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CSX v. Pacific Rail

November 15, 2010

CSX
v.
PACIFIC RAIL



Name of Assigned Judge Blanche M. Manning Sitting Judge if Other or Magistrate Judge than Assigned Judge

DOCKET ENTRY TEXT

For the reasons detailed below, CSX's Motion to Alter or Amend Judgment [151-1] is granted; Pacific Rail's Motion to Alter or Amend Judgment [155-1] is granted in part and denied in part; and CSX's Motion for Clarification and/or Rule 59(e) Motion for Prejudgment Interest [161-1] is granted. As a result, the court's order of February 26, 2010, is vacated in part and amended as detailed below. Additionally, Pacific Rail's Motion for Review of Costs [174-1] is granted in part and denied in part; and CSX's Motion for Review of Costs [176-1] is granted in part and denied in part. As a result, Pacific Rail is entitled to costs in the amount of $12,867.64, while CSX is entitled to costs in the amount of $13,501.57.

O [ For further details see text below.] Docketing to mail notices.

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STATEMENT

On February 26, 2010, the court entered a Memorandum and Order making findings of fact and conclusions of law resolving the disputes between the parties, which were presented to the court without a jury. Before the court are two motions to alter or amend the judgment under Federal Rules of Civil Procedure 52(b) and/or 59(e), as well as one motion for clarification, and two motions to review costs awarded the parties under Federal Rule of Civil Procedure 54(d)(1). The court considers each motion in turn.

CSX's Motion to Alter or Amend Judgment [151-1]

CSX seeks to alter the court's conclusion that CSX must reimburse Pacific Rail for the $666,406.77 Pacific Rail spent defending itself in a state wrongful death lawsuit. The court concluded that Pacific Rail was entitled to be reimbursed because under Florida's wrongful act doctrine, "where the wrongful act of the defendant has placed the claimant in such relation with others as makes it necessary to incur expenses to protect its interests, such costs and expenses, including reasonable attorney's fees upon appropriate proof, may be recovered as an element of damages." Robbins v. McGrath, 955 So. 2d 633, 634 (Fla. App. Ct. 2007). However, CSX notes that the doctrine applies only to costs and fees incurred in litigation with others. See Tew v. Chase Manhattan Bank, N.A., 728 F. Supp. 1551, 1561 (S.D. Fla. 1990) ("In a direct action by the wronged party against the defendant who caused involvement in the litigation with the third party, the American Rule applies," meaning that each party pays its own attorney's fees). The attorneys fees Pacific Rail seeks to recover are those it incurred in the state wrongful death lawsuit when it defended against a third-party complaint filed by CSX. Because those fees were incurred in a direct action filed by CSX against Pacific Rail, Florida's wrongful act doctrine is inapplicable.

Because Pacific Rail was not entitled to recover its fees under Florida's wrongful act doctrine, the court now addresses the only alternative basis for fees identified by Pacific Rail-§ 9.3 of the Lift Services Agreement.

Section 9.3 reads as follows:

9.3 Release of Liability. Neither CSXI nor any Affiliate . . . shall be liable for, and [Pacific Rail] hereby releases all claims, liabilities, demands, damages, losses, costs and expenses, including attorneys' fees and expenses, against CSXI and any Affiliate with respect to, any injury to or death of persons or damage to or loss of property arising from or in connection with or caused (in whole or in part) by the condition or use of any part of the Terminal or storage yard to the condition of any equipment or other property . . . This release shall not extend to any injury to or death of person or damage to or loss of property to the extent caused by the negligence or willful misconduct of CSXI.

Lift Services Agreement (Joint Trial Exhibit 1) at 10-11.

Pacific Rail interprets § 9.3 to operate as follows with regards to attorneys' fees: CSX is not liable for attorneys' fees, and Pacific Rail releases all claims for attorneys' fees, except to the extent that injury or death was caused by CSX's negligence or willful misconduct. Because the court has determined that the collapse of crane 4087 was caused by CSX's negligence, Pacific Rail contends that CSX is therefore liable for attorneys' fees under § 9.3.

Contracts must be interpreted in accordance with the plain meaning of the language used. See Palm Beach Pain Management, Inc. v. Carroll, 7 So. 3d 1144, 1145 (Fla. Dist. App. Ct. 2009) (applying Florida law). The title of § 9.3 is "Release of Liability." According to the Release of Liability as quoted above,, "[t]his release shall not extend to any injury to or death of person or damage to or loss of property to the extent caused by the negligence or willful misconduct of CSXI". Thus, § 9.3 cannot create liability for attorneys' fees in the event of CSX's negligence because, given CSX's negligence, § 9.3 does not operate at all.

Accordingly, Pacific Rail has identified no stauttory or contractual provision under which CSX must pay Pacific Rail's attorneys' fees incurred defending itself in the state court proceeding. As a result, the court erred when it granted judgment to Pacific Rail on Count III of its complaint and awarded Pacific Rail damages in the amount of $666,406.77. Therefore, the portion of the court's February 26, 2010, order granting judgment to Pacific Rail on Count III of its complaint is vacated, and judgment on that count is entered in favor of CSX.

Pacific Rail's Motion to Alter or Amend Judgment [155-1]

In its motion to alter or amend, Pacific Rail raises the ...


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