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Welch v. Kansas City Southern Ry. Co.

United States District Court, W.D. Louisiana, Lake Charles Division

April 17, 2013

MICHAEL WELCH
v.
THE KANSAS CITY SOUTHERN RAILWAY COMPANY, UOP LLC AND SOUTHERN IONICS, INC

Page 403

For Michael Welch, Plaintiff: Bristol Alan Baxley, LEAD ATTORNEY, Jerry Easley, PRO HAC VICE, Rome Arata & Baxley (TX), Pearland, TX.

For U O P L L C, Defendant: Jay M Jalenak, Jr, LEAD ATTORNEY, John E Heinrich, Kean Miller (BR), Baton Rouge, LA.

For Kansas City Southern Railway Co, Defendant: Richard E Gerard, Jr, LEAD ATTORNEY, Kevin Paul Fontenot, Robert E Landry, Scofield Gerard et al, Lake Charles, LA.

For Southern Ionics Inc, Defendant: Richard G Duplantier, Jr, LEAD ATTORNEY, Carlina Castro Eiselen, Galloway Johnson et al (NO), New Orleans, LA.

For Kansas City Southern Railway Co, Third Party Plaintiff: Richard E Gerard, Jr, LEAD ATTORNEY, Kevin Paul Fontenot, Robert E Landry, Scofield Gerard et al, Lake Charles, LA.

For Southern Ionics Inc, Third Party Defendant: Richard G Duplantier, Jr, LEAD ATTORNEY, Carlina Castro Eiselen, Galloway Johnson et al (NO), New Orleans, LA.

For U O P L L C, Third Party Defendant: Jay M Jalenak, Jr, LEAD ATTORNEY, John E Heinrich, Kean Miller (BR), Baton Rouge, LA.

PATRICIA MINALDI, UNITED STATES DISTRICT JUDGE. MAGISTRATE JUDGE KAY.

OPINION

PATRICIA MINALDI, UNITED STATES DISTRICT JUDGE

Page 404

MEMORANDUM RULING

Before the court is a Motion for Summary Judgment as to Third Party Demand of the Kansas City Southern Railway Company [Doc. 53], filed by the defendant/third party defendant, UOP LLC (" UOP" ).[1] The defendant/third party plaintiff, Kansas City Southern Railway (" KCSR" ), simultaneously filed a Motion to Amend its Third Party Demand Against UOP and Southern Ionics [Doc. 59], and an Opposition to the Motion for Summary Judgment [Doc. 60], incorporating into its Opposition an argument on a new contractual indemnity claim found for the first time in its proposed Amended Third Party Demand. UOP then filed a reply to KCSR's Opposition to the Motion for Summary Judgment [Doc. 66]. Magistrate Judge Kay subsequently granted KCSR's Motion to Amend KCSR's Third Party Demand [Doc. 69],[2] and requested that the parties submit supplemental briefs addressing the new issue of contractual indemnity raised in KCSR's Amended Third Party Demand. KCSR thus filed a Supplemental Memorandum in Opposition to the Motion for Summary Judgment [Doc. 71], and UOP filed a Reply to KCSR's Supplemental Memorandum [Doc. 72]. As the undersigned finds that the motion is fully briefed, it is ripe for review. For the reasons discussed below, UOP's Motion for Summary Judgment is DENIED IN PART and GRANTED IN PART.

BACKGROUND

The plaintiff, Michael Welch, filed this suit in the Fourteenth Judicial District Court for the State of Louisiana.[3] Originally, the sole defendant in the complaint was the plaintiff's employer, KCSR.[4] The petition alleged that KCSR was liable to plaintiff, pursuant to the Federal Employers Liability Act (" FELA" ), 45 U.S.C. § 51, et seq , for injuries he sustained after he was exposed to toxic chemicals, gasses, vapors, and/or other substances from a gasket leak on a defective rail car.[5] Welch alleged that KCSR failed to (1) properly inspect, repair, and maintain the railcar; (2) establish and enforce proper safety procedures; (3) properly instruct, train, and supervise; (4) provide reasonably safe and suitable tools, machinery, and equipment; and, (5) follow applicable standards, rules, and regulations.[6] The parties have since settled that FELA claim.

Welch amended his petition for damages on two separate occasions around the time he signed the aforementioned settlement with KCSR (June 30, 2011), while the case was still in state court. The first amended petition added the defendant UOP (who loaded the railcar) on June 21, 2011, more than a week before Welch signed his settlement

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agreement with KCSR.[7] The second amended petition added defendant Southern Ionics (who shipped the railcar) on July 25, 2011, after Welch had signed his settlement agreement with KCSR.[8] In both amended pleadings, he alleged that his injury was " due in whole or in part" to the negligence of UOP and Southern Ionics, and reasserted the exact same claims he made against KCSR[9] against both parties, albeit under a general negligence theory instead of under the FELA.

KCSR amended its answer on September 6, 2011, to include third party demands against the newly added defendants, UOP and Southern Ionics[10] The substance of each cause of action was nearly identical, and both were phrased exclusively in terms of tort liability: that any injuries sustained by Welch were caused " in whole or in part [due to] the negligence" of UOP and Southern Ionics.[11] As in Welch's petition, KCSR alleged that UOP and Southern Ionics were negligent in failing to: (1) inspect the defective railcar, including inspecting the gaskets for damage; (2) properly repair and maintain the railcar; (3) inspect and properly secure and make closures on the railcar; (4) establish and enforce proper safety precautions; (5) instruct, train and supervise; and, (6) follow applicable standards, rules, codes, and regulations.[12] KCSR requested a judgment ordering the two parties to " fully indemnify and hold harmless KCSR for any amounts paid to plaintiff in compensation for his alleged damages." [13] On September 30, 2011, UOP removed this case to this court based on diversity jurisdiction.[14]

The claims that remain in this action, after Welch settled with KCSR, are negligence claims against UOP and Southern Ionics, and the indemnity claims in KCSR's third party complaint.

On October 15, 2012, UOP filed a Motion for Summary Judgment as to KCSR's Third Party Demand.[15] UOP argued that summary judgment was appropriate as KCSR could not assert a claim for contribution or for legal/implied indemnity for joint tortfeasors. The summary judgment memorandum did not discuss contractual indemnity; in fact, UOP specifically noted that KCSR had not asserted such a claim

In response to this summary judgment motion, KCSR filed a Motion to Amend Third Party Demand on November 5, 2012, for the first time inserting a contractual indemnity claim into its amended third party demand petition.[16] KCSR

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also incorporated this contractual indemnity claim into its opposition to the summary judgment motion, filed on November 6th. Specifically, KCSR alleged that UOP owed indemnity to KCSR under an Industry Track Agreement (" side track agreement" ) wherein " UOP . . . contractually agreed to indemnify KCSR" in a situation such as the one presented in Welch's complaint.[17] The proposed amended third party demand only pertained to UOP's alleged liability; it did not affect the potential liability of Southern Ionics.[18] KCSR also addressed and refuted UOP's allegations in its summary judgment motion that it did not have an actionable contribution claim or legal/implied indemnity claim against UOP or Southern Ionics.

On November 16, 2012, UOP filed a reply to KCSR's opposition to summary judgment, reasserting its arguments against implied/legal indemnity, and arguing that the new contractual indemnity claim failed because the side track agreement only covered accidents that happened " on or about" a sidetrack inside UOP's facility, and not accidents that happened on railcars once they left the facility (as was the case in Welch's accident).[19]

After extensive briefing by the parties, Judge Kay granted KCSR's Motion to Amend Third Party Demand to include the new side track agreement contractual claim, and requested that the parties submit additional briefing for the purposes of the pending summary judgment motion on the contractual indemnity issue.[20]

On February 1, 2013, KCSR filed its Supplemental Memorandum in Opposition to Motion for Summary Judgment as to Third Party Demand of KCSR.[21] In its memorandum, KCSR argued that UOP owed both " implied and contractual indemnity obligations to KCSR in connection with the injuries alleged by Mr. Welch." It noted that it had already briefed the issue of implied/legal indemnity in its original opposition to the summary judgment motion. Turning to its contractual indemnity claim, it alleged that under the side track agreement, it was at least ambiguous whether UOP had to indemnify KCSR for injuries Welch sustained, when UOP's alleged negligence in unloading and failing to inspect the railcar at its Caddo Parish Facility on June 23, 2009 could be the proximate cause of Welch's injuries, which occurred after the railcar left UOP's facility, on June 26, 2009.

On February 8, 2013, UOP filed its Reply (Contract Claim) in Support of Motion for Summary Judgment as to KCSR's Third Party Demand. In its memorandum, it noted that it had already briefed the issue of contractual ...


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