National Railroad Passenger Corp. v. Rountree Transport & Rigging, Inc.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
MARCH 26, 2002
THOMAS K. KAHN
CLERK
No. 00-13811

D. C. Docket Nos. 93-01090-CV-ORL-19C
and 94-0976-CV-ORL-19C

NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK),
CSX TRANSPORTATION, INC.,

Plaintiffs-Cross-Defendants-Counter-Defendants-
Cross-Appellants-Cross-Appellees,

AMERICAN HOME ASSURANCE COMPANY,
f.u.b.o. Stewart and Stevenson Services, Inc.,

Plaintiff-Appellant-Cross-Appellee,

versus

ROUNTREE TRANSPORT AND RIGGING, INC.,

Defendant-Cross-Defendant-Appellee,

KISSIMMEE UTILITY AUTHORITY,

Defendant-Cross-Claimant-Cross-Defendant-
Counter-Claimant-Counter-Defendant-
Third-Party-Plaintiff-Third-Party-Defendant-
Appellee-Cross-Appellant,
WOKO TRANSPORTATION,
BLACK AND VEATCH, et al.,

Defendants-Cross-Claimants-Cross-Defendants-
Counter-Claimants-Counter-Defendants-
Third Party Plaintiffs-Third-Party-
Defendants-Appellees,

FLORIDA MUNICIPAL POWER AGENCY,

Defendant-Cross-Claimant-Cross-Defendant-
Counter-Claimant-Counter-Defendant-
Third Party-Plaintiff-Third-Party Defendant-
Appellee-Cross-Appellant,

GENERAL ELECTRIC COMPANY, INC.,

Consolidated Defendant-Third-Party Defendant-
Appellee-Cross-Appellant,

STEWART AND STEVENSON SERVICES, INC.,

Movant-Cross-Appellant.
_____________________________________________________

AMERICAN HOME ASSURANCE COMPANY,
f.u.b.o. Stewart and Stevenson Services, Inc.,

Plaintiff-Counter-Defendant-Appellant-
Cross-Appellee,

versus

NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK),
CSX TRANSPORTATION, INC., et al.,

Defendants-Appellees-Cross-Appellants,

2
ROUNTREE TRANSPORT AND RIGGING, INC.,

Defendant-Cross-Defendant-Appellee,

KISSIMMEE UTILITY AUTHORITY,

Defendant-Appellee-Cross-Appellant,

FLORIDA MUNICIPAL POWER AGENCY,

Movant-Appellee-Cross-Appellant,

GENERAL ELECTRIC CO.,

Movant-Appellee-Cross-Appellant,

STEWART AND STEVENSON SERVICES, INC.,

Movant-Cross-Appellant.

No. 00-13986

D. C. Docket No. 93-01090-CV-ORL-19C

NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK),
CSX TRANSPORTATION, INC.,

Plaintiffs-Cross-Defendants-Counter-Defendants,

J.E. BEDGOOD, JR.,
LINDA BEDGOOD, et al.,
AMERICAN HOME ASSURANCE COMPANY,
f.u.b.o. Stewart and Stevenson Services, Inc.,

3
 Plaintiffs,

versus

ROUNTREE TRANSPORT AND RIGGING, INC.,

Defendant-Cross-Defendant-Appellee,

KISSIMMEE UTILITY AUTHORITY,

Defendant-Cross-Claimant-Cross-Defendant-
Counter-Claimant-Counter-Defendant-
Third-Party-Plaintiff-Third-Party-Defendant,

WOKO TRANSPORTATION,

Defendant-Cross-Claimant-Cross-Defendant-
Counter-Claimant-Counter-Defendant-
Third-Party-Plaintiff-Third-Party-Defendant,

BLACK AND VEATCH, et al.,

Defendant-Cross-Claimant-Cross-Defendant-
Counter-Claimant-Counter-Defendant-
Third-Party-Plaintiff-Third-Party-Defendant-
Appellant,

FLORIDA MUNICIPAL POWER AGENCY,

Defendant-Cross-Claimants-Cross-Defendants-
Counter-Claimant-Counter-Defendant-
Third-Party-Plaintiff-Third-Party-Defendant,

GENERAL ELECTRIC CO.,

Third-Party-Defendant-Appellee.

___________

4
 Appeals from the United States District Court
for the Middle District of Florida

(March 26, 2002)

Before TJOFLAT and BIRCH, Circuit Judges, and GOLDBERG*, Judge.

BIRCH, Circuit Judge:

These consolidated appeals arise from the district court’s final judgment

resolving a series of cases that were filed after a passenger train of the National

Railroad Passenger Corporation (“Amtrak”), as it moved on the railroad track of

CSX Transportation, Inc. (“CSX”), collided with a hauler rig owned by Rountree

Transport and Rigging, Inc. (“Rountree”). The Rountree vehicle had become

immobilized on a railroad crossing as it attempted to transport a combustion

turbine and a turbine enclosure to a power plant of the Kissimmee Utility Authority

(“KUA”) near Kissimmee, Florida. American Home Assurance Corporation

(“AHA”), subrogee of Stewart and Stevenson Services, Inc. (“S&S”), commenced

these appeals to challenge several district court rulings that affected its entitlement

to damages flowing from the collision. The issues in this aspect of the appeal

include: (1) the propriety of excluding certain evidence offered by AHA to prove

*
Honorable Richard W. Goldberg, Judge, U.S. Court of International Trade, sitting by
designation.

5
its damages; (2) whether transport of the combustion turbine properly was deemed

an inherently dangerous work activity; (3) the propriety of reducing AHA’s

damages under the Florida comparative fault statute; and (4) whether AHA should

have been denied prejudgment interest on its damages. We AFFIRM the district

court’s rulings with regard to the first, second, and fourth issues. The third issue,

however, raises unsettled questions of state law which we certify to the Florida

Supreme Court for resolution.

In addition to AHA’s appeal, KUA, Florida Municipal Power Agency

(“FMPA”), and Black & Veatch (“B&V”) have appealed the decision by the

district court that General Electric Company (“GE”) did not have to defend and

indemnify them for the collision. We AFFIRM the district court’s decision. KUA

and FMPA also have appealed the district court’s decision requiring them to

defend and indemnify CSX and Amtrak. Within this latter appeal, KUA and

FMPA have raised the issue of whether state law sovereign immunity shields them

from being required to defend and indemnify CSX and Amtrak. Because the

sovereign immunity issue involves unsettled questions of state law, we certify the

issue to the Florida Supreme Court for review. In sum, we have decided that with

respect to these consolidated appeals, we AFFIRM in part but STAY all further

proceedings, pending the Florida Supreme Court’s resolution of our certified

6
questions.

I. BACKGROUND

A. Construction of the Cane Island Power Plant

KUA is an municipal agency created by the city of Kissimmee, Florida, to

construct, operate, and manage the city’s municipal electrical utility systems. As

part of its charge, KUA oversaw the construction of the electrical facility known as

the Cane Island Power Plant (the “Plant”) near Kissimmee, Florida. To effectuate

the construction, KUA contracted with B&V, who agreed to serve as project

engineer. KUA also entered into a Participation Agreement with FMPA, a joint-

action agency organized under Florida law with authority to undertake and finance

electric projects. By entering into the Participation Agreement, FMPA acquired a

50% ownership interest in the Plant and agreed to share with KUA the production

costs of electricity.

In overseeing the construction, KUA took steps to ensure that there would be

vehicular and pedestrian access to the Plant. Accordingly, KUA entered into a

Private Road Grade Crossing Agreement (the “Crossing Agreement”) with CSX,

who granted the utility a license to construct, use, and maintain a private road

grade crossing over CSX’s railroad tracks. In return for the license, KUA was

required under the Crossing Agreement to “defend, indemnify, protect and save

7
[CSX] harmless from and against [designated losses and casualties].” R53-1172

Exh. A at 14.2. The Crossing Agreement further mandated that KUA defend and

indemnify any company whose property was “operated” by CSX at the railroad

crossing. Id. at 1.2.

In its oversight role, KUA also contracted with GE for purchase and delivery

of certain customized power generation equipment, including a combustion

turbine. KUA and GE entered into a Turbine Purchasing Agreement (the

“Purchasing Agreement”), which included an indemnification provision under

which GE promised to defend and indemnify KUA, its agents, and B&V “to the

extent of and on account of any negligent act or omission of [GE] in performing

the work under the Contract.” R104-2060 Exh. A at GC.29.

Upon entering into the Purchasing Agreement, GE contracted with S&S,

who agreed to purchase and then customize the equipment that would be delivered

to the Plant. In turn, S&S contracted with a “transportation broker,” WOKO

Transportation (“WOKO”), who arranged for transport of the customized turbine

equipment. WOKO contracted with Rountree to have certain pieces of the

customized equipment — the combustion turbine and an enclosure for housing it

— transported to the Plant on 30 November 1993. The combustion turbine and its

enclosure made up only one out of forty-five boxes of customized turbine

8
equipment transported to the Plant. Not included in the November shipment were

boxes 2-45, which contained additional equipment customized by S&S, including,

among other things, an air filter, turbine generator controls, a control house, and

lube oil cooler fans.

B. The Collision

Because the combustion turbine weighed 82 tons, Rountree transported the

turbine and its enclosure by using a road tractor that pulled a hauler rig. The height

of the hauler rig could be adjusted to deal with gradations in the terrain. The

underlying casualty occurred on 30 November 1993 as Rountree, while

transporting the combustion turbine and its enclosure to the Plant, attempted to

adjust the height of the rig at the railroad crossing licensed to KUA from CSX.

The railroad tracks at the crossing were on an elevated grade. As the hauler rig

was driven onto the crossing, the hauler crew realized that the rig would be unable

to negotiate the elevated terrain without its height first being adjusted. The crew

adjusted the height of the rig without first removing the rig from the railroad

tracks. Before the rig was removed from the tracks, an Amtrak passenger train

collided with it. The collision destroyed the rig, the combustion turbine, and the

turbine enclosure. The Amtrak train also was damaged, and some of the

passengers and train crew suffered personal injuries.

9
C. The Lawsuits

Multiple lawsuits were filed against various parties and their insurers

seeking to establish responsibility for the collision. CSX and Amtrak

(collectively, the “Rail Companies”) brought suit against, among others, B&V,

Rountree, and KUA. The Rail Companies raised several claims, including that the

crossing had been improperly designed and constructed by B&V, and that

Rountree and KUA were negligent in the transport of the combustion turbine and

its enclosure. They further claimed that, by virtue of the Crossing Agreement,

KUA was obligated to defend and indemnify them.

Additionally, numerous passengers and crew members who were aboard the

Amtrak train at the time of the collision sued for personal injuries and property

damage. Later, AHA, as subrogee of S&S, commenced suit against several

entities, including the Rail Companies, Rountree, B&V, KUA, and FMPA, after it

compensated its insured, S&S, for loss of the combustion turbine and the turbine

enclosure. AHA claimed that the negligence of the defendants collectively caused

S&S to sustain the loss which was covered by its insurance policy with AHA. In

turn, as part of the AHA litigation, KUA brought a third-party complaint against

GE claiming that the Purchasing Agreement required GE to defend and indemnify

KUA.

10
D. Procedural History

The various cases were consolidated, and the district court bifurcated the

proceedings into a liability phase and a damages phase. During the former phase,

the Rail Companies moved for summary judgment on the indemnification issue.

They asked the court to rule as a matter of law that KUA had to defend and

indemnify them as a result of the Crossing Agreement. The court granted

summary judgment in favor of CSX but denied the motion by Amtrak. The court

concluded that Amtrak’s claim for indemnity involved factual issues that had not

yet been resolved.1

A three-week jury trial subsequently was held in 1996 on the liability issue

for all claimants and all defendants in the consolidated cases. On the same day as

the jury rendered its verdict, the district court granted judgment as a matter of law

to S&S and GE, holding that they were free of direct negligence for the collision.

The jury, in turn, absolved all parties of direct negligence except for Rountree,

CSX, and Amtrak. The jury determined that Rountree was 59% at fault for the

collision, CSX was 33% at fault, and Amtrak was 8% at fault. The district court

1
After the district court issued its order, KUA filed an interlocutory appeal with our
Court. KUA argued that the district court erred in granting summary judgment to CSX because
it was entitled to sovereign immunity under Florida law. We held that we lacked jurisdiction to
resolve an appeal based on issues of state law sovereign immunity because the matter was not
final and because such issues were not entitled to interlocutory review. CSX Transp., Inc. v.
Kissimmee Util. Auth., 153 F.3d 1283, 1286 (11th Cir. 1998).

11
then issued orders that damages trials would be held for all plaintiffs, starting with

the personal injury plaintiffs, then with the Rail Companies, and finally with AHA.

Additionally, the court granted B&V’s motion for a ruling that transportation of the

combustion turbine was inherently dangerous as a matter of law. The court further

held that, as a result of the inherent dangerousness in transporting the combustion

turbine, WOKO, S&S, and GE were vicariously liable for Rountree’s negligence.

Before a jury trial on damages ensued, B&V, KUA, and FMPA moved for

summary judgment against GE. They alleged that, under the indemnification

provision contained in the Purchasing Agreement, GE had to reimburse them for

the expenses they incurred as a result of successfully defending themselves in the

turbine litigation. The district court denied the motions and ruled that the losses

suffered by the three parties were not within the scope of the indemnification

provision. Also before the damages trial, the court reconsidered the issue of

whether KUA had to defend and indemnify Amtrak under the Crossing Agreement.

Having reconsidered the issue, the district court granted Amtrak’s renewed motion

for summary judgment and ruled as a matter of law that KUA was contractually

obligated to defend and indemnify Amtrak. In addition to its other decisions, the

court granted Rountree’s motion for a ruling as a matter of law that its liability to

AHA was limited to $1,000,000.

12
 Then, in December 1999, the district court oversaw a jury trial on the issue

of AHA’s damages. By the time of the damages trial, the Rail Companies had

settled their claims with all other parties. Indeed, all parties in the various

consolidated cases had settled their damages claims by that time, except for AHA

as subrogee of S&S. At the damages trial, AHA wanted to prove the amount of

damages incurred by S&S by using the formula that its personnel had employed in

adjusting the insurance claim of S&S. Under this formula, the loss to S&S was

measured by taking the total value of all the customized turbine equipment

contained in boxes 1-45 and then subtracting the value of the equipment contained

in boxes 2-45, equipment that was undamaged because boxes 2-45 were never on

the Rountree hauler. Pursuant to its valuation method, AHA tried to substantiate

the value of the customized equipment contained in boxes 2-45 through invoices

and witness testimony. AHA also sought to introduce certain documentary

evidence and witness testimony concerning both how it arrived at the monetary

figures in its insurance valuation and how much it paid out to S&S. The district

court refused to admit any of this documentary and testimonial evidence.

After AHA rested its case-in-chief, several parties orally moved for the

district court to direct a verdict as to the amount of proven damages. They

maintained that the court should enter judgment in favor of AHA and against

13
Rountree, CSX, and Amtrak in the amount of $1,851,822.40, which represented

41% of the damages they argued AHA had proven ($4,546,640). Orally granting

the motion, the court ruled that AHA, standing in the shoes of S&S, had proven

that S&S had incurred $4,546,640 in damages, only 41% of which AHA was

entitled to recover. The district court previously had ruled that S&S was

vicariously liable for Rountree’s negligence based on the inherent dangerousness

of transporting the combustion turbine. The court reasoned that, just as Rountree

could collect only 41% of its damages under Florida comparative fault principles,

the vicariously liable S&S (and hence AHA) could collect only 41% of the

damages incurred by S&S. Having reduced AHA’s damages, the court then denied

AHA’s request for prejudgment interest on its damages award. Since the district

court already had held that Rountree’s liability to AHA was limited to $1,000,000,

the court proceeded to enter final judgment against the Rail Companies jointly and

severally for the remaining $851,822.40.

Upon entry of final judgment,2 the turbine litigation, a train wreck in its own

2
The parties initially appealed from the final judgment issued by the district court on 15
June 2000. FMPA, however, moved to dismiss and remand because the district court had failed
to dispose of AHA’s post-judgment motion to alter or amend the judgment or for a new trial filed
pursuant to Federal Rule of Civil Procedure 59. As a consequence, we ordered that the appeal be
held in abeyance pending the district court’s resolution of the Rule 59 motion. Thereafter, the
district court signed a memorandum order disposing of the Rule 59 motion, and on 4 October
2000 the court issued an amended final judgment from which the parties now appeal.

14
right, came crashing into our court. AHA commenced appeal to seek review of

several rulings made by the district court during the damages trial. On appeal,

AHA argues that the district court erred in restricting the evidence it could

introduce to prove the amount of its damages. AHA also asserts that the court

erroneously concluded that transport of the combustion turbine was inherently

dangerous as a matter of Florida law,3 a ruling that led the court to impute

Rountree’s negligence to S&S (and thus to AHA) for damages purposes.

Moreover, AHA contends that even if S&S properly was imputed with Rountree’s

negligence, the district court erred in applying Florida comparative fault principles

to limit AHA, as subrogee of S&S, to recovering 41% of S&S’s proven damages.

Finally, AHA contends that the court mistakenly refused to grant prejudgment

interest on its damages award.

In addition to the appeal over AHA’s damages, KUA, FMPA, and B&V

have commenced appeals against GE on the issue of contractual indemnification.

They argue that the district court erred in holding that, under the indemnification

provision in the Purchasing Agreement, GE did not have to reimburse them for the

expenses they incurred in defending themselves. They maintain that the

3
S&S, GE, and Rountree also seek review of the district court’s ruling that transport of
the combustion turbine was inherently dangerous.

15
indemnification provision is applicable here because they had to defend themselves

against claims resulting from the turbine collision that arose out of GE’s failure to

have the turbine transported safely.

Finally, KUA and FMPA have commenced cross appeals against the Rail

Companies. They seek review of the district court’s grant of summary judgment to

CSX and Amtrak on the issue of contractual indemnification. They assert that, for

several reasons, the court erroneously concluded that KUA — and by extension,

FMPA4 — had to defend and indemnify the Rail Companies under the

indemnification provision in the Crossing Agreement. KUA and FMPA claim that

the indemnification provision is unenforceable based on Florida sovereign

4
In its first order related to the indemnity issue, the district court ruled that KUA had to
defend and indemnify CSX. In a later order, the court ruled that KUA had to defend and
indemnify Amtrak. In neither of these orders did the court refer to FMPA.

The Rail Companies originally sued only KUA for contractual indemnity. FMPA
subsequently filed a motion to be added as an additional defendent with regard to the
indemnification claim brought by the Rail Companies against KUA. FMPA requested that it be
added as a defendant because, under its Participation Agreement with KUA, FMPA was required
to pay 50% of any sums that KUA paid out as a consequence of the turbine litigation. The
district court granted FMPA’s motion, and after its joinder as a defendant, FMPA actively
litigated and opposed the indemnity claims against KUA in its own name.

In its amended final judgment, the district court stated that in its two summary judgment
orders regarding the indemnity issue, it had ruled that both KUA and FMPA had to defend and
indemnify the Rail Companies. This is technically incorrect because only KUA is mentioned in
those orders. But when the summary judgment orders are read in conjunction with the court’s
order concerning joinder of FMPA, and in conjunction with the terms of the Participation
Agreement, the amended final judgment is reflective of the net effect of all these rulings,
namely, that FMPA (along with KUA) is required to defend and indemnify the Rail Companies.

16
immunity law. They also raise several alternative arguments as to why they should

not have to defend and indemnify the Rail Companies. For instance, KUA and

FMPA argue that the indemnification provision is unenforceable because the

special requirements under Florida law for indemnification in “construction”

contracts have not been met. The provision also is unenforceable, they contend,

based on Florida law dealing with exculpatory, or adhesion, contracts. Indeed, the

indemnification provision is not applicable to the present case, KUA and FMPA

maintain, because the negligent actions of CSX occurred in a location separate and

apart from the railroad crossing. Finally, they assert that, even if the provision is

enforceable and applicable to the facts here, Amtrak was not covered by the

provision.

II. DISCUSSION

A. AHA’s Damages

In addressing the plethora of issues raised on appeal, we turn first to those

raised by AHA. AHA’s appeal focuses on several decisions made by the district

court, including: (1) the decision to exclude AHA’s damages evidence and to direct

a verdict on the amount of damages; (2) the decision that transport of the

combustion turbine was inherently dangerous as a matter of Florida law; (3) the

decision that Florida comparative fault principles limited AHA to recovering 41%

17
of its damages; and (4) the decision not to grant AHA prejudgment interest on its

damages. We will address each decision in turn.

1. Evidentiary Rulings

The evidentiary rulings at issue occurred as the district court oversaw the

damages trial at which AHA, as subrogee of S&S, sought to prove the damages

incurred by S&S as a result of the collision. Prior to the collision, S&S bought

certain turbine equipment, such as the turbine engine, which it then customized by

adding wiring assemblies, harnesses, and piping. It also built an enclosure for

housing the turbine equipment. S&S sold the customized equipment to GE, who

then resold the equipment to KUA for use at the Plant.

So that Rountree could transport the customized equipment to the Plant,

S&S sorted the items of equipment into forty-five separate boxes, which were

shipped at different times. Box 1 contained the combustion turbine and its

enclosure. Boxes 2-45 contained other equipment, including air filters, turbine

generator controls, a control house, and a ventilation module. Only box 1 was on

the Rountree hauler rig, and only box 1 was damaged in the collision. As a result

of the damage from the collision, S&S sold the turbine engine as scrap to GE for

$130,000. S&S subsequently filed an insurance claim with AHA, who paid out

$8,695,300 in proceeds to S&S.

18
 At the damages trial, AHA’s theory of damages was predicated on the

formula its personnel had used to adjust the insurance claim of S&S after the

collision. Under this insurance valuation formula, AHA did not measure the loss

to S&S by taking the value of the customized turbine equipment in box 1 before

the collision and subtracting the value of what was left of the equipment after the

collision. Rather, AHA measured the loss to S&S by taking the total value of all

the customized turbine equipment contained in boxes 1-45 before the collision and

then subtracting the value of the equipment contained in boxes 2-45, equipment

that went undamaged because it was shipped separately and thus was not on the

Rountree hauler rig.

To prove its damages under this formula, AHA attempted to admit into

evidence a list of invoice prices for the equipment contained in boxes 2-45, which

it argued represented the “salvage value”5 of the turbine equipment not destroyed

by the collision. The district court refused to admit this evidence. The court,

moreover, prevented several witnesses from testifying about the way in which the

loss to S&S was calculated for the insurance valuation. The court excluded

5
Both during the damages trial and on appeal, AHA has referred to the value of the
undamaged equipment in boxes 2-45 as “salvage value.” The use of this terminology only sows
confusion. The undamaged equipment in boxes 2-45 was not salvaged from the scene of the
collision because it was never present at the collision. The only salvage in this case was the
equipment contained in box 1 that was retrieved from the accident and that retained some value
even after it was damaged.

19
testimony from Dianne Furgerson, the claims adjuster for the collision, who would

have testified about the proof of loss form submitted by S&S. She also would have

testified about the subrogation receipts that showed the amount of insurance

proceeds paid to S&S in settlement of its insurance claim. Additionally, the court

excluded testimony from Carl Shook, a project manager for S&S, and Dean

Summers, a S&S corporate risk manager. They would have testified as to how

S&S calculated its loss under the insurance policy.

The district court excluded the aforementioned evidence under Federal Rule

of Evidence 401 as irrelevant and under Rule 403 as confusing to the jury. The

court excluded AHA’s evidence because it rejected the insurer’s formula for

calculating damages. In the district court’s view, AHA was limited to proving the

loss in value of the customized turbine equipment contained in box 1 (the

combustion turbine and its enclosure), the only box involved in the collision. The

court saw no basis for permitting AHA to expand the evidence it presented to

include proof as to the value of the undamaged equipment shipped separately in

boxes 2-45.

The district court, however, did permit the introduction of evidence

concerning the value of the combustion turbine engine because it was shipped in

box 1. The court allowed into evidence the invoice for the original sale of the

20
engine to S&S for $4,646,640.6 The court also allowed in evidence that S&S sold

the damaged engine for scrap to GE for $130,000. Based on the invoice and scrap

price, the district court granted judgment as a matter of law as to the amount of

damages AHA had proven, which the court calculated as $4,546,640 ($4,646,640 -

$130,000).7

In evaluating the district court’s decisions concerning the relevancy of

certain evidence of damages, we reverse only if the court abused its discretion.

Pesaplastic, C.A. v. Cincinnati Milacron Co., 750 F.2d 1516, 1524 (11th Cir.

1985). As to the district court’s grant of judgment as a matter of law on the

amount of damages, our review is de novo, and we treat the evidence presented to

the jury in the light most favorable to the nonmoving party. Willingham v.

Loughnan, 261 F.3d 1178, 1180 (11th Cir. 2001). We turn now to the Florida law

that will guide us in assessing the aforementioned rulings by the district court.

In Florida, “[t]he objective in calculating the proper measure of damages is

to place the plaintiff in the same financial position as that occupied before the

property was damaged.” Ocean Elec. Co. v. Hughes Labs., Inc., 636 So. 2d 112,

6
AHA never introduced invoices or other documentation showing the costs it incurred in
obtaining and customizing the other equipment in box 1.
7
Having ruled that AHA had proven damages in the amount of $4,546,640, the court
reduced the proven damages by 41% to $1,851,822.40. This reduction in damages is discussed
infra at sections II.A.2 & 3.

21
114 (Fla. Dist. Ct. App. 1994). A party whose chattel is harmed “is entitled to the

difference between the value before and after the damage.” Hillside Van Lines,

Inc. v. Matalon, 297 So. 2d 848, 848 (Fla. Dist. Ct. App. 1974) (per curiam); see

also American Equity Ins. Co. v. Van Ginhoven, 788 So. 2d 388, 391 (Fla. Dist.

Ct. App. 2001). Courts, however, must be careful to ensure that the party who

incurred the loss is not unjustly enriched by the damages award. Ocean Elec., 636

So. 2d at 114.

Applying these principles to this case, we rule that the district court was

correct in its exclusion of AHA’s damages evidence. The evidence that AHA

sought to introduce was meant to substantiate the damages figure arrived at by

AHA in adjusting the insurance claim of S&S. It follows that, if the formula used

by AHA to adjust the claim was an improper measure of damages under Florida

law, the admission of evidence offered to substantiate the damages figure

calculated under that formula would similarly be improper. Because we conclude

that AHA’s insurance valuation formula constitutes an improper measure of

damages, we likewise conclude that the district court correctly excluded evidence

offered to substantiate that valuation.

As we have explained, AHA’s insurance valuation formula was based on the

value before the collision of all the customized turbine equipment contained in

22
boxes 1-45, minus the value after the collision of the equipment contained in boxes

2-45, equipment that was shipped separately, was not on the Rountree hauler, and

was not involved in the collision. There is no authority under Florida law for

calculating damages in this manner. Rather, Florida law indicates that the basic

measure of damages for loss to chattels is the difference between the value of the

damaged property before and after the casualty. American Equity Ins. Co. v. Van

Ginhoven, 788 So. 2d at 391; Hillside, 297 So. 2d at 848. The focus thus is on the

property actually involved in the casualty and the resulting loss in its value caused

by any damage it sustained.

AHA did not properly constrain its focus. Instead of focusing narrowly on

the loss in value to the combustion turbine and its enclosure in box 1, AHA chose

to measure its damages by incorporating the value of equipment contained in boxes

2-45. There could be no “difference between the value before and after the

damage” with regard to such equipment, however, because it was not involved in

the underlying casualty in the first place. Hillside, 297 So. 2d at 848.

Consequently, AHA’s damages formula, and the evidence it tried to introduce in

support thereof, are inconsistent with Florida law.

AHA argues in rebuttal that the equipment contained in the forty-five boxes

constituted one item of merchandise that had been disassembled into separate

23
boxes for transport to the Plant. AHA points out that all of the customized

equipment was sold to GE by S&S as part of one sales contract. Moreover, AHA

claims that the two contracting parties, in the purchase invoice and otherwise,

treated the equipment as one LM 6000 turbine unit. In this manner, AHA argues

that the proper measure of damages is the value before the collision of the LM

6000 turbine unit (boxes 1-45) minus its value after the collision (boxes 2-45).

We disagree. This is not a contracts action, and the terminology of the sales

contract between S&S and GE is not determinative with regard to third party

tortfeasors like the Rail Companies or Rountree. AHA, moreover, cannot avoid the

fact that separate items of turbine equipment were contained in boxes 1-45, and

that only a distinct set of those items was involved in the underlying casualty. The

distinct set of items in box 1 had an independent market value that readily could be

ascertained, and so there was no good reason to complicate and confuse matters by

including boxes 2-45 in the damages calculation.

AHA’s argument would carry more weight if the separate items of turbine

equipment were so interdependent that the value of any one item could not be

ascertained without reference to the others. That is, AHA’s position would have

merit if the value of the combustion turbine and the enclosure in box 1 was so

intertwined with the value of the other equipment in boxes 2-45 that it could not be

24
separately adduced. But that is not the case here. The record, for example,

demonstrates that the value of the combustion turbine engine in box 1 could be

ascertained both before and after the accident through a purchase invoice and

through testimony regarding the scrap sale of the damaged engine. As a result, we

reject AHA’s attempt to treat boxes 1-45 as a single item of merchandise for

damages purposes.

We also note that, even if we agreed with AHA’s treatment of all forty-five

boxes as a single item of merchandise, its theory of damages still would be

fundamentally flawed. In calculating the market value of the turbine equipment in

boxes 1-45 before the collision, AHA relied on the “declared value” of that

equipment under its insurance policy with S&S. The declared value of the forty-

five boxes of equipment was $12,513,270, and this figure, in turn, was calculated

in part by factoring in the price at which S&S sold the customized equipment to

GE, $12,219,213.

The proper measure of market value “is dependent upon the choice of the

appropriate economic market which will achieve the objective of making the

injured party whole, while avoiding any unjust enrichment.” Ocean Elec., 636 So.

2d at 114. Because AHA’s insurance valuation relied in part on the price GE paid

S&S for the customized turbine equipment, AHA’s damages figure contained a

25
profit component.8 Inclusion of this component, however, would unjustly enrich

S&S, and hence AHA. After the collision, S&S customized a new combustion

turbine and turbine enclosure for the Plant and sold these replacement items to GE.

S&S thus was able to obtain its profit on the sale of the turbine and its enclosure.

To allow AHA to predicate its damages on a figure that includes such profits

8
We recognize that AHA’s insurance valuation purported to subtract out S&S’s profit
component for the equipment in boxes 2-45. But AHA has not explained how the profit figure
was generated. Even Dean Summers, the S&S corporate risk manager, indicated in his proffered
deposition that he was unsure about the figure:
Q. In your letter here you say, “I am still visiting with various individuals who may be
able to shed more light on how profits are figured.” Who were you visiting in that
regard?
A. [Dean Summers:] Probably Carl [Shook], probably Rick Stewart, other people at
Jacinto Port.
Q. And what did they tell you in terms of how much profit is in the main unit as opposed
to the auxiliary units?
A. I’m not sure they really told me anything as far as profit. I don’t have a recollection
of knowing what the profit was on the unit, whether it be as a whole or whether it be
salvage value, except what was stated here. And I couldn’t tell you how that number was
arrived at. That number was acceptable to us, [as] it was acceptable to . . . American
Home.
Q. Well, I understand it may be acceptable to both of you, but my question is what is the
basis for arriving at it?
A. I couldn’t tell you.
Mr. Karcher: Objection. Which number are you talking about now?
Mr. Roper: I was referring, and I think the witness was referring to the
profit figure on the undamaged items.
Mr. Karcher: Oh, okay.
Q. (By Mr. Roper): Is that correct?
A. Yes, sir.
Summers Dep. at 53-54 (November 5, 1999) (proffered at R138-34). It is therefore unclear
whether AHA employed a valuation methodology that reliably extricated all of S&S’s profits
with regard to boxes 2-45. In addition, and more importantly, there is no evidence that AHA
attempted to subtract out the profit component from its insurance valuation for the equipment
contained in box 1, the box most central to this case.

26
would permit the insurer “to recover lost profits that were never lost in the first

place.” Ocean Elec., 636 So. 2d at 115 (quotations omitted).9

Furthermore, AHA would be unjustly enriched even more than our analysis

at first suggests because, even if the profit component were extracted from the

declared value, the declared value still would not reflect the actual loss incurred by

S&S. Indeed, Dianne Furgerson, the claims adjuster, stated in her proffered

deposition testimony that the AHA insurance policy was not geared towards

compensating S&S for the actual cash value of the equipment that was damaged,

but was instead predicated on the invoice sales price, plus a 5% markup.10 Thus,

9
AHA seeks to justify its damages calculation, which includes a profit component, by
relying on the actual loss rule under 49 U.S.C. § 11707. Section 11707, however, is applicable
only to common carriers under the Interstate Commerce Act. AHA has presented no evidence
that any of the parties are subject to the Act. Even if AHA was correct and § 11707 applies, an
exception to the actual loss rule exists where the shipper or manufacturer can replace a shipment
at cost and suffers no loss of profit. Philips Consumer Elecs. Co. v. Arrow Carrier Corp., 785 F.
Supp. 436, 441 (S.D. N.Y. 1992). Because S&S eventually fulfilled its contract with a
replacement combustion turbine and turbine enclosure and thus did not lose its profit on the
contract, the actual loss rule does not apply, and the proper measure of damages under the
Interstate Commerce Act would be the replacement cost of the damaged goods. Oak Hall Cap &
Gown Co. v. Old Dominion Freight Line, Inc., 899 F.2d 291, 296 (4th Cir. 1990).
10
Q. So your policy is not geared at all to compensating the insured for the actual cash
value of the loss, is that what you’re saying?
A. [Dianne Furgerson:] Correct. We pay [an] insured amount.
Furgerson Dep. at 32 (November 5, 1999) (proffered and read into record at R138-18-19).
Furgerson later indicated that the insured amount, or the declared value, was premised on the
invoice sales price plus the 5% markup:
Q. That declared value, as I understand it, is a function of the invoice price plus a 5
percent add-on or markup, correct?
A. Correct.
Id. at 34 (proffered at R138-18).

27
the insurance policy calculated the amount paid to S&S in insurance proceeds not

only by factoring in the purported value of the equipment based on the invoice

sales price, which included a profit component, but also by including a 5% increase

to that amount.

The 5% markup was not based on any actual costs substantiated by S&S.

The increase, in fact, was a generic, fixed percentage that AHA had agreed to as

part of the insurance coverage.11 The inflated value attributed to the equipment as

a result of the 5% increase would lead, in turn, to the insurance formula overstating

the losses incurred by S&S when the equipment was damaged. As we have noted,

Florida law requires that courts ensure that the damages awarded for loss to chattel

do not unjustly enrich the injured party. Ocean Elec., 636 So. 2d at 114.

Accordingly, we rule that an insured party whose property has been damaged

cannot force a third-party tortfeasor to pay out in damages a negotiated figure

between insurer and insured that reflects contract terms that inflate the value of the

11
In her proffered deposition testimony, Furgerson stated that the 5% markup was
“standard” in such insurance policies and that the percentage increase was factored in regardless
of whether the insured “had any additional charges or not.” Furgerson Dep. at 35 (proffered at
R138-18). She also noted that S&S never demonstrated that it had incurred any additional costs
that would justify the 5% increase:
Q. Did Stewart & Stevenson ever provide you with any documentation that they had, in
fact, incurred a 5 percent additional cost as a result of this accident?
A. No. They are not required to.
Id. at 35.

28
property. In sum, the contractual 5% markup that was factored into the declared

value of the equipment in the insurance policy skews AHA’s damages theory,

because, like the inclusion of the profit component, it raises the specter of unjust

enrichment.

Based on the foregoing analysis, we hold that the district court did not abuse

its discretion in excluding AHA’s damages evidence. AHA’s evidence concerning

the insurance valuation of the turbine equipment contained in boxes 2-45 was

irrelevant to a proper determination of S&S’s actual damages, given that only the

equipment in box 1 was involved in the collision. Such evidence would have

confused the jury, who likely would have lost focus as to which equipment was

actually on the Rountree hauler. AHA’s evidence regarding the insurance

valuation of the damaged turbine equipment in box 1 also was irrelevant because,

by including a profit component and a generic 5% markup, it did not reflect the

loss that S&S actually sustained.

It follows that the district court did not err in granting judgment as a matter

of law in the amount of $4,546,640. The only relevant evidence concerning the

value before and after the collision of the equipment in box 1 was the invoice

representing the price of the turbine engine sold to S&S for $4,646,640, and the

evidence concerning the scrap price of the damaged turbine sold to GE by S&S for

29
$130,000. AHA failed to introduce any other witnesses or documentary evidence

that demonstrated the costs incurred by S&S in obtaining and customizing the

other equipment in box 1. AHA could have gathered this information and

presented it at trial had it chosen to do so.12 Accordingly, the district court was

correct to hold as a matter of law that AHA had proven damages totaling

$4,546,640.

2. The Inherently Dangerous Work Doctrine

a. The Inherent Dangerousness Issue

Having held as a matter of law that AHA had proven damages totaling

$4,546,640, the district court limited AHA to recovering 41% of its damages

award. The court reduced AHA’s damages based on its earlier ruling that transport

of the combustion turbine was inherently dangerous as a matter of Florida law.

Based on its ruling that transport of the combustion turbine was inherently

12
For example, with regard to the turbine enclosure in box 1, Shook, the S&S project
manager, testified to the following:
Q. AND AS YOU TOLD THE JURY YESTERDAY, YOU DO NOT KNOW AND
CANNOT TELL US HOW MUCH IT COST STEWART & STEVENSON TO
MANUFACTURE THE TURBINE ENCLOSURE, IS THAT CORRECT, SIR?
A. [Carl Shook:] I DID NOT PUT ANY COST TOGETHER TO REPRESENT WHAT
THE BALANCE OF THAT PACKAGE WOULD BE, THAT’S CORRECT.
Q. AND BACK IN 1994, IF YOU HAD BEEN ASKED TO PUT TOGETHER THE
COST OF WHAT IT WAS IN THE BOX ENCLOSURE, YOU COULD HAVE DONE
THAT?
A. YES, WE COULD.
R138-45.

30
dangerous, the court had held that S&S, GE, and WOKO were vicariously liable

for Rountree’s negligent transport of the turbine. Had S&S not been held

vicariously liable, Rountree’s negligence (59%) would not have been imputed to

S&S, and hence to AHA as subrogee of S&S.13 The imputation of Rountree’s

negligence to S&S, and thus to AHA, led the court to limit AHA’s recovery to

41% of the proven damages based on comparative fault principles.

On appeal, AHA, as well as S&S, GE, and Rountree (collectively, the “I.D.

Appellants”),14 challenge the district court’s decision that transport of the

combustion turbine constituted inherently dangerous work as a matter of Florida

law. We review de novo a ruling on a matter of law by the district court.

Willingham, 261 F.3d at 1180. We take the evidence presented in the light most

favorable to the nonmoving party. Id.

Under Florida law, an owner, contractor, or employer is not liable for injury

caused by an independent contractor’s negligence, unless the owner, contractor, or

employer’s own active negligence caused or contributed to the injury. Baxley v.

13
AHA does not dispute that, as subrogee of S&S, it steps in the shoes of S&S, the
subrogor. See Underwriters at Lloyds v. Lauderdale Lakes, 382 So. 2d 702, 704 (Fla. 1980).
14
It is true that the Florida Supreme Court’s answer to our certified question in section
II.A.3 may be dispositive of whether AHA’s damages properly were reduced by 41%.
Nevertheless, we proceed to address the inherent dangerousness issue because several parties
have challenged the ruling of the district court. It follows that our decision on the issue will not
become moot, regardless of how the Florida Supreme Court answers the certified question.

31
Dixie Land & Timber Co., 521 So. 2d 170, 172 (Fla. Dist. Ct. App. 1988). An

exception to this rule is the inherently dangerous work doctrine, which applies

when the work to be performed by the independent contractor “is inherently or

intrinsically dangerous.” Florida Power & Light Co. v. Price, 170 So. 2d 293, 295

(Fla. 1964) (per curiam). An activity is inherently dangerous if the “danger inheres

in the performance of the work,” and “it is sufficient if there is a recognizable and

substantial danger inherent in the work, even though a major hazard is not

involved.” Id. The activity, moreover, must be such that “in the ordinary course of

events its performance would probably, and not merely possibly, cause injury if

proper precautions were not taken.” Id. If the activity is found to be inherently

dangerous, then the “one engaged in or responsible for the performance of [the]

work . . . is said to be under a nondelegable duty to perform, or have others

perform, the work in a reasonably safe and careful manner.” Baxley, 170 So. 2d at

172.

Generally, it is a fact question for the jury whether a particular activity is

inherently dangerous. Doak v. Green, 677 So. 2d 301, 302 (Fla. Dist. Ct. App.

1996) (per curiam). The trial court nonetheless may rule that an activity is

inherently dangerous as a matter of law if there is “some statute or case law

designating the activity as inherently dangerous,” or if there is a “sufficient record

32
of undisputed facts” upon which the decision can be based. Id. Indeed, Florida

courts often have held that particular activities are inherently dangerous as a matter

of law. See, e.g., Midyette v. Madison, 559 So. 2d 1126, 1128 (Fla. 1990) (holding

that clearing of land by fire is inherently dangerous as a matter of law); Bialkowicz

v. Pan Am Condominium No. 3, Inc., 215 So. 2d 767, 772 (Fla. Dist. Ct. App.

1968) (holding that installation of support pilings is inherently dangerous as a

matter of law).

Applying these standards to the present case, we conclude that the district

court had a sufficient basis for concluding that transport of the combustion turbine

was inherently dangerous as a matter of law. The court’s extensive analysis points

to several undisputed facts that warrant this conclusion. The district court noted

that the combustion turbine itself was tremendous in size, constituting an 82-ton,

14-foot high, 14-foot wide, and 57-foot long piece of machinery. The vehicle used

to transport the 82-ton turbine itself weighed over 290,000 pounds. The transport

vehicle, in fact, was an 184-foot, specially-equipped hauler consisting of a road

tractor and a hauler rig that contained three separate cargo decks. The vehicle was

over three times the length of an ordinary 18 wheeler. As further evidence of the

oversized nature of the turbine and the transport vehicle, the hauler rig had to be

equipped with special hydraulic equipment to adjust to gradations in the road.

33
 In addition to the unique dimensions and weight of the combustion turbine

and the transport vehicle, the district court pointed to the quantum of regulations

dealing with the transport of oversized items like the turbine as indicative of the

inherent dangerousness involved. The court noted that Florida strictly regulates

the transportation of oversized items like the turbine, see Florida Statute § 316.550,

and that state law specifically addresses the moving of heavy equipment across

railroad crossings. See § 316.170. The court also pointed out that the Florida

Department of Transportation, the City of Tampa, and Polk County all required

special permits before the turbine could be transported.

As further evidence of inherent dangerousness, the district court focused on

the unique preparation and the special precautions that were taken in transporting

the combustion turbine. For instance, GE and S&S used a special “transportation

broker” to arrange for the transport of the turbine on a specially-equipped vehicle.

Unique measures then had to be taken by Rountree before it could transport the

turbine; for instance, it had to coordinate and use special signs, lights, and escort

vehicles, all of which the permitting authorities mandated. A separate utility

vehicle, moreover, had to clear signs, traffic lights, overhead wires, and other

obstacles as the transport of the turbine took place. Two off-duty Florida Highway

Patrol officers in marked vehicles also were present to facilitate the transport.

34
 All of these factors, when taken together, provide ample justification for the

district court’s conclusion on the inherent dangerousness issue. It is true that

Florida precedent shows that towing of a piece of equipment is not in itself

inherently dangerous. See E.J. Strickland Constr., Inc. v. Department of Agric. &

Consumer Servs. of Florida, 515 So. 2d 1331, 1335 (Fla. Dist. Ct. App. 1987)

(towing of tractor not inherently dangerous); American Auto. Assoc., Inc. v.

Tehrani, 508 So. 2d 365, 371 (Fla. Dist. Ct. App. 1987) (operation of wrecker truck

not inherently dangerous). But the situation in the present case was drastically

different from the average towing scenario, as evidenced by the extraordinary

dimensions and weight of the combustion turbine and the transport vehicle.

Furthermore, as the district court explained, transportation of an oversized

item like the turbine is strictly regulated by Florida law, and such regulation was

one of the primary reasons the Florida Supreme Court held that the clearing of land

by fire is inherently dangerous. See Midyette, 559 So. 2d at 1128. Finally, we

point out that the use of special hydraulics on the hauler rig to raise or lower its

height makes this case similar to the operation of a crane, which Florida courts, on

numerous occasions, have held is an inherently dangerous activity. See Scott &

Jobalia Constr. Co. v. Halifax Paving, Inc., 538 So. 2d 76, 79-80 (Fla. Dist. Ct.

App. 1989); Atlantic Coast Dev. Corp. v. Napoleon Steel Contractors, Inc., 385 So.

35
2d 676, 679 (Fla. Dist. Ct. App. 1980).

b. The Collateral Negligence Issue

Even if the district court properly concluded that transport of the turbine was

inherently dangerous, the I.D. Appellants argue that the court nevertheless erred in

its vicarious liability determination because the damage in this case resulted from

Rountree’s “collateral” negligence. The I.D. Appellants claim that, even when an

owner, contractor, or employer has a nondelegable duty, such a party “is not

vicariously responsible for all torts committed by the independent contractor.”

U.S. Security Servs. Corp. v. Ramada Inn, Inc., 665 So. 2d 268, 271 (Fla. Dist. Ct.

App. 1996) (per curiam). They further contend that, based on the Restatement

(Second) of Torts § 416, an owner, contractor, or employer can be held vicariously

liable only if the independent contractor fails to take the special precautions that

need to be taken as a result of the inherent dangerousness of the activity involved.15

Conversely, the I.D. Appellants maintain that such parties cannot be held

vicariously liable for the independent contractor’s negligence that is collateral to

15
The section states in full:
One who employs an independent contractor to do work which the employer should
recognize as likely to create during its progress a peculiar risk of physical harm to others
unless special precautions are taken, is subject to liability for physical harm caused to
them by the failure of the contractor to exercise reasonable care to take such precautions,
even though the employer has provided for such precautions in the contract or otherwise.
Restatement (Second) of Torts § 416 (1965).

36
the risks inherent in the activity, such as “abnormal or unusual kinds of negligence

on the part of the contractor, or negligence in the performance of operative details

of the work which ordinarily may be expected to be carried out with proper care.”

Restatement (Second) of Torts § 426 cmt. b (1965);16 see also Security Servs., 665

So. 2d at 271.

Based on these principles, the I.D. Appellants’ position is that, even if

transport of the turbine constituted inherently dangerous work, evidence presented

at the liability trial17 shows that Rountree was collaterally negligent because its

crew failed to take routine, common-sense precautions in attempting to transport

the combustion turbine across the railroad crossing. They assert that the Rountree

crew committed ordinary negligence by choosing to disable the transport vehicle

16
The comment states in full:
The employer is required to contemplate, and to be responsible for, the negligence of the
contractor with respect to all risks which are inherent in the normal and usual manner of
doing the work under the particular circumstances. He is not required to contemplate or
anticipate abnormal or unusual kinds of negligence on the part of the contractor, or
negligence in the performance of operative details of the work which ordinarily may be
expected to be carried out with proper care, unless the circumstances under which the
work is done give him warning of some special reason to take precautions, or some
special risk of harm to others inherent in the work.
Restatement (Second) § 426 cmt. b (1965).
17
At oral argument, there was some confusion over whether the transcripts of the liability
trial had been filed with our court and whether any of the parties had been denied access to the
transcripts in composing their appellate briefs. In a joint letter from counsel dated 14 December
2001, the parties explained that the liability trial transcripts had been filed. We therefore have a
complete record before us in deciding the inherent dangerousness issue. The parties also stated
in their joint brief that no counsel of any party was claiming that he or she was denied use of the
transcripts in preparing their appellate briefs.

37
on the train tracks at the railroad crossing instead of moving the vehicle off the

tracks first, even though the crew knew that an Amtrak train was due to pass. The

Rountree crew did not fail to take special precautions related to transport of the

oversized combustion turbine and transport vehicle, in the I.D. Appellants’ view.

Rather, from their viewpoint, the crew acted with extreme recklessness, failing to

take the precautions that any ordinary driver would take at a railroad crossing.

Under these circumstances, the I.D. Appellants maintain, they should not be held

vicariously liable for Rountree’s negligent acts or omissions.18

We reject the position of the I.D. Appellants because, as the district court

properly held, Rountree’s failure to move the transport vehicle from the railroad

crossing was a function of the unique dangers that arose in transporting an

oversized piece of machinery like the combustion turbine. The basic

characteristics of the massive transport vehicle are not in dispute. The vehicle had

13 axles and 8 articulations, or pivot points. It required two drivers, one at the

18
The collateral negligence issue was raised in the appellate briefs of GE and Rountree,
but not in AHA’s brief. As a result, the Rail Companies argue that, even if we were to determine
that Rountree acted with collateral negligence, they should not be bound by this determination
on waiver grounds. The Rail Companies are appellees with respect to the appeal by AHA over
its damages award. They are not involved in the separate cross appeal over the indemnification
agreement between KUA and GE, the context within which the collateral negligence issue was
raised. Since AHA, within the context of its own appeal, did not raise the collateral negligence
issue, the Rail Companies contend that AHA should be deemed to have waived that defense with
regard to them. Because we conclude that the district court acted correctly in holding that
Rountree was not collaterally negligent, we need not resolve the waiver issue.

38
front of the vehicle, and one at the back. The vehicle, moreover, was equipped

with a special hydraulic system that could raise or lower the cargo beds to adjust to

gradations in road terrain. If gradations in the terrain were too great, the cargo

beds could then be raised further through “shimming,” the insertion of metal pieces

into certain crevices in the vehicle. R124-814. Before the crew could shim the

load, the vehicle had to be set down on pine blocks, resulting in only a few inches

of clearance between the vehicle and the road surface.

The basic facts leading up to the collision also are not in dispute.19 On the

collision date, the transport vehicle arrived at the private road grade crossing in the

late morning. The Rountree crew first attempted to turn the transport vehicle left

19
The district court’s order and memorandum on the inherently dangerous work issue, as
well as the appellate briefs filed in this case, did not make clear precisely how the transport
vehicle became immobilized on the tracks. Indeed, the appellate briefs did not reference any
specific testimony during the fourteen-day liability trial concerning whether the transport vehicle
became stuck on the tracks, or whether the vehicle instead was disabled on the tracks by the
Rountree crew. Furthermore, if the Rountree crew had disabled the vehicle on the tracks, the
appellate briefs did not make clear the crew’s rationale (or lack thereof) for doing so. Since
resolution of this question would aid us in resolving the collateral negligence issue, we asked the
parties to address the following questions in letter brief form:
Where in the transcript of the two-week liability trial (cite to volume, page, and line) is
there testimony concerning whether the hauler rig was stuck on the railroad grade
crossing when the collision occurred, or whether the crew had purposefully disabled it
there after determining that the rig could not clear the crest in the road? If the latter
occurred, was there any testimony that addressed whether the crew, having determined
that the rig could not clear the crest, had sufficient time to remove the rig from the
crossing prior to the collision?
Order to File Supplement Briefs (January 17, 2002).
The letter briefs filed in response enabled us to obtain a better picture of how the
collision occurred and of what issues were in dispute. We have incorporated this information
into the description of events leading up to the collision.

39
onto the crossing, but a utility pole prevented this maneuver. The Rountree crew

then turned the vehicle around and approached the railroad crossing from the

opposite direction in order to make a right-handed turn. Before proceeding

forward over the railroad crossing, James Garren, the project supervisor, and Ralph

Shook, the rear driver of the transport vehicle, inspected the elevation of the

crossing. To do so, Garren and Shook stood on opposite ends of the track. Garren

kneeled and “eye-balled” how far the crest of the crossing extended up Shook’s

leg. R122-1779. Garren and Shook then used a tape measure to determine the

distance from the ground to the point on Shook’s leg to which the crest extended.

They concluded that the vehicle would clear the crest of the crossing, if the vehicle

was elevated to its maximum height using the hydraulic system.

After raising the height, the Rountree crew attempted to maneuver the

transport vehicle over the railroad crossing. The crew shortly realized, however,

that even with the height of the vehicle fully extended by the hydraulic system, the

cargo beds would not clear the crest of the crossing. Consequently, the crew

stopped the vehicle on the tracks, even though members of the crew had heard that

an Amtrak train was due to pass the railroad crossing by 1:00 p.m. Instead of

backing the transport vehicle completely off the crossing, the crew disabled the

vehicle on the tracks in order to implement the shimming procedure, which would

40
raise the height of the vehicle enough to clear the crossing. The crew did so at the

direction of Garren, who believed that the vehicle could be removed from the

tracks more quickly if the crew set down the vehicle on the tracks to shim the load

than if they first attempted to maneuver it backwards off the crossing. Garren

feared that if the crew tried to back the vehicle completely off the crossing, it

would jack knife and would get stuck there. The crew proceeded to shim the load

with the transport vehicle on the tracks. After completing the shimming procedure,

but before the vehicle had time to proceed forward over the crossing, an Amtrak

train arrived and the collision occurred.

At the liability trial, the dispute over whether Rountree was negligent

focused primarily on the decision to shim the load with the transport vehicle still

on the tracks. The parties presented conflicting accounts of whether the transport

vehicle could have been backed off the crossing in a quick and safe manner.

Additionally, the parties disputed whether the Rountree crew followed a reasonable

procedure in measuring the crest of the crossing before trying to proceed with the

vehicle over the tracks. That is, they argued over whether the Garren and Shook

acted unreasonably by eye-balling the railroad crossing elevation instead of using a

more scientific, precise method of measurement.

That the dispute concerned these particular acts or omissions of the Rountree

41
crew shows that, contrary to the I.D. Appellants’ position, the present case is not

about collateral negligence. This conclusion follows from the fact that the risk that

the Rountree crew would err over whether and how to maneuver backwards the

enormous transport vehicle — with its 13 axles and 8 pivot points — is exactly the

type of dangerous risk inherent to the moving of oversized machinery in a low-

clearance, specialized transport vehicle. That a supervisor like Garren might

miscalculate whether the specialized vehicle would jack knife and get stuck is one

of the dangers inherent to the operation of a 184-foot vehicle hauling an 82-ton

piece of machinery. Moreover, that Garren and Shook would measure the height

of the crest improperly is one of the dangers that flows directly from utilization of

a low-clearance vehicle with a specially-equipped hydraulic unit for raising or

lowering cargo beds in response to terrain elevation. We therefore agree with the

district court that Rountree’s negligence resulted from its failure to take the special

precautions required for transporting an oversized combustion turbine in a

complex, specially-equipped vehicle that was sensitive to changes in terrain

gradation levels. The factual disputes in this case only reinforce this conclusion.

c. The Vicariously Liable Parties

The I.D. Appellants raise one final argument. They contend that even if

transport of the turbine was inherently dangerous, and even if Rountree did not

42
commit collateral negligence, S&S should not be held vicariously liable for

Rountree’s negligent acts or omissions.20 The I.D. Appellants contend that

Rountree’s employer, WOKO, can be held vicariously liable for Rountree’s

negligence, but not S&S, who hired WOKO but had no direct employment or

contractual relationship with Rountree. The issue here is whether a principal

(S&S) can be liable for the conduct of its contractor’s (WOKO’s) subcontractor

(Rountree). We agree with the district court on this issue and conclude that, under

the facts of this case, S&S can be held vicariously liable for Rountree’s negligence.

The parties do not dispute that S&S, through its contract with GE, was

responsible for transporting the combustion turbine to the Plant. By contracting

with GE, S&S assumed the duty of providing for the safe transport of the turbine.

As part of its contractual duties, S&S arranged for the inherently dangerous

activity of having the turbine transported in a specially-equipped vehicle. Because

transport of the turbine constituted inherently dangerous work, the duty of S&S to

provide for the safe transport of the turbine was nondelegable. See Baxley, 521

20
The I.D. Appellants apparently have decided not to challenge the district court’s
decision that GE was vicariously liable for Rountree’s negligence. The I.D. Appellants therefore
have waived their right to appeal the district court’s vicarious liability determination as regards
GE. In any event, the same rationale we apply to uphold the court’s decision as to the vicarious
liability of S&S would apply equally to its decision with regard to GE, who had a nondelegable
duty to transport the turbine safely to the Plant as a result of its Purchasing Agreement with
KUA.

43
So. 2d at 172 (stating that anyone “engaged in or responsible for” the inherently

dangerous activity has a nondelegable duty). When a duty is nondelegable,

“responsibility, i.e., ultimate liability, for the proper performance of that

undertaking may not be delegated.” Atlantic Coast, 385 So. 2d at 679. Thus, as

the district court concluded, S&S remained ultimately liable for the transport of the

turbine, even though it had contracted with WOKO to arrange for the

transportation.

3. Comparative Fault

Even if transport of the combustion turbine was inherently dangerous as a

matter of law, AHA argues that the district court nevertheless should not have

limited its recovery to 41% of its damages. As subrogee of S&S, AHA claims that,

because S&S was only vicariously liable for the collision, the district court erred in

applying Florida comparative fault principles, as enunciated in Florida Statute §

768.81, to reduce the proven damages. AHA contends that § 768.81 applies solely

to parties who are directly negligent, and that a party who is only vicariously liable

cannot have fault apportioned to him under § 768.81. This issue has not been

directly addressed by the Supreme Court of Florida. Because this issue involves

unsettled questions of state law that raise important public policy concerns, we

44
have decided to certify the issue to Florida’s highest court for resolution.

As previously noted, at the conclusion of AHA’s presentation of evidence in

the damages trial, KUA and FMPA,21 among others (collectively, the “C.F.

Appellees”), orally moved for the court to enter judgment as a matter of law in

favor of AHA and against Rountree and the Rail Companies in the amount of

$1,851,822.40, which represented 41% of $4,546,640. The district court granted

the motion. The court ruled that the subrogee AHA could recover only 41% of the

damages that it had proven were incurred by S&S because Rountree’s fault (59%)

was to be apportioned to S&S, and hence to AHA, under Florida Statute § 768.81.

Rountree’s fault was apportioned to the subrogee AHA under § 768.81 because

S&S had been held vicariously liable for, and thus had been imputed with,

Rountree’s negligence under the inherently dangerous work doctrine. Not only

was S&S legally obligated to pay damages owed by Rountree to the collision

victims, but also, through AHA, it was to have its own damages for loss of the

combustion turbine and of the enclosure reduced under § 768.81 in proportion to

Rountree’s negligence. Upon reaching this conclusion regarding the application of

§ 768.81, the district court, having ruled already that Rountree’s liability to AHA

21
KUA and FMPA enjoyed an identity of interest with the Rail Companies over the
damages awarded to AHA because the district court previously had held that KUA and FMPA
had to indemnify the Rail Companies. We discuss in detail the indemnification agreement
between KUA and CSX in section II.C.

45
was limited to $1,000,000,22 entered judgment against the Rail Companies jointly

and severally for the remaining $851,822.40.

In discussing the district court’s conclusion, we turn first to Florida Statute §

768.81, entitled “Comparative Fault.” The section states that “any contributory

fault chargeable to the claimant diminishes proportionally the amount awarded as

economic . . . damages for an injury attributable to the claimant’s contributory

fault.” Fla. Stat. Ann. § 768.81(2) (West 1997).23 The section further provides that

“[t]he court shall enter judgment against each party liable on the basis of such

party’s percentage of fault and not on the basis of the doctrine of joint and several

liability.” § 768.81(3).

AHA’s primary assertion is that the district court improperly treated

vicarious liability as synonymous with the word “fault” in § 768.81, given that

“fault,” in AHA’s view, means direct negligence. To substantiate its position,

AHA points to Florida cases that treat vicarious liability as a matter of status or

relationship, not of fault. See Nash v. Wells Fargo Guard Servs., Inc., 678 So. 2d

22
AHA does not challenge the district court’s determination that it could recover no more
than $1,000,000 from Rountree.
23
In its appellate brief, AHA references Florida Statutes Annotated § 768.81 (West 1997)
as the version of the section applicable to this case. This version was last amended in 1992,
before the turbine collision occurred. The Florida legislature amended § 768.81 in 1999, before
the damages trial over AHA’s damages took place. See Fla. Stat. Ann. § 768.81 (West Supp.
2002). FMPA argues that the 1999 version of the section should apply. The 1999 amendments,
however, did not change the substantive language quoted in the paragraph above.

46
1262, 1264 (Fla. 1996) (“We . . . hold that the named defendant cannot rely on the

vicarious liability of a nonparty to establish the nonparty’s fault.”); Mercury

Motors Express, Inc. v. Smith, 393 So. 2d 545, 549 (Fla. 1981) (“An employer is

vicariously liable . . . [for] the negligent acts of employees committed within the

scope of their employment even if the employer is without fault. This is based

upon the long-recognized public policy that victims . . . should be compensated

even though it means placing vicarious liability on an innocent employer.”)

(emphasis added); Crowell v. Clay Hyder Trucking Lines, Inc., 700 So. 2d 120,

125 (Fla. Dist. Ct. App. 1997) (“Vicarious liability awards compensate for injuries

without regard to fault.”). AHA also notes that in this case, the district court

specifically stated that S&S is an “innocent part[y] who [i]s vicariously liable for

damages which are wholly the fault of Rountree.” R100-1979-22 n.17.

As a consequence of such case law, AHA concludes that when Florida

Statute § 768.81(3) states that damages are to be apportioned based on a party’s

“percentage of fault,” it means based on a party’s direct negligence, not on a

party’s status or relationship with another party. Fla. Stat. Ann. § 768.81(3); see

also Fabre v. Marin, 623 So. 2d 1182, 1185 (Fla. 1993), overruled in part on other

grounds, Wells v. Tallahassee Mem’l Reg’l Med. Ctr., Inc., 659 So. 2d 249 (Fla.

1995) (“We conclude that [§ 768.81] is unambiguous. By its clear terms, judgment

47
should be entered against each party liable on the basis of that party’s percentage

of fault.”) (emphasis added). Indeed, AHA indicates that at least one Florida

appellate panel has interpreted Fabre as equating fault under Florida Statute §

768.81 with direct negligence. See Wal-Mart Stores, Inc. v. McDonald, 676 So. 2d

12, 20 (Fla. Dist. Ct. App. 1996), aff’d sub nom., Merrill Crossing Assocs. v.

McDonald, 705 So. 2d 560 (Fla. 1997) (stating that, in addressing § 768.81, the

Fabre court “equated a defendant’s fault with the amount of its negligence”)

(quotations omitted). The essence of AHA’s contention, therefore, is both that

Florida law consistently has drawn a sharp distinction between vicarious liability

and fault, and that this same distinction should be recognized in the application of

Florida Statute § 768.81, which refers only to fault and never specifically mentions

vicarious liability.

Additional arguments can be made in favor of AHA’s position. AHA claims

that a vicariously liable party cannot be said to have contributed to, or to have

participated in, the accident at issue in a given torts case. But the Fabre court

stated that apportionment of damages under § 768.81 is between “participants to

the accident.” Fabre, 623 So. 2d at 1185 (emphasis added). Furthermore, one can

argue that a vicariously liable party is not a joint or concurrent tortfeasor, given

that such a party is being held liable solely for the conduct of another. Some

48
Florida cases, however, have indicated that § 768.81 only applies to joint or

concurrent tortfeasors. See D’Amario v. Ford Motor Co., __ So. 2d __ (Fla.

November 21, 2001) (No. SC95881, SC96139) (per curiam) (holding that, in a

crashworthiness case between a car accident victim and an automobile

manufacturer, the third-party driver responsible for the initial collision cannot have

fault apportioned to him under § 768.81 because the third-party driver and

manufacturer are not joint or concurrent tortfeasors ); Association for Retarded

Citizens-Volusia, Inc. v. Fletcher, 741 So. 2d 520, 524-25 (Fla. Dist. Ct. App.

1999) (stating that, in an action between an injured party and an initial tortfeasor, a

health care provider who aggravates the initial injury cannot have fault apportioned

to him under § 768.81 because the physician and initial tortfeasor are successive,

rather than joint, tortfeasors).

In sum, AHA’s assertion is that a party who is only vicariously liable cannot

have another’s fault apportioned to him under § 768.81, which AHA argues only

applies to parties who are directly negligent, who actively participate in the

accident at issue, or who constitute joint or concurrent tortfeasors. The subrogee

AHA therefore contends that it should be able to recover all of the damages that it

had proven were incurred by S&S without having Rountree’s negligence

apportioned to it under § 768.81. This interpretation of § 768.81 would not harm

49
the C.F. Appellees, AHA maintains, because they still could recover their damages

from S&S as a result of S&S’s vicarious liability for Rountree’s negligence.

Moreover, irrespective of the outcome here, AHA points out that, should Rountree

seek to recover its own damages from the C.F. Appellees, Rountree still would be

required to have its damages reduced under § 768.81 as a result of its direct

negligence in causing the turbine collision.

The C.F. Appellees raise several rebuttal arguments. They too focus on the

precise wording of § 768.81. The C.F. Appellees note that under § 768.81(2), any

contributory fault that is “chargeable to the claimant” has the effect of diminishing

his or her damages “for an injury attributable to the claimant’s contributory fault.”

Fla. Stat. Ann. § 768.81(2) (emphasis added); see also Cody v. Kernaghan, 682 So.

2d 1147, 1149 (Fla. Dist. Ct. App. 1996) (noting that the doctrine of contributory

fault applies “ to reduce . . . economic . . . damages by the percentage of fault

which can be attributed to the plaintiff”). Terms like “chargeable” and

“attributable,” in the view of the C.F. Appellees, indicate that the meaning of

“fault” for purposes of § 768.81 goes beyond direct negligence. Furthermore, §

768.81(4)(b) lists several situations where comparative fault does not apply, such

as where liability is “based upon an intentional tort,” but the list does not include

situations where liability is based upon vicarious liability. Fla. Stat. Ann. §

50
768.81(4)(b). Based on this statutory language, the C.F. Appellees have a basis for

arguing that the district court did not overreach by treating S&S’s vicarious

liability as within the ambit of the term “fault” found in § 768.81.

In addition to arguing that their position synchronizes with the statutory

language of § 768.81, the C.F. Appellees claim that their position, unlike that of

AHA, accords with baseline tort principles, as pronounced in Restatement (Third)

of Torts: Apportionment of Liability § 5. Section 5 states that “[t]he negligence of

another person is imputed to a plaintiff whenever the negligence of the other

person would have been imputed had the plaintiff been a defendant.” Restatement

(Third) of Torts: Apportionment of Liability § 5 (1999). In turn, comment b of the

Restatement section states that “[w]hen a party would be responsible as a

defendant for the negligence of a third person, the negligence of the third person is

imputed to the party as a plaintiff.” Id. § 5 cmt. b. The C.F. Appellees argue that,

since the vicariously liable S&S would be charged with Rountree’s negligence if

S&S were the defendant, thus causing S&S to bear legal responsibility for any

damages owed by Rountree to collision victims, it follows that Rountree’s

negligence should be charged to S&S in this action where S&S, through AHA, is

the plaintiff.

Finally, the C.F. Appellees turn to distinguishing the cases relied on by

51
AHA, including Fabre, Nash, and Walmart. They contend that Fabre only held

that in enacting § 768.81, the Florida legislature intended for all joint or concurrent

tortfeasors who cause an accident to be included in the apportionment of fault for

that accident, even those tortfeasors who are non-parties to the suit. Fabre, 623 So.

2d at 1185. Fabre never indicated that fault under § 768.81 can only mean direct

negligence, the C.F. Appellees assert. Similarly, they maintain that Nash stands for

the proposition that it is inappropriate for a named defendant to include a non-party

on the verdict form for apportionment of damages, if the non-party is only

vicariously liable for the named defendant’s negligence. Nash, 678 So. 2d at

1264-65. Otherwise, the C.F. Appellees note, the plaintiff’s recovery against the

named defendant would be unfairly split between two parties — the named active

tortfeasor and the vicariously liable non-party — even though the liability of the

two should be coextensive under basis principles of joint and several liability. The

C.F. Appellees’ argument is that the Nash holding has nothing to do with whether a

party to an action, vicariously liable for another’s negligence, can be imputed with

the active tortfeasor’s negligence for purposes of reducing its own damages

recovery. Finally, the C.F. Appellees point out that Walmart held that a non-party

intentional tortfeasor should not be included on the verdict form for purposes of

apportioning fault under § 768.81. Walmart, 676 So. 2d at 16-23. They claim that

52
Walmart is not relevant to the vicarious liability context because the case focuses

exclusively on the interaction between intentional torts and comparative fault.

Unfortunately, there is no easy method for resolving the conflicting

interpretations of § 768.81 and of Florida precedent provided by AHA and the C.F.

Appellees. In our effort to resolve this conflict, we did locate two additional

Florida appellate decisions that deal with vicarious liability and comparative fault,

but on close analysis, neither resolves the issue raised here. In J.R. Brooks & Son,

Inc. v. Quiroz, the Florida appellate court stated that when the named defendant’s

“liability for the accident was purely vicarious in nature . . . it is obvious, contrary

to the ruling below, that the comparative fault statute, section 768.81 . . . do[es] not

apply.” 707 So. 2d 861, 863 (Fla. Dist. Ct. App. 1998). Brooks, however, held

only that a vicariously liable party is entitled to a complete set off as to settlement

amounts paid to the plaintiff by the active tortfeasor. Id. The case was about the

interaction between Florida set-off statutes and § 768.81, a different subject than

the one addressed in the present litigation. We therefore are hesitant to interpret

broadly the language of the opinion concerning the interaction between vicarious

liability and § 768.81.

Similarly, in Suarez v. Gonzalez, a case where the defendant was vicariously

liable for another’s negligence, the Florida appellate court stated that “[t]his is not

53
a situation where there were joint tortfeasors, so the comparative fault statute and

Fabre do not apply.” __ So. 2d __, __ (Fla. Dist. Ct. App. January 2, 2002) (No.

4D01-671). The case, however, was the flip-side of Nash. The appellate court

held that a non-party active tortfeasor should not be included on the verdict form

when a party defendant, who was vicariously liable for the non-party’s negligence,

already was included on that form. Id. Otherwise, like in Nash, the plaintiff’s

recovery against the named defendant would be unfairly split between two parties

even though the liability of the two should be coextensive. As with Brooks, we

refrain from broadly analogizing Suarez to the present case. It therefore is clear

that existing Florida case law does not resolve the question of how § 768.81 is to

be interpreted with regard to vicarious liability. Both sides in the present case have

good arguments for their respective interpretations of § 768.81, and the issue is one

upon which reasonable persons can disagree.

Having concluded that the comparative fault issue raised here involves an

unanswered question of Florida law that is not specifically addressed by

controlling state precedent, we certify the following question of law to the

Supreme Court of Florida for instructions:

SHOULD A VICARIOUSLY LIABLE PARTY HAVE THE
NEGLIGENCE OF THE ACTIVE TORTFEASOR APPORTIONED TO IT
UNDER FLORIDA STATUTE § 768.81 SUCH THAT RECOVERY OF
ITS OWN DAMAGES IS REDUCED CONCOMITANTLY?

54
If the Florida Supreme Court decides to accept this certification, we note that the

phrasing of the question is not meant to limit, in any way, how the court responds

to the question or analyzes the state law issues involved therein.24

4. Prejudgment Interest

After ruling that AHA could recover 41% of its proven damages, the district

court denied AHA’s request for prejudgment interest on its damages award. AHA

argues that the court erred in this regard. We review the district court’s decision on

whether to award prejudgment interest for abuse of discretion. Insurance Co. of

24
As we already noted, the parties dispute which version of Florida Statute § 768.81
applies to this case. If the Florida Supreme Court decides that a vicariously liable party should
have the active tortfeasor’s fault apportioned to it under § 768.81, then it is clear under both
versions of the section that the Rail Companies cannot be held jointly and severally liable for
AHA’s damages. See Fla. Stat. Ann. § 768.81(3) (West 1997); § 768.81(3)(c) (West Supp.
2002). That is, the fault of S&S (59%), and hence of AHA, would be greater than that of either
CSX (33%) or Amtrak (8%), in which case the Rail Companies cannot be held jointly and
severally liable for AHA’s damages
Yet, if the Florida Supreme Court decides that the active tortfeasor’s fault should not be
apportioned to the vicariously liable party, the outcome differs under the two versions of the
section. Under the earlier version cited by AHA, “with respect to any party whose percentage of
fault equals or exceeds that of a particular claimant, the court shall enter judgment with respect
to economic damages against that party on the basis of the doctrine of joint and several liability.”
Fla. Stat. Ann. § 768.81(3) (West 1997). Under this version, both of the Rail Companies would
be jointly and severally liable for AHA’s damages because the direct negligence of CSX (33%)
and Amtrak (8%) would exceed the direct negligence of S&S (0%), and therefore of AHA. Yet,
under the later version of § 768.81 that FMPA argues should apply, “[a]ny defendant found 10
percent or less at fault shall not be subject to joint and several liability.” § 768.81(3)(b)(1) (West
Supp. 2002). Amtrak thus would not be jointly and severally liable for CSX’s damages under
this later version of the section. We refrain from resolving which version of the section should
apply, however, until the Florida Supreme Court has addressed our certified question.
Otherwise, we would run the risk that our decision on the issue would become moot, in the event
that the Florida Supreme Court decides that a vicariously liable party should be apportioned the
active tortfeasor’s negligence under § 768.81.

55
North America v. M/V Ocean Lynx, 901 F.2d 934, 942 (11th Cir. 1990).

Under Florida law,25 “tort claims are generally excepted from the rule

allowing prejudgment interest, primarily because tort damages are generally too

speculative to liquidate before final judgment.” Lumbermens Mut. Cas. Co. v.

Percefull, 653 So. 2d 389, 390 (Fla. 1995). Florida law, moreover, does not

permit a prejudgment interest award unless there is “an ascertainable out-of-pocket

loss occurring at a specific time prior to the entry of the judgment.” Underhill

Fancy Veal, Inc. v. Padot, 677 So. 2d 1378, 1380 (Fla. Dist. Ct. App. 1996).

Applying these principles to the present case, we hold that the district court

acted within its discretion in not awarding prejudgment interest. As section II.A.1

of our opinion indicates, the amount of loss incurred by S&S was unclear and was

a matter of bitter dispute during the damages trial. There was no easily

ascertainable, out-of-pocket amount that AHA could point to as a dispositive

25
FMPA argues that federal law should apply on the issue of prejudgment interest
because federal question jurisdiction is proper in this case. It is true that, because Amtrak is a
federally chartered corporation that meets the requirements of 28 U.S.C. § 1349, federal question
jurisdiction is proper. See The Pacific Railroad Removal Cases, 115 U.S. 1, 11, 5 S.Ct. 1113,
1118 (1885); Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738, 817-28 (1824). If
the federal law at issue provides no substantive standards for the allowance of prejudgment
interest, however, we can use state law as a reference point for purposes “of convenience and
practicality.” United States ex rel. Georgia Elec. Supply Co. v. United States Fidelity & Guar.
Co., 656 F.2d 993, 997 (5th Cir. Unit B Sept. 1981). This is especially true here, where Florida
law has been applied throughout this litigation and where the statute at issue, 28 U.S.C. § 1349,
does not contain any substantive legal content.

56
measure of S&S’s loss. It follows the district court did not err in treating the

damages incurred by S&S as unascertainable and speculative before the time of

final judgment, and thus in refusing to grant prejudgment interest to AHA.

B. Indemnification Agreement between KUA and GE

We turn next to the appeal by KUA, FMPA, and B&V (collectively, the

“Indemnitee Appellants”) of the district court’s denial of their motions for

summary judgment on the issue of whether, under the indemnification provision in

the Purchasing Agreement, GE had to reimburse the Indemnitee Appellants for the

expenses they suffered in defending themselves. In denying their motions, the

district court ruled that, as a matter of law, the attorney’s fees and costs the

Indemnitee Appellants incurred were not within the scope of the indemnification

agreement between KUA and GE.

As we have noted, KUA contracted with GE for purchase and delivery of the

customized turbine equipment. The Purchasing Agreement between KUA and GE

included the following provision entitled “Indemnification”:

[T]he Contractor [GE] shall defend, indemnify, and hold
harmless the Owner [KUA] and its officers, directors, commissioners, agents
and employees, and the Engineer [B&V] and its partners from and against
all liability, claims, damages, losses and expenses, including reasonable
attorney[’s] fee[s], resulting from . . . injury to or death of persons (including
employees of Owner, Engineer and Contractor) or physical damage to or
physical loss of property of third parties to the extent of and on account of
any negligent act or omission of Contractor in performing the work under

57
 the Contract. . . .

R104-2060 Exh. A at GC.29 (emphasis added).26 Based on this language, the

Indemnitee Appellants moved for summary judgment, arguing that GE had to

reimburse them for attorney’s fees and costs incurred in successfully defending

themselves against liability.

In rejecting their motion, the district court relied primarily on two Florida

cases, Houdaille Industries, Inc. v. Edwards, 374 So. 2d 490 (Fla. 1979), and SEFC

Building Corp. v. McCloskey Window Cleaning, Inc., 645 So. 2d 1116 (Fla. Dist.

Ct. App. 1994). The court found the present case factually indistinguishable from

Houdaille and SEFC Building, both of which state that the indemnitor does not

have to indemnify the indemnitee unless the indemnitee is found to be without

fault. See Houdaille, 374 So. 2d at 492-93; SEFC Bldg., 645 So. 2d at 1117. That

is, both cases provide that, under Florida law, one party has to indemnify another

only if the latter’s liability is founded on the former’s wrongdoing, not on its own.

Id.; SEFC Bldg., 645 So. 2d at 1117. The only time a party can be indemnified for

its own wrongful acts is if the indemnity contract “express[es] such an intent in

clear and unequivocal terms.” SEFC Bldg., 645 So. 2d at 1117.

26
The indemnification provision does not specifically mention FMPA. Because the
district court ruled that the expenses incurred by the Indemnitee Appellants did not fall within
the contours of the provision, the court did not reach the question of whether FMPA was covered
by the indemnification agreement between KUA and GE.

58
 Based primarily on these cases, the district court denied the summary

judgment motions and held as a matter of law that the Indemnitee Appellants could

not obtain attorney’s fees and costs under the indemnification provision. The court

noted that, if the Indemnitee Appellants had been held liable at trial, it would have

been due to their own negligence, not that of GE. This is because, the district court

maintained, it had been established that the Indemnitee Appellants could not be

held vicariously liable for GE’s acts or omissions. Based on Houidaille and SEFC

Building, the court concluded that none of the Indemnitee Appellants would have

been entitled to indemnification had they been held liable for the claims brought

against them.27 Since the Indemnitee Appellants would not have been entitled to

indemnification from GE had they been held liable, the court decided that the

Indemnitee Appellants were not entitled to recover attorney’s fees and costs in

defending themselves against such liability.

We review de novo the district court’s decision concerning a motion for

summary judgment, applying the same standard as the district court. Mitchell v.

USBI Co., 186 F.3d 1352, 1354 (11th Cir. 1999). A district court may grant

summary judgment “if the pleadings, depositions, answers to interrogatories, and

27
At the liability trial, the jury had determined that Rountree was 59% at fault for the
collision, CSX was 33% at fault, and Amtrak was 8% at fault. The Indemnitee Appellants had
been cleared of any liability for the turbine collision.

59
admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to a

judgment as a matter of law.” Fed. R. Civ. P. 56(c) (2001).

The Indemnitee Appellants raise several arguments as to why the district

court erred by failing to grant them reimbursement for attorney’s fees and costs.

Their best argument, however, is that the district court failed to consider Florida

cases like Florida Department of Transportation v. Southern Bell Telephone &

Telegraph Co., 635 So. 2d 74, 78 (Fla. Dist. Ct. App. 1994), and J.A. Jones

Construction Co. v. Zack Co., 232 So. 2d 447, 450 (Fla. Dist. Ct. App. 1970),

which address indemnification agreements that specifically state that the

indemnitor has to “defend” the indemnitee. The Indemnitee Appellants point out

that the indemnification provision in the Purchasing Agreement states not only that

GE shall “indemnify[] and hold harmless” KUA and others, but also that GE shall

“defend” these parties. R104-2060 Exh. A at GC.29. The Indemnitee Appellants

assert that the district court failed to consider the duty to defend created by the

contractual language and the case law associated therewith. Instead, the court

primarily relied on Houidaille and SEFC Building, cases that do not involve

indemnity provisions containing a duty to defend.

Florida precedent distinguishes between two duties in the contractual

60
indemnification context: (1) the duty to indemnify and hold harmless the

indemnitee, and (2) the duty to defend the indemnitee. See Southern Bell, 635 So.

2d at 78 (noting that the “duty to defend is entirely separate from [the] right to

indemnification”); J.A. Jones, 232 So. 2d at 450 (same). The duty to defend is

triggered based on “the nature of the claim” alleged against the indemnitee,

“regardless of whether the party asserting the claim should win or lose upon a final

determination of the suit.” J.A. Jones, 232 So. 2d at 450; see also Southern Bell,

635 So. 2d at 78. The indemnitor must defend the indemnitee if the underlying

facts contained in the complaint can be fairly read to support a claim covered by

the indemnification provision. Metropolitan Dade County v. CBM Indus. of

Minnesota, Inc., 776 So. 2d 937, 938 (Fla. Dist. Ct. App. 2001). If the lawsuit

involves “a covered claim and a claim which is not covered by the indemnity

agreement, then the duty to defend extends to the entire lawsuit.” Metropolitan

Dade County v. Florida Aviation Fueling Co., 578 So. 2d 296, 298 (Fla. Dist. Ct.

App. 1991) (per curiam).

The Indemnitee Appellants contend that the district court should have

followed the methodology of duty-to-defend cases like CBM Industries and hence

should have focused solely on whether any of the claims brought against the

Indemnitee Appellants were covered by the indemnification provision. They argue

61
that, under cases such as Florida Aviation, so long as one of the claims alleged was

that the Indemnitee Appellants were vicariously liable for GE’s negligence, this

was enough to trigger GE’s duty to defend them against all claims raised in the

litigation. The district court, however, did not focus on whether such claims had

been raised against the Indemnitee Appellants; instead, the court focused on

whether such claims would be successful, concluding that “none of [the three]

parties can be held vicariously or constructively liable for GE’s negligence.”

R104-2086-8.

Had the indemnification provision in the Purchasing Agreement stated that

GE had to defend the Indemnitee Appellants and went no further, we would agree

with the Indemnitee Appellants’ argument. It is clear that the district court did not

follow the methodology commonly employed by Florida courts in the duty-to-

defend context, where the focus is on the claims raised against the indemnitee, not

on the ultimate success of such claims. See CBM Indus., 776 So. 2d at 938; J.A.

Jones, 232 So. 2d at 450. Nevertheless, we agree with the result reached by the

district court because the plain language of the indemnification provision in the

Purchasing Agreement trumps the rules that would otherwise apply in the duty-to-

defend context.

Contract interpretation normally raises questions of law for the court to

62
resolve. DEC Elec., Inc. v. Raphael Constr. Corp., 558 So. 2d 427, 428 (Fla.

1990). In interpreting an indemnity agreement, courts are to look to “the logical

meaning and intent of the contract.” Misener Marine Constr. Co. v. Southport

Marine, Inc., 377 So. 2d 757, 758 (Fla. Dist. Ct. App. 1979). In so doing, courts

are to remember that “[w]ords in an instrument should be given their natural or

most commonly understood meaning.” Tropabest Foods, Inc. v. Florida Dep’t of

Gen. Servs., 493 So. 2d 50, 51-52 (Fla. Dist. Ct. App. 1986).

The indemnification provision here states that GE has to pay the damages,

losses, and expenses (including attorney’s fees) of the Indemnitee Appellants only

“to the extent of and on account of any negligent act or omission of Contractor

[GE] in performing the work under the Contract.” R104-2060 Exh. A at GC.29

(emphasis added). It does not provide, in a manner similar to some indemnity

agreements, that GE must make such payments for damages, losses, or expenses

that may arise out of a negligent act or omission of GE. Cf. CBM Indus., 776 So.

2d at 938. Rather, the wording here is much closer to the indemnity agreement at

issue in Westinghouse Electric Corp. v. Prudential Insurance Co. of America, the

language of which limited the indemnitor’s payment of claims and expenses to

situations where “liability [was] imposed by law.” 547 So. 2d 721, 721 (Fla. Dist.

Ct. App. 1989). Consequently, we conclude that the “to the extent of and on

63
account of” language indicates that any payment of attorney’s fees or other

expenses is limited to situations where GE itself has been found negligent.

Because the district court held as a matter of law that GE was free of direct

negligence for the collision, GE is not required to reimburse the Indemnitee

Appellants for their attorney’s fees or other expenses incurred in defending

themselves.

In response to this interpretation of the indemnification provision, the

Indemnitee Appellants argue that the phrase “negligent act or omission” in the

provision means either direct negligent or vicarious liability. Since GE was held

vicariously liable for Rountree’s transport of the turbine, the Indemnitee

Appellants contend that any contractual condition placed on the payment of

attorney’s fees or expenses has been met. We disagree with the Indemnitee

Appellants’ argument because the word “negligent” contained in the

indemnification provision cannot be read to encompass vicarious liability without

unnaturally expanding its meaning.

Florida law provides that negligence occurs when a person, by some act or

omission, “fail[s] to use reasonable care.” Moransais v. Heathman, 744 So. 2d

973, 976 n.4 (Fla. 1999). In contrast, vicarious liability involves “[t]he imposition

of liability on one person for the actionable conduct of another, based solely on a

64
relationship between the two persons.” Blacks Law Dictionary 1566 (6th ed.

1990). In other words, a person is held negligent based on his or her own failure to

exercise reasonable care, but a person is held vicariously liable based on another’s

failure to exercise reasonable care. It follows that the words “negligent” and

“vicarious liability” are not interchangeable because, in terms of liability, the latter

is a more expansive concept than the former. Had the parties instead meant for

both terms to apply to the provision, they could have chosen a word like “liability”

instead of “negligent.” Furthermore, even if the word “negligent” was ambiguous

as to whether it included vicarious liability, “[i]n construing an indemnity

provision not given by one in the insurance business but given as an incident to a

contract . . . the indemnity provision must be construed strictly in favor of the

indemnitor.” Westinghouse Elec., 547 So. 2d at 722. Any ambiguity in the word

“negligent” thus should be construed in favor of GE to exclude vicarious liability

from its scope.

In sum, the indemnification provision in the Purchasing Agreement placed

upon GE both a duty to indemnify and hold harmless and a duty to defend. The

district court failed to consider Florida precedent that addresses the duty to defend,

instead focusing solely on precedent that addresses the contractual duty to

indemnify and hold harmless. The district court, however, reached the correct

65
result because the plain language of the indemnification provision trumped the

rules that otherwise would apply in the duty-to-defend context. More specifically,

the provision required that GE be held directly negligent for the collision before it

could be required to reimburse the other parties for their attorney’s fees or other

legal expenses incurred in defending themselves. Because the district court

concluded that, as a matter of law, GE was not negligent, the Indemnitee

Appellants are not entitled to reimbursement for their attorney’s fees and costs.

Accordingly, we affirm on the indemnification issue because we can do so “as long

as the judgment entered is correct on any legal ground regardless of the grounds

addressed, adopted, or rejected by the district court.” Ochran v. United States, 273

F.3d 1315, 1318 (11th Cir. 2001) (quotations omitted).

C. Indemnification Agreement between KUA and CSX

As previously mentioned, KUA entered into the Crossing Agreement with

CSX to ensure that there would be vehicular and pedestrian access to the Plant.

Under the Crossing Agreement, CSX granted KUA a license to construct, use, and

maintain a private road grade crossing across CSX’s railroad tracks. Section 14 of

the Crossing Agreement, entitled “RISK, LIABILITY, INDEMNITY,” addresses

KUA’s duty to defend and indemnify CSX in return for receiving the license.

Section 14.1 states:

66
 Licensee [KUA], recognizing that Railroad’s [CSX’s] operations and any
use of Railroad property, tracks and right-of-way involves increased risks,
expressly assumes all risk of loss and damage to, and waives any right to ask
or demand for, Property of Licensee, or any part thereof, at the Crossing
including loss of or interference with the use of service thereof, regardless of
cause. . . .

R53-1172 Exh. A at 14.1. Section 14.2 further provides that KUA “assumes all

liability for, and releases and agrees to defend, indemnify, protect and save

Railroad harmless from and against [designated losses and casualties] regardless of

cause, even if occurring or resulting from the sole or joint fault, failure or

negligence of Railroad.” Id. at 14.2. In addition, the Crossing Agreement requires

that KUA not only defend and indemnify CSX, but also “any other company . . .

whose property at [the crossing] may be leased or operated by the undersigned

Railroad,” as well as “any parent, subsidiary or affiliated system companies of

Railroad.” Id. at 1.2.

Based on the indemnification provision found in the Crossing Agreement,

the Rail Companies moved for summary judgment and asked the district court to

rule as a matter of law that KUA had to indemnify them against all property loss or

damage they incurred as a result of the collision. They also asked the court to rule

that KUA had to defend them against all claims for property damage or personal

injury in the turbine litigation, and to rule that KUA had to indemnify them against

any liability incurred as a result of such claims. The court granted summary

67
judgment in favor of CSX but denied Amtrak’s motion because material issues of

fact remained in dispute. Later, after the liability trial, the district court granted

Amtrak’s renewed motion for summary judgment, holding that KUA had to defend

and indemnify Amtrak to the same extent that it had to defend and indemnify CSX

because the Amtrak train constituted property that was “operated by” CSX at the

time of the collision. See id. at 1.2.

On appeal, KUA and FMPA28 (collectively, the “Utility Appellants”) present

several arguments as to why we should reverse the district court’s grant of

summary judgment to the Rail Companies. The Utility Appellants’ first assertion

is that the indemnity provision is void and unenforceable because, absent specific

legislative authority, KUA could not waive its sovereign immunity beyond what

was authorized by Florida Statute § 768.28.29 They also contend that the

indemnity provision is void and unenforceable under Florida Statute § 725.06

because its terms failed to meet the requirements for such provisions when

contained in “construction” contracts. Additionally, the Utility Appellants

maintain that due to the indemnity provision, the Crossing Agreement constituted

28
For an explanation as to why FMPA is required to defend and indemnify the Rail
Companies if KUA is required to do so, see supra note 4.
29
The State of Florida filed an amicus curiae brief in support of the Utility Appellants on
the sovereign immunity issue.

68
an exculpatory, or adhesion, contract and that, for this reason, there was a question

of fact for the jury as to whether CSX possessed a superior bargaining position in

the execution of the Crossing Agreement. They argue, moreover, that the

indemnity provision is inapplicable under the facts of this case because the

negligent actions of CSX occurred in a location separate and apart from the

railroad crossing. Finally, the Utility Appellants contend that the district court

erred in ruling that Amtrak was a beneficiary of the indemnity agreement between

KUA and CSX.

We need not address all of the Utility Appellants’ arguments at this time. As

we shall explain, the state sovereign immunity issue raised by the Utility

Appellants has not been directly resolved by the Supreme Court of Florida. The

issue involves unsettled questions of state law that raise important public policy

concerns, and so we have decided that, like the comparative fault issue raised in

this case, it should be certified to Florida’s highest court for resolution. Since the

Florida Supreme Court’s decision on the state sovereign immunity issue might be

dispositive of the Crossing Agreement dispute, we refrain from addressing the

Utility Appellants’ other arguments challenging the indemnity provision until the

Florida Supreme Court has spoken.

Under Florida law, the baseline norm is that sovereign immunity applies to

69
actions where the state is a party, but “[p]rovision may be made by general law for

bringing suit against the state as to all liabilities now existing or hereafter

originating.” Florida Const. art. X, § 13. Only the Florida Legislature has

authority to enact a general law that waives the state’s immunity. Manatee County

v. Longboat Key, 365 So. 2d 143, 147 (Fla. 1978). In the torts context, the Florida

Legislature has authorized a limited waiver of state sovereign immunity through

the enactment of Florida Statute § 768.28, which provides in part that:

Actions at law against the state or any of its agencies or subdivisions to
recover damages in tort for money damages against the state or its agencies
or subdivisions for injury or loss of property, personal injury, or death
caused by the negligent or wrongful act or omission of any employee of the
agency or subdivision while acting within the scope of his office or
employment under circumstances in which the state or such agency or
subdivision, if a private person, would be liable to the claimant, in
accordance with the general laws of this state, may be prosecuted subject to
the limitations specified in this act. . . .

Fla. Stat. Ann. § 768.28(1) (West 1997).30 Section 768.28(5) further provides that

state liability is limited to $100,000 per claimant and $200,000 per accident, unless

the Florida Legislature enacts legislation to pay a particular claim in whole or in

part. In contrast, the Supreme Court of Florida has held the limitations imposed by

§ 768.29 do not apply in actions brought against the state for breach of contract.

30
Section 768.28 subsequently has been amended. See Fla. Stat. Ann. § 768.28 (West
Supp. 2002). The substantive language of the section that is important in this case, however,
has not been changed.

70
Pan-Am Tobacco Corp. v. Department of Corrections, 471 So. 2d 4, 5 (Fla. 1984).

Based on these sovereign immunity principles, the Utility Appellants argue

that the indemnification agreement between KUA and CSX waived state sovereign

immunity in tort beyond the limits imposed by § 768.28.31 The indemnification

provision does not limit the amount KUA has to pay out per claimant and per

accident, as specified in § 768.28(5). Nor does the provision limit payment by

KUA to situations where the property loss or personal injury is caused by a

negligent act or omission committed by one of its employees. See § 768.28(1).

In contrast, the indemnity provision does require KUA to defend and

indemnify CSX against all claims and liability for property damage or personal

injury “connected in any manner with the construction, reconstruction,

maintenance, existence, use, condition, repair, change, relocation or subsequent

removal of [the] Crossing.” R53-1172 Exh. A at 14.2(C). Indeed, in the present

case, the Rail Companies seek reimbursement even though KUA was cleared of all

negligence for the collision, and even though the Rail Companies never had to

defend against a claim that they were vicariously liable for negligent misconduct

by KUA. Thus, the Utility Appellants contend, the terms of the indemnification

provision go far beyond what is authorized by Florida Statute § 768.28. They

31
The parties do not dispute that the Utility Appellants are agencies of the state for
sovereign immunity purposes.

71
maintain that, as a result, we should not give effect to the terms of the

indemnification provision. See Evanston Ins. Co. v. Homestead, 563 So. 2d 755,

758. (Fla. Dist. Ct. App. 1990) (per curiam) (“A contract may not give validity to

an illegal act, notwithstanding upon whom the hardship should fall”).

There is case law that appears to support the Utility Appellants’ position.

For instance, in Evanston, a Florida city bought an excess professional liability

insurance policy that provided coverage to the city for tort claims that exceeded

$500,000. If the insurance company settled a claim, the policy required the city to

reimburse the company for the retained limit, $500,000. The insurance company

settled a medical malpractice claim against the city for $2,700,000 and sought

reimbursement of $500,000. The city refused, instead agreeing to reimburse the

company only for $200,000, the maximum waiver of sovereign immunity allowed

under § 768.28. The insurance company brought suit, alleging that § 768.28 did

not apply because the suit was for breach of contract. The Florida court disagreed,

holding that the insurance contract could not be used to circumvent the limits of §

768.28. Evanston, 563 So. 2d at 757-58. Similarly, in Seaboard Air Line Railroad

Co. v. Sarasota-Fruitville Drainage District, the Fifth Circuit held that an unlimited

indemnity agreement between a Florida drainage district and a railroad was void as

against public policy because the district could not be compelled to do through an

72
indemnification contract what it could not be compelled to do in a torts damages

suit. 255 F.2d 622, 623-24 (5th Cir. 1958).

Based on cases like Sarasota-Fruitville, the argument goes, an

indemnification agreement between a state agency and a private company, like the

one between KUA and CSX, cannot be used to circumvent the dictates of § 768.28.

That is, KUA should not be compelled, based on an indemnification agreement, to

pay out funds that it could not be compelled to pay out in a torts damages suit.

This assertion is buttressed by another case, Donisi v. Trout, 415 So. 2d 730 (Fla.

Dist. Ct. App. 1981). In Donisis, the state appellate court held that an

indemnification agreement between a city and its employee was void in so far as it

required the city to reimburse the employee in an amount that exceeded the limits

imposed by § 768.28. 415 So. 2d at 730-31.

The Utility Appellants also point to several opinions by the Attorney

General of the State of Florida to solidify their position.32 They argue that these

opinions demonstrate that a state agency is prohibited from entering into an

indemnity agreement if it fails to comply with the limits imposed by § 768.28 —

like the agreement entered into between KUA and CSX — unless the agency is

32
“Although an opinion of the [Florida] Attorney General is not binding on a court, it is
entitled to careful consideration and generally should be regarded as highly persuasive” on
matters of Florida law. Florida v. Family Bank of Hallandale, 623 So. 2d 474, 478 (Fla. 1993).

73
otherwise authorized to do so by the Florida Legislature. For instance, in Opinion

2000-22, the Florida Attorney General concluded that no state law authorized a

county to enter into an indemnification agreement that increased the limits of

liability beyond what § 768.28 allows. Fla. Op. Att’y Gen. 2000-22 (April 4,

2000). Similarly, in Opinion 90-21, the Attorney General concluded that the

Department of Corrections did not have statutory authority to enter into an

indemnity agreement with a private company that circumvented the limitations

imposed by § 768.28. Fla. Op. Att’y Gen. 90-21 (March 20, 1990); see also Fla.

Op. Att’y Gen. 95-12 (February 9, 1995) (stating that no statute authorized the

Department of Health and Rehabilitative Services to agree by contract to indemnify

another governmental entity in a manner that altered the state’s immunity under §

768.28).

In rebuttal to these arguments, the Rail Companies assert that the Utility

Appellants cannot rely on § 768.28 because it only governs torts actions. In

Provident Management Corp. v. Treasure Island, the Florida Supreme Court stated

that § 768.28 “applies only when the government entity is being sued in tort” and

when the “damages . . . flow from . . . tortious conduct.” 796 So. 2d 481, 486 (Fla.

2001). In contrast, the Rail Companies contend, the present case involves a suit for

breach of contract, namely, the failure by KUA to fulfill its contractual obligation

74
to defend and hold harmless the Rail Companies. Breach of contract claims, the

Rail Companies claim, are governed by the rule enunciated in Pan-Am. In Pan-

Am, the Florida Supreme Court stated that “[i]n section 768.28 . . . the legislature

has explicitly waived sovereign immunity in tort. There is no analogous waiver in

contract. Nonetheless, the legislature has, by general law, explicitly empowered

various state agencies to enter into contracts.” 471 So. 2d at 5. The court then

went on to hold that “where the state has entered into a contract fairly authorized

by the powers granted by general law,” sovereign immunity does not apply to the

breach of contract action. Id.

According to the Rail Companies, Pan-Am indicates that, as long as KUA

was fairly authorized by general law to enter into contracts like the Crossing

Agreement, sovereign immunity does not protect KUA from the breach of its

contractual duty to defend and indemnify the Rail Companies. To show that KUA

was fairly authorized to enter into the Crossing Agreement, the Rail Companies

point to several provisions of Florida law: (1) the powers given municipalities

under article VIII, § 2(b) of the Florida Constitution; (2) the Municipal Home Rule

Powers Act, Florida Statute § 166.021; (3) the Florida Interlocal Cooperation Act,

Florida Statute § 163.01; and (4) the Joint Power Act, Florida Statute §§ 361.10-

361.18.

75
 The Rail Companies’ argument is buttressed by the fact that the cases that

appear to support the Utility Appellants’ position can be distinguished. Evanston,

for instance, failed to address Pan-Am and failed to discuss how the latter decision

might affect the sovereign immunity analysis contained therein. Moreover, Donisi

was decided prior to Pan-Am, as was Sarasota-Fruitville. Furthermore, in contrast

to such cases, the Rail Companies point to a Florida case, Jacksonville v. Franco,

where the court upheld an indemnification agreement between a city and a private

railroad because the “clear and unequivocal language” of the contract put the city

on notice of its contractual obligations. 361 So. 2d 209, 211 (Fla. Dist. Ct. App.

1978) (quotations omitted).

The Rail Companies also contrast the Fifth Circuit decision in Sarasota-

Fruitville with Seaboard Air Line Railroad Co. v. Crisp, where the Fifth Circuit

held that a Georgia county could not assert a sovereign immunity defense when it

had entered into a license with a private railroad under which the county assumed

liability for damage occasioned to a railroad embankment. 280 F.2d 873, 877 (5th

Cir. 1960). The county had entered into the license as part of its efforts to build a

hydroelectric dam. The Fifth Circuit distinguished the case from Sarasota-

Fruitville and concluded that, because operation of the dam was a business

operation, the county should be treated like any other business that breaches a

76
contract, thus rendering sovereign immunity inapplicable. Id. Similarly, the Rail

Companies argue that operation of the Plant by the Utility Appellants is itself a

business operation, and so the Utility Appellants should be treated like any other

business that breaches a contract.

In addition, the Rail Companies respond to the Utility Appellants’ citation

to opinions of the Florida Attorney General. The Rail Companies argue that these

opinions are misleading because the Attorney General, in issuing his opinions, has

applied a stricter standard than that provided for in Pan-Am. They maintain that

the Attorney General has erroneously failed to apply Pan-Am and has instead

concluded that state agencies have no authority to enter into indemnification

agreements that exceed the dictates of § 768.28, unless a Florida statute

specifically indicates otherwise. In contrast, the Rail Companies contend that Pan-

Am makes clear that an indemnification agreement between a state agency and

private party is binding and enforceable as long as it is part and parcel of a contract

that itself was “fairly authorized” by Florida law. 471 So. 2d at 5.

Finally, the Rail Companies argue that, even if Pan-Am does not apply and

§768.28 controls, the Utility Appellants did not violate § 768.28 by entering into

the indemnification agreement.33 The Rail Companies note that § 768.28(18)

33
The Rail Companies also contend that, even if the indemnification provision in the
Crossing Agreement is invalid, the Utility Appellants should not be heard to so complain

77
specifically provides that when state agencies contract with one another, “[s]uch a

contract must not contain any provision that requires one party to indemnify or

insure the other party for the other party’s negligence or to assume any liability for

the other party’s negligence.” Fla. Stat. Ann. § 768.28(18). By negative

implication, they assert, § 768.28 authorizes state agencies to agree by contract to

defend and indemnify private parties as they so choose. In any event, the Rail

Companies contend that the Florida Interlocal Cooperation Act, Florida Statute §

163.01(15)(k),34 exempts the Utility Appellants from the limitations of § 768.28.

In reply to the arguments of the Rail Companies, the Utility Appellants

because the doctrine of estoppel applies in this case. We will address this argument, if need be,
after the Florida Supreme Court speaks to the sovereign immunity issue raised in this case.
34
The provision states in part:
The limitations on waiver in the provisions of s. 768.28 or any other law to the contrary
notwithstanding, the Legislature, in accordance with s. 13, Art. X of the State
Constitution, hereby declares that any such legal entity or any public agency of this state
that participates in any electric project waives its sovereign immunity to:
....
2. Any person in any manner contracting with a legal entity of which any such
public agency is a member, with relation to:
a. Ownership, operation, or any other activity set forth in sub-subparagraph
(b)2.d. with relation to any electric project; or
b. The supplying or puchasing of services, output, capacity, energy, or any
combination thereof.
Fla. Stat. Ann. § 163.01(15)(k) (West 1997). The Florida Interlocal Cooperation Act
subsequently has been amended. See Fla. Stat. Ann. § 163.01 (West Supp. 2002). The
substantive language at issue here, however, has not been changed.
KUA and FMPA entered into a Participation Agreement to facilitate construction of the
Plant. As KUA acknowledges in its Motion to Correct Misstatement of Fact Contained in the
Reply Brief, this agreement was entered into pursuant to the authority granted by § 163.01. The
Florida Interlocal Cooperation Act therefore is relevant to this case. The Utility Appellants,
however, dispute the meaning attached to § 163.01(15)(k) by the Rail Companies.

78
argue that Pan-Am is irrelevant to the present case and that § 768.28 applies. They

claim that there is a distinction between contracts in which a state agency offers to

pay for goods or services, and indemnification contracts, where the agency agrees

to assume the tort liability of a private party. Pan-Am, the Utility Appellants

maintain, was limited to situations where a state agency breaches a contract to pay

for goods or services from a private party. Furthermore, they assert that, even if

Pan-Am does apply, KUA was not “fairly authorized” under any Florida statute to

enter into the species of contract at issue here, namely, an indemnification contract

in which it assumed the tort liability of a private party. 471 So. 2d at 5. In

contrast, other state agencies explicitly have been given the authority to enter into

indemnification agreements. See Florida Statute § 161.101(4) (authorizing the

Department of Environmental Protection to enter into indemnification agreements

to effectuate beach erosion control); § 255.559(1) (authorizing state agencies to

enter into indemnification agreements with asbestos consultants).

Upon reviewing all of these arguments, we have concluded that there is no

clear answer, based on Florida precedent, for resolving this sovereign immunity

dispute and the important public policy concerns associated therewith. It is an

unsettled question whether the indemnification agreement entered into between

KUA and CSX is controlled by § 768.28. It also is unsettled whether the

79
agreement should be governed by the sovereign immunity rule for breach-of-

contract actions, as laid down in Pan-Am. Indemnification agreements appear to

occupy a grey area between two lines of Florida precedent that address state

sovereign immunity, one of which deals with torts actions, the other with breach-

of-contract actions. Moreover, even if Pan-Am applies, it is unclear, under existing

Florida precedent, if KUA loses its sovereign immunity protection only if it had

statutory authority to enter into the particular species of contract at issue here, an

indemnification contract, or if KUA loses such protection as long as it had general

statutory authority to contract with private parties.

Concluding that the sovereign immunity issues raised in this case involve

unanswered questions of Florida law that are not specifically addressed by

controlling state precedent, we certify the following three questions of law to the

Supreme Court of Florida for review:

GIVEN THAT KISSIMMEE UTILITY AUTHORITY, A MUNICIPAL
AGENCY UNDER FLORIDA LAW, AGREED BY CONTRACT TO
INDEMNIFY A PRIVATE PARTY, IS THE AGREEMENT
CONTROLLED BY THE RESTRICTIONS ON WAIVER OF
SOVEREIGN IMMUNITY FOUND IN FLORIDA STATUTE § 768.28?

IS THE INDEMNIFICATION AGREEMENT INSTEAD CONTROLLED
BY THE RULE FOR BREACH-OF-CONTRACT ACTIONS
ENUNCIATED IN PAN-AM TOBACCO CORP. V. DEPARTMENT OF
CORRECTIONS, 471 So. 2d 4 (Fla. 1985)?

IF PAN-AM APPLIES, DOES A MUNICIPAL AGENCY LIKE

80
 KISSIMMEE UTILITY AUTHORITY LOSE THE PROTECTION OF
SOVEREIGN IMMUNITY ONLY IF IT HAS SPECIFIC STATUTORY
AUTHORIZATION TO ENTER INTO INDEMNIFICATION
AGREEMENTS, OR IS IT SUFFICIENT THAT THE AGENCY MORE
GENERALLY HAS STATUTORY AUTHORIZATION TO CONTRACT
WITH PRIVATE PARTIES?

Our phrasing of the certified questions is not meant to limit, in any way, how the

Florida Supreme Court responds to the questions or analyzes the state law issues

involved therein, should the court decide to accept this certification.

III. CONCLUSION

These consolidated appeals ensued after the district court issued its final

judgment respecting a 1993 incident in which an Amtrak passenger train collided

with a hauler rig that was transporting a combustion turbine and turbine enclosure.

On appeal, AHA challenged several district court’s rulings that affected its

damages award. With respect to AHA’s arguments, we have ruled that the district

court correctly restricted the evidence AHA, as subrogee of S&S, could introduce

to prove the damages incurred by S&S, and we have ruled that the court correctly

directed a verdict as to the amount of damages AHA had proven. We also have

determined that the court properly held that transport of the combustion turbine

was inherently dangerous as a matter of Florida law, and that AHA was not entitled

to prejudgment interest. We have decided, however, to certify one of the issues

raised by AHA to the Florida Supreme Court for review. The issue concerns the

81
interrelationship between vicarious liability and comparative fault under Florida

Statute § 768.81. Additionally, we have heard the appeals filed by KUA, FMPA,

and B&V concerning the district court’s ruling that GE did not have to defend and

indemnify them, and we have affirmed that ruling. Finally, we have considered the

appeals of KUA and FMPA challenging the district court’s holding that they had to

defend and indemnify CSX and Amtrak. Because of the important issues of state

law sovereign immunity raised by KUA and FMPA, we have certified three

questions to the Florida Supreme Court for resolution. To assist in the

consideration of all four questions that have been certified herein, we direct the

Clerk of the Court to transmit this certificate, as well as the entire record and the

briefs of the parties, to the Florida Supreme Court. Until such time as the Florida

Supreme Court responds to our certified questions, all further proceedings in these

consolidated appeals are STAYED.

AFFIRMED IN PART AND QUESTIONS CERTIFIED.

82