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Csx Transportation, Inc. v. General Mills, Inc.

United States District Court, N.D. Georgia, Atlanta Division

February 3, 2015



THOMAS W. THRASH, Jr., District Judge.

This is a breach of contract action. The Plaintiff CSX Transportation, Inc. is claiming that the Defendant General Mills, Inc. is contractually obligated to indemnify the Plaintiff for a judgment entered against the Plaintiff in a personal injury action. It is before the Court on the Defendant General Mills, Inc.'s Motion to Dismiss [Doc. 23]. For the reasons set forth below, the Defendant's Motion to Dismiss [Doc. 23] is GRANTED.

I. Background

This case arises out of a workplace accident in which Douglas Burchfield - a General Mills employee - sustained personal injuries. The relevant facts are as follows. The Plaintiff CSX Transportation, Inc. provides rail transportation services in multiple areas, including Covington, Georgia.[1] The Plaintiff entered into a contract (the "Agreement") with the Defendant, General Mills, Inc., where the former agreed to construct a private sidetrack - a railroad track connected to a main track - for rail freight traffic to and from the Defendant's Covington, Georgia cereal processing plant.[2]

The Agreement also grants the Defendant the right to conduct "switching" - the process of moving and assembling railcars so that they can be coupled to a locomotive and shipped away - on a portion of the sidetrack.[3] Because the Plaintiff was not conducting all of the switching operations, the parties included a specific liability provision concerning switching ("Section 15"):

[General Mills] shall have the right to switch with its own trackmobile... over [General Mills'] Segment of the Sidetrack.... [I]n consideration therefor, [General Mills] assumes all risk of loss, damage, cost, liability, judgment and expense (including attorneys' fees) in connection with any personal injury to... any persons... that may be sustained or incurred in connection with, or arising from or growing out of, the operation of [General Mills'] trackmobile... upon said Sidetrack.[4]

This case concerns a switching operation performed on an AEX 7136 railcar. The Star of the West Milling ("Star") Co. - an agricultural company based in Frankenmuth, Michigan - shipped grain to the Defendant's Covington facility using an AEX 7136 railcar, which it leased from The Andersons, Inc.[5] On the day of the incident, Burchfield and a fellow employee, Rodney Turk, were using a trackmobile - a railcar mover - to "switch" certain railcars, including Star's AEX 7136.[6] Turk, in particular, was operating the trackmobile.[7] After Turk and Burchfield moved the AEX 7136 onto a holding track, they uncoupled it from the trackmobile and then proceeded to move another railcar located on a part of the sidetrack farther downhill.[8] Then, after Burchfield had exited the trackmobile, the AEX 7136 rolled down the track and collided with the trackmobile.[9] As a result, both railcars and the trackmobile struck Burchfield, causing significant personal injuries.[10]

On June 1, 2007, Burchfield brought suit against the Plaintiff, asserting a negligence claim.[11] Ultimately, Burchfield secured a jury verdict in his favor for $20, 559, 004.[12] The jury found that Burchfield was "0% negligent as compared to the 100% negligence of [CSX]."[13] Both parties appealed the final judgment entered pursuant to the jury award, [14] and then participated in court-mandated mediation where they finally agreed to a settlement amount of $16, 000, 000.[15] The Plaintiff paid this amount in full.[16] The Plaintiff then demanded indemnification from the Defendant under the Agreement, and the latter refused.[17] Consequently, the Plaintiff filed suit against the Defendant, asserting a claim for breach of contract. The Defendant now moves to dismiss.

II. Legal Standard

A plaintiff may survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6) if the factual allegations in the Complaint give rise to a plausible claim for relief.[18] For a claim to be plausible, the supporting factual matter must establish more than a mere possibility that the plaintiff is entitled to relief.[19] In determining whether a plaintiff has met this burden, the Court must assume all of the factual allegations in the Complaint to be true. The Court, however, need not accept as true any legal conclusions found in the Complaint.[20]

III. Discussion

In moving to dismiss, the Defendant makes two arguments: (1) the Agreement does not require the Defendant to indemnify the Plaintiff for the damages the latter paid to Burchfield, and (2) if the Agreement does require such indemnity, it is inconsistent with Georgia public policy, and thus void. The Court's analysis begins - and ends - with the first argument.

Under Georgia law, when interpreting a contract the Court must first "decide whether the language is clear and unambiguous."[21] If it is, then that concludes the matter.[22] However, "if the contract is ambiguous in some respect, the court must apply the rules of contract construction to resolve the ambiguity."[23] If "the ambiguity remains after applying the rules of construction, the issue of what the ambiguous language means and what the parties intended must be resolved by a jury."[24] The "construction of a contract is a question of law for the courts... as is the existence or nonexistence of an ambiguity in a contract."[25] Additionally, in the context of an indemnity contract, the Court must construe "the words... strictly against the indemnitee."[26]

Here, two provisions of the Agreement are relevant to the Court's analysis. Section 11 - the Agreement's ...

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