Amtrak does not have to be indemnified by gravel contractor for lawsuit arising out of dump truck accident, judge rules

By Jon Campisi | Aug 8, 2012

A federal judge in Philadelphia has denied a motion by Amtrak for declaratory relief that

a gravel provider with which it had contracted should indemnify Amtrak in a case in which the railroad corporation is being sued by a dump truck driver who claims his vehicle sunk on Amtrak property while he was making a delivery.

New Jersey resident Paul Fekete filed suit last October against Amtrak and Rob’s Towing & Hauling.

The latter was subsequently dismissed as a defendant.

Amtrak, however, remains embroiled in the litigation, which alleges that damage was done to Fekete’s dump truck as a result of Amtrak instructing Fekete to proceed down a supposedly unstable access road on a property in suburban Philadelphia back in June 2010.

Fekete initially named the towing company as a defendant since he claims more damage was done to the dump truck after tow workers attempted to remove it from the spot in which it became stuck.

A federal judge dismissed the towing company as a defendant after determining that the plaintiff failed to adequately plead elements required for negligence claims.

According to background information on the case, Amtrak subsequently filed a third-party complaint against its contractor, Dyer Quarry, for contribution and indemnity.

The stone Fekete was delivering to Amtrak at the time of the incident was supplied by Dyer.

Amtrak claimed an indemnification and hold harmless agreement with Dyer stated that the quarry had a duty to defend the railroad company in events such as these.

After both parties engaged in discovery, Amtrak filed its motion for declaratory relief on July 9 of this year.

In an order filed Aug. 6, U.S. District Judge Berle M. Schiller wrote that the court does not read the indemnification provision in the agreement as “broadly” as Amtrak.

Schiller wrote that the language in the indemnification clause specifically references “supplies, material, deliverables, products or equipment supplied by, or from activities or work performed by Contractor, Contractor’s officers, employees, agents, servants, subcontractors, or any other person acting for or with the permission of Contractor under the Contract, or as a result of Contractor’s failure to perform its obligations in compliance with the Contract Documents.”

Schiller wrote that all of the entities listed are people controlled or directed by Dyer Quarry, the contractor.

“Based on the facts of this case, that does not include Amtrak,” the ruling states.

The judge wrote that Amtrak left out key language when it stated that it must be indemnified “for any claims which Amtrak may incur as a result of damage to property ‘arising out of or in any degree directly or indirectly … resulting from activities … under the contract.’”

“This quotation fails to include any of the language that limits the class of entities entitled to indemnification under the contract,” Schiller wrote.

The order states that Amtrak also directed the court to a federal statute that, according to Amtrak, “has been interpreted to remove all obstacles to the enforceability of contracts to indemnify Amtrak,” with the statute assuring that a “provider of rail passenger transportation may enter into contracts that allocate financial responsibility for claims.”

Schiller wrote that while this principle is not in dispute here, the fact remains that Amtrak’s indemnification agreement with Dyer is ambiguous.

Schiller wrote that the court will not “redraft the provision [of the indemnification agreement] to ensure it includes the sweeping language Amtrak failed to include.”

“Thus, this Court’s ruling is not that Amtrak cannot be indemnified for its negligence, but rather that in this case, it is not indemnified for its negligence,” Schiller wrote.

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