Daniel T. Miller, et al., Plaintiffs,
Soo Line Railroad Company d/b/a Canadian Pacific, defendant and third party plaintiff, Respondent,
Knoedler Manufacturers, Inc., et al., third party defendants, Appellants.
Hennepin County District Court File No. 27-CV-14-8066
Randall J. Pattee, Alex L. Rubenstein, Fox Rothschild LLP,
Minneapolis, Minnesota; and Daniel J. Mohan, Daley Mohan
Groble, P.C., Chicago, Illinois (for respondent)
T. Smith, Huffman, Usem, Crawford & Greenberg, P.A.,
Minneapolis, Minnesota (for appellants)
Considered and decided by Bratvold, Presiding Judge;
Halbrooks, Judge; and Jesson, Judge.
a defendant/third-party plaintiff in a FELA action prevails
on its claim for contribution and receives a money judgment,
the third-party plaintiff is entitled to prejudgment interest
under Minn. Stat. § 549.09, subd. 1(b) (2018).
Prejudgment interest for a judgment of contribution damages
is computed as provided in Minn. Stat. § 549.09, subd.
1(b), and runs from the date the damages were incurred, not
from the date the contribution action was commenced.
lawsuits that were later consolidated, three railroad
employees sued their employer, respondent Soo Line Railroad
Company d/b/a Canadian Pacific (Canadian Pacific), for
personal injuries caused when their locomotive seats
collapsed. Canadian Pacific filed a third-party complaint
seeking contribution and/or indemnity from the seat
manufacturers, appellants Knoedler Manufacturers Inc., and
Knoedler Manufacturers Canada LTD (collectively, Knoedler).
Knoedler filed a motion for summary judgment, arguing that
Canadian Pacific's claims are preempted by federal law,
specifically the Locomotive Inspection Act (the LIA). The
district court disagreed, and denied Knoedler's motion.
Pacific settled with the three employees, and its
contribution claims against Knoedler went to trial. The
jury's special verdict determined that Knoedler and
Canadian Pacific both violated the LIA and their violations
caused each employee's injuries. The jury's special
verdict also allocated fault, finding that Knoedler and
Canadian Pacific were each 50% at fault for each
employee's injuries. The district court adopted the
jury's special verdict, and based on its earlier finding
that Canadian Pacific's settlements with the employees
were reasonable, the district court directed entry of a
judgment in Canadian Pacific's favor for half of the
total settlement amount.
Pacific then moved to amend the judgment to add prejudgment
interest under Minn. Stat. § 549.09, subd. 1. Over
Knoedler's opposition, the district court awarded
prejudgment interest. At Canadian Pacific's request, the
district court agreed to allow further briefing on how to
compute the interest. The district court concluded that,
under section 549.09, Canadian Pacific was entitled to
prejudgment interest from the date that it commenced its
consolidated third-party action against Knoedler. The
district court directed entry of an amended judgment that
included $110, 737 in prejudgment interest.
raises three issues on appeal. First, Knoedler argues that
Canadian Pacific's contribution and/or indemnification
claims are wholly preempted by federal law, therefore, the
district court erred in denying Knoedler's motion for
summary judgment. Second, Knoedler argues that Canadian
Pacific is not entitled to prejudgment interest under Minn.
Stat. § 549.09, subd. 1(b), because federal law governs
the claim. Third, Knoedler argues, in the alternative, that
if this court determines Canadian Pacific is entitled to
prejudgment interest, then the district court used the wrong
start date for its calculation of prejudgment interest.
affirm in part, reverse in part, and remand the district
court's decision. The district court correctly rejected
Knoedler's preemption challenge because the Minnesota
Supreme Court determined in Engvall v. Soo Line Railroad
Co. that the LIA does not preempt state common-law
claims for contribution or indemnity that are asserted by a
railroad against a manufacturer. 632 N.W.2d 560, 570-71
(Minn. 2001). Because Engvall is binding precedent
and governs our analysis of this issue, we affirm the
district court's denial of Knoedler's
summary-judgment motion. The district court also correctly
determined that Canadian Pacific is entitled to prejudgment
interest under Minnesota law. While it is true that
prejudgment interest is not recoverable in a FELA action
brought in state court, Canadian Pacific commenced a
common-law claim for contribution. The district court erred,
however, in determining that Canadian Pacific is entitled to
prejudgment interest from the date it commenced its
consolidated third-party action. We conclude that Canadian
Pacific is entitled to prejudgment interest from the date its
contribution damages "were incurred," which is the
date Canadian Pacific settled with each employee.
See Minn. Stat. § 549.09, subd. 1(b).
2013, three Canadian Pacific employees, Daniel Miller,
Brandon Wolf, and Joseph Heilman, were injured as a result of
the unexpected backwards collapse of their locomotive seats.
Each of the three employees sued Canadian Pacific in a
separate action, asserting that the railroad caused their
injuries by (1) providing them with "unsafe"
locomotives in violation of the Locomotive Inspection Act
(LIA), and (2) failing to provide a "reasonably
safe" place to work in accordance with the Federal
Employers Liability Act (FELA).
in August 2014, Canadian Pacific brought third-party
contribution and/or indemnity claims against Knoedler in each
of the three FELA lawsuits. The third-party complaints
alleged that the locomotive seats involved in all three cases
were Knoedler brand seats, and that Knoedler failed to design
and manufacture seats that complied with the LIA and
"applicable federal regulations." Canadian Pacific
asserted that if it was "found to be liable" to its
employees, it was "entitled to indemnity or appropriate
contribution" from Knoedler.
three FELA lawsuits were consolidated on October 16, 2015.
Canadian Pacific served Knoedler with its consolidated
third-party complaint on October 20, 2015. Between December
2015 and October 2016, Canadian Pacific reached settlements
with each employee in the combined amount of $2, 464,
446.40. Consistent with the settlement agreements,
the district court dismissed the three FELA claims against
filed a motion for summary judgment and argued that Canadian
Pacific's contribution and/or indemnification claims are
"preempted by federal law, namely the Locomotive
Inspection Act." Knoedler asserted that Canadian
Pacific's claims are based entirely "upon violations
of the LIA and applicable federal regulations," and that
the United States Supreme Court decided in Napier v.
Atlantic Coast Line Railroad, 272 U.S. 605, 612-13, 47
S.Ct. 207, 209-10 (1926), that the "LIA fully occupies
the field of locomotive design to the exclusion of all other
Pacific opposed summary judgment and argued that the
Minnesota Supreme Court previously rejected Knoedler's
argument in a 2001 decision which reasoned, according to
Canadian Pacific, that "the field preempted by the LIA
does not include state common law actions based on a
violation of the LIA." Engvall, 632 N.W.2d at
570-71. At a hearing on the motion, Knoedler argued that
Engvall is no longer controlling because the United
States Supreme Court had "revisited the issue" in
Kurns v. R.R. Friction Prod. Corp., 565 U.S. 625,
132 S.Ct. 1261 (2012). The district court denied
Knoedler's motion after determining that Engvall
is still good law and held that claims for "contribution
and indemnity [are] not preempted."
the jury trial, Knoedler and Canadian Pacific exchanged
written "global" settlement offers under Minn. R.
Civ. P. 68.01. On February 27, 2017, Canadian Pacific made a
settlement offer in the amount of $1, 750, 000. On March 2,
2017, Knoedler rejected Canadian Pacific's offer and made
a counter-offer of $810, 000. No settlement was reached.
close of a seven-day trial, the district court determined
that Canadian Pacific's settlements with its three
employees were reasonable as a matter of law. The jury returned
a verdict in favor of Canadian Pacific on its contribution
claims. In its special verdict, the jury found that Knoedler
violated the LIA by "providing seats which were (a) not
in proper condition and safe to use in locomotives without
unnecessary danger of personal injury and/or were (b) not
securely mounted and braced." The jury also determined
that Knoedler's LIA violation caused the injuries
sustained by each of the three Canadian Pacific employees.
Additionally, the jury determined that Canadian Pacific
violated the LIA, and also caused each employee's
injuries. Finally, the jury allocated the fault of each party
for the injuries sustained by each employee, finding that
Knoedler was 50% at fault, as was Canadian Pacific. After the
jury verdict, the district court directed entry of judgment
for Canadian Pacific in the amount of $1, 232, 223.20.
April 2017, Canadian Pacific filed a motion for prejudgment
interest under Minn. Stat. § 549.09, subd. 1, arguing
that the district court should award interest on the judgment
running from the dates that it had settled with each
employee. Knoedler opposed and argued, in part, that the
district court should award prejudgment interest only on the
amount of Knoedler's final settlement offer to Canadian
Pacific, which was $810, 000, because Knoedler's offer
was "closer to the jury's verdict sum than [Canadian
Pacific's offer]." See Minn. Stat. §
549.09, subd. 1(b) ("If the amount of the losing
party's offer was closer to the judgment or award than
the prevailing party's offer, the prevailing party shall
receive interest only on the amount of the settlement offer
or the judgment or award, whichever is less . . . .").
written decision, the district court granted Canadian
Pacific's motion for prejudgment interest, but agreed
with Knoedler that section 549.09 "limits the sum by
which prejudgment interest can be calculated to $810,
000." The district court also determined that
prejudgment interest should be computed from the dates that
Knoedler was notified of the three FELA settlements and end
on the date of Knoedler's $810, 000 settlement offer.
Following this reasoning, the district court determined that
Canadian Pacific is entitled to $47, 702.52 in prejudgment
Pacific requested leave, via letter, to file a motion to
reconsider the amount of prejudgment interest because
"the starting dates used to calculate [Canadian
Pacific's] prejudgment interest [are] inconsistent with
existing law and [are] in error." Canadian Pacific
conceded in its letter that the "amount upon which
pre-judgment interest should be calculated is $810, 000"
and stated that "the end date of the pre-judgment
interest calculation should be March 2, 2017," the date
of Knoedler's settlement offer. Canadian Pacific argued,
however, that the district court should have calculated
prejudgment interest from the commencement of Canadian
Pacific's consolidated third-party action against
Knoedler, October 20, 2015.
district court granted Canadian Pacific's request and
both parties filed briefs. Knoedler argued that Canadian
Pacific is not entitled to prejudgment interest because
federal law governed the claim. Alternatively, Knoedler
argued that the district court correctly calculated the
prejudgment interest award from the date that Knoedler was
notified of "the settlement amounts and corresponding
releases." Knoedler also contended that Canadian