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Leslie v. BNSF Railway Co.

United States District Court, D. New Mexico

July 15, 2019

ARLINDA LESLIE, INDIVIDUALLY and as Next Friend of BLAIR KING AND SETH KING And BRANDON LESLIE, Plaintiffs,
v.
BNSF RAILWAY COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court on (i) the First Motion for Summary Judgment and Supporting Memorandum (ECF No. 29) filed by Defendant BNSF Railway Company (“Defendant” or “BNSF”) and (ii) the Motion for Partial Summary Judgment (ECF No. 37) filed by Plaintiffs Arlinda Leslie, individually and as next friend of Blair King and Seth King, and Brandon Leslie (“Plaintiffs”). The Court, having considered the motions, briefs, supplemental memorandum, response in opposition to the supplemental memorandum, evidence, applicable law, and otherwise being fully advised, concludes that Defendant's motion for summary judgment should be denied and Plaintiffs' motion for partial summary judgment should be granted.[1]

         I. FACTUAL BACKGROUND

         This case arises out of a collision on November 1, 2013, when an automobile in which Plaintiffs Arlinda Leslie, Blair King, and Seth King were riding hit a cow that was on New Mexico State Highway 6. See Compl. ¶¶ 7, 14, 17, ECF No. 1-1. On January 14, 2014, Plaintiffs filed a state court lawsuit (“First State Case”) for damages for personal injuries sustained by Plaintiffs from the collision against the owner of the cow, Huning Limited Partnership (“Huning LP”), and Dean Nix and Colton Nix, who were allegedly acting as employees or agents of Huning LP (hereinafter, collectively, “Huning Defendants”). See Ex. A, ECF No. 29-1 at 1-2. During the litigation, the Huning Defendants argued that the cow entered the highway by jumping over a gate owned and maintained by BNSF. See Compl, ¶ 16, ECF No. 1-1.

         On October 27, 2016, Plaintiffs filed a separate lawsuit against BNSF in state court for negligence and negligence per se arising from the November 1, 2013 collision (“Second Case”). See Compl, ECF No. 1-1. Plaintiffs allege that BNSF owned and operated a railroad right of way across a portion of the ranch property owned and operated by Huning LP and BNSF owned and maintained fences and gates to keep cattle from getting onto its railroad right of way. Id. ¶¶ 10-11. Plaintiffs assert that BNSF negligently failed in its duty to take reasonable action to prevent cattle from entering BNSF's right of way and gaining access to Highway 6. See Id. ¶¶ 23-34. BNSF removed the case to this Court. See Notice of Removal, ECF No. 1.

         Subsequently, by letter dated November 28, 2016, counsel for BNSF informed counsel for Huning LP of BNSF's belief that Huning LP is “contractually obligated to hold harmless and indemnify BNSF from and against any and all damages arising out of or related to the November 1, 2013 occurrence” based on certain written agreements executed between 1921 and 1957. Def.'s Ex. C at 1, ECF No. 29-3. BNSF further stated in the letter: “As both an insured under all applicable policies of insurance and as a party entitled to indemnification, BNSF hereby further demands that adequate protections and reservations be made under each policy of insurance…. Any settlement negotiated by the Huning Ranch or its carriers must include a full and complete release of BNSF Railway Company.” Id. at 2. On February 2, 2017, counsel for Huning LP responded by letter and denied that Huning LP is obligated to defend and indemnify BNSF. Def.'s Ex. D at 1, ECF No. 29-4.

         On September 28, 2017, Plaintiffs and the Huning Defendants participated in a mediation and reached a written Settlement Agreement in which the Huning Defendants agreed to pay Plaintiffs $3, 000, 000.00 “upon execution of a release to be prepared by the Defendants.” Def.'s Ex. E, ECF No. 29-5. BNSF did not participate in the mediation. Aff. of Paul D. Barber (“Barber Aff.”) ¶ 17, ECF No. 34-1. During the mediation, there was no discussion of the other pending litigation against BNSF, id. ¶ 7, and the Huning Defendants blamed BNSF for the negligent maintenance of the gate and fence, id. ¶ 13.

         As relevant here, the Settlement Agreement provided: “This settlement shall resolve all claims, pled or unpled, between all named or potential parties to the litigation arising out of an automobile/livestock accident that occurred on November 1, 2013, on New Mexico Highway 6 in Valencia County, New Mexico.” Def.'s Ex. E at 1, ECF No. 29-5 (bold added). The caption of the Settlement Agreement listed Arlinda Leslie, individually and as next friend of Blair King and Seth King, and Brandon Leslie as Plaintiffs and “Huning Limited Liability Limited Partnership, Dean Nix and Colton Nix” as Defendants. Id. It was signed by counsel for Plaintiffs and “Counsel for Defendants Dean Nix, Colton Nix, and Huning Limited Liability Limited Partnership.” Id. at 2-3. BNSF did not sign the agreement or agree to provide any compensation to Plaintiffs under the agreement. See id.; Barber Aff. ¶ 17.

         Following the mediation, the parties to the First State Case exchanged several draft forms of release. Barber Aff. ¶ 18. On December 29, 2017, Plaintiffs filed another state court action against the Huning Defendants as well as a number of insurance companies and law firms representing the Huning Defendants for alleged breach of the Settlement Agreement for failing to prepare settlement documents that complied with the settlement agreement as well as for bad faith and legal malpractice. See Defs.' Ex. F, ECF No. 29-6, & Ex. G, ECF No. 29-7.[2]

         II. STANDARD

         On a motion for summary judgment, the moving party initially bears the burden of showing that no genuine issue of material fact exists. Shapolia v. Los Alamos Nat'l Lab., 992 F.2d 1033, 1036 (10th Cir. 1993). Once the moving party meets its burden, the nonmoving party must show that genuine issues remain for trial. Id. The nonmoving party must go beyond the pleadings and by its own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). A court must construe all facts and reasonable inferences in the light most favorable to the nonmoving party. Quaker State Minit-Lube, Inc. v. Fireman's Fund Ins. Co., 52 F.3d 1522, 1527 (10th Cir. 1995). Only disputes of facts that might affect the outcome of the case will properly preclude the entry of summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. See id. at 248.

         Cross-motions for summary judgment must be treated separately, and the denial of one does not require the grant of the other. Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000) (quoting Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir.1979)). When considering cross-motions for summary judgment, a court may assume that no evidence needs to be considered other than that filed by the parties, but summary judgment is inappropriate if material factual disputes nevertheless exist. Id.

         III. ANALYSIS

         BNSF argues that the Settlement Agreement released and discharged BNSF from all liability arising from the accident because the parties contemplated releasing BNSF when they used the phrase “all named or potential parties to the litigation.” BNSF contends that it is contractually related to Huning LP as its indemnitee and therefore also a released entity according to that relationship. In response, Plaintiffs argue that, although the Settlement Agreement is an enforceable contract, there was no executed release and Defendant's motion can be denied on that ground alone. Additionally, Plaintiffs contend that BNSF was never an intended beneficiary of the Settlement Agreement and/or release, so the Court should deny BNSF's motion for summary judgment and grant Plaintiffs' motion for summary judgment on BNSF's defense. Both parties rely on Hansen v. Ford Motor Company, 1995-NMSC-044, 120 N.M. 203, in support. Based on the holding and reasoning of Hansen, the Court does not need to determine whether the Settlement Agreement constitutes a release, because even assuming it is, BNSF was not a third-party beneficiary of the Settlement Agreement.

         The Hansen case involved a general release of liability secured during a settlement of an injured party's claims against the driver of the other vehicle that released “all other persons, firms or corporations liable or, who might be claimed to be liable … on account of all injuries” that resulted from the car accident. Hansen, 1995-NMSC-044 ¶ 1, 3. When the injured party sued Ford Motor Company (“Ford”) two years later claiming she suffered damages from a faulty air bag, Ford moved for summary judgment, arguing that the general release precluded claims against Ford by the injured party, despite that it neither took part in the settlement negotiations nor contributed any money toward settling the claims. See Id. ΒΆΒΆ 1, 6. The New Mexico Supreme Court held that the purported ...


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