Opinion
Cause No. 2:03-CV-534 PPS.
March 14, 2005
ORDER
Before the Court is Cross-Defendant Norfolk Southern Railway Company's Motion to Dismiss Chicago SouthShore and South Bend Railroad's cross-claim. Midwest Construction Services, Inc., has joined the Motion to Dismiss.
I. BACKGROUND
This case arose out of an accident in which Plaintiff Timothy Carr was injured in a train derailment on December 20, 2001. The alleged cause was a defective railroad switch. Carr filed this suit alleging, among other things, FELA liability against his employer, Chicago SouthShore and South Bend Railroad ("Chicago SouthShore"), and common law negligence against Norfolk Southern and Midwest Construction Services, Inc. According to the complaint, Carr was injured when a Norfolk Southern train negligently ran through a switch causing it to fail which then led to the derailment that injured Carr. Midwest is liable, according to the complaint, because it had the responsibility for maintenance of the track.
On June 15, 2004, Chicago SouthShore filed a Cross-Complaint against Midwest and Norfolk Southern. There were several counts contained in the Cross-Complaint, but the two at issue here are Count II, seeking indemnity from Norfolk Southern, and Count IV, seeking indemnity from Midwest. Norfolk Southern filed a Motion to Dismiss Count II of the Cross-Complaint on July 2, 2004, and Midwest joined that Motion as to Count IV on July 20, 2004.
II. DISCUSSION
Indiana law generally does not allow a negligent party to indemnify another, but there is an exception for those occasions where "one who is constructively liable to a third person by operation of some special statute or rule of law which imposes upon him a non-delegable duty, but who is otherwise without fault." McClish v. Niagra Machine and Tool Works, 266 F.Supp. 987, 990 (S.D. Ind. 1967). This approach was discussed at length in McClish and later approved again by at least two cases from the Indiana Courts of Appeals. Mullen v. Cogdell, 643 N.E.2d 390, 400 (Ind.Ct.App. 1994); Indiana State Highway Commission v. Thomas, 346 N.E.2d 252, 259 (ind. Ct. App. 1976). Carr has alleged that Chicago SouthShore is liable to him for a number of things, among them delegating a non-delegable duty to maintain a safe workplace.
As an initial matter, Norfolk Southern makes much of the fact that there are a number of FELA allegations made against Chicago SouthShore in Carr's Complaint that do not apply to Norfolk Southern, and that as such, Chicago SouthShore's alleged liability is not solely based on a non-delegable duty under FELA. While it is true that Carr alleges a number of different theories of liability against Chicago SouthShore (e.g., failing to use reasonably safe methods and procedures with regard to the use and maintenance of the switch, track and track structure at Bethlehem Steel), on a motion to dismiss this court must assume that there is no set of facts under which the defendant could be found liable. Lachmund v. ADM Investor Serv., Inc., 191 F.3d 777, 781 (7th Cir. 1999) (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). In this case, Chicago SouthShore maintains that a jury could find them liable only because of their delegation of a non-delegable duty to maintain a safe workplace, thus entitling them to indemnification from Norfolk Southern. As such, the fact that Carr alleges a number of sources of liability against Chicago SouthShore has no bearing at this stage of the litigation. Thus, how Chicago SouthShore is liable, if at all, to Carr will be decided by a jury with the aid of a special verdict form, but for purposes of this motion we assume that a jury could find Chicago SouthShore liable only for delegating a non-delegable duty.
The heart of this motion to dismiss is not so readily disposed of. The real dispute is over whether or not Chicago SouthShore is entitled to indemnity if they are only found liable for delegating their FELA mandated non-delegable duty to maintain a safe workplace. Chicago SouthShore argues that if their liability stems only from this source, it is solely derivative liability, and the exception to the general rule that a negligent party cannot seek indemnification kicks in. The most often cited case in this area of law remains the McClish case discussed above. In that case, Judge Dillin outlined Indiana's law regarding indemnity. In Indiana, "in the absence of express contractual or statutory right to indemnity, a party may bring an action for indemnification only if he is without fault." Mullen, 643 N.E.2d at 400; McClish, 266 F.Supp. 987, 989 (S.D. Ind. 1967). The right to indemnity may be implied only in favor of one whose liability to another is solely derivative or constructive and only against one whose wrongful act has caused such liability to be imposed. Mullen, 643 N.E.2d at 400 (citing Indianapolis Power Light Co. v. Snodgrass, 578 N.E.2d 669, 671 (Ind. 1991)). The rule in Indiana is different than the rule in many other jurisdictions. The Mullen court described the difference:
Some jurisdictions have recognized exceptions to this general rule in cases where there is a disparity in the conduct of the parties. Thus, it has been held that one who is only secondarily liable is entitled to indemnity from one who bears primary responsibility for the plaintiff's injury. Yohay v. City of Alexandria Employees Credit Union (4th Cir. 1987), 827 F.2d 967, 973-74. In some cases, a passively negligent tort-feasor may obtain indemnity against one who is actively negligent. Playskool, Inc. v. Elsa Benson, Inc. (1986), 147 Ill.App.3d 292, 100 Ill.Dec. 837, 841, 497 N.E.2d 1199, 1203, appeal denied. In at least one jurisdiction, a negligent tort-feasor has a right to indemnity from an intentional tort-feasor. Kutner v. Moore (1990), 159 Wis.2d 120, 464 N.W.2d 18, 20.
However, Indiana has refused to adopt any of these variations, instead reaffirming the rule that there may be no indemnity where the party claiming indemnity is guilty of actual negligence whether malfeasance, misfeasance or nonfeasance. Coca-Cola Bottling Co. v. Vendo Co. (1983), Ind.App., 455 N.E.2d 370, 373; Indiana State Highway Comm'n v. Thomas (1976), 169 Ind.App. 13, 346 N.E.2d 252, 259 quoting McClish, 266 F.Supp. at 991. This is so because Indiana recognizes no degrees of fault. Coca-Cola, 455 N.E.2d at 373.643 N.E.2d at 400.
Norfolk Southern's position is that because FELA is a negligence based statute and the law in Indiana only allows a claim for implied indemnity for one whose liability is solely derivative or constructive, no cross-claim for indemnity is available to Chicago SouthShore. Their support for this proposition comes from the unpublished opinion of Chief Judge Miller in Boomershine v. Consolidated Rail Corp., No. 3:98cv385 (N.D. Ind. April 24, 2000), which involved a situation very similar to the case at bar. The plaintiff in Boomershine sued the railroad for whom he worked, among others, and the railroad cross-claimed for indemnity against several parties. The court dismissed the cross-claim on the basis that Indiana law would not allow a party found liable under FELA to have an indemnity claim against a joint tortfeasor because in order to be found liable under FELA, a party must have been found negligent in some manner. The Boomershine court recognized that there is a lower standard of negligence under FELA, Boomershine at p. 4 ( citing Fulk v. Illinois Cent. R.R. Co., 22 F.3d 120, 124 (7th Cir. 1994)), but emphasized that this fact does not transform FELA into a strict liability statute. In other words, the court found that there had to be a showing of some negligence for the railroad to be found liable.
Applying this reasoning to the present case, Norfolk argues that in order to be held liable for delegating a non-delegable duty, Chicago SouthShore will have to be found negligent in some way. If Chicago SouthShore is found not liable, there is no need for indemnification. If they are found liable, it means they have been found negligent in some way, so Indiana law does not allow indemnification. Either way, under the logic of Boomershine, there is no set of facts under which Norfolk Southern could be found liable.
Obviously, Chicago SouthShore reads Indiana law differently. They claim that Norfolk Southern's wrongful conduct caused the derailment and that the exception under Indiana law that allows implied indemnity between joint tortfeasors when one party is liable only for delegating a non-delegable duty applies. In support of this position, they largely rely on the reasoning of two Illinois state court cases. In the first case, Summar v. Indiana Harbor Belt Railroad Co., 147 Ill.App.3d 851 (Ill.App.Ct. 1987), the court found that a railroad did have a viable action for implied indemnity under Indiana law. The plaintiff in that suit filed a FELA action against the railroad, who counterclaimed for implied indemnity against a steel company. The court held that an action for indemnity could be implied under Indiana law and denied the steel company's motion to dismiss because the railroad "would have a viable cause of action if its negligence was based solely upon its non-delegable duty to provide its employee with a safe place to work, is otherwise without fault, and plaintiff's injuries were solely caused by the negligence of [the steel company]." Id. at 856.
Similarly, in Indiana Harbor Belt Radio Co. v. Inland Steel Co., 82 Ill.App.3d 561 (Ill.App.Ct. 1980), an employee brought an action under FELA against a railroad for injuries sustained when he tripped over debris in the plant yard of a steel company. The railroad brought a third-party action for indemnification against the steel company. The court found that the railroad had a valid cause of action for indemnity under Indiana law if the railroad was found negligent solely based upon its non-delegable FELA duty to provide its employees with a safe place to work, but was found otherwise without fault, and the dangerous condition was found to have been caused solely by the negligent acts of the steel company. Id. at 568. The court explained that while there must be some negligence, however slight, by the railroad before they can be held liable in a FELA action, Indiana law allows indemnity for a party who is constructively liable by operation of a special statute or rule of law that imposes upon him a nondelegable duty, but is otherwise without fault. Id. at 564.
While the dichotomy laid out by the Boomershine court is compelling, we nonetheless respectfully disagree with the holding. Instead, this Court ultimately finds the logic set forth in the Illinois appellate cases more persuasive. Essentially, Indiana law would not allow Chicago SouthShore to claim indemnification if they themselves are guilty of negligence. Since FELA requires a finding of some "negligence" before Chicago SouthShore can be held liable, a literal reading of the law would indicate that indemnification is not available to them. But because the meaning of "negligence" as used here has been stretched beyond its normal bounds in this context, see, e.g., Fulk, 22 F.3d at 124, saying that the constructive liability at issue here amounts to negligence is mere semantics. Rather, whether or not we call it "negligence" when one party is constructively liable because of the negligence of another party, the essential facts of the situation remain the same as the exception outlined in McClish: it is possible that Chicago SouthShore can prove that they are liable only because of the operation of a special statute imposing upon them a non-delegable duty. Semantics aside, this is exactly the type of situation described by McClish as allowing indemnity, and as mentioned above, McClish has since been cited favorably by the Indiana Courts of Appeals. Mullen v. Cogdell, 643 N.E.2d 390, 400 (Ind.Ct.App. 1994); Indiana State Highway Commission v. Thomas, 346 N.E.2d 252, 259 (Ind.Ct.App. 1976).
Further, as the McClish court explained, the exception at issue here applies only to "one who is constructively liable to a third person by operation of some special statute or rule of law which imposes upon him a non-delegable duty, but who is otherwise without fault." McClish, 266 F.Supp. at 990 (emphasis added). This statement of the law implicitly contemplates the possibility that there may be some "negligence" giving rise to the indemnitee's liability, but as long as the indemnitee is otherwise without fault, indemnification is still a possibility.
For these reasons, it is possible that Chicago SouthShore could prove that Norfolk Southern must indemnify them, so Norfolk Southern's Motion to Dismiss [Docket No. 28] is DENIED. As Midwest filed a Motion to Dismiss that adopted Norfolk Southern's reasoning, their Motion [Docket No. 34] is DENIED as well.