O'BRIEN v. Watco Contract Switching, Inc.

• Decision Date: 10 February 2004
• Docket Number: No. 49A05-0303-CV-131.,49A05-0303-CV-131.
• Citation: 802 N.E.2d 999
• Parties: Danny O'BRIEN and Cindra O'Brien, Appellants-Plaintiffs, v. WATCO CONTRACT SWITCHING, INC., a Kansas Corporation, a/k/a and/or d/b/a Watco Switching Services, Inc., Watco, Inc., a/k/a Watco, Inc., a/k/a Watco Indiana a/k/a Watco Switching, Appellee-Defendant.
• Court: Indiana Appellate Court

802 N.E.2d 999

Danny O'BRIEN and Cindra O'Brien, Appellants-Plaintiffs, v. WATCO CONTRACT SWITCHING, INC., a Kansas Corporation, a/k/a and/or d/b/a Watco Switching Services, Inc., Watco, Inc., a/k/a Watco, Inc., a/k/a Watco Indiana a/k/a Watco Switching, Appellee-Defendant.

No. 49A05-0303-CV-131.

Court of Appeals of Indiana.

February 10, 2004.

Transfer Denied May 21, 2004.

Karl G. Popowics, Lia R. Lukaart, Goodin Abernathy & Miller, Indianapolis, IN, Attorneys for Appellants.

Geoffrey L. Blazi, Nicholas C. Nizamoff, Stuart & Branigin, Lafayette, IN, Attorneys for Appellee.

OPINION

SHARPNACK, Judge.

Danny O'Brien and Cindra O'Brien appeal the trial court's grant of summary judgment in favor of Watco, Incorporated ("Watco").¹ The O'Briens raise two issues, which we consolidate and restate as whether the trial court abused its discretion by granting Watco's motion for summary judgment.² We affirm.

The relevant facts follow. Danny O'Brien was employed by Watco as an operations manager. Watco's business includes "repair of certain rolling stock for various railroads and intra-company switching operations for several contracting industries." Appellant's Appendix at 102. "The switching operations were performed on trackage owned or leased by the contracting industries." Id. In November 1997, Watco was performing railroad switching services for National Starch and Chemical Company ("National Starch"). National Starch operates a starch manufacturing facility in Indianapolis, Indiana. The parties entered into a Switching Services Agreement, which provided, in relevant part, that:

2.4 [Watco] shall pick-up all inbound cars delivered by [Conrail] to the receive track/tracks designated by National and move these cars as prescribed by [National Starch's] designated representatives within the facility.

2.5 [Watco] shall pick up all outbound cars within the Facility and move them to the outbound track/tracks designated by [National Starch].

* * * * *

2.7 [Watco] shall provide all intra-facility switching as instructed by [National Starch's] designated representatives.

Id. at 105-106. The Agreement described Watco as an independent contractor. All switching services performed by Watco for National Starch "were performed on trackage owned by, leased to, or licensed to National Starch" at National Starch's plant facility. Id. at 102. In November 1997, the National Starch facility contained approximately eighteen tracks and five warehouses. The facility is divided into two sections, the "Drover" section and the "Raymond" section. Id. at 138-139. In order to travel from one section of the National Starch facility to the other, Watco employees had to move equipment over Conrail's tracks. Each time Watco employees traveled over Conrail's tracks, they were required to get permission from Conrail. Watco's charges to National Starch were based upon "man hours for switching services." Id. at 102. On November 26, 1997, a railroad car struck O'Brien during the course of his employment with Watco, and he sustained severe personal injuries.

In November 1997, Charles Webb owned 100% of Watco. Charles Webb has two children, Richard Webb and Susan Webb. Watco operated ten companies that were owned by Charles, Richard, and Susan either individually or collectively in some capacity. All of the companies were involved in the railroad industry in some fashion.

On November 18, 1999, O'Brien and his wife, Cindra, filed a complaint against Watco to recover damages for O'Brien's injuries under the Federal Employer's Liability Act, 45 U.S.C. §§ 51-60 ("FELA"). On August 31, 2001, Watco filed a motion for summary judgment, alleging that the "undisputed material facts of this case demonstrate that Watco is an intra-plant switching service, not a common carrier subject to [FELA]. Thus, Plaintiffs' FELA claims against Watco fail as a matter of law, and summary judgment in Watco's favor should be granted." Id. at 96. The trial court granted Watco's motion for summary judgment, finding that Watco "is not a common carrier by railroad as required in order [for it to be subject to] an action under [FELA], 45 U.S.C § 51." Id. at 22.

The sole issue is whether the trial court abused its discretion by granting Watco's motion for summary judgment. The O'Briens suggest that our review of this matter is a mixed question of fact and law; however, the O'Briens also acknowledge "there is absolutely no dispute between the parties that [Watco] performs rail services for compensation in switching and moving railcars." Appellant's Brief at 22. Likewise, Watco notes that "[p]ursuant to the Switching Services Agreement between Watco and National Starch, Watco provided intra-plant switching services for National Starch, moving rail cars in and around National Starch's Indianapolis facility as instructed by National Starch representatives." Appellee's Brief at 3. Because the parties agree about the extent of Watco's specific operations at National Starch, there is no genuine issue of material fact. Rather, we must consider whether, as a matter of law, Watco's specific operations at National Starch make it a common carrier by railroad that is subject to liability under FELA.

When reviewing a trial court's decision to grant or deny summary judgment, we apply the same standard as the trial court. Accordingly, we must decide whether there is a genuine issue of material fact that precludes summary judgment and whether the moving party is entitled to judgment as a matter of law. Carie v. PSI Energy, Inc., 715 N.E.2d 853, 855 (Ind.1999). When material facts are not in dispute, as is the case here, our review is limited to determining whether the trial court correctly applied the law to the undisputed facts. Burkett v. Am. Family Ins. Group, 737 N.E.2d 447, 452 (Ind.Ct. App.2000). We review such pure questions of law de novo. Id.

Congress enacted FELA in response to the "special needs of railroad workers who are exposed to daily risks inherent in their work." Iverson v. S. Minn. Beet Sugar Coop., 62 F.3d 259, 261 (8th Cir.1995). FELA "imposes broad liability on railroads to provide compensation for on-the-job injuries sustained by their employees, but its application is explicitly limited to railroads that function as common carriers." Id. FELA provides, in part, that:

Every common carrier by railroad while engaging in commerce between any of the several States or Territories, or between any of the States and Territories, or between the District of Columbia and any of the States or Territories, or between the District of Columbia or any of the States or Territories and any foreign nation or nations, shall be liable in damages to any person suffering injury while he is employed by such carrier in such commerce ... for such injury or death resulting in whole or in part from the negligence of any of the officers, agents, or employees of such carrier, or by reason of any defect or insufficiency, due to its negligence, in its cars, engines, appliances, machinery, track, roadbed, works, boats, wharves, or other equipment.

45 U.S.C. § 51 (emphasis added); see generally Baltimore and Ohio R.R. Co. v. Taylor, 589 N.E.2d 267, 271 (Ind.Ct.App. 1992)

(discussing negligence action brought under FELA).

45 U.S.C. § 57 provides that "[t]he term `common carrier' as used in this chapter shall include the receiver or receivers or other persons or corporations charged with the duty of the management and operation of the business of a common carrier." The Supreme Court of the United States has also defined the term and held that "the words `common carrier by railroad,' as used in [FELA], mean one who operates a railroad as a means of carrying for the public—that is to say, a railroad company acting as a common carrier." Wells Fargo Co. v. Taylor, 254 U.S. 175, 188, 41 S.Ct. 93, 98, 65 L.Ed. 205 (1920). Moreover, "[w]hether a transportation agency is a common carrier depends not upon its corporate character or declared purposes, but upon what it does." Lone Star Steel Co. v. McGee, 380 F.2d 640, 648 (5th Cir. 1967) (quoting United States v. California, 297 U.S. 175, 181, 56 S.Ct. 421, 422, 80 L.Ed. 567 (1936)).

In Greene v. Long Island R.R. Co., 280 F.3d 224, 226 (2nd Cir.2002), cert. denied sub nom Metro Transp. Auth. v. Greene, 538 U.S. 1031, 123 S.Ct. 2073, 155 L.Ed.2d 1060 (2003), the Second Circuit addressed the issue of corporate form versus actual operations in the context of defining a common carrier. Specifically, the circuit court addressed whether the Metropolitan Transportation Authority ("MTA") was a common carrier for purposes of FELA. Id. at 229. In 1996, MTA acquired the Long Island Railroad Company ("LIRR") as a subsidiary, and, until 1998, LIRR maintained its own police force to conduct surveillance at its parking lots and railroad stations. Id. at 227, 236. Greene was employed by LIRR from 1991 through December 1997. Id. at 227. In 1997, MTA became authorized to maintain a police department, and on January 1, 1998, all LIRR police officers, including Greene, became MTA employees. Id. Green was subsequently injured during the course of his employment by MTA and brought an action against MTA and LIRR to recover damages under FELA. Id.

MTA and LIRR moved for partial summary judgment. Id. At the time of Greene's accident, MTA was involved in LIRR's budgeting, capital raising, marketing, advertising, real estate, risk management, and labor relations. Id. at 239. MTA also provided security personnel for LIRR station parking lots. Id. MTA argued that its relationship with LIRR consisted merely of "indirect support functioning." Id. at 227. The district court disagreed and denied MTA's motion for summary judgment. Id. at 228. Specifically, the district court found that "it is not the corporate form of the entity that is dispositive" in "determining whether a defendant is a common carrier." Id. The district court added that::

[B]y virtue of [MTA's] extensive

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