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Black v. Dixie Consumer Products LLC

United States District Court, W.D. Kentucky, Bowling Green Division

March 2, 2018

STEVE BLACK PLAINTIFF
v.
DIXIE CONSUMER PRODUCTS LLC and GEORGIA-PACIFIC CONSUMER PRODUCTS HOLDINGS, LLC DEFENDANTS/THIRD-PARTY PLAINTIFFS
v.
WESTERN EXPRESS, INC. THIRD-PARTY DEFENDANT

          MEMORANDUM OPINION AND ORDER

          Joseph H. McKinley, Jr., Chief Judge

         This matter is before the Court on the motion by Defendants/Third-Party Plaintiffs, Dixie Consumer Products LLC and Georgia-Pacific Consumer Products Holdings LLC, for the entry of summary judgment on their third-party claims against Third-Party Defendant, Western Express, Inc. and on the counterclaim asserted against them by Western Express [DN 113] and on a motion by Third-Party Defendant, Western Express, Inc., to dismiss Third-Party Plaintiffs' third-party complaint with prejudice [DN 163]. Fully briefed, these matters are ripe for decision.

         I. STANDARD OF REVIEW

         Before the Court may grant a motion for summary judgment, it must find that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial burden of specifying the basis for its motion and identifying that portion of the record that demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once the moving party satisfies this burden, the non-moving party thereafter must produce specific facts demonstrating a genuine issue of fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

         Although the Court must review the evidence in the light most favorable to the non-moving party, the non-moving party must do more than merely show that there is some “metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, the Federal Rules of Civil Procedure require the non-moving party to present specific facts showing that a genuine factual issue exists by “citing to particular parts of materials in the record” or by “showing that the materials cited do not establish the absence . . . of a genuine dispute[.]” Fed.R.Civ.P. 56(c)(1). “The mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson, 477 U.S. at 252. It is against this standard the Court reviews the following facts.

         II. BACKGROUND

         On July 11, 2008, Plaintiff, Steve Black, sustained an injury while on the business premises of Dixie Consumer Products LLC (hereinafter “Dixie”) in its Bowling Green, Kentucky, plant. Plaintiff was at the Dixie facility to deliver a shipment of rolled paper materials to the plant. While Plaintiff was on the loading dock, an employee of Dixie who was unloading the truck ran over Plaintiff with a forklift/lift truck. Plaintiff sustained an injury to his left foot resulting in a below-the-knee amputation of his leg. At the time of the accident, Plaintiff was employed by Western Express, Inc., a commercial carrier that had contracted for shipping services with Georgia-Pacific LLC, Dixie's parent corporation. Jeff Gottke, Dixie's Bowling Green Plant Director, testified that the subject shipment occurred under the terms of this contract.

         Following his injury, Plaintiff pursued a workers' compensation claim against his employer, Western Express. Plaintiff testified that he was acting within the course of his employment with Western Express when he sustained his injuries. Western Express secured the payment of workers' compensation for Plaintiff as part of his employment with that company for the injuries sustained as a result of the accident.

         In October of 2008, Plaintiff filed suit against Dixie Consumer Products and Georgia-Pacific Consumer Products Holdings alleging that he was “negligently injured by the agents, servants, and employees of Defendants.” (Complaint at ¶ 4.) Defendants filed responsive pleadings denying liability for the injuries sustained by the Plaintiff. In addition, Defendants affirmatively pleaded that Plaintiff's claims are barred by the exclusive remedy sections of the Kentucky Workers' Compensation Act. Defendants argued that they are “statutory employers” within the provisions and definitions in KRS § 342.610(2)(b) and KRS § 342.690. The Court entered a scheduling order allowing for discovery to be taken on the statutory employer defense. The parties then filed cross-motions for summary judgment on this threshold issue.

         The Court originally granted summary judgment in favor of the Defendants finding that the Plaintiff's complaint against them was barred by the exclusive remedy of workers' compensation. The Court found that transportation of raw paper materials to Dixie is a regular and recurrent part of Dixie's business operations. Plaintiff appealed to the Sixth Circuit. A three-judge panel of the Sixth Circuit reversed the summary judgment entered by the Court and remanded the case for further proceedings. The Sixth Circuit concluded that because Dixie and Georgia Pacific had not established that the work Black performed at the time of his injury was a “regular or recurrent” part of its work, Defendants were not entitled to judgment as a matter of law. On remand, the Plaintiff was allowed to amend his complaint against the Defendants. The Defendants were permitted to file a third-party complaint against Western Express for breach of contract for failing to defend and indemnify them in this case pursuant to the Contract Carriage Agreement. Western Express also filed a counterclaim against Defendants/Third-Party Plaintiffs alleging a subrogation claim for the workers' compensation benefits secured for Plaintiff.

         On April 30, 2014, the Court denied Western Express' motion for summary judgment on the third-party claim asserted against it by Dixie and Georgia-Pacific Consumer Products Holdings. The Court rejected Western Express' lack of privity argument finding that the Contract Carriage Agreement expressly intended for the Georgia-Pacific subsidiaries to be direct beneficiaries of the agreement. The Court also concluded that Western Express had not established that Plaintiff's accident was “solely caused” by Dixie and Georgia-Pacific to extinguish Western Express' obligation to indemnify or defend.

         Dixie, Georgia-Pacific, and Western Express renewed their motions for summary judgment. Relying on the Sixth Circuit opinion in this case, the Court denied summary judgment in favor of Dixie and Georgia Pacific finding that they were not entitled to the protection of the statutory employer defense. The Court also denied the parties' cross-motions for summary judgment on Dixie and Georgia-Pacific's claim finding the issue of whether the alleged negligence of Third-Party Plaintiffs “solely caused” the injury to Black remains in dispute.

         Defendants appealed to the Sixth Circuit. On August 29, 2016, the Sixth Circuit reversed the denial of summary judgment finding that Defendants were entitled to statutory immunity from Plaintiff's suit. Plaintiff filed a petition for writ of certiorari which was denied by the Supreme Court of the United States on June 26, 2017. The Court has now entered summary judgment in favor of Defendants on Plaintiff's claim.

         Dixie and Georgia Pacific's third-party claim against Western Express and Western Express' counterclaim against Dixie and Georgia-Pacific remain. The parties have now filed dispositive motions on the remaining claims.

         III. THIRD-PARTY COMPLAINT

         Dixie and Georgia-Pacific move for summary judgment on their third-party claim against Western Express for breach of contract for failing to defend and indemnify them in this case pursuant to the Contract Carriage Agreement [DN 113]. Western Express filed a cross-motion to dismiss the third-party complaint with prejudice [DN 163].

         A. Contract Carriage Agreement and Court's Previous Decision

         The Contract Carriage Agreement provides that Western Express shall defend, save harmless, and indemnify Georgia-Pacific and its subsidiaries for all costs of any sort on account of the injury of a person “arising out of or predicated upon the . . . the transportation and handling of goods by CARRIER, its agents or employees whether pursuant to this Agreement or otherwise.” (Contract Carriage Agreement ¶ 7.)

         In analyzing the contract, the Court previously held that Georgia-Pacific's Contract Carriage Agreement with Western Express is unambiguous. The Court found that the Contract Carriage Agreement provides such indemnity to Georgia-Pacific and its subsidiaries for the injuries “arising out of or predicated upon . . . the transportation and handling of goods by CARRIER, its agents or employees whether pursuant to this Agreement or otherwise, ” unless the action giving rise to the claim was solely caused by the negligent act or omission of Georgia Pacific. (Id.) Specifically, the Court concluded that the removal of dunnage or trash grows out of, flows from, or is done in connection with the transportation and handling of goods. Trash removal was a necessary component to the preparation of Western Express' next load of goods. Black testified that the trailer had to be immaculate for the load to be approved by the beer company. Accordingly, a duty of indemnification exists in favor of Georgia-Pacific under the Contract Carriage Agreement absent the application of the sole negligence exclusion. The Court further concluded that the issue of whether the alleged negligence of Georgia-Pacific “solely caused” the injury to Black remains in dispute.

         B. Western Express' Motion ...


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