Toledo v. Van Waters & Rogers, Inc.

Decision Date27 April 2000
Docket NumberNo. 98-066L.,98-066L.
Citation92 F.Supp.2d 44
CourtU.S. District Court — District of Rhode Island
PartiesJohn TOLEDO, Plaintiff, v. VAN WATERS & ROGERS, INC., CRST Logistics, Inc., D & S Express, Inc., Frey Industries, Inc., Investors Insurance Company, and Investors Insurance Holding Corporation, Defendants.

Thomas A. Tarro, III, Tarro Law Offices, Warwick, RI, for plaintiff.

Deming E. Sherman, Stephen J. MacGillivray, Edwards & Angell, Providence, RI, Thomas C. Angelone, Hodosh, Spinella, Angelone, Providence, RI, Paul V. Curcio, Mark O. Denehy, Adler Pollock & Sheehan, Providence, RI, David H. Stillman, Law Office of Richard P. Barry, Braintiree, MA, Robert Allen Mitson, Jarret & Mitson, Inc., Woonsocket, RI, for defendants.

OPINION AND ORDER

Lagueux, District Judge.

This litigation largely concerns the question of whether and to what extent liability can be delegated through the operation of contract. In this dispute, as is common in an efficient marketplace, employers contract with outside firms to perform specialized tasks in order to lower costs. When, as in this case, injuries result after the delegation of duties, it must be determined whether liability runs back up the chain of assignment.

Plaintiff, John Toledo, alleges that defendant Van Waters & Rogers, Inc. ("Van Waters"), and its independent contractors and agents, defendants CRST Logistics, Inc. ("CRST"), Frey Industries ("Frey") and D & S Express, Inc. ("D & S"), are liable for personal injuries sustained by him as a result of a chemical leakage caused by the negligence of one or all of Van Waters' delegatees. Plaintiff has also sued the general liability insurer of Frey, who is now under bankruptcy protection, Investors Insurance Company and Investors Insurance Holding Company (collectively, "Investors Insurance") under a Rhode Island law that permits suits against insurers of entities that have filed for bankruptcy protection. Originally plaintiff only sued Van Waters. Shortly thereafter Van Waters filed a third-party complaint against Frey, Investors Insurance, CRST and D & S for indemnification or contribution if made liable to plaintiff. Plaintiff took the hint and subsequently filed a Second Amended Complaint wherein he named the above mentioned parties as direct defendants in this action. So the third party claims of Van Waters are now cross-claims. Van Waters, Investors Insurance, CRST and D & S responded to plaintiff's claims with a raft of defenses and each now moves separately for summary judgment on all claims. For the reasons stated below, the motions of Van Waters and D & S for summary judgment are denied, and the motions of CRST and Investors Insurance for summary judgment are granted.

I. Background

On June 25, 1996, plaintiff was employed as a truck-driver for C & E Transportation ("C & E") of Pawtucket, Rhode Island.1 On this date, he was transporting chemical barrels containing nitric and sulfuric acid from Rhode Island to defendant Van Waters at its location in Salem, Massachusetts. When plaintiff arrived at his destination, he opened the rear doors of the trailer and was overcome by toxic fumes. It was later discovered that four of the barrels within the trailer had been improperly sealed, packaged and/or transported, thereby causing a chemical leak in the four barrels containing nitric acid. As a result of inhaling the toxic fumes, plaintiff alleges he sustained permanent personal injury.

By following the travel of these chemical barrels, it is clear that they were handled by a number of entities along the way. The acid in question was bought in bulk by the Woodbridge, New Jersey branch of Van Waters. Pursuant to a longstanding contractual agreement between Van Waters and Frey, the latter would package and seal the acids. The chemicals in question were delivered to Frey's warehouse in Newark, New Jersey in bulk in a tanker-truck from the manufacturer. Frey then packaged the chemicals and sealed them in smaller drums for transportation. Frey has since filed for bankruptcy protection. Investors Insurance is Frey's general liability insurance carrier.

Van Waters contracted with CRST, a licensed freight broker, for the transportation of the chemicals from New Jersey to the Salem, Massachusetts branch of Van Waters. CRST then contracted with D & S for the transportation of the chemicals from New Jersey to Massachusetts. The chemical barrels in question were filled, sealed, and loaded onto D & S trailer number 251 by employees of Frey. The load of chemicals was then transported from Frey's warehouse to Greenbrook, New Jersey, by a driver for D & S.

Since D & S did not have a regular route to Massachusetts, it contracted with C & E to transport the packaged chemicals. An employee of C & E moved the drums of chemicals from the D & S trailer onto C & E trailer number 201, and drove them to a warehouse in Pawtucket, Rhode Island. There is no evidence as to the condition of the chemicals at issue when they arrived in Pawtucket.

It was at this time that plaintiff, a C & E driver, finally came into contact with the chemicals. On June 25, 1996, plaintiff picked up trailer 201 without looking therein and drove the chemical drums at issue to the Van Waters warehouse in Salem, Massachusetts. Upon arrival at the Salem warehouse, plaintiff alleges that he came into contact with the fumes from the leakage of four barrels of nitric acid upon opening the doors to the trailer. Plaintiff alleges that the chemical spill was caused by improper gaskets having been placed onto the barrel caps, improper loading within the trailer and a failure to inspect or re-package the load during transportation.

In his Second Amended Complaint, plaintiff alleges that he has sustained physical injuries as a result of having come in contact with the chemical fumes. Specifically, in Count I plaintiff alleges that the packaging, sealing and transportation of nitric and sulfuric acid is a hazardous activity, such that defendants, their agents and/or employees were under a duty to use reasonable care in carrying out these activities. See Second Amended Complaint, § 15. Plaintiff further contends that defendants, their agents and/or servants negligently breached their respective duties in carrying out these activities. Id. at § 17. In addition, in Count II plaintiff posits that in the absence of direct evidence of defendants' breach of duty, he will rely on the doctrine of res ipsa loquitur to circumstantially prove that the chemical leak of nitric acid was the result of defendants' negligence in carrying out the aforementioned activities. Id. at §§ 20-24.

As stated earlier, defendant Van Waters has filed cross-claims against Frey, Investors Insurance, CRST and D & S seeking indemnification or contribution if it is made liable to plaintiff. Finally, CRST filed a cross-claim against D & S for refusing to honor an indemnification provision in their contract.

Van Waters, Investors Insurance, CRST and D & S have all separately moved for summary judgment on all claims and cross-claims. At the hearing on September 10, 1999, this writer invited plaintiff and Van Waters to further brief several issues pertinent to the summary judgment motion filed by Van Waters. After consideration of all the briefs and after conducting further research on all the issues, this Court will now address each motion for summary judgment in turn.

II. Standard of Review

Rule 56(c) of the Federal Rules of Civil Procedure sets forth the standard for ruling on a motion for summary judgment:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of any material fact and that the moving party is entitled to a judgment as a matter of law.

Therefore, the critical inquiry is whether a genuine issue of material fact exists. "Material facts are those `that might affect the outcome of the suit under the governing law.'" Morrissey v. Boston Five Cents Savings Bank, 54 F.3d 27, 31 (1st Cir.1995)(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202(1986)). "A dispute as to a material fact is genuine `if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Id.

On a motion for summary judgment, the Court must view all evidence and related inferences in the light most favorable to the nonmoving party. See Springfield Terminal Ry. Co. v. Canadian Pac. Ltd., 133 F.3d 103, 106 (1st Cir.1997). "[W]hen the facts support plausible but conflicting inferences on a pivotal issue in the case, the judge may not choose between those inferences at the summary judgment stage." Coyne v. Taber Partners I, 53 F.3d 454, 460 (1st Cir.1995). Similarly, "[s]ummary judgment is not appropriate merely because the facts offered by the moving party seem more plausible, or because the opponent is unlikely to prevail at trial." Gannon v. Narragansett Elec. Co., 777 F.Supp. 167, 169 (D.R.I.1991). Summary judgment is only available when there is no dispute as to any material fact and only questions of law remain. See Blackie v. Maine, 75 F.3d 716, 721 (1st Cir.1996). Additionally, the moving party bears the burden of showing that no evidence supports the nonmoving party's position. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

III. Discussion
A. Jurisdiction and Choice of Law Rules in Tort Cases

This Court has subject matter jurisdiction over this lawsuit based on diversity of citizenship of the parties. See 28 U.S.C. § 1332(a)(1). When the basis of a federal court's jurisdiction is diversity of citizenship, the court must apply the substantive law of the state where it sits, including that state's choice of law rules. See Erie R. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Spurlin v. Merchants Ins. Co., 57 F.3d 9,...

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