Brief in Opposition to Petition for a Writ of Certiorari — Midwest-Raleigh, Inc. v. Eastern Gas & Fuel Associates

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' SUPREME COURT. U. &.

: | eZ |. SEP 27 1087

In THE | ;

Supreme Court of the United “nits: °™

NO. 553

_ OCTOBER TERM, 1967

MIDWEST-RALEIGH, INC., THE TRAVELERS IN-

SURANCE. COMPANY, INTERSTATE ENGINEERS

- & CONSTRUCTORS, INC., and THE FIDELITY & CAS-

UALTY COMPANY OF NEW YORK et al., Petitioners,

.

EASTERN GAS & FUEL ASSOCIATES, Respondent.

RESPONDENT’S BRIEF IN OPPOSITION TO THE —

GRANTING OF A WRIT OF CERTIORARI

RUSSELL L. FURBEE

First National Bank Building

Fairmont, West Virginia

Counsel for Respondent

' Of Counsel: '

“ FuRBEE, AMos, WEBB &

CRITCHFIELD

Attorneys at Law

First National Bank Building

Fairmont, West Virginia

——

SMITH BROS. CO. INC., LAW PRINTERS, 620 SECOND AVENUE, PITTSBURGH, PA. 15219

aS tO ERE

: — PAGE

OPINIONS BELOW .....:....-.-0-..055- arte 41

' STATEMENT OF THE CASE ...............--- 2

THE CONTRACT. ......:...200-eee0e: Ser Re

ARGUMENT BY POINTS ..+.......---.+--- an

I. The Court of Appeals acted | in harmony

with the Erie principles and doctrine and

did not disregard West Virginia law...... 8

If. The Court of Appeals responded to its

judicial responsibilities in reversing the

District Court on interpretation and appli-

cation of the indemnity contract terms and

provisions and did not disregard Federal

Rules of Civil Procedure. Rule 52(a). 5 in.

CONCLUSION .......-..-0-010000 0 Guests a

TABLE OF AUTHORITIES |

CasEs

Aluminum Co. v. Hully 200 F. > eae ieee ae

. Anthony v. L. & A. Railway Co. 316 F. 2d 858

_ (1963) .......-..-- iucdbodecuscewedeuseves 15

' Associated Engineers, Inc. v. Job, 370 F. 2d 633

i. 3 BP eerperrererr rr tree 8

' Atlantic Coast Line Railways Co. Vv. Robertson 214.

pf to fy Err rrr rrr errr 14, 15

Birmingham v. Louisville & NRC. Co. 316.F. 2d

858 (1964) pi cwdvadhacendes sv esieernuhdeus 15

Booth-Kelly Co. v. South Pacific Co. 183 F. 2d 902 ih

GEE ac cigbvcpissdsewstn cheeses ctacssvetee 16

Borderland Coal Co. v. Norfolk & W. Ry., 87 W. Va.

*. - $B: 106 BI. GB4 (1000)... occ ccc sccccccsess 8

Bowlby-Harman Lumber Co. v Commodore Serv-

ices, Inc.,'144 W. Va. 239, 248; 107 S.E, 2d 602,

607 ( 1959) ED Hievccvsseavksvedeerers 8

“Table of Authorities.

: or) Cases | PAGE

Broderick v. Cauldwell-Wingate Co. Inc.; 281 A.D.

904; 120 NYS 2d 289, aff’d 305 N.Y. 872..-... 13 |

Burke v. ‘City of New York, 2.N. Y. 2d 90 Tiebeee 14

Carstens v. Western Pipe & Steel Co., (142 Wash.

259, 252 Pac. 939 (1927). i din Gis FIG aie Pe oe « 9.

' coniaegial aces v. C. R. Jahn Company, 4 Ill.

App. 2d 164, 123 N. E. 2d 858 (1954)........

Cerny-Pickas & Co. v. C. R. Jahn Co., 7 Ill. 2d 393, ° ,

131 i & 2 | a eee 10

Chicago & N.W. Railway Co. v. Cateage Fuel Co.

—«-183 F.. 2d 630 (1950) Sake dude CRO EDITED 000 15

Consolidated Coal Co. v. Peers, 150 Il. 344, 37 N.E.

937 ee a

Erie R.R. Co. v. Tompkins, 304 U. S. 64, 58 S. Ct.

817, 82 L. Ed. 1188 (1938)....... Db iuececns 8

General Acc. F. & L. Assur. Corp., Ltd. v. Smith &

Oby Co., 6 Cir., 1959. 272 F. 2d 581, 77 A.L.R. -

soca tess cihcy <cc4s vice cs sxc: 15,16

. General Electric Co. v. Hatzel & Buehler, 19 A.D.

Gish oa de ceaeeeenns ¥tgegecsas 14

George H. Dingledy Lumber Co. v. Erie R. Co., 102

Ohio St. 236; 131 N.E, 723. (1921)........... 17

Griffiths v. Henry Broderick, Inc., 27 Wash. 2d 901,

162 P. 20 18 (9987)... 62. k ie cececesciceseee 9D

Insurance Co. of N.A. v. Elgin, J. & E. Railway Co.

229 F. 2d 705 (1956)....... re re Pre 15

Jacksonville Terminal Co. v. Railway Express

Agency, Inc. 296 F.2d 256 (5 Cir. 1961). cer-

tiorari denied, 369 U.S. 860, 82 S. Ct. 949, 8 L.

Ed..2d 18 (1962) . < A Se Fy ae ie ee - 15,19

Jordan v. City of New York, 3 A.D. da 507, aff'd

without opinion, 5.N.Y. 2d 723......:.... ag”

Table of Authorities.

Cases: * PAGE

Korzak v. Curry Auto Rental Inc. 17 Mis. 2d 685 |

RR orcs et bea ait 5 head bee ck ooh L 14

Llewellyn v. Board of Education, 324 tl. 254, 154

RR Rectan iia I iy 10

Mace v. Carpenter & Lloyd, 147 W. Va. 322, 127 SE. |

le . , Ete ree :9

McAndrews & Forbes Co. v . Mechanical Mtg. Co.,

367 Tl 288, 11-N. E. 24 382 Sioa i Se 10

_ Moses-Ecco Co. 'v. Roscoe Ajax Corp., 115 US. Apo.

D.C. 366; 320 F, 2d 685 (1963).......... ;. «12, 16 )

Patent Scaffolding Co. v. Standard Oil Co., 68 Ill.

App. 2d 29, 215 N.E. 2d 1 (1966), 6 Syllabus. . 11

Price & Co. v. Union Lighterage Co., 6 British Rul-

ing Cases 119 (1904) ..........ceeccseeeeee oO

Rice v. Pennsylvania Railway. bacon 202 Fed.

+ < G B Ss ch 66504 nme Shes be eeeetaceen 15

: a New York City Railroad Co., 1 A.D. 2d

p hehe abe weke ew bee CE¥ 0s 600 ban 6b sees eee ke 18

Seaboldt v. Pennsylvania Railway Company, 290 F.

i ee CEC cco s sieht ceakaaccuce deus 15

_ Southern Pacific Co. v. Fellows, 71: Pac. 2d 1. - Ores 14

. §t. Paul Mercury Indemnity. Co. v. Kopp, Ohio App. ia

BF 8 DG RS ret Te eee 17

Thompson Starrett v. Otis Elevator, 271 N.Y. 36.. 13

Union Pac. Ry v. Ross Transfer Co., 64 Wash. 2d

486, 392 P. 2d 450 (1964) . Peeatr eae co ae

Unitec Corp. v. Beatty Safeway Scaffold Co. 358. F.

2d 470 (March 19, 1966)...........0.0. eee, 16

‘United Air Lines, Inc. v. Wiener, 335 F. 2d 379 (9th:

Sees PTA cc ucesbisea tebe veeecekbepeucecs 19

United States Fid. and Guaranty Co. v. O'Neil Seat

Be Ws WN Is Se ec aN vec cbivicecveecaecss 16

iv -

— of Authorities.

United state v John McShain, Inc., 258 F. 2d 422

_ -(D.C. Cir.\ 1958), certiorari denied, 358 U.S.

. =, 79 S. Ct. 52, 3 L. Ed. 2470 (1958), 424-

eeeeeyvpe eee eee et emeeeeeet eee e ee eee eeeveae

West v. Ranney Refrigerator Co, 261 Il. 560, 104

cy ie eee bias Babee eRe en

Rape

SOG NE eon ior viclics fee so sore res

1965 Excerpt, 1965 Proceedings of hattiatilien Bar

‘ - Association’s Section on Insurance, Beate I

and Compensation law, page 269.........%..

Rule 52 (a) Federal Rules of Civil Procedure. . Pn,

4 Williston on Contracts § 609 (3d Ed. 1961).:.....

PAGE

_:

on March 7, 1967, be denied.

_ Supreme Court of the United States

NO. 558

_ OCTOBER TERM, 1967

MIDWEST-RALEIGH, INC., THE TRAVELERS IN-

SURANCE COMPANY, INTERSTATE ENGINEERS

& CONSTRUCTORS, INC., and THE FIDELITY & CAS- 7

UALTY COMPANY OF NEW YORK et al., Petitioners,

. v.

EASTERN GAS & FUEL ASSOCIATES, Respondent :

RESPONDENT’S BRIEF IN OPPOSITION TO THE

GRANTING OF A WRIT OF re eam

The Respondent, Eastern Gas & Fuel Associates,

respectfully prays that a Petition for a Writ of Certio-

rari by Petitioners, Midwest-Raleigh, Inc., The Travelers

Insurance Company, Interstate Engineers & Construc-

tors, Inc., and The Fidelity & Casualty Company of New

York, to review the judgment of.the United States Court

of Appeals for The Fourth Circuit entered in this cause

a

OPINION S BELOW

* The opinion of The United States District Court fr

, The Northern District of West Virginia will be found in

"the certified appendix (94a-112a), and it is reported in

.253 F. Supp, 954. The opinion of the Court of Appeals

is reportelin 374 F. oe Se GES WHE be Deans is the

appendix to the Petitioners’ petition at la-8a.

| Statement of the Case.

STATEMENT OF THE CASE

Respondent desires only to amplify the statement_

_. Of the case as contained in the petition i in that the state-

ment therein presented wholly fails to imclude matters

and things known to Interstate, and which should have

controlled their activities particularly relating to safety

_ precautions and measures that should have been em-

ployed and used by them in the dismantling of the plant.

It assumes in ph 4 of Petitioners’ Brief that

.. Harold Sargeant, who was the active head of Interstate,

was wholly and entirely innocent and had no knowledge

of the dangerous operation under his control. It as-

sumes as a fact that Sargeant was told that the shaft

was filled, etc. The preponderance of the evidence is

otherwise. The physical set up makes such a lack of

knowledge by Sergeant an impossibility. Mr. Sargeant

' ‘knew this was a gaseous mine, as he stated at T. Page

40 (26a), that he knew this was a gaseous mine. He

stated the concrete pad, or slab, was practically the

“center of the operations of the job”, (T. 58) (28a),

_ and that his men dropped debris and material on the

slab — (T. 59) (29a). He testified he had not seen the

trap door on top of the slab because his own men had

deposited so much debris on the slab—(T. 63) (30a).

| The testimony of Harold Sargeant shows that de-

spite his training and experience as a mining engineer,

his familiarity with the existence of the shaft, the

gaseous nature’ of the mine, and the fact that the slab

was the. “center of operations”, including the use of

cutting torches, neither he nor any of his employees »

‘ ever made any gas tests — (T. 64) (30a). As a matter

- of fact, even though he knew the contract required him

Statement of the Case. |

to use “eutrenne care”, he made no provisions for gas

tests even though his own foreman (decedent Ice) re-

minded him this was a “hot” mine and expressed great

concern! — .(T. 83-84) (30a-31a). And this was 3 to

4 weeks before the explosion — (T. 85) (32a). It was

with knowledge of these facts that he and his employees

continued the use of cutting torches, which discharge

highly combustible gases ond create: flame. (T. 88-89)

(33a-34a).

He admitted heswletgi of small being started

by his burning operations (T.99) (34a-35a) : that these

in fact occurred on top of the slab, as well as in its

immediate vicinity (T. 100) (36a); that the fire was

“flying around” from the torches (T. 109) (37a); and

that there was so much fire around the top of the slab

that “it looked like a 4th of July exhibit.” (T. 111)

(37a). ‘

We contend that Interstate’s knowledge of these.

facts, together with knowledge that this was a gaseous

mine, and the expressions of concern made to Sargeant

by Mr. Ice, convict Interstate of negligence of the

greatest degree, and can hardly be said to constitute the

“extreme care” which they agreed to exercise:

Nowhere in the record is there anything to indicate

the contract between the parties was intended to cover

only surface prevention of fire, accident, etc.

, Likewise, there is nothing in the contract between

the parties that the “extreme care” required of Inter-

state did not cover the entire dismantling process,

whether it be above or below the surface, and which has

:. been interjected in the argument of petition, without

any basis in fact. .

Statement of the Case.

We cannot pass without comment the statement on

* . pages 5 and 6 of Petitioners’ Brief, wherein they say:

“In other words and contrary to all prior deci- .

sions elsewhere in the country on this point, the

Fourth Circuit Court of Appeals now holds that an

indemnity provision general and “unqualified” in its

terms, will be extended to protect the indemnitee

‘against its own negligence and that in the Fourth

Circuit, at least, it is now up to the indemnitor who .

did not prepare the agreement to limit or qualify

the extent of indemnification in order to prevent its

application to the indemnitee’s own sole negligence!

In no other case in this country has a court

ever so held.”

These statements grossly misinterpret the opinion

of the Court of Appeals so that further comment need

not be made, except to refer to the many cases herein-

after cited and quoted. } |

Statement of the Case.

The Contract ,

The disputed contract between Eastern (Owner

and Seller) and Interstate (Contractor and Purchaser),

and the whole thereof, was filed with the complaint as

Plaintiff’s Exhibit No. 1, ‘and for the complete contract

reference is now made to that exhibit. We hereinafter

quote the pertinent parts of the contract, which counsel

for Respondent believe to be relevant to the matters

in dispute (9a).

“Purchaser will furnish all labor, supervision,

— saadly etc., required for eee of

this wor

“Purchaser will perform all work in such a

manner so that he, his men, or his equipment will

not delay or interfere with the normal operation

of the mine, the new Coal Cleaning and Preparation

Plant or any other “Eastern” activity required or

taking place in or adjacent to the work site area,

also will not block any roadway and/or railroad

trac Lae

“Purchaser will prior to removal of equipment,

ete., and prior to use of cutting torches, saws or

other tools and/or equipment will remove all coal

and/or coal dust from said equipment, building,

etc., by hosing down all structures inside and out

and will otherwise perform this work with all

safety precautions including stand-by first aid fire .

fighting facilities and will exercise extreme care in

the performance of this work to prevent fire and/or

- Other damage or accident to ales tained and persons

_. of the Seller or others. nee

Statement of the Case.

‘tenet will keep someone at site for a

reasonable time after cutting by torch or any other.

method and wili make certain that all equipment

and power are properly shut down or off. before his

employees leave the work site.”

“Note: It is understood by both Purchaser and

Seller that a serious fire could . possibly put

Federal No. 1 Mine out of operation for.

two years.”

“Purchaser will have right to come on to East-

ern’s property to perform this work.”

“Purchaser will protect and indemnify Eastern

against loss or damage to property and injury and

death to persons resulting from, arising out of or

incident to the performance of this contract.”

_ “Purchaser, during the period of this contract

will maintain Bodily Injury Insurance in limits of

not less than $500,000.00, to cover any liability —

including collapse arising out of removal and dis-

mantling, clean-up work, loading and transporting

of the items stated herein.”

“Purchaser will also maintain Workmen’ s Com-

. pensation Insurance for any employees engaged in

~. this activity. wie

“Certificates of Insurance for Bodily Injury

and Property Damage and Workmen’s Compensa- ©

tion will be submitted to Seller’s Insurance Man-

ager, Koppers Building, Pittsburgh 19, Pa., before

Purchaser commences any activities.”

.

LEE ONL BNI AG SEER BLE RS Ae, OPEN CE INTO EE IME SEE NE ILE! MOG SE ABE APD rad hapictath, wriget teddies ad

we

Statement of the Case.

From the above, the following should be clear, as

the wording lends itself to but one interpretation:

1. . Contractor was vested with the duty of super-

i vision.

2. Contractor was to perform the work with all

Safety precautions.

8. Contractor was to use extreme care in the per-

' "formance of the Contract.

4. Contractor was to protect and indemnify -

Owner against loss or damage to property and

injury or death to persons resulting from,

arising out of, or incident to the performance

_ of the Contract. .

5. Contractor, during the Contract, was to main-

tain bodily injury insurance in limits of not

less than $500,000.00 per ‘accident, and prop-

erty damage insurance in limits of not less:

than $500,000.00 to cover any ability during :

its work.

Consider all of this, dealin with the fact that the

Certificate of Insurance filed with plaintiff (copy of

which is filed with Respondent’s complaint as “Plain-

tiff’s Exhibit No. 2) (17a), contained the following pro-

. vision: “Policy condition as to Exclusions of Explosions

and Collapse hazards are deleted and coverage thereon

is included.” uf ;

, - It must be kept in mind that the insurance certifi-

. ¢@ate had to be filed with Respondent before the Peti-

tioners started the work of dismantling, and it is rea-

sonable to believe that Respondent had to accept and

approve the same. (Our emphasis) |

Argument by Points. |

ARGUMENT BY POINTS |

I. The Court of Appeals Acted in Harmony With the

Erie Principles and Doctrine and Did Not Disre-

gard West Virginia Law.

. The Erie case, to which counsel for Petitioners

refer, is Erie R. R. Co, v. Tompkins, 304 U. S. 64, 58 S..

Ct. 817, 82 L. Ed. 1188 (1938), holding that federal

-courts in diversity cases may not disregard the sub-

stantive law of the state. Associated Engineers, Inc. v.

Job, 370 F. 2d .633 (8th Cir. 1967).

The District Court adopted the position that the

West Virginia case of Bowlby-Harmon Lumber Co. v.

Commodore Services, Inc., 144 W. Va.'239, 107 S. E. 2d

602 (1959), established West Virginia law on the sub-

ject. But in fact, at page 248 of the official report, the

‘West Virginia Court, in pure dictum, observed: -

. Moreover, to relieve a party from liability for

his own negligence by contract, — to that’

effect must be clear and definite .

The Court of Appeals gave intent consideration to

this area of the case and found no West Virginia statute

thereon and properly termed the Bowlby-Harmon case

statement as dictum. The Court of Appeals found the.

contract language “cleaf and definite” and expressive

- of the intent and meaning of the parties. It was noted

in the opinion that in West Virginia contracts of indem-

nity against one’s own negligence are not against public ©

_ policy. Borderland Coal Co. v. Norfolk & W. R. R. Co.,

87 W. Va. 339, 104 S. E. 624 (1920).

Argument by Points.

Moreover, in West Virginia, “When the provisions

of a written instrument are clear and unambiguous they ~

will be given full force: and effect according to their.

plain terms and provisions.” Mace v. Carpenter & Lloyd,

147 W. Va. 322, 127 S. E. 2d 254 (1962). .

On page 11 of Petitioner’s brief, counsel concludes

that “the West Virginia Court requires ‘clear and defi-

nite’ language or ‘clear and explicit’ language, or ‘clear

terms’.” This statement, it is respectfully submitted, is

not well founded.

First, the Bowlby-Harmon case statement is clearly

dictum. The West Virginia opinion refers to other cases

from other jurisdictions by the introductory word “See”.

Two of these cases are then cited and quoted by counsel

for Petitioners. One is Carstens v. Western Pipe & Steel

Co., 142 Wash. 259, 252 Pac. 939 (1927), which is a

landlord-tenant lease contract. Counsel for Petitioners

quote the old Washington case and include a quote —

therefrom, taken from the older English case, Price &

Co. v. Union Lighterage Co., 6 British Ruling Cases 119

' (1904), which is a carrier case involving a contract for

liability exempting loss or damage. “whieh can be cov-

ered by insurance.”

Counsel for Petitioners cite and leah from the

Annotation in 175 A.L.R. 8 (1948). This Annotation .

. springs from a Washington case, Griffiths v. Henry

Broderick, Inc., 27 Wash. 2d 901, 182 P. 24 18 (1947),

which is not favorable to Petitioners herein 4nd is cer- _

tainly the more current expression of the Washington

Counsel for Petitioners also cite and quote from

Cerny-Pickas & Co. v. C. R. Jahn Company, 4 Ill. App. _

10. : sat

Argument by Points. _—_-

2d 164, 123.N.:E. 2d 858 (1954), which was cited in the

West Virginia case reference.

_ , This Illinois case was decided by the First District

Court of the Third Division of the intermediate appel-

late court system of the State. The case relates to land-

lord-tenant fire insurance coverage relations. The case

was not published except in abstract form and the part

quoted in Petitioner’s brief is the publishing company’s

edited syllabus point, not appearing in the official re-

ports. But the important fact to be considered is that

the case was reversed in the Supreme Court of Illinois

in Cerny-Pickas & Co. v. C. R. Jahn Co., 7 Ill. 2d 393,

131 N. E. 2d 100 (1955). Point 2 of the syllabus and the

Court’s opinion clearly indicate the law of Illinois. We

' quote from pages 102 and 103 of the opinion:

“The argument most strongly urged against

exoneration of the lessee is that the lease does not

_ in so many words provide that the lessee be free

from liability for fires resulting from its own negli-

gence. Of course, if the lease contained such an’

express provision, that would be the end of the

matter. But because the contingency was not cov-

ered by express language, it does not follow that

the instrument may not, when all‘of its provisions

are considered, show that the parties themselves

intended that the lessee should not be liable. That

determination is to be made upon a consideration

of the instrument as a: whole. MacAndrews &

Forbes Co. v. Mechanical Mfg. Co., 367 Ill. 288, 11

N. E. 2d 382; Llewellyn v. Board of Education, 324

Ill. 254; 154 N. E.. 889; West v. Ranney Refrigerator

Co., 261 Ill. 560, 104 N. E. 182; Consolidated Coal

.. Co, v. Peers, 150 Ill. 344, 37 N. E. 937.” .

eS ee 2 ee ee —— ee eee ee ee, ee .

11 .

Argument by Points.

On page 19 of Petitioners’ brief, question is raised

as to the use and purpose of the:indemnity provision in

the contract if it be not to cover the very situation now

in issue. Counsel use this approach to argue that the

contract language is not “clear and definite” and there-

fore needs construction. The Washington Court in

another case would not agree with this approach. Union

Pacific R. R. Co. v. Ross Transfer Co., 64 wom: 2d 486,

392 P. 2d 450 (1964).

On this point the more recent Illinois case, Patent

Scaffolding Co. v. Standard Oil Co., 68 Ill. App. 2d 29,

215 N. E. 2d 1 (1966), 6 Syllabus:

“Indemnity agreement by which subcontractor

agreed to assume liability, be responsible for and

indemnify and save harmless contractor and owner

for any liability for death or injury to any person

or persons or for any property damage or loss of

use resulting from or in connection with perform-

_ ance of work specified, and which also provided that

_ subcontractor would assume full responsibility for

and hold contractor and owner harmless from any

loss or damage to tools and equipment used by.

workmen and/or subcontractors, was intended to

and did cover acts of negligence of indemnitees.”

; Note this recent Illinois case deals with somewhat

comparable contract language. The Court does not .

require express language to indemnify the indemnitee

but merely clear and explicit language. And the Illinois

_. Court held the contract language was not ambiguous—

was clear and explicit to meet the test—and did not

require invocation of rules of construction. 4 Williston™

on Contracts. § 609 (3d ed. 1961). In Associated Engi- —

Argument ™ Points.

_ neers, Inc: v. ». Job; supra, pages 649-650, this same _

. gis is developed. The able Circuit Court there points,

out that judicial references to the “clear” or “definite”

-or “unequivocal”’ language do not mean a requirement

of express language, but language from which no doubt

may be honorably raised as-to meaning and intent of

the parties. The Court notes also that this intent and

’ meaning may be supplied by circumstances surrounding ~

' the making of the contract and the evident ere of

the parties thereto.

In Moses-Ecco Company v. Roscoe-Ajax Corpora-

tion, 115 U. S. App. D.C. 366, F.2d 685, 687, the Circuit

Court of Appeals, Distr. of Columbia said:

“Losses. incurred by Roscoe-Ajax. through its

own negligence are not specifically included. And

Moses-Ecco urges here, as it did below, that no

intention to include such losses ‘is otherwise clearly

and unequivocally révealed.’

The District Court concluded that the language

of the indemnification agreement in the present.

case was so broad and sweeping as to plainly re-

veal an intent to encompass losses incurred in .

' whole or in part by the negligence of the indemni-

tee. *.° ee a Gee Wee is Denotes Coat fo an

correc o |

, A very realistic statement of the present-day law

‘is found in the 1965 Proceedings of the American Bar _

Association’s Section on Insurance, Negligence and

Compensation. law, page 269:

_ “Insofar as the contract waiely attempts to

indemnify for the working contractor’s own negli-

4% gence, it is merely an adoption of the’common law

Argument by Points.

- principle of indemnity and is of no particular signi-:

However, the Courts have held that a party

_ May contract to hold another harmless from the

indemnitee’s own neglect and carelessness.

The leading case in New York on this question,

undoubtedly is Thompson Starrett v. Otis Elevator,

271 N. Y. 36. It was decided there that adult con-

tracting parties could expressly contract. that one

erindlidecyeetia Bee sige: age sustained by the

other, even though entire fault might lie ac-

. tively on the shoulders of the indemnitee. This case,

which now seems to have general acceptance in

most jurisdictions and in the Federal Courts, puts

at rest the counter-argument that it was against

public policy to the burden of paying for one’s

own wrong to ——

The court did, however, hedge this decision, with

~. the proviso that the contractual language must be

express and unequivocal. (See Broderick v. Cauld-

well-Wingate Co. Inc., 281 A. D. 904; 120 NYS 24

289, aff'd 305 N.Y. 872.)

However, as time passed the courts have grad-

ually réalized (relaxed) this rule so that no longer

need the indemnification for one’s own negligence

be express or explicit 4s long as the intent is clear

~ In Salamy v. New York City Railroad Co, ¥

A. D. 2d 27, usé of a private crossing over defend-

ant’s tracks was allowed pursuant to a written

agreement with the third- -party defendant but it -

14

Argument by Points. —

contained no express covenant that the Licensees

would be liable for the Railroad’s own negligence.

Yet, the court sustained | a right té peaartanied

thereon saying:

‘The intention is. the thing which must appear a

clearly and unequivocally, however, and the agree-.

_ Ment need not contain express language referring

to the negligence of the indemnitee. The require-

ments of the rule are met if such an intention ‘may

| -be clearly implied from. the language, purposes of

the agreement, and all the ‘surrounding facts and

circumstances.’

.. See also:

Jordan v. tty of New ‘York, 3 A.D. 2d 507,

aff'd without opinion, 5 N.Y. 2d 723; Korzak v.

Curry Auto. Rental Inc., 17 Mis. 2d 685 (N. Y.);

Burke v. City of New York, 2 N. Y. 2d 90; General

: Electric Co. v. Hatzel &. Buehler, 19 A. D. 2d 40 ©

(N. Y.) ne Larne Co. v. Fellows, 71 Pac. 2d

75.” gy ;

As to how other ‘Suitediotions and by far the ma-

jority thereof have construed language somewhat sim-

ilar to the language of the contract under considera-

tion, we will attempt very briefly to recite some of the

‘There is pertinent precedent in our own Fourth

Circuit, and we find it in Judge Soper’s written opinion |

in the case of Atlantic Coast Line Railway Co. v. Rob-

ertson, 214 F. 2d 146 at 753 (1954):

ig y it is true when the injury is ss

caused by the negligent act of the indemnitor; and

af

. Z.

*

Ont enter eA STEN SN I REE re bn ee ince einen

se

» Argument by Points.

Salsa Atadeliiitetae easiest aati

_ loss for any injury caused by the negligence of

either party, to the contract for it specifies loss, in-

jury, or damage of any and every character and.

howsoever caused that may be sustained in connec- —

tion with the “tears ewestr -, the ne over

the sidetrack.

We now submit some recent cases from the various

Circuits, which we believe fully substantiate and sup-.

‘port our position and which clearly indicate the think-

ing regarding Indemnity Agreements since 1948. .

Second Circuit—Rice v. Pennsylvania Railway

Company 202 Fed. 2d 861 (1953) eS,

Third Circuit—Seaboldt v. Pennsylvania Rail- .

way Company 290 F. 2d 296 (1961) es

Fourth Circuit—Atlantic Coast Line Raihoays

Co. v. Robertson 214 F. 24 746 (1954)

, Fifth Circuit—Birmingham v. Louisville &

N. R. C. Co, 316 F. 2d 858 (1964)

Jacksonville Terminal Co. v. Railway Eupress |

Agency 296 F. 2d 256 (1961)

Sixth Circuit—General Acc. Fire & Life Assur-

ance Corp. v. Smith Oby Co., 272 F. 2d 581

(1959)

Seventh Circuit—Insurance Co. of N. A. v. Fl-

| gin, J. & EB. Raihoay Oo., 229 F. 24 705

(1956) Pe asin

Chicago & N. W. Rally Co. v.. Chicago Fuel.

| Co. 183 F. 2d 630 (1950) ~

‘Eighth Circuit—Anthony v. L. & A. Railway

Co. 316 F. arelie ane se o |

; %

: '

"16. aay es

. Argument by Points.

| Aluminum Co. v. Hully 200 F.. 2d 257

Ninth Circuit—Unitec Corp. v. Beatty Safeway

‘Scaffold Co. 358 F. 2d 470 (March 19,

1966) .

Booth-Kelly Co. v. South Pacific Co., 183 F. 2d

~ * 902 (1950) |

District of Columbia Court of init, ees

Ecco Co. v. Roscoe Ajax Corp., 115 U. S.

WRT ‘ci vancntss, App. D. C. 366, 320 F. 2d 685 (1963)

An interesting case very recently decided, May 9,

1966, by the United States District Court E. D. Louisi-

ana, but following Ohio law and precedent and particu-

larly General Accident Fire and_Life Assurance Corp.

_ Ltd. v. Smith and Oby Co., 272 F. 24 581 (6th Circuit,

1959) and styled United States Fid. and Guaranty Co.

v. O’Neil Company, reported in 254 F. Supp. 140, con-

strued the following provision of an indemnity agree-

ment:

“Article IX—(a). Sub-contractor shall indem-

‘nify Contractor against all claims for damages

arising from accidents to persons or property oc- -

_ + easioned by the Sub-contractor, his agents or em-

' ployee; and Sub-contractor shall defend all suits

brought against. the Contractor on actount of any

such accidents and shall reimburse Contractor for

any expense, including reasonable attorney’s fee

eae Ae Serene OF een of wath, acct

dents.”

The Court in ‘its opinion said:

. * “Under Ohio law contracts of elinesilty'y pur-

porting to relieve one from the results of his own

e

17

higunens by Points. Og wade

nathan: ciiniiu mdi ti eitlii caitlin ial :

indemnity provisions express that intent in clear

and unequivocal terms. ‘George H. Dingledy Lum-

ber Co. v. Erie R. Co., 102 Ohio St. 236; 131 N.E.

‘723 ~«(1921); St. Paul Mercury Indemnity. Co. v.

Kopp, Ohio App., 1954, 121 NE. 24 23. The word

“negligence” is not sacrosanct if the language ex-

pressed in the agreement ghows a clear intention to. -

hold the negligent indemnitee harmless... General

Acc. F. & L. Assur. Corp., Ltd. v. Smith & Oby Co.,

___ 6 Cir,, 1959. 272 F. 2d 581, 77 A. L. R.2d-4134;———

George H. Dingledy Lumber Co. v. Erie R. Co. ‘

supra.;” also

(2) “Weare convinced that the aise to the.

present agreement, in clear and unequivocal lan-

‘guage expressed the intention.that Blount should

be held harmless and indemnified against all. claims

for damages arising from accidents suffered by

O’Neil’s employees occasioned or caused by O’Neil

or its employees, regardless of whether Blount was

negligent.” }

“A reading of the cases hereinabove set forth pwns

will indicate that the language used in the contract of

Petitioners and Respondent is much clearer and more ‘

definitive of the rights of the parties than the language

used and construed therein to be broad enough to cover

one, even in case of his own negligence. In other words,.

Respondent believes the contract to be unambiguous

and. the intent and purpose and the coverage is clear

that Respondent was to be indemnified against any

liability arising out of or incident to the Petitioners’

-performance of the contract.

io”

: ils by Points.

: re The Court of dopiiin Responded to Its Judicial

Responsibilities in Reversing the District Court

on literpretation and Application of the Indem- —

nity Contract Terms and Provisions and Did Not

Disregard Federal Rules of Civil Procedure, Rule

52(a). j

Rule 52(a) provides in. part that. “Findings of fact

shall wot be set aside unless clearly erroneous.” ;

| Coimeel tor Petitioners: takes the position-that the

——€ourt of Appeals ‘violated this rule in disregarding the |

District Court’s “significant and dispositive findings of

fact, from which the District Court concluded other-.—

wise.” The Brief of Counsel for Petitioners, pages 14-15,

itemizes seven “findings of fact” by the District Court.

. Findings 5, 6 and’7 are of more immediate concern, '

since they deal with pricinioane: of the ocmranua dial 2 <a een:

, — MOR

. At the outset, it may be noted that the basic prob-

teas in the case, as presented by counsel for Petitioners,

isone of interpretation of the contract of indemnity.

On this point, United States v. John McShain, Inc.,

. 258 F. 2d 422 (D.C. Cir. 1958), certiorari denied 358 -

U.S. 832, 79 S. Ct. 52, 3 L. Ed. 24 70 (1958), holds,

- pages 424-425; a

“The only question before the District Court

was the question of the interpretation of written:

documents. That is a ‘question of law’ as to which

this court is not bound by the ‘cleerly- erroneous’ .

provisions of Fed. Rules Civ. Proc. rule 52 (a) * * *”

Earlier in this Brief of Respondent the status of

the West . Virginia law on contract language require-

. 1

seaiaiias by Points.

ments iain to indemnitee’s o indemnity has been dis- %

cussed. The District Court adopted dictum from a West _

Virginia case and counsel for Petitioners in their brief

have enlarged the language to state that the West Vir-

_. ginia law requires “clear and definite”. and other com-

parable language in indemnity contracts to so indem- |

nify the indemnitée. ‘The Court of Appeals reviewed

this area of the case and firmly held the District Court

‘was wrong, using the words “We cannot agree”, On |

page 17 of the Petitioners’ brief, complaint is made that _

the Court of Appeals did not “label” the District

Court’s findings as clearly erroneous. The Court of Ap-

| peals holding is firm and plain and it appears unnecces- :

sary to argue on the magic of particular labels. In

Jacksonville Terminal Co.'v. Railway Express Agency,

. Inc.; 296 FP. 2d 256 (5th Cir. 1961), the Court reversed

a District Court decision but did not employ the words .

“clearly erroneous or unsupported by the record”, as-

counsel for Petitioners argue is necessary. Rehearing —

was denied in the Jacksonville Terminal Co. case and.

Gertiorari was likewise denied, 369 U.S. 860, 82S. Ct.

949, 8 L. Ed. 24 18 (1962).

‘In United’ Air Lines, Inc. v. Wiener, 335 F. 24'379

(9th Cir. 1964), the Court, at pages 401-402, rules it

was not bound by the “clearly erroneous” language of

Rule 52(a) when reviewing a District Court decision on

issues relating to applicability of a law and negli-

gence of the es involved.

- The dietecmtinaticin of the Court of Appeals ‘

greatly distorted by way of improper and unjust infer-

- ence on page 19 of Petitioners’ Brief. It is there stated, .

_ “The Court of Appeals has thus held vag in. all: in-

+20

Conclusion.

i aia int adic:

“< demnity provisions is to protect the indemnitee against

his own negligence, since the common law through im-

plied indemnification protects the indemnitee otherwise .

_ than for hié own primary negligence”. This is a very

» gross misstatement, improper deduction and an avoid-

” ‘ance-of the true and real adjudication of the Court of.

_ Appeals. The second paragraph on ‘page 19 of Peti-

- tioners” brief is likewise. an apparent avoidance of the

true meaning and ne of the © oplition of. the

Court of Agpewe:: cea!

, 3 pe

* sien onli ici CONCLUSION

“. Kor the foregoing reasons, your Respondent ‘urges

that the Petition for Writ of Certiorari should be denied.

_ Respectfully submitted,

3. - Russe L. FOURBEE:

\

Of Counsel: eee

_ PURBEE, Amos, Wess & CRrrcHYTELD

Attorneys at Law

' ‘First National Bank Building

een West Virginia

Eo ——