Coca-Cola Sw. Beverages v. Marten Transp.
| Docket Number | Civil Action 1:21-CV-4961-TWT |
| Decision Date | 07 August 2023 |
| Parties | COCA-COLA SOUTHWEST BEVERAGES LLC, Plaintiff, v. MARTEN TRANSPORT, LTD., Defendant. |
| Court | U.S. District Court — Northern District of Georgia |
This is a breach of contract action. It is before the Court on the Plaintiff's Motion for Partial Summary Judgment [Doc 72], the Plaintiff's Motion to Stay [Doc. 75], and the Defendant's Motion for Summary Judgment [Doc. 76]. For the reasons set forth below, the Plaintiff's Motion for Partial Summary Judgment [Doc. 72] is GRANTED, the Plaintiff's Motion to Stay [Doc. 75] is GRANTED, and the Defendant's Motion for Summary Judgment [Doc. 76] is GRANTED in part and DENIED in part.
This case arises from the denial of a tender of defense and demand for indemnity in a Texas state court action by the Plaintiff Coca-Cola Southwest Beverages LLC. In October 2019, William Gero, an employee of the Defendant Marten Transport, Ltd. was allegedly injured at a Coca-Cola Southwest facility in Texas when a Coca-Cola Southwest employee struck him with a forklift. (Def.'s Statement of Additional Undisputed Material Facts ¶ 1.) Gero filed suit against Coca-Cola Southwest and the forklift operator, Jonathan Scott, in the 11th Judicial District of Harris County, Texas, (the “Gero action”) alleging that Coca-Cola Southwest and Scott were at fault for his injuries. (Id. ¶¶ 3-7.) In its answer to the Gero action, Coca-Cola Southwest asserted that Gero's injuries were caused by his own negligent acts and omissions-namely his failure to comply with Coca-Cola Southwest's safety practices and procedures. (Pl.'s Statement of Undisputed Material Facts ¶ 15.) Coca-Cola Southwest also designated Marten Transport as a responsible third party. (Id. ¶ 16.) There has been no adjudication on the merits or other final judgment or settlement in the Gero action. (Id. ¶ 17.)
On September 9, 2020, Coca-Cola Southwest tendered its defense of the Gero action to Marten Transport under a Transportation Services Agreement for General Carriers (the “Agreement”) between Marten Transport and non-party Coca-Cola Bottlers Sales & Services LLC. (Id. ¶ 18.) It is undisputed that Coca-Cola Southwest is an intended third-party beneficiary under the Agreement. (Id. ¶¶ 2-3.) Coca-Cola Southwest based its tender demand on Article 19.1 of the Agreement, which provides:
[Marten Transport] shall indemnify, defend, and hold . . . [Coca-Cola Southwest] and [its] parents, subsidiaries, affiliates, and their respective officers, directors, employees and agents . . . harmless from and against any and all claims, demands, suits and proceedings whatsoever initiated by [Marten Transport's] employees, agents or contractors, or other third parties; provided, however, that [Marten Transport's] indemnification and hold harmless obligations under this paragraph will not apply to the prorated extent that any claim is attributable to the negligence or wrongful conduct of [Coca-Cola Southwest].
(Id. ¶ 10.) Under Article 19.2, Marten Transport further agreed to indemnify, defend, and hold Coca-Cola Southwest harmless in certain enumerated situations, including in relevant part: (1) “any breach of any obligation of [Marten Transport] under this Agreement, whether by [Marten Transport] itself or as a result of the acts or omissions of [Marten Transport's] employees, agents or contractors”; (2) “any Services provided by [Marten Transport] hereunder, including without limitation Services performed by its employees, agents, or contractors”; (3) “any negligent or willful act or omission of [Marten Transport] or its employees, agents or contractors”; and (4) “[Marten Transport's] failure to comply with applicable laws, industry practice or [Coca-Cola Southwest's] standards[.]” (Agreement ¶ 19.2.)
Marten Transport denied Coca-Cola Southwest's tender demand on April 28, 2021, and has since never provided a defense to Coca-Cola Southwest in the Gero action. (Pl.'s Statement of Undisputed Material Facts ¶¶ 19-21.) In this case between Coca-Cola Southwest and Marten Transport, Coca-Cola Southwest asserts three claims for breach of contract (Count I), declaratory judgment (Count II), and attorney's fees and expenses (Count III). Not only does Coca-Cola Southwest allege that Marten Transport breached the Agreement by refusing to defend and indemnify it against Gero's claims, but Coca-Cola Southwest also alleges that Marten Transport failed to maintain insurance policies and follow safety procedures specified in the Agreement.
In particular, Article 16 and Schedule E of the Agreement require that Marten Transport obtain commercial general liability insurance and statutory workers' compensation liability and employer's liability insurance naming Coca-Cola Southwest as an additional insured. (Agreement ¶ 16.1 & Schedule E ¶¶ 1, 4.) The commercial general liability policy must be primary and contain limits of at least $1,000,000 per occurrence and $2,000,000 in the aggregate. (Id., Schedule E ¶ 1(a).) The workers' compensation policy must also be primary and contain limits of at least $1,000,000 each employee by accident, $1,000,000 each employee by disease, and $1,000,000 aggregate by disease with benefits afforded under the laws of the state or country in which the services are to be performed. (Id. ¶ 1(d).) According to Marten Transport, it acquired each of the required policies through ACE American Insurance Company prior to Gero's accident.[1] (Def.'s Statement of Undisputed Material Facts ¶¶ 8-11, 13-16.) Regarding the issue of safety, the Agreement states that Marten Transport must follow all applicable safety practices and procedures, including those established by Coca-Cola Southwest for its premises, in performing its services. (Agreement ¶ 6.3.)
Now pending before the Court are the parties' motions for summary judgment and Coca-Cola Southwest's motion to stay. Coca-Cola Southwest moves for summary judgment on the narrow issue of whether Marten Transport has a duty to defend it against the Gero action. Once that issue is decided, Coca-Cola Southwest asks the Court to stay this case pending the outcome of the Gero action, which will determine the extent of Marten Transport's indemnification obligation under the Agreement. For its part, Marten Transport opposes a stay because its motion for summary judgment, if granted, would resolve this entire case. In its motion, Marten Transport argues that it has no duty to defend or indemnify Coca-Cola Southwest against allegations that Coca-Cola Southwest (and its agent) was solely negligent for Gero's injuries. Marten Transport also argues that it complied with all of its insurance obligations under the Agreement and that its alleged safety violations are not ripe and, in any event, could not cause indemnifiable losses to Coca-Cola Southwest.
Summary judgment is appropriate only when the pleadings, depositions, and affidavits submitted by the parties show that no genuine issue of material fact exists, and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a), (c). The court should view the evidence and draw any inferences in the light most favorable to the nonmovant. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970). The party seeking summary judgment must first identify grounds that show the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). The burden then shifts to the nonmovant, who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact exists. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
In its motion for partial summary judgment, Coca-Cola Southwest argues that Marten Transport breached its duty to defend Coca-Cola Southwest in the Gero action. (Pl.'s Br. in Supp. of Pl.'s Mot. for Partial Summ. J., at 1.) As noted, the Agreement requires Marten Transport to indemnify, defend, and hold Coca-Cola Southwest harmless against all claims and suits initiated by Marten Transport's employees. (Agreement ¶ 19.1.) Immediately after this indemnity language, contained within the same paragraph, is the following exculpatory clause: “provided, however, that [Marten Transport's] indemnification and hold harmless obligations under this paragraph will not apply to the prorated extent that any claim is attributable to the negligence or wrongful conduct of the Indemnitees.” (Id.) Because this clause does not include the word “defend,” Coca-Cola Southwest reasons that the duty to defend is subject to no qualifications. (Pl.'s Br. in Supp. of Pl.'s Mot. for Partial Summ. J., at 11.) That is, Coca-Cola Southwest's position is that Marten Transport must defend it even where Marten Transport has no obligation to indemnify and hold it harmless; even in actions arising from Coca-Cola Southwest's sole negligence.
In Georgia, the construction of a contract is a matter of law reserved, at least initially, for the court. See Woody's Steaks, LLC v. Pastoria, 261 Ga.App. 815 817 (2003). “The cardinal rule of contract construction is to ascertain the intention of the parties.” Samdperil v. Watson, 359 Ga.App. 129, 130 (2021) (citation omitted). When construing a contract, the trial court must first determine whether the disputed terms are clear and unambiguous, examining the contract as a whole and affording the words their plain and ordinary meaning. See id. at 130-31. If the contract is unambiguous, the court will enforce it according to its plain terms. See id. at 131. If an ambiguity exists, though, the court...
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