FIAT MOTORS OF NORTH AMERICA v. Mayor and Council of Wilmington
| Decision Date | 27 February 1985 |
| Docket Number | Civ. A. No. 82-691 CMW. |
| Citation | 619 F. Supp. 29 |
| Parties | FIAT MOTORS OF NORTH AMERICA, INC. and Affiliated FM Insurance Company, Plaintiffs, v. MAYOR AND COUNCIL OF the CITY OF WILMINGTON; Department of Commerce of the City of Wilmington; Board of Harbor Commissioners of the Port of Wilmington; E.I. du Pont de Nemours & Company and American Auto, Inc., Defendants. |
| Court | U.S. District Court — District of Delaware |
J.R. Julian, Wilmington, Del., for plaintiffs; Henry J. Catenacci, Podvey, Sachs & Catenacci, Newark, N.J., of counsel.
David E. Brand, Prickett, Jones, Elliott, Kristol & Schnee, Wilmington, Del., for defendants Mayor and Council of Wilmington, Dept. of Commerce of the City of Wilmington, Bd. of Harbor Com'rs of the Port of Wilmington.
Paul M. Lukoff and Catherine B. Hagerty, Wilmington, Del., for defendant E.I. du Pont de Nemours & Co.
Peter M. Sieglaff, Esquire of Potter, Anderson & Corroon, Wilmington, Del., for defendant American Auto, Inc.
Fiat Motors of North America, Inc. (hereinafter "Fiat") and Fiat's insurance carrier, Affiliated FM Insurance Co. (hereinafter "Affiliated") have brought suit against the Mayor and Council of the City of Wilmington, Department of Commerce of the City of Wilmington, and the Board of Harbor Commissioners of the Port of Wilmington (collectively referred to hereinafter as "City of Wilmington"), E.I. du Pont de Nemours & Co. (hereinafter "Du Pont"), and American Auto, Inc. (hereinafter "American"), claiming that these parties are liable for flood damages to Fiat's automobiles caused by the defendants' allegedly negligent acts or omissions. Presently before the Court is defendant City of Wilmington's Motion for Summary Judgment.1 The City of Wilmington asserts that it is immune from tort liability under the County and Municipal Tort Claims Act, 10 Del.C. §§ 4010-4013 (hereinafter "Tort Claims Act"). Although the City has raised other defenses,2 the assertion of sovereign immunity would represent a complete bar to plaintiffs' tort claims against the City of Wilmington.
At oral argument, the Court raised sua sponte the issue of certifying questions of state law to the Delaware Supreme Court under a modification of that Court's rules which was made possible by a recent amendment to the state constitution.3 Although federal courts in other jurisdictions have had experience in certifying questions of law to state's highest court, certification for the District Court of Delaware, applying Delaware law, represents a novel and as yet, untested procedure. For this reason, this Court must carefully assay the standards governing certification of questions of state law in diversity proceedings to determine whether certification is appropriate in this case.
Fiat is engaged in importing and selling motor vehicles in the United States. On January 6, 1974, Fiat entered into an agreement to lease approximately 30 acres of property at the Wilmington Marine Terminal from the Board of Harbor Commissioners of the Department of Commerce of the City of Wilmington. Fiat leased this property to provide the company with facilities for the processing, servicing and storage of its imported automobiles prior to their shipment to Fiat dealers. The annual rent to be paid by Fiat to Wilmington was approximately $193,000 plus annual adjustments based upon the wholesale price index. In addition, Fiat was obligated to pay dockage and wharfage charges assessed by Wilmington and to guarantee generation of a minimum of $75,000 per lease year in dockage and wharfage assessments by the City. Fiat renewed the lease on March 29, 1979.
The other defendants in this lawsuit, Du Pont and American, entered into separate agreements with Fiat independent of Fiat's lease with the City. American, a wholly-owned subsidiary of Pasha Industries, Inc., was required to process, service and store Fiat's automobiles at the Wilmington Terminal Facility under a contract between Pasha and Fiat entered into in June of 1979. Du Pont leased part of its parking lot at its nearby Christiana Laboratories to Fiat beginning in the summer of 1980 to handle Fiat's cars when the number of cars shipped to Wilmington exceeded Fiat's storage capacity at the Port of Wilmington.
On October 25, 1980, a severe rain storm caused the Christina River to overflow and flood the Port of Wilmington facilities and the Du Pont parking lot. At the time of the flood, several thousand Fiat automobiles were parked at the Port of Wilmington and the Du Pont lot. The flood caused over $10 million in damages to those automobiles.
Fiat subsequently filed a flood loss claim with the company's insurance carrier, Affiliated. Affiliated paid Fiat approximately $9.2 million on the claim. As a result of deductibles under Fiat's insurance policy, approximately $1 million in flood losses were not covered by the policy.
On October 22, 1982, Fiat instituted suit against American, Du Pont and various municipal bodies of the City of Wilmington.4 Affiliated, as a subrogee to Fiat's claims, joined with Fiat as a plaintiff in this suit. The City of Wilmington admits to having one million dollars in insurance coverage for any tort liability on its part arising from Fiat's property damages.
On a motion for summary judgment, a court determines whether the moving party is entitled to judgment as a matter of law after drawing all inferences from the existing record in a light most favorable to the non-moving party. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977); Fed.R.Civ.P. 56(c). The initial burden of demonstrating the absence of any genuine issue as to a material fact rests on the moving party, and until the moving party discharges his burden, the non-moving party may rely solely on his allegations taken from the pleadings. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970).
Here, plaintiffs, the non-moving parties, have alleged negligence on the part of the City. The City does not seek to challenge this allegation through its motion and so the Court, assumes, for purposes of the defendant City's motion, that the City was in fact negligent. The City contends, however, that regardless of whether it was negligent, it is immune from liability under the Tort Claims Act, 10 Del.C. §§ 4010-4013. The plaintiffs contest the City of Wilmington's claim of immunity on two grounds. First, it is argued that the City in leasing parking facilities was acting in a proprietary capacity. Prior to enactment of the Tort Claims Act, a municipality's proprietary activities were beyond the scope of any immunity enjoyed by a municipality. Plaintiffs argue that this rule of law was unaffected by passage of the Tort Claims Act. Alternatively, plaintiffs claim that the City of Wilmington, in purchasing liability insurance for activities beyond the scope of the activities enumerated in 10 Del.C. § 4012, waived any statutory immunity under 10 Del.C. § 4011.
This Court sits in exercise of its diversity jurisdiction. As such, the Court, although providing a federal forum, must apply the substantive law of the appropriate state jurisdiction as expressed in that state's statutes and the decisions of its state's highest court. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).5 While Erie established the source of law for federal courts' decisions in diversity cases, knowing the proper source of law does not guarantee that it can be ascertained with complete certainty. Federal courts in applying state law frequently encounter instances in which state law is not readily accessible because the state's highest court has not recently addressed a particular question of law. See Jones & Laughlin Steel Corp. v. Johns-Manville Sales Corp., 626 F.2d 280, 284 (3d Cir.1980).
"In the absence of an authoritative pronouncement from the state's highest court, the task of a federal tribunal is to predict how the court would rule." Pennsylvania Glass Sand Corp. v. Caterpillar Tractor Co., 652 F.2d 1165, 1167 (3d Cir. 1981). Accurate forecasts of the decisions of a state's highest court must begin with an examination of the best available evidence. Evidence of state law comes in many forms: lower state court precedents, related decisions and considered dicta of a state's highest court, the policies that inform that court's application of certain legal doctrines, the decisions of courts in another jurisdiction and even legal treatises and articles. See McKenna v. Ortho Pharmaceutical Corp., 622 F.2d 657, 662-63 (3d Cir.), cert. denied, 449 U.S. 976, 101 S.Ct. 387, 66 L.Ed.2d 237 (1980); Brown v. Caterpillar Tractor Co., 696 F.2d 246, 250 (3d Cir.1982). The decisions of state trial courts are not to be regarded by federal courts as conclusive evidence of what the state's highest court would hold, although state trial court decisions should be accorded some weight. Commissioner v. Estate of Bosch, 387 U.S. 456, 464, 87 S.Ct. 1776, 1782, 18 L.Ed.2d 886 (1967). Under some conditions, federal authority may not be bound even by intermediate state appellate court rulings, id., especially when such rulings bear certain indicia of unreliability. See National Surety Corp. v. Midland Bank, 551 F.2d 21, 32 (3d Cir.1977). The purpose of these prudential rules for ascertaining state law is not to afford federal courts unfettered discretion in deciding issues of state law, but to assure that litigants in a diversity action are not penalized by being deprived of the same flexibility that a state court could reasonably expect to show, Becker v. Interstate Properties, 569 F.2d 1203 (3d Cir.1977), cert. denied, 436 U.S. 906, 98 S.Ct. 2237, 56 L.Ed.2d 404 (1978), when the federal court is, in effect, sitting as a state court. Commissioner v. Estate of Bosch, ...
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