SOUTHERN RAILWAY COMPANY v. Brunswick Pulp & Paper Co.

• Decision Date: 22 May 1974
• Docket Number: Civ. A. No. 807.
• Citation: 376 F. Supp. 96
• Parties: SOUTHERN RAILWAY COMPANY, Plaintiff, v. BRUNSWICK PULP & PAPER COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Georgia

376 F. Supp. 96

SOUTHERN RAILWAY COMPANY, Plaintiff, v. BRUNSWICK PULP & PAPER COMPANY, Defendant.

Civ. A. No. 807.

United States District Court, S. D. Georgia, Dublin Division.

May 22, 1974.

COPYRIGHT MATERIAL OMITTED

Will Ed Smith, Smith & Harrington, Eastman, Ga., for plaintiff.

Wallace Miller, Jr., Jones, Cork, Miller & Benton, Macon, Ga., for defendant.

ORDER ON SECOND MOTION OF BRUNSWICK PULP & PAPER COMPANY FOR SUMMARY JUDGMENT UPON CONTRACTUAL INDEMNITY COUNT

LAWRENCE, Chief Judge.

I

This is an action by Southern Railway Company to recover from Brunswick Pulp & Paper Company all or part of a settlement made by the Railroad with an injured employee. It amounted to $250,000 plus lifetime responsibility for medical and hospital care.¹ The settlement was formalized by a consent judgment entered in 1972 against Southern Railway in an FELA suit brought in the Superior Court of Bibb County, Georgia. The injury occurred in May, 1971.

The present action is brought in three counts, implied indemnity, express indemnity and contribution. Count I proceeded on the theory of implied indemnity growing out of a negligent tort in which the fault of Brunswick Pulp is claimed to have been active as contrasted with the merely passive negligence of Southern. The second count is based on express or contractual indemnity. Count III was predicated on contribution.

In an Order dated January 4, 1974, I granted defendants' motion for summary judgment as respects Counts I and III. Since there was a voluntary settlement and not an involuntary judgment, under Georgia law existing at the time of the injury, no action could be maintained for implied indemnity or contribution without "the force of a legal judgment".²

II

Count II is based on contractual indemnity. In it Southern seeks recovery under the clause of a sidetrack agreement in which the Railroad agreed to construct and operate a spur track and facilities for receipt of freight from Brunswick Pulp. The agreement provides: "Industry will indemnify and save harmless Railroad, and any associated, controlled, or affiliated association, from and against all damage resulting from negligence of Industry or the servants or employees of Industry, in and about said industrial track and the right-of-way therefor".

In my Order of January 4th I ruled that the quoted language covers the loss resulting from an injury to a freight conductor of Southern occurring on the main line (many miles from the loading site) as the alleged result of negligence by Brunswick Pulp in loading the pulp car at the spur track.³ This Court further held that, under Georgia law, the right to indemnity exists where there is a reasonable, good faith settlement between the indemnitee and an injured employee. See Robert & Company Associates et al. v. Pinkerton & Laws Company et al., 120 Ga.App. 29, 33f, 169 S.E.2d 360; Union Camp Corporation v. Louisville & Nashville Railroad Company et al., 130 Ga.App. 113, 202 S. E.2d 508.

III

Subsequently, Brunswick Pulp moved that the judgment of this Court as to Count II be amended pursuant to Rule 58. Defendant complained that the effect of the ruling "is to permit indemnification by Brunswick Pulp & Paper for the negligence of the Railroad, which is contrary to the established law of Georgia".

That question had not been previously raised. The Court suggested to defendant's counsel that the better way to raise it would be to amend the answer to Count II by specifically pleading the defense and then moving for summary judgment. This was done and since then oral argument has been had and briefs filed dealing with the issue of whether Southern is entitled to be indemnified for its own negligence.

I will first consider the existence and extent of the Railroad's negligence as to which the indemnitor (Brunswick Pulp) contends that Southern cannot absolve or indemnify itself by contract.

Clearly, the Railroad thought that it was liable to the employee, Robert L. Elder, under the Federal Employers' Liability Act. While Southern contended that it was only passively at fault and that the active cause of the injury was the negligence of Brunswick Pulp in loading the rack car, it acknowledged by its conduct that it was concurrently negligent in respect to causing the injury. It agreed to a settlement and consummated same by means of a consent judgment in the Superior Court of Bibb County. The complaint filed by the conductor was prepared in collaboration with the Railroad. It contained allegations that the proximate cause of the injury was the negligence of Southern and that the accident was due to the failure to furnish its employee with a reasonably safe place to work.

In the brief of plaintiff presented in this case at the time defendant's original motion for summary judgment was before me, the consent judgment was described by counsel as a "solemn judgment of Bibb Superior Court". Southern contended that the judgment was "voluntary" only to the extent that "a person shells out his money to one who is pointing a pistol as his head . . .."

IV

Under the indemnity clause, Southern Railway is entitled to be indemnified for "all damage" resulting from the negligence of Brunswick Pulp. But what if the negligence of the indemnitee itself combined with that of the indemnitor to cause the injury that resulted in the claim by Mr. Elder and the consequent settlement? Under a 1970 act of the General Assembly of Georgia, an indemnity contract connected with the construction, alteration, repair, maintenance, demolition or moving of a "building structure" is void as against public policy where it purports to indemnify or hold harmless the promisee against liability for damage or injury caused by or resulting from "the sole negligence" of the indemnitee. Ga. Laws 1970, p. 441; Ga.Code Ann. § 20-504. The instant case is not affected by the 1970 legislation since the contract here does not provide for indemnity if the damage or injury resulted solely from the negligence of Southern Railway.⁴

"A contract of indemnity will not be construed to indemnify the indemnitee against losses resulting from his own negligent acts unless such intention is expressed in clear and unequivocal terms, or unless no other meaning can be ascribed to it." See 41 Am.Jur. 2d Indemnity § 15. The Courts of Georgia adhere to the general rule. Where an agreement does not show plainly and specifically that it was intended to indemnify the indemnitee for his own negligence, he cannot recover thereunder if his own negligence caused the loss. Massee & Felton Lumber Company v. Georgia & Florida Railway, 143 Ga. 173, 84 S.E. 468; Batson-Cook Company v. Georgia Marble Setting Company, 112 Ga.App. 226, 144 S.E.2d 547. One who seeks to absolve himself from the consequences of his own negligence may contract to do so in unequivocal terms. Such a result will not be read into the contract by implication. Bohannon v. Southern Railway Co., 97 Ga.App. 849, 855, 104 S.E.2d 603; Searboro Enterprises, Inc. et al. v. Hirsh, 119 Ga.App. 866, 870, 169 S.E.2d 182; Peacock Construction Company v. Montgomery Elevator Company et al., 121 Ga.App. 711, 175 S.E.2d 116; Benson Paint Company v. Williams Construction Company, 128 Ga.App. 47, 49, 195 S.E.2d 671.

Only one Georgia case has come to my attention where it is held that an indemnity agreement containing no explicit inclusion of indemnitee's negligence demonstrated a clear intent to require indemnification for loss caused by the indemnitee's own negligence. In Robert & Company Associates et al. v. Pinkerton & Laws Company et al., supra, 120 Ga.App. 29, 169 S.E.2d 360, the Court of Appeals said that the "all-inclusive" language admitted no doubt that Robert & Company was to be indemnified for its own negligence.⁵ The indemnity agreement between Southern and Brunswick Pulp bears much more resemblance to those construed in Massee and in Batson-Cook, supra. At any rate, under the authorities cited, it is settled that Southern's own negligence cannot constitute the basis for indemnification if it constituted the proximate cause of the injury.

V

But what if Southern Railway and Brunswick Pulp were both negligent?⁶ Massee and Batson-Cook are of little help since the pleadings and the record in those cases disclose that the indemnitee was solely negligent. There may be an issue of fact in the present case as to whether Southern's negligence was the sole cause of the injury or whether there was concurrent fault by Brunswick Pulp. It is true that in Elder's suit in the Bibb Superior Court, formalizing the settlement by consent judgment, the complaint alleged that the Railroad's negligence was the proximate cause of Elder's injury. Such a judgment did not conclusively adjudicate that issue as far as Brunswick Pulp was concerned.⁷

I conclude that the grant of summary judgment to defendant on the theory of Southern's admitted negligence is precluded by the decisions in Benson Paint Company v. Williams Construction Company, supra, 128 Ga.App. 47, 195 S.E.2d 671, and Peacock Construction Company v. Montgomery Elevator Company, supra, 121 Ga.App. 711, 175 S.E.2d 116. In Benson the plaintiff, an employee of a subcontractor, was injured while working at a construction project. He sued the general contractor (Williams) for negligence in breaching the duty to keep the premises clean. Defendant impleaded the subcontractor under a contract in which the latter agreed to indemnify the general contractor from liability or claims arising out of negligence by the subcontractor in the performance of the work. The Court of Appeals held that the agreement clearly did not indemnify the general contractor for his own acts of negligence. The Court found that there was evidence that the negligence of the indemnitor and indemnitee "combined" to cause the injury. "In such a case," said the Court of Appeals, "the defendant would be entitled to indemnity from the third-party defendant under the express terms of...