's negligence in unloading the car while on its premises and in its control; that Railroad was "exposed to a substantial liability," and that the settlement "was reasonable and prudent in view of said exposure."Count 2 omitted the allegation of legal liability of Bethlehem to Stevens.Counts 3 and 4 are the same as 1 and 2, respectively, except that each contains the further allegation, "Railroad was liable to Stevens for the damages he suffered."

Bethlehem moved to dismiss all counts on the ground that the complaint failed to "state facts which show any legal liability for any payment * * * to * * * Stevens * * * nor * * * to allege any act or omission on the part of Bethlehem which caused Railroad to become liable to * * * Stevens."Following a hearing on this motion the court wrote a memorandum in which it stated that Count 1 was based on the second aspect of the indemnity agreement, and Count 2 on the first.We infer that it made the same distinction between Counts 3 and 4, but it did not address itself to this specifically.¹The court went on to say that the "critical issue" was the failure of Railroad to call upon Bethlehem to defend the suit.In the court's opinion Massachusetts law "is strict in laying down the conditions for an indemnitee's recovery.* * * Massachusetts law requires * * * a notice not merely that the indemnitee is faced with a claim, but also that the indemnitor is invited to take control of that claim."Having made this pronouncement it stated that unless Railroad amended its complaint and filed an affidavit "to meet this vital point" it would entertain a motion for summary judgment.Railroad failing to amend, the court thereafter, "in accordance with the memorandum," gave summary judgment for Bethlehem.This appeal followed.

The court made clear what it was...