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Alvaro Mendez-Garcia v. Eaj Galaxie Corporation

November 3, 2011

ALVARO MENDEZ-GARCIA, PLAINTIFF,
v.
EAJ GALAXIE CORPORATION, DEFENDANT/THIRD-PARTY PLAINTIFF,
v.
NANOTEC METALS, INC. THIRD-PARTY DEFENDANT.



ORDER

This cause comes before the Court on cross motions for summary judgment (Doc. Nos. 52, 57), and respective responses in opposition (Doc. Nos. 64, 65). For the reasons stated below, Third-Party Defendant Nanotec Metals Inc.'s Motion for Summary Judgment (Doc. No. 57) is granted, and Third-Party Plaintiff Galaxie Corporation's Motion for Partial Summary Judgment (Doc. No. 52) is denied.

I. Background

The dispute between Galaxie and Nanotec ("Parties") arises from the primary action in this case, in which Plaintiff Alvaro Mendez-Garcia, a Nanotec employee, sued Galaxie for injuries he suffered on March 6, 2009, while operating a Herr Voss 17-Roll, 4-Hi Leveler ("Leveler") at Nanotec's facility in Lakeland, Florida. Specifically, Mendez-Garcia's hand and wrist were injured, and ultimately, his hand had to be amputated. (Doc. No. 2, p. 3.) Galaxie, a Michigan company that buys and sells used steel processing and coil handling equipment, sold the Leveler to Nanotec on July 25, 2008. Mendez-Garcia filed a one-count complaint for negligence against Galaxie, alleging that Galaxie breached the duty it owed Mendez-Garcia by "selling [the Leveler] without the guarding, interlocks and other safety equipment that was necessary for its safe operation; by failing to warn its customer and the end user of these defects; and by failing to provide any instructions on safety to its customer and the end user of the [Leveler]" and that those "breaches were a proximate cause of loss[,] injury and damage to [Mendez-Garcia]." (Doc. 2, p. 3--4.)

After Mendez-Garcia sued Galaxie, Galaxie filed this third-party action against Nanotec for Breach of Contract, Negligence, and Common Law Indemnification/Contribution.*fn1 (Doc. No. 26.) Foremost, Galaxie sought indemnification pursuant to a contract provision entitled "Buyer Assumption of Risk and Indemnification of Seller" ("Assumption of Risk and Indemnification Provision" or "Provision") contained in the Supplementary Terms and Conditions of Sale, which was attached to the invoice that Galaxie gave to Nanotec when Nanotec purchased the Leveler. That Assumption of Risk and Indemnification Provision states:

BUYER ASSUMPTION OF RISK AND INDEMNIFICATION OF SELLER: Buyer assumes all risk and liability for loss, damage and/orinjury to persons or property of Buyer or others arising out of the use or possession of any goods sold hereunder, and agrees to forever indemnify and hold Seller harmless from any and all costs, expenses and/or damages resulting thereby. Buyer hereby waives, releases, and discharges any and all claims (with the exception of claims for breach of this agreement) of any and every kind (including but not limited to injury or death of any person or damage to property), which itmay have at any time against Seller, it's [sic] agents or employees, by reason of or arising out of any condition or defect of the goods sold hereunder, including but not limited to any claims of negligence of Seller, improper design, specifications, or manufacturing defect of goods sold hereunder. Buyer further covenants to indemnify and hold-harmless Seller, it's [sic] agents and employees of, from, and against any and all loss, damage, expense, claims, suits, costs of defense, including attorney's fees or liability which Seller or any of its employees may sustain or incur at any time for or by reason of any injury to or death of any person or persons or damage to any property, arising out of any condition or defect of the goods sold hereunder, including but not limited to claimed improper design or manufacturing defect or other defect of the goods sold hereunder, or any claimed inadequate or insufficient safeguards or safety devices, or warning. (Doc. 52, Ex. D, p. 3.)

Galaxie moves for summary judgment against Nanotec, arguing that the Parties entered into an enforceable sales contract, which is governed by Michigan law, and that the contract validly and unambiguously requires Nanotec to indemnify Galaxie against damages stemming from Galaxie's purported negligence that resulted in injury to Mendez-Garcia. Nanotec moves for summary judgment against Galaxie, contending that the Parties did not enter into an enforceable sales contract, that Florida law governs, and that (even if there were a contract) Nanotec has no obligation to indemnify Galaxie for Galaxie's own negligence because the Assumption of Risk and Indemnification Provision does not clearly and expressly state that Nanotec agrees to indemnify Galaxie for Galaxie's own wrongful acts.

II. Standard of Review

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The Court must draw all inferences from the evidence in the light most favorable to the non-movant and resolve all reasonable doubts in that party's favor. Porter v. Ray, 461 F.3d 1315, 1320 (11th Cir. 2006). The moving party bears the initial burden of showing the Court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial. Id. Summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Johnson v. Bd. of Regents, 263 F.3d 1234, 1243 (11th Cir. 2001) (quotation omitted).

When a moving party has discharged its burden, the non-moving party must then go beyond the pleadings, and by its own affirmative evidence, designate specific facts showing there is a genuine issue for trial. Porter, 461 F.3d at 1320. In determining whether there is a "genuine" issue, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251--52 (1986).

III. Discussion

A. Breach of Contract/Contractual Indemnity

The Parties disagree about whether an enforceable contract was formed and, if so, whether Florida or Michigan law governs. But even assuming that Galaxie is correct both that the parties entered into an enforceable contract, of which the Assumption of Risk and Indemnification Provision is a part, and that Michigan contract law controls, Galaxie's argument that it is entitled to contractual indemnification from Nanotec fails.

Under Michigan law, "a contract which purportedly indemnifies one against the consequences of his or her own negligence is subject to strict construction and will not be so construed unless it clearly appears that it was intended to cover the indemnitee's own negligence." Powers v. APCOA Standard Parking, Inc., 259 F. Supp. 2d 606, 609 (E.D. Mich. 2003). "Also, indemnity contracts are construed most strictly against the party who drafts them and the indemnitee." Id. Indemnifying language will not insulate a party "from the consequences of his own negligent conduct unless it is clearly shown that the parties expressly agreed to this type of indemnification." Id. at 610 (quoting Geurink v. Herlihy Mid-Continent Co., 146 N.W.2d 111, 113 (Mich. Ct. App. 1966)). Accordingly, unless indemnifying language clearly and unequivocally establishes that the parties intended to indemnify the indemnitee for his own negligence, it will not be so construed. Id. ("[U]nless the intention is unequivocally expressed in the plainest of words, the law will consider that the parties did not undertake to indemnify one against the consequences of his own negligence. . . . The purpose to impose this extraordinary liability on the Indemnitor must be spelled out in unmistakable terms.") (quoting Batson-Cook Co. v. Indus. Steel Erectors, 257 F.2d 410, 412, 413 (5th Cir. 1958)); see also Meadows v. Depco Equip. Co. v. McLouth Steel Corp., 144 N.W.2d 844, 847 (Mich. Ct. App. 1966).*fn2

Here, the Assumption of Risk and Indemnification Provision is set out in three sentences, found in Galaxie's Supplementary Terms and Conditions of Sale attached to the invoice. However, none of those sentences operate to shift the ...


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