Caldwell Tanks, Inc. v. Tnemec Co., Inc.
| Decision Date | 14 February 2006 |
| Docket Number | No. CIV.A. 03-11726-NMG.,CIV.A. 03-11726-NMG. |
| Parties | CALDWELL TANKS, INC., Plaintiff, v. TNEMEC COMPANY, INC. et al., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
John C. Barker, Michienzie & Sawin, LLC, Boston, MA, for Tnemec Company Inc., Righter Group, Inc., Defendants.
John F. Folan, Folan & McGlone P.C., New Bedford, MA, for Robert L. Merithew, Inc., Defendant.
Anne E. Gorham, Joseph L. Hardesty, Mark W. Leach, Robert M. Connolly, Stites & Harbison, LLC, Louisville, KY, Charles E. Schaub, Lauren Timoney Upton, Hinckley, Allen and Snyder, LLP, Boston, MA, for Caldwell Tanks, Inc., Plaintiff.
David J. Hatem, Warren D. Hutchison, Donovan & Hatem, LLP, Boston, MA, for Haley & Ward, Inc., Robert L. Merithew, Inc., Defendants.
Martin L. Legg, Boston, MA, Paul Michienzie, Michienzie & Sawin, LLC, Boston, MA, for Righter Group, Inc., Tnemec Company Inc., Defendants.
Douglas Marc Marrano, Nicholas A Ogden, Donovan Hatem LLP, Boston, MA, for Haley & Ward, Inc., Counter Claimant.
Pending before the Court is a motion for judgment as a matter of law that challenges a jury verdict in favor of a defendant-counterclaimant.
The underlying case arose in connection with certain damage done to a million-gallon water tank owned by the Buzzards Bay Water District and located in Buzzards Bay, Massachusetts. The manufacturer of the tank, Caldwell Tanks, Inc. ("Caldwell"), incurred substantial costs to remedy the alleged damage to the tank and subsequently filed a lawsuit against 1) Tnemec Co., Inc. ("Tnemec"), which provided the primer for the tank, 2) Righter Group, Inc. ("Righter"), Tnemec's sales agent, 3) Haley & Ward, Inc. ("Haley"), the engineering firm that designed the tank, and 4) Robert L. Merithew, Inc. ("Merithew"), the on-site tank inspector.
Caldwell's complaint sought damages from Tnemec for breach of contract, breach of express and implied warranties, negligence, negligent misrepresentation and strict liability, and from Righter, Haley and Merithew for negligent misrepresentation. Haley filed a counterclaim against the plaintiff, contending that any liability on its part was precluded by a contractual indemnity clause binding upon Caldwell.
After a two-week trial in April, 2005, the jury returned a verdict in favor of defendants on all counts. The jury also found that Haley had proved it was "entitled to indemnification from Caldwell for damages arising out of or resulting from the Buzzards Bay Water District project". It awarded Haley $175,000 on the indemnification counterclaim.
On May 6, 2005, Caldwell filed a motion for judgment notwithstanding the verdict, treated here as a motion for judgement as a matter of law, in which it contends that the verdict in favor of Haley is incorrect as a matter of law.1 Haley opposes that motion and has moved for an award of attorney's fees incurred in preparing its opposition.
Pursuant to Fed.R.Civ.P. 50(b), a court may direct entry of judgment as a matter of law only "when after examining the evidence of record and drawing all reasonable inferences in favor of the nonmoving party, the record reveals no sufficient evidentiary basis for the verdict". Zimmerman v. Direct Fed. Credit Union, 262 F.3d 70, 75 (1st Cir.2001) (citations omitted). In making such an evaluation, the court "may not weigh the evidence, undertake credibility determinations, or engage in differential factfinding". Id. (citation omitted). The jury verdict must be allowed to stand "unless the evidence, taken in the light most favorable to the prevailing party, points unerringly to an opposite conclusion". Id. (citation omitted).
Caldwell submits that it should be granted judgment as a matter of law, with respect to the affirmative judgment against it, on the grounds that 1) the indemnification clause on which Haley's counterclaim was based cannot, as a matter of law, support indemnification under the circumstances and, in any event, 2) the evidence produced at trial was insufficient to entitle Haley to indemnification. Haley maintains that the jury verdict is supported by adequate legal and evidentiary bases. After careful consideration of the parties' contentions, the Court is persuaded by Caldwell's position.
Courts interpreting indemnification contracts under Massachusetts law are to "give effect to the parties' intentions and construe the language to give it reasonable meaning wherever possible". Shea v. Bay State Gas Co., 383 Mass. 218, 418 N.E.2d 597, 601 (1981).
The contractual indemnity at issue provides that:
19.1 The CONTRACTOR [Caldwell] will indemnify and hold harmless the OWNER [Water District] and the ENGINEER [Haley] and their agents and employees from and against all claims, damages, losses and expenses including attorney's fees arising out of or resulting from the performance of the Work, provided that any such claims, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property including the loss of use resulting therefrom; and is caused in whole or in part by any negligent or willful act or omission of the CONTRACTOR, and SUBCONTRACTOR, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable.2
Indemnification clauses typically shift costs from the indemnitee to the indemnitor where a third party makes a claim against the indemnitee. Courts applying Massachusetts law have dealt infrequently with indemnification in the context of indemnitor-indemnitee litigation. Those that have addressed the issue, however, have concluded that there is no right to indemnification of claims between an indemnitor and indemnitee unless the contract expressly contemplates such entitlement. See Petit v. Basf Corp., No. CIV.A. 96-1814A, 2001 WL 410358, at *3 (Mass.Super. April 20, 2001) (); Astrolabe, Inc. v. Esoteric Technologies PTY, Ltd., No. Civ.A.01-11352, 2002 WL 511520 (D.Mass. Mar.29, 2002) (...
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Caldwell Tanks, Inc. v. Haley & Ward, Inc.
...had forced it to incur. The district court vacated the jury verdict for Haley on the counterclaim. See Caldwell Tanks, Inc. v. Tnemec Co., 417 F.Supp.2d 179, 182-83 (D.Mass.2006). The court held as a matter of law that under Massachusetts law there could be no indemnity from Caldwell to Hal......