Court Opinion

ID: 37141
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:49:31+00
Date Added: 2024-06-11T17:15:34.088394
License: Public Domain

United States Court of Appeals
                                                                   Fifth Circuit
                                                                F I L E D
                 IN THE UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT                 December 10, 2004
                        _______________________
                                                            Charles R. Fulbruge III
                              No. 04-10095                          Clerk
                        _______________________

         THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY,

                         Plaintiff - Appellee,

                                  v.

                    INTERDOM PARTNERS, LTD., ET AL,

                              Defendants,

                INTERDOM PARTNERS, LTD., INTERDOM INC.,

                       Defendants - Appellants,

                        _______________________

             Appeal from the United States District Court
                  for the Northern District of Texas
                        _______________________

Before WIENER and PRADO, Circuit Judges, and LITTLE, District
Judge.*

PER CURIAM:**

     Appellant Interdom Partners Ltd. (“Interdom”) appeals from

the district court’s grant of summary judgment, in which the

district court determined that Interdom must indemnify Appellee

The Burlington Northern and Santa Fe Railway Company (“BNSF”) for

     *
      District Judge of the Western District of Louisiana,
sitting by designation.
     **
       Pursuant to 5TH CIRCUIT RULE 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIRCUIT
RULE 47.5.4.

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damages from a train derailment.       Because fact questions

concerning the cause of the derailment prevent summary judgment,

we reverse and remand.

Background Facts and Procedural History

     Interdom serves as a sort of shipping intermediary.        In this

role, Interdom arranges for the transportation (including by

rail) of commodities for clients, who include various carriers

and direct shippers.   As part of that process, Interdom entered

into a series of agreements with BNSF.       This case involves the

provision in those agreements where Interdom agreed to indemnify

BNSF for damage “proximately caused by or resulting from” failure

to comply with BNSF’s requirements or from failure to load and

brace the cargo properly, unless caused by BNSF’s sole

negligence.

     On January 17, 2001, a BNSF train carrying a load of steel

coils, among other items, derailed near Loder, Oklahoma.

Interdom had arranged for the transportation of this load.       The

parties appear to agree that, because of an improper description

from another company, Interdom was not aware that the containers

it was transporting contained steel coils.       The parties also

agree that, under their contracts, steel coils required different

handling from other kinds of cargo and that special bracing

procedures for steel coils were not used in this case.       In fact,

the insufficiency of the framework that supported the coils has

                                   2
been cited, particularly by BNSF, as one possible cause of the

derailment.

     Following the derailment and repair, BNSF sued Interdom in

the Northern District of Texas.   In the suit, BNSF claimed that

the indemnification provisions in the agreements required

Interdom to pay for all the damage from the derailment.     BNSF’s

complaint also included claims for breach of contract,

negligence, and negligent misrepresentation.     Interdom filed

third-party claims against Columbus Line, Inc., the company that

provided the incorrect description, which in turn filed third-

party claims against four other companies.     On November 6, 2003,

BNSF moved for summary judgment on its indemnity claims against

Interdom.

     The district court granted BNSF’s motion for summary

judgment, finding that Interdom’s liability was established

because the parties’ experts “do not rule out the improper

loading of the coils and the mislabeling of the shipment as

proximate causes of the derailment.”     The district court also

concluded that BNSF had established the amount of its damages.

After reaching these conclusions, the court entered a final

judgment on these claims in the amount of $3,230,100.30 plus

post-judgment interest and costs.     Interdom filed a notice of

appeal, and the district court stayed the remaining proceedings.

Standard of Review

                                  3
     We review the district court’s grant of summary judgment de

novo.   Moore v. Willis Indep. Sch. Dist., 233 F.3d 871, 874 (5th

Cir. 2000).   Summary judgment is appropriate when there are no

genuine issues of material fact and the movant is entitled to

judgment as a matter of law.   FED. R. CIV. P. 56(c).   When faced

with a summary judgment motion,

     [T]he court must review all of the evidence in the
     record, but make no credibility determinations or weigh
     any evidence. In reviewing all the evidence, the court
     must disregard all evidence favorable to the moving party
     that the jury is not required to believe, and should give
     credence to the evidence favoring the nonmoving party as
     well as to the evidence supporting the moving party that
     is uncontradicted and unimpeached.

Moore, 233 F.3d at 874 (citations omitted).

Discussion

     Each party cites different provisions of their agreements

when arguing whether summary judgment was appropriate.     Interdom

emphasizes the existence of a dispute about the proximate cause

requirement, whereas BNSF contends that Interdom has not

presented any evidence supporting the sole negligence exception

to the indemnity agreement.

     The relevant parts of the agreement read:

     The shipper will be liable to BNSF or any third party for
     property damage, personal injury or death proximately
     caused by or resulting from (1) failure to comply with
     any requirement set forth in this BNSF Intermodal Rules
     and Policies Guide, including, but not limited to,
     equipment specifications and standards, (2) a defect in
     a vehicle supplied by shipper, or (3) failure of the
     shipper to load and brace the lading properly and in
     accordance with the requirements set forth in this BNSF

                                  4
     Intermodal Rules and Policies Guide, unless caused by the
     proven sole negligence of BNSF.

     IT IS EXPRESSLY INTENDED THAT THE SHIPPER IS TO INDEMNIFY
     BNSF PURSUANT TO THE FOREGOING; SUCH INDEMNITY SHALL
     INCLUDE (1) INDEMNITY FOR THE NEGLIGENCE OR ALLEGED
     NEGLIGENCE OF BNSF, WHETHER ACTIVE OR PASSIVE, WHERE SUCH
     BNSF NEGLIGENCE IS A CAUSE (BUT NOT THE SOLE CAUSE) OF
     THE LOSS OR DAMAGE; (2) INDEMNITY FOR STRICT LIABILITY
     RESULTING FROM VIOLATION OR ALLEGED VIOLATION OF ANY
     FEDERAL, STATE OR LOCAL LAW OR REGULATION BY BNSF,
     INCLUDING, BUT NOT LIMITED TO, THE FEDERAL EMPLOYERS
     LIABILITY ACT, AND THE OCCUPATIONAL HEALTH AND SAFETY
     ACT.

     The Shipper will defend and indemnify BNSF from and
     against the loss and damage described above and for the
     cost of defending claims filed against BNSF for such
     damage, including, but not limited to, reasonable
     attorney’s fees necessary to defend against claims or
     suit. Upon tender of the defense for any claim or action
     against BNSF, shipper shall, at its expense, defend BNSF
     in such claim or action.

     Acceptance by BNSF of a shipment not in compliance with
     this BNSF Intermodal Rules and Policies Guide will not
     serve to release the shipper from its obligations,
     including the obligation to defend and indemnify BNSF
     . . . .

     Emphasizing the requirement that the damage be “proximately

caused by or resulting from” any of the listed things, Interdom

argues that the experts disagree about what caused the derailment

and that they therefore disagree about whether Interdom’s actions

proximately caused the accident.       In contrast, BNSF contends that

none of the experts suggest that BNSF’s negligence was the sole

cause of the derailment and that it was therefore entitled to

summary judgment.   In making this argument, BNSF invokes the sole

negligence exception and skips over the “proximately caused by or

                                   5
resulting from” language.    The issue thus becomes whether cause

is a prerequisite for indemnity under the agreement.

     We conclude that it is––the proximate cause requirement must

be met before the indemnity clause applies.    This reading is

clear from the language introducing the provision: “The shipper

will be liable to BNSF or any third party for property damage,

personal injury or death proximately caused by or resulting from

....”   (Emphasis added).   The sole negligence provision is an

exception, as evidenced by its “unless” language.     Without

showing that one of the listed items caused the damage, BNSF is

not entitled to idemnity.

     Thus, to analyze whether summary judgment was proper, we

must first address whether BNSF’s evidence established that this

initial requirement was met.    This requirement can be met in two

ways––damage can be either proximately caused or “resulting from”

the action.   Under Texas law, proximate cause has two parts:

foreseeability and cause in fact.     Southwest Key Program, Inc. v.

Gil-Perez, 81 S.W.3d 269, 274 (Tex. 2002).    The parties,

particularly Interdom, emphasize the cause-in-fact element.      For

cause in fact, a party must show that an action was “a

substantial factor in bringing about [the] injury and without

which no harm would have been incurred.”     Id.   “Resulting from,”

too, requires causation.

     Interdom bases its challenge on this point and argues that

                                  6
BNSF failed to conclusively show that Interdom’s actions caused

the derailment.1   Thus, according to Interdom, a fact question

remains.   In making this argument, Interdom emphasizes that, in

reviewing summary judgment, all factual inferences from the

evidence are to be drawn in favor of it as the nonmovant.     See

Moore, 233 F.3d at 874.

     As part of this evidence, Interdom cites the affidavit of

its expert Gregg Perkin, who concluded that “too many facts

remain for anyone to precisely determine the proximate cause(s)

of this derailment.   The possibility remains that BNSF directly

contributed to the events leading up to this derailment.”   While

not ruling out improper loading of steel coils as a cause, Perkin

provided other possible causes of the derailment: structural

deficiencies with the railcar, defects along the railway,

slipping by another car, and the train’s speed.   With all of

these unknown factors, Interdom contends that a fact question

exists regarding proximate cause.

     We agree with BNSF, however, that Perkin’s affidavit is

insufficient by itself to defeat summary judgment because it

merely indicates, without elaboration or support, that several

     1
      According to the district court, the plaintiff’s experts
“do not rule out the improper loading of the coils and the
mislabeling of the shipment as proximate causes of the
derailment.” Interdom contends that this kind of analysis places
an improper burden on it when it was BNSF’s burden to establish
proximate cause.

                                 7
causes might be possible.2    It does not provide its own view of

causation; because it is so vague, it also does not impeach

BNSF’s expert opinion.     Nevertheless, Interdom has provided

further evidence beyond Perkin’s affidavit.     Interdom also

provided the reports of two other experts, Colin Fulk and Roger

Iversen.3    Both reports were based on examination of the site and

cars, and both reports provide specifics of other possible

causes.     In particular, Fulk contends that defects in the rail

car, combined with train speed and track conditions, caused the

derailment.     The second expert report, by Iversen, concluded that

the train derailed because of BNSF’s excessive rough handling.

These experts’ opinions contradict the opinion of BNSF’s expert,

who contended that derailment was caused by the steel coils

exceeding the maximum weight for the container.     In other words,

these reports show the existence of a fact question concerning

causation and, more importantly, concerning whether any of the

actions listed in the agreement caused the derailment.     This

dispute among the experts cannot be resolved at summary judgment.

Because of this dispute, summary judgment on BNSF’s indemnity

claim was improper.

Conclusion

     Because a fact question concerning proximate cause remains,

     2
      We also note that Perkin never physically examined the rail
car or the site.
     3
      These experts were retained by other parties.

                                   8
the district court’s grant of summary judgment was incorrect.   We

reverse and remand for further proceedings in the district court.

REVERSED AND REMANDED.

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