Gibbs v. Air Canada
| Decision Date | 26 February 1987 |
| Docket Number | No. 85-5736,85-5736 |
| Parties | Caryl Antony Vaughn GIBBS, and other underwriters, etc., Plaintiff-Cross- Appellee, v. AIR CANADA, Defendant-Third Party Plaintiff-Appellee, Cross-Appellant, Aircraft Services, Inc., Third Party Defendant-Appellant. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Richard R. McCormack, Miami, Fla., for Aircraft Services.
Timothy Armstrong, Armstrong & Meyer, Coral Gables, Fla., David A. Russell, Walters, Costanzo, Russell, Zyne & Newman, Miami, Fla., for Gibbs.
Richard Gale, Miami, Fla., for Air Canada.
Appeals from the United States District Court for the Southern District of Florida.
Before JOHNSON and ANDERSON, Circuit Judges, and GARZA *, Senior Circuit Judge.
Appellant, Aircraft Services, Inc. ("Aircraft Services"), appeals the grant of a motion for directed verdict in favor of Air Canada as third party plaintiff below on an indemnity agreement and the denial of its own motion for directed verdict or, in the alternative, for a new trial. Air Canada cross-appeals the denial of its motion to vacate default judgment with regard to its liability to Caryl Antony Vaughn Gibbs and the other Underwriters at Lloyds subscribing to Insurance Policy Binder No. MK00135 ("Gibbs"), plaintiffs below. We reverse the grant of Air Canada's motion for directed verdict and the denial of Aircraft Services' motion for directed verdict. We affirm the denial of Air Canada's motion to vacate the default judgment with regard to liability.
On August 16, 1971, Aircraft Services entered a contract with Air Canada to provide various ramp services for Air Canada at the Miami International Airport ("Contract"). The services to be provided were listed on a schedule attached to the Contract. Beginning in January 1980, those services included transportation of cargo between Air Canada's cargo warehouse and its terminal ramp area. The Contract contained a provision pursuant to which Aircraft Services agreed to indemnify Air Canada for damages caused by the negligence or willful misconduct of its authorized representatives, agents or employees.
On March 6, 1980, Johnnie Sorey, a truck driver employed by Aircraft Services, picked up Air Canada shipping containers at the Air Canada warehouse and drove them to the Air Canada ramp for loading aboard an incoming flight. In one of the containers was $790,870.23 worth of precious metal belonging to Gibbs' insured, Trend Coin Co., d/b/a Trendline & Precious Metal Brokers, Inc. Because of the value of the shipment, Air Canada employee Phil Scandiarato followed Sorey's truck from the warehouse to the airport. He had informed Sorey that the shipment contained valuable cargo.
Upon arrival at the Air Canada terminal, the containers were unloaded onto the ramp by Sorey and another Aircraft Services employee with the aid of a forklift. Scandiarato informed P.J. Morris, the Air Canada Ramp Supervisor, and Dennis Lurchbacker, another Air Canada employee, that there was a valuable shipment on the ramp. Under Air Canada's procedures, Morris was then responsible for security with regard to the cargo until it was loaded on the airplane. He did not guard the cargo, however, because of problems with another flight, and he did not assign that responsibility to another employee.
Upon unloading the containers, Sorey's duties with regard to the shipment were completed and he should have returned to the Air Canada warehouse for another load. Instead, he called an accomplice from the Air Canada terminal office, reloaded the container containing the precious metal on his truck, and drove to his accomplice's house in Ocala, Florida. There was no one present on the ramp at the time Sorey stole the container. Providing security for this cargo at the terminal was not one of Aircraft Services' duties under the Contract.
Gibbs paid his insured for the loss, and filed suit against Air Canada, alleging, inter alia, gross negligence and willful misconduct on the part of Air Canada. The summons and complaint were served on John Lemay, Air Canada's Personnel and Administration Manager for the Southeastern United States, on April 6, 1981. Lemay telephoned Patrick Saul, the solicitor in charge of administration and control of litigation and claims at Air Canada's legal department in Montreal, Canada. Saul was out of the office and Lemay left a message with Saul's secretary for Saul to call him. Saul never returned the call and Lemay never followed up on his first telephone call to Saul. Instead, on April 8, 1981, Lemay forwarded the complaint to Saul via company mail. Saul never received the complaint.
On May 8 and again on June 8, 1981, entries of default were made by the clerk of court because of Air Canada's failure to answer or otherwise defend. On December 9, 1981, the district court granted judgment by default in the amount of $790,870.23. Air Canada learned of this judgment January 27, 1982, when Saul received a letter from Gibbs' counsel requesting satisfaction of the judgment. On February 12, 1982, Air Canada filed a motion to set aside the default judgment for excusable neglect pursuant to Fed.R.Civ.P. 60(b)(1). On April 24, 1982, the district court set aside the default judgment with regard to damages, but denied the Rule 60(b) motion with regard to liability because the court found that Air Canada's failure to answer the complaint was caused by its lack of minimum procedural safeguards.
Air Canada then filed a third party complaint against Aircraft Services seeking contractual indemnification. 1 A jury trial was held on the damages issue and a jury verdict for $790,870.23 was returned in favor of Gibbs against Air Canada. Aircraft Services participated in this trial. A two day jury trial then was held with regard to the third party complaint and the district court granted a directed verdict in favor of Air Canada at the close of all the evidence. On July 25, 1985, final judgment in the amount of $1,182,271.74 ($790,870.23 principal plus $391,401.51 in prejudgment interest) was entered in favor of Gibbs against Air Canada and in favor of Air Canada against Aircraft Services. On August 26, 1985, the district court denied Aircraft Services' motions for directed verdict, new trial and to alter or amend the judgment, and this appeal followed. Air Canada cross-appealed with regard to the December 9, 1981 default judgment, the April 24, 1982 order denying Air Canada's motion to set aside default judgment with regard to liability, and the entry of final judgment against Air Canada in favor of Gibbs.
The standard of review with regard to the grant of a directed verdict is whether "viewing all the evidence in the light most favorable to the non-moving party, the facts and inferences point so strongly in favor of one party that reasonable persons could not decide against the movant." Cook v. Branick Mfg., Inc., 736 F.2d 1442, 1445 (11th Cir.1984). In the present case, the district court's directed verdict in favor of Air Canada was based on its interpretation of the language of the indemnity provision of the Contract. Contract interpretation is generally a question of law subject to de novo review on appeal. Brewer v. Muscle Shoals Bd. of Education, 790 F.2d 1515, 1519 (11th Cir.1986).
The district court found that the language of the indemnity provision evidenced an intent to cover Sorey's act in stealing the container. Aircraft Services argues that its liability under the indemnity clause should not exceed its liability under the Florida law 2 of respondeat superior, pursuant to which an employer is not liable for the tort of his employee if the employee was acting in furtherance of his own personal interests, rather than his employer's interests, and thus has "stepped away" from the employer's business at the time of the tort. Lay v. Roux Laboratories, Inc., 379 So.2d 451, 453 (Fla.App.1980); accord, Gonpere Corp. v. Rebull, 440 So.2d 1307, 1308 (Fla.App.1983). Although whether one is acting within the scope of his employment normally is a jury question, Lay, 379 So.2d at 453, it is clear in this case that Sorey's act in stealing the container was in furtherance of his own personal interests and that, therefore, Aircraft Services has no vicarious tort liability for his actions under Florida respondeat superior principles. Air Canada's theory of recovery, however, was not respondeat superior, but a contractual right to indemnification for claims caused by negligence or willful misconduct of Aircraft Services employees. 3
Under Florida law, construction of a contract of indemnity generally is a question of law for the court applying recognized rules of contract construction. Improved Benevolent & Protected Order of Elks of the World, Inc. v. Delano, 308 So.2d 615, 617 (Fla.App.1975). Thus, the district court's task at trial, and our own task on this appeal, is to determine the intent of the parties with regard to the scope of the indemnification provision from the language of the Contract and the circumstances under which it was made. See id. In determining this intent, contract provisions should be given their natural and most commonly understood meaning in light of the subject matter and circumstances, Baker & Co., Florida v. Goding, 317 So.2d 118, 119 (Fla.App.1975), cert. denied, 328 So.2d 840 (Fla.1976), and the language being construed should be read in common with the other provisions of the contract. American Employers' Insurance Co. v. Taylor, 476 So.2d 281, 283 (Fla.App.), cause dismissed, 485 So.2d 426 (Fla.1985).
Based on our application of the above principles, we find that the district court erred in its determination that the indemnity clause of the Contract covered Sorey's...
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