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CSX Insurance Co. v. Pacific Rail Services

May 21, 2009

CSX INSURANCE CO., ET AL., PLAINTIFFS,
v.
PACIFIC RAIL SERVICES, LLC, DEFENDANT, AND PACIFIC RAIL SERVICES, LLC, ET AL., PLAINTIFFS,
v.
CSX INTERMODAL, INC., DEFENDANT.



The opinion of the court was delivered by: Judge Blanche M. Manning

MEMORANDUM AND ORDER

In these consolidated cases, the parties are attempting to establish liability stemming from a crane accident that killed the crane's operator, Warren Kubicek. Before the court are numerous motions in limine. The court previously issued orders on Pacific Rail's first motion in limine [98-1] and CSX's second motion in limine [78-1]. The court now resolves the remaining motions.

CSX Insurance Co.'s Motions in Limine

07 CV 4185

Motion to Enforce August 20, 2008 Order [76-1]

CSX seeks to bar evidence or argument offered to (i) contest Pacific Rail's liability for failing to obtain adequate insurance coverage as required under the parties' agreement, or (ii) establish that CSX must reimburse Pacific Rail for the costs incurred in defending CSX in a state court wrongful death proceeding. CSX contends that this court's August 20, 2008, order granting CSX's motion for judgment on the pleadings determined that Pacific Rail is liable for breaching the agreement to obtain insurance and, given Pacific Rail's breach, under no set of circumstances is it entitled to reimbursement of state court defense costs.

1. Liability for Failing to Obtain Insurance Coverage

In the August 20, 2008, order, the court determined only that Pacific Rail breached the parties' ageement to obtain insurance. It explicitly did not determine what damages flowed from that breach. Accordingly, the motion in limine is granted to the extent that any evidence or argument is offered to show that Pacific Rail did not breach the parties' agreement. However, because the court has not determined what damages were incurred, evidence of damages is not excluded.

2. Reimbursement of Defense Costs

CSX's motion also seeks to exclude any evidence or argument that it must reimburse Pacific Rail for the defense costs Pacific Rail incurred on CSX's behalf in the state court wrongful death proceeding. As detailed in the court's August 20, 2008 order, an indemnification provision in the parties' agreement required Pacific Rail to pay for CSX's state court defense, but Pacific Rail has the right to be reimbursed if CSX was "finally determined judicially or through arbitration, or agreed by [CSX], that [CSX]'s negligence, gross negligence or other tortious conduct" caused Kubicek's accident. Life Services Agreement (attached to Complaint (R.1), Ex. 1) at ¶ 9.4.2.

According to CSX, whether it must reimburse Pacific Rail under the indemnification provision is irrelevant because Pacific Rail is also obligated to pay CSX's defense costs for a different reason. Specifically, CSX contends that Pacific Rail breached its obligation to purchase insurance that would have covered defenses costs and, therefore owes CSX those defense costs as an element of damages for its breach. In support, CSX cites the following provision from the parties' agreement that obligated Pacific Rail to purchase insurance: commercial general liability insurance, naming CSXI as an additional insured, covering bodily injury and property damage, arising out of exposures not covered by other insurance coverages, with a coverage limit of not less than $5,000,000 per occurrence Lift Services Agreement ¶ 9.1.2. However, the quoted provision contains no requirement that coverage would include defense costs and CSX's argument is therefore unsupported. Accordingly, the court has no reason to conclude, based upon the arguments in the motion in limine, that CSX's obligations under the indemnity provision are irrelevant and denies the motion to exclude evidence on that issue.

Pacific Rail's Motions In Limine

07 CV 2738

Motion to Exclude Opinion Evidence from Lay ...


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