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Ronald A. Chisholm, Ltd. v. American Cold Storage, Inc.

United States District Court, Sixth Circuit

August 7, 2013

RONALD A. CHISHOLM, LTD., Plaintiff,
v.
AMERICAN COLD STORAGE, INC. and AMERICAN COLD STORAGE NORTH AMERICA, LP, Defendants and Third Party Plaintiffs.
v.
ABILENE TEXAS FOODS, INC., Third Party Defendant.

MEMORANDUM OPINION

CHARLES R. SIMPSON, III, Senior District Judge.

This case is before the court on a motion for summary judgment by the Defendants and Third Party Plaintiffs, American Cold Storage, Inc. and American Cold Storage North America, LP ("ACS"), against the Third Party Defendant, Abilene Texas Foods, Inc. ("Abilene") (DN 77). ACS requests that the court enter summary judgment in favor of ACS for indemnification from Abilene because Abilene's acts exposed ACS to liability (DN 29).

The Plaintiff, Ronald A. Chisholm, Ltd. ("Chisholm"), asserted the following against ACS: breach of contract; breach of the fiduciary duty of good faith and of the covenant of good faith; and breach of a contractual bailment (DN 21). ACS then filed a third-party complaint against Abilene seeking indemnity against Abilene if the event that is found liable to Chisholm.

BACKGROUND

In October 2009, Chisholm commenced an action against ACS alleging ACS released Chisholm's meat products to Abilene without permission (DN 58-1).[1] In August 2010, ACS filed a third-party complaint against Abilene seeking indemnification from Abilene based on the theory that if Chisholm sustained damages due to the unauthorized release of its meat products, the damages were created by the acts or omissions of Abilene, or in the alternative, Abilene requested contribution commensurate with Abilene's degree of fault in causing Chisholm's damages (DN 77).

In the motion at issue, ACS contends that Abilene requested the release of Chisholm's meat from ACS without Chisholm's permission.[2] ACS claims that Abilene was neither authorized to issue a delivery order to ACS, nor was Abilene authorized to accept delivery because Abilene did not have Chisholm's authorization to do so (DN 85). ACS argues that Chisholm's claims against it are, in whole or in part, tort claims and that therefore its indemnity and contribution claims against Abilene are proper (DN 85).

Abilene's response argues that ACS's claims for indemnity and contribution are not legally maintainable. This raises the question of whether Chisholm's claims against ACS sound in tort - which would allow ACS to claim indemnity and contribution against Abilene, or whether Chisholm's claims sound in contract - such that indemnity and contribution are improper. Abilene argues that because Chisholm's underlying claims against ACS are based in contract, contribution and indemnity claims against Abilene are not available. Abilene also argues that ACS cannot assert a claim for contribution for Abilene's proportionate share of fault if ACS is held liable for Chisholm's damages because Kentucky courts abrogated contribution actions in favor of comparative fault through apportionment (DN 79).

STANDARD

Fed. R. Civ. P. 56(a) states that "[t]he court shall grant summary judgment 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." A party moving for summary judgment bears the initial burden of specifying a basis for its motion by demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Not every factual dispute between the parties will prevent summary judgment - the disputed facts must be facts which, under the substantive law governing the issue, might affect the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). After the moving party meets this burden, the nonmoving party bears the burden of showing "specific facts showing that there is a genuine issue for trial." Id. at 248 ( quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288 (1968)). Plaintiffs must offer evidence demonstrating a genuine issue of material fact. Celotex, 477 U.S. at 322. A "mere scintilla of evidence is insufficient" because there must be evidence on which a jury could find for the nonmoving party. McLean v. Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000) ( quoting Anderson, 477 U.S. at 252)).

However, the evidence must be construed in the light most favorable to the party opposing the motion. Matsushida Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United States v. Diebold Inc., 369 U.S. 654, 655 (1962)). The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor. Anderson, 477 U.S. at 255.

DISCUSSION

I. Chisholm's Underlying Claims Against ACS are Contract-Based

In Kentucky, claims for indemnity and contribution arise only if a party identifies a viable underlying tort claim. See Ohio River Pipeline Corp. v. Landrum, 580 S.W.2d 713, 719-720 (Ky. Ct. App. 1979) ( citing V.V. Cooke Chevrolet, Inc. v. Metro. Trust Co., 451 S.W.2d 428, 420 (Ky. 1970)). Indemnity and contribution are separate and distinct and apply to different fact situations. Id. ; Degener v. Hall Contracting Corp., 27 S.W.3d 775, 779 (Ky. 2000).

Kentucky law now obviates claims for contribution among joint tort feasors in favor of apportionment. See Ky. Rev. Stat. Ann ยง 411.182 (West). Contribution "distributes the loss among the tort feasors by requiring each to pay a share of the injured party's loss." Ohio River Pipeline Corp., 580 S.W.2d at 719-720. Like contribution, "apportionment is concerned with the distribution of loss among joint tort-feasors." Id. at 719. Accordingly, even though there is no cause of action for ...


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