Summary
applying Maryland law, which like federal maritime law, requires an explicit provision to construe an indemnity provision to include negligence
Summary of this case from In re Complaint of Boskalis Westminster Int'l B.V.Opinion
01 Civ. 2490 (JSM).
January 23, 2002.
OPINION AND ORDER
Plaintiff Roberto Lopez was injured when a truck operated by Ravan Transport, Inc.("Ravan"), which was draying a chassis and container owned by American President Lines Limited ("APL"), struck his car. Plaintiff commenced this action against the two entities, Ravan and APL, as well as the driver of the truck.
"Draying" is a term of art for pulling a container that can be loaded on a container ship.
APL now moves to compel Ravan to defend and indemnify it with respect to the claims alleged. The agreement by which APL leased the chassis and container at issue to Ravan provided:
MOTOR CARRIER AGREES TO DEFEND, HOLD HARMLESS AND FULLY INDEMNIFY THE INDEMNITEES, AGAINST ANY AND ALL CLAIMS, SUITS, LOSS, DAMAGE OR LIABILITY, FOR BODILY INJURY, DEATH AND/OR PROPERTY DAMAGE (INCLUDING REASONABLE ATTORNEY FEES AND COSTS INCURRED IN THE ENFORCEMENT OF THIS AGREEMENT) ARISING OUT OF OR RELATED TO THE MOTOR CARRIER'S USE OR MAINTENANCE OF THE EQUIPMENT DURING ANY INTERCHANGE PERIOD; THE PERFORMANCE OF THIS AGREEMENT; AND/OR PRESENCE IN THE FACILITY OPERATOR'S PREMISES.
Ravan contends that this indemnity provision does not require it to indemnify APL for its own negligence and that, at this point in the proceedings, prior to any extensive discovery, it can not determine whether Plaintiff's injuries arise from APL'S negligence.
The parties apparently agree that Maryland law applies to their contract. Both parties also agree that under Maryland law, a contract will not be construed to indemnify a party for its own negligence absent an express provision to that effect. Where they differ is with respect to whether the language in this contract is specific enough to provide APL with indemnification for its own negligence. Both parties rely on the decision of the Supreme Court of Maryland in Mass. Transit Administration v. CSX Transportation, Inc., 349 Md. 299, 708 A.2d 298 (1998).
In CSX, the indemnity provision at issue provided:
[MTA] agrees to indemnify, save harmless, and defend CSXT from any and all casualty losses, claims, suits, damages or liability of every kind arising out of the Contract Service under this Agreement, up to a maximum amount of One Hundred Fifty Million Dollars ($150,000,000), per occurrence, during the term of this Agreement, as excepted or limited by the terms of subsections (a), (c), (d), and (e), infra. This maximum indemnification amount shall include any expenses for outside manpower, for legal representation and for other extraordinary expenses of handling individual claims for [MTA]. . . .Id., 708 A.2d at 301-02 (emphasis in original) (footnote omitted).
The Maryland Supreme Court found: "In `unequivocal terms,' the indemnification in the instant matter includes the liability of CSXT for its own acts or omissions." 708 A.2d at 310. There is no reason to believe that the Maryland Supreme Court would reach a different conclusion with respect to the contract at issue here. Among other things, the contract at issue uses the same broad "arising out of" language that was at issue in CSX. It also contains a provision obligating the indemnitor to obtain liability insurance, which the court in CSX found indicative of an intent to extend the indemnity to cover negligence of the indemnitee.
Nor would the result be any different if New York law were to be applied. In Levine v. Shell Oil Company, 28 N.Y.2d 205, 321 N.Y.S.2d 81 (1971), the Court of Appeals construed a contract between a service station operator and an oil company that required the operator to indemnify the oil company for negligence. In that case the Court stated:
The clause, in the instant case, clearly states that Visconti will be required to indemnify Shell against all claims, suits, loss, cost and liability. Since the plain meaning of these words fairly includes the liability for the active negligence of Shell, we see no reason why more should be required to establish the unmistakable intent of the parties.Id., 28 N.Y.2d at 212, 321 N.Y.S.2d at 86.
Since the contract between Ravan and APL provided indemnification for "ANY AND ALL CLAIMS, SUITS, LOSS, DAMAGE OR LIABILITY," the reasoning of the New York Court of Appeals in Levine compels the conclusion that Ravan is obligated to indemnify APL, even for its own negligence.
For the foregoing reasons, the Court finds that Ravan is liable to indemnify APL for all claims at issue in this action and to reimburse APL for its reasonable costs and expenses. APL shall supply Ravan with copies of its counsel's billing records by February 15, 2002, and the parties shall meet and confer within two weeks thereafter to determine the extent to which the amounts claimed by APL are contested. If the parties can not agree on the amount to be paid, they shall contact the Court by March 8, 2002, to request a conference.
SO ORDERED.