Northwest Airlines, Inc. v. Alaska Airlines, Inc.

• Decision Date: 14 April 1972
• Docket Number: Civ. No. A-103-69.
• Citation: Northwest Airlines, Inc. v. Alaska Airlines, Inc., 343 F.Supp. 826 (D. Alaska 1972)
• Parties: NORTHWEST AIRLINES, INC., Plaintiff, v. ALASKA AIRLINES, INC., Defendant.
• Court: U.S. District Court — District of Alaska

343 F. Supp. 826

NORTHWEST AIRLINES, INC., Plaintiff, v. ALASKA AIRLINES, INC., Defendant.

Civ. No. A-103-69.

United States District Court, D. Alaska.

April 14, 1972.

Burr, Pease & Kurtz, Anchorage, Alaska, for defendant.

Faulkner, Banfield, Boochever & Doogan, Juneau, Alaska, for plaintiff.

MEMORANDUM OF DECISION AND ORDER

PLUMMER, Chief Judge.

This case comes before the court on cross motions for summary judgment. The motions arise from a 1961 crash of an Alaska Airlines plane on the Shemya Airfield which, at the time, was under the control of Northwest Airlines. In 1959, Alaska and Northwest entered into the following indemnity agreement:

"4. Alaska agrees to hold harmless and indemnify Northwest, its officers, agents, contractors, servants and employees from all claims and liabilities for damage to, loss of, or destruction of any property of Alaska, its officers, agents, servants, and employees, and the property of any other person or persons, and for injuries to or death of any person or persons which may now or hereafter arise out of or be in any way connected with the service and facilities furnished to Alaska under this agreement."

The personal representatives of those who died in the crash sued Northwest for wrongful death and Alaska sued Northwest for damage to the aircraft on grounds that the negligence of Northwest was the sole proximate cause of the crash. Northwest then sued Alaska seeking a declaratory judgment that Northwest was not liable to Alaska because of the indemnity agreement, and that Alaska was obligated to defend and hold Northwest harmless from the wrongful death actions. This court in 228 F.Supp. 322 (1964) held that the indemnity agreement was ineffective to release Northwest from the consequences of its own negligence on the basis of public policy reasons. The decision was affirmed in Northwest Airlines, Inc. v. Alaska Airlines, Inc., 351 F.2d 253 (9th Cir. 1965), and the language therein is relied upon by both sides in the motions presently before the court.

The case of Alaska Airlines v. Northwest Airlines, No. J-4-63, was concluded on January 4, 1969. That decision held that Alaska had failed to prove by a preponderance of the evidence that the crash and damages sustained were the direct result of Northwest's negligence or misconduct. This decision was affirmed in Alaska Airlines, Inc. v. Northwest Airlines, Inc., 444 F.2d 84 (9th Cir. 1971).

In 1969, Northwest settled the wrongful death actions after Alaska refused to defend on grounds of its nonliability and the unenforceability of the indemnity clause. Claims of approximately two to three million dollars were settled by Northwest for amounts in excess of four hundred thousand dollars.

The present case was commenced in the United States District Court for the Western District of Washington, and thereafter transferred to this district. Northwest's complaint seeks indemnity from Alaska pursuant to the indemnity agreement mentioned above, notwithstanding all previous litigation. Northwest denies its negligence as the proximate cause of the crash, and even if found negligent, Northwest alleges that its negligence was joint and concurrent, and also that Alaska's negligence was an intervening cause of the crash. Northwest's prayer is for the amount of settlement made by it in the wrongful death cases as well as attorneys' fees and costs for all previous litigation to which it was a party.

Alaska's answer essentially pleads that the decision in Northwest Airlines, Inc. v. Alaska Airlines, Inc., 351 F.2d 253 (9th Cir. 1965), in which the court upheld this court's findings that the indemnity agreement was unenforceable, amounts to a final adjudication—res judicata and collateral estoppel—of the validity of the agreement.

This controversy seems to turn upon one issue—the validity of the indemnity agreement with regard to all the facts resulting from all previous litigation. Without the existence or validity of the indemnity agreement as evidence of any obligation of Alaska to Northwest, Northwest's action fails for lack of substance at least at this point in the litigation. Both sides seek a decision that the Ninth Circuit in 351 F.2d 253 held in their favor concerning the case now before the court. In its decision at page 258, the court stated:

"If, in the orderly course of litigation, it is determined that negligence, if any, on the part of `Northwest' was not a proximate cause of the disaster, the indemnity provision may afford an avenue by which it may gain some relief from `Alaska'. And it is, of course, not to be implied that `Northwest' is, by this opinion, deprived of any established defenses which Alaskan law affords in actions based upon alleged negligence, nor is it divested of rights of contribution or indemnity which it may have under proper application of general law. We hold only that the exculpatory and indemnity provision, insofar as it is sought to be enforced to spare `Northwest' from liability for its own negligence, being against public policy and invalid, is unenforceable."

By the explicit wording above, it is clear that the court was precluding Northwest's reliance on the indemnity provision until the fault or cause of the accident was determined. Since the cause of the accident has now been determined not to be due to the negligence of Northwest, the court may give effect to the indemnity agreement and hold Alaska liable for indemnification.

Alaska's contentions must stand or fall on the validity of the indemnity agreement. Without such agreement, Alaska's argument is logical and probably legally correct. The indemnity agreement's existence and validity is fatal to Alaska's contentions that the Alaska Workmen's Compensation Act, AS 23.30.055, regarding the liability of an employer for a tort action by the employee, precludes indemnity by Northwest. United Airlines, Inc. v. Wiener, 335 F.2d 379, 403 (9th Cir. 1964), states as follows:

"As pointed out in the Weyerhaeuser opinion Weyerhaeuser S. S. Co. v. United States 372 U.S. 597 602, 83 S.Ct. 926 10 L.Ed.2d 1, the exclusive liability provision of the Federal Employees' Compensation Act is indistinguishable from Section 5 of the Longshoremen's and Harbor Worker's Act, 33 U.S.C. § 905.39 In construing this statute the courts have held that an employer may be liable for indemnity to another on the basis of an express or implied contract of indemnity but that in the absence of a contractual duty, the exclusive liability provision removed the underlying liability necessary for indemnity." (Citations omitted)

The Wiener holding is based upon the holding in Weyerhaeuser S. S. Co. v. United States, 372 U.S. 597, 83 S.Ct. 926, 10 L.Ed.2d 1, in which the following language is found:

"Section 5 of the Longshoremen's and Harbor Workers' Compensation Act is

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