Opinion ID: 1829631
Heading Depth: 1
Heading Rank: 1

Heading: The Dismissal of the Third-Party Complaint

Text: In its third-party complaint, the railroad demanded a judgment against Lessel, based on the principles of common law indemnity, for all sums of money which [the railroad] may be adjudged to pay to plaintiff by reason [of] the injuries alleged in his complaint. In dismissing the third-party complaint, the court found that §§ 5 and 10 (45 U.S.C. § 55 and § 60) of the FELA prohibited the railroad from filing a third-party complaint against the plaintiff's co-worker. We agree that the trial court did not err in dismissing the railroad's third-party claim, because it affirmatively appears from the face of the complaint that the railroad was seeking indemnity from Lessel for any sum it might be required to pay as a result of Lessel's alleged negligent act. In finding that the trial court did not err in dismissing the third-party complaint, we do not address the question of whether a railroad, in a proper case, could maintain a counterclaim or third-party claim to recover for property damage allegedly resulting from a plaintiff's or a third-party's negligence, and arising out of the same basic operative facts. See, Murphy, Sidetracking the FELA: The Railroads' Property Damages Claims, 69 Minn.L.Rev. 349 (1985), in which the author collects the federal and state cases that have addressed the question, and in which he concludes that [i]f courts continue to thwart Congress's overriding remedial objective by permitting such liability-avoidance techniques as the recently invented property damage counterclaim, Congress once again should intervene to clarify the situation by explicitly barring such actions. 69 Minn. L.Rev. at 394. Because the third-party claim in this case arose out of the same operative facts giving rise to the plaintiff's FELA claim, and because the railroad was seeking indemnity for any sums it might be required to pay to the plaintiff for his personal injuries, we must construe the provisions of the Act, considering the railroad's argument that the provisions of the Act do not forbid its third-party complaint. Section 5 of the FELA states in pertinent part: Any contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter, shall to that extent be void. 55 U.S.C. § 55. Section 10 of the FELA states in pertinent part: Any contract, rule, regulation, or device whatsoever, the purpose, intent or effect of which shall be to prevent employees of any common carrier from furnishing voluntarily information to a person in interest as to the facts incident to the injury or death of any employee, shall be void[.] 55 U.S.C. § 60. There is some disagreement among federal and state jurisdictions as to whether a defendant railroad in a FELA action may maintain a property damage claim. The railroad points out that this court is not the first court asked to decide whether § 5 of the FELA bars claims like that asserted by the railroad in this case, stating in its brief the following: The majority of courts have permitted such claims against railroad employees by their employer railroads. See, e.g., Sprague v. Boston and Maine Corp., 769 F.2d 26 (1st Cir.1985); Cavanaugh v. Western Maryland R.R., 729 F.2d 289 (4th Cir.1984); C.H.B. Foods v. Rebelo, 662 F.Supp. 1359 (S.D.Cal.1987); Capitola v. Minneapolis, St. Paul and Sault Ste. Marie R.R., 258 Minn. 206, 103 N.W.2d 867 (1960); Kentucky & Indiana Terminal R.R. v. Martin, 437 S.W.2d 944 (Ky.1969); Cook v. St. Louis-San Francisco R.R., 75 F.R.D. 619 (W.D.Okla.1976); Key v. Kentucky & Indiana Terminal R.R., No. C 78-0313-L(a) (W.D.Ky.1979); and Consolidated Rail Corp. v. Dobin, No. 82-2539 (E.D.Pa.1981). The minority view is that such claims are not permitted. See Stack v. Chicago, Milwaukee, St. Paul & Pacific Railroad, [94 Wash.2d 155] 615 P.2d 457 (Wash.1980); Sheilds v. Consolidated Rail Corp., 530 F.Supp. 400 (S.D.N.Y. 1981). We are unable to agree with the railroad's argument that the FELA does not prohibit the filing of a third-party claim such as the one dismissed by the trial judge here. We believe that the Congress, in adopting §§ 5 and 10 of the FELA, intended to prohibit the filing of a common law indemnity claim such as the one filed here. We are further of the opinion that the cases cited by the railroad in support of its argument are distinguishable in that they deal with counterclaims for property damage and do not address the specific indemnification claim presented here. The railroad has not cited to us a case in which a state or federal court has held that a third-party claim such as the one filed here has been permitted, and there is disagreement among the jurisdictions as to whether a counterclaim for property damage is allowed. An outline of the two views of property damage counterclaims is set out in Cavanaugh v. Western Maryland R.R., 729 F.2d 289 (4th Cir.1984) and Stack v. Chicago, Milwaukee, St. Paul & Pacific R.R., 94 Wash.2d 155, 615 P.2d 457 (Wash.1980). [1] In Cavanaugh, the Court of Appeals for the Fourth Circuit reversed the trial court's order dismissing a counterclaim filed by the railroad against the plaintiff employee. There, the plaintiff served as engineer on a Baltimore and Ohio Railroad Company (B & O) train that collided with another B & O train. Cavanaugh initiated a FELA action in the United States District Court, seeking a recovery for personal injuries sustained in the collision. In response, the railroad filed a counterclaim to recover for property damage resulting from the same collision. The trial court dismissed the counterclaim, based on a holding that the claim violated §§ 5 and 10 of the FELA. The Fourth Circuit disagreed. In the Cavanaugh opinion, the Fourth Circuit noted that the applicable state law, that of West Virginia, allowed the employer a common law cause of action against an employee for any property damage resulting from negligent acts that the employee committed within the scope of his employment. Cavanaugh, 729 F.2d at 290-91. The court also noted that the railroad's claim arose out of the same transaction or occurrence that gave rise to the plaintiff's cause of action and thus was a compulsory counterclaim under F.R.Civ.P. 13(a), and that the railroad's failure to assert it would result in a waiver of the claim. Id. at 291. The Fourth Circuit concluded that the railroad was entitled to assert its common law claim unless it was precluded by the FELA. Id. In order to determine if the FELA did indeed preclude this common law claim, the court looked at the language of §§ 5 and 10, the legislative history of the FELA, and relevant case law. See Note, The FELA and an Employer's Right to Sue: Property Damages Resulting from Employee Negligence, 42 Wash. & Lee L.Rev. 708, 712 (1985). The court found no explicit language in the Act which could be said to require, or even suggest that the railroads must give up their common law right to hold an employee liable for property damage occasioned as a result of the employee's negligence. Cavanaugh, 729 F.2d at 291. The plaintiff in Cavanaugh, like the plaintiff in the case at bar, argued that a counterclaim was a device, under § 5, used by the railroad to exempt itself from liability to the plaintiff employee. The court disagreed with the employee's argument and found that the critical word in the definition of device was exemption: It is only when the `contract ... or device' qualifies as an `exempt[ion] itself from any liability' that it is `void[ed]' under Section 5. But a counterclaim by the railroad for its own damages is plainly not an `exempt[ion] ... from any liability' and is thus not a `device' within the contemplation of Congress. Id. at 292. The court looked at the legislative history of § 5 to determine the definition of the term device, id., and concluded that the legislative history showed that the Congress was trying to eliminate employment contracts that release the company from liability for damages arising out of the negligence of other employees or of the common carrier. Id. As a result, the court held that a counterclaim by the railroad was not a `contract ... or device' the purpose of which [was] to provide an exemption which Congress was intending to `void' in Section 5. Id. Our reading of Cavanaugh and some of the legislative history of the FELA convinces us that Congress intended to make employers responsible for the acts of their employees. [2] To permit an employer to seek indemnification, however, would violate the intent of Congress rather than foster it. We, therefore, affirm the judgment of the trial court dismissing the third-party claim.