CSX Transportation, Inc. v. City of Garden City , 258 F. App'x 287 ( 2007 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
DECEMBER 10, 2007
No. 06-11805 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 98-00223-CV-4
CSX TRANSPORTATION, INC.,
NATIONAL RAILROAD PASSENGER CORPORATION,
Plaintiffs-Cross-
Defendants-Appellants,
versus
CITY OF GARDEN CITY, GA,
Defendant-Third-Party-
Plaintiff-Appellee,
versus
ARCO, INC.,
Third-Party-Defendant-
Cross-Claimant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
_________________________
(December 10, 2007)
Before BIRCH and PRYOR, Circuit Judges, and COVINGTON,* District Judge.
PER CURIAM:
In this appeal, we consider whether a Georgia municipality is liable under a
license agreement for personal injury and property damage caused by a train
collision. Plaintiffs-cross-defendants-appellants CSX Transportation, Inc. (“CSX”)
and National Railroad Passenger Corporation (“Amtrak”) appeal the district court’s
grant of summary judgment to defendant-third-party-plaintiff-appellee City of
Garden City, Georgia (the “City”) and third-party-defendant-appellee ARCO, Inc.
(“ARCO”). Because we have determined that CSX and Amtrak cannot establish
liability under the license agreement, and have not pled a claim sounding in tort,
we AFFIRM.
I. BACKGROUND
This case is before us for the fourth time. In a previous related opinion, the
Georgia Supreme Court set out the facts as follows:
In 1996, the City entered into a series of agreements with
CSX to utilize a railroad right-of-way to install water and
sewer lines. The agreements required the City to
indemnify and hold harmless CSX or its subsidiaries for
all liabilities CSX incurred in connection with the project
and for which CSX was not the sole cause. The
agreements also required the City to maintain insurance
*
Honorable Virginia M. Hernandez Covington, United States District Judge for the
Middle District of Florida, sitting by designation.
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covering the indemnity obligations the City had assumed.
The City employed ARCO, Inc. (“ARCO”) as the general
contractor for its pipeline installation project. In October
1997, a National Railroad Passenger Corporation
(“Amtrak”) passenger train collided with a tractor trailer
operated by the City's subcontractor causing CSX to
incur substantial property damage and subjecting CSX to
third-party claims. CSX sought indemnification from the
City in accordance with the agreements. The City
refused and CSX 1 brought suit alleging that it was
entitled to indemnification.
The District Court granted summary judgment to the
City, finding that the indemnification provisions
constituted an impermissible waiver of the City's
sovereign immunity in the absence of any evidence that
the City had liability insurance to cover the indemnity
claim. The Eleventh Circuit vacated the entry of
summary judgment and remanded the case to the District
Court for its consideration of the effect of the City's
participation in the Georgia Interlocal Risk Management
Agency (“GIRMA”), a multi-government insurance fund.
CSX Transp., Inc. v. City of Garden City, 235 F.3d 1325
(11th Cir. 2000) (“CSX I”). On remand, the District
Court again granted summary judgment to the City,
finding that the indemnification agreements were ultra
vires and that OCGA § 36-33-1(a) did not authorize the
City to waive its immunity by entering into an indemnity
contract. CSX Transp., Inc. v. City of Garden City,
Georgia, 196 F. Supp. 2d 1288 (S.D. Ga. 2002) (“CSX
II”).
CSX again appealed to the Eleventh Circuit, which
then certified two questions to [the Georgia Supreme]
1
There are two plaintiffs in the case: CSX which owns the train track on which the
collision occurred and Amtrak, which owns the wrecked train. For convenience, the [court]
refers to CSX as if it [were] the only plaintiff.
3
Court:
1. May a Georgia municipality contractually
indemnify a private party for any and all loss,
damage, and liability arising in connection with a
public works project involving the private party's
land?
2. If not, is there any loss, damage, or liability
arising in connection with a public works project
involving a private party's land for which a
Georgia municipality may contractually indemnify
the private party?
CSX Transp., Inc. v. City of Garden City, 325 F.3d 1236
(11th Cir. 2003) (“CSX III”).
[The Georgia Supreme] Court answered both
certified questions in the negative. CSX Transp., Inc. v.
City of Garden City, 277 Ga. 248, 588 S.E.2d 688 (2003)
(“CSX IV”). In so doing, [the Georgia Supreme] Court
noted that
if the facts behind CSX's cause of action against
the City fall within the scope of the coverage
provided by the GIRMA policy and sovereign
immunity would otherwise apply to that cause of
action, the City's sovereign immunity is waived to
the extent of such liability coverage.
CSX IV, [277 Ga.] at 251, 588 S.E.2d 688. Based upon
CSX IV, the Eleventh Circuit concluded that
Georgia municipalities may never waive their
sovereign immunity by, for example, contracting
to indemnify third parties, without (1) express
legislative authority or (2) satisfying the
requirements of § 36-33-1(a).
4
CSX Transp., Inc. v. City of Garden City, 355 F.3d 1295,
1297 (11th Cir. 2004) (“CSX V”). The Eleventh Circuit
found that “while the indemnification agreement between
the City and CSX was correctly determined by the
district court to be void as ultra vires, it must again
remand the case to the District Court for consideration of
whether, pursuant to O.C.G.A. § 36-33-1(a), Garden City
waived its sovereign immunity as to CSX's cause of
action by purchasing GIRMA insurance.” Id. It further
determined that on remand,
the district court must scrutinize the GIRMA
policy and consider if the facts behind CSX's cause
of action against the City fall within the scope of
coverage provided by the GIRMA policy and
sovereign immunity would otherwise apply to that
cause of action to determine whether the City's
sovereign immunity was waived to the extent of
such liability coverage.
(Punctuation omitted). Id. The Eleventh Circuit
therefore affirmed in part and remanded in part the
decision of the District Court for further proceedings
consistent with its opinion.
CSX Transp., Inc. v. City of Garden City, 279 Ga. 655, 656-58, 619 S.E.2d 597,
598-99 (2005) (“CSX VII”). Instead of ruling on the issues framed by this Court
on remand, the district court certified five additional questions to the Georgia
Supreme Court. CSX Transp., Inc. v. City of Garden City, 391 F. Supp. 2d 1234,
1245-46 (S.D. Ga. 2005) (“CSX VI”). The Georgia Supreme Court declined the
certified questions, but took the “opportunity to reiterate [their] holding in CSX IV,
that the indemnification agreement between the City and CSX is void as an ultra
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vires contract. CSX VII, 279 Ga. at 658 n.4, 619 S.E.2d at 599.
The district court then granted the City’s motion for summary judgment and
denied CSX’s motion for partial summary judgment. CSX Transp., Inc. v. City of
Garden City, 418 F. Supp. 2d 1366, 1378 (S.D. Ga. 2006) (“CSX VIII”). The
district court found that, in the latest round of briefs filed in the district court, CSX
relied on a sovereign immunity tort theory of liability, while CSX “pled and
proceeded on only a contract-based theory of recovery” during the remainder of
the case, which was CSX’s “indemnification contract claim that the City must pay
CSX for damages the City, if not others, tortiously caused.” CSX VIII, 418 F.
Supp. 2d at 1375-76. In a prior opinion, the district court recognized that “CSX
does not allege that the City breached any tort duty, or any other private right other
than the breach of the CSX-City indemnification agreement.” CSX VI, 391 F.
Supp. 2d at 1238. The district court further noted that CSX never attempted to
invoke Federal Rule of Civil Procedure 15(a) to amend its claim, “nor would such
be granted at this late hour.” CSX VIII, 418 F. Supp. 2d at 1376. As a result, the
district court found that CSX was pursuing a “legally inconsistent” theory, which
“therefore fails as a matter of law.” Id. Alternatively, the district court found that
it is impossible for CSX to recover damages under the contract because the
Georgia Supreme Court twice declared the indemnification agreement between
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CSX and the City to be void, which moots the insurance coverage issues on
remand. Id. This appeal followed.
II. DISCUSSION
We review the grant or denial of summary judgment de novo, applying the
same standard as the district court. Kinnon v. Arcoub, Gopman & Assocs., Inc.,
490 F.3d 886, 890 (11th Cir. 2007). Summary judgment is appropriate when,
“viewing all facts and reasonable inferences in the light most favorable to the
nonmoving party,” “there is no genuine issue as to any material fact and the
moving party is entitled to judgment as a matter of law.” Id. (citation omitted);
Fed. R. Civ. P. 56. The facts in this case are not in dispute. Rather, CSX argues
that the district court reversibly erred by finding that CSX abandoned its contract
claim against the City, and by concluding that the insurance coverage issues have
been mooted by the Georgia Supreme Court’s holding that the indemnity
agreement between CSX and the City is void.2
In CSX’s complaint, CSX presented a claim for “contractual indemnity,”
seeking damages under the indemnification provision of its contract with the City.3
2
Because we find that the district court correctly determined that CSX abandoned its
contract claim against the City, we do not address its alternative holding that the GIRMA
coverage issues are moot.
3
CSX’s claims have always sounded in contract, as they acknowledge in their brief.
(Appellees’ Br. 14)
7
R1-1 at 5-8. The Georgia Supreme Court twice held that the indemnification
provision was void. CSX then argued in the district court, and on appeal, that it
could recover damages under the contract’s separate insurance provision.4
Pursuant to O.C.G.A. § 36-33-1(a), CSX argues that an event occurred (the train
collision) as a result of a party’s fault or negligence, causing personal injury and
property damage covered by the City’s GIRMA policy, and the City waived its
ability to rely on sovereign immunity through its purchase of GIRMA insurance.
On that basis, CSX contended that the City was liable to CSX for tort damages
covered by the GIRMA policy, because the City assumed such liability under its
contract with CSX and purchased insurance to cover such liability.
As the district court correctly found, CSX’s right to sue the City for torts
covered by the GIRMA policy does not arise from CSX’s contract with the City.
See CSX VIII, 418 F. Supp. 2d at 1375-76. That right is conferred by O.C.G.A. §
36-33-1(a) itself, which provides:
4
No court has ever found the City to be in breach of the insurance provision.
8
there is no waiver of the sovereign immunity of
municipal corporations of the state and such municipal
corporations shall be immune from liability for damages.
A municipal corporation shall not waive its immunity by
the purchase of liability insurance, ... unless the policy of
insurance issued covers an occurrence for which the
defense of sovereign immunity is available, and then only
to the extent of the limits of such insurance policy.
Id. The Georgia Supreme Court further clarified this issue, explaining that “the
indemnification agreement between CSX and the City has no effect on the issue of
the City’s waiver of immunity both because it is void and because under OCGA §
36-33-1(a) it is the purchase of insurance that effectuates the waiver of sovereign
immunity.” CSX IV, 277 Ga. at 250, 588 S.E.2d at 690. By the plain terms of the
statute, the City waived its sovereign immunity to the extent that it purchased
liability insurance covering occurrences to which sovereign immunity otherwise
would apply. Therefore, CSX did not need to sue on its contract with the City to
seek tort damages covered by the GIRMA policy.
The district court also correctly determined that, in the latest stage of this
case, CSX abandoned its contract theory of liability and embraced a tort theory that
it had never pled before. CSX now argues that the City is liable for damages
caused by the train collision because the City has waived its sovereign immunity
from certain torts through its purchase of liability insurance. Even though CSX
contends that the City assumed liability for such damages under its contract with
9
CSX, the Georgia Supreme Court’s opinion establishes that the City exposed itself
to tort liability by purchasing GIRMA insurance, not by entering into the contract
with CSX. CSX IV, 277 Ga. at 250, 588 S.E. 2d at 690. The district court is
correct; the contract has no bearing on this claim because CSX has transformed its
contract claim into a tort claim. CSX’s case has always been predicated upon an
underlying train collision, for which the City may or may not have waived its
immunity from tort liability, but CSX cannot use the insurance provision of its
contract with the City to bootstrap an unpled tort claim into this case. CSX never
pled a claim sounding in tort, and we cannot construe CSX’s pleadings so liberally
as to present such a claim. See Maniccia v. Brown, 171 F.3d 1364, 1367 n.1 (11th
Cir. 1999) (“the liberal construction afforded a pleading . . . does not require courts
to fabricate a claim that a plaintiff has not spelled out in his pleadings”). Because
the district court correctly found that CSX abandoned its contract claim against the
City, and CSX never moved to amend its pleadings under Federal Rule of Civil
Procedure 15(a) to assert a claim sounding in tort,5 we affirm the district court’s
grant of summary judgment to the City.
5
At oral argument, counsel for CSX acknowledged that CSX had never filed such a
motion because the district judge indicated that it would be denied. Even if that were true, this
Court cannot review the effect of a potential denial of a motion that was never filed.
10
III. CONCLUSION
Plaintiffs-cross-defendants-appellants CSX and Amtrak appealed the district
court’s grant of summary judgment to Defendant-third-party-plaintiff-appellee City
of Garden City and Third-party-defendant-appellee ARCO. Because we have
determined that CSX and Amtrak cannot establish that the City is liable under the
license agreement between CSX and the City, and because CSX has not pled a tort
claim, we affirm the district court’s grant of summary judgment to the City.
AFFIRMED.
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