Whitaker v. Harvell-Kilgore Corporation

• Decision Date: 03 December 1969
• Docket Number: No. 27206.,27206.
• Citation: Whitaker v. Harvell-Kilgore Corporation, 418 F.2d 1010 (5th Cir. 1969)
• Parties: Harold Glenn WHITAKER, Plaintiff-Appellant, v. HARVELL-KILGORE CORPORATION and Day & Zimmerman, Inc., Defendants-Appellees. Lura Madden WHITAKER, Plaintiff-Appellant, v. HARVELL-KILGORE CORPORATION and Day & Zimmerman, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

418 F.2d 1010 (1969)

Harold Glenn WHITAKER, Plaintiff-Appellant, v.HARVELL-KILGORE CORPORATION and Day & Zimmerman, Inc., Defendants-Appellees.

Lura Madden WHITAKER, Plaintiff-Appellant, v.HARVELL-KILGORE CORPORATION and Day & Zimmerman, Inc., Defendants-Appellees.

No. 27206.

United States Court of Appeals Fifth Circuit.

December 3, 1969.

W. Meade Burns, Jr., Robert W. Beynart, for appellants, Smith, Cohen, Ringel, Kohler, Martin & Lowe, Atlanta, Ga., of counsel.

Thomas R. Bryan, Jr., Columbus, Ga., for White and Atkinson.

Howell Hollis, James M. Manire, Columbus, Ga., for appelleeHarvell-Kilgore Corporation(Now Kilgore Corporation); Foley, Chappell, Hollis & Schloth, Columbus, Ga., Chandler, Manire, Johnson & Chandler, Memphis, Tenn., of counsel.

W. M. Page, Max R. McGlamry, Columbus Ga., Edwin P. Rome, Philadelphia, Pa., for appelleeDay & Zimmerman Inc.; Swift, Pease, Davidson & Chapman, Columbus, Ga., Blank, Rome, Klaus & Comisky, Philadelphia, Pa., of counsel.

Before RIVES, COLEMAN and MORGAN, Circuit Judges.

LEWIS R. MORGAN, Circuit Judge:

This is an appeal by plaintiffs, Harold Glenn Whitaker and his wife, Lura Madden Whitaker, as the result of dismissal of their complaint by the United States District Court.The motion to dismiss was sponsored by defendants, Harvell-Kilgore Corporation and Day & Zimmerman, Inc. Jurisdiction in this Court is founded on diversity of citizenship.

On November 23, 1966, Harold Whitaker was an enlisted man in the United States Army undergoing basic combat training at Fort Benning, Georgia.At that time and place, Whitaker was required to throw a live hand grenade as part of this military training.The hand grenade prematurely exploded, causing serious injuries to plaintiff, including loss of vision and hearing, and loss of his right hand.Fragments caused wounds in both eyes, including a detached retina of the left eye, and punctured his right eardrum.

In his own behalf Whitaker sued the manufacturer of the grenade, Day & Zimmerman, Inc., and the manufacturer of the fuse, Harvell-Kilgore Corporation, for $750,000.00.In another action, consolidated with the principal one, appellant's spouse, Lura Madden Whitaker, sued the same defendants for loss of consortium in the amount of $100,000.00.Each action contained substantially similar counts against both defendants including negligence in manufacture and inspection, breach of implied warranty, breach of expressed warranty of suitability, and strict liability in tort.

DefendantHarvell-Kilgore Corporation filed a motion to dismiss as to each plaintiff for failure to state a claim upon which relief could be granted.The theory of the motion was (1) that under the facts the grenades were in reality furnished by the United States and that any action on account of a defect would be barred by the sovereign immunity of the United States, and (2) that no expressed or implied warranties were made by the United States.Day & Zimmerman filed motions to dismiss predicated on the belief that it functioned solely as an instrumentality of the United States, that the liability of the United States was involved, and that the United States was an indispensable party.

On February 12, 1968, appellees filed the affidavit of Mr. William Moseley, Vice-President of Day and Zimmerman, Inc., in charge of the Lone Star Division of Day & Zimmerman in its operation at Texarkana, Texas.Moseley deposed that Day & Zimmerman operates the government-owned Lone Star Army Ammunition Plant.All component parts and explosives were the property of the Government.Only the fiber glass sleeve was procured by Day & Zimmerman, and title to it passed to the Government on delivery.With respect to component parts the company was expected to make only a visual inspection and was under no duty to make x-ray inspection of the components.Assembly of the grenades followed specifications prescribed by the Government under the continuous surveillance of government inspectors.Finally Moseley concluded should a judgment be obtained against Day & Zimmerman, the burden of satisfying such judgment will rest with the United States Government.The contract imposed upon the company the duty to procure such insurance as the Contracting Officer might require but that the company should be reimbursed for the cost.

Defendant Harvell-Kilgore also filed affidavits in support of its motion.James P. Wray, President of Harvell-Kilgore, stated that the inspection procedures followed by the manufacturer's personnel and by government inspectors were fully approved and regularly monitored by the Government.Special reliance was placed upon an x-ray inspection performed by a machine furnished by the United States.If the fuse body did not interrupt the x-ray beam to the required extent, the fuse was rejected.Robert S. Long, Vice-President of Harvell-Kilgore, corroborated President Wray's version of inspection procedures.

Pursuant to Rule 12(b),Federal Rules of Civil Procedure, the motions to dismiss were treated as motions for summary judgment under Rule 56,Federal Rules of Civil Procedure, since matters outside the pleadings were presented to and accepted by the Court.After briefs by the parties, the District Court entered an order dismissing the complaint on November 13, 1968.

The initial argument that defendants propound to insulate themselves from liability is grounded in the theory of sovereign immunity.Defendants postulate that they are alter egos of the United States and that their actions are the actions of the United States duly protected from liability by the doctrine of sovereign immunity.Although hoary, sovereign immunity still retains a place in our legal scheme; however, it must be maintained in its proper place.¹

Day & Zimmerman, Inc., present circumstances surrounding the manufacture of the grenades as well as provisions of the contract to buttress their position.Under a specified contract with the United States, appellee operated the Lone Star Army Ammunition Plant at Texarkana, Texas, a facility wholly owned by the United States, including all land, buildings, machinery and equipment.All component parts assembled to form the finished grenade were property of the Government; and as to these government furnished components, Day & Zimmerman, Inc., was required to make only a visual inspection.Assembly of the grenades rigidly followed government specifications, under active surveillance of government inspectors; and the finished grenades were packed and stored on the plant premises for disposition by the Army Officer in command of the plant area.It is contended that if any plaintiff in these cases should obtain judgment against Day & Zimmerman, Inc., the burden of satisfying such judgment would ultimately fall upon the United States, such being the design of Article VI-A² of the operating contract (in brief, the contract provided that the Government shall indemnify and hold the Contractor harmless against loss — including, without limitation, injuries to and death of persons.)

However, a study of these points fails to convince the Court that Day & Zimmerman, Inc., is within the pale of sovereign immunity.The teachings of Powell v. United States Cartridge Co., 339 U.S. 497, 70 S.Ct. 755, 94 L.Ed. 1017(1950), are quite influential.The Powell case concerned the identical plant that is presently in litigation, and many of the circumstances are similar.³In that case the Lone Star Ordnance Plant at Texarkana, Texas, was owned by the Government and operated under a cost-plus-a-fixed-fee contract.Most of the materials were furnished by the Government, and the finished products were shipped in accordance with government instructions on government bills of lading to military destinations, usually outside of Texas.The title to substantially all of the raw material, work in progress and finished products was in the Government.Additionally, the contract in Powell contained a provision as does the contract in the case at bar that the Contractor is an independent Contractor and in no wise an agent of the Government.⁴The Supreme Court concluded in its opinion:

"In these great projects built for and owned by the Government, it was almost inevitable that the new equipment and materials would be supplied largely by the Government and that the products would be owned and used by the Government.It was essential that the Government supervise closely the expenditures made and the specifications and standards established by it.These incidents of the program did not, however, prevent the placing of managerial responsibility upon independent contractors."SeeUnited States v. United States Cartridge Company, 198 F.2d 456(8 Cir.1952).

Furthermore, Day & Zimmerman, Inc., relies upon its indemnification agreement with the United States.The company argues that, since under the terms of this agreement any judgment must be paid by the United States, this suit is in reality a suit against the United States, and is barred by sovereign immunity.However, the contract contained another provision which provided that Day & Zimmerman, Inc., had an obligation to carry liability insurance.This provision, coupled with the reasoning that if sovereign immunity was intended to extend to this company there would be no necessity of an indemnity agreement, would appear to exclude Day & Zimmerman from the protection of this doctrine.The weight of the circumstances and the law does not support the ruling of the District Court and we are compelled to deny Day & Zimmerman sovereign immunity.

Harvell-Kilgore Corporation's attempt to invoke the principle of sovereign immunity must also be refused.Harvell-Kilgore stands in no better position than Day & Zimmerman, if not worse.Kilgore, under a contract with the Government, was the manufacturer of the fuses that were used in the grenades.Upon completion of the production, the fuse was examined by an x-ray machine prescribed and...