Court Opinion

ID: 76439
Source: CourtListenerOpinion
Date Created: 2010-04-27 00:00:07+00
Date Added: 2024-06-11T12:08:39.708635
License: Public Domain

[PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                     FOR TH E ELEV ENTH C IRCUIT
                                                                FILED
                       ________________________ U.S. COURT OF APPEALS
                                                         ELEVENTH CIRCUIT
                                                           January 12, 2004
                              No. 02-12261
                                                          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-
                                                        Defen dants-A ppellants ,

                                   versus

THE CITY OF G ARD EN C ITY,

                                                         Defendant-Third-P arty
                                                             Plaintiff- Appe llee,

                                   versus

ARC O IN C.,

                                                         Third- Party D efendan t-
                                                      Cross- Claiman t-App ellee.

                        ________________________

                 Appeal from the United States District Court
                    for the S outhern District o f Geor gia
                      _________________________
                             (January 12, 2004)
Before AN DERS ON, BIR CH and B ARKE TT, Circuit Judges.

BIRC H, Circ uit Judg e:

      This court certified to the Supreme Court of Georgia two questions of

Georgia law that we found determinative of a case pending in this court and for

which there app eared to b e no con trolling p receden t. CSX Transp., Inc. v. City of

Garde n City, 325 F.3d 1236, 1249 (11th Cir. 2003). The Georgia Supreme Court

answered both certified questions, and, based on its answers, we AFFIRM in part

and RE MA ND in part.

      The G eorgia S uprem e Cour t set out the facts as fo llows:

      In 1996 Garden City entered into a series of agreements with CSX
      Transportation Inc. and its affiliates to utilize a railroad right-of-way
      to install w ater and s ewer lin es. The a greeme nts requ ired Ga rden C ity
      to indem nify and hold ha rmless C SX o r its subsid iaries for a ll
      liabilities CSX suffered in connection with the project and for which
      CSX was not the sole cause. The agreements also required Garden
      City to m aintain ins urance c overing the indem nity oblig ations the City
      had assumed. In October 1997 a passenger train collided with a
      tractor traile r operate d by G arden C ity's subco ntractor c ausing C SX to
      incur su bstantial p roperty d amage a nd sub jecting CSX to third-pa rty
      claims. CSX sought indemnification from Garden City in accordance
      with the agreem ents. Ga rden C ity refused and CS X bro ught su it
      alleging that it was entitled to indemnification. The district court
      granted summary judgment to the City, finding that the
      indemnification provision constituted an impermissible waiver of the
      City's sov ereign im munity in the absen ce of any evidenc e that the C ity
      had liability insuran ce to cov er the ind emnity cla im. The Eleven th
      Circuit reversed and remanded to the trial court for its consideration
      of the effect of the City's participation in the Georgia Interlocal Risk
      Mana gemen t Agen cy (GIR MA ), a multi-g overnm ent insur ance fun d.

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       On remand, the district court again granted summary judgment to the
       City, finding that the indemnification agreements were ultra vires and
       that O.C .G.A. § 36-33 -1(a) did not auth orize the C ity to waiv e its
       immun ity by enter ing into a n indem nity contr act.

CSX Transp ., Inc. v. C ity of Ga rden C ity, 588 S .E.2d 6 88, 688 -89 (G a. 2003 ).

CSX again appealed the district court's ruling to us, whereupon we certified the

follow ing two question s to the G eorgia S uprem e Cour t:

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

CSX Transp., 325 F .3d at 12 49.

       The Georgia Supreme Court answered both certified questions in the

negative . CSX Transp., 588 S.E.2d at 689. Relying on the plain language of

O.C.G.A. § 36-33-1(a), 1 the court concluded that “sovereign immunity may be

       1
       O.C.G.A. § 36-33-1(a) provides that
      there is no waiver of the sovereign immunity of municipal corporations of the state
      and such municipal corporations shall be immune from liability for damages. A
      municipal corporation shall not waive its immunity by the purchase of liability
      insurance, . . . 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).

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waived only by an act of the legislature” and, therefore, “the indemnification

agreement between the City and CSX is void as an ultra vires contract.” Id. at 690.

The court also “decline[d] CSX's invitation to find that municipalities have an

implied authority to do what is expressly reserved to the legislature.” Id. Thus,

according to the Georgia Supreme Court, Georgia municipalities may never waive

their sovereign immunity by, for exam ple, contracting to indemnify third parties,

without (1) express legislative authority or (2) satisfying the requirements of § 36-

33-1(a ). See id.

       Finding the indemnity contract between the City and CSX to be void for lack

of legislativ e author ity, how ever, did not end the Geo rgia Su preme C ourt's analysis

because, under § 36-33-1(a), a municipality's sovereign immunity still may be

waived “by the purchase of liability insurance if the 'policy of insurance issued

covers an occurrence for which the defense of sovereign immunity is available, and

then on ly to the ex tent of the limits of su ch insur ance po licy.'” 2 Id. (quoting

O.C.G .A. § 36 -33-1( a)). Consequently, while the indemnification agreement

betwee n the City and CS X wa s correctly determin ed by the district cou rt to be vo id

as ultra vires, we again must remand this case to the district court for consideration

of whether, pursuant to O.C.G.A. § 36-33-1(a), Garden City waived its sovereign

       2
       The Georgia Supreme Court stated that the City's “purchase of a GIRMA coverage
agreement . . . constitutes the purchase of liability insurance.” CSX Transp., 588 S.E.2d at 690.

                                                4
immunity as to CSX's cause of action by purchasing GIRMA insurance. On

remand, the district court on remand must scrutinize the GIRMA policy and

consider “if the facts behind CSX's cause of action against the City fall within the

scope o f covera ge prov ided by th e GIR MA policy an d sover eign imm unity w ould

otherwise apply to that cause of action” to determine whether the City's sovereign

immunity was “waived to the extent of such liability coverage.” Id. The decision

of the United States District Court is therefore AFFIRMED in part and

REMAN DED in part for further proceedings consistent with this opinion.

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