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Burlington Northern Railroad Co. v. Stone Container Corp.2/20/1997
Plaintiff, Burlington Northern Railroad Company (railroad), appeals the award of damages on its judgment for indemnification against defendant, Stone Container Corporation (landowner). The landowner cross-appeals the judgment. We affirm the judgment against the landowner for indemnification, vacate the award of damages, and remand the cause for further findings regarding, and if necessary reconsideration of, the award of damages.
The landowner purchased industrial property serviced by the railroad. The predecessor in interest to the landowner had entered into an Industrial Track Agreement (Agreement) with the railroad. The landowner assumed the rights and obligations of its predecessor under the Agreement.
The landowner's obligations included its agreement not to place or permit to be placed, or to remain, any material or other obstruction within 8 1/2 feet laterally from the center of the track. It was further obligated to indemnify and hold the railroad harmless from any claims arising out of a breach of the Agreement.
In 1989, the railroad's employee was riding the side of one of its boxcars across the landowner's property. Excessive "slack action" in the cars caused the employee to lose his grip and fall from the train. He landed on the ground upright and running, but was injured when he tripped over a board leaning against the side of a building and fell into a construction pit. The landowner's contractor, who was performing construction on its behalf, had dug the hole and left the board against the building. Both were within 8 1/2 feet of the center of the track.
The employee filed an injury report with the railroad describing injuries to a thigh and both knees. The railroad notified the landowner of its claim for indemnification from any resulting losses. The employee returned to work three weeks later, but continued to receive treatment. The treatment was expanded to include his neck and back, which he had injured some years earlier.
In October 1992, the employee filed suit against the railroad under the Federal Employers' Liability Act (FELA) seeking damages for the 1989 accident. The employee offered to settle the case for $57,339. The railroad responded with an offer of $10,000. The case remained unsettled.
In January of 1993, while the employee was riding the side of a boxcar in extremely cold weather, he felt a pain shooting down his left arm. He filed another report of injury . It was determined that the employee had a herniated disk in his neck and this time he was unable to return to work.
The railroad again notified the landowner of its claim for indemnification. The landowner denied any legal responsibility.
The railroad entered into settlement negotiations with the employee and invited the landowner to participate in a settlement conference. The landowner's insurer sent a representative to the conference but did not permit the representative to participate in the negotiations.
The railroad settled with the employee for $230,000. The settlement expressly included any claims arising out of either the 1989 or the 1993 "accident," together with any other claims arising out of his employment with the railroad.
The railroad then brought this action seeking indemnity under the Agreement. After a trial to the court, the railroad was awarded $25,000. The award was based on the court's findings that the incidents in 1989 and 1993 were separate "events," that it was possible to separate the damages caused by the two events, that the settlement value for the 1989 event was $25,000, and that the landowner was liable for the entire amount of that settlement value but not for
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