Goodyear Tire & Rubber Co. v. G4S Secure Solutions (USA), Inc.
| Decision Date | 23 January 2013 |
| Docket Number | CASE NO. 5:11CV01170 |
| Court | U.S. District Court — Northern District of Ohio |
| Parties | GOODYEAR TIRE & RUBBER COMPANY, Plaintiff, v. G4S SECURE SOLUTIONS (USA), INC., Defendant. |
MEMORANDUM OF OPINION AND
ORDER [Resolving ECF Nos. 16, 17.]
This controversy arises out of the parties' disagreements with respect to an indemnification provision and a subrogation waiver in a contract for security services. The Court is called to decide cross Motions for Summary Judgment filed by Plaintiff Goodyear Tire & Rubber Co. and Defendant G4S Secure Solutions (USA), Inc. f/k/a The Wackenhut Corporation ("Wackenhut"). Having reviewed and considered the briefs attending the two Motions, as well as the attached exhibits and the governing law, the Court grants Goodyear's Motion for Summary Judgment (ECF No. 16) and denies Wackenhut's Motion for Summary Judgment. ECF No. 17.
Goodyear, an Ohio corporation, owns and operates a tire manufacturing plant in Gadsden, Alabama. ECF No. 15 at 1. Goodyear entered into a Security Guard Vendors Agreement ("Agreement") with Wackenhut, a Florida corporation, wherein Wackenhut agreed to provide security personnel and other protective services to Goodyear at the Gadsden plant. ECF No. 15 at 1-2. During the course of their contractual relationship, a lawsuit was initiated againstGoodyear and Wackenhut in the Circuit Court of Etowah County, Alabama. ECF No. 15 at 2. The plaintiff, Jerry Wells, claimed that while working as a Wackenhut security officer at the Gadsden plant, he allowed a Goodyear employee to borrow a golf cart owned by Wackenhut, and, when the golf cart was returned, Wells' hands touched a substance left upon the steering wheel that caused him to suffer rubber poisoning. ECF Nos. 15-2 at 3; 15-4 at 2; 15-7 at 1. After a hearing, the Alabama court determined that Wells had become "totally and permanently disabled" due to his injury and awarded judgment in Wells' favor on his claim seeking workers' compensation benefits from Wackenhut. ECF No. 15-7 at 2, 4-5. Wells' remaining claim of negligence against Goodyear, however, has not resolved and is pending in the Alabama court. ECF No. 15 at 3.
Subsequently, in a letter, Wackenhut agreed to defend and indemnify Goodyear in the Wells litigation pursuant to the terms of the Agreement. ECF No. 15-6. The Agreement contains an indemnification provision, which provides:
5. VENDOR'S INDEMNITY. VENDOR expressly agrees to indemnify, defend and hold GOODYEAR, its directors, officers and employees harmless from any and all claims, demands, suits, damages, fines and penalties on account of any violation of applicable law, or any loss, damages or injury to any persons or property whatsoever caused by any negligent act or omission or wrongful act by VENDOR, its employees or agents, or arising in any manner out of VENDOR'S performance of this Agreement, including without limitation claims arising from personal injury, illness or death due to the negligent act or omission of any GUARD assigned to the PLANT by VENDOR, whether or not such GUARD was acting within the scope of his or her authority.
ECF No. 15-1 at 3-4. Wackenhut reserved the right, however, to decline to indemnity at a later time. ECF No. 15-6. Later, Wackenhut withdrew its agreement to indemnify, claiming that its investigation revealed that "this incident did not arise out of The Wackenhut Corporation'sperformance or negligence under the contract." ECF No. 15-9. Wackenhut has also made a formal demand upon Goodyear for subrogation to recoup the workers' compensation payments it made to Wells pursuant to the judgment of the Alabama court. ECF 15 at 3.
Goodyear has now instituted an action against Wackenhut in this Court.1 ECF No. 1. In Count One of the Complaint, Goodyear seeks a declaration under 28 U.S.C. § 2201 that the Agreement expressly requires that Wackenhut (1) indemnify Goodyear for the costs of defending the Wells lawsuit and for any judgment Wells may recover against Goodyear, and (2) waive all of its subrogation rights with respect to Goodyear. In Count Two, Goodyear alleges that Wackenhut breached the Agreement by withdrawing its defense and indemnification and by asserting its subrogation demand. Wackenhut responded by filing an Amended Answer and Amended Counterclaims. ECF No. 8. In Counterclaim One, Wackenhut seeks a declaratory judgment that it is not required to indemnify Goodyear under the Agreement. Wackenhut also asserts, in Counterclaim Two, a subrogation claim for the amounts it has paid to Wells for lost wages and medical expenses and for any amounts it may be required to pay in the future.
Thereafter, Goodyear and Wackenhut each filed Motions for Summary Judgment upon all outstanding claims, supported with memoranda of law. ECF Nos. 16, 17, 17-1. The parties then filed opposition briefs (ECF Nos. 18. and 19), as well as replies. ECF Nos. 20. and 21.
The summary judgment procedure is "designed to secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986) (internal quotations omitted). "Summary judgment is appropriate only 'if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled judgment as a matter of law.'" EJS Properties, LLC v. City of Toledo, 698 F.3d 845, 855 (6th Cir. 2012) (quoting Fed. R. Civ. P. 56(a)). "Where the moving party carries its initial burden, the nonmoving party 'may not rest upon its mere allegations or denials of the adverse party's pleadings, but rather must set forth specific facts showing that there is a genuine issue for trial.'" Ellington v. City of East Cleveland, 689 F.3d 549, 552 (6th Cir. 2012) (quoting Moldowan v. City of Warren, 578 F.3d 351, 374 (6th Cir. 2009)). "'A genuine issue of material fact exists when there is sufficient evidence for a trier of fact to find for the non-moving party.'" U.S. ex rel. Wall v. Circle C Construction, LLC, 697 F.3d 345, 351 (6th Cir. 2012) (quoting Ciminillo v. Streicher, 434 F.3d 461, 464 (6th Cir. 2006)). "Reviewing the facts in the light most favorable to the nonmoving party, the court must ultimately determine whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Blizzard v. Marion Technical College, 698 F.3d 275, 282 (6th Cir. 2012) (internal quotations omitted).
Cross motions for summary judgment are examined under the usual Rule 56 standards, and a court "must evaluate each motion on its own merits and view all the facts and inferences in the light most favorable to the non-moving party." Spectrum Health Continuing Care Group v.Anna Marie Bowling Irrecoverable Trust, 410 F.3d 304, 309 (6th Cir. 2005) (quotations omitted).
Goodyear and Wackenhut present to the Court three broad issues for adjudication. The first is whether the indemnification provision is enforceable as a matter of law and public policy. The second is whether, if enforceable, the terms of the provision require indemnification. The third concerns whether Wackenhut contractually waived its subrogation rights. The Court addresses each of these issues below.2
1. Enforceability
Paragraph 18(C) of the Agreement provides that the Agreement "will be governed by and interpreted under, the laws of the State of Ohio, without regard to its laws respecting choice oflaw." ECF No. 15-1 at 8. Wackenhut argues that, as a matter of Ohio law and public policy, the indemnification provision is unenforceable because it does not specifically waive the immunity afforded to Wackenhut as an employer who pays into a workers' compensation fund. ECF No. 17-1 at 6-11. Wackenhut claims, therefore, that irrespective of what the terms of the provision actually require, it is not obligated to indemnify Goodyear in the present case.
To understand this argument, an examination of the immunity referenced by Wackenhut is necessary. Ohio's Constitution and workers' compensation regime shield employers who contribute to the state workers' compensation fund from statutory or common-law liability for injuries sustained by employees in the course of employment. Ohio Constitution, Art. II, § 35;3 R.C. § 4123.74.4 Kendall v. U.S. Dismantling Co., 20 Ohio St.3d 61, 65, 485 N.E.2d 1047 (1985); see Lamb v. Summit Mall, 2002 WL 533477 at *3 (Ohio App. 9 Dist., April 10, 2002).
Practically speaking, however, this immunity may be waived if an employer enters into an indemnity agreement with a third party who subsequently is found liable for the injury of an employee. Kendall v. U.S. Dismantling Co., 20 Ohio St. 3d at 61, illustrates this principle. U.S. Dismantling contracted with American Cyanamid to dismantle American Cyanamid's sulfuric acid plant. While disassembling pipelines at the work site, Kendall, an employee of U.S. Dismantling, was injured. Kendall brought suit against his employer and American Cyanamid. American Cyanamid then cross-claimed against U.S. Dismantling for indemnification based upon an indemnity agreement in their contract. The question before the Ohio Supreme Court was "whether the indemnity agreement at bar constitutes a waiver of [U.S. Dismantling's] statutory and constitutional immunity as an employer in compliance with Ohio's workers' compensation law." Id. at 64-65. The court recognized that an employer is entitled to waive its workers' compensation immunity by contract. Id. at 65. Nevertheless, the court determined...
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