Youell v. Maddox, Civ. A. No. 86-300-JLL.

• Citation: 692 F. Supp. 343
• Decision Date: 11 July 1988
• Docket Number: Civ. A. No. 86-300-JLL.
• Court: U.S. District Court — District of Delaware
• Parties: John R. YOUELL, on behalf of himself and those Underwriters at Lloyd's, London, subscribing Railroad Protective Policy No. 3649-1982, Plaintiff, v. James Roland MADDOX, individually and d/b/a J & M Construction and Demolition, an unincorporated firm, Defendants.

692 F. Supp. 343

John R. YOUELL, on behalf of himself and those Underwriters at Lloyd's, London, subscribing Railroad Protective Policy No. 3649-1982, Plaintiff, v. James Roland MADDOX, individually and d/b/a J & M Construction and Demolition, an unincorporated firm, Defendants.

Civ. A. No. 86-300-JLL.

United States District Court, D. Delaware.

July 11, 1988.

W. Harding Drane, Jr. of Potter, Anderson & Corroon, Wilmington, Del., and Michael J. Athans of Lord, Bissell & Brook, Atlanta, Ga., of counsel, for plaintiff.

David E. Brand of Prickett, Jones, Elliott, Kristol & Schnee, and Alan T. Boyd of Bayard, Handelman & Murdoch, P.A., Wilmington, Del., for defendants.

MEMORANDUM OPINION

LATCHUM, Senior District Judge.

I. INTRODUCTION

The present matter stems from a suit brought by John R. Youell ("plaintiff"), on behalf of himself and those Underwriters at Lloyd's, London, subscribing Railroad Protective Liability Policy No. 3649-1982, against James Maddox ("Maddox"), a citizen of Delaware, and J & M Construction and Demolition ("J & M Construction").¹ The suit arises from a settlement which plaintiff's insured, and the original nominal plaintiff, Consolidated Rail Corporation ("Conrail") entered into with its employee, James F. Tuerk ("Tuerk"), who was injured in an area where J & M Construction was removing track and rail pursuant to a contract with Conrail.

Presently before the Court is defendants' motion for summary judgment (Docket Item "D.I." 54) as to Counts I and II of plaintiff's amended complaint (D.I. 51 ¶¶ 11-18), as well as plaintiff's Renewed Motion for Summary Adjudication as to Count III of said complaint (D.I. 57).² Count I alleges that plaintiff is entitled to indemnification at common law for the $500,000 which plaintiff paid to Tuerk in settlement of his claim against Conrail. (D.I. 51 ¶ 14.) In the alternative, Count I seeks contribution from defendants for a portion of that amount. (Id.) Count II asserts that J & M Construction breached its contract with Conrail by failing to perform its work in a safe, orderly, efficient and workmanlike manner. (Id. ¶ 17.) Plaintiff alleges that this breach caused Tuerk to suffer injuries and plaintiff to incur damages in the amount of $500,000. (Id. ¶ 18.) Count III alleges that J & M Construction agreed in its contract with Conrail to indemnify Conrail for all losses occurring in connection with the performance of the contract and that J & M Construction did not defend and has not indemnified Conrail for the Tuerk suit and settlement. (Id. ¶¶ 19-23.)

In support of their motion for summary judgment, defendants argue that, as a matter of law, plaintiff may not assert the claims set out in Count I. Defendants also maintain that plaintiff's claim in Count II for breach of contract is barred by the applicable statute of limitations. For the reasons set forth below, the Court will grant defendants' motion for summary judgment as to the claims for common law indemnity and breach of contract. However, defendants' motion as to the claim for contribution in Count I will be denied.

Finally, the Court will deny plaintiff's Renewed Motion for Summary Adjudication as to Count III.

II. BACKGROUND

The parties do not dispute the material facts of this case. On June 22, 1982, Conrail and J & M Construction entered into a contract for the removal of railroad rails and ties from Conrail's Benning Yard facility, located in Washington, D.C. (See D.I. 55 Exhibit C.) Paragraph Two of the contract provided that "all work to be done by J & M Construction ... shall be done in a safe, orderly, efficient and workmanlike manner...." (Id. ¶ 2.) The contract also provided that "Conrail's property shall be left in a clean and safe condition and the condition of said premises shall be subject to the approval of Conrail at all times during the course of the work." (Id. ¶ 7.)

The contract further required that Maddox, at his own expense, purchase the following forms of insurance;

(a) Workmen's Compensation, Employer's Liability Insurance, and Occupational Disease Insurance;

(b) Contractor's Public Liability Insurance

Contractor shall furnish evidence that, with respect to the operations it performs, it carries regular Contractor's Public Liability Insurance providing for a limit of not less than $500,000 single limit, bodily injury and/or property damage combined, for damages arising out of bodily injuries to or death of all persons in any one occurrence and for damage to or destruction of property, including the loss of use thereof, in any one occurrence.

(c) Contractor's Protective Public Liability Insurance

Contractor shall furnish evidence that, with respect to the operations performed by subcontractors, it carries in its own behalf regular Contractor's Protective Public Liability Insurance providing for a limit of not less than $500,000, single limit, bodily injury to or death of all persons in any one occurrence and for damage to or destruction of property, including the loss of use thereof, in any one occurrence.

(d) Railroad Protective Public Liability Insurance

In addition to the above, Contractor shall furnish evidence that, with respect to the operations it or any of its subcontractors perform, it has provided Railroad Protective Public Liability Insurance (AAR-AASHTO form) in the name of Consolidated Rail Corporation providing for a limit of not less than $500,000, single limit, bodily injury and/or property damage combined, for damages arising out of bodily injuries to or death of all persons in any one occurrence and for damage to or destruction of property, including the loss of use thereof, in any one occurrence. Such insurance shall be furnished with an aggregate of not less than $1,000,000 for all damages as a result of more than one occurrence.

(Id. ¶ 18) (emphasis in original).

Paragraph Eighteen also stated that "the furnishing of the aforesaid insurance shall not be deemed a limitation on the liability of J & M Construction ... but shall be deemed additional security for Conrail." (Id. at 9.)

Maddox purchased the Railroad Protective Liability Insurance through a Certificate of Insurance with Lloyd's, London, and obtained the Contractor's Public Liability Insurance from Selected Risks Insurance Company. (Defendants' Answer to Plaintiff's Second Set of Interrogatories, D.I. 19 ¶ 1.)

Tuerk, a Conrail engineer, was injured in the pre-dawn hours on July 3, 1982 when, during the course of his employment, he fell over track material in the Benning Yard in an area in which J & M Construction was working. (D.I 51 ¶ 7; D.I. 52 ¶ 7.) Tuerk sued Conrail pursuant to the Federal Employers' Liability Act, 45 U.S.C. § 51 et seq., to recover damages for his injuries. (D.I. 51 ¶ 9; D.I. 52 ¶ 9.) Conrail made a demand upon Maddox to assume the defense of the Tuerk suit and to indemnify it on the claim by Tuerk. Maddox took no action on this demand.³

On November 30, 1983, plaintiff settled Tuerk's claim by paying $500,000 to Tuerk on behalf of its insured, Conrail. (D.I. 51 ¶ 10; D.I 52 ¶ 10.) Lloyd's paid the settlement in fulfillment of its obligations under the Railroad Protective Liability Insurance policy.

On July 2, 1986, Conrail filed suit in this Court to recover the $500,000 paid out to Tuerk. (D.I. 1.) Within the past year, the parties have briefed and argued various motions for summary judgment. This Court has most recently denied defendants' motion for summary judgment as to Counts I and II of Conrail's original complaint. (See Order Denying Defendants' Motion for Summary Judgment on Counts I & II, D.I. 47.) At that time the Court directed the parties to clarify the pleadings and refocus their legal theories. In response, plaintiff filed an amended complaint (D.I. 51), which substituted John R. Youell, on behalf of Lloyd's, London, as the nominal plaintiff and clarified the legal theories upon which recovery is sought in Count I. Defendants' present motion for summary judgment on Counts I and II is based upon the affirmative defenses raised in their answer to plaintiff's amended complaint. (See D.I. 52 ¶¶ 24-27.)

III. ANALYSIS

The defendants have moved for summary judgment on Counts I and II of plaintiff's amended complaint. (See D.I. 54.) Count I of the amended complaint claims that plaintiff is entitled to common law indemnification from defendants in the full amount of the $500,000 paid to Tuerk on behalf of Conrail. (D.I. 51 ¶ 14.) In the alternative, Count I claims a right to contribution for a portion of that amount. (Id.) Each of these claims in Count I is based on the alleged, underlying negligence of defendants in creating unsafe conditions in the railyard which led to Tuerk's injuries. (Id.)⁴ In Count II, plaintiff claims that defendants breached the contract with Conrail in two respects: (1) by failing to leave Conrail's property in a clean and safe condition while defendants' employees performed the track removal project (id. ¶ 16); and (2) by failing to perform their work in a safe, orderly, efficient and workmanlike manner. (Id. ¶ 17.) Plaintiff asserts that these and other contractual breaches resulted in Tuerk's injuries and caused plaintiff to incur damages of $500,000. (Id. ¶ 18.)

For reasons set out in detail below, the defendants deny liability under each of these theories and move for summary judgment on Counts I and II. This Court may enter summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), Fed.R.Civ.P. The United States Supreme Court has explained that Rule 56(c) mandates entry of summary judgment against a party who fails to make a showing sufficient to establish the existence of an element that is essential to that party's case, and on which that party will bear the burden of proof at trial....