Wise v. E.I. DuPont de Nemours and Co.
| Decision Date | 18 July 1995 |
| Docket Number | No. 94-60490,94-60490 |
| Citation | 58 F.3d 193 |
| Parties | Gene A. WISE, et al, Plaintiffs, v. E.I. DuPONT DE NEMOURS AND CO., Defendant, E.I. DuPONT DE NEMOURS AND CO., Defendant-Third-Party Plaintiff-Appellant, v. BROWN & ROOT U.S.A., INC., Third-Party Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
T. Patrick Baynham, John Calvin Box, Abbott & Meeks, New Orleans, LA, William Lee Guice, III, Rushing & Guice, Biloxi, MS, for appellant.
James H. Colmer, Jr., Stephen W. Burrow, James H. Heidelberg, Colingo, Williams, Heidelberg, Steinberger & McElhaney, Pascagoula, MS, for appellee.
Appeal from the United States District Court for the Southern District of Mississippi.
Before REYNALDO G. GARZA, HIGGINBOTHAM and PARKER, Circuit Judges.
This appeal is before us on summary judgment. The sole issue on appeal involves the interpretation of an indemnity clause in a contract between E.I. DuPont de Nemours & Company and Brown & Root U.S.A., Inc. For the reasons discussed below we affirm the district court's judgment.
On May 26, 1988 Brown & Root U.S.A., Inc. (Brown & Root) entered into a contract with E.I. DuPont de Nemours & Company (DuPont) to provide "ON-SITE CONTRACTING SERVICES" at DuPont's De Lisle, Mississippi plant. Section 16 of the General Conditions of the contract provides that Brown & Root shall indemnify DuPont for various expenses under certain conditions. Section 16 provides in relevant part the following:
16. INDEMNIFICATION.--Contractor shall indemnify DuPont for all loss and expense incurred by DuPont resulting from any act or omission, negligent or otherwise, by DuPont or Contractor or Contractor's agents, subcontractor, or assigns in performance under the Agreement. This indemnity shall not apply where the sole cause of the loss or expense is the willful misconduct or negligence of DuPont.
The loss or expense covered by this indemnity includes settlements, judgments, court costs, attorneys' fees and other litigation expenses incurred by DuPont arising out of (1) injury or death of any person, including employees of Contractor or DuPont, or (2) loss of or damage to property, including property of Contractor or DuPont, or (3) damage to the environment.
On March 30, 1989, Brown & Root hired Gene A. Wise (Wise) to work in the packing area of the De Lisle facility. On June 23, 1989, Wise was injured while operating an industrial manipulator arm at the facility. Wise filed suit against several defendants, including DuPont, and filed a workers' compensation claim against Brown & Root. Wise claimed, inter alia, that DuPont failed to exercise reasonable care in selecting, installing and providing instruction as to the use of the industrial manipulator arm.
DuPont brought a third-party claim against Brown & Root seeking indemnification under the contract for the costs of defending against the claim. DuPont moved for summary judgment on Wise's claim based on his status as a "borrowed servant," claiming that Wise was barred from suing DuPont under Miss.Code Ann. Sec. 71-3-9, Mississippi's worker's compensation law. Brown & Root joined in this motion and filed two other motions for summary judgment. In the first motion, Brown & Root argued that the indemnity clause did not apply under these circumstances. In the second motion, Brown & Root argued that if the indemnity clause did apply, it was void and unenforceable under Miss.Code Ann. Sec. 31-5-41. The district court granted DuPont's motion for summary judgment on Wise's claim. Subsequently, the district court granted Brown & Root's motion for summary judgment, holding that the contract did not require Brown & Root to indemnify DuPont. With one exception, 1 the other defendants settled the underlying claim with the plaintiff, and on July 18, 1994 the district court entered final judgment dismissing the case. This appeal ensued.
This Court reviews a grant of summary judgment de novo by evaluating the district court's decision using the same standards that guided the district court. 2 We review the evidence and inferences in the light most favorable to the non-movant. 3 "Summary judgment will not lie if the dispute about a material fact is 'genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." 4
The party moving for summary judgment bears the initial burden of showing the absence of a genuine issue of material fact. 5 Once the burden of the moving party is discharged, the burden shifts to the nonmoving party to show, by either referring to evidentiary material in the record or by submitting additional evidentiary documents, that genuine issues of material fact remain to be resolved. 6 We will affirm the grant of summary judgment only if there exists no genuine issue of material fact and the movant was entitled to judgment as a matter of law. 7
The district court granted summary judgment in favor of Brown & Root; the court's reasoning is provided below.
The Court finds the provision to be clear and unambiguous. Pertinent to the present analysis, the first clause identifies the persons or entities whose actions or omissions can trigger the application of the indemnity clause. The second provides that as between DuPont and such persons or entities, if the "sole cause of the loss or expense is the willful misconduct or negligence" of DuPont, then there is no indemnity.
An examination of the first clause reveals that Brown and Root's motion is meritorious. There has been absolutely no evidence presented that Brown and Root or any of its "agents, subcontractors, or assigns" have by act or omission caused any loss or expense to be borne by DuPont. The Court notes that of the other parties to this action, none can be considered to be Brown and Root's "agents, subcontractors, or assigns". Put differently, there has been presented no evidence of an act or omission by a person or entity identified in the first clause sufficient to trigger the application of the indemnity provision.
Although we agree with the grant of summary judgment, we disagree, in part, with the district court's reasoning. The first rule of contract interpretation 8 is that the court give effect to the intent of the parties. 9 In this particular contract, the intent of the parties may be ascertained from the language found within the four corners of the contract. 10 On this point we agree with the district court; the indemnity clause is clear and unambiguous. The first clause sets out the triggering conditions of indemnity coverage. "Contractor shall indemnify DuPont for all loss and expense incurred by DuPont resulting from any act or omission, negligent or otherwise, by DuPont or Contractor." DuPont bears the burden of ultimately establishing that a loss occurred attributable to some act or omission by either DuPont or Brown & Root. 11 The second clause provides that "indemnity shall not apply where the sole cause of the loss or expense is the willful misconduct or negligence of DuPont." Brown & Root, the party seeking the benefit of this exclusionary clause, bears the burden of ultimately establishing that the sole cause of the loss is the willful misconduct or negligence of DuPont.
In determining whether the first clause was triggered, the district court erred by placing the burden on DuPont to bring forth evidence of some act or omission attributable to Brown & Root. This construction is not consistent with the language of the contract. DuPont must show that (1) a loss occurred, and (2) the loss resulted from an act or omission by DuPont or Brown & Root. "Loss" is a defined term in the contract. "[L]oss ... includes settlements, judgments, court costs, attorneys' fees and other litigation expenses incurred by DuPont arising out of ... injury ... of any person, including employees of Contractor or DuPont." Wise, an employee of Brown & Root and a borrowed servant of DuPont, suffered an injury while operating an industrial manipulator arm. Wise filed suit against DuPont. DuPont incurred certain expenses defending against this claim. These expenses fall squarely within the definition of loss. 12
The second element DuPont must establish under the triggering clause is an act or omission, negligent or otherwise, by DuPont or Brown & Root that gave rise to the loss. The district court required DuPont to establish that Brown & Root contributed to the loss in order to trigger the first sentence. This construction is inconsistent with the plain language of the triggering clause; the first clause may also be triggered by an act or omission by DuPont. Unfortunately, because the trial court misapplied the burdens of proof, a review of the record does not reveal whether or not DuPont can satisfy its burden, that is, whether it can bring evidence of an act or omission attributable...
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