Court Opinion

ID: 58074
Source: CourtListenerOpinion
Date Created: 2010-04-26 02:25:42+00
Date Added: 2024-06-11T17:19:42.200890
License: Public Domain

[DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS
                                                                FILED
                    FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                      ________________________ ELEVENTH CIRCUIT
                                                          DECEMBER 10, 2007
                             No. 06-11805                 THOMAS K. KAHN
                       ________________________               CLERK

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

CSX TRANSPORTATION, INC.,
NATIONAL RAILROAD PASSENGER CORPORATION,

                                                   Plaintiffs-Cross-
                                                   Defendants-Appellants,

                                  versus

CITY OF GARDEN CITY, GA,

                                                   Defendant-Third-Party-
                                                   Plaintiff-Appellee,

                                  versus

ARCO, INC.,

                                                  Third-Party-Defendant-
                                                  Cross-Claimant-Appellee.

                       ________________________

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

                           (December 10, 2007)
Before BIRCH and PRYOR, Circuit Judges, and COVINGTON,* District Judge.

PER CURIAM:

       In this appeal, we consider whether a Georgia municipality is liable under a

license agreement for personal injury and property damage caused by a train

collision. Plaintiffs-cross-defendants-appellants CSX Transportation, Inc. (“CSX”)

and National Railroad Passenger Corporation (“Amtrak”) appeal the district court’s

grant of summary judgment to defendant-third-party-plaintiff-appellee City of

Garden City, Georgia (the “City”) and third-party-defendant-appellee ARCO, Inc.

(“ARCO”). Because we have determined that CSX and Amtrak cannot establish

liability under the license agreement, and have not pled a claim sounding in tort,

we AFFIRM.

                                  I. BACKGROUND

       This case is before us for the fourth time. In a previous related opinion, the

Georgia Supreme Court set out the facts as follows:

              In 1996, the City entered into a series of agreements with
              CSX to utilize a railroad right-of-way to install water and
              sewer lines. The agreements required the City to
              indemnify and hold harmless CSX or its subsidiaries for
              all liabilities CSX incurred in connection with the project
              and for which CSX was not the sole cause. The
              agreements also required the City to maintain insurance

       *
        Honorable Virginia M. Hernandez Covington, United States District Judge for the
Middle District of Florida, sitting by designation.

                                              2
              covering the indemnity obligations the City had assumed.
              The City employed ARCO, Inc. (“ARCO”) as the general
              contractor for its pipeline installation project. In October
              1997, a National Railroad Passenger Corporation
              (“Amtrak”) passenger train collided with a tractor trailer
              operated by the City's subcontractor causing CSX to
              incur substantial property damage and subjecting CSX to
              third-party claims. CSX sought indemnification from the
              City in accordance with the agreements. The City
              refused and CSX 1 brought suit alleging that it was
              entitled to indemnification.

              The District Court granted summary judgment to the
              City, finding that the indemnification provisions
              constituted an impermissible waiver of the City's
              sovereign immunity in the absence of any evidence that
              the City had liability insurance to cover the indemnity
              claim. The Eleventh Circuit vacated the entry of
              summary judgment and remanded the case to the District
              Court for its consideration of the effect of the City's
              participation in the Georgia Interlocal Risk Management
              Agency (“GIRMA”), a multi-government insurance fund.
              CSX Transp., Inc. v. City of Garden City, 235 F.3d 1325
              (11th Cir. 2000) (“CSX I”). On remand, the District
              Court again granted summary judgment to the City,
              finding that the indemnification agreements were ultra
              vires and that OCGA § 36-33-1(a) did not authorize the
              City to waive its immunity by entering into an indemnity
              contract. CSX Transp., Inc. v. City of Garden City,
              Georgia, 196 F. Supp. 2d 1288 (S.D. Ga. 2002) (“CSX
              II”).

                    CSX again appealed to the Eleventh Circuit, which
              then certified two questions to [the Georgia Supreme]

       1
          There are two plaintiffs in the case: CSX which owns the train track on which the
collision occurred and Amtrak, which owns the wrecked train. For convenience, the [court]
refers to CSX as if it [were] the only plaintiff.

                                                3
Court:

   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., Inc. v. City of Garden City, 325 F.3d 1236
(11th Cir. 2003) (“CSX III”).

       [The Georgia Supreme] Court answered both
certified questions in the negative. CSX Transp., Inc. v.
City of Garden City, 277 Ga. 248, 588 S.E.2d 688 (2003)
(“CSX IV”). In so doing, [the Georgia Supreme] Court
noted that

   if the facts behind CSX's cause of action against
   the City fall within the scope of the coverage
   provided by the GIRMA policy and sovereign
   immunity would otherwise apply to that cause of
   action, the City's sovereign immunity is waived to
   the extent of such liability coverage.

CSX IV, [277 Ga.] at 251, 588 S.E.2d 688. Based upon
CSX IV, the Eleventh Circuit concluded that

   Georgia municipalities may never waive their
   sovereign immunity by, for example, contracting
   to indemnify third parties, without (1) express
   legislative authority or (2) satisfying the
   requirements of § 36-33-1(a).

                            4
             CSX Transp., Inc. v. City of Garden City, 355 F.3d 1295,
             1297 (11th Cir. 2004) (“CSX V”). The Eleventh Circuit
             found that “while the indemnification agreement between
             the City and CSX was correctly determined by the
             district court to be void as ultra vires, it must again
             remand the case to the District Court for consideration of
             whether, pursuant to O.C.G.A. § 36-33-1(a), Garden City
             waived its sovereign immunity as to CSX's cause of
             action by purchasing GIRMA insurance.” Id. It further
             determined that on remand,

                the district court must scrutinize the GIRMA
                policy and consider if the facts behind CSX's cause
                of action against the City fall within the scope of
                coverage provided by the GIRMA policy and
                sovereign immunity would otherwise apply to that
                cause of action to determine whether the City's
                sovereign immunity was waived to the extent of
                such liability coverage.

             (Punctuation omitted). Id. The Eleventh Circuit
             therefore affirmed in part and remanded in part the
             decision of the District Court for further proceedings
             consistent with its opinion.

CSX Transp., Inc. v. City of Garden City, 279 Ga. 655, 656-58, 619 S.E.2d 597,

598-99 (2005) (“CSX VII”). Instead of ruling on the issues framed by this Court

on remand, the district court certified five additional questions to the Georgia

Supreme Court. CSX Transp., Inc. v. City of Garden City, 391 F. Supp. 2d 1234,

1245-46 (S.D. Ga. 2005) (“CSX VI”). The Georgia Supreme Court declined the

certified questions, but took the “opportunity to reiterate [their] holding in CSX IV,

that the indemnification agreement between the City and CSX is void as an ultra

                                           5
vires contract. CSX VII, 279 Ga. at 658 n.4, 619 S.E.2d at 599.

      The district court then granted the City’s motion for summary judgment and

denied CSX’s motion for partial summary judgment. CSX Transp., Inc. v. City of

Garden City, 418 F. Supp. 2d 1366, 1378 (S.D. Ga. 2006) (“CSX VIII”). The

district court found that, in the latest round of briefs filed in the district court, CSX

relied on a sovereign immunity tort theory of liability, while CSX “pled and

proceeded on only a contract-based theory of recovery” during the remainder of

the case, which was CSX’s “indemnification contract claim that the City must pay

CSX for damages the City, if not others, tortiously caused.” CSX VIII, 418 F.

Supp. 2d at 1375-76. In a prior opinion, the district court recognized that “CSX

does not allege that the City breached any tort duty, or any other private right other

than the breach of the CSX-City indemnification agreement.” CSX VI, 391 F.

Supp. 2d at 1238. The district court further noted that CSX never attempted to

invoke Federal Rule of Civil Procedure 15(a) to amend its claim, “nor would such

be granted at this late hour.” CSX VIII, 418 F. Supp. 2d at 1376. As a result, the

district court found that CSX was pursuing a “legally inconsistent” theory, which

“therefore fails as a matter of law.” Id. Alternatively, the district court found that

it is impossible for CSX to recover damages under the contract because the

Georgia Supreme Court twice declared the indemnification agreement between

                                            6
CSX and the City to be void, which moots the insurance coverage issues on

remand. Id. This appeal followed.

                                     II. DISCUSSION

       We review the grant or denial of summary judgment de novo, applying the

same standard as the district court. Kinnon v. Arcoub, Gopman & Assocs., Inc.,

490 F.3d 886, 890 (11th Cir. 2007). Summary judgment is appropriate when,

“viewing all facts and reasonable inferences in the light most favorable to the

nonmoving party,” “there is no genuine issue as to any material fact and the

moving party is entitled to judgment as a matter of law.” Id. (citation omitted);

Fed. R. Civ. P. 56. The facts in this case are not in dispute. Rather, CSX argues

that the district court reversibly erred by finding that CSX abandoned its contract

claim against the City, and by concluding that the insurance coverage issues have

been mooted by the Georgia Supreme Court’s holding that the indemnity

agreement between CSX and the City is void.2

       In CSX’s complaint, CSX presented a claim for “contractual indemnity,”

seeking damages under the indemnification provision of its contract with the City.3

       2
         Because we find that the district court correctly determined that CSX abandoned its
contract claim against the City, we do not address its alternative holding that the GIRMA
coverage issues are moot.
       3
        CSX’s claims have always sounded in contract, as they acknowledge in their brief.
(Appellees’ Br. 14)

                                               7
R1-1 at 5-8. The Georgia Supreme Court twice held that the indemnification

provision was void. CSX then argued in the district court, and on appeal, that it

could recover damages under the contract’s separate insurance provision.4

Pursuant to O.C.G.A. § 36-33-1(a), CSX argues that an event occurred (the train

collision) as a result of a party’s fault or negligence, causing personal injury and

property damage covered by the City’s GIRMA policy, and the City waived its

ability to rely on sovereign immunity through its purchase of GIRMA insurance.

On that basis, CSX contended that the City was liable to CSX for tort damages

covered by the GIRMA policy, because the City assumed such liability under its

contract with CSX and purchased insurance to cover such liability.

      As the district court correctly found, CSX’s right to sue the City for torts

covered by the GIRMA policy does not arise from CSX’s contract with the City.

See CSX VIII, 418 F. Supp. 2d at 1375-76. That right is conferred by O.C.G.A. §

36-33-1(a) itself, which provides:

      4
          No court has ever found the City to be in breach of the insurance provision.

                                                 8
             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.

Id. The Georgia Supreme Court further clarified this issue, explaining that “the

indemnification agreement between CSX and the City has no effect on the issue of

the City’s waiver of immunity both because it is void and because under OCGA §

36-33-1(a) it is the purchase of insurance that effectuates the waiver of sovereign

immunity.” CSX IV, 277 Ga. at 250, 588 S.E.2d at 690. By the plain terms of the

statute, the City waived its sovereign immunity to the extent that it purchased

liability insurance covering occurrences to which sovereign immunity otherwise

would apply. Therefore, CSX did not need to sue on its contract with the City to

seek tort damages covered by the GIRMA policy.

      The district court also correctly determined that, in the latest stage of this

case, CSX abandoned its contract theory of liability and embraced a tort theory that

it had never pled before. CSX now argues that the City is liable for damages

caused by the train collision because the City has waived its sovereign immunity

from certain torts through its purchase of liability insurance. Even though CSX

contends that the City assumed liability for such damages under its contract with

                                           9
CSX, the Georgia Supreme Court’s opinion establishes that the City exposed itself

to tort liability by purchasing GIRMA insurance, not by entering into the contract

with CSX. CSX IV, 277 Ga. at 250, 588 S.E. 2d at 690. The district court is

correct; the contract has no bearing on this claim because CSX has transformed its

contract claim into a tort claim. CSX’s case has always been predicated upon an

underlying train collision, for which the City may or may not have waived its

immunity from tort liability, but CSX cannot use the insurance provision of its

contract with the City to bootstrap an unpled tort claim into this case. CSX never

pled a claim sounding in tort, and we cannot construe CSX’s pleadings so liberally

as to present such a claim. See Maniccia v. Brown, 171 F.3d 1364, 1367 n.1 (11th

Cir. 1999) (“the liberal construction afforded a pleading . . . does not require courts

to fabricate a claim that a plaintiff has not spelled out in his pleadings”). Because

the district court correctly found that CSX abandoned its contract claim against the

City, and CSX never moved to amend its pleadings under Federal Rule of Civil

Procedure 15(a) to assert a claim sounding in tort,5 we affirm the district court’s

grant of summary judgment to the City.

       5
        At oral argument, counsel for CSX acknowledged that CSX had never filed such a
motion because the district judge indicated that it would be denied. Even if that were true, this
Court cannot review the effect of a potential denial of a motion that was never filed.

                                                10
                               III. CONCLUSION

      Plaintiffs-cross-defendants-appellants CSX and Amtrak appealed the district

court’s grant of summary judgment to Defendant-third-party-plaintiff-appellee City

of Garden City and Third-party-defendant-appellee ARCO. Because we have

determined that CSX and Amtrak cannot establish that the City is liable under the

license agreement between CSX and the City, and because CSX has not pled a tort

claim, we affirm the district court’s grant of summary judgment to the City.

AFFIRMED.

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