CHICAGO, M., ST. P. & PR CO. v. Famous Brands, Inc.

• Decision Date: 14 November 1963
• Docket Number: No. 17264.,17264.
• Citation: 324 F.2d 137
• Parties: CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY, Appellant, v. FAMOUS BRANDS, INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

324 F.2d 137 (1963)

CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY, Appellant, v. FAMOUS BRANDS, INC., Appellee.

No. 17264.

United States Court of Appeals Eighth Circuit.

November 14, 1963.

Gene F. Bennett, Minneapolis, Minn., for appellant; Rider, Bennett, Egan & Johnson, Minneapolis, Minn., and E. O. Schiewe and R. K. Merrill, Chicago, Ill., on the brief.

Clyde F. Anderson (of Meagher, Geer, Markham & Anderson), Minneapolis, Minn., for appellee; O. C. Adamson, II and Mary Jeanne Coyne, Minneapolis, Minn., on the brief.

Before VAN OOSTERHOUT and BLACKMUN, Circuit Judges, and MICKELSON, District Judge.

VAN OOSTERHOUT, Circuit Judge.

This is an appeal by plaintiff railroad from final judgment dismissing its complaint wherein it sought contractual indemnity from Famous Brands, Inc., defendant, for $56,972.95 paid by plaintiff in settlement of a Federal Employers Liability Act claim of Lloyd J. Enger. Like counsel, we will refer to the parties as plaintiff and defendant.

Plaintiff provides railway service to defendant via a spur track pursuant to a private contract which contains the indemnity provisions upon which this action is based. This track, described in the record as a spur track, runs approximately parallel to defendant's building in Minneapolis, Minnesota, at a distance of between 6.35 and 6.45 feet north of said building and serves the defendant and a neighboring business. To the north of the spur track is a track referred to in the record as the new track.¹ Such tracks will be referred to in this opinion as the spur track and the new track. The distance between the center of the spur track and the center of the new track is 12 feet. The new track is a main lead track controlled exclusively by the plaintiff and is used to service numerous industries in the area.

Mr. Enger, serving on a switching crew moving cars westward on the new track just prior to the accident which occurred about 2:30 a. m. on April 8, 1959, was riding on the south side of a box car with his feet in the bottom stirrup as such moving car approached a refrigerator car spotted on the spur track opposite defendant's building for defendant's use. Normally there is sufficient room (about 18 inches) for a switchman in Enger's position on the south side of the car on the new track to pass safely by cars standing on the spur track. At the time of the accident, the doors of the refrigerator car on the spur track had been left open² leaving inadequate space between the moving car on the new track and the spotted car on the spur track for Mr. Enger to safely pass.

Mr. Enger, upon suddenly discovering this situation, was forced to jump to the ground thereby sustaining the serious injuries for which the railroad has compensated him. The amount of damages is not here in dispute.

Plaintiff's action is based solely upon the indemnity provisions of the contract entered into between the plaintiff and defendant with relation to the spur track on March 1, 1944.³

The contract provides for car load pickup and delivery service for defendant on the spur track and provides for the expense of maintaining the track and for other matters not here material. The portion of the contract material to this action is Section 12 which deals with track clearances and indemnity. The first paragraph of Section 12 provides that with respect to the portion of the track opposite its property defendant "shall not place or permit to be placed, or to remain, any material, equipment, structure, pole or other obstacle or obstruction within 8.5 feet on straight track or 9.5 feet on curved track laterally of the center or within twenty-five (25) feet vertically from the top of either rail of said track."

The second paragraph of Section 12 relates to existing reduced clearances and reads:

"As between the Owner, the Tenant and the Railroad Company, it is mutually agreed that the existing horizontal clearances which are less than the minimum prescribed in preceding paragraph hereof with respect to that portion of the track "B" — "C", to the extent and in the location shown on the blueprint hereto attached, marked Exhibit "B" and hereby made a part hereof, may be permitted to remain for the time being, provided, however, that if at any time a change in such clearances is necessary to meet legal or operating requirements, the Tenant, or upon default of the Tenant, the Owner will, at its own expense, make such changes therein so as to conform with such requirements, and provided further, that so long as such reduced clearances are maintained, the Tenant, or upon default of the Tenant, the Owner shall indemnify and save the Railroad Company free and harmless from all damages, cost and expenses of every kind and nature, including personal injury to or death of persons resulting from said reduced clearances."

Judge Nordbye, in a well-considered memorandum opinion (not reported) supplemented by findings of fact and conclusions of law, determined that the factual situation here presented is not covered by the indemnity agreement and entered judgment dismissing the complaint.

Upon this appeal, defendant urges that the court erred in failing to construe the contract as providing plaintiff contractual indemnity against the consequences of the damages it was compelled to pay its employee Enger.

There is no question under Minnesota law with respect to the validity of an indemnity contract exempting a railroad from the consequences of its own negligence where, as here, the contract is private and not in fulfillment of a common carrier obligation. The parties so agree and are supported by Minneapolis-Moline Co. v. Chicago, M., St. P. & P. R. R., 8 Cir., 199 F.2d 725.

The parties also agree that under Minnesota law indemnity agreements should not be given "an unduly liberal or harshly strict, construction, but a fair construction that will accomplish its stated purpose." Northern Pac. Ry. v. Thornton Bros. Co., 206 Minn. 193, 288 N.W. 226.

The rules governing the requisites, validity and construction of contracts generally apply to indemnity contracts. Anthony v. Louisiana & Ark. Ry., 8 Cir., 316 F.2d 858, 863; Minneapolis-Moline Co. v. Chicago, M., St. P. & P. R. R., supra.

The burden is upon one attacking the contract interpretation made by the trial court of an ambiguous contract to show that the interpretation made is irrational, illogical, unsound or contrary to local law applicable to the interpretation of indemnity contracts. Northern Natural...