Court Opinion

ID: 3063317
Source: CourtListenerOpinion
Date Created: 2015-10-14 20:58:23.514049+00
Date Added: 2024-06-11T12:07:58.383742
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                      ________________________           FILED
                                                U.S. COURT OF APPEALS
                             No. 09-13898         ELEVENTH CIRCUIT
                                                      FEB 08, 2010
                         Non-Argument Calendar
                                                       JOHN LEY
                       ________________________
                                                     ACTING CLERK

                  D.C. Docket No. 08-00087-CV-AAA-2

BRUNSWICK CELLULOSE, INC.,

                                                     Plaintiff-Appellant,

                                  versus

ROGERS CARTAGE COMPANY,
CONTINENTAL CASUALTY COMPANY,

                                                     Defendants-Appellees.

                       ________________________

                Appeal from the United States District Court
                   for the Southern District of Georgia
                      ________________________

                            (February 8, 2010)

Before BLACK, PRYOR and COX, Circuit Judges.

PER CURIAM:
      Brunswick Cellulose, Inc. appeals the grant of summary judgment to Rogers

Cartage Company and Continental Casualty Company. Brunswick Cellulose also

appeals the denial of its motion for summary judgment. We affirm.

      In 2000, Georgia-Pacific Corporation, a non-party, entered into a carriage

agreement with Rogers. The contract called for Rogers to deliver freight to and from

a mill operated by the Brunswick Pulp & Paper Company, which was a wholly owned

subsidiary of Georgia-Pacific. The contract required Rogers to assume all risks and

to indemnify Georgia-Pacific from all losses arising out of Rogers’ performance

under the contract. It also required Rogers to obtain liability insurance, and to “cause

[Georgia-Pacific] to be named as an additional insured” on the policy. (R.2-30, Ex.

A App. A.) The contract between Rogers and Georgia-Pacific covered “all of the

direct or indirect subsidiaries and affiliates of Georgia-Pacific Corporation.” (Id. Ex.

A at 1.) At the time of its execution, Brunswick Pulp & Paper Company was covered

under the contract as a subsidiary of Georgia-Pacific. Each year, the contract

renewed automatically unless one of the parties cancelled the agreement, and the

contract provided that it could not be assigned without the consent of either party.

      In 2004, Koch Cellulose, LLC, acquired Brunswick Pulp & Paper Company

from Georgia-Pacific. A purchase agreement between Georgia-Pacific and Koch

stated that the carriage agreement was an “excluded asset,” meaning Koch did not

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acquire rights under the carriage agreement when it purchased Brunswick Pulp &

Paper Company. (R.2-30 Ex. C Part 2 at 52.)

      Shortly after it acquired Brunswick Pulp & Paper Company, Koch renamed it

Brunswick Cellulose, Inc. Over the next several years, Brunswick Cellulose and

Rogers continued to do business with one another; Rogers delivered freight to and

from the Brunswick mill site and accepted payment for its services. However,

Brunswick Cellulose and Rogers did not execute a written carriage agreement from

2004, when Koch acquired Brunswick Cellulose, until 2007.

      In 2005, after Koch acquired Brunswick Cellulose but before a new written

carriage agreement was executed, Charles E. Bell, a truck owner and operator

working for Rogers was injured while making a delivery at the Brunswick Cellulose

mill. Bell filed a lawsuit against Koch and Brunswick Cellulose in the Superior Court

of Glynn County, Georgia. Brunswick Cellulose asked Rogers to defend and

indemnify it against Bell’s claims, but Rogers refused. The action remains pending

in the Georgia superior court.

      Invoking the court’s diversity jurisdiction, Brunswick Cellulose sued Rogers

in the U.S. District Court for the Southern District of Georgia for breach of contract

arising out of Rogers’ refusal to defend and indemnify Brunswick Cellulose in Bell’s

case. Brunswick Cellulose also sued Continental, Rogers’ insurer, for bad faith

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refusal to defend and indemnify. All parties moved the district court for summary

judgment. The court granted Rogers’ and Continental’s motions, and denied

Brunswick Cellulose’s motion because the court concluded Rogers and Continental

had no contractual obligations to Brunswick Cellulose under the May 2000 carriage

agreement. (R.5-61 at 7.) Brunswick Cellulose appeals.

      Brunswick Cellulose contends that it is entitled to indemnification and defense

in the Bell action because (1) it was an original party to the 2000 carriage agreement

between Georgia-Pacific and Rogers; and/or (2) Rogers’ conduct and course of

dealings with Brunswick Cellulose after the Koch acquisition ratified the carriage

agreement. We reject both of these arguments.

      We conclude Brunswick Cellulose had no rights under the 2000 carriage

agreement at the time the incident giving rise to the Bell action occurred. Under

Georgia law, a contract may be enforced “by the person in whom the legal interest in

the contract is vested.” Harris v. Joseph B. English Co., 63 S.E.2d 346, 347 (Ga.

App. 1951). A third party beneficiary may enforce a contract if its terms indicate that

the contract was intended for his or her benefit. Id. Brunswick Cellulose was neither

a named party to nor a named beneficiary of the 2000 carriage agreement. The

agreement created rights and obligations for Rogers and for Georgia-Pacific and its

subsidiaries. (R.2-30 Ex. A at 1.) The carriage agreement applied to Brunswick Pulp

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& Paper Company only so long as it remained a subsidiary of Georgia-Pacific. Once

Koch acquired Brunswick, it could no longer claim any benefits under the contract.

Any questions as to whether the rights and obligations of the carriage agreement

transferred to Koch and the newly renamed Brunswick Cellulose as part of the

acquisition are resolved by a review of the terms of the purchase agreement between

Koch and Georgia-Pacific. It lists the carriage agreement as an excluded asset. So,

after the acquisition, the rights and obligations of the carriage agreement remained

with Georgia-Pacific and its subsidiaries; the contract ceased to be effective as to

Brunswick Cellulose.

      After Koch acquired Brunswick Pulp & Paper Company and renamed it

Brunswick Cellulose, Rogers continued to deliver freight to and from the Brunswick

mill. But, Rogers and Brunswick Cellulose did not execute a formal carriage

agreement until 2007. We have no reason to conclude that between 2004 and 2007,

Brunswick Cellulose and Rogers agreed that Rogers would indemnify or defend

Brunswick Cellulose for losses arising from their business dealings. While in 2004

Brunswick Cellulose asked that Rogers name it as a beneficiary on its insurance

policies, Rogers did not respond to this request. Nor did it expressly or implicitly

assent to defend or indemnify Brunswick Cellulose prior to the execution of a formal

carriage agreement in 2007. The incident giving rise to the Bell action occurred when

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neither Rogers nor its insurer were under any obligation to indemnify or defend

Brunswick Cellulose. Therefore, the district court correctly concluded that both

defendants are entitled to summary judgment, and it did not err in dismissing

Brunswick Cellulose’s lawsuit.

      AFFIRMED.

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