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Preston v. Old Dominion Freight Line, Inc.

United States District Court, D. Minnesota

July 23, 2018

Robert Preston, Plaintiff,
v.
Old Dominion Freight Line, Inc., Defendant/Third-Party Plaintiff,
v.
Magnum LTL, Inc. Third-Party Defendant.

          MEMORANDUM AND ORDER

          Paul A. Magnuson United States District Court Judge

         This matter is before the Court on cross-Motions for Summary Judgment on the Third-Party Complaint by Third-Party Plaintiff Old Dominion Freight Line, Inc., and Third-Party Defendant Magnum LTL, Inc. For the following reasons, Old Dominion's Motion is denied, and Magnum's Motion is granted.

         BACKGROUND

         This lawsuit stems from injuries Plaintiff Robert Preston-a Magnum employee- claims that he sustained after slipping and falling in an employee parking lot on his way to work at an industrial facility in Blaine, Minnesota. (See Compl. (Docket No. 1).) Old Dominion owns this facility, and it leases office space and loading docks at the facility to Magnum. (See Kuhl Decl. (Docket No. 42-1) Ex. A (Lease).) The lease agreement contains two provisions that are relevant to this matter: an indemnification provision and an insurance provision that required Magnum to obtain a general liability insurance policy. (Id. ¶ 10(a)-(b).)

         For the purposes of these Motions, neither Old Dominion nor Magnum contest the allegations in Preston's Complaint. But they do dispute the extent of Magnum's duty under the lease to indemnify and defend Old Dominion in this lawsuit, whether the general liability insurance policy that Magnum obtained satisfied its obligations under the lease, and which party was responsible for snow and ice removal in the employee parking lot.

         After Preston filed this lawsuit against Old Dominion, Old Dominion tendered its defense to Magnum and Northland Insurance, Magnum's insurer. (Kuhl Decl. (Docket Nos. 42-3, 42-5) Exs. C, E.) Northland denied coverage, and Magnum refused to defend or indemnify Old Dominion. (Id. (Docket Nos. 42-4, 42-6) Exs. D, F.) Old Dominion then filed a Third-Party Complaint against Magnum, claiming breach of contract, contractual indemnity and contribution, and common law indemnity and contribution. (3d-Party Compl. (Docket No. 17).)

         DISCUSSION

         Old Dominion claims that Magnum breached the lease agreement by failing to defend and indemnify Old Dominion in this lawsuit and by obtaining inadequate insurance coverage, and it therefore seeks contractual and common law indemnification and contribution in this matter. Magnum contends that it did not breach the lease because Preston's claims arise solely out of Old Dominion's negligence, and Magnum need not indemnify or defend Old Dominion under these circumstances. Magnum also argues that it obtained adequate insurance coverage and that the contribution claims should be dismissed because there is no common liability.

         A. Standard of Review

         Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The Court must view the evidence and inferences that “may be reasonably drawn from the evidence in the light most favorable to the nonmoving party.” Enter. Bank v. Magna Bank of Mo., 92 F.3d 743, 747 (8th Cir. 1996). The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials, but must set forth specific facts in the record showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).

         The Third-Party Complaint turns on the interpretation of the lease agreement, to which Minnesota substantive law applies. (See Lease ¶ 21(h).) “The cardinal purpose of construing a contract is to give effect to the intention of the parties as expressed in the language they used in drafting the whole contract.” Art Goebel, Inc. v. N. Suburban Agencies, Inc., 567 N.W.2d 511, 515 (Minn. 1997). If the language of a contract is unambiguous, the Court will enforce that contract and will not “rewrite, modify, or limit its effect.” Storms, Inc. v. Mathy Constr. Co., 883 N.W.2d 772, 776 (Minn. 2016) (quotation omitted). A contract is ambiguous if it is “reasonably susceptible of more than one meaning.” Qwinstar Corp. v. Anthony, 882 F.3d 748, 754 (8th Cir. 2018) (quotation omitted).

         A. Contractual Indemnification[1]

         Old Dominion argues that, under the lease agreement, Magnum has an express duty to defend and indemnify Old Dominion, even for Old Dominion's negligence. An indemnification provision that shifts liability for an indemnitee's own negligence is “not favored by the law and . . . not construed in favor of indemnification.” Nat'l Hydro Sys. v. M.A. Mortenson Co., 529 N.W.2d 690, 694 (Minn. 1995). To be enforceable, such a provision “must use specific, express language that clearly and unequivocally states the contracting parties' intent for the indemnitor to indemnify the indemnitee for the indemnitee's own negligence.” Dewitt v. London Road Rental Ctr., 910 N.W.2d 412, 417 (Minn. 2018) (quotation omitted).

         The indemnification provision here provides that Magnum must defend and indemnify Old Dominion from “any and all claims . . . resulting from . . . bodily or personal injury . . . arising . . . out of . . . [Magnum]'s use and occupancy of the Premises, or by any act, omission, or negligence of [Magnum] or . . . their respective employees . . ., except to the extent such claims arising [sic] out of the act, omission, or negligence of Landlord.” (Lease ¶ 10(a)(i).) According to Old Dominion, this provision provides two paths to indemnification: Magnum must indemnify Old Dominion for claims that arise out of (1) Magnum's use of the premises, and (2) an act, an omission, or the negligence of Magnum. But ...


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