McKoin v. Huber Engineered Woods, LLC

Filing 51

ORDER by Judge Ronald A. White granting motion for summary judgment ( 34 Motion for Summary Judgment), dismissing Huber's Third-Party Complaint and deeming as moot RAB's earlier motion to dismiss ( 17 Motion to Dismiss Party) (lal, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA
KEITH McKOIN,
Plaintiff,
v.
HUBER ENGINEERED WOODS, LLC,
Defendant/Third-Party Plaintiff,
v.
RAB, INC.,
Third-Party Defendant.

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Case No. CIV-14-177-RAW

ORDER
Before the court is the motion for summary judgment of third-party defendant RAB,
Inc. (“RAB”). Summary judgment is appropriate when “the movant shows that there is no
genuine dispute as to any material fact and [it] is entitled to judgment as a matter of law.”
Rule 56(a) F.R.Cv.P. The record is viewed in the light most favorable to the party opposing
summary judgment. Bohn v. Park City Grp., Inc., 94 F.3d 1457, 1460 (10 th Cir.1996).
Plaintiff was an employee of RAB and had finished his work shift at the Huber
Engineered Woods, LLC (“Huber”) mill in Broken Bow, Oklahoma on December 13, 2013.
Leaving the Huber mill required one to sign out at the guard/scale house. The complaint
alleges that plaintiff stepped out of the vehicle in which he was a passenger and stepped into
“a hole or gap between the pavement the truck was on and the adjoining scale(s).”
(Complaint at ¶10). Plaintiff sues Huber for negligence.

Huber filed a third-party complaint against RAB, alleging that the Purchase Order (by
which Huber contracted with RAB for the work to be done) states that the offer was subject
to Huber’s Terms and Conditions. Among those terms and conditions is ¶13, which provides
as follows:
Indemnity. To the fullest extent permitted by applicable law,
Seller agrees to indemnify and hold harmless Buyer, its
subsidiaries, affiliates, successors, assigns, directors, officers,
employees, agents, customers and users of its products against
any and all claims, demands, losses, damages, liabilities and
obligations, including, without limitation, costs, expenses and
attorneys’ fees arising out of or relating to: (a) any claim that the
Goods or Buyer’s use of the Goods constitutes an infringement
of any patent, copyright, trademark, trade name, service mark or
other proprietary right; (b) any claim that the Goods are
defective; (c) any breach of warranty by Seller; or (d) the
manufacture, use, sale, delivery or installation of the Goods.
For any claim arising under (a) above, Seller shall have the
right, at its sole expense, to obtain for Buyer the right to
continue using the Goods or to modify or replace the Goods in
a manner acceptable to Buyer in its sole discretion. Buyer shall
notify Seller as soon as practicable of any claim under this
Paragraph. At buyer’s request, Seller shall promptly assume full
responsibility for the defense of any suit or proceeding described
in this Paragraph.

Additionally, Paragraph 24 of the Purchase Order states in pertinent part: “To the
extent not inconsistent with the terms set forth herein, this Purchase Order shall be governed
by the Uniform Commercial Code as adopted in the State of North Carolina and shall
otherwise be governed by the internal laws (notwithstanding the conflict of law provisions
thereof) of the State of North Carolina.”

2

RAB moves for summary judgment largely based upon section 22B-1 of the General
Statutes of North Carolina, which prohibits certain contract clauses requiring the promisor
to indemnify the promisee. The court does not reach this issue, because it concludes no
pertinent indemnity agreement exists between Huber and RAB.1
Pursuant to North Carolina law, “[w]hen interpreting a contract of indemnity, the rules
of contract construction apply.” Old Republic Surety Co. v. Reliable Housing, Inc., 572
S.E.2d 442, *2 (N.C.App.2002). Indemnity agreements are generally to be construed to
cover all loses, damages, and liabilities which reasonably appear to have been within the
contemplation of the parties, but not those which are neither expressed nor reasonably
inferrable from the terms. Id.
A reading of ¶13 demonstrates that the word “negligence” does not appear. The
paragraph is clearly directed toward rights and remedies under the UCC. This reading is
strengthened by reference to the passage from ¶24 quoted earlier. Huber offers the following
interpretation: “‘Goods’ is defined as that which is specified on the face of the Purchase
Agreement, at the price and delivery date so specified. Thus, the term ‘Goods,’ as defined,
can include both goods and services, and is not limited to the definition promulgated by the
Uniform Commercial Code.” (#20 at 2).

1

This argument is not directly made in RAB’s motion for summary judgment, but it does appear
(albeit under a section titled “Oklahoma law”) in RAB”s earlier motion to dismiss (#17), which remains
pending. This case was transferred to the undersigned with the motion to dismiss pending several months.
To comply with the dispositive motion deadline under the scheduling order, RAB filed the present motion
shortly thereafter.

3

The court disagrees. Issues of contract interpretation are matters of law. See
Mecklenburg County v. Simply Fashion Stores, Ltd., 704 S.E.2d 48, 52 (N.C.App.2010).
Paragraph 1 of the Purchase Order defines “Goods” not, as Huber argues, as “that which is
specified on the face of the Purchase Agreement” but as “the goods specified on the face
hereof.” (Emphasis added). This language does not transform the word “Goods” to include
services. The Uniform Commercial Code applies to transactions in goods. See N.C.G.S.
§25-2-102. It does not apply to contracts for the provision of services.2 Troche v. Bimbo
Foods Bakeries Distribution, Inc., 2014 WL 1669112, *4 (W.D.N.C.2014). The Purchase
Order is a standard form provided by Huber to its contractors. A written contract is
construed against the party who drafted it. State v. Philip Morris USA Inc., 618 S.E.2d 219,
225 n.14 (N.C.2005).
The court concludes ¶13 does not create an indemnity agreement regarding negligence
between Huber and RAB. Because that is the basis of Huber’s Third-Party Complaint, the
motion is granted.3

2

Here, RAB undisputedly provided repair services under the agreement.

3

In its response (#36) Huber stated that the motion was premature and additional discovery was
required. No supplement has been filed but in any event the court is ruling based upon contract interpretation
as a matter of law.

4

It is the order of the court that the motion for summary judgment (#34) is GRANTED.
Huber’s Third-Party Complaint (#12) is dismissed. RAB’s earlier motion to dismiss (#17)
is deemed moot.

ORDERED THIS 20th DAY OF JULY, 2015.

Dated this 20th day of July, 2015.

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