Dahlman v. Great Northern Railway Co.

480 P.2d 177, 156 Mont. 307, 1970 Mont. LEXIS 329
Montana Supreme Court·Decided December 17, 1970·No. No. 11781·Published

Opinion

MR. JUSTICE DALY,

delivered the Opinion of the Court.

This is a declaratory judgment action between a Butte transfer business and a railroad to determine their respective rights to indemnity under applicable contract provisions between them. From a judgment of the district court of Silver Bow County holding that neither party was entitled to indemnity from the other, an appeal and crossappeal by the parties has been taken.

Plaintiff in the declaratory judgment action is Jack F. Dahlman doing business as Dahlman Transfer Business, hereafter called Dahlman. Defendant is the Great Northern Railway Company, hereafter called the railroad. Dahlman and the railroad entered into two contracts on December 1, 1965, relating to certain transportation business which Dahlman would perform for the railroad. Both contracts were in effect on February 7, 1968 when Everett Salvail, an employee of the railroad, was injured in a fall from the rear end of a trailer owned by the railroad and being moved by a tractor belonging to Dahlman which was then being driven by a Dahlman employee, Frank Sikonia.

As a result of this accident Salvail filed a personal injury suit against Dahlman and the railroad. Salvail later voluntarily dismissed Dahlman as a party defendant and went to trial against the railroad as sole defendant. A jury verdict and judgment was entered in favor of Salvail against the [309] railroad which was on appeal to this Court at the time of trial and entry of judgment in the instant declaratory judgment action. Although the appeal in the Salvail case has since been decided by this Court, Salvail v. Great Northern Railway Company, 156 Mont. 12, 473 P.2d 549, this fact is of no consequence in determining the right of indemnity in the present declaratory judgment action. The dollar amount of indemnity is not involved in the present appeal, being subject to later determination by the district court in supplementary proceedings under section 93-8908, E.C.M. 1947.

The two contracts between Dahlman and the railroad heretofore mentioned can be identified as the TOFC (trailers on flat cars) contract and the LCL (less than carload) contract. The indemnity provisions in the two contracts differ. The TOFC contract provides:

“5. As between the parties, each assumes and agrees to indemnify and hold harmless the other against liability for injury to or death of its own officers, agents, and employees engaged in the operations covered by this contract, however such injury or death may occur or be caused.” (Emphasis supplied.)

The LCL contract contained this indemnity provision:

“The Contractor (Dahlman) covenants and agrees to protect, indemnify and hold harmless the Eailroad Company from and against any and all loss, damage, cost and expense, including attorneys’ fees, that may be suffered or incurred by the Eailroad Company, or by any person or persons, firm, association or corporation, resulting from:
“(a) Injury to or death of persons * * * caused by, or resulting in any manner from, any acts or omissions, negligent or otherwise, of Contractor, or any of Contractor’s agents, servants or employes, in performing or failing to per[310] form any of the services or duties on the part of the Contractor to he performed hereunder”. (Emphasis supplied, parenthetical identification added).

At the trial the underlying controversy concerned whether the TOFC contract or the LCL contract was controlling. The district court entered findings of fact and conclusions of law to the effect that the services being performed by Dahlman at the time of Salvail’s injury were being performed under the LCL contract whose terms were applicable and controlling. A declaratory judgment was entered that Dahlman was obligated to pay the amount of Salvail’s judgment against the railroad and all costs incurred by the railroad by reason of Salvail’s injury including medical expenses and attorney’s fees.

Thereafter, in response to Dahlman’s exceptions to these findings of fact and conclusions of law and his motion to amend the declaratory judgment, the district court entered an additional finding that the railroad had not as yet suffered any detriment or out-of-pocket loss and therefore Dahlman was in no manner liable to the railroad. The declaratory judgment was amended to provide that neither Dahlman nor the railroad had shown any basis on which either could have recovery against the other and all declaratory relief was denied to both. The railroad then appealed from this final judgment and Dahlman crossappealed.

All issues involved in this appeal are encompassed in two basic questions: (1) Is the TOFC contract, the LCL contract, or both applicable and controlling? (2) What are the indemnity rights and liabilities of the parties thereunder?

Dahlman’s basic contention is that the TOFC and LCL contracts must be construed together as one agreement, and that the TOFC contract provision that each will hold the other harmless against liability for injuries to its own employees pervades such entire agreement denying indemnity to the railroad irrespective of whether Dahlman’s services were being [311] performed under the TOFC or LCL contract at the time of Salvail’s injury. Alternatively, Dahlman argues that if the two contracts are not construed as one indivisible agreement, the TOFC contract is controlling and its indemnity provisions deny recovery to the railroad for injuries to its own employee. Finally, Dahlman argues, neither contract provides for indemnity to the railroad for injuries occasioned by its own negligence. By way of affirmative relief, Dahlman contends he is entitled to indemnity from the railroad, including his attorney’s fees both in Salvail’s personal injury action and in the declaratory judgment action.

On the other hand, the railroad’s fundamental position is that the LCL contract is the controlling contract and under the indemnity provision therein it is entitled to be held harmless and reimbursed for any judgment finally entered in favor of Salvail, including reasonable medical bills incurred by the railroad and reasonable attorneys’ fees for the services of the railroad’s attorneys in the Salvail case, irrespective of whether the railroad was negligent or not.

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Dahlman v. Great Northern Railway Co., 480 P.2d 177, 156 Mont. 307, 1970 Mont. LEXIS 329 (Mo. 1970).

480 P.2d 177 (Dahlman v. Great Northern Railway Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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