Watson v. Union Camp Corp., CV493-124.

Decision Date22 August 1994
Docket NumberNo. CV493-124.,CV493-124.
Citation861 F. Supp. 1086
PartiesCraven WATSON, Plaintiff, v. UNION CAMP CORPORATION, Defendant/Third Party Plaintiff, v. PIPING SYSTEMS, INC. and Richard Barrow, Third Party Defendants.
CourtU.S. District Court — Southern District of Georgia

Noble L. Boykin, Jr., Savannah, GA, for plaintiff.

Francis S. Exley, Savannah, GA, for Union Camp.

George L. Lewis, Savannah, GA, for Piping Systems and Barrow.

ORDER AND MEMORANDUM

NANGLE, District Judge.

Before the Court are several motions for summary judgment relating to the third-party action between defendant/third-party plaintiff Union Camp Corporation ("Union Camp") and third-party defendants Piping Systems, Inc. ("PSI") and Richard Barrow: (1) Union Camp's motion for partial summary judgment on the issue of indemnity; (2) PSI and Barrow's cross-motion for partial summary judgment on the issue of indemnity; and (3) PSI and Barrow's motion for summary judgment on the issue of release. Union Camp seeks a holding from the Court that PSI and Barrow must indemnify Union Camp from liability in the instant action pursuant to a construction contract between Union Camp and PSI and a release agreement between Union Camp, PSI, and Richard Barrow. PSI and Barrow request a holding that a separate release agreement relieves them from the duty to indemnify Union Camp, or, alternatively, that the indemnification provisions in these documents are invalid. Because the Court finds that the separate release agreement relieves PSI and Barrow from any indemnification obligations to Union Camp, it will grant summary judgment in favor of the third party defendants.1

FACTUAL BACKGROUND

In 1993, plaintiff Craven Watson, an employee of PSI, filed an action to recover for injuries allegedly sustained in an explosion that occurred on May 10, 1991 at the Union Camp plant in Savannah, Georgia.2 At the time of the accident, Watson was working on the Union Camp premises under an agreement labelled "Construction Contract" between Union Camp and PSI (the "contract") as part of an odor abatement project at the plant. The contract required PSI to install a "vent collection system" at the plant, involving, among other things, demolishing an existing storage tank and piping and installing prefabricated tanks and piping. (Contract Ex. A at 1.) Union Camp contends that the explosion involving Watson resulted from the failure of PSI employees or subcontractors to comply with Union Camp rules and practices, in breach of a provision in the contract requiring PSI to "cause its employees, agents and subcontractors to comply with Union Camp's plant rules and practices while such persons are upon any premises of Union Camp." (Contract at 5 ¶ 7(d)(3).)

Union Camp asserts that PSI should indemnify it for any liability incurred in this action, along with costs and attorney fees, pursuant to an indemnification provision of the contract. That provision reads, in full:

11. Indemnification:
Contractor at all times will indemnify, release, protect, defend and hold Union Camp harmless from and against any and all loss, liability, expenses, claims, or demands arising from personal injury (including death at any time resulting therefrom), property damage, or damage of whatever nature to any person, including Contractor or Union Camp, occurring as a direct or indirect result of, or in any manner connected with the performance of this Contract, whether such injury or damage shall be caused by the acts, omissions or negligence of Contractor, Contractor's employees, Contractor's subcontractors, or employees of any of Contractor's subcontractors hereunder and Contractor shall at its expense defend any and all actions based thereon and shall pay all charges of attorneys and all costs and other expenses arising therefrom.

(Contract at 7 ¶ 11.)

Union Camp further seeks indemnification from both PSI and Richard Barrow under a release agreement dated March 27, 1992 (the "PSI release"). In this agreement, PSI and Barrow discharge Union Camp from all claims arising out of the construction contract, waive any subrogation rights against Union Camp, and agree "to protect, defend and indemnify and hold Union Camp Corporation harmless from and against any claims" connected with the construction contract. (PSI Release at 1.)

PSI and Barrow respond that the indemnification provisions of the construction contract and the PSI release are invalid under Georgia law. They further respond that a second release agreement, signed by Union Camp and dated March 27, 1992 (the "Union Camp release"), prevents Union Camp from pursuing any claims arising out of the May 10, 1991, accident at the Union Camp plant. The Union Camp release discharges PSI and Barrow from "any and all claims ... from any act or occurrence up to the present time, and particularly on account of all property damage, loss suffered, or damages of any kind sustained as a result of an accident that occurred on or about the 10th day of May, 1991." (Union Camp Release at 1.) PSI and Barrow request that the Court grant summary judgment in their favor on the basis of the Union Camp release.

DISCUSSION
I. SUMMARY JUDGMENT STANDARD

A court may grant a motion for summary judgment only when the pleadings, depositions, and affidavits submitted by the parties indicate no genuine issue of material fact and show that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The court must view the evidence and any inferences that may be drawn from it in the light most favorable to the nonmovant. Mercantile Bank & Trust Co. v. Fidelity & Deposit Co., 750 F.2d 838, 841 (11th Cir. 1985). If the party seeking summary judgment identifies grounds demonstrating the absence of a genuine issue of material fact, the nonmovant must go beyond the pleadings and present affirmative evidence showing that a genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986); Thompson v. Metropolitan MultiList, Inc., 934 F.2d 1566, 1583 n. 16 (11th Cir.1991), cert. denied sub nom. DeKalb Bd. of Realtors, Inc. v. Thompson, ___ U.S. ___, 113 S.Ct. 295, 121 L.Ed.2d 219 (1992).

II. THE UNION CAMP RELEASE IS VALID AND DISCHARGES THE INDEMNIFICATION OBLIGATIONS OF PSI AND BARROW

On March 27, 1992, Union Camp signed a general release that discharged PSI from liability for "any and all claims ... arising from any act or occurrence up to the present time, and particularly on account of all property damage, loss suffered, or damages of any kind sustained as a result of the accident." (Union Camp Release at 1.) PSI and Barrow contend that, as a matter of law, this release relieves them from any liability arising from the accident involving Craven Watson. The Court agrees.

A. General rules of contract interpretation in Georgia.

General rules of construction governing ordinary written contracts also govern releases. U.S. Anchor Mfg. v. Rule Indus., 264 Ga. 295, 443 S.E.2d 833, 835 (1994); Thomaston v. Fort Wayne Pools, 181 Ga. App. 541, 352 S.E.2d 794, 795 (1987). In Georgia, the interpretation of a contract is ordinarily a question of law. O.C.G.A. § 13-2-1; Sakas v. Jessee, 202 Ga.App. 838, 415 S.E.2d 670, 672 (1992). When interpreting a contract, a court must determine: (1) whether the contract is ambiguous; and (2) whether applicable rules of construction remove the ambiguity. Smith v. Seaboard Coast Line R.R. Co., 639 F.2d 1235, 1239 (5th Cir. Unit B Mar. 1981) (per curiam)3; Travelers Ins. Co. v. Blakey, 255 Ga. 699, 342 S.E.2d 308, 309 (1986) (per curiam); Tidwell v. Carroll Builders, 251 Ga. 415, 306 S.E.2d 279, 281 (1983). "Construction of written contracts, even if they are ambiguous, is a matter for the court and no jury question arises unless after application of applicable rules of construction the ambiguity remains." Chalkley v. Ward, 119 Ga.App. 227, 166 S.E.2d 748, 754 (1969); see also, e.g., Smith v. Seaboard Coast Line, 639 F.2d at 1239; Blakey, 342 S.E.2d at 309; Hardin v. Great N. Nekoosa Corp., 237 Ga. 594, 229 S.E.2d 371, 373 (1976); Archer v. Carson, 213 Ga.App. 161, 444 S.E.2d 82, 84 (1994); Andrews v. Skinner, 158 Ga.App. 229, 279 S.E.2d 523, 525 (1981).

In Georgia, "the cardinal rule of contract construction is to ascertain the intention of the parties." O.C.G.A. § 13-2-3; Head v. Hook, 248 Ga. 818, 285 S.E.2d 718, 719 (1982). The contract itself provides the only evidence of the parties' intent, Paige v. Jurgensen, 204 Ga.App. 524, 419 S.E.2d 722, 723 (1992), but a court may determine whether a contract is ambiguous as to intent. Archer, 444 S.E.2d at 84; Kusuma v. Metametrix, Inc., 191 Ga.App. 255, 381 S.E.2d 322, 323 (1989). A court may not, however, impose upon unambiguous language a different meaning to comport with the drafter's claimed intent, or use extrinsic evidence to create an ambiguity in an otherwise unambiguous contract. O.C.G.A. § 24-6-1; Stewart v. KHD Deutz of Amer., Corp., 980 F.2d 698, 702 (11th Cir.1993); Paige, 419 S.E.2d at 723; Emerson v. Cousins Mtg. & Equity Invs., 145 Ga.App. 883, 244 S.E.2d 890, 894 (1978). "No construction of the contract is required or even permissible when the language employed by the parties in the contract is plain, unambiguous and capable of only one reasonable interpretation." Sakas, 415 S.E.2d at 673 (emphasis added); see also Reuss v. Time Ins. Co., 177 Ga.App. 672, 340 S.E.2d 625, 626 (1986).

B. The Union Camp release and the PSI release, read together, are ambiguous as to the scope of the third-party defendants' obligations.

The Union Camp release, read alone, appears to relieve PSI and Barrow from any liability connected with the accident at issue in this action, including liability for Watson's claim, which Watson filed after the parties signed the release. Under Georgia law, a general release will discharge a...

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