Opinion ID: 2971613
Heading Depth: 2
Heading Rank: 2

Heading: Application of the Agreement to this dispute

Text: -4- No. 03-4125 Southside River Rail Terminal, Inc. and Royal Indemnity Company v. CSX Transportation, Inc. Southside first contends that the insurance provision in the Agreement cannot shield CSX from liability because the Agreement itself does not apply to the misdelivery of the rail car in question. According to Southside, although both parties had duties to Cognis, those duties were separate and independent, and therefore did not emanate from the Agreement. (Southside’s duty was to receive, store, and ship kosher methyl ester for Cognis, whereas CSX’s duty was to deliver car GATX 26106 to Peter Cremer North America for storage.) As a result, the delivery of the fatty acid was allegedly not “for the account of” Southside as required by Section 1.1 of the Agreement. CSX contends that Southside cannot now question the district court’s application of the Agreement because it did not raise the issue below, citing Michigan Bell Tel. Co. v. Strand, 305 F.3d 580, 590 (6th Cir. 2002), which noted that this court will ordinarily not address arguments raised for the first time on appeal. This is a correct statement of the law, but it is inapplicable to the present case because Southside, during the course of oral arguments on CSX’s motion for summary judgment, contended that the Agreement does not apply to the misdelivered tank car. At that time, the court and Southside’s counsel engaged in a lengthy discussion, encompassing approximately ten pages of the hearing transcript, regarding whether the Cognis car was delivered “for the account of” Southside. The argument was therefore properly raised. Nonetheless, it fails for lack of merit. Southside does not dispute that it instructed CSX to deliver the tank car to the sidetrack or that it accepted the car for delivery. The fact that the car did not turn out to be the Cognis car Southside expected does not negate that it was delivered “for the account of” Southside.