355 F.3d 1295 | 11th Cir. | 2004
Before AN DERS ON, BIR CH and B ARKE TT, Circuit Judges. BIRC H, Circ uit Judg e:
This court certified to the Supreme Court of Georgia two questions of Georgia law that we found determinative of a case pending in this court and for which there app eared to b e no con trolling p receden t. CSX Transp., Inc. v. City of Garde n City, 325 F.3d 1236, 1249 (11th Cir. 2003). The Georgia Supreme Court answered both certified questions, and, based on its answers, we AFFIRM in part and RE MA ND in part.
The G eorgia S uprem e Cour t set out the facts as fo llows: In 1996 Garden City entered into a series of agreements with CSX Transportation Inc. and its affiliates to utilize a railroad right-of-way to install w ater and s ewer lin es. The a greeme nts requ ired Ga rden C ity to indem nify and hold ha rmless C SX o r its subsid iaries for a ll liabilities CSX suffered in connection with the project and for which CSX was not the sole cause. The agreements also required Garden City to m aintain ins urance c overing the indem nity oblig ations the City had assumed. In October 1997 a passenger train collided with a tractor traile r operate d by G arden C ity's subco ntractor c ausing C SX to incur su bstantial p roperty d amage a nd sub jecting CSX to third-pa rty claims. CSX sought indemnification from Garden City in accordance with the agreem ents. Ga rden C ity refused and CS X bro ught su it alleging that it was entitled to indemnification. The district court granted summary judgment to the City, finding that the indemnification provision constituted an impermissible waiver of the City's sov ereign im munity in the absen ce of any evidenc e that the C ity had liability insuran ce to cov er the ind emnity cla im. The Eleven th Circuit reversed and remanded to the trial court for its consideration of the effect of the City's participation in the Georgia Interlocal Risk Mana gemen t Agen cy (GIR MA ), a multi-g overnm ent insur ance fun d. On remand, the district court again granted summary judgment to the City, finding that the indemnification agreements were ultra vires and that O.C .G.A. § 36-33 -1(a) did not auth orize the C ity to waiv e its immun ity by enter ing into a n indem nity contr act.
CSX Transp ., Inc. v. C ity of Ga rden C ity, 588 S .E.2d 6 88, 688 -89 (G a. 2003 ). CSX again appealed the district court's ruling to us, whereupon we certified the follow ing two question s to the G eorgia S uprem e Cour t:
1. MAY A GEORGIA MUNICIPALITY CONTRACTUALLY INDEMNIFY A PRIVATE PARTY FOR ANY AND ALL LOSS, DAMAGE, AND LIABILITY ARISING IN CONNECTION WITH A PUBLIC WORKS PROJECT INVOLVING THE PRIVATE PARTY'S LAND? 2. IF NOT, IS THERE ANY LOSS, DAMAGE, OR LIABILITY ARISING IN CONNECTION WITH A PUBLIC WORKS PROJECT INVOLVING A PRIVATE PARTY'S LAND FOR WHICH A GEORGIA MUNICIPALITY MAY CONTRACTUALLY INDEMNIFY THE PRIVATE PARTY?
CSX Transp., 325 F .3d at 12 49. The Georgia Supreme Court answered both certified questions in the negative . CSX Transp., 588 S.E.2d at 689. Relying on the plain language of O.C.G.A. § 36-33-1(a), [1] the court concluded that “sovereign immunity may be waived only by an act of the legislature” and, therefore, “the indemnification agreement between the City and CSX is void as an ultra vires contract.” Id. at 690. The court also “decline[d] CSX's invitation to find that municipalities have an implied authority to do what is expressly reserved to the legislature.” Id. Thus, according to the Georgia Supreme Court, Georgia municipalities may never waive their sovereign immunity by, for exam ple, contracting to indemnify third parties, without (1) express legislative authority or (2) satisfying the requirements of § 36- 33-1(a ). See id.
Finding the indemnity contract between the City and CSX to be void for lack of legislativ e author ity, how ever, did not end the Geo rgia Su preme C ourt's analysis because, under § 36-33-1(a), a municipality's sovereign immunity still may be waived “by the purchase of liability insurance if the 'policy of insurance issued covers an occurrence for which the defense of sovereign immunity is available, and then on ly to the ex tent of the limits of su ch insur ance po licy.'” [2] Id. (quoting O.C.G .A. § 36 -33-1( a)). Consequently, while the indemnification agreement betwee n the City and CS X wa s correctly determin ed by the district cou rt to be vo id as ultra vires, we again must remand this case to the district court for consideration of whether, pursuant to O.C.G.A. § 36-33-1(a), Garden City waived its sovereign immunity as to CSX's cause of action by purchasing GIRMA insurance. On remand, the district court on remand must scrutinize the GIRMA policy and consider “if the facts behind CSX's cause of action against the City fall within the scope o f covera ge prov ided by th e GIR MA policy an d sover eign imm unity w ould otherwise apply to that cause of action” to determine whether the City's sovereign immunity was “waived to the extent of such liability coverage.” Id. The decision of the United States District Court is therefore AFFIRMED in part and REMAN DED in part for further proceedings consistent with this opinion.
NOTES
[1] O.C.G.A. § 36-33-1(a) provides that there is no waiver of the sovereign immunity of municipal corporations of the state and such municipal corporations shall be immune from liability for damages. A municipal corporation shall not waive its immunity by the purchase of liability insurance, . . . unless the policy of insurance issued covers an occurrence for which the defense of sovereign immunity is available, and then only to the extent of the limits of such insurance policy. O.C.G.A. § 36-33-1(a).
[2] The Georgia Supreme Court stated that the City's “purchase of a GIRMA coverage agreement . . . constitutes the purchase of liability insurance.” CSX Transp., 588 S.E.2d at 690.
