The Honorable Stephen M. Reasoner, Chief United States Di strict Judge for the 1 Eastern District of Arkansas, sitting by designation. United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 96-3530

___________ Burlington Northern Railroad Company, * * Appellant, * Appeal From the United States v. * District Court for the District of * North Dakota. Farmers Union Oil Co., of Rolla, * a corporation. * * Appellee. * *

___________ Submitted: March 14, 1997 Filed: May 21, 1997

___________ Before WOLLMAN and BEAM, Circuit Judges, and REASONER, District Judge. 1

___________ BEAM, Circuit Judge. This diversity case requires us to interpret a port ion of an indemnity clause of an industrial railroad track lease. The district court determined that the indemnity clause had not been triggered b y an accident because the events at issue did not occur "on or near" the leased premises. We reverse.There is some dispute as to the date the car was received and as to which of the 2 two cars had the defective brake. Neither of these contentions is relevant to ou r determination here. -2- I. BACKGROUND
Fa rmers Union Oil Company (Farmers Union) maintains a fertilizer plant i n Rolla, North Dakota. The plant is next to a spur line off the main track of th e Burlingt on Northern Railroad Company (BN) and is located between two facilitie s maintained by the Rolla Grain Company ("Rolla Grain"). The two b usinesses share the side tr ack and have identical track lease agreements with BN which contain a n indemnity clause providing:
Lessee [Farmers Union] also agrees to indemnify and hold harmles s Lessor [BN] for loss, damage, injury or death f rom any act or omission of Le ssee, Lessee's invitees, licensees, employees, or agents, to the person or property of the parties hereto and their employees, and to the perso n or propert y of any other person or corporation while on or near sai d prem ises ; and if any claim or liability, other then from fire, shall aris e from the joint or concurring negligence of both parties hereto, it shall be borne by them equally. Jt. App. at 194 (emphasis added). The parties dispute whether this indemnification cla use was triggered by the 1987 inj ury of Teddy Cahill, a Rolla Grain employee, when he fell from a moving grain car. On April 10 of that year, Farmers Union received and unloaded two railroad cars, one of which had a brake that was sticking. The Farmers Union employees did not report 2 the defective brake to BN, but did warn a Rolla Grain employee of the problem. That employee pulled the empty cars to Rolla Grain and loaded them. O ver the weekend, BN delivered twenty-six addition al cars for loading. The following Monday, Cahill and his co-worker began loading these empty grain cars. To do this, Cahill stood-3-

on top o f the cars, while his co-worker stayed on the ground. Before the empty car s could be load ed, however, the two cars that had been filled Friday had to be moved

. When Cahill's co-worker could not release the sticky brake, he called Cahill down for assistance. The two released the brake without incident, but as Cahill resum ed his perch, he slipped, fell under another car and was injured.
Cahill sued BN alleging that if the brake had not been defective on the car unloaded by Farmers Union, he would not have been required to climb down to hel p re lease it. Thus, his theory of liability was that BN had placed him in the "zone o f danger" by supplyin g a defective car that required his assistance in releasing the brake. BN tendered defense of Cahill's suit to Farmers Union on the theory that the failure of its employees to notify BN of the defective b rake and the transfer of the defective car to Rolla Grain constituted an a ct and/or omission that triggered the indemnification clause of the lease. Farmers Union refused the tender of defense. BN the n moved for summary judgment in its favor on Cahill's claim, arguing that the defective car brake was not the proximate cause of Cahill's injuries. That motion was denied, and BN eventually settled the Cahill case for $400,000. BN then sought $200,000 each from Farmers Union and Rolla Grain under their respective leases. Farmers Union refused to pay, and BN filed this diversity action

. The district court granted Farmers Union's motion for summar y judgment on the grounds that the accident did not occur "on or near" Farmers Union's property. BN appeals.
II. DISCUSSION
We review a district court's grant of summary judgment de novo, applying th e same standard as the district court, examining the record in the light most favorable to the nonm oving party. Lang v. Star Herald , 107 F.3d 1308, 1311 (8th Cir. 1997)

. Summary judgm

ent is appropriate when the evidence "show[s] that there is no genuine-4-

issue as to an y material fact and that the moving party is entitled to a judgment as a mat ter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett , 477 U.S. 317, 32 2 (1986). "[A]n ind ustry's obligation to indemnify a railroad under an industrial trac k agreement

is a contractual duty and not a duty arising under the common law of tort." Burl ingtonN., Inc. v. Bellaire Corp. , 921 F.2d 760, 763 (8th Cir. 1990) (quotatio n omitted). Farmers Union's indemnity obligation is, therefo re, governed by North Dakota contrac t law. In North Dakota, "the interpretation of [a] contract is entirely a question of law" and a

ppellate courts are instructed to "independently examine and construe the contract to determine if the district court erred in its interpretation of it." Pamida, Inc. v. M eide , 526 N.W.2d 487, 490 (N.D. 1995). Indemnity contracts are construed i n accordanc e with the general rules for construction of contracts. Hoge v. Burleig h County Water Management Dist. , 311 N.W.2d 23, 27 (N.D. 1981). Our independent examination of th e contract language in this case leads us to the conclusion that Cahill's accident did occur "on or near" Farmers Union's leased property. Rolla Grain's property, wh ere Cahill was injured, surrounds the Farmers Union facility. The accident took place about 100 feet from Farmers Union's land. Contracts should be construed so that "every clause, sentence, or provision [is] given effect consistent with the main pu rpose of [the] contract." Barsness v. General Diesel & Equip. Co. , 42 2 N.W.2d 819, 824 (N.D. 1988). To read "on or near" to exclude events that occur in such close proximity denies the "near" language any effect.
Th ere are numerous other legal and factual points of contention between th e parties. Farmers Union argues that even if the accident occurred "on or near" it s premises, no "act or omission" can be attributed to it, which is another predicate to its inde mnificationobligation. Farmers Union has also unearthed evidence creatin g uncertainty as to whether it even took delivery of the car with the sticky brake. Further, the parties disagree as to whether BN's letter tendering defense of the Cahill action-5-

adeq uately notified Farmers Union of its potential liability. These and other dispute s were not reac hed by the district court, since it based its ruling on the "on or near " language of the indemnity cla use. We decline to pass on these issues without affording the district court the initial opportunity to consider them.
III. CONCLUSION
For the f oregoing reasons the decision of the district court is reversed, and th e case is remanded for additional proceedings consistent with this opinion. A true copy.
ATTEST: CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.