Federated Rural Electric Insurance Exchange v. R.D. Moody & Associates, Inc. , 284 F. App'x 636 ( 2008 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 07-13345 JUNE 27, 2008
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 03-00247-CV-WDO-5
FEDERATED RURAL ELECTRIC INSURANCE EXCHANGE,
Plaintiff-Appellant,
versus
R.D. MOODY & ASSOCIATES, INC.,
MASTEC NORTH AMERICA, INC.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Georgia
_________________________
(June 27, 2008)
Before EDMONDSON, BLACK and FARRIS,* Circuit Judges.
PER CURIAM:
*
The Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit Court of
Appeals, sitting by designation.
Thomas Stanley Smith was fatally injured by a power line owned by
Washington Electric Membership Corporation and constructed in 1997 by R.D.
Moody & Associates, Inc. Washington EMC’s insurer, Federated Rural Electric
Insurance Exchange, settled with Smith’s estate and brought this action seeking
contribution from Moody. The district court granted summary judgment for
Moody, holding that, under the terms of the parties’ 1994 construction contract,
Moody’s liability terminated when possession and control of the line were turned
over to Washington EMC. On appeal, Federated argues that (1) the construction of
the power line was not governed by the 1994 contract but, instead, a 1995 “Cost-
Plus Proposal” and (2) even if the 1994 contract governs, Moody is liable under an
unsigned indemnity agreement that was appended to the contract. We affirm.
I
On December 16, 1993, Moody and Washington EMC entered into a
Distribution Line Extension Construction Contract, whereby Moody agreed to
construct power lines for Washington EMC. The parties call this the 1994
contract. The 1994 contract contained a provision, Article I, Section 2, titled
“Additional Projects,” that read:
From time to time the Owner and the Contractor may enter into
negotiations for the performance of work at labor prices which may
differ from those in the Proposal (such work being hereinafter called
“Additional Projects”). Except as may otherwise be agreed upon in
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writing by the Owner and the Contractor at the time the supplemental
contract for the Additional Project is negotiated, the provisions of the
Contract for the Project shall apply.
Approximately nine months into the 1994 contract, Washington EMC
solicited bids for a new contract to complete the balance of work remaining on its
“1993-1995 Work Plan.” Washington EMC executed a contract with Floyd S. Pike
Electrical Contractor, Inc., the low bidder.
On September 26, 1995, Washington EMC contacted Moody to construct
additional power lines pursuant to a Cost-Plus Proposal. The proposal consisted of
a single page listing labor and equipment rates. Moody constructed the power line
that fatally injured Mr. Smith in January 1997.
After Mr. Smith’s death, his surviving spouse brought a personal injury and
wrongful death suit against Washington EMC and its consulting engineer.
Pursuant to a settlement agreement, Mrs. Smith received $6,500,000 from
Washington EMC’s insurer, Federated, and $500,000 from the engineer.
Washington EMC brought suit in federal court seeking indemnity or
contribution from Moody, asserting that Moody was negligent in constructing the
power line that injured Mr. Smith. Federated was later substituted as the party
plaintiff. The district court initially granted summary judgment to Moody on the
ground that the action was barred by the Florida Insurance Guaranty Act.
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Federated Rural Elec. Ins. Exch. v. R.D. Moody & Associates, Inc., 468 F.3d 1322,
1323 (11th Cir. 2006). We reversed, finding that Georgia law controlled the
dispute. Id.
On remand, the district court granted summary judgment in favor of Moody,
finding that under Article IV, Section 4 of the 1994 contract, Moody’s liability
terminated when possession and control of the line were turned over to
Washington EMC. This appeal followed.
II
We review de novo a district court’s order granting summary judgment.
Wilson v. B/E Aerospace, Inc., 376 F.3d 1079, 1085 (11th Cir. 2004). Summary
judgment is appropriate when “there is no genuine issue as to any material fact and
. . . the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c);
see Damon v. Fleming Supermarkets of Fla., Inc., 196 F.3d 1354, 1358 (11th Cir.
1999). We view the evidence in the light most favorable to the non-moving party.
See Damon, 196 F.3d at 1358.
III
Federated argues that liability is governed by the Cost-Plus Proposal rather
than the 1994 contract. It argues that the 1994 contract was terminated when
Moody entered into the construction contract with Pike. Thus, the only contract in
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effect at the time of the 1997 construction was the Cost-Plus Proposal. To support
this argument, Federated points to declarations from Robert S. Moore and Thomas
E. Glover stating that Washington EMC’s policy was to have only one power line
contractor under contract at any time.
Under Georgia law,
there are three steps in the process of contract construction. The trial
court must first decide whether the contract language is ambiguous; if
it is ambiguous, the trial court must then apply the applicable rules of
construction (O.C.G.A. § 13-2-2); if after doing so the trial court
determines that an ambiguity still remains, the jury must then resolve
the ambiguity.
Georgia-Pacific Corp. v. Lieberam, 959 F.2d 901, 904 (11th Cir. 1992) (quoting
Copy Sys. of Savannah, Inc. v. Page, 398 S.E.2d 784, 785 (Ga. Ct. App. 1990)).
“A contract term is ambiguous if it is reasonably susceptible of more than one
interpretation.” Int’l Bhd. of Boilermakers v. Local Lodge D111, 858 F.2d 1559,
1561 (11th Cir. 1988).
The 1994 contract unambiguously governs the 1997 construction. Article I,
Section 2 of the contract states that, in the absence of an agreement to the contrary,
the provisions of the 1994 contract will apply to future construction projects. The
Cost-Plus Proposal signed by the parties consisted only of Moody’s labor and
equipment rates and its billing procedure. Because the Cost-Plus Proposal
contained no statement that indicated otherwise, the terms of the 1994 contract
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control the construction.
Federated argues that Article I, Section 2 is ambiguous because it is
susceptible to another interpretation: it applies to supplemental negotiations during
the one-year duration of the contract. This reading is not supported by the plain
language of the contract. The contract contains no terms indicating that it would
expire after one year or when Washington EMC entered into another contract with
a competitor. Federated’s interpretation would require the contract to be read in
conjunction with the Glover and Moore declarations. We may not, however, look
outside the plain language of the contract to create ambiguity. See Georgia-Pacific
Corp. 959 F.2d at 904.
IV
Federated argues that the district court erred in finding that Moody was not
liable under the 1994 contract. We reject the argument. Under Article IV, Section
1(f) of the 1994 contract, Moody was liable for damage to persons or property
“from the commencement of work to completion” or until Washington EMC took
possession and control of the power line. However, pursuant to Article IV, Section
4, “[u]pon . . . delivery of possession and control to the Owner,” these risks were
“terminated.” Under the terms of the contract, Moody’s liability for personal
injuries arising from negligent construction ended when Washington EMC took
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control of the line in 1997, three years prior to Mr. Smith’s accident.
Federated argues that the liability provisions of the contract are ambiguous.
It points to Article III, Section 2 of the contract, which provides that “[u]pon the
Completion of Construction of any Section of the Project . . . the Contractor shall
deliver to the Owner in the form attached hereto, . . . (2) an agreement to hold the
Owner harmless against any liens arising out of the Contractor’s performance . . .
.” Federated argues that this provision incorporates into the contract an unsigned
form that was attached to the contract stating that “the Contractor will . . . agree to
indemnify and hold harmless the Owner from any claim or lien arising out of . . .
the performance of the contract.” (emphasis added).
This argument also fails. Moody did not “specifically assent” to be bound
by all the terms of the attached form. Hembree v. Johnson, 482 S.E.2d 407, 408
(Ga. Ct. App. 1997). Instead, it merely agreed to provide to Washington EMC an
agreement that it would be liable for all liens arising from its performance of the
contract. If the parties intended for Moody to be liable for all claims arising from
its performance, they would have added this language to the body of the contract.
Federated’s reading of the contract would also contravene the rule that “a
court should, if possible, construe a contract so as not to render any of its
provisions meaningless.” White v. Kaminsky, 610 S.E.2d 542, 545 (Ga. Ct. App.
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2004) (citation omitted); see also O.C.G.A. § 13-2-2(4). To construe the 1994
contract to require Moody to indemnify Washington EMC against all claims would
render meaningless the provision in Article IV terminating Moody’s liability.
AFFIRMED.
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