Supreme Court of Kansas.

MIDWEST CRANE & RIGGING, LLC, Appellant,

v.

KANSAS CORPORATION COMMISSION, Appellee.

No. 114,168

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Opinion filed July 21, 2017

Review of the judgment of the Court of Appeals in an unpublished opinion filed August 5, 2016. Appeal from Shawnee District Court; REBECCA W. CROTTY, Judge.

Attorneys and Law Firms

Kurt S. Brack, of MDP Services, LLC, of Overland Park, argued the cause and was on the briefs for appellant.

Dustin Lee Kirk, deputy general counsel, Kansas Corporation Commission, argued the cause and was on the briefs for appellee.

Syllabus by the Court

*1 A crane permanently bolted to a truck chassis and associated necessary tools do not qualify as cargo under 49 U.S.C. § 31101(1) (2012), and the truck itself thus does not qualify as a commercial motor vehicle under the federal Unified Carrier Registration Act.

 

Opinion

The opinion of the court was delivered by Beier, J.:

 

This appeal concerns whether a truck with a crane permanently attached to it qualifies as a commercial vehicle subject to registration and fee payment under the federal Unified Carrier Registration Act (UCR). See 49 U.S.C. § 14504a (2012). The answer to this question turns on whether the crane and associated tools qualify as “cargo,” as that term is used in the Act. Because the crane and associated tools are not cargo, the truck is not a commercial vehicle subject to the registration and fee requirements.

 

 

FACTUAL AND PROCEDURAL HISTORY

Appellant Midwest Crane & Rigging, LLC, is a contractor that provides a “crane service.” One of its employees was stopped by Kansas Highway Patrol Master Trooper Christopher Beas. Beas had noticed that the truck the employee was driving did not have a license plate. He identified the truck as part of Midwest’s fleet, photographed the truck, documented the stop, and identified two possible violations: (1) failure to pay a UCR fee, and (2) failure to display a current license plate.

 

The truck’s only purpose was to provide the crane service. It has a crane permanently attached to its chassis. The driver was headed to a job site where the crane was to be used to hoist a large air conditioning unit onto the roof of a building. Otherwise the truck carried only the tools necessary to operate the crane, such as cables, shackles, and a spreader beam.

 

The license plate violation was dismissed after Midwest established that the truck was exempt from registration requirements, because it is classified as a self-propelled crane. See K.S.A. 2016 Supp. 8-128(b); State v. Zeit, 39 Kan. App. 2d 364, 180 P.3d 1068 (2008). But the UCR issue remained, and the Kansas Corporation Commission fined Midwest $300 for failure to register and pay the fee required by the Act. See 49 U.S.C. § 14504a(a)(1)(A)(ii).

 

Midwest requested a hearing to challenge the UCR violation.

 

The resulting administrative hearing focused on whether the truck qualified as a commercial motor vehicle under the Act, which requires a “motor carrier” to pay a fee based on the size of its fleet of “commercial motor vehicles.” The debate largely centered on the meaning of “cargo,” as used in the definition of “commercial motor vehicle” under the Act. See 49 U.S.C. § 31101(1) (2012) (“ ‘commercial motor vehicle’ means … a self-propelled or towed vehicle used on the highways in commerce principally to transport passengers or cargo” [emphasis added] ).

 

The Act is included as a part of the Motor Carrier Safety Improvement Act (MCSIA). The Commission considered not only the definition of commercial motor vehicle from the UCR but also a second definition of commercial motor vehicle from a different subsection of the MCSIA. See 49 U.S.C. § 31132(1) (2012) (subchapter III—Safety Regulations: “ ‘commercial motor vehicle’ means a self-propelled or towed vehicle used on the highway in interstate commerce to transport passengers or property”).

 

*2 In its order upholding the fine, the Commission found that “the subject vehicle is a straight truck with a crane apparatus, or personal property, attached.” In other words, it treated the term “cargo” from § 31101 and the term “property” from § 31132 as synonymous, enabling it to conclude that the truck was a “commercial motor vehicle.” The Commission therefore upheld the UCR fee assessed against Midwest.

 

Midwest petitioned for judicial review after the Commission denied a request for reconsideration. The district court treated the Commission’s interpretation as “reasonable” and affirmed, determining that it made sense to require every commercial motor vehicle subject to the safety regulations of 49 U.S.C. § 31132(1) to also be subject to a UCR fee.

 

On Midwest’s appeal to the Court of Appeals, a majority of the panel affirmed the Commission’s order, although it disagreed with its logic. Midwest Crane & Rigging, LLC v. Kansas Corp. Comm’n, No. 114,168, 2016 WL 4161384, at *11 (Kan. App. 2016) (unpublished opinion).

 

The majority ruled that “cargo” and “property” are not wholly synonymous, interpreting “cargo” to be “goods, i.e., tangible or moveable personal property, other than money, transported or conveyed by a self-propelled vehicle for commercial purposes.” Midwest, 2016 WL 4161384, at *9 (relying on definition of “cargo” from Congress’ use of term for purposes of air commerce and safety, as well as both legal and standard dictionaries).

 

Applying its definition of cargo to the truck at issue in this case, the majority held that “[i]n this commercial enterprise, Midwest’s crane, spreader beam, and tools were separate, moveable items of personal property or goods which, transported together to the worksite, were all necessary to enable Midwest Crane to hoist an air conditioner onto the roof of the building.” 2016 WL 4161384, at *10. “[T]he self-propelled vehicle in question was a commercial motor vehicle for purposes of 49 U.S.C. § 31101(1),” because “[t]he vehicle was used on the highway in commerce principally to transport the crane, spreader beam, and tools to the job site.” 2016 WL 4161384, at *10. The attachment of the crane to the truck chassis “merely [made it] easier to transport” this item of cargo “from one jobsite to another without the need for loading and unloading.” 2016 WL 4161384, at *10. “[D]espite this attachment,” the majority said, “the truck and crane retain their independent character because the crane does not in any way affect the mechanical functioning of the truck.” 2016 WL 4161384, at *10.

 

Judge G. Gordon Atcheson dissented. He would have held that the crane, “permanently affixed to the chassis of a truck and then used with the truck as a single piece of equipment on construction projects,” is not “cargo” and would have reversed the civil penalty assessed against Midwest. 2016 WL 4161384, at *17. Judge Atcheson interpreted “cargo” to mean “salable items or similar things being moved from one place to another by truck, train, or other conveyance. The objects are placed on the conveyance, transported, and then removed. They are separate from the means of conveyance.” 2016 WL 4161384, at *19. He also disagreed with the majority’s statement that the truck was used “principally” to transport cargo: “The truck-crane’s principal (and only) use depends upon the permanently attached crane. The related items would not be transported if there were no crane.” 2016 WL 4161384, at *20.

 

*3 We granted Midwest’s petition for review.

 

 

DISCUSSION

The provisions of the Kansas Judicial Review Act (KJRA) govern this appeal from the Commission’s decision. K.S.A. 77-601 et seq. We may grant relief only in limited circumstances, including when the Commission erroneously interpreted or applied the law. K.S.A. 2016 Supp. 77-621(c)(4). Resolution of the issue presented requires statutory interpretation or construction, tasks that raise questions of law subject to de novo review. Norris v. Kansas Employment Sec. Bd. of Review, 303 Kan. 834, 837, 367 P.3d 1252 (2016).

 

Whenever possible when we are interpreting a federal statute, we “ ‘should seek direction from the decision[s] of federal courts interpreting similar language.’ [Citation omitted.]” Sierra Club v. Moser, 298 Kan. 22, 48, 310 P.3d 360 (2013). Yet, absent any binding federal authority, it is within our power to blaze an interpretive trail. Sierra Club, 298 Kan. at 48.

 

We owe no deference to the Commission’s statutory interpretation. Ft. Hays State Univ. v. University Ch., Am. Ass’n of Univ. Profs., 290 Kan. 446, 457, 228 P.3d 403 (2010) (“an agency’s or board’s statutory interpretation is not afforded any significant deference on judicial review”).

 

 

Regulating Motor Carriers

Beginning in 1965, states were permitted by Congress to require motor carriers operating within their borders to register and pay a fee in order to operate lawfully. See Yellow Transp., Inc. v. Michigan, 537 U.S. 36, 39–40, 123 S. Ct. 371, 154 L.Ed. 2d 377 (2002) (explaining history of systems for registration of motor carriers); 49 U.S.C. § 13102(14) (2012) (motor carrier defined as “person providing motor vehicle transportation for compensation”). Until 2007, the registration system generally operated as a Single State Registry System, under which a motor carrier need register annually only with one state, which would satisfy the registration requirement for all participating states. See 49 U.S.C. § 14504(c) (2006) (defining single state registration system).

 

Congress then enacted the UCR to “authorize funds for Federal-aid highways, highway safety programs, and transit programs, and for other purposes.” Pub. L. 109-59. The Act, which repealed and replaced the Single State Registry System, created a Unified Carrier Registration Plan to govern the registration and the collection and distribution of fees generated. See 49 U.S.C. §§ 14504a(a)(8), (9). Each state chose whether to participate in the UCR Plan, and Kansas elected to do so. See 49 U.S.C. § 14504a(e); K.S.A. 2016 Supp. 66-1,115; K.S.A. 2016 Supp. 66-1,139a; K.A.R. 82-4-30a(c).

 

Under the UCR, a motor carrier and certain other passenger or freight carriers that operate in interstate commerce must submit a UCR registration fee to its designated base state in order to operate lawfully in the participating states. See 49 U.S.C. § 14504a(a)(2)(B), (a)(4), (a)(5); 49 C.F.R. § 392.2 (2016) (“Every commercial motor vehicle must be operated in accordance with the laws” of jurisdiction in which it is driven.). The UCR fees are shared among the participating states. 49 U.S.C. § 14504a(g), (h).

 

*4 The UCR fee amount is determined by the size of the motor carrier’s fleet of commercial motor vehicles. See 49 U.S.C. § 14504a(a)(2), (f)(1)(A)(i). For purposes of calculating fleet size, the Act adopts the definition of “commercial motor vehicle” in 49 U.S.C. § 31101(1), subchapter I of the MCSIA, which provides for general authority and state grants. The definition reads:

“ ‘[C]ommercial motor vehicle’ means … a self-propelled or towed vehicle used on the highways in commerce principally to transport passengers or cargo, if the vehicle—

“(A) has a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds, whichever is greater;

“(B) is designed to transport more than 10 passengers including the driver; or

“(C) is used in transporting material found by the Secretary of Transportation to be hazardous.” (Emphasis added.) 49 U.S.C. § 31101(1).

 

The truck stopped by Beas weighs at least 10,001 pounds; it is self-propelled and used on the highways in commerce. It is not used principally to transport passengers. In order to qualify as a commercial motor vehicle under the Act, it must be used principally to transport “cargo” to subject Midwest to the fee requirement.

 

Our primary goal when examining statutory language is determination of legislative intent. See State ex rel. Secretary of DCF v. Smith, 306 Kan. 40, 48, 392 P.3d 68 (2017). We employ “statutory interpretation, as long as the language used by the legislature is plain and unambiguous.” Ambrosier v. Brownback, 304 Kan. 907, 911, 375 P.3d 1007 (2016). We give common words their ordinary meanings. Ullery v. Othick, 304 Kan. 405, 409, 372 P.3d 1135 (2016). It is only when “the language is less than clear or is ambiguous” that the court should “move to statutory construction and use the canons of construction and legislative history and other background considerations to divine the legislature’s intent.” Ambrosier, 304 Kan. at 911.

 

We see flaws in the interpretation and application of the definition of “cargo” in both the majority and the dissent from the Court of Appeals.

 

The majority makes too much out of the fact that the crane had no role in the mechanical function of the truck. Neither the crane nor the truck truly retained any “independent character.” The truck did not merely make the crane and its associated tools “easier” to transport. Each item was meaningless and useless outside the context of the whole.

 

The dissent’s weakness is its dependence on “salability” as an indispensable attribute of cargo. While much “cargo” may be salable, not all must be. Parents who ferry children in their automobiles may refer fondly or ironically to those children as “precious cargo,” although they would never sell them or trade them.

 

Congress did not define “cargo,” as used in the UCR. When a statute does not define a term, the “words in a statute are assumed to bear their ‘ordinary, contemporary, common meaning.’ ” Walters v. Metro. Educ. Enterprises, Inc., 519 U.S. 202, 207, 117 S. Ct. 660, 136 L.Ed. 2d 644 (1997); see also In re A.M.M.–H., 300 Kan. 532, 535, 331 P.3d 775 (2014) (appellate court must first attempt to determine legislative intent by “ ‘giving common words their ordinary meanings’ ”). Dictionary definitions are good sources for the “ordinary, contemporary, common” meanings of words.

 

Black’s Law Dictionary defines “cargo” as “[g]oods transported by a vessel, airplane, or vehicle; freight (1).” Black’s Law Dictionary 255 (10th ed. 2014). “Freight” is further defined as “[g]oods transported by water, land, or air; cargo.” Black’s Law Dictionary 782 (10th ed. 2014). Merriam-Webster provides a similar definition of “cargo”: “the goods or merchandise conveyed in a ship, airplane, or vehicle.” (Online ed. 2017.) The essential character of “cargo” under these definitions is neither the mere fact of its ownership nor its salability. It is not its independence from the mechanical workings of its means of conveyance. It is its identity as goods and its amenability to and actuality of transport. Cargo is not only personal property. It need not be at the heart of or potentially at the heart of an exchange for money or one side of a barter for other goods or services. The essence of its existence is transit or the expectation or immediate aftermath of it. Speaking more metaphorically, we might also say that cargo’s essence is inevitably transitory or impermanent.

 

*5 Our recognition of this essence leads us to agree with a federal district court judge in Massachusetts who crafted the following, more precise definition of the term “cargo”: “Under the most generous understanding of the term that common sense will allow, ‘cargo’ is 1) any item, 2) transported on a vessel from one point to another, 3) with only a temporary connection to the vessel.” (Emphasis added.) Am. Home Assur. Co. v. Fore River Dock & Dredge, Inc., 321 F. Supp. 2d 209, 223 (D. Mass. 2004) (Young, C.J.).

 

The case giving rise to this definition, Fore River Dock, involved the grounding of a tugboat and the wreck of a barge, followed by a legal set-to over insurance coverage. The judge was tasked with determining whether a crane that “was secured to the deck of the Barge by removable turnbuckles” and owned by another company was covered by an insurance policy as “ ‘cargo’ owned by a third party.” 321 F. Supp. 2d at 222-23. Although the crane could be detached, it “had not actually been removed from the Barge for at least ten years.” 321 F. Supp. 2d at 223. The “Barge functioned as an on-site working platform, and … the crane aided the Barge in this basic function.” 321 F. Supp. 2d at 223. The district judge ruled that “[t]he crane … had more than a temporary connection to the Barge, and therefore cannot reasonably qualify as cargo.” 321 F. Supp. 2d at 223.

 

Our search for additional authority further supports our conclusion. Most cases discussing “cargo” do so in the context of shipping goods. See, e.g., In re World Imports Ltd., 820 F.3d 576 (3d Cir.) (maritime lien on cargo during bankruptcy proceeding), cert. denied sub nom. World Imports, Ltd. v. OEC Grp. N.Y., 137 S. Ct. 340 (2016); All Pac. Trading, Inc. v. Vessel M/V Hanjin Yosu, 7 F.3d 1427 (9th Cir. 1993) (owners of “cargo” suing owner of vessel after cargo damaged by water); American Mail Line Ltd. v. United States, 377 F. Supp. 657 (W.D. Wash. 1974) (suit regarding cargo damaged by water during transportation). And courts often refer to the “loading” and “unloading” of cargo. See American Trucking Associations, Inc. v. City of Los Angeles, Cal., 569 U.S. ––––, 133 S. Ct. 2096, 186 L.Ed. 2d 177 (2013) (considering whether federal law preempts provisions of agreement that trucking companies must sign before they could transport cargo at the Port of Los Angeles); Lewan v. Soo Marine Supply, Inc., No. 14-CV-10953, 2016 WL 4072471 (E.D. Mich. 2016) (considering whether ship-chandler employer’s negligence caused employee’s fall). Various types of “cargo” also have been the subject of litigation, including a car, frozen chicken, steel, and flour. See Barber v. Encompass Indem. Co., 458 Fed. Appx. 617 (9th Cir. 2011) (unpublished opinion) (car); Scotlynn USA Div., Inc. v. Cold Ground Transp., LLC, No. 2:15-CV-152-FTM-38CM, 2016 WL 6066682 (M.D. Fla. 2016) (frozen chicken); Crispin Co. v. M/V Morning Park, 578 F. Supp. 359 (S.D. Tex. 1984) (steel); see Nashiwa v. Matson Nav. Co., 116 F. Supp. 897 (D. Hawaii 1953) (flour).

 

Having identified the temporarily attached nature of cargo as critical to its definition, the answer to the question before us is plain: the crane and its associated tools are not cargo. The truck to which it is bolted is driven to a job site; the crane, with assists from its associated tools lifts a heavy object; and then the truck leaves the site. The crane does not come off of the truck, nor does the truck leave anything else behind at the site. Regardless of the fact that the crane does not affect the mechanical functioning of the truck, it is an essential part of the truck and the sole reason for its use. It is not merely temporary “cargo” transported by it. The crane is not “shipped” from job site to job site, nor is it loaded or unloaded. It is different in character from a car, frozen chicken, steel, or flour—those are all things that are loaded onto a means of conveyance, temporarily connected to the vessel, transported, and finally unloaded at a final destination.

 

*6 Because the crane and tools do not qualify as cargo, the truck is not a commercial motor vehicle in Midwest’s fleet. The Commission, the district judge, and the Court of Appeals majority erroneously affirmed the fine. See K.S.A. 2016 Supp. 77-621(c)(4) (court shall grant relief from an agency action if “the agency has erroneously interpreted or applied the law”).

 

 

CONCLUSION

For all of the reasons explained above, we reverse the Court of Appeals’ decision and the judgment of the district court and vacate the fine affirmed by the Kansas Corporation Commission.

 

United States Court of Appeals,

Eighth Circuit.

Lenny M. Chapman; Tracy M. Chapman Plaintiffs

v.

Hiland Partners GP Holdings, LLC, a foreign company; Hiland Partners, LP, a foreign partnership; Hiland Operating, LLC, a foreign company Defendants

Lenny M. Chapman; Tracy M. Chapman, as assignees of Hiland Partners GP Holdings, LLC, Hiland Partners, LP, and Hiland Operating, LLC; Hiland Operating, LLC Third Party Plaintiffs – Appellees

v.

Missouri Basin Well Service, Inc. Third Party Defendant – Appellant

B&B Heavy Haul, LLC Third Party Defendant

Missouri Basin Well Service, Inc. Cross Claimant – Appellant

v.

B&B Heavy Haul, LLC Cross Defendant – Appellee

Lenny M. Chapman; Tracy M. Chapman Plaintiffs

v.

Hiland Partners GP Holdings, LLC, a foreign company; Hiland Partners, LP, a foreign partnership; Hiland Operating, LLC, a foreign company Defendants

Lenny M. Chapman; Tracy M. Chapman, as assignees of Hiland Partners GP Holdings, LLC, Hiland Partners, LP, and Hiland Operating, LLC; Hiland Operating, LLC Third Party Plaintiffs – Appellees

v.

Missouri Basin Well Service, Inc. Third Party Defendant – Appellant

B&B Heavy Haul, LLC Third Party Defendant

Missouri Basin Well Service, Inc. Cross Claimant – Appellant

v.

B&B Heavy Haul, LLC Cross Defendant – Appellee

No. 15-2103, No. 15-2396

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Submitted: December 15, 2016

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Date Filed: 07/14/2017

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Filed: July 14, 2017

Appeals from United States District Court for the District of North Dakota – Bismarck

Before KELLY and MURPHY, Circuit Judges, and MONTGOMERY,1 District Judge.

Opinion

KELLY, Circuit Judge.

 

*1 In this consolidated appeal, Missouri Basin Well Service, Inc. (Missouri Basin) appeals from the district court’s2 grant of summary judgment to Lenny and Tracy Chapman (the Chapmans) and from the district court’s rulings on post-judgment motions. Having jurisdiction under 28 U.S.C. § 1291, we affirm the court’s orders granting summary judgment to the Chapmans, granting the Chapmans’ Rule 59(e) motion, and denying Missouri Basin’s Rule 59(e) motion.

 

 

1. Background

Hiland Partners GP Holdings, LLC, Hiland Partners, LP, and Hiland Operating, LLC (collectively, Hiland) own and operate a natural gas plant in Watford City, North Dakota. Missouri Basin offers trucking services to oil and gas companies in North Dakota. Hiland entered into a Master Service Contract (Hiland MSC) with Missouri Basin in 2008 whereby Missouri Basin, as “Contractor,” agreed to perform various services for Hiland. As part of the agreement, Missouri Basin agreed to “indemnify, defend and save harmless Hiland Group … from and against any and all claims, demands, judgments, defense costs, or suits … in any way, directly or indirectly, arising out of or related to the performance of this Contract.” The Hiland MSC included an Oklahoma choice-of-law provision.

 

B&B Heavy Haul, LLC (B&B) entered into a Master Services Contract with Missouri Basin (B&B MSC) in May 2011, in which B&B, as “Carrier” agreed “to provide the transportation services required by [Missouri Basin] and Customer.” In the B&B MSC, B&B agreed to “indemnify, defend, and save harmless [Missouri Basin] and the Customer from any and all claims, demands, judgments, defense costs, or suits … in any way, directly or indirectly, arising out of or related to the performance of this Contract.” The B&B MSC provided for the application of North Dakota law.

 

On October 18, 2011, Hiland requested Missouri Basin remove water from condensate tanks at the Watford plant. Missouri Basin contacted B&B, which sent Lenny Chapman to the gas plant. Chapman arrived shortly after midnight. He and an employee of Hiland began connecting the tank to the B&B truck that Chapman was driving. An explosion occurred and Chapman was seriously injured.

 

Chapman and his wife, Tracy, filed an action against Hiland, alleging negligence and loss of consortium. Hiland filed a third-party complaint against Missouri Basin and B&B, contending they were contractually obligated to indemnify and defend Hiland. Missouri Basin cross-claimed against B&B, seeking a defense and indemnification if it was required to indemnify Hiland.

 

B&B filed a motion for partial summary judgment, contending the B&B MSC did not require it to indemnify Missouri Basin or Hiland for Hiland’s negligence. On September 10, 2014, the district court granted B&B’s motion, dismissing Hiland’s third-party complaint against B&B and Missouri Basin’s cross-claim against B&B. As for Hiland’s third-party complaint, the court concluded as a matter of law that B&B had no legal duty under the B&B MSC to indemnify Hiland for its own negligence. The court further found that even if the B&B MSC could be construed to require B&B to indemnify Hiland for its own negligence, the contract was void and unenforceable under North Dakota law. With regard to Missouri Basin’s cross-claim, the court concluded as a matter of law that B&B had no legal obligation to indemnify Missouri Basin for any indemnification obligations Missouri Basin might have to Hiland.

 

*2 On October 1, 2014, the Chapmans entered into a “Confidential Release and Settlement Agreement and Addendum” (Settlement Agreement) with Hiland, settling their claims against Hiland for $10 million. Of that amount, $3 million was to be paid by Hiland and $7 million by Hiland’s insurers. As part of the settlement, Hiland assigned all its indemnity claims against Missouri Basin to the Chapmans. The Chapmans filed an amended third-party complaint, asserting, “as assignees of [Hiland],” the “right to pursue the Hiland Defendants’ indemnity claims against Missouri Basin arising from the Missouri Basin MSC.” The Chapmans sought a judgment “for all amounts that the Hiland Defendants, or others on their behalf, have paid or will pay” to the Chapmans under the Settlement Agreement.

 

The Chapmans and Missouri Basin filed cross-motions for summary judgment. The parties disputed whether Oklahoma law or North Dakota law governed the Hiland MSC. Applying Oklahoma law, the district court found the indemnity provision in the Hiland MSC fully enforceable. On April 23, 2015, the court entered an order granting the Chapmans’ motion for summary judgment, stating: “Missouri Basin is obligated to indemnify Third-Party Plaintiffs for all amounts that have been paid or will be paid as a result of the Confidential Release and Settlement Agreement and the Addendum.” The judgment was entered on April 24, 2015.

 

Both the Chapmans and Missouri Basin filed post-judgment motions. The Chapmans requested the court reduce its judgment to a sum certain: $10 million plus interest. Missouri Basin opposed the Chapmans’ motion, contending its indemnity obligation was limited to $3 million—the amount Hiland directly contributed to the settlement. In its post-judgment motion, Missouri Basin asked the court to reconsider its September 2014 order granting summary judgment in favor of B&B and its April 2015 order granting summary judgment in favor of the Chapmans. Missouri Basin argued the two orders were erroneous and contradictory. The court granted the Chapmans’ motion and denied Missouri Basin’s motion, and issued an amended judgment the next day.

 

 

1. Discussion

Missouri Basin appeals the district court’s grant of summary judgment to the Chapmans, asserting the district court erred in applying Oklahoma rather than North Dakota law in construing the Hiland MSC. Missouri Basin also contends the district court erred in its post-judgment rulings.

 

 

1. Summary Judgment

“We review de novo a district court’s grant of summary judgment, viewing the evidence in the light most favorable to the nonmoving party.” Am. Fire & Cas. Co. v. Hegel, 847 F.3d 956, 958 (8th Cir. 2017) (quoting Barkley, Inc. v. Gabriel Bros., 829 F.3d 1030, 1038 (8th Cir. 2016)). Summary judgment is appropriate if there is “no dispute of material fact and reasonable fact finders could not find in favor of the nonmoving party.” Id. (quoting Shrable v. Eaton Corp., 695 F.3d 768, 770–71 (8th Cir. 2012)).

 

The parties agree that North Dakota choice-of-law rules apply in this case. See Inacom Corp. v. Sears, Roebuck & Co., 254 F.3d 683, 687 (8th Cir. 2001) (when sitting in diversity jurisdiction, district court applies the conflict-of-law rules for the state in which it sits). Relying on the choice-of-law provision in the Hiland MSC, the district court applied Oklahoma law to determine the enforceability of the indemnity provision in the MSC. See Snortland v. Larson, 364 N.W.2d 67, 68–69 (N.D. 1985) (applying Minnesota law to contract case because the parties chose Minnesota law); Am. Hardware Mut. Ins. v. Dairyland Ins., 304 N.W.2d 687, 689 n.1 (N.D. 1981) (noting that “[p]arties may stipulate as to choice of law”); see also Macquarie Bank Ltd. v. Knickel, 793 F.3d 926, 933 (8th Cir. 2015) (“We believe that the North Dakota Supreme Court would resolve this dispute under Texas law, as called for by the Credit Agreement.”). Because the district court decided that the Hiland MSC was governed by Oklahoma law, it concluded that “any arguments based on North Dakota law necessarily fail.” We “review de novo the district court’s choice-of-law determination.” DCS Sanitation Mgmt., Inc. v. Castillo, 435 F.3d 892, 895 (8th Cir. 2006). We likewise review de novo the court’s “interpretation of North Dakota law.” Kovarik v. Am. Family Ins. Grp., 108 F.3d 962, 964 (8th Cir. 1997).

 

*3 Missouri Basin acknowledges that the parties chose Oklahoma law to govern disputes under the Hiland MSC and concedes that North Dakota courts generally honor choice-of-law provisions. Missouri Basin does not challenge the district court’s conclusion that the Hiland MSC indemnity provision is enforceable under Oklahoma law. Missouri Basin asserts, however, that honoring the choice-of-law provision in this case is contrary to public policy, as expressed in North Dakota’s motor carrier anti-indemnification statute. See N.D. Cent. Code § 22-02-10. Section 22-02-10(2) provides, in part:

Notwithstanding any provision of law to the contrary, any portion of a provision, clause, covenant, or agreement contained in, collateral to, or affecting a motor carrier contract3 which purports to indemnify, defend, or hold harmless, or has the effect of indemnifying, defending, or holding harmless, the promisee from or against any liability for loss or damage resulting from the negligence or intentional acts or omissions of the promisee is void and unenforceable to the extent that the loss or damage:

1. Occurs during the motor carrier’s presence on the promisee’s premises and is caused by or results from the negligent or intentional acts or omissions of the promisee[.]

N.D. Cent. Code § 22-02-10(2). Missouri Basin argues the Hiland MSC fits all three elements set forth in § 22-02-10(2): (1) the MSC is a motor carrier transportation contract; (2) the harm occurred while the motor carrier was on the promisee’s premises; and (3) the harm was caused by the negligence of the promisee.

 

As relevant here, the statute defines a “motor carrier transportation contract” as “a contract, agreement, or understanding covering the transportation of property for compensation or hire by the motor carrier … or a service incidental to activity described in this subdivision, including storage of property.” N.D. Cent. Code § 22-02-10(1)(a). Below, Missouri Basin asked the district court to find the indemnification provision in the Hiland MSC against public policy and thus unenforceable under § 22-02-10(1)(a), but failed to address why the Hiland MSC should be considered a “motor carrier transportation contract” in the first instance. On appeal, Missouri Basin simply asserts that the Hiland MSC is a “motor carrier transportation contract” because a significant part of Missouri Basin’s business is offering trucking services to gas companies to haul property for hire, and Missouri Basin subcontracted with B&B specifically to “provide the transportation services required by” Missouri Basin and its “customer.” Missouri Basin’s alternative assertion is that the Hiland MSC “cover[ed]” a “service incidental to the activity described in this subsection”—the transportation of property for hire—because Missouri Basin’s actions in requesting B&B to haul water from the condensate tanks at the Hiland plant on October 18, 2011, were “a service incidental” to B&B’s hauling activities under the B&B MSC—a contract the district court found to be a motor carrier contract.4 Though North Dakota enacted its motor carrier anti-indemnification statute in 2009, neither side has pointed us to any reported cases applying its provisions and we have found none. Our task then is to determine whether North Dakota courts would interpret the Hiland MSC to be a “motor carrier transportation contract” under § 22-02-10. See Kvorarik, 108 F.3d at 964 (“If the North Dakota Supreme Court has not spoken on [the] issue[ ], we must attempt to predict what that court would decide if it were faced with [it].”).

 

*4 North Dakota courts construe written contracts to give effect to the parties’ intent when the contract was executed, ascertaining the intent from the written contract alone, if possible. Rasnic v. ConocoPhillips Co., 854 N.W.2d 659, 661 (N.D. 2014) (citing N.D. Cent. Code §§ 9-07-03 and 9-07-04). Words in a written contract are given their plain, ordinary, and commonly understood meaning “unless they are used by the parties in a technical sense or a special meaning is given to them by usage.” Specialized Contracting, Inc. v. St. Paul Fire & Marine Ins., 825 N.W.2d 872, 877 (N.D. 2012) (citing N.D. Cent. Code § 9-07-09).

 

Nothing in the Hiland MSC identifies it as a contract covering the transportation of property for hire. There is no reference to a “motor carrier” or to transportation services. Notably, there is nothing in the MSC to indicate that it was tailored to Missouri Basin specifically, as opposed to any other contractor or vendor with whom Hiland might contract. In the Hiland MSC, Missouri Basin agrees, as “Contractor,” that it will, “from time to time, … perform certain work or furnish certain services to Hiland. The jobs contemplated are any such work or services performed by Contractor.” Exhibit A, attached to the Hiland MSC, lists the various minimum insurance requirements that the different types of contractors or vendors who sign a master service contract with Hiland must maintain. Exhibit A lists 26 types of contractors and vendors, including carpenters, electricians, gate guards, surveyors, and welders. The required insurance coverage includes coverage any contractor might be expected to maintain, such as worker’s compensation, employer’s liability, comprehensive general liability, and automobile liability, but no insurance a motor carrier might be expected to maintain, such as cargo liability insurance.

 

In contrast, the B&B MSC—a contract that was undisputedly a motor carrier transportation contract—specifically identified B&B as an “authorized for-hire motor carrier with the necessary authority and licenses to operate in interstate and/or intrastate commerce, and is otherwise qualified, competent and available to provide the transportation services required by Missouri Basin and Customer.” In the MSC, B&B agrees to a number of conditions relevant to being a contract for-hire motor carrier, including that it will comply with all laws “regarding the provision of … transportation services,” that it will ensure “its vehicles and drivers fully comply with the Federal Motor Carrier Safety Regulations established by the DOT,” that it would have “the sole and exclusive care, custody and control of each tendered shipment from the time it is delivered … for transportation until delivered,” and that it assumed “the liability of a common carrier under 49 U.S.C. § 14706.”

 

Unlike the B&B MSC, the Hiland MSC lacks express language identifying it as a contract covering “the transportation of property for compensation or hire by the motor carrier,” or “a service incidental to” such activity. We conclude the Hiland MSC, which covered multiple services not limited to transportation, is not a “motor carrier transportation contract” under North Dakota law. Because it is not, N.D. Cent. Code § 22-02-10 does not apply. Accordingly, honoring the Oklahoma choice-of-law provision in the Hiland MSC does not violate a fundamental public policy of North Dakota.

 

 

1. Rule 59(e) motions

*5 Following the court’s entry of summary judgment, Missouri Basin and the Chapmans both filed Rule 59(e) motions to alter or amend the judgment. The court denied Missouri Basin’s motion but granted the Chapmans’ motion. Missouri Basin appeals both rulings. District courts enjoy broad discretion to alter or amend judgments under Rule 59(e), and we reverse only for a clear abuse of discretion. Matthew v. Unum Life Ins. Co. of Am., 639 F.3d 857, 863 (8th Cir. 2011).

 

“Federal Rule of Civil Procedure 59(e) was adopted to clarify a district court’s power to correct its own mistakes in the time period immediately following entry of judgment.” Innovative Home Health Care, Inc. v. P.T.–O.T. Assocs. of the Black Hills, 141 F.3d 1284, 1286 (8th Cir. 1998). Federal courts generally use Rule 59(e) “to support reconsideration of matters properly encompassed in a decision on the merits.” White v. N.H. Dep’t of Emp’t Sec., 455 U.S. 445, 451 (1982). “An abuse of discretion will only be found if the district court’s judgment was based on clearly erroneous factual findings or erroneous legal conclusions.” Matthew, 639 F.3d at 863 (quoting Innovative Home Health Care, 141 F.3d at 1286).

 

In its order granting the Chapmans summary judgment, the district court ordered Missouri Basin to indemnify the Chapmans “for all sums that have been paid or will be paid” as a result of the Chapmans’ settlement with Hiland. In their Rule 59(e) motion, the Chapmans requested the court issue a supplemental judgment stating a sum certain. The court granted the Chapmans’ request, clarifying that by using the language “all amounts that have been paid or will be paid,” it intended “that Missouri Basin indemnify the Chapmans for the full amount of the settlement, including those amounts paid by Hiland’s insurers.” The court explained that by rejecting Hiland’s tender of defense and request for indemnification, Missouri Basin lost its right to control the litigation and became obligated to reimburse the Chapmans, as assignees of Hiland and its insurers, for the full settlement to which Hiland and its insurers had agreed—$10 million. That judgment was not clearly erroneous. See Muskogee Title Co. v. First Nat’l Bank & Trust Co. of Muskogee, 894 P.2d 1148, 1151 (Okla. Civ. App. 1995) (holding that a partially subrogated insurer and its insured may join as co-plaintiffs in an action to recover the entire loss from a third party); Kelly-Springfield Tire Co. v. Mobil Oil Corp., 551 P.2d 671, 675 (Okla. Civ. App. 1975) (“[I]n Oklahoma[,] … where the indemnitor denies liability under the indemnity contract and refuses to assume the defense of the claim, then the indemnitee is in full charge of the matter and may make a good faith settlement without assuming the risk of being able to prove absolute legal liability or the actual amount of the damage.”) (internal quotation omitted); see also Okla. Stat. tit. 15, § 427.5 (“If, after request, the person indemnifying neglects to defend the person indemnified, a recovery against the latter, suffered by him in good faith, is conclusive in his favor against the former.”). The district court did not abuse its discretion in granting the Chapmans’ Rule 59(e) motion.

 

Missouri Basin also argues the district court erred in denying its Rule 59(e) motion, in which it sought reconsideration of the district court’s orders granting summary judgment in favor of B&B and the Chapmans. Missouri Basin argued that the two orders were erroneous and contradictory. The district court found the motion untimely, but concluded that, even if it was not untimely, the Rule 59(e) motion was an impermissible attempt to raise new arguments that could have been raised earlier and, because the orders were not inconsistent, lacked merit.

 

*6 Federal Rule of Civil Procedure 59(e) allows any party aggrieved by a judgment to file a motion to alter or amend the judgment “no later than 28 days after” the judgment has been entered. Fed. R. Civ. P. 59(e). Courts are not allowed to extend the twenty-eight day deadline. Fed. R. Civ. P. 6(b)(2). The district court entered judgment on April 24, 2015. Missouri Basin filed a motion for leave to file documents under seal on May 22, 2015, attaching its Rule 59(e) motion and memorandum in support, and the clerk docketed the motion as well as the attachments on May 22, 2015. The court granted Missouri Basin’s motion for leave to file under seal on May 26, 2015, and Missouri Basin filed the Rule 59(e) and memorandum in support on May 29, 2015. Missouri Basin asserts that all the rules require is that the Rule 59(e) motion and memorandum be delivered to the clerk and so its Rule 59(e) motion was timely. See Fed. R. Civ. P. 5(d)(2) (explaining that “[a] paper is filed by delivering it … to the clerk”). B&B asserts that the motion was untimely because the request that the documents be filed was in the memorandum rather than the motion. Neither party has directed us to a local rule or local practice indicating whether a motion docketed as an attachment to a motion to file under seal is considered “filed” in the United States District Court of North Dakota. For purposes of this appeal, we assume without deciding that a motion and memorandum docketed as attachments to a motion to file under seal are “filed” on the day the attachments are docketed, and we proceed to the merits.

 

In its Rule 59(e) motion, Missouri Basin shifted focus to the B&B MSC, arguing that its claim against B&B for indemnity was within the scope of the indemnification provision of the B&B MSC. That contract provided indemnity for claims “directly or indirectly … related to the performance of” the B&B MSC, and Missouri Basin newly contended that its indemnity obligation to Hiland is an indirect claim that is within the scope of the B&B MSC indemnity provision. B&B counters that this argument is an inappropriate attempt to raise a new argument that Missouri Basin could have made in opposition to B&B’s partial motion for summary judgment. See United States v. Metro. St. Louis Sewer Dist., 440 F.3d 930, 933 (8th Cir. 2006) (Rule 59(e) “motions cannot be used to introduce new evidence, tender new legal theories, or raise arguments which could have been offered or raised prior to entry of judgment.” (quoting Innovative Home Health Care, 141 F.3d at 1286)).

 

Missouri Basin concedes that it did not raise this argument until its Rule 59(e) motion, but argues that it could not do so until after the district court issued its April 23, 2015, ruling on the Chapmans’ motion for summary judgment because, according to Missouri Basin, the ruling was inconsistent with its prior order on B&B’s motion for partial summary judgment. But nothing about the district court’s orders prevented Missouri Basin from asserting in its earlier filings that its indemnity obligation to Hiland was an indirect claim within the scope of the B&B MSC. In any event, the rulings—which examined two separate contracts, one governed by North Dakota law, and one by Oklahoma law—are not inconsistent. The district court did not abuse its discretion in denying Missouri Basin’s Rule 59(e) motion. See Matthew, 639 F.3d at 863.

 

 

III. Conclusion

For the reasons set forth above, we affirm the district court’s grant of summary judgment to the Chapmans on their third-party complaint and its orders granting the Chapmans’ Rule 59(e) motion and denying Missouri Basin’s Rule 59(e) motion.

 

All Citations

— F.3d —-, 2017 WL 2990177

 

 

Footnotes

1

The Honorable Ann D. Montgomery, United States District Judge for the District of Minnesota, sitting by designation.

2

The Honorable Daniel L. Hovland, Chief Judge, United States District Court for the District of North Dakota.

3

Section 22-02-10 is entitled: “Indemnity agreement in motor carrier transportation contracts void,” and the term “motor carrier transportation contract” is used in other parts of the section. See N.D. Cent. Code § 22-02-10(1)(a) (defining “motor carrier transportation contract”); id. § 22-02-10(1)(b) (clarifying that the term “promisee” “does not include a motor carrier that is party to a motor carrier transportation contract with the promisee”). Neither party has argued that by using the term “motor carrier contract” in § 22-02-10(2), the North Dakota legislature meant something different than a “motor carrier transportation contract.” Similarly, we see no reason that the North Dakota Supreme Court would construe the term “motor carrier contract” to mean something different than “motor carrier transportation contract”; and we note “motor carrier contract” is not otherwise defined in the statute See Sorenson v. Felton, 793 N.W.2d 799, 803 (N.D. 2011) (“Statutes must be construed to avoid absurd results.” (quoting Toso v. WorkforceSafety & Ins., 712 N.W.2d 312, 318 (N.D. 2006)). For purposes of this appeal, we use the terms interchangeably.

4

The district court concluded, without explanation, that the Hiland MSC “cannot be described as a motor carrier contract, and Missouri Basin was not acting as a motor carrier” on October 18, 2011.