Under the first Kimbell Foods factor, there is no reason to think that a uniform body of law is required. Commercial enterprises purchasing or selling assets generally look to state law when drafting contracts. CERCLA is but one of several potential sources of liability that may be the subject of indemnification; thus, it is efficient if state law controls contractual interpretation in this area. State contract law is sufficiently well-developed and even-handed in application to permit interpretation of indemnification agreements within the context of private parties' CERCLA liability.
Moreover, under the second Kimbell Foods factor, the application of state law will not frustrate a specific objective of CERCLA. Because liability to the government remains joint and several under Section 107(e)(1), indemnification as between private parties has no impact on the central goal of CERCLA -- to hold PRPs, rather than taxpayers, liable for the cost of environmental clean-up. Indeed, which of two private enterprises ultimately pays clean-up costs is largely irrelevant in terms of CERCLA's ultimate goal of remediation of hazardous waste sites.
Finally, under the third Kimbell Foods factor, fashioning a national interpretive standard might interfere with reasonable commercial expectations. It is true that commercial entities today engaged in the sale of assets are aware of the potential of CERCLA liability, and in light of the principle that federal law governs the validity of releases of federal causes of action, see Dice, 342 U.S. at 361, could reasonably expect to be governed by a national standard. The converse, however, is true of parties, such as those now before the Court, that entered into indemnity agreements prior to the enactment of CERCLA. Such parties reasonably would have expected their agreements to be governed by, and interpreted in accordance with, state contract law. While this factor is not dispositive, the fact that so many similarly situated parties are affected by CERCLA weighs heavily in favor of the incorporation of state law.
Under the Kimbell Foods test, therefore, state law should serve as the federal rule of decision in the instant case and thus control whether a given indemnification agreement affects or allocates CERCLA liability. As a matter of statutory interpretation and judicial policy, this Court views the incorporation of state law as the favored course. It is not disputed that, if state law is employed as the rule of decision in the instant matter, the law of New York State provides the appropriate basis for this Court's decision.
b. Under New York Law, the Indemnity Agreements Entered Into By Olin and Conalco Are Valid and Enforceable
Under New York law, agreements purporting to exculpate and indemnify parties for the results of their own actions are strictly construed. "Contracts indemnifying a party against his own negligence are generally disfavored." Quintel Corp., N.V. v. Citibank, N.A., 596 F. Supp. 797, 801 (S.D.N.Y. 1984) (construing New York law). Such agreements will be closely scrutinized by the courts. Niagara Frontier Transp. Auth. v. Tri-Delta Constr. Corp., 107 A.D.2d 450, 487 N.Y.S.2d 428, 430 (4th Dep't), aff'd, 65 N.Y.2d 1038, 494 N.Y.S.2d 695, 484 N.E.2d 1047 (1985). For an indemnity clause to insulate a party from liability for its own negligence, "such intention [must be] expressed in unequivocal terms." Id. However, "contractural provisions which express a clear and unmistakable intent to indemnify a party against his own negligence are enforceable in New York." Simon v. Corbetta Constr. Co., 391 F. Supp. 708, 709 (S.D.N.Y. 1975); see Quintel Corp. 596 F. Supp. at 801; Dillon v. Riverso Constr. Co., 39 A.D.2d 744, 332 N.Y.S.2d 432, 433-34 (2d Dep't 1972), aff'd, 33 N.Y.2d 530, 347 N.Y.S.2d 434, 301 N.E.2d 422 (1973).
Although CERCLA is a strict liability statute, rather than one based on negligence, similar policy concerns underlie New York's treatment of agreements indemnifying against one's own negligence and indemnification agreements applicable to CERCLA. See Purolator Products, 772 F. Supp. at 131 ("While CERCLA liability is strict, and is not based on negligence, I believe that the policy behind the [New York] rule regarding negligence is also applicable [to CERCLA]."). CERCLA is intended to hold potentially responsible parties liability for clean-up costs
-- a concept that necessarily implicates fault. CERCLA provides an incentive for PRPs to voluntarily remediate hazards, but, prospectively it also provides a deterrent to the unsafe release of hazardous materials. Similarly, New York tort law attempts to make injured persons whole while providing a disincentive for dangerous behavior. On the basis of the analogous policy concerns at issue, this Court finds that a New York court would apply the interpretive rules regarding indemnification clauses in negligence actions to similar agreements purporting to allocate liability under CERCLA.
3. Summary Judgment
A party seeking summary judgment must demonstrate "that there is no genuine issue as to any material fact" such that it "is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 (1987). "It is well settled that a court should grant a motion for summary judgment only if the evidence, viewed in the light most favorable to the party opposing the motion, presents no genuine issue of material fact." Cable Science Corp. v. Rochdale Village, Inc., 920 F.2d 147, 151 (2d Cir. 1990); see United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962); Owens v. New York City Hous. Auth., 934 F.2d 405, 408 (2d Cir.), cert. denied, 116 L. Ed. 2d 451, 112 S. Ct. 431 (1991).
"In considering the motion, the court's responsibility is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party." Knight, 804 F.2d at 11 (citations omitted). However, mere conclusory allegations, or a dispute between the parties as to contractual interpretation, will not defeat a motion for summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Francis v. Coughlin, 891 F.2d 43, 47 (2d Cir. 1989). Summary judgment is an appropriate tool by which to resolve disputes concerning legally operative contractual provisions. As the Supreme Court has recognized, "summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986) (quoting Fed. R. Civ. P. 1).
When the terms of an agreement are clear and unambiguous, a court will not look beyond the "four corners" of the document to determine what the parties meant. Bellefonte Re Ins. Co. v. Argonaut Ins. Co., 581 F. Supp. 241, 243 (S.D.N.Y. 1984), aff'd, 757 F.2d 523 (2d Cir. 1985). Provided that the language of an agreement is unambiguous and reasonable people could not differ on its meaning, a court may decide the proper interpretation of the language in the agreement. American Home Assurance Co. v. Baltimore Gas & Elec., 845 F.2d 48, 51 (2d Cir. 1988). Conversely, "if an ambiguity in the contract exists, then summary judgment is generally improper, because the principles governing summary judgment 'require that where contract language is susceptible of at least two fairly reasonable meanings, the parties have a right to present extrinsic evidence of their intent at the time of contracting.'" Ginett v. Computer Task Group, Inc., 962 F.2d 1085, 1097 (2d Cir. 1992) (quoting Schering Co. v. Home Ins. Co., 712 F.2d 4, 9 (2d Cir. 1983)).
In the instant case no ambiguity exists as to the proper interpretation of the indemnity clauses contained in the Hannibal Sale Documents. Contractual provisions that express a clear and unmistakable intent to indemnify a party against the consequences of his or her own actions are enforceable under New York law. Simon, 391 F. Supp. at 709; Quintel Corp., 596 F. Supp. at 801. By its express terms, the Release provides that Conalco "releases and settles all claims of any nature which Conalco now has or hereafter could have against Olin . . . whether or not previously asserted, under or arising out of the Purchase Agreement . . . or the transactions contemplated thereby." (emphasis added). One would be hard pressed to draft broader or more inclusive indemnification provisions than those entered into by Conalco and Olin. Indeed, similar provisions have repeatedly been enforced by New York courts. See, e.g., Margolin v. New York Life Insur. Co., 32 N.Y.2d 149, 344 N.Y.S.2d 336, 339, 297 N.E.2d 80 (1973); Levine v. Shell Oil Co., 28 N.Y.2d 205, 321 N.Y.S.2d 81, 85-87, 269 N.E.2d 799 (1971); Kurek v. Port Chester Hous. Auth., 18 N.Y.2d 450, 223 N.E.2d 25, 276 N.Y.S.2d 612, 615-16 (1966); Merchants Mutual Insur. Co. v. Saxon Indus. Inc., 170 A.D.2d 654, 566 N.Y.S.2d 933, 935 (2d Dep't 1991). This Court finds that the indemnity provisions contained in the Hannibal Sale Documents are sufficiently broad to indemnify Olin against liability to Conalco pursuant to CERCLA.
There are no factual issues to be tried. The indemnification agreements incorporated into the Hannibal Sale Documents are clear on their face. These provisions effectively shield Olin from liability to Conalco and, thus, partial summary judgment in favor of Olin is appropriate.
For the reasons stated above, Olin Corporation's motion for partial summary judgment is hereby GRANTED. Consolidated Aluminum Corporation's and Swiss Aluminum, Ltd.'s motion for partial summary judgment is DENIED.
EDITOR'S NOTE: The following court-provided text does not appear at this cite in 807 F. Supp. 1133.
Dated: December 1, 1992
New York, New York
David N. Edelstein
OPINION & ORDER - December 1, 1992, Filed
EDELSTEIN, District Judge:
WHEREAS this Court entered an Opinion & Order, dated December 1, 1992, in the above-captioned action; and
WHEREAS this Opinion & Order granted Olin Corporation's motion for partial summary judgment and denied Consolidated Aluminum Corporation's and Swiss Aluminum, Limited's cross motion for partial summary judgment; and
WHEREAS Federal Rule of Civil procedure 54(b) authorizes the Court to "direct the entry of a final judgment as to one or more but fewer than all of the claims" in an action "upon an express determination that there is no just reason for delay and upon an express direction for entry of judgment"; and
WHEREAS Rule 54(b) certification is warranted if necessary to avoid hardship or injustice that may result from delay or if it promotes sound judicial administration, see Curtiss-Wright Corp. v. General Elec. Co. 446, U.S. 1, 8 (1980); Hogan v. Consolidated Rail Corp., 961 F.2d 1021, 1025 (2d Cir. 1992); and
WHEREAS this Court's December 1, 1992 Opinion and Order in the above-captioned action resolves all disputed issues of law as between the parties to this action; and
WHEREAS any further litigation in this action will necessarily require this Court to address previously adjudicated issues of law and will therefore result in needless delay; and
WHEREAS Rule 54(b) certification will promote sound judicial administration because the claims decided by this Court are "inherently inseparable" and "inextricably interrelated," Ginett v. Computer Task Force Group, Inc., 962 F.2d 1085, 1096 (2d Cir. 1992);
IT IS HEREBY ORDERED that final judgment be entered for this Court's December 1, 1992 Opinion & Order and that this Opinion & Order be certified pursuant to Fed. R. Civ. P. 54(b).
Dated: December 1, 1992
New York, New York
David N. Edelstein