Steed v. Central of Georgia Ry. Co., 74--3157

• Citation: 529 F.2d 833
• Decision Date: 05 April 1976
• Docket Number: No. 74--3157,74--3157
• Parties: J. P. STEED, Plaintiff, v. CENTRAL OF GEORGIA RAILWAY COMPANY, Defendant-Third Party Plaintiff-Appellee, v. RIEGEL TEXTILE CORPORATION, Third Party Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 833

529 F.2d 833

J. P. STEED, Plaintiff, v. CENTRAL OF GEORGIA RAILWAY COMPANY, Defendant-Third Party Plaintiff-Appellee, v. RIEGEL TEXTILE CORPORATION, Third Party Defendant-Appellant.

No. 74--3157.

United States Court of Appeals Fifth Circuit.

April 5, 1976.

Rehearing and Rehearing En Banc

Denied June 28, 1976.

James E. Clark, Birmingham, Ala., for Riegel Textile Corp.

W. H. Sadler, Jr., Birmingham, Ala., for Central of Georgia.

Al G. Rives, Birmingham, Ala., for J. P. Steed.

Appeal from the United States District Court for the Northern District of Alabama.

Before GEWIN and AINSWORTH, Circuit Judges, and MARKEY, ^* Chief Judge.

MARKEY, Chief Judge:

In this diversity case, third party defendant Riegel Textile Company (Riegel) appeals from a directed verdict in the total amount of $469,558.75 on the motion of third party plaintiff Central of Georgia Railroad Company (Central). Judgment was entered in accordance with findings of fact and conclusions of law entered contemporaneously therewith. We affirm.

Background

This suit is based on the indemnity clause of a Side Track Agreement (agreement), dated April 24, 1948, in effect between Riegel and Central at the time of the accident. The cause arose on December 30, 1966, when J. P. Steed, a trainman employee of Central was injured while riding on the side of the lead end of a cut of cars which were being shoved along a spur track owned and maintained by Riegel at Riegel's plant in Trion, Georgia. The car derailed causing Steed to be caught between the side of the car and a loading platform which ran parallel to the track. Steed's left leg was amputated below the knee and his right leg had multiple fractures.

On March 1, 1967, Steed filed a Federal Employers' Liability Act (FELA) suit against Central in the Circuit Court of Jefferson County, Alabama. His first count charged the railroad with negligence of its officers, agents or employees while acting within the line and scope of their employment or by reason of a defect or insufficiency in its cars, engines, appliances, machinery, track, roadbed, works or other equipment. A second count charged negligence in failing to exercise reasonable care to furnish or maintain a reasonably safe place to work.

Central sent Riegel a notice of the suit and a request to defend. On December 9, 1968, anticipating its liability to Steed Central filed a third party complaint against Riegel, claiming under the indemnity clause of the agreement. The agreement provides in pertinent part as follows:

2. The tenant (Riegel) will pay for, own, maintain the entire track from the point of switch to the end of the track. . . .

4. If the tenant fails to maintain said track in safe operating condition as prescribed by the Railway, the Tenant agrees that the Railway may put it in repair at the Tenant's expense, or may discontinue operating thereover.

9. The Tenant also agrees to indemnify and hold harmless the Railway from loss, damage or injury from any act or omission of the Tenant, its employees or agents, to the person or property of the parties hereto and their employees and if any claim or liability other than from fire shall arise from the joint or concurring negligence of the parties hereto, it shall be borne by them equally.

On Riegel's petition, the entire case was removed to the federal court, which thereinafter entered an order remanding the original complaint to the state court but retaining jurisdiction over Central's third party complaint for indemnification. We affirmed, Central of Georgia Railway Co. v. Riegel Textile Corp., 426 F.2d 935 (5th Cir. 1970).

The trial of the FELA case in the state court resulted in a judgment against Central for $500,000, which was reduced by remittitur to $300,000 and accepted by Steed. On appeal, the Alabama Supreme Court affirmed, Central of Georgia v. Steed, 287 Ala. 64, 248 So.2d 110 (1971). The railroad's liability to Steed having been established, the district court granted summary judgment for Central on its third party complaint. This court reversed. Steed v. Central of Georgia Railway Co., 477 F.2d 1303 (5th Cir. 1973).

In the trial on remand, Central introduced the complete record of the state court trial, the deposition taken in this case of A. T. McLendon, its conductor; Rufus Everhart, its brakeman; James B. Long, who was Riegel's Safety Director at the time of the accident, none of whom testified at the Steed trial, and the deposition of W. A. Russell, its engineer who did testify in that trial. In addition, Central's acting trainmaster at the time of the accident, B. F. Griffin, testified in person. Riegel introduced two operating rules but offered no testimony. The excellent summary of the evidence set forth by the district court appears in the margin. ¹

Opinion

Riegel argues that the trial court's directed verdict must be reversed because it is based on the evidence on which the erroneously granted motion for summary judgment was based, supplemented only by the testimony of Griffin. Regarding that testimony, Riegel contends:

that this additional evidence from Griffin changes the circumstances already reviewed by this Court only in the sense that his ore tenus testimony, if anything, further controverts the factual issues which were withdrawn from the Jury.

We cannot agree. In the prior appeal, it was pointed out that this court, on the record then before it, could determine neither the facts considered important below nor the rationale supporting the grant of summary judgment. In the present appeal, the record includes Judge McFadden's memorandum decision in which he delineated the evidence and made findings of fact and conclusions of law. Moreover, at the trial on remand Riegel had opportunity to conduct a searching cross-examination of Griffin concerning his investigation of the accident. In the prior appeal, Riegel argued that summary judgment denied him that opportunity. For these reasons, Riegel's effort to equate this appeal with that which considered the summary judgment must fail.

Nor can we agree with Riegel that Central must show negligence on the part of Riegel constituting the proximate cause of Steed's injury. In referring to the agreement, which provides that Central be indemnified for 'loss, damage or injury from any act or omission of the Tenant,' Riegel would have us equate 'any act or omission' with common-law negligence.

The trial judge found that there was dirt and debris covering the track which Riegel was under a contractual duty to maintain, and that the presence of the dirt and debris was the proximate cause of Steed's accident. No substantial evidence was offered to contradict those findings. It was further concluded that Riegel's liability to Central, under the indemnity agreement, must be determined by the law making Central liable to Steed. In other words, if Central was found liable to Steed in the prior action based upon its nondelegable duty to provide a safe place to work, then Riegel would be liable under the indemnity agreement. The position of the trial judge on this point is correct and finds support in the case law.

In Chicago R.I. & P.R. Co. v. Dobry Flour Mills, Inc., 211 F.2d 785, 788 (10th Cir. 1954), the court commented with regard to an identical indemnity agreement:

We construe the 'acts or omissions' referred to in the indemnity clause of the contract to mean the wrongful or negligent acts by Dobry (the industry) which would create liability on the part of the Railroad. Consequently, under the provisions of the contract Dobry's liability is to be determined under the law which would make the Railroad liable to Fruit (the employee), and not upon Dobry's common law liability . . ..

Riegel refers to the third party complaint wherein Central alleges that the accident in which Steed was hurt 'occurred as a proximate result of the negligence of Riegel Textile Corporation in placing debris, or permitting debris to remain, on the track covered by said Track Agreement.' But the argument that the quoted allegation of its initial third party complaint made it encumbent upon Central to prove that 'defendant negligently failed to exercise reasonable care' is not on point. The pre-trial order herein supplemented the allegations of the initial complaint and governed the pattern of the lawsuit. Rule 16, F.R.C.P. See Case v. Abrams, 352 F.2d 193 (10th Cir. 1965).

The trial judge was also correct in concluding that Central's liability to Steed, as determined in the state court action, was based on its nondelegable duty to provide its employee with a safe place to work pursuant to the standards of the FELA. No jury issue was raised in that regard. Both counts of Steed's complaint involve the track and roadbed condition as proximate cause of the injury. Riegel could have taken over and defended Steed's charges in that action. Having chosen not to do so, it is bound by the result, absent fraud or collusion. Miller and Company of Birmingham v. Louisville and Nashville R. Co., 328 F.2d 73, 78 (5th Cir. 1964). We conclude, therefore, that the state court's...