California Northern Railroad v. Gunderson Rail Services, LLC

912 F. Supp. 2d 662, 2012 WL 6107654, 2012 U.S. Dist. LEXIS 174703
CourtDistrict Court, N.D. Illinois
DecidedDecember 10, 2012
DocketNo. 11 C 7170
StatusPublished
Cited by3 cases

This text of 912 F. Supp. 2d 662 (California Northern Railroad v. Gunderson Rail Services, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Northern Railroad v. Gunderson Rail Services, LLC, 912 F. Supp. 2d 662, 2012 WL 6107654, 2012 U.S. Dist. LEXIS 174703 (N.D. Ill. 2012).

Opinion

Memorandum Opinion and Order

FEINERMAN, District Judge.

Plaintiff California Northern Railroad Company filed this diversity suit against Defendant Gunderson Rail Services, LLC, alleging that Gunderson breached its contractual duty to defend and indemnify California Northern in Walters v. The Belt Railway Co. of Chicago, No. 2006 L 7349 (Cir.Ct.Cook Cnty., Ill., filed July 13, 2006), a tort action brought against California Northern, Gunderson, and others in Illinois state court. Doc. 1. California Northern has moved for. summary judgment.on the issue of liability for Count I of its complaint, which alleges that Gunderson had and breached a duty to defend California Northern in the underlying lawsuit. Doc. 29. Because the pertinent provisions of California Northern’s contract with Gunderson are so indefinite that the court cannot ascertain the parties’ respective rights and obligations regarding the duty to defend in the particular circumstances presented by the Walters case, California Northern’s motion is denied.

In July 2001, the parties entered into a Freight Car Inspection & Repair Contract (“Agreement”). Doc. 1-1; Doc. 77 at ¶ 6. The Agreement provided that Gunderson was to perform inspections and repairs on railcars received by California -Northern in interchange from other railroads at California Northern’s interchange locations, and Gunderson in fact provided such services during the Agreement’s five-year term. Doc. 77 at ¶¶ 7-8. The Agreement contains an indemnification provision, Doc. [664]*6641-1 at 4, which will be discussed in detail below.

In July 2006, Joseph Walters brought the Walters case against his employer, the Belt Railway Company of Chicago, alleging that he had fallen and been injured on the job when a handrail he was holding broke as he was climbing onto a railcar. Doc. 77 at ¶ 11; Doc. 31-2 at 7-14 (Walters’s initial complaint). Upon learning that Gunderson had inspected and repaired the railcar on California Northern’s premises about two months before the accident, The Belt brought third-party claims for negligence against California Northern and Gunderson. Doc. 77 at ¶¶ 12-14; Doc. 31-2 at 1-6 (The Belt’s third-party complaint). Walters then amended his complaint to bring claims directly against California Northern and Gunderson, alleging that their negligence caused his injury. Doc. 77 at ¶ 15; Doc. 15-8 (Walters’s amended complaint).

Walters’s amended complaint alleges that California Northern had and breached duties to inspect the railcar when it was on California Northern’s tracks and to ensure that the railcar was not defective:

9. Railroad car utilization in the industry is managed on a national basis in accordance with Car Service Rules promulgated by the Association of American Railroads (AAR). The AAR is an industry organization that regulates the railroad industry by promulgating practices setting forth the types of freight car inspection and repair work which must be performed. Railroads, including California Northern, subscribe to these rules, thereby agreeing to be governed by them in their operations.
10. The AAR Rules provide the specific guidelines and criteria regarding when freight car parts are defective and need repair or replacement. Under the rules, the handling line (the carrier with possession of the freight car) must make certain repairs to “foreign” freight cars (freight cars not owned by the handling line). California Northern was the handling line for the freight car that is the subject of this litigation.
* * *
12. On or about November 15, 2005, while on California Northern’s railroad in the State of California, a handhold on the railcar referred to in Plaintiffs Complaint at Law, rail car SRY286031[,] required repairs.
13. California Northern was under a duty to repair the handhold on the rail-car in a reasonably safe and proper manner in accordance with the AAR Interchange Rules, the Federal Safety Appliance Act, and the Code of Federal Regulations.
14. California Northern was further under a duty to inspect the railcar’s handhold to ensure that it was not defective and had been repaired in a proper manner before delivering the empty rail-car to another railroad in interstate commerce.
18. Defendant, . CALIFORNIA NORTHERN, caused repairs to be performed to .said car in a careless' and negligent manner, to wit:
(a) Carelessly and negligently delivered a defective railcar, specifically Car Number 286031, to service interstate commerce in violation and contrary to 49 U.S.C. § 20302, and the Code of Federal Regulations, Title 49, Chapter II, parts 231.18, 231.6, and 231.27;
(b) Carelessly and negligently failed to properly inspect the handhold, specifically Car Number 286031, before delivering the railcar to service in interstate commerce in violation and contrary to 49 U.S.C. [665]*665§ 20302, and the Code of Federal Regulations, Title 49, Chapter II, parts 231.6 and 231.27;
(c) Carelessly and negligently failed to exercise reasonable care in repairing the handhold in question and delivering it to service in interstate commerce.
(d) The careless and negligent acts of the Defendant, CALIFORNIA NORTHERN, made the condition of Railcar SRY 286031 unreasonably dangerous.

Doc. 15-8 at pp. 9-11, ¶¶ 9-10, 12-14, 18. Walters’s amended complaint further alleges that Gunderson, as California Northern’s agent, had and breached duties to inspect the railcar and to ensure that it was not defective:

24. California Northern did, prior to the occurrence alleged, delegate the inspection and repair of rail cars, traveling on its railroad lines, including the rail car involved in this occurrence, to Gunderson Rail, which then and there became its agent for the purpose of inspecting and repairing rail cars traveling on California Northern’s lines.
25. In that regard, on or about November 15, 2005, Gunderson Rail, as agent for California Northern, had a duty to repair the handhold on the rail car in a reasonably safe and proper manner, and to inspect the rail car’s handhold to ensure that it was not defective before delivering it to service in interstate commerce.
26. On or about November 15, 2005, Defendant, GUNDERSON RAIL, released railcar SRY 2856031 [sic ] to service in interstate commerce without first ascertaining that the railcar’s handholds were secure and adequate for use.
27. Defendant, GUNDERSON RAIL, as an agent of California Northern, committed one or more of the following careless and negligent acts and/or omissions:
(a) Carelessly and negligently repaired the handholds on' railcar SRY' 286031 in violation of the Code of Federal Regulations, Title 49, Chapter II, Parts 231.18, 231.6 and 231.27;
(b) Carelessly and negligently delivered a defective railcar, specifically Car Number SRY 286031, to service interstate commerce in violation and contrary to 49 U.S.C. § 20302

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Cite This Page — Counsel Stack

Bluebook (online)
912 F. Supp. 2d 662, 2012 WL 6107654, 2012 U.S. Dist. LEXIS 174703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-northern-railroad-v-gunderson-rail-services-llc-ilnd-2012.