Prolec GE International, S. De R.L.., De C.V. v. HLI Rail & Rigging, LLC
1:11-cv-03238
S.D.N.Y.Feb 9, 2015Background
- Chartis Seguros Mexico, as subrogee of Prolec GE, asserts Carmack Amendment claims against HLI Rail Rigging, FMMC, and KCSR after derailment damaged Prolec transformers.
- Prolec contracted HLI to transport transformers from Apodaca, Mexico to Port Arthur, Texas; HLI carried to Laredo and subcontracted the Laredo–Port Arthur leg to KCSR.
- KCSR asserted a contractual liability limitation of $25,000 per railcar under 49 U.S.C. § 11706 and sought indemnification from HLI for excess liability and defense costs.
- KCSR argued that its bills of lading incorporated terms from HLI’s Price Quote and KCSR’s Rules Publication, including the liability limitation and an indemnity provision.
- In 2014, the court addressed whether to reconsider the March 13, 2014 ruling denying HLI’s cross-motion on KCSR’s indemnity cross-claim; the court ultimately granted summary judgment to HLI on the indemnity cross-claim.
- The decision supersedes the 2014 March opinion to the extent inconsistent, via sua sponte reconsideration under Rule 54(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court should reconsider the March 13, 2014 order | KCSR argues no reconsideration is warranted | Court has discretion to reconsider erroneous ruling | Granted in part; court sua sponte revises previous decision |
| Whether the Rules Publication was incorporated into the BOLs | KCSR contends incorporation by reference; Price Quote referenced Rules Publication | No sufficiently specific reference or unmistakable incorporation | Indemnity cross-claim barred; no valid incorporation found |
| Whether HLI is entitled to summary judgment on KCSR’s indemnity cross-claim | HLI seeks indemnity relief under cross-claim | Indemnity provision unenforceable due to lack of proper incorporation | Summary judgment granted to HLI on indemnity cross-claim |
Key Cases Cited
- Continental Ins. Co. v. Polish S.S. Co., 346 F.3d 281 (2d Cir. 2003) (incorporation by reference requires clear terms and awareness by the parties)
- Creative Waste v. Capitol Environment, 429 F. Supp. 2d 582 (S.D.N.Y. 2006) (incorporation by reference requires explicit and identifiable incorporation)
- Chiacchia v. Nat'l Westminster Bank USA, 507 N.Y.S.2d 888 (2d Dep't 1986) (identification and identification of incorporated terms)