Doug Burchfield, a General Mills employee, was severely injured after a loaded railcar unexpectedly rolled down a railway sidetrack leading from a CSX line to a General Mills plant. Burchfield sued CSX and the company that owned the railcar, alleging that CSX negligently delivered the car to General Mills with a faulty handbrake, which caused the accident. (Burchfield received workers’ compensation and was precluded by statute from suing his employer, CSX.)
The contract between CSX and General Mills provided that except as otherwise provided, the parties would “jointly defend and bear equally” losses due to “joint or concurring negligence” for claims arising out of use of the sidetrack, but each party would hold the other harmless for losses due to the “indemnifying party’s . . .sole negligence.” The contract also gave General Mills the right to conduct its own “switching” on the sidetrack, and provided that if General Mills exercised that option—which it did—General Mills would assume all risk of loss and liability “in connection with any personal injury” sustained “in connection with, or arising from or growing out of, the operation of” General Mills’s switching operations.
After Burchfield sued CSX, CSX sent General Mills a letter, notifying it of the lawsuit and demanding that General Mills provide CSX a defense, which General Mills refused to do. In the litigation with Burchfield, CSX sought to attribute fault to General Mills for Burchfield’s injuries, and requested that the court use a verdict form that would allow the jury to allocate fault to General Mills. But the district court granted Burchfield’s motion for summary judgment on the issue of General Mills’s liability, determining that CSX had failed timely to raise the affirmative defense of General Mills’s liability and had not introduced expert testimony as to the applicable standard of care. Burchfield’s negligence claim went to trial, and the jury returned a verdict for CSX. Burchfield appealed, and the Eleventh Circuit reversed on the ground that the district court had erred in admitting certain evidence.
In the second trial, the jury awarded Burchfield more than $20 million, allocating zero fault to Burchfield and 100% fault to CSX. CSX and Burchfield settled while CSX’s appeal was pending.
After that, CSX demanded indemnification from General Mills, asserting that General Mills was liable, under the agreement between CSX and General Mills, for the amount of the settlement plus CSX’s attorneys’ fees and costs. General Mills refused the demand, citing the jury’s finding that CSX was 100% at fault for Burchfield’s injuries.
CSX sued General Mills for breach of contract. General Mills moved to dismiss the complaint, and the district court granted the motion, finding that the contract between CSX and General Mills did not meet the “heightened specificity requirement” required under Georgia law if a party is to indemnify another party for losses even absent the first party’s negligence. CSX moved for reconsideration, arguing that the dismissal order relied implicitly on the prior finding that CSX was 100% at fault, which General Mills argued was an improper application of federal-law collateral estoppel rather than Georgia law. The district court denied the motion, but the Eleventh Circuit reversed, holding that the court should have applied Georgia’s collateral estoppel rule, and remanded for a determination whether General Mills and Burchfield were “identical parties” as required for application of collateral estoppel under Georgia law.
On remand, the district court determined that CSX was not collaterally estopped from arguing that General Mills was partially at fault for Burchfield’s injuries. But General Mills continued to argue that CSX’s claims against it were barred, this time claiming that CSX was bound by the jury’s allocation of fault because CSX had vouched General Mills into the case. The district court agreed, and CSX appealed.
The court reversed again. CSX Trans., Inc. v. General Mills, Inc., 82 F.4th 1315 (11th Cir. 2023). Its opinion, written by Judge Jill Pryor, began by rejecting CSX’s argument that General Mills was contractually required to indemnify CSX even for CSX’s sole negligence. The contract, the court concluded, was “simply not explicit enough” to impose that indemnification obligation. But the court agreed with CSX that the district court misapplied Georgia’s vouchment statute, O.C.G.A. § 9-10-13. The statute provides that “[w]here a defendant may have a remedy over against another person and vouches him into court by giving notice of the pendency of the action, the judgment rendered therein shall be conclusive upon the person vouched, as to the amount and right of the plaintiff to recover.”
The parties agreed that CSX had vouched General Mills into the Burchfield litigation. Accordingly, CSX could invoke the vouchment doctrine to bar General Mills from relitigating Burchfield’s right to recover or the amount of damages. But the question before the court was whether CSX—the voucher, not the vouchee—was barred from relitigating issues decided in the first case. Finding the issue one of first impression on which it had no state court guidance, the court concluded that under the statute’s plain language, CSX was not bound by the prior judgment. The court noted that its conclusion was consistent with the common-law vouchment doctrine in Georgia at the time the statute was enacted, and with the doctrine’s goal of increasing judicial efficiency: “Vouchment exists to incentivize the vouchee to participate in the earlier action, defend his interests there, and reduce the burden of duplicative litigation on the judicial system.” CSX’s vouching General Mills into the case did not affect CSX’s own right to relitigate the issue of General Mills’s fault.