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CHICAGO CENT. v. UNION PACIFIC2/19/1997
[558 NW2d Page 713]
This suit stems from a freight train derailment that occurred near Williams, Iowa, in December 1990. Two railroad companies dispute, on numerous theories, whether one of them should compensate the other for various items of damage stemming from the derailment. We affirm in part and reverse in part and remand on the appeal, and affirm on the cross-appeal.
A "truck bolster" is a solid steel casting that forms a part of the framework upon which a railroad car rests as it travels on the rails. The failure of one such bolster caused this derailment and the ensuing litigation. The truck bolster had been manufactured by Buckeye Steel Castings Co. (Buckeye), sold to defendant Union Pacific Railroad (Union), and installed in one of Union's "bathtub gondola" coal cars. At the time of the derailment, this Union-owned rail car was being operated by plaintiff Chicago Central & Pacific Railroad Company (Chicago) and carrying coal pursuant to a three-party contract between Chicago, Union, and Commonwealth Edison (Commonwealth). The coal was to be transported from where it was mined in Wyoming, over Union's and then Chicago's lines, for delivery to Commonwealth's generating station in Joliet, Illinois . The rail lines are subject to the interchange rules of the American Association of Railroads (AAR rules).
The derailment caused substantial damage to the two railroads' property and to the property of others. In accordance with the AAR rules, Chicago computed and paid $86,727.30 to Union on March 26, 1991, for destroyed railroad cars owned by Union, and billed and paid itself $77,997.29 for repairs it made to cars owned by third parties. Chicago also paid, among other things, $63,150.36 to Commonwealth for the loss of coal being shipped.
On August 21, 1992, Chicago filed suit against Buckeye seeking to hold it liable for damage to Chicago's tracks, damage to the property of adjoining landowners, and damage to and destruction of railroad cars. Chicago's claims against Buckeye included products liability theories, strict liability, and negligence. On September 27, 1993, Chicago filed an amended petition adding Union as a defendant. Chicago's theories against Union included warranties of merchantability and fitness, strict liability, negligence, and indemnity under the Chicago/Union/Commonwealth coal shipment contract. Buckeye settled with Chicago before trial.
A number of disputed issues in the suit against Union were withdrawn by pretrial and trial rulings. The case was eventually submitted to a jury on Chicago 's claims under theories of contractual indemnity, breach of warranty of the cars' fitness, and negligence. The trial court very prudently submitted the case by way of special verdicts so we have the benefit of the jury's answers to specific questions relating to liability and damage.
The jury found Union breached the contract of indemnity. On the negligence and warranty-of-fitness claims, the jury found Chicago was not at fault for the train derailment, that Buckeye was fifty-five percent at fault and Union was forty-five percent at fault. The jury also found various dollar values for items of claimed damages. It found damage to the adjacent landowner's property was $4500. The damage to railroad cars owned by parties other than Union was $26,166.55. The value of destroyed railroad [558 NW2d Page 714]
cars owned by parties other than Union was $27,116.82. Damage to railroad cars owned by Union was $51,830.74. Destroyed railroad cars owned by Union were valued at $83,127.30. Damage to Chicago's railroad tracks totaled $9182.81. The cost of cleanup at the derailment site was $59,419.45. The value of the coal destro
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