U.S. Fidelity and Guar. Co. v. Housing Authority of the City of Poplar Bluff, Mo.

• Decision Date: 19 May 1997
• Docket Number: No. 96-1556,96-1556
• Citation: 114 F.3d 693
• Parties: UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellee, v. HOUSING AUTHORITY OF THE CITY OF POPLAR BLUFF, MISSOURI, Appellant. Joe Barnes, Third-Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 693

114 F.3d 693

UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellee, v. HOUSING AUTHORITY OF THE CITY OF POPLAR BLUFF, MISSOURI, Appellant.

Joe Barnes, Third-Party Defendant-Appellee.

No. 96-1556.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 22, 1996.

Decided May 19, 1997.

John L. Oliver, argued, Cape Girardeau, MO, for Appellant.

Joseph C. Blanton, argued, Sikeston, MO, for Appellee.

Before McMILLIAN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and BOGUE, ^* District Judge.

McMILLIAN, Circuit Judge.

United States Fidelity and Guaranty Company (USF & G) brought this indemnity action in the United States District Court ¹ for the Eastern District of Missouri against Housing Authority of the City of Poplar Bluff, Missouri (Housing Authority), to enforce rights assigned to it by the Morris and Wallace Elevator Company (Morris and Wallace). Housing Authority thereafter filed a third-party action against Joe Barnes, an employee of Morris and Wallace. Following a final judgment in favor of USF & G and Barnes, Housing Authority filed the present appeal from the district court's order granting summary judgment in favor of USF & G and Barnes, United States Fidelity & Guaranty Co. v. Housing Authority, 885 F.Supp. 194 (E.D.Mo.1995) (USF & G v. Housing Authority ), and the district court's final order denying Housing Authority's motion for reconsideration and awarding USF & G $239,849.30 plus interest. Id., No. 1:92 CV 164 (E.D.Mo. Feb. 5, 1996) (hereinafter "slip op. (Feb. 5, 1996)"). For reversal, Housing Authority argues that the district court erred in (1) holding that Housing Authority's written agreement to indemnify Morris and Wallace for certain losses and liabilities covered Morris and Wallace's liability in an underlying state court action; (2) holding that the indemnity agreement was not void as an adhesion contract; (3) ordering Housing Authority to pay interest on the money judgment pursuant to Mo.Rev.Stat. § 408.020 and accruing as of July 20, 1995, the date on which the district court entered its judgment of liability; and (4) dismissing on summary judgment Housing Authority's third-party action against Barnes. For the reasons set forth below, we modify the district court's order dated February 5, 1996, to provide post-judgment interest pursuant to 28 U.S.C. § 1961, accruing as of February 5, 1996, and we affirm the judgment as modified.

Background

The underlying facts are not in dispute. Housing Authority, at all relevant times, operated a housing complex called the Brent B. Tinnin Apartments (the complex), in Poplar Bluff, Butler County, Missouri. The complex was owned by the Butler County Council on Housing for the Elderly and Handicapped (the Butler County Council), and was developed with the assistance of the United States Department of Housing and Urban Development (HUD). As the managing agent of the complex, Housing Authority hired Morris and Wallace to install, maintain, and service two elevators at the complex. In October 1984, Housing Authority and Morris and Wallace entered into a "Full Maintenance Service Contract" (hereinafter referred to as "maintenance service contract"), which provided in pertinent part:

You [Housing Authority] shall indemnify, protect and save harmless Morris & Wallace Elevator Company from and against liabilities, losses and claims of any kind or nature imposed on, incurred by, or asserted against Morris & Wallace Elevator Company arising out of the active or passive negligence of Morris & Wallace Elevator Company in any way connected with the use or operation of the equipment ....

... You [Housing Authority] shall at all times and at your own cost, maintain comprehensive bodily injury and property damage insurance (naming Morris & Wallace Elevator Company as an additional insured), including bodily injury and property damage caused by the ownership, use or operation of the equipment described herein.

See Joint Appendix at 80 (indemnity agreement in maintenance service contract); see also USF & G v. Housing Authority, 885 F.Supp. at 195 (quoting indemnity agreement). Housing Authority never purchased or maintained any insurance naming Morris and Wallace as an insured.

In December 1986, while the maintenance service contract was still in effect, Mamie Jane Farmer accidentally fell down one of the elevator shafts at the complex and died from injuries sustained in the fall. Members of her family brought a wrongful death action in state court against Morris and Wallace and the Butler County Council. (Hereinafter, the family members who brought this state court action are referred to as "the state court plaintiffs.") USF & G, as Morris and Wallace's insurer, tendered the defense of the state court claims to Housing Authority, based upon the indemnification language in the maintenance service contract. Housing Authority refused to provide a defense for, or otherwise indemnify, Morris and Wallace. Thereafter, the state court plaintiffs settled their claims against the Butler County Council for $40,000 and settled their claims against Morris and Wallace for $150,000, which was paid by USF & G.

USF & G, as Morris and Wallace's assignee, then brought this action in federal district court, seeking to enforce the above-quoted indemnity agreement against Housing Authority. Housing Authority filed a third-party complaint against Barnes, alleging that Barnes's negligence caused the accident. (Hereinafter USF & G and Barnes are together referred to as "appellees.") Housing Authority moved for summary judgment asserting that it had no duty to indemnify Morris and Wallace. Appellees moved for partial summary judgment on the indemnity issue and for dismissal of Housing Authority's third-party action against Barnes. The district court denied Housing Authority's motion for summary judgment and granted appellees' cross-motion for summary judgment. USF & G v. Housing Authority, 885 F.Supp. at 197. Following further summary judgment proceedings on the amount of damages owed by Housing Authority to USF & G, the district court ordered Housing Authority to pay (1) reasonable attorneys' fees and costs in the amount of $239,849.30 (which included the $150,000 settlement payment by USF & G to the state court plaintiffs on behalf of Morris and Wallace) and (2) a "per diem interest penalty" calculated pursuant to Mo.Rev.Stat. § 408.020, accruing as of July 20, 1995, the date upon which the district court entered a judgment of liability. Slip op. (Feb. 5, 1996) at 3. This appeal followed.

Discussion

Indemnity agreement

Housing Authority first argues that the district court erred in holding, on summary judgment, that the indemnity agreement in the maintenance service contract, if valid, covered Morris and Wallace's liability arising out of the underlying state court action. We review a grant of summary judgment de novo. The question before the district court, and this court on appeal, is whether the record, when viewed in the light most favorable to the non-moving party, shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986); Get Away Club, Inc. v. Coleman, 969 F.2d 664, 666 (8th Cir.1992); St. Paul Fire & Marine Ins. Co. v. FDIC, 968 F.2d 695, 699 (8th Cir.1992). Where, as here, the unresolved issues are primarily legal rather than factual, summary judgment is particularly appropriate. Crain v. Board of Police Comm'rs, 920 F.2d 1402, 1405-06 (8th Cir.1990).

In support of the argument that the indemnity agreement does not cover Morris and Wallace's liability arising from the underlying state court wrongful death action, Housing Authority highlights language in the agreement which limits the indemnification to liabilities and losses "arising out of the active or passive negligence [of Morris and Wallace] ... in any way connected with the use and operation of the equipment." Housing Authority argues that the state court action was based upon a theory of product liability, not negligence. Moreover, Housing Authority argues, although claims of "negligence and carelessness" were asserted in the state court plaintiffs' second amended petition, those negligence claims were in connection with the design, manufacture, sale, or distribution of the elevator equipment, not the "use or operation" of the elevator equipment. Housing Authority separately claims that the Butler County Council settled with the state court plaintiffs on the condition that the state court plaintiffs agree to pursue only strict liability claims against Morris and Wallace. The settlement between the Butler County Council and the state court plaintiffs was consummated before the state court plaintiffs settled with Morris and Wallace. Therefore, Housing Authority argues, the state court plaintiffs could not--consistent with their contractual obligations--pursue a negligence claim against Morris and Wallace at the time they settled their claims against Morris and Wallace. Thus, Housing Authority concludes, the settlement could not have implicated the indemnity agreement in the maintenance service contract. Housing Authority also contends, among other things, that the indemnity agreement is at least ambiguous with respect to whether Morris and Wallace's settlement with the state court plaintiffs would be covered, thus precluding summary judgment.

The district court concluded that the indemnity agreement in the maintenance service contract clearly and unambiguously covered Morris and Wallace's potential liabilities and losses arising out of the underlying state court action. We agree. As the district court observed, "the indemnification was broad, but it was specific." 885 F.Supp. at 196. According to...