Olin Corp. v. Yeargin Inc.

Decision Date13 August 1998
Docket NumberNo. 97-5606,97-5606
Citation146 F.3d 398
Parties, 28 Envtl. L. Rep. 21,362 OLIN CORPORATION, Plaintiff-Appellant, v. YEARGIN INCORPORATED, Defendant-Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

Gregory M. Leitner (argued and briefed), Timothy L. Mickel (briefed), Leitner, Williams, Dooley & Napolitan, Chattanooga, TN, for Plaintiff-Appellant.

William G. Colvin, Schumaker & Thompson, Chattanooga, TN, Edmund M. Kneisel (argued), Caroline W. Spangenberg (briefed), Kilpatrick & Stockton, Atlanta, GA, for Defendant-Appellee.

Before: KENNEDY, CONTIE, and MOORE, Circuit Judges.

KENNEDY, J., delivered the opinion of the court, in which MOORE, J., joined. CONTIE, J. (pp. 409-410), delivered a separate opinion concurring in part and dissenting in part.

OPINION

KENNEDY, Circuit Judge.

Plaintiff, Olin Corporation, appeals from the District Court's order granting partial summary judgment on behalf of the defendant, Yeargin Incorporated, in this action seeking indemnity and contribution for expenses and damages incurred by Olin Corporation following the exposure of Yeargin Incorporated employees to mercury, a hazardous substance. For the reasons set forth below, we AFFIRM, in part, and REVERSE, in part, the judgment of the District Court.

I.

Olin Corporation ("Olin") owns and operates a facility in Charleston, Tennessee which produces chlorine utilizing the mercury-cell electrochemical process. On July 27, 1988, Olin contracted with Yeargin Corporation ("Yeargin") to conduct certain on-site construction and maintenance services. Among the projects to be completed by Yeargin on August 22-23, 1988, was the replacement of a dilute caustic header pipe. During the replacement of the pipe on August 22, an undetermined amount of caustic soda and toxic mercury spilled onto the floor and onto the clothes and skin of the Yeargin employees when they applied an acetylene cutting torch to the header pipe. In addition, as a result of the heat of the torch and surrounding atmosphere, a mercury vapor developed which was inhaled by Yeargin employees. 1 Upon leaving the premises on August 22, the Yeargin employees who were exposed to the mercury did not clean or decontaminate their bodies, clothes, tools or equipment. The workers therefore contaminated their motor vehicles and their homes and exposed their spouses to the mercury.

As a result of their exposure to mercury, the Yeargin employees and their spouses filed several lawsuits against Olin seeking compensatory and punitive damages in the United States District Court for the Eastern District of Tennessee. The suits were consolidated and will be collectively referred to as the "Rayburn cases." The Rayburn plaintiffs alleged they became physically ill due to their exposure to mercury and suffered such ailments as severe headaches, dizziness, nausea, cramps, urinary tract problems, pain in body joints, and memory loss; they sought recovery under such theories as negligence, assault and battery, strict liability, trespass and nuisance to real property, and loss of consortium. The Rayburn plaintiffs also alleged that, once they began to show symptoms of mercury poisoning, Olin intentionally mislead the Yeargin employees into believing they suffered merely from the flu. According to the Rayburn plaintiffs, Olin further attempted to conceal its misconduct by falsely reporting to them that testing of their homes revealed they were free from mercury toxins. 2 To recover for Olin's alleged misrepresentations, the Rayburn plaintiffs asserted theories of negligent misrepresentation, fraudulent misrepresentation, intentional infliction of emotional distress, and outrageous conduct.

The District Court entered orders on August 6, 1990, and December 16, 1992, granting partial summary judgment on behalf of Olin. In the August 6 order, the court held that Olin was the statutory employer of the Yeargin construction workers and therefore the plaintiffs' tort claims against Olin were barred by the exclusive remedy provision of the Tennessee Workers' Compensation Act, Tenn.Code Ann. § 50-6-108. In the December 16 order, the court dismissed the plaintiffs' fraudulent misrepresentation claims, which were based on Olin's conduct before and during the August project, because the plaintiffs had not brought forth sufficient probative evidence to support their claims. Once the two orders were entered, three sets of claims remained: (1) claims by the Yeargin employees and their wives for trespass and nuisance to real property; (2) claims of fraudulent misrepresentation concerning Olin's conduct subsequent to the completion of the project; and (3) claims by the spouses for personal injuries they suffered as a result of their exposure to mercury in their homes. Prior to trial, Olin settled all of these claims.

In addition to the sum paid as a result of the settlement with the Rayburn plaintiffs, Olin incurred costs in relation to three other legal matters. First, Olin paid various fines, attorney's fees and expenses following the resolution of a complaint filed by the Commissioner of the Tennessee Department of Labor with the State of Tennessee Occupational Safety and Health Review Commission alleging violations of the Occupational Safety and Health Act, Tenn.Code. Ann. § 50-3-101 et seq. Second, Olin settled a claim with the United States Government in the amount of $1,000,000 following the government's institution of a suit against Olin alleging violations of the Clean Air Act, 42 U.S.C. §§ 7401--7479, and the National Emission Standards for Hazardous Air Pollutants, 40 C.F.R. Part 61, Subparts A and E. Lastly, Olin incurred additional attorney's fees, fines, civil penalties and costs relating to an administrative order entered by the Environmental Protection Agency requiring Olin to reimburse government costs and to clean-up contaminated areas as a result of its violations of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601-9615.

To recover the costs it incurred, Olin filed the instant action against Yeargin seeking indemnity under its contract with Yeargin, contribution under CERCLA, 42 U.S.C. §§ 9607(e) and 9613(f), and contribution under the Tennessee Uniform Contribution Among Tortfeasors Act, Tenn.Code Ann. §§ 29-11-101. 3 On May 28, 1993, Yeargin filed a motion for summary judgment and on March 14, 1994, Olin filed a motion seeking partial summary judgment on the ground that their contract required Yeargin to indemnify Olin for all costs it incurred in relation to the construction project so long as Yeargin was at least negligent in part and its negligence contributed to the damages caused by the mercury spill. On September 26, 1995, the District Court entered an order which granted in part and denied in part Yeargin's motion for summary judgment and denied Olin's motion for partial summary judgment. The court dismissed Olin's contractual indemnity claim seeking reimbursement for the amount paid in settlement with the Rayburn plaintiffs and for its CERCLA and Occupational Safety and Health Act costs. The court also dismissed Olin's claim for contribution under the Tennessee Uniform Contribution Among Tortfeasors Act, Tenn.Code Ann. §§ 29-11-101, and one of its claims for contribution under CERCLA; the court dismissed the claim under CERCLA seeking reimbursement for the Yeargin employees' transport of mercury to their homes. Regarding Olin's second theory for reimbursement under CERCLA, the court denied Yeargin's motion for summary judgment on Olin's claim that Yeargin was a transporter pursuant to CERCLA when its employees moved the header pipe from the cell room where it was removed to another location in Olin's plant. The court also denied Yeargin's motion for summary judgment on Olin's breach of contract claim. 4 The court's rulings thus left two claims for adjudication.

Thereafter, Olin filed a motion for interlocutory appeal and a motion to stay the proceedings. On the same date, Olin filed a motion to reconsider and a motion to certify several issues to the Tennessee Supreme Court. In the alternative, Olin sought dismissal of its remaining claims without prejudice in order to file an appeal as of right. In a detailed opinion, the District Court, on February 11, 1997, denied all of Olin's motions. In order to pursue immediate appellate review, Olin voluntarily dismissed with prejudice the claims that remained viable following the District Court's rulings. Olin is now before this Court seeking reversal of the District Court's order granting partial summary judgment to Yeargin.

II.

Our standard of review of a grant of summary judgment is de novo; we use the same test used by the district court. See Brooks v. American Broadcasting Cos., 932 F.2d 495, 500 (6th Cir.1991). We view the evidence in the light most favorable to the nonmoving party to determine whether a genuine issue of material fact exists. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Summary judgment is proper if the evidence " 'show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to [a] judgment as a matter of law.' " See Fed.R.Civ.P. 56(c); Canderm Pharmacal, Ltd. v. Elder Pharmaceuticals, Inc., 862 F.2d 597, 601 (6th Cir.1988)(quoting Fed.R.Civ.P. 56(c)).

III.
A. Contractual Indemnity
1. Indemnity for Olin's Negligence

Olin's contract with Yeargin contains an indemnification clause upon which Olin relies to recover from Yeargin the costs it incurred in connection with the suit brought by the Rayburn plaintiffs following the mercury spill. Article XXII of the contract reads as follows:

(a) Contractor agrees to protect, indemnify and hold Owner harmless from any and all loss, damage, liability, claims, demands, costs, or suits of any nature...

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