Court Opinion

ID: 76107
Source: CourtListenerOpinion
Date Created: 2010-04-26 23:51:32+00
Date Added: 2024-06-11T17:18:24.581384
License: Public Domain

[PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                     FOR TH E ELEV ENTH C IRCUIT     FILED
                     ____________________________ COURT OF APPEALS
                                                U.S.
                                                     ELEVENTH CIRCUIT
                             No. 02-12261               MARCH 27, 2003

                     ____________________________     THOMAS K. KAHN
                                                          CLERK

                   D. C. Docket No. 98-00223-CV-4-BAE

CSX TRA NSP ORT ATIO N, IN C.,
NAT ION AL R AILR OAD PAS SEN GER COR POR ATIO N,

                                            Plaintiffs-Cross-Defendants-
                                            Appe llants,

                                 versus

THE CITY OF G ARD EN C ITY,

                                            Defen dant-T hird-P arty
                                            Plaintiff- Appe llee,

                                 versus

ARC O IN C.,

                                            Third-Party Defend ant-Cross-
                                            Claiman t-App ellee.
                           ____________________________
                     Appe al from th e United States D istrict Cou rt
                         for the S outhern District o f Geor gia
                         ____________________________
                                    (March 27, 2003)

Before AN DERS ON, BIR CH and B ARKE TT, Circuit Judges.

BIRCH, Circuit Judge:

       CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT TO THE SUPREME COURT OF GEORGIA,

PURSUANT TO O.C.G.A. § 15-2-9. TO THE SUPREME COURT OF

GEORGIA AND ITS HONORABLE JUSTICES:

       In this cas e we m ust determ ine und er wha t circums tances, if an y, a Geo rgia

municipality may contractually indemnify a private party for loss, damage, or

liability arisin g in con nection w ith a pub lic work s project in volving the priva te

party’s land. The district court granted summary judgment in favor of a

municipality that had entered into such an agreement on the ground that it was ultra

vires. Because the resolution of this appeal turns on questions of first impression

under G eorgia law , we certif y it to the S uprem e Cour t of Geo rgia for r eview.

Questio ns CE RTIF IED.

                                              2
                                    I. BACKGROUND

         The facts of this case, which are not in dispute, were succinctly stated in our

earlier op inion, CSX Transp ., Inc. v. C ity of Ga rden C ity, 235 F.3d 1325, 1326

(11th Cir. 2000) (“CSX I”):

                In 1996, the City of Garden City, Georgia (Garden City or the
         City) decided to install water and sewer lines along the p ublic rights-
         of-way that ran across, under, and parallel to CSX Transportation,
         Inc.’s (CSX) railroad tracks. Th e City contracted with CSX to use
         CSX’s rights-of-ways and agreed to indemnify CSX for any damages
         arising o ut of the C ity’s use of the rights -of-w ay. Und er the con tract,
         the City ag reed to m aintain ins urance to cover th e indem nity
         obligatio ns it had a ssumed .

                Garden City employed ARCO, Inc. as the general contractor for
         this project which employed CARLCO Trucking, Inc. as a sub-
         contractor. On October 9, 1997, a CARLCO em ployee drove a
         tractor-trailer truck to the City’s work site to remove equipment. As
         he crossed CSX’s tracks, his truck stalled on the tracks where it was
         hit by a National Railroad Passenger Corporation (Amtrak) passenger
         train. CSX paid damages to passengers on the train and sued Garden
         City for indemnification under their agreement. Garden City filed a
         third-party claim against its contractor, ARCO.

         The C ity move d for su mmary judgm ent, claimin g that the in demnity

agreement was void for a number of reasons. The district court granted the motion,

concluding that the agreem ent constituted an impermissib le waiver of th e City’s

sovereig n immu nity in the a bsence o f any evid ence that th e City had liability

insuran ce that w ould co ver the in demnity claim. Id. at 1329. On appeal, CSX1

1
    For convenience, we refer to Appellants CSX and Amtrak as “CSX.”

                                               3
moved to supplement the record “to show that Garden City participates in the

Georgia Interlocal Risk Management Agency (GIRMA ) fund.” Id. at 1330. We

observed that the indemnification agreement, “in effect, required the City to waive

its sovereign immunity vis-a-vis CSX in connection with any claims against CSX

arising out of the City’s construction project,” id. at 1329 , but that “G eorgia law . .

. forbids a city from waiving its sovereign immunity unless it has insurance to fund

any liability it might thereby incur.” Id. Relying on our “inherent equitable power

to allow supplem entation o f the app ellate recor d if it is in the interests o f justice,”

we gra nted the m otion. Id. at 1330, 1331. Expressing no opinion in the outcome,

we “reman d[ed] the case to th e district court so tha t it [could] conside r [the City’s

participatio n in the G IRM A fun d] befor e determining w hether G arden C ity

effectively waived its immunity by its agreement to indemnify CSX.” Id. at 1331.

       On rem and, the d istrict cour t stated the is sue as “w hether th e City is leg ally

authoriz ed to con tractually w aive its imm unity by p urchasin g insurance to

indemnify CSX against third party liability claims.” R7-87 at 3-4. Finding that

“CSX ha[d] pointed to no express authority for a contract enabling CSX to hold the

City liable for negligence claims against CSX,” id. at 7-8, “tha t the Geo rgia

legislature was inte rested in p ermitting , conting ent on th e purch ase of ins urance, a

way for injured members of the public to ‘sue city hall’ for negligence damag es . . .

                                               4
, not contract-based d amages , and mo st certainly n ot contract damages flowing

from the ‘tort indemnification’ of third parties like CSX,” id. at 8 (foo tnote

omitted), and that “contractual indemnification . . . is a considered choice the

Georgia legislature should make . . . not a federal court sitting in diversity,” id. at

9, the court concluded that the indemnification contract was ultra vires and granted

summary judgm ent in favor of the City. 2 Id. at 9. Afte r certificatio n pursu ant to

Rule 54(b) of the Federal Rules of Civil Procedure, CSX timely appealed.3

                                    II. DISCUSSION

       “This co urt review s a grant o f summ ary judg ment de novo, applying the

same standards as the district court.” O’Ferrell v. United States, 253 F.3d 1257,

1265 (11th Cir. 200 1). Though the m aterial facts are not in dispute here, we must

determine whether the indemnification agreement is void ab initio as a matter of

law. In accordance with Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817

(1938), we review the district court’s decision in light of Georgia law. “Where

there is any doubt as to the application of state law, a federal court should certify

the question to the state supreme court to avoid m aking unnecessary Erie ‘guesses’

2
  The court also granted Third-Party Defendant ARCO summary judgment against the City,
except as to liability for attorney fees and costs, and denied as moot ARCO’s summary judgment
motion against CSX. Id. at 9-10 & n.9.
3
 The case was not closed with the district court’s summary judgment order “[b]ecause the
City’s claim against ARCO still remain[ed].” Id. at 10.

                                              5
and to offer the state court the opportunity to interpret or change existing law.”

Mosher v. Speedstar Div. of AMCA Int’l, Inc., 52 F.3d 913, 916-17 (11th Cir.

1995) (footnote omitted). Because this case presents a question of first impression

under Georgia law, we seek guidance from the Supreme Court of Georgia and

certify the questions set out below.

       Georg ia “[m]un icipalities are creatures of the leg islature. T hey pos sess only

such power as are expressly delegated to them by the legislature. They possess no

inherent powers.” Koeh ler v. M assell, 191 S.E.2d 830, 833 (Ga. 1972). As such,

Georg ia courts “h ave long acknow ledged th at munic ipal corp orations have on ly

limited power to enter into contracts.” Precise v . City of R ossville, 403 S.E.2d 47,

49 (Ga. 1991). While “[a] municipal corporation may bind itself by, and cannot

abrogate, any contract which it has the right to make,” Williams v. City Council of

West Point, 68 Ga . 816, 81 6 (188 2), it has n o pow er to enter into a con tract if it is

not auth orized b y charter o r by legisla tive gran t. Barrett v . City of A tlanta, 89 S.E.

781, 78 2 (Ga. 1 916). T here mu st be exp ress or im plied auth ority. See Forsyth

County v. Childers, 525 S .E.2d 3 90, 392 (Ga. C t. App. 1 999). “If a contrac t is

beyond the pow er or com petence o f the local g overnm ent, then th e contrac t is

termed ultra vires and is void.” Precise, 403 S .E.2d at 4 9. Even “‘comple te

performance of such contract on the part of [the other party] will not prevent the

                                              6
municipal corporation from pleading its want of power or the illegality of the

contract.’” City of Warm Springs v. Bulloch, 91 S.E.2d 13, 14 (Ga. 1956) (quoting

City Council of Dawson v. Dawson Waterworks Co., 32 S.E . 907, 90 7 (Ga. 1 899)).

Here, G arden C ity argues that the ind emnifica tion agre ement is u ltra vires an d void

on several grounds.

A. Void on Sovereign Immunity Ground

       First, the City argues that the indemnity agreement constitutes an

impermissible waiver of the municipality’s sovereign immunity. “The common

law doctrine of sovereign immunity, adopted by [Georgia] in 1784, protected

governments at all levels from unconsented-to legal actions.” Gilbert v.

Richardson, 452 S.E.2d 476, 478 (Ga. 1994) (footnote omitted). By statute,

municipalities are clothed with immunity and shielded from “liab[ility] for failure

to perform or for errors in performing their legislative or judicial powers.”

O.C.G.A. § 36-33-1(b) (2000). 4 Thus, “[i]n Georgia a municipal corporation is not

liable in damages for injuries arising from the exercise of a governmental

function.” Boone v. City of Columbus, 75 S.E .2d 338 , 339 (G a. Ct. Ap p. 1953 ).

“The General Assembly may waive the immunity of counties, municipalities, and

school d istricts by law .” Ga. C onst. art. IX , sec. II, par a. IX. R elying on this

4
  However, “[f]or neglect to perform or improper or unskillful performance of their ministerial
duties, they shall be liable.” Id.

                                                7
provision, with two exceptions relating to the purchase of liability insurance, “the

General Assembly . . . declares it is the public policy of the State of Georgia that

there is no waiver of the so vereign immun ity of mu nicipal co rporatio ns of the state

and such municipal corporations shall be immune from liability for damages.”

O.C.G .A. § 36 -33-1( a). Gen erally, “a mu nicipality ca nnot ratif y the unla wful ac ts

of its sub ordinate officials d one in p ursuan ce of its go vernm ental fun ctions so as to

make itself liable for such acts.” Boone, 75 S.E.2d at 340. Accordingly, “[a]

municip al corpo ration sh all not w aive its imm unity by th e purchase of liab ility

insurance, except as provided in Code Section 33-24-51, or unless the policy of

insurance issued covers an occurrence for which the defense of sovereign

immunity is available, and then only to the extent of the limits of such insurance

policy.” O.C.G.A. § 36-33-1(a).5

5
  Section 33-24-51(a) permits a municipality to procure liability insurance covering bodily
injury or death or property damage “arising by reason of ownership, maintenance, operation, or
use of any motor vehicle by the municipal corporation.”

       Whenever a municipal corporation . . . shall purchase the insurance authorized by
       subsection (a) of this Code section to provide liability coverage for the negligence
       of any duly authorized officer, agent, servant, attorney, or employee in the
       performance of his official duties, its governmental immunity shall be waived to
       the extent of the amount of insurance so purchased.

O.C.G.A. § 33-24-51(b). Because the indemnification provision involved here exposes the city
to liability far beyond the limits of § 33-24-51(b) and the district court itself relied on the general
insurance waiver provision in § 36-33-1(a), we will do the same.

                                                   8
       Since these two code sections are the only ones to waive municipal

immunity, the more specific question we need answered is whether the validity of

an agree ment by a Geor gia mun icipality to co ntractually indemn ify a priva te party

is first even controlled by O.C.G.A. § 36-33-1(a). 6 If so, we then ask the effect of

6
        Indeed, this is the true bone of contention here. CSX, Garden City, and the district court
all agree that CSX’s claim does not sound in tort, which clearly would involve the doctrine of
sovereign immunity, but, rather, in contract. See Appellants’s Supplemental Br. at 1 (“The
Court may decide this appeal on a contract rather than a tort theory . . . .”); Appellee’s Br. at 17
(“[T]he central principle in this appeal does not involve immunity and can be stated simply:
without a valid contract with the City, there can be no contract action against the City.”); R7-87
at 6 (“CSX is advancing a contract (not tort) claim against the City (i.e., it is seeking recovery
under the indemnification contract for the cost of any tort claims brought against it).”). CSX
principally argues, however, that, because its claim is grounded on the indemnification
agreement alone, it is a pure breach of contract action for which the defense of sovereign
immunity is not available at all. Thus, the threshold issue is not whether this is a tort or contract
action, but whether sovereign immunity is even involved in this case.
        The City contends that CSX is estopped from so arguing under the law of the case
doctrine, pointing to our statement in CSX I that the indemnity agreement “required the City to
waive its sovereign immunity vis-a-vis CSX,” 235 F.3d at 1329, and citing our decision in A.A.
Profiles, Inc. v. City of Fort Lauderdale, 253 F.3d 576, 582 (11th Cir. 2001) (stating that
“[g]enerally, the law of the case doctrine requires a court to follow what has been explicitly or
by necessary implication decided by a prior appellate decision”). We agree with CSX that we
made no decision in CSX I as to whether the indemnity agreement constituted a waiver of
sovereign immunity. We merely said that the agreement, “in effect, required” such waiver, 235
F.3d at 1329, but we did not decide, and remanded to the district court to determine, “whether
Garden City effectively waived its immunity by its agreement to indemnify CSX.” Id. at 1331.
We only granted CSX’s motion to enlarge the record because “[t]he existence or non-existence
of insurance . . . was pivotal to the district court’s resolution of th[e] case.” Id. at 1330.
        Nevertheless, the doctrine of sovereign immunity and its permissible waiver is clearly
implicated in this case. Were it not, we would have little need to certify these questions to the
Georgia Supreme Court, since it is clear under Georgia law that “[t]he doctrine of sovereign
immunity is available to a municipality against claims based on negligence . . . [but] is not
applicable to claims against a municipality which are contractual in nature.” City of Atlanta v.
Atlantic Realty Co., 421 S.E.2d 113, 116 (Ga. Ct. App. 1992); see also Precise, 403 S.E.2d at 49
(holding that “municipal immunity is not a valid defense to an action for breach of contract”).
As we observed in a remarkably similar case involving Florida law, however, “[i]ndemnification
agreements appear to occupy a grey area between two lines of [state law] precedent that address
state sovereign immunity, one of which deals with tort actions, the other with breach-of-contract
actions.” Nat’l R.R. Passenger Corp. (Amtrak) v. Rountree Transp. & Rigging, Inc., 286 F.3d

                                                  9
§ 36-33-1(a) on the indemnification agreement. In this case, the City purchased a

GIRM A liability policy.7 The Georgia Supreme Court has held that such a policy

constitutes the purchase of liability insurance within the meaning of § 36-33-1(a),

after having concluded that the statutory provision to the contrary remained

uncon stitutional. See Gilbert, 452 S.E.2d at 482.8 We are uncertain, however,

1233, 1269 (11th Cir. 2002).
        CSX’s argument is not furthered by the recent holding in Satilla Cmty. Serv. Bd v. Satilla
Health Servs., Inc., 555 S.E.2d 188, 191, 192 (Ga. Ct. App. 2001), that a state agency “has no
sovereign immunity as to claims sounding in breach of contract or indemnity as a contractual
right,” where the court found that a fourth-party action against the agency “sounds in implied
contract of indemnity.” After granting certiorari, the Georgia Supreme Court found “no support
in Georgia law for ‘identical reciprocal implied contractual indemnification.’” Satilla Cmty.
Serv. Bd. v. Satilla Health Servs., Inc., 573 S.E.2d 31, 32 (Ga. 2002).
        Thus, although “th[e] dispute is about the breath of the City’s authority to enter into the
subject contract, and not simply what its obligations are under it,” R7-87 at 7, what we must
determine is whether a municipal corporation’s agreement with a private party is void in part ab
initio because one of its obligations, indemnification, constitutes an impermissible waiver of its
tort immunity. The threshold question under that analysis is whether the statutory waiver
provision strictly limiting a municipality’s authority to waive its sovereign immunity is even
controlling. Ordinarily, “[w]hat can not be done by an ordinance can not be done by a contract.”
Screws v. City of Atlanta, 8 S.E.2d 16, 20 (Ga. 1940). Thus, we must decide whether municipal
indemnification is tantamount to waiving immunity in the first place.
7
   The policy covers “all sums which [Garden City] shall be obligated to pay as money damages
by reason of liability . . . assumed by [Garden City] under contract or agreement.” R4-58, Ex. B
at 27. Thus, if § 36-33-1(a) is controlling and does permit the indemnification agreement at
issue here, the City’s sovereign immunity will be waived “to the extent of the limits of [the]
insurance policy.” § 36-33-1(a). Here, that limit is $ 1,000,000 per occurrence under the
policy’s casualty coverage. R4-58, Ex. B at 1. If the property coverage section applies, the
policy covers “all risks of physical loss or damage to all Real or Personal Property of every kind
and description wherever located in the world occurring during the period of this coverage,” id.
at 15, including “property which [Garden City] . . . agrees to cover by any contractual agreement
normal to its operations.” Id. at 17. The per-occurrence limit is on file with GIRMA and
therefore unknown to us. Id. at 1.
8
 The statutory provision invalidated provides that participation in the GIRMA plan by a
municipality “shall not constitute the obtaining of liability insurance and no sovereign immunity

                                                10
whether the policy “covers an occurrence for which the defense of sovereign

immunity is available.” O.C.G.A. § 36-33-1(a).

          The City indemnified and h eld CSX harm less from any and all liability, loss,

and damage it suffered in connection with the project, unless solely the fault of

CSX , includin g the neg ligence o f others f or wh ich the m unicipality would

otherwise not be liable.9 Thus, it exposed itself to liability for “occurrences” for

which the sove reign im munity d efense, ab sent wa iver, wo uld be b oth availa ble 10

shall be waived on account of such participation.” O.C.G.A. § 36-85-20. Though Gilbert
specifically referred to § 33-24-51(b) at issue in that case, we see no reason to distinguish the
case on that ground. The overriding statutory provision is § 36-33-1(a).
9
     Section 9.1 of the contract in pertinent part provides:

          [Garden City] hereby assumes, and, to the fullest extent permitted by State law
          (Constitutional or Statutory, as amended), shall defend, indemnify and save
          [CSX] harmless from and against any and all liability, loss . . . [or] damage . . .
          arising out of, resulting from, or in any way connected with the construction,
          presence, existence, repair, maintenance, replacement, operations, use or removal
          of [a p]ipeline [used for the transmission of raw or treated sewage] or any
          structure in connection therewith, . . . EXCEPT when caused solely by the fault or
          negligence of [CSX].

     R4-58, Ex. A at 5.
10
   For instance, under a pure tort theory, the City would normally be immunized from damages
arising from its own negligence in the performance of governmental functions, see Koehler, 191
S.E.2d at 833, such as “[t]he establishment and maintenance of a sewerage system,” see City of
Douglas v. Cartrett, 137 S.E.2d 358, 360 (Ga. Ct. App. 1964), including that of its contractors
and subcontractors under circumstances for which the City would otherwise be liable, see Fulton
County St. R.R. Co. v. McConnell, 13 S.E. 828, 829 (Ga. 1891) (“If [an] independent contractor
is guilty of an act of negligence which causes injury to a third person, and the evidence shows
that the act does not fall within any of [the statutory] exceptions, the employer is not liable.”);
O.C.G.A. §§ 51-2-4 to -5.

                                                    11
and un available 11 in a pure tort action . If § 36- 33-1(a ) is to be re ad for its p lain

meaning, then, waiver of sovereign immunity as to the former would be

permissible as, presumably, would an indemnity agreement to that effect, whereas

waiver as to the latte r wou ld be imp ermissib le as, presu mably, w ould an indemn ity

11
         By contrast, under a pure tort theory, the City would normally not be immunized from
damages arising from its own negligence in the performance of its ministerial functions, see
O.C.G.A. § 36-33-1(b); Atlantic Realty Co., 421 S.E.2d at 116, or from its own negligence in
creating or maintaining “a nuisance, permanent in its character, and dangerous to life and
health,” Bass Canning Co. v. Mayor of Milledgeville, 162 S.E. 687, 689-90 (Ga. 1932),
including that of its contractors and subcontractors, see Mayor & Aldermen of Savannah v.
Waldner, 49 Ga. 316, 324 (1873) (holding “that if the [private] builders of the sewer in this case,
negligently left it unguarded, by not having proper barriers, or lights, or other protection against
danger, and it was so permitted to continue for an unreasonable or unnecessary time by the
municipal authorities, who had notice, or there are facts from which notice could be reasonably
inferred, they are liable for injuries resulting from such neglect to perform their duty”).
Indemnifying a private party for these acts does not appear to waive sovereign immunity, since it
would not be available in the first place and, therefore, would not be prohibited by § 36-33-1(a).
However, the Georgia law on that point is not entirely clear.
         In addition, sovereign immunity might not be an “available” defense if the City were
sued in tort for damages arising from the negligence or fault of other actors, simply because the
claim would most likely not survive a motion to dismiss or for summary judgment. It is not
clear, then, whether an indemnity contract assuming liability for the torts of others would be an
“occurrence” for which sovereign immunity is not available, and therefore prohibited under §
36-33-1(a), or whether that provision would have no application because, like indemnification
for torts committed while performing ministerial duties, indemnification for the torts of others
would not waive sovereign immunity at all, since it would not be available in the first place and,
therefore, not prohibited.
         Finally, the term “occurrence” in § 36-33-1(a) could theoretically also refer to a breach of
an indemnity contract itself, thus, rendering any such agreement void, irrespective of the type of
liability it assumed, because sovereign immunity is not “available” for breach of contract claims.
See Atlantic Realty Co., 421 S.E.2d at 116. However, because indemnity contracts “occupy a
grey area” within the doctrine of sovereign immunity, see Nat’l R.R. Passenger Corp., 286 F.3d
at 1269, it is questionable that the Georgia General Assembly intended such a result.

                                                 12
agreement to that effect. Yet, Garden City’s indemnity agreement covers them

all.12

         In addition to the absence of any express authority in § 36-33-1(a) as to the

validity of a municipality’s indemnification agreement, there is no binding case

law on the subje ct.13 To complicate matters even further, there are at least two,

diametrically opposed policy arguments. On the one hand, “[c]ities [should] be

able to induce the CSX’s of the world to cooperate in public works projects such as

in the case sub judice by entering into contractual indemnity agreements.” R7-87

at 8. On the other hand, “one m odern purpose of the [so vereign immunity]

12
   Section 18.4 of the contract here contains a severability clause. R4-58, Ex. A at 10. Thus, if
§ 36-33-1(a) permits indemnification for some damages but not for others, Garden City’s
indemnity agreement may be saved by the clause. However, if the permissibility of
indemnification agreements were variable as to the type of liability assumed, a municipality’s
summary judgment motion on the ground of sovereign immunity would require a court hearing
the motion to determine before trial where to lay blame. Indeed, the City argued to the district
court in this case that “the Court must first determine that the City was negligent—CSX’s or a
third party’s negligence could have caused the complained of damage—and then ‘determine
whether Georgia law permits a waiver of sovereign immunity for purposes of assuming the tort
liability of third parties.’” R7-87 at 3.
13
   The holding in City of Douglas, 137 S.E.2d at 359, 360, 362, voiding a contract entered into
by a municipality to pay damages to the owner of land, upon which the municipality had been
granted an easement for the purpose of running a sewer line, for “any damage” to the owner’s
land outside of the easement boundaries, does not help the City’s argument here. The contract
was found void, not because it waived the city’s sovereign immunity, but because it “extend[ed]
beyond the term of the council making” the contract and was not otherwise a covenant running
with the land. Id. at 361. Also, the opinions of the state attorney general presented by the City,
one of them formal, the other informal, suggesting that the indemnity agreement at issue is
invalid, are not binding on Georgia courts and, therefore, not on federal courts sitting in
diversity. Moore v. Ray, 499 S.E.2d 636, 637 (Ga. 1998); Nat’l R.R. Passenger Corp., 286 F.3d
at 1266 n.32.

                                                13
doctrine is to ‘preserve the protection of the public purse.’” Gilbert, 452 S.E.2d at

481 n.7 (citation omitted). Because “there is no provision of law for raising the

funds w ith whic h to pay a claim no t authoriz ed or rec ognized by law[ , i]t stands to

reason that a municipal corporation cannot make an illegal act legal by a simple act

of waiver. In doing so, it would be encroaching on the powers of the State, of

which it is only a creature.” Boone, 75 S.E .2d at 34 0. Othe rwise, as Garde n City

points o ut, “corru pt or me rely inept p ublic off icers cou ld subjec t the pub lic to

untold f inancial liab ility.” App ellee’s Br. a t 16. Th ese ration ales apply equally to

waivers of sovereign immunity in tort actions and indemnity agreements having

the same effect. Thus, even if § 36-33-1(a) were to control the question of the

validity of municipal indemnity agreements, we decline to decide the operation of

the provision as applied to the facts of this case, since they involve unsettled

question s of state law and pu blic policy and, acco rdingly, c ertify the q uestion to

the justices of the Georgia Supreme Court for their review.

B. Void on Other Grounds

       Supposing that the indemnity provision here does not constitute an

impermissible waiver of Garden City’s sovereign immunity, and, therefore, is not

ultra vires on this ground, we must nevertheless consider other possible grounds

under s tate law th at might b ar the City ’s indem nification of priva te parties. See

                                              14
J.E. Riley Inv. Co. v. Commissioner, 311 U.S. 55, 59, 61 S. Ct. 95, 97 (1940)

(“Where the decision below is correct it must be affirmed by the appellate court

though the low er tribun al gave a w rong re ason fo r its action.” ); Magluta v.

Samples, 162 F.3d 662, 66 4 (11th Cir. 1998) (per cu riam) (“[W]e may not reverse

a judgment of the district court if it can be affirmed on any ground, regardless of

wheth er those g round s were u sed by th e district co urt.”); Turner v. Am. Fed’n of

Teachers Local 1565, 138 F.3d 878, 880 n.1 (11th Cir. 1998) (“We must affirm the

judgment of the district court if the result is correct even if the district court relied

upon a wrong ground or gave a w rong reason.”).

       Garden City argues tw o additio nal grou nds for voiding the indem nity

provisio n: it creates b oth an u nlawfu lly lengthy obligatio n and an unlaw ful pub lic

debt. 14 Under Georgia law, “[o]ne council may not, by an ordinance, bind itself or

its successors so as to prevent free legislation in matters of municipal government.”

O.C.G.A. § 36-30-3(a). In Screw s v. City o f Atlanta, 8 S.E.2d 16 (Ga. 1940), the

Georg ia Supr eme Co urt exten ded the p rohibitio n to con tracts. Id. at 20 (holding

14
   In its first motion for summary judgment, the grant of which was on appeal in CSX I, the City
also contended, in addition to its sovereign immunity argument, that the indemnity agreement
“impermissibly grants a gratuity[] and violates public policy.” 235 F.3d at 1330 n.8. Since we
remanded the case “for reconsideration of the issue of immunity in view of the existence of the
GIRMA policy,” we did not “consider the issues of unlawful obligation and public debt as they
may depend on the existence of insurance coverage.” Id. We found, however, “no merit in the
remaining arguments advanced by the City.” Id. Thus, we do not consider them here.

                                               15
that a con tract betw een a city an d a priva te party w hereby th e forme r agrees to

supply f ree wate r to the latter for a per iod of tw enty-five years is vo id).

       Consideration of whether municipal contracts are subject to the
       prohibition . . . involves at least 4 questions: (1) Is the contract
       governmental in nature and hence subject to the prohibition, or
       proprietary and hence not subject to the prohibition? (2) If
       governmental in nature, is the contract subject to an exception? (3) If
       not, is the contract subject to ratification and has it been ratified? (4)
       If not, is the municipality estopped from relying on the statutory
       prohibition?

City of Powder Springs v. WM M Props., Inc., 325 S.E.2d 155, 158 (Ga. 1985)

(footno te omitted ).

       It is clear that the installation and maintenance of sewers is a governmental

function . Barr v. C ity Coun cil of Au gusta, 58 S.E .2d 820 , 822 (G a. 1950 ).

Wheth er a mun icipality’s ag reemen t to indem nify priv ate parties u ltimately

violates § 36-30 -3(a), ho wever , appears to be a qu estion of first impr ession in

Georgia.15 Thou gh the co ntract in w hich the in demnity provisio n at issue h ere is

contained is “year-to-year, subject to the right of either party hereto to terminate at

the end o f any on e (1) year term by w ritten notic e,” R4-5 8, Ex. A at 2, § 2.3 , it is

unclear to us wh ether the a ct of inde mnificatio n itself, if the need so arose, w ould

15
   In City of Douglas, the Georgia Court of Appeals voided a contract entered into by a
municipality to pay damages to the owner of land, upon which the municipality had been granted
an easement for the purpose of running a sewer line, because it went beyond the term of office of
the council executing the contract and was not otherwise a covenant running with the land. 137
S.E.2d at 359-62. Unlike that case, the train/truck collision giving rise to our case actually took
place within the term of office of city officials who approved the agreement.

                                                16
“prevent free legislation in matters of municipal government,” O.C.G.A. § 36-30-

3(a), especially in light of the certain delays inherent in litigation, or whether the

act would c onstitute a “‘reason able time beyond the official term of the officers

entering into the contract for the municipality’” permitted by “‘[t]he weight of

authority.’” Unified Gov’t o f Athen s-Clark e Coun ty v. No rth, 551 S.E.2d 798, 803

(Ga. Ct. App. 2001) (citation omitted). Accordingly, we certify the question to the

Georg ia Supr eme Co urt.

       The second, other ground asserted by the City to void the indemnification

agreement is that it creates an unlawful public debt. The Georgia Constitution

prohibits any municipality from “incur[ring] any new debt without the assent of a

majority of the qualified voters . . . voting in an election held for that purpose as

provid ed by law .” Ga. C onst. art IX , sec. V, p ara. I(a).

       Whenever a political subdivision undertakes a liability which is “not
       to be discharged by money in the treasury, or by taxes to be levied
       during the year in which the con tract under which the liability arose
       was m ade,” suc h a debt is created. T herefor e, if a mun icipality
       undertakes an obligation that extends beyond a single fiscal year, then
       a new “d ebt” has b een incu rred w ithin the m eaning o f the Ge orgia
       Constitu tion and requires voter ap proval.

                                             17
Barkley v. City of Rome, 381 S.E.2d 34, 35 (Ga. 1989) (citation omitted).16 As

with the statutory provision precluding the binding of legislative successors, we are

uncertain whether a city’s indemnification agreement constitutes a fiscal obligation

extendin g beyon d a single year. Ac cording ly, we cer tify this qu estion as w ell.

        Even if the indemnification agreement here is not void as an unlawful

waiver of sove reign im munity, b inding o f success ors, or cr eation of a new p ublic

debt, that does not end the inquiry. As we have explained, there must be express or

implied a uthority in order fo r a mun icipality to en ter into a b inding c ontract. See

Forsyth Coun ty, 525 S .E.2d at 3 92. CS X doe s not arg ue that ex press au thority

exists for municip al indem nity contr acts. Rath er, they arg ue that the requisite

authority is implied from express constitutional and statutory authority to provide

sewer services as well as the authorization contained in the City’s charter to enter

into contracts for the provision of such services. 17 “A municipal corporation,

16
   Municipalities are permitted by statute “to enter into multiyear lease, purchase, or lease
purchase contracts of all kinds for the acquisition of goods, materials, real and personal property,
services, and supplies, provided that,” inter alia, “[t]he contract shall state the total obligation of
the . . . municipality for the calendar year of execution and shall further state the total obligation
which will be incurred in each calendar year renewal term, if renewed.” O.C.G.A. § 36-60-
13(a)(3). While a contract pursuant to, and meeting all the conditions of, § 36-60-13 “would fall
outside the purview of Art. IX, Sec. V, Par. I since it does not constitute a ‘debt,’” Barkley, 381
S.E.2d at 35, the indemnity provision here clearly does not, and could not, accurately state
Garden City’s total obligation, and, therefore, is not exempt from the constitutional provision.
17
   The Georgia Constitution provides in part that any “municipality . . . may exercise the
following powers and provide the following services: . . . [s]torm water and sewage collection
and disposal systems.” Ga. Const. art. IX, sec. II, para. III (a)(6). The statutory authority
provides:

                                                  18
unless restricted by its charter, has power to enter into any necessary contract for

the accomplishment of a corporate purpose. . . . [S]uch power necessarily implies

the right to do all things which may be required for the proper execution of such

power.” Mayor of Washington v. Faver, 117 S.E. 653, 656 (Ga. 1923) (citation

omitted).

         Where, by statute, jurisdiction over a subject-matter is conferred upon
         county a uthorities , and ther ein the po wer to d o certain th ings is
         express ed, the fu rther po wer to c ontract in regard to that subje ct-
         matter is to be implied; and a part of this implicit power is the
         authority to use discretion as to the details of such contracts, subject
         only to the limitations imposed by the statutes or public policy of the
         state.

Wrigh t v. Floyd Coun ty, 58 S.E. 72, 72 (Ga. Ct. App. 1907) (cited with approv al in

Smith v. Bd. of Comm’rs, 259 S.E.2d 74, 77 (Ga. 1979)). 18

         In addition to the other powers which it may have, any municipal corporation
         shall have the power under this chapter:

                (1) To acquire by gift, by purchase, or by the exercise of the right of eminent
                domain, to construct, to reconstruct, to improve, to better, and to extend any water
                system or sewage system, or both, within the municipal corporation;

                (2) To acquire by gift, by purchase, or by the exercise of the right of eminent
                domain any lands, easements, rights in lands, and water rights in connection
                therewith . . . .

     O.C.G.A. § 36-34-5.
18
  Recognizing the differences between municipalities and counties, the court neverthless
“believe[d] that the measure of [a county’s] contractual capacity, in relation to any subject-
matter expressly conferred by statute, is not different from that of other public corporations.”
Wright, 58 S.E. at 74-75.

                                                 19
       CSX relies on Hancock County v. Williams, 198 S.E.2d 659 (Ga. 1973) (per

curiam) (“William s I”) to argu e that this im plied auth ority inclu des inde mnity

agreements. In that cas e, the plain tiffs brou ght an ac tion “to rec over fo r the death

of their mother who w as drowned w hen the automobile in wh ich she was a guest

passenger ran into . . . an artificial impoundment of water . . . , on a road which ran

directly into such lake without any warning sign.” Id. at 660. The plaintiffs filed a

claim aga inst the po wer co mpany that ow ned the r oad and the lake. They also filed

a claim against a county government that had previously entered into an easement

contract with the power company for use of the road and, in that contract, had

agreed to indemnify the power company “for any damages arising out of the use of

such easement by the county.” Id. at 660, 661. The pow er company filed a cross

claim seek ing inde mnificatio n from the coun ty, and the county moved to d ismiss

both the claim and the cross claim. Finding that the county was authorized by

statute to provide recreational facilities for its residents, the court held that “the

contract w as autho rized [an d b]eing an autho rized con tract, the actio n wou ld lie

thereon” and, accordingly, affirmed the trial court’s order overruling both of the

county’s motion s. Id. at 661. In doing so, the court noted that it was not required

to first determine whether a state statute, providing for the county’s sovereign

immunity and its waiver, was unconstitutional as alleged because “[t]he complaint

                                             20
as finally amended set forth a cause of action against [the county] based upon the

contract which was valid.” Id. (emphasis added). Thus, by implication, the court

in William s I refused to dismiss the suit on the ground that the plaintiffs were

third-party beneficiaries to the indemnification contract between the county and the

powe r comp any. See O.C.G.A. § 9-2-20(a) (“As a general rule, an action on a

contract . . . s hall be br ought in the nam e of the p arty in w hom th e legal inter est in

the contr act is vested , and aga inst the pa rty who made it in person or by ag ent.”); §

9-2-20 (b) (“Th e benefic iary of a co ntract ma de betw een othe r parties fo r his

benefit may maintain an action against the promisor on the contract.”).

       In Williams v. Georgia Power Co., 212 S.E.2d 348, 350 (Ga. 1975)

(“Williams II”), however, on a postjudgment appeal by the plaintiffs after a jury

had returned a verdict for the power company and the county, the court did decide

the constitutional question, concluding that the statutory provision providing for

the county’s sovereign immunity was not unconstitutional. It also found that, since

there w as no sp ecific statuto ry autho rity waiv ing the co unty’s so vereign immun ity

and no ground to maintain a nuisance action against the county, the trial “court

[had] co rrectly cha rged the jury that th e only liab ility of the co unty w as unde r its

indemnity contract with the power company.” Id. at 351.

                                              21
       In Dekalb County v. Gibson, 246 S.E.2d 692, 692-93 (Ga. Ct. App. 1978),

the parent of a child who drowned at a county swimming pool brought a wrongful

death action against the county predicated on allegations of negligence and

nuisanc e as well a s an action as a third- party ben eficiary to a contract a llegedly

created b etween the coun ty and the child w hen he p aid adm ission to th e pool.

After findin g no basis fo r the nuisance c laim and no statute waiving the county’s

immun ity to the tor t claim, the c ourt con cluded th at William s I would not perm it

the third- party bre ach of co ntract claim because there, pre sumab ly unlike in

Gibson, “the county had entered into an indemnity contract under statutory

author ity with [the power com pany] and this contract authorized the suit against

the county.” Id. at 693. “In the absen ce of statu tory auth ority to m aintain this suit

[either as a tort or co ntracts claim ], the doctr ine of so vereign immun ity comp letely

bars this claim.” Id. Thus, William s I appears to hold that, irrespective of whether

sovereign immunity exists, if a county contract is generally authorized, a third-

party beneficiary action may be had, while Gibson holds that, absent express

statutory authority, a third-party breach of contract claim against a county is barred

by sove reign im munity. In other word s, Gibson seems to suggest that statutory

authority to enter into the contract waives sovereign immunity, while William s I

                                             22
appears to suggest that statutory authority permits the contract and that sovereign

immunity is not even an issue.

       In Miree v. United States, 249 S .E.2d 5 73 (G a. 1978 ), the matte r was ag ain

addressed. The Georgia Supreme Court, in answering certified questions from the

former Fifth C ircuit, con cluded th at plaintiffs , who h ad brou ght an ac tion again st a

county government to recover for injuries sustained as a result of the crash of a

Lear jet taking off from an airport operated by the county under contract with the

Federal Aviation Administration, were not third-party beneficiaries to that contract

because “[t]he county’s exposure of liability . . . is too broad to permit a contention

that every injured p arty was an intend ed bene ficiary un der the p ublic con tract in

this case.” Id. at 574, 5 75, 576 , 579. In doing s o, the cou rt first felt co mpelled to

observe that, after “review[ing] the record and the assignments of error in”

William s I, “[t]he sub sequen t decision of this co urt in that s ame case , [William s

II], limiting the holding in the earlier decision, is a correct pronouncement of the

law, and anything that was said in the first decision contrary to the pronouncement

made in the second decision will not be followed.” Id. at 579.

       Prior to reading Miree, we un derstoo d that William s I, Williams II and

Gibson all endor sed the sa me basic propo sition that, b ecause th e indem nity

contract between the county and the power company was valid as implied by

                                             23
statutory authorization of the activity giving rise to the contract in the first

instance, the plaintiffs’s third-party contract claim was also authorized. We do not

understand how Williams II limits the holding of William s I. We also are unsure

as to wh at effect this limitation, if any, has o n the valid ity of the in demnity

provision itself, irrespective of the validity of a third-party contract claim brought

by plaintif fs seekin g, in con tracts, wh at they are b arred by sovereig n immu nity

from re coverin g in a tort a ction. Fu rthermo re, even if these case s do assu me that a

county may agree to indemn ify a private party for the county’s own neg ligent acts,

it is not clear whether the argument presented in this case, that such agreements are

void in themselves, was squarely before the court in these other cases. It is also not

clear wh ether suc h an agr eement w ould also be perm issible if the county a greed to

indemnification for the negligent acts of other parties in addition to its own.19

       Thus, w e canno t readily ag ree with CSX that these cases con sistently

recogn ize the prin ciple that a m unicipality ’s implicit au thority “‘to e nter into

contracts necessary and proper to carry into effect [its] powers,’” Wright, 58 S.E.

at 74 (citation omitted), extends to indemnity agreements with private parties. The

19
  We find Garden City’s argument, that these cases are distinguishable because they involve
counties and not municipalities, unpersuasive because a county’s authority to waive its sovereign
immunity is less than that of a municipality. See O.C.G.A. §§ 33-24-51, 36-33-1(a).

                                               24
pattern o f these ho ldings is c onfusin g to us. T herefor e, we cer tify this qu estion to

the Geo rgia Su preme C ourt.

       After th oroug h review of Geo rgia law , we find that these is sues rem ain

unsettled and unaddressed and , therefore, certify the following questions:

       1.     MAY A GEORGIA MUNICIPALITY CONTRACTUALLY
              INDEMNIFY A PRIVATE PARTY FOR ANY AND ALL
              LOSS, DAMAGE, AND LIABILITY ARISING IN
              CONNECTION WITH A PUBLIC WORKS PROJECT
              INVOLVING THE PRIVATE PAR TY’S LAND?

       2.     IF NOT, IS THERE ANY LOSS, DAMAGE, OR LIABILITY
              ARISING IN CONNECTION WITH A PUBLIC WORKS
              PROJECT INVOLVING A PRIVATE PAR TY’S LAND FOR
              WHICH A GEORG IA MUNICIPALITY MAY
              CONTRACTUALLY INDEMNIFY THE PRIVATE PARTY?

                                 III. CERTIFICATION

       This ap peal ensu ed after th e district co urt gran ted sum mary jud gment in

favor of a municipality, finding that the municipality’s agreement to indemn ify a

private party for any and all loss, damage, and liability arising in connection with a

public works project involving the private party’s land interest was ultra vires and,

conseq uently, vo id. Becau se of the im portant is sues inv olving s overeig n immu nity

and municipal authority to contract, we have decided to certify the above-styled

questions to the Georgia Su preme Court. Neither the ph rasing used in these

questions, nor our own analyses, should limit the Supreme Court’s analyses or

                                              25
answers. To assist in its consideration of the questions, the entire record, along

with the briefs of the parties , shall be tra nsmitted to the Su preme C ourt of G eorgia.

Until the Supreme Court responds to our certified questions, all relevant

proceedings in this appeal are STAYED.

QUESTIONS CERTIFIED.

                                            26