MISSOURI PACIFIC RAILROAD COMPANY v. Winburn Tile Mfg. Co.

• Decision Date: 06 June 1972
• Docket Number: No. 71-1194.,71-1194.
• Citation: 461 F.2d 984
• Parties: MISSOURI PACIFIC RAILROAD COMPANY, Appellant, v. WINBURN TILE MANUFACTURING COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

461 F.2d 984 (1972)

MISSOURI PACIFIC RAILROAD COMPANY, Appellant, v. WINBURN TILE MANUFACTURING COMPANY, Appellee.

No. 71-1194.

United States Court of Appeals, Eighth Circuit.

Submitted November 16, 1971.

Decided June 6, 1972.

Robert V. Light, Little Rock, Ark., William J. Smith, Little Rock, Ark., of counsel, for appellant.

James D. Storey, Wright, Lindsey & Jennings, Little Rock, Ark., for appellee.

Before GIBSON and HEANEY, Circuit Judges, and VAN PELT, Senior District Judge.^*

VAN PELT, Senior District Judge.

This action was brought by the Missouri Pacific Railroad Company to recover from the Winburn Tile Company amounts paid an injured railroad switchman, Carl Randell Breece, under the Federal Employers' Liability Act. The case was tried to a jury, which found that both of the parties were negligent; that such negligence was the proximate cause of the employee's injuries; that the railroad had acquiesced in the tile company's negligence; that the settlement made by the railroad with the injured employee was reasonable, prudent, and in good faith; and that the railroad had incurred $1,272.55 in reasonable expenses in handling the injured employee's claim. The trial court, based on the jury findings, determined that the defendant should only pay 50% of the amounts paid by the railroad to Breece. The railroad appeals.

Pursuant to Rule 10(d) of the Federal Rules of Appellate Procedure, the parties have filed an agreed statement of the case which establishes the facts hereinafter set forth.

Winburn Tile established its business near the tracks of the Missouri Pacific Railroad in the late 1950's. The tile company's premises had previously been served by a sidetrack of the railroad, and both parties wished to continue this relationship. The tile company's premises were fenced and the sidetrack was crossed by a metal gate which was kept locked. Railroad personnel had keys and they opened and closed the gate on each occasion when it was necessary for switch engines and freight cars to enter or leave the premises.

Pursuant to this arrangement, the parties executed an "Industrial Track Agreement" in 1960, providing service to the tile company from this sidetrack. The agreement also contained three indemnification provisions, two of which are apparently standard forms and were a part of a printed form, while the third was typewritten. This typewritten clause dealt specifically with the gates.

The three indemnification provisions are:

1. Paragraph 3 in which the tile company agreed to maintain certain clearances in connection with the spur track:

"Shipper assumes full responsibility for, and shall defend, indemnify and save harmless the Carrier from and against, any and all liability, suits, claims, damages, costs (including attorneys\' fees), losses, outlays, and expenses in any manner caused by, arising out of or connected with the failure or refusal of Shipper to comply with, observe or perform any of the provisions of this covenant, notwithstanding any possible negligence (whether sole, concurrent or otherwise) on the part of Carrier, its agents or employees."

2. Paragraph 4, which reads:

"It is understood that movement of railroad locomotives involves some risk of fire and, unless solely caused by the negligence of Carrier—which Shipper shall have the burden of proving, Shipper assumes all responsibility for and agrees to indemnify Carrier against loss or damage to property of Shipper or to property upon Shipper\'s premises arising from fire caused by locomotives operated by Carrier on Switch, or in its vicinity, for purpose of serving Shipper or Shipper\'s tenant, if any, except to premises of Carrier and to rolling stock belonging to Carrier or to others and to shipments in course of transportation. Shipper also agrees to indemnify and hold harmless Carrier for loss, damage or injury from any act or omission of shipper, Shipper\'s employees or agents, to the person or property of the parties hereto and their employes and to the person or property of any other person or corporation, while on or about Switch; and, except as otherwise provided in this agreement, if any claim or liability shall arise from joint or concurring negligence of both parties hereto, it shall be borne by them equally." (Emphasis supplied.)

3. The unnumbered, typewritten paragraph, pertaining to the gates, which states:

"Shipper, at Shipper\'s sole cost and responsibility, shall have the right to erect, keep and maintain as part of Shipper\'s fence enclosing Shipper\'s premises, metal gates and appurtenances, hereinafter, collectively, called `Gates\' over and across Switch approximately where indicated by brown line on Exhibit `A\'. Gates shall conform substantially to cross section sketch shown on Exhibit `A\' and be of design and construction satisfactory to Carrier\'s Division Superintendent. Shipper, at Shipper\'s cost, shall maintain Gates in a good and safe condition. Shipper shall provide and keep as part of Gates suitable appliances for fastening same when open so that no part thereof shall be nearer than 9 feet horizontally from the center line of Switch, and, as well, suitable appliances for fastening Gates when closed.

Gates shall be equipped with switch lock, to be furnished by Carrier, so that Carrier\'s employes may open and close Gates incident to the operation of locomotives and cars over Switch. Shipper assumes fully responsibility for, and shall defend, indemnify and save harmless the Carrier from and against any and all liability, suits, claims, damages, costs (including attorneys\' fees), losses, outlays and expenses in any manner caused by, arising out of or connected with the installation, construction, operation, maintenance, use or existence of Gates or any part thereof, except such loss and damage or claims which may arise from the sole negligence of Carrier, its agents, servents sic, or employes." (Emphasis supplied.)

Following execution of this agreement, the railroad provided industrial switching service to the tile company. On August 5, 1968, one of the railroad switch crews opened the gates for the purpose of delivering or picking up freight cars on the spur. Railroad employee Breece, a switchman, rode into the plant on the side of a car or locomotive, performed his work within the tile plant premises, and was in the process of riding out of the plant on the right side of a freight car when he was struck in the back by the gate section nearest the plant building. This caused him to fall to the ground and sustain severe personal injuries. Breece later settled his claim with the railroad for $26,545.00.

Investigation revealed that the gate had been permitted to swing back toward the track and into a position where it hit Breece in the back because of the absence or inoperative condition of the appliances used to secure the gates while in an open position, or because of vegetation which prevented moving the gates to a full open position, or because of the failure of a railroad employee to prop the gate open by use of a rock or other object, or by concurrence of one or more of these conditions. These conditions had existed for a long period of time.¹ There was no evidence that the tile company employees had occasion to unlock the gates. There was no evidence that the railroad employees had ever brought these conditions to the attention of their railroad superiors.

The railroad made demand on the tile company for the $26,545.00 paid to Breece, but the title company consistently refused to pay. Thereafter, the railroad company commenced this suit, which went to trial with the results above set forth. Because of the jury's findings, the trial judge, pursuant to paragraph 4 of the agreement, quoted above, awarded the plaintiff only 50% of the settlement expenses and entered judgment for $13,848.78. We reverse.

Under Arkansas law, a contract which indemnifies a party against his own negligence is not contrary to public policy. Pickens-Bond Const. Co. v. North Little Rock Elec. Co., 249 Ark. 389, 402, 459 S.W.2d 549, 557 (1970); Hardeman v. J. I. Hass Co., 246 Ark. 559, 439 S.W.2d 281 (1969); Ross v. Smith, 315 F.Supp. 1064 (E.D.Ark. 1970). It is our determination that the unnumbered, typewritten provision of the contract in question here requires that the defendant tile company be held liable for all sums paid by the railroad to the injured employee. The typewritten provision dealt specifically with the gates. Defendant's conduct was in direct violation of the provision. The other two provisions quoted above only dealt generally with the situation presented. Under Arkansas law, if there is an inconsistency between general and specific provisions of a contract, the specific provisions ordinarily qualify the meaning of the general provisions. Pate v. Goyne, 212 Ark. 51, 204 S.W.2d 900 (1947); English v. Shelby, 116 Ark. 212, 172 S.W. 817 (1915); United States v. R. D. Wilmans & Sons, 147 F.Supp. 232, 238 (E.D.Ark.1956), aff'd, 251 F.2d 509 (8th Cir. 1958); Restatement of Contracts § 236(c) (1932). The fact that the provision pertaining to the gates is typewritten, while the other clauses are from a printed form, also merits some consideration. McKinnon v. So. Farm Bureau Casualty Ins. Co., 232 Ark. 282, 335 S.W.2d 709, 710 (1960). In addition, paragraph 4 of the agreement, under which the trial court made its determination of the 50-50 split, contained the limiting language "except as otherwise provided in this agreement."

While it is true that an indemnification provision must be clear and unequivocal in order to be upheld, Hardeman v. J. I. Hass Co., supra, 246 Ark. at 562, 439 S.W.2d at 285, we believe the provision here clearly sets forth the tile company's duty. Under the typewritten clause, the tile company assumed "full responsibility for . . . any and all liability . . . caused by . . . the . . . installation, construction, operation, maintenance, use or existence of Gates or any part...