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Zurich American Insurance Co. v. Intermodal Maintenance Services, Inc.

United States District Court, District of Nevada

March 20, 2015

INTERMODAL MAINTENANCE SERVICES, INC., a foreign corporation; DOES I-X, inclusive; and ROE INSURANCE COMPANIES XI-XX, inclusive; and MOE CORPORATIONS XXI-XXX, inclusive, Defendants.


Plaintiffs’ Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment (#43), Defendant’s Motion for Partial Summary Judgment (#50), Defendant’s Motion to Dismiss for Spoliation of Evidence (#40), Plaintiffs’ Motion for Leave to Supplement (#62) and Plaintiffs’ Requests for Judicial Notice (##53 and 58) having come on for hearing on February 26, 2015, Ryan Kerbow, Esq. appearing on behalf of Plaintiffs ZURICH AMERICAN INSURANCE COMPANY and DISCOVER PROPERTY AND CASUALTY INSURANCE COMPANY (collectively, “Plaintiffs”) and Alan Westbrook, Esq. appearing on behalf of Defendant INTERMODAL MAINTENANCE SERVICES, INC. (“Defendant”), the court having reviewed all related briefing and heard oral argument from counsel makes these Findings of Fact and Conclusions of Law.

To the extent any Findings of Fact also contain Conclusions of Law, said Conclusions of Law should be considered as such. To the extent any Conclusions of Law also contain Findings of Fact, said Findings of Fact should be considered as such.

Findings of Fact

1. This is an indemnity, contribution, and breach of contract action following the settlement of Bert & Linda Brasher v. Union Pacific Railroad Company, et al. that was pending in the Second Judicial District Court for the State of Nevada in and for the County of Washoe, Case No. CV08-01825 (the “Underlying Action”). Plaintiffs were the defending and indemnifying insurance companies for Union Pacific Motor Freight Company and Union Pacific Corporation (“Union Pacific”) in the Underlying Action and paid a total settlement of $2, 000, 000 to Bert and Linda Brasher, Plaintiffs in the Underlying Action, on behalf of both Union Pacific and IMS.

2. The Underlying Action arose from injuries Mr. Bert Brasher sustained on July, 2006, at a loading dock in Reno, Nevada while employed by Devine Intermodal (“Devine”) as a truck driver. Specifically, Mr. Brasher alleged he was manually operating a spring-loaded slider arm to adjust the rear axle assembly of a 53-foot trailer chassis when his left hand was crushed because the slider arm allegedly popped out of position and retracted. As a result, his left hand was pinned between the slider arm handle and the z-bar metal plate of the chassis’ tandem axle assembly. Mr. Brasher sustained a laceration to his left middle finger for which he underwent surgery. He later developed reflex sympathetic dystrophy, a type of complex regional pain syndrome. Mr. Brasher claimed he had complete and permanent loss of use of his left arm and constant pain. He asserted multiple damage claims including medical expenses, wage loss, and loss of earning capacity.

3. The subject trailer chassis was owned by Union Pacific and interchanged by Devine at Union Pacific’s intermodal ramp in Sparks, Nevada. Pursuant to a Ramp Contractor Agreement with Union Pacific (the “Contract”), Defendant performed terminal operating services at the Sparks, Nevada intermodal ramp where the subject trailer chassis was interchanged prior to the accident, including maintenance and repair of the chassis. The Contract contains an express indemnity provision that reads as follows:

The Contractor shall indemnify and hold harmless the Railroad [. . .] against and from any and all liability, loss, damage, claims, demands, costs and expenses of whatsoever nature, including court costs and attorneys’ fees, arising from or growing out of any injury to or death of persons whomsoever (including officers, agents and employees of the Railroad, of the Contractor and of any subcontractor, as well as other persons) or loss of or damage to property whatsoever (including property of or in the custody of the Railroad, the Contractor or any subcontractor as well as other property). The right to indemnify shall accrue when such injury, death, loss or damage occurs from any cause and is associated in whole or in part with the work performed under this agreement, a breach of the agreement or the failure to observe the health and safety provisions of the agreement or any activity or omission arising out of performance or nonperformance of this agreement. However, the Contractor shall not indemnity the Railroad when the loss is caused by the direct active negligence of the Railroad.

4. The Contract also required Defendant to procure commercial general liability insurance coverage for Union Pacific with a single occurrence limit of $5 million, including, but not limited to, broad form contractual liability and coverage for bodily injuries. Further, the Contract required Defendant to procure business automobile coverage with a combined single limit of at least $1 million per occurrence, including, but not limited to, coverage for bodily injuries and for all vehicles non-owned. The Contract stated that “[a]ll policy(ies) required above (excluding Workers Compensation and Professional Liability) shall provide severability of interests and shall name Railroad as an additional insured.”

5. Section 7 of the Contract entitled “Specifications for Intermodal Trailer/Tire Repairs/Replacements” provides, in part, the following:

Contractor shall perform any necessary repairs to the intermodal Equipment in order to keep such Equipment in good operating condition. Contractor shall furnish labor and shall provide all parts, forms, and supplies as requested by the Railroad in order to make repairs to said Equipment. Contractor shall maintain at each Facility an inventory of supplies and repair parts in such content and quality as are jointly determined by Contractor and the Railroad Representative from time to time, but in all cases in such content and quality as are reasonably determined to be required for the Work.

(Emphasis added.) Section 9, “Specifications for Intermodal Trailer/Tire Repairs/Replacements, ” provides, in part:

Railroad agrees to assist Contractor in locating any piece of Equipment in need of repair, and shall position the Equipment at an agreed service area for servicing, if possible, in a manner so as not to cause undue delay to the Maintenance of Equipment.

(Emphasis added.) Section 3, “Trailer/Container/Chassis Repair, ” provides, in part:

Repairs and maintenance to any railroad owned or controlled Intermodal Equipment exceeding $450.00 for owner responsibility repairs must have an authorization number from the Equipment owner, which is to be obtained by the Contractor from the Equipment owner.

Section 5 entitled “Trailer/Container/Chassis Repair” provides, in part, the following:

Contractor shall maintain all records of all repairs as well as any and all Federal Highway Administration (FHWA) Inspections or California Bi-Annual (BIT) Inspections, if applicable, performed in accordance with Railroad policy, and shall furnish such reports as required by the Railroad Representative as shown in Item No. 13, Index of Maintenance and Repair Schedules and Forms, upon request.

6. On June 30, 2008, the Brashers filed a Complaint (Case No. CV08-01753) naming Union Pacific as a defendant. Mr. Brasher’s employer on the date of loss, Devine Intermodal, filed a Complaint on July 7, 2008 (Case No. CV08-01825). The two cases were consolidated on December 9, 2008.

7. The Brashers’ Complaint alleged that “Union Pacific Railroad Company [ . . . ] negligently and carelessly performed various functions, including, but not limited to, negligent inspection, maintenance, servicing and repair of said trailer chassis, ...

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