Koppers Co. v. Missouri Pacific Railroad

809 S.W.2d 830, 34 Ark. App. 273, 1991 Ark. App. LEXIS 318
CourtCourt of Appeals of Arkansas
DecidedMay 29, 1991
DocketCA 90-373
StatusPublished
Cited by3 cases

This text of 809 S.W.2d 830 (Koppers Co. v. Missouri Pacific Railroad) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Koppers Co. v. Missouri Pacific Railroad, 809 S.W.2d 830, 34 Ark. App. 273, 1991 Ark. App. LEXIS 318 (Ark. Ct. App. 1991).

Opinion

Melvin Mayfield, Judge.

In 1962, appellee, Missouri Pacific Railroad Company, Inc. (MoPac), and appellant, Kop-pers Company (Koppers), entered into an agreement whereby Koppers contracted to treat crossties, switch ties, bridge lumber, timbers, and other lumber materials used by MoPac in its railway system. MoPac contracted to deliver the materials to Koppers by opentop railroad car, and Koppers agreed to unload and treat the lumber and reload the materials onto a railroad car to be returned to MoPac. The contract also contained a paragraph in which Koppers agreed to indemnify MoPac against any and all claims, judgments, and losses incident to or in any way connected with Koppers’ operations under the agreement. In accordance with its provisions, the contract was terminated by MoPac effective March 10, 1984.

On October 14, 1982, a Koppers employee was injured on Koppers’ premises when he fell between moving railroad cars owned by MoPac. In August 1984, the employee sued MoPac for injuries sustained, and that suit was settled on April 23,1987. On June 10,1985 (subsequent to suit being filed by the employee but prior to the settlement agreement), MoPac made written demand on Koppers to defend, indemnify and hold MoPac harmless. Koppers refused to do so. On August 22, 1988, MoPac brought suit to enforce the indemnity provision in the parties’ contract. The trial court entered judgment for MoPac in the amount of $300,000.00, finding that the indemnity clause survived the March 10,1984, expiration of the contract and required Koppers to indemnify MoPac. Koppers brings this appeal from that ruling. We affirm.

Under the indemnity clause in the contract, Koppers agreed:

On behalf of itself, its successors and assigns to fully protect, indemnify and save harmless the Railroad, its successors and assigns against any and all claims, demands, suits, judgments, losses and expenses incident to, or in any way connected with the Contractor’s operations under this agreement and howsoever arising, whether by reason of the infringement or alleged infringement of patent rights covering or relating to treating processes, machinery, apparatus, appliances or facilities, or by reason of loss or injury of whatsoever nature, to persons or property or otherwise, excepting loss by fire or by the acts of the employees of the Railroad.

Appellant and appellee stipulated that, at the time of the injury, the contract between the parties was in force. The parties further agreed that the contract terminated prior to suit being filed by the injured Koppers employee against MoPac. They also agreed that the only issue before the trial court was whether appellee’s right to indemnification from appellant survived the termination of the agreement between the parties.

In holding that the indemnity clause survived, the trial court stated that, although it had not found a case precisely on point, it was “most persuaded” by Kentucky Fried Chicken Corp. v. Collectramatic, Inc., 547 A.2d 245 (N.H. 1988). That case involved an indemnity clause by which Collectramatic agreed to protect Kentucky Fried Chicken Corporation (KFC) “from any claim or action ... for products liability based upon this [agreement.” The agreement was entered into in August of 1972 and specifically provided that the provisions of the indemnification paragraph would survive the termination of the agreement. In 1974, the parties entered into a second agreement which did not contain an indemnity clause and which provided that “this agreement contains the entire understanding between [the parties] concerning the subject matter hereof and supersedes all prior and contemporaneous understandings or representations between the parties relating thereto.”

Collectramatic sold a pressure cooker to KFC pursuant to the 1972 agreement. In 1980, a KFC employee was injured while using this pressure cooker. The employee sued KFC and Collec-tramatic, and both defendants settled. Then, KFC attempted to recover from Collectramatic the portion of the settlement KFC had paid, basing its claim for indemnity on the 1972 agreement. The court held that KFC was entitled to indemnification under the 1972 agreement and found the parties intended in the 1974 contract to merge only their prior agreements as to terms governing purchases and sales yet to be made, and the parties intended it to have no effect at all on vested rights and concomitant duties with respect to sales already concluded. In regard to the 1972 agreement, the court said:

One would typically expect that the agreement in effect at the time equipment was bought and sold would determine the parties’ rights and duties with respect to that equipment.

Id. at 247. And in response to Collectramatic’s argument that a provision in the 1974 agreement clearly indicated that the parties intended that the 1974 agreement would supersede all previous agreements, including the 1972 agreement, the court said:

For a party to abandon, in a later contract of this type, a right previously bargained for and acquired would certainly be unusual.

Id. at 248.

Koppers, however, argues that the Kentucky Fried Chicken case is only marginally on point and would distinguish that case on the basis that the 1972 agreement provided that the indemnity clause “shall survive the termination of this agreement.” The court in that case did not regard this provision to be controlling. It said: “The language of each of these agreements is entirely prospective and makes no reference to vested rights and duties.” So, although the 1972 agreement provided that the indemnity clause “shall survive the termination of this agreement” and the 1974 agreement provided that it “contains the entire understanding between [the parties] ” and that it “supersedes all prior and contemporaneous understandings or representations” between them, the court looked to the intent of the parties and said:

We therefore hold that the parties did not intend, by the 1974 agreement, to extinguish KFC’s right to indemnification for transactions already completed under the 1972 agreement, . . .

Id. at 249.

The appellant concedes that “a contract of indemnity is to be construed in accordance with the rules for the construction of contracts generally.” Arkansas Kraft Corporation v. Boyed Sanders Construction Co., 298 Ark. 36, 764 S.W.2d 452 (1989). If there is no ambiguity in the language of the contract, then there is no need to resort to rules of construction. Id. And “the first rule of interpretation is to give to the language employed by the parties to a contract the meaning they intended.” Sutton v. Sutton, 28 Ark. App. 165, 771 S.W.2d 791 (1989). The appellant argues, however, that in contracts of indemnity the losses to be indemnified must be clearly stated and the intent to indemnify against them must be expressed in clear and unequivocal terms. Weaver-Bailey Contractors, Inc. v. Fiske-Carter Construction Company, 9 Ark. App. 192, 657 S.W.2d 209

Free access — add to your briefcase to read the full text and ask questions with AI

Related

East-Harding, Inc. v. Horace A. Piazza & Associates
91 S.W.3d 547 (Court of Appeals of Arkansas, 2002)
Odom Antennas, Inc. v. Stevens
966 S.W.2d 279 (Court of Appeals of Arkansas, 1998)
Buchwald v. University of Minnesotsa
573 N.W.2d 723 (Court of Appeals of Minnesota, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
809 S.W.2d 830, 34 Ark. App. 273, 1991 Ark. App. LEXIS 318, Counsel Stack Legal Research, https://law.counselstack.com/opinion/koppers-co-v-missouri-pacific-railroad-arkctapp-1991.