Gulf Oil Corp. v. Atlantic Coast Line R. Co.

• Decision Date: 10 March 1967
• Docket Number: Nos. 6917,6916,s. 6917
• Citation: 196 So.2d 456
• Court: Florida District Court of Appeals
• Parties: GULF OIL CORPORATION, Appellant, v. ATLANTIC COAST LINE RAILROAD COMPANY and the Atlantic Land & Improvement Company, Appellees.

Page 456

196 So.2d 456

GULF OIL CORPORATION, Appellant, v. ATLANTIC COAST LINE RAILROAD COMPANY and the Atlantic Land & Improvement Company, Appellees.

Nos. 6917, 6916.

District Court of Appeal of Florida, Second District.

March 10, 1967.

Rehearing Denied April 5, 1967.

Thomas C. MacDonald, Jr., William T. Keen, J. Warren Frazier, of Shackleford, Farrior, Stallings, Glos & Evans, Tampa, for appellant.

E. Snow Martin, of Martin & Martin, Lakeland, for appellees.

LILES, Acting Chief Judge.

Appellant, plaintiff below, brings this appeal from an adverse final decree rendered in a declaratory judgment suit.

Plaintiff brought a declaratory judgment suit against defendants seeking construction of a portion of a license agreement between the parties. This agreement permitted plaintiff, as licensee, to maintain and operate pipe lines located on defendants' property for the purpose of unloading petroleum from tank steamers.

A stipulated statement of facts shows that two employees of plaintiff oil company, Stanley Scally and John D. Barfield, were burned and received personal injuries as the result of a fire on defendants' premises. The fire resulted from a hose rupture which occurred during the unloading of a tanker.

Scally and Barfield brought suit against defendants charging negligence on the part of defendants in operating and maintaining an open flame kerosene operated switch lamp located adjacent to plaintiff's unloading docks. On the basis of this charge of negligence against defendants, a compromise settlement was made with Scally and Barfield for $100,000.00. Defendants sought indemnity from plaintiff under the terms of the licensing agreement between the parties and specifically under the fourth paragraph thereof which provides:

'Fourth: That Licensee (plaintiff) shall and will at all times indemnify and save harmless the Licensors, their successors and assigns, from, and will pay and discharge all loss, costs, expense and damage to persons or property resulting from or in any manner connected with the laying, maintenance, operation or presence of said pipe lines or contents thereof on the premises of the Licensors or the removal of said pipe lines therefrom.'

The switch lamp referred to above was an existing facility at the time the agreement was executed by the parties.

The trial court was confronted with the question of whether the language quoted above required indemnification by plaintiff of defendants' negligent acts. The court found that the quoted indemnity clearly and unequivocally required plaintiff to indemnify defendants. We are asked to determine the correctness of this ruling.

The question of whether the language of an indemnity agreement is sufficient to indemnify one against his own negligence is thoroughly discussed in the annotation found in 175 A.L.R. 8 and the discussion in 27 Am.Jur. Indemnity § 15. The conflicting views on the subject were ably presented by Chief Judge Tuttle in Jacksonville Terminal Co. v. Railway Express Agency, Inc., 296 F.2d 256 (5th Cir. 1961). The case involved the construction of a clause in a lease agreement which provided in part:

'* * * (I)t is hereby expressly stipulated that the said Express Company will fully indemnify and save harmless the said Terminal Company and the Railway Companies using the Terminal Company's station and property from and against all charges, expenses, loss, damage, injuries, suits, or judgments, arising by reason of or in connection with occupation and use of the premises of the Terminal Company by the Express Company under this agreement, whether to the property of, or persons in employ of, the Terminal Company * * *.'

Judge Tuttle stated:

'At first glance, this would not seem to present a difficult problem of interpretation, for given its ordinary and natural meaning, the word 'all' leaves no room for exceptions. Since, absent extraordinary circumstances, we are bound to interpret a contract in accordance with the natural and ordinary meaning of the language employed therein, there would appear to be no alternative to the conclusion that, under Paragraph 9 of the lease, REA was obligated to indemnify JTC for losses due to the latter's negligence.

'Unfortunately, however, the solution is not so simple. We are faced with numerous cases wherein it has been held that a promise to indemnify for 'all losses, etc.' will not relieve the indemnitee from liability for losses caused by his own negligence. Apparently, the theory underlying these decisions is that the assumption of this liability is such an 'unusual' and 'hazardous' undertaking, that there can be no presumption that the indemnitor meant to assume it absent explicit reference to the indemnitee's negligence in the contract. Indeed, this is perhaps the majority, although far from a universally accepted, rule.' 296 F.2d 256 at 261.

Although the contention was made in the Jacksonville Terminal Co. case that the courts of Florida have adopted the 'majority view,' the federal court, after a discussion of the Florida cases cited in support of that contention, concluded that Florida courts had not adopted such a position and that the federal court was '* * * unfettered by any rule of construction which would require us to do violence to the plain and clear meaning of the language employed therein. * * *' The court then held that the language of the indemnity clause clearly and unequivocally manifested an intention to absolve the Jacksonville Terminal Company for all losses, including those caused by its own negligence. The holding in the Jacksonville Terminal case was followed by subsequent federal decisions including American Agricultural Chemical Co. v. Tampa Armature Works, Inc., 315 F.2d 856 (5th Cir. 1963), involving an application of Florida law to an indemnity clause.

It is true that Florida courts have yet to make a definite pronouncement as to whether Florida has adopted the so-called 'majority rule.' Yet there have been strong indications as to what Florida's position is on the matter. In Smith v. Ryan, 142 So.2d 139 (D.C.A.Fla.1962), (which did not involve an indemnity agreement similar to the one in the instant case) this court said:

'It is never presumed that a contract is intended to protect one against his own negligence, and hence, Unless it clearly so states, the courts hold that such was not the intention. Annotation 175 A.L.R. 8; Jackson v. Florida Weathermakers, Fla.1951, 55 So.2d 575. * * *' (Emphasis added.) 142 So.2d at 141.

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