United States District Court, S.D. Illinois
MEMORANDUM AND ORDER
PHIL GILBERT DISTRICT JUDGE.
matter comes before the Court on two motions for summary
judgment, one filed by plaintiff BNSF Railway Company
(“BNSF”) (Doc. 85) and the other filed by
defendant Gilster-Mary Lee Corporation (“GML”)
(Doc. 87). BNSF's motion seeks summary judgment only on
Count II. GML has responded to that motion (Doc. 90), and
BNSF has replied to that response (Doc. 92). GML seeks
summary judgment on Counts I, II and III. BNSF has responded
to that motion (Doc. 89), and GML has replied to that
response (Doc. 91).
case arose after a BNSF employee, Cecil A. Parrish, was
injured while working for BNSF at GML's rail yard. He was
injured using a pry bar to align two railcars on a curved
track in the rail yard. Parrish filed a lawsuit against BNSF
under the Federal Employers' Liability Act
(“FELA”), 45 U.S.C. § 51 et seq.:
Parrish v. The Burlington Northern and Santa Fe Railway
Company, No. 13-cv-1054-JPG-SCW. BNSF and Parrish
settled that lawsuit.
case at bar, BNSF seeks to hold GML and its insurers,
defendants ACE American Insurance Company and ACE Property
and Casualty Insurance Company (collectively, the “ACE
defendants”), liable for the costs of the defense in
Parrish and the settlement amount. It believes a
written Industry Track Agreement (the “Sidetrack
Agreement”) between BNSF and GML (Count I) as well as a
common law duty of implied indemnity (Count III) obligate GML
to indemnify it for those amounts. BNSF also believes GML
breached the Sidetrack Agreement by failing to name BNSF as
an additional insured on an insurance policy that covered
BNSF's liability and defense in Parrish (Count
II). BNSF tendered the defense of the case to GML and asked
GML to initiate an insurance claim on its behalf, but GML
a previous round of summary judgment motions, the Court found
as a matter of law that GML did not agree in the Sidetrack
Agreement to indemnify BNSF for BNSF's own negligence and
that neither of the insurance policies issued by the ACE
defendants provided coverage for BNSF for losses from the
Parrish lawsuit (Doc. 84).
current round of summary judgment motions, both parties seek
summary judgment on Count II, the claim for breach of the
promise to obtain insurance in the Sidetrack Agreement. BNSF
relies on the Court's finding in its prior summary
judgment order to argue GML breached the Sidetrack Agreement
by failing to provide liability insurance that would cover
liability for Parrish's injury. On the other side, GML
argues the Sidetrack Agreement only obligated it to name BNSF
as an additional insured on an automobile insurance
policy, not a general liability policy. In any case, it
contends, even if it were required to obtain general
liability insurance naming BNSF as an additional insured, it
complied with the Sidetrack Agreement with the ACE policy it
purchased. Additionally, GML argues that BNSF waived the
also seeks summary judgment on Count I for contractual
indemnity and Count III for implied indemnity. With respect
to Count I, GML argues that it was not negligent in any way
with respect to Parrish's injury because it owned him no
duty. As a consequence, it argues, the Sidetrack Agreement
does not obligate it to indemnify BNSF for any of the costs
stemming from Parrish's injury. In response, BNSF argues
GML was negligent in a number of ways and that its liability
stems from its contractual obligation to provide a safe
respect to Count III, GML argues that BNSF does not satisfy
the requirements for implied indemnity, which include being
completely blameless. BNSF maintains that the relative fault
of the parties - and whether BNSF is blameless - is a
question for the jury to decide.
Summary Judgment Standard
judgment must be granted “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986); Spath v. Hayes Wheels
Int'l-Ind., Inc., 211 F.3d 392, 396 (7th Cir. 2000).
The reviewing court must construe the evidence in the light
most favorable to the nonmoving party and draw all reasonable
inferences in favor of that party. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986);
Chelios v. Heavener, 520 F.3d 678, 685 (7th Cir.
2008); Spath, 211 F.3d at 396.
initial summary judgment burden of production is on the
moving party to show the Court that there is no reason to
have a trial. Celotex, 477 U.S. at 323;
Modrowski v. Pigatto, 712 F.3d 1166, 1168 (7th Cir.
2013). Where the non-moving party carries the burden of proof
at trial, the moving party may satisfy its burden of
production in one of two ways. It may present evidence that
affirmatively negates an essential element of the non-moving
party's case, see Fed. R. Civ. P. 56(c)(1)(A),
or it may point to an absence of evidence to support an
essential element of the non-moving party's case without
actually submitting any evidence, see Fed. R. Civ.
P. 56(c)(1)(B). Celotex, 477 U.S. at 322-25;
Modrowski, 712 F.3d at 1169. Where the moving party
fails to meet its strict burden, a court cannot enter summary
judgment for the moving party even if the opposing party
fails to present relevant evidence in response to the motion.
Cooper v. Lane, 969 F.2d 368, 371 (7th Cir. 1992).
responding to a summary judgment motion, the nonmoving party
may not simply rest upon the allegations contained in the
pleadings but must present specific facts to show that a
genuine issue of material fact exists. Celotex, 477
U.S. at 322-26; Anderson, 477 U.S. at 256-57;
Modrowski, 712 F.3d at 1168. A genuine issue of
material fact is not demonstrated by the mere existence of
“some alleged factual dispute between the parties,
” Anderson, 477 U.S. at 247, or by “some
metaphysical doubt as to the material facts, ”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). Rather, a genuine issue of material
fact exists only if “a fair-minded jury could return a
verdict for the [nonmoving party] on the evidence
presented.” Anderson, 477 U.S. at 252.
the two general issues in the pending motions - indemnity and
insurance coverage - turn on facts about different aspects of
this case, the Court sets forth the facts separately,
followed by analysis of each issue.
Counts I and III: Indemnity Issues
in the light most favorable to BNSF, the evidence establishes
the following relevant facts.
Parrish was an employee of BNSF. When he first began working
for BNSF, BNSF trained him to do his job. It provided him a
training booklet, the train yard and engine safety rules
(“Safety Rules”), which included instructions
about how to couple and uncouple railcars and locomotives.
Coupling involves aligning a drawbar on the railcar coupler
and a drawbar on the locomotive coupler so that when they
impact each other, the knuckles of the couplers automatically
attach to allow the locomotive to pull the railcar. When
couplers are not aligned - or mismatched, in the language of
the Safety Rules - they must be adjusted into alignment
either by hand or using a device such as, for example,
various types of bars listed in the Safety Rules. The Safety
Rules describe the adjustment procedure, but no BNSF employee
ever actually demonstrated to Parrish use of the specific
devices mentioned in the Safety Rules.
April 12, 2013, Parrish was working for BNSF at GML's
Centralia, Illinois, rail yard within fifty feet of track
owned and maintained by GML. BNSF would run railcars full of
sugar into GML's Centralia plant, which GML would use to
manufacture cake mixes, and would remove empty railcars from
the yard. GML employees would instruct BNSF employees which
railcars to move where and would observe the railcar
movement, but they would not participate in the actual
movement. The Sidetrack Agreement, a standard agreement BNSF
drafted and executed with the owners of industrial facilities
on which BNSF provided rail service by a track other than the
main track, governed the arrangement between BNSF and GML
regarding BNSF's rail service to the GML plant. In the
Sidetrack Agreement, GML agreed, among other things,
“to provide a safe workplace for [BNSF]
employees.” Sidetrack Agmt. § 2(a) (Doc. 1-1 at
1). Further, as explained in the Court's June 30, 2016,
order, in § 8(a) of the Sidetrack Agreement, GML agreed
to indemnify BNSF for losses BNSF incurs as a result of
GML's fault or negligence in proportion to GML's
comparative degree of fault or negligence.
day, Paul Spieth, a GML yard operator, instructed Parrish
where to put the loaded railcars being delivered and which
empty railcars to pull out of the yard, and then GML's
yard manager Elmer Patten observed the operation.
Spieth's instruction did not include any direction about
how to accomplish the mechanics of the movement such as, for
example, how to couple or uncouple railcars. When Parrish
tried to couple an empty railcar with a locomotive in
preparation for moving the railcar out, he was faced with
mismatched couplers that he was unable to move by hand.
had once or twice a week on numerous other occasions when
adjusting couplers in the GML yard, Parrish retrieved a pry
bar that was kept near where he was working. The pry bar had
been kept there for about three years. Parrish thought the
bar was of a type mentioned in the Safety Rules as
appropriate for adjusting couplers, and he had been taught to
use the pry bar for that purpose by other BNSF employees. It
was actually a pry bar GML provided for its employees to use
to open outlet valves of full railcars. BNSF had not provided
Parrish with any other device to assist in adjusting
mismatched couplers, had not observed Parrish using the pry
but had also not instructed Parrish not to use GML's pry
bar. At least ...