Wal-Mart's Claims Against Transportation Contractor Dismissed on Pre-Answer Motion

Eckhoff v. Wal-Mart Assocs, Inc., 2013 U.S. Dist. LEXIS 181156 (S.D.N.Y. 2013)

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The United States District Court for the Southern District of New York dismissed a Third-Party Complaint by a Wal-Mart subsidiary finding that the indemnification agreement at issue did not apply.

U.S. District Judge Cathy Seibel dismissed the Third-Party Complaint in an Opinion and Order of December 30, 2013, addressing issues of contractual interpretation as well as numerous procedural issues.

At its core, the opinion rejected the argument of Wal-Mart Stores East, LP that terms within the compensation payment section of the relevant contract should extend the limits of an indemnification provision set forth in an entirely different section. The Court wrote, "[I]t would be nonsensical to bury in a sub-sub-section of the payment part of the contract a provision that was intended to apply to the whole contract, especially when there are myriad more logical places for it." Thus, as the party seeking indemnity was not a beneficiary of the indemnification agreement, it could not maintain its third-party action.

The Court also held that Walmart's breach of contract claim, because it was asserted in an impleader complaint, was impermissible under the Federal Rules of Civil Procedure.

AGF&J partner Glenn A. Jacobson briefed and argued the motion.