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Militello v. ICAN Logistics, Inc.

United States District Court, W.D. Oklahoma

April 11, 2018

GINA MILITELLO, now ERIN, Individually and as Administratrix of The Estate of ASHLEY NICOLE CRABTREE, Deceased, Plaintiff,
v.
ICAN LOGISTICS, INC., a Foreign For Profit Corporation; ZEYS WANG, an Individual; and HONGYUE TRUCKING, INC., Defendants. and ICAN LOGISTICS, INC., Defendant/ Third-Party Plaintiff,
v.
WESCO INSURANCE COMPANY, Third-Party Defendant.

          ORDER

          JOE HEATON CHIEF U.S. DISTRICT JUDGE.

         Plaintiff Gina Militello[1] filed this wrongful death action individually and on behalf of her deceased daughter, Ashley Nicole Crabtree, against ICAN Logistics, Inc. (“ICAN”), [2] Zeyu Wang, and Hongyue Trucking, Inc. (“Hongyue”). Her claims arise out of a vehicle accident involving the decedent and defendant Wang. ICAN filed a third-party complaint against Wesco Insurance Company (“Wesco”), who then filed a counterclaim and crossclaims for declaratory judgment against ICAN, Militello, Hongyue and Wang. The court previously denied dispositive motions filed by Wesco and Ms. Militello. In this order it will consider a motion for summary judgment filed by ICAN.

         Summary judgment is appropriate only “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). “A genuine dispute as to a material fact ‘exists when the evidence, construed in the light most favorable to the non-moving party, is such that a reasonable jury could return a verdict for the non-moving party.'” Carter v. Pathfinder Energy Servs., Inc., 662 F.3d 1134, 1141 (10th Cir. 2011) (quoting Zwygart v. Bd. of Cnty. Comm'rs, 483 F.3d 1086, 1090 (10th Cir.2007)). Considering ICAN's motion filed under this standard, the court concludes it should be granted.

         Background

         On November 8, 2015, defendants Hongyue, as lessor, and ICAN, as lessee, executed a one year Equipment Performance Lease Agreement (“lease” or “agreement”). The agreement provided that Hongyue would lease a tractor and a trailer, both of which were specifically identified, to ICAN, and that Hongyue would “employ a solo driver operating this equipment.” Doc. #70-1, p. 1, ¶ 4.[3] With respect to the driver the agreement also stated that “Lessor shall, by its own choosing, employ personnel to driver [sic].” Id. at p. 2, ¶8. The lease further provided that:

Lessor shall indemnify and be liable to Carrier for each accident for any loss or damage to third person, or property, or to Carrier's equipment which results from the conduct of Lessor and his, or her agents or employees. Lessor shall be liable for the entire loss or damage to third persons or properties resulting from his or her conduct or that of his, or her agents or employees. This shall include, but is not limited to, colliding with third parties, structures, vehicles, loss of or damage to cargo due to the negligence of or the improper or negligent securing by Lessor, his, or her agents or employees.

Id.

         Plaintiff's daughter was killed when her vehicle collided with a tractor-trailer driven by Zeyu Wang on March 6, 2016, in Oklahoma City, Oklahoma. In the amended complaint (“complaint”) plaintiff alleges that defendant Hongyue had leased the tractor and trailer and provided the driver, Wang, to ICAN. She alleges that both ICAN and Hongyue should have known that Wang, who purportedly left California around March 5, 2016, transporting cargo in the tractor-trailer, was not qualified to operate the vehicle because he could not speak or write English sufficiently to, among other things, understand traffic signs and make legible entries on reports and records. Plaintiff alleges that Wang violated federal motor carrier regulations by failing to take mandatory rest breaks while driving from California. She specifically claims that when the accident occurred Wang had been driving more than eleven hours, been on duty more than fourteen hours and had falsified his record of duty logs. Plaintiff contends that, even though there was a sign on the road where the accident occurred which stated “‘Congestion Be Prepared to Stop, ' Wang negligently struck the rear of Crabtree's vehicle, fatally injuring her daughter. Doc. #15, p. 4, ¶¶ 28-29. Plaintiff asserts claims for negligence and negligence per se against ICAN, Wang and Hongyue.

         ICAN filed a crossclaim against Hongyue, asserting it is entitled to contractual indemnity pursuant to the terms of the lease agreement they executed and common law indemnity for any liability imposed in this action. ICAN claims that Hongyue breached the agreement by failing to list it as an additional insured on an insurance policy Hongyue obtained from Wesco. ICAN also filed a third-party complaint against Wesco, in which it alleged that Wesco also “breached its duty and the Lease Agreement by failing to make ICAN an additional insured under its policy.” Doc. #18, p. 2, ¶6.

         ICAN has moved for summary judgment against Hongyue on its indemnity crossclaim. It contends the agreement “clearly and unequivocally states that Hongyue will indemnify ICAN for any damages caused by its [Hongyue's] employees when colliding with third-parties.” Doc. #70, p. 10.

         Analysis

         The court begins by determining which law applies to the contract at issue. Because jurisdiction in this case is based on diversity of citizenship, the choice-of-law provisions of Oklahoma, the forum state, are applied to determine the law which governs the interpretation of the lease agreement. See Mountain Fuel Supply v. Reliance Ins. Co., 933 F.2d 882, 887 (10th Cir. 1991) (when interpreting a contract, “[w]e look to the conflict of laws rules of ... the forum state[ ] to determine which state's laws will be controlling”). Oklahoma's choice-of-law rules for contract actions are statutory: “A contract is to be interpreted according to the law and usage of the place where it is to be performed, or, if it does not indicate a place of performance, according to the law and usage of the place where it is made.” 15 Okla. Stat. § 162. When the agreement does not directly or implicitly indicate the place of performance, the court will apply the law of the state of contracting. Rhody v. State Farm Mut. Ins. Co., 771 F.2d 1416, 1420 (10th Cir.1985).

         Applying those principles leads to the application of California law.[4] The agreement is silent as to place of performance but the court assumes it was executed in California, as both ICAN and Hongyue are California corporations.[5] In addition, the agreement contains a choice of law clause stating that “This writing constitutes the entire agreement between the parties and shall be governed by the laws of California.” Doc. #70-1, p. 2. California has a strong policy favoring the enforcement of freely negotiated choice-of-law clauses. See Kaul v. Mentor Graphics Corp., 2016 WL 6249024, at **6, 8 (N.D.Cal. Oct. 26, 2016, appeal filed (9th Cir. November 22, 2016) (No. 16-17139).

         Under California law, in general, an indemnity agreement “is construed under the same rules as govern the interpretation of other contracts.” Crawford v. Weather ShieldMfg., Inc., 187 P.3d 424, 430 (Cal. 2008).[6] Effect is given to the parties' mutual intent, ascertained from the contract language, if it is clear and explicit. Id. (citing Cal. Civ. Code, §§ 1636, 1638. The contract's words are to be understood in their ordinary and popular sense, unless the parties have indicated a special meaning.” Id. The goal “is to give effect to the intent of the ...


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