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Upon Dana’s motion, the district court enjoined the Trust
from "representing to any asbestos claimant against the
Celotex Asbestos Settlement Trust that the Celotex Asbestos
Settlement Trust has any right of action against the Dana
Corporation to assign, transfer, or otherwise to convey [Dana
rights]," and from "instituting or prosecuting, directly or
indirectly, in any tribunal or court (federal, state, foreign, or
otherwise) other than this court, any action or claim against
the Dana Corporation . . . based on any right of action
putatively assigned or otherwise derived or obtained from or
through the Celotex Asbestos Settlement Trust." (J.A.II at
,QFRQQHFWLRQZLWKWKLVRUGHUWKHGLVWULFWFRXUWDOVR
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contract construction. See Ford Motor Co. v. John L. Frazier
& Sons Co., 196 N. E. 2d 335, 337 (Ohio Ct. App. 1964).
4. S&K Comp’s $900,000 Note owed to Dana but
Transferred to Philip Carey
The district court found that the parties’ treatment of an
S&K note owed to Dana but transferred to Philip Carey
without recourse against Dana also supported its decision and
cut against the Trust’s position. The district court reasoned
that to read the indemnification provision as obligating Dana
for all of S&K’s pre-closing obligations and liabilities, as the
Trust contends, would conflict with the parties’ agreement for
S&K to transfer its $900,000 note to Philip Carey without
recourse. We agree that it is unlikely that the parties would
not have treated the note in this fashion if Dana was to be held
liable for all of S&K’s liabilities under the Agreement.
In summary, the district court properly found that under
§ 6.1(c) of the Agreement, Dana’s obligation to indemnify did
not trigger until such time that Philip Carey was damnified.
Because three years after Philip Carey bought S&K’s stock
from Dana, Philip Carey% then called Panacon after merging
with Briggs % merged with Celotex, S&K’s liabilities at the
point when damnification occurred were Celotex’s own
liabilities, thereby making the district court’s summary
judgment dismissal of the matter in favor of Dana proper.
II. Case 99-4493: Motion for Permanent Injunction
In South Central Power Company v. International
Brotherhood of Electrical Workers, Local Union 2359, this
Court opined that "[a] district court’s decision to grant or
deny a permanent injunction is reviewed under several
distinct standards. Factual findings are reviewed under the
clearly erroneous standard, legal conclusions are reviewed de
novo, and the scope of injunctive relief is reviewed for an
abuse of discretion." 186 F.3d 733, 737 (6th Cir. 1999)
(citing Walters v. Reno, 145 F.3d 1032, 1047 (9th Cir. 1998)).
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-$,, DW The district court then noted that Dana’s
fears originated "in the persistent desire of counsel for
asbestos claimants to sue Dana in disparate courts of their
choice, rather than in a single court." The district court cited
the Lee case which originated in Georgia and the suit that
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simply an indemnification provision. See, e.g., Wilson, 9
Ohio St. at 469; Midwest Specialities, Inc. 940 F. Supp. at
1168 ("Under Ohio law, . . . [t]he right to indemnity and/or
contribution becomes complete and enforceable only upon
payment by the claimant satisfying the whole of the
obligation.")
2. Section 7.6 % "Binding Effect, Benefits"
The district court found that § 7.6 of the Agreement also
demonstrated the parties’ intent to limit Dana’s
indemnification obligation. In § 7.6, the parties agreed that
neither S&K nor anyone else would benefit from the
agreement between Dana and Philip Carey:
[N]othing in this agreement express or implied is
intended to confer on any person, other than the parties
hereto, any rights, remedies, agreements, understandings,
obligations, or liabilities under or by reason of this
Agreement.
(J.A. at 371-72.) The practical effect of this section is that it
demonstrates that under the terms of the Agreement, S&K
was not relieved of its obligations and liabilities for which it
was not an indemnitee.
3. Section 2.8 % "Absence of Undisclosed Liabilities"
In this section, Dana warranted that in accordance with
generally accepted accounting principles, S&K’s balance
sheet made full and adequate provision for all obligations and
liabilities, fixed or contingent, of that company, and that no
such obligations or liabilities in an aggregate amount greater
than $10,000 were not reflected or reserved against in the
balance sheet. Therefore, the effect of this section is to
allocate a category of S&K’s liabilities to Philip Carey and,
as found by the district court, interpreting the indemnification
agreement provision as making Dana liable for all of S&K’s
liabilities would render § 2.8 surplusage, in violation of

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This conclusion is supported by the plain language of § 6.1(c)
as well as the other provisions of the contract. We are not
persuaded otherwise by the Trust’s attempt to distinguish
between "loss" and "liability" for purposes of determining
when the obligation to indemnify is triggered.
1. Other Subsections of Section 6.1
Subsection (a) and (b) of section 6.1 also support the
conclusion that subsection (c) is a simple indemnification
agreement and not an agreement to pay. For example, the
language of subsections (a) and (b) reads that Dana agrees to
"reimburse and indemnify" Philip Carey "against and in
respect of,"
(a) any loss, liability or damage to [Philip Carey] or
[S&K], in excess of the reserve for bad debt loss, if any,
reflected in the Balance Sheet, resulting from the
noncollection of any receivable (other than receivables
owing by [Philip Carey]) referred to in Section 2.2(b)
hereof;
(b) any loss, liability or damage to [Philip Carey] or
[S&K] arising from any breach of any representation or
warranty contained herein . . . .
(J.A. at 371.) These two provisions, aside from expressly
agreeing to indemnify S&K as well as Philip Carey, expressly
state the type of harm that triggers the duty to indemnify;
namely, "loss, liability, or damage . . . for bad debt loss . . .
reflected in the Balance Sheet," § (a), or "loss, liability, or
damage . . . arising from any breach of any representation or
warranty," § (b), thus differentiating these subsections from
(c) which does not provide for the nature of the harm that
must occur as precondition for indemnification. As noted
above, and as found by the district court, the additional
language in subsections (a) and (b) as opposed to subsection
(c) indicates that the parties intended to limit the application
of subsection (c), and that under Ohio law, subsection (c) is
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Celotex filed in the Middle District of Florida against Dana as
examples of the type of split litigation that Dana feared.
The district court also made note of the fact that Celotex
did not seek leave to have its claim against Dana litigated on
the merits in the bankruptcy proceedings, but instead
facilitated the attempt of Anderson Memorial Hospital to seek
recovery against Dana on the indemnity provision through a
lawsuit in South Carolina state court, in derogation of the
1987 injunction. The district court found that in order to
accomplish its end of suing Dana in South Carolina state
court, Celotex assigned a portion of its claim against Dana to
a putative class of asbestos property damage claimants. The
district court opined that the express purpose of that
assignment was to enable counsel for Anderson to pursue
Dana under the indemnity provisions of the Agreement in
South Carolina. The district court also expressly noted that
in response to the show cause motion filed by Dana against
Anderson in the South Carolina suit, Anderson was found in
contempt of the 1987 injunction. The district court also took
note of the fact that "the parties and lawyers in the Chapter 11
proceeding created the mechanism for claim splitting as
presently found in the plan . . . . [t]hereby [allowing]
Celotex’s unitary claim against Dana to be atomized into
thousands of separate, free-standing claims assigned to
individual asbestos claimants." (J.A.II at 110.) The district
court expressed its concern that "[n]o similar provision
applies under the plan to Celotex’s insurers. From the record
presently before this court, it appears that no similar provision
has ever been included in other asbestos-related bankruptcy
reorganization plans." (J.A.II at 111.) The court opined:
No one suggests any other explanation for this aspect
of the plan other than a desire to deny Dana the
protection of [the 1987] injunction and deprive it of a fair
opportunity to litigate the merits of the indemnification
claim to finality in a single proceeding in a single court.
I find that the motivating purpose of claim splitting
among tens, if not hundreds of thousands of Celotex’s

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claimants is to compel Dana to accede to the demand that
it settle the Trust’s claim for indemnity under the S&K
stock purchase agreement.
(J.A.II at 111.)
The district court thereby granted Dana’s motion for
injunctive relief as well as the parties request for Rule 54(b)
certification of its order granting Dana summary judgment.
It is from the district court’s order granting Dana permanent
injunctive relief that the Trust now appeals in Case No. 99-
4493.
DISCUSSION
I. Case No. 99-4494: Motions for Summary Judgment
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The district court held that the indemnification provision as
provided in the Agreement between Dana and Philip Carey
limited Dana’s obligation to instances in which Philip Carey
was damnified, either by an unsuccessful defense of a claim
based on a tort by S&K, or by payment of such a claim. The
district court based its holding "on the plain meaning of
§ 6.1(c) [the indemnification provision], whereby Dana
agreed to ‘reimburse and indemnify’ Philip Carey for the
‘obligations and liabilities’ of Smith & Kanzler Company."
(J.A. at 140.) The district court also based its holding on
other provisions in the Agreement which were more
expansive than § 6.1(c) in that they benefitted Dana, Philip
Carey, and S&K alike. However, with regard to § 6.1(c), the
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accrual."); see also Midwest Specialities, Inc. v. Crown Indus.
Prods. Co., 940 F. Supp. 1160, 1168 (N.D. Ohio 1996)
("Under Ohio law, . . . [t]he right to indemnity and/or
contribution becomes complete and enforceable only upon
payment by the claimant satisfying the whole of the
obligation.")
An Ohio bankruptcy case also makes clear the distinction
between a contract to indemnify and a contract to pay, noting
that the obligation to pay under the former is not triggered
until the indemnitee is damnified:
If an agreement is to simply indemnify, and nothing
more, then damage must be shown before the indemnitee
is entitled to recover. On the other hand, however, if
there is an agreement to stand for a debt or to pay a sum
certain, then it is no defense that the indemnitee has
suffered no loss.
In re Highland Group, Inc., 136 B.R. 475, 478 (Bankr. N.D.
Ohio 1992). Highland involved a contract between a retailer
and one of its suppliers, and provided that the supplier "will
indemnify and hold harmless J.C. Penney and J.C. Penney’s
agents and employees from and against any and all loss,
liability or damage." Id. at 478-79. The bankruptcy court
found that because the language of the agreement did not
contain any language to suggest that it stood for a debt or to
pay a sum certain, the contract by its terms was one for
indemnity. Id. at 479.
Here, the contract provides that Dana would "reimburse and
indemnify" Philip Carey; therefore, as found by the district
court, the contract was one for indemnification and, under
Ohio law, Dana’s obligation to pay was not triggered until
Philip Carey was damnified. In other words, Dana could only
be successfully sued under the indemnity agreement for some
loss or obligation imposed on Philip Carey for the tortious
conduct of S&K % i.e., when Philip Carey was damnified as
a result of S&K’s conduct. See Wilson, 9 Ohio St. at 469.

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the just claims against said firm J. M. Tooker & Co., then
this obligation is to be void and of no effect; otherwise to
remain in full force and virtue.
Wilson, 9 Ohio St. at 469. The Supreme Court of Ohio
looked at this provision and opined that
[t]he phrase ‘settle up and liquidate,’ in the connection
of this bond, taken in connection with the accompanying
recital, is equivalent to the word pay and imposes the
obligation to pay all the debts of the late firm of J. M.
Tooker & Co., and is readily distinguishable from an
obligation to indemnify against a liability to pay. And
the doctrine seems to be now well established, by a
current of decisions both in this country and in England,
that if there be a contract to indemnify simply, and
nothing more, then damage must be shown before the
party indemnified is entitled to recover; but if there be an
affirmative contract to do a certain act, or to pay a certain
sum or sums of money, then it is no defense to say that
the plaintiff has not been damnified; and that the measure
of damages in such case is the amount agreed to be paid,
or the proper expense of doing the act agreed to be done.
Id. at 469-70 (emphasis added). In other words, the Supreme
Court of Ohio held that inclusion of the phrase "settle up and
liquidate" took this agreement out of the bounds of the rule
that a general agreement to indemnify requires that the
indemnitee be damnified before triggering the indemnitor’s
obligation to pay. Thus, Wilson supports the proposition that
damages must be shown before the party indemnified is
entitled to recover under a contract to indemnify which does
not specify otherwise. This principle of Ohio has been
repeatedly embraced since Wilson was decided many years
ago. See Firemen’s Ins. Co. of Newark, N.J. v. Antol, 471
N. E. 2d 831, 835 (Ohio App. 3d 1984) (Whiteside, J.,
concurring) ("Unlike a subrogated claim, a claim for
indemnity does not arise until payment is made in the absence
of an express contractual provision providing for an earlier
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district court explained, the parties expressly excluded S&K
as an indemnitee % as evidenced by the final language of
§ 6.1(c) as opposed to prior drafts of this section.
The district court rejected the Trust’s reading of the
Agreement % that being that pursuant to § 6.1(c) Dana agreed
to be obligated for all of S&K’s pre-closing obligations and
liabilities % because this reading conflicted with the parties’
agreement to "a) transfer Smith & Kanzler Company’s
$900,000 note to Philip Carey and b) allocate any undisclosed
obligations and liabilities of Philip Carey which need not
have been disclosed in accordance with generally accepted
accounting principles." (J.A. at 140.) The district court
further opined that it was required to read § 6.1(c) in
accordance with Ohio’s common law of indemnification
which makes clear that an agreement to indemnify differs
from a commitment to pay. (J.A. at 140) (citing Wilson v.
Stillwell, 9 Ohio St. 468, 470 (1869).) Finally, in rendering
its decision, the district court was persuaded by Dana’s
argument that as a result of the Agreement, Philip Carey got
exactly what Dana had to sell -- a wholly owned subsidiary
whose liabilities could not, as a result of shareholder
immunity, be imposed on the parent company, and Dana
could not therefore now be required to have greater liability
than what it had when it owned S&K. We agree with the
district court’s reasoning and conclusion.
We begin with the plain language of § 6.1(c) as it appears
in final form in the Agreement:
6. Indemnification
6.1 Indemnification. The Shareholder [Dana]
agrees to reimburse and indemnify Purchaser [Philip
Carey] against and in respect of:
* * *

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(c) all obligations and liabilities of the Subject
Corporation [S&K] whether accrued, fixed, contingent or
otherwise, aggregating in excess of $10,000, arising on
or before November 30, 1968 to the extent not reflected
or reserved against in the Balance Sheet; . . . .
(J.A. at 370-71.) Accordingly, as found by the district court,
the very terms of § 6.1(c), provide that Dana agreed to
reimburse and indemnify Philip Carey for "all obligations and
liabilities of the Subject Corporation [S&K];" Dana did not,
however, agree to indemnify S&K for its liabilities as
evidenced by a prior draft which provided as much, but was
rejected. Specifically, the prior draft provided that Dana
would "indemnify and hold Purchaser [Philip Carey] and the
Subject Corporation [S&K] harmless against and in respect
of . . . ." (J.A. at 594-96 (emphasis added).) Therefore, by
the language of the final draft as well as the what appears to
be the intent of the parties, Dana agreed to indemnify Philip
Carey alone for any liabilities that it incurred as a result of
S&K being found to be a tortfeasor. See Skivolocki v. E. Ohio
Gas Co., 313 N. E. 2d 374, 376 (Ohio 1974) (noting that the
court must look to the language of the agreement to interpret
the parties’ intent when interpreting a contract dispute). The
Trust has offered nothing that has persuaded us to conclude
otherwise.
The Trust disagrees with this reading of the Agreement and
maintains that it is not necessary to look at extrinsic evidence
of prior drafts because the Agreement is plain on its face. We
are not persuaded by this argument, however, where even
without the extrinsic evidence of a prior draft, a logical
reading of the language of the Agreement cannot be
interpreted to mean that Dana agreed to indemnify S&K for
its actions as a tortfeasor. See Lovewell v. Physicians Ins.
Co., 679 N. E. 2d 1119, 1121 (Ohio 1997) (stating the "the
construction of contracts is a matter of law to be resolved by
the court"); Carroll Weir Funeral Home, Inc. v. Miller, 207
N. E. 2d 747, 749 (Ohio 1965) (noting that contract terms are
to be given their usual and ordinary meaning).
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Accordingly, having found that Dana did not agree to
indemnify S&K, but instead agreed to indemnify Philip Carey
for any liability that it may have suffered as a result of S&K’s
tortious conduct, the issue becomes what triggered Dana’s
obligation to indemnify. In other words, did Dana become
obligated to indemnify for S&K’s tortious conduct at the time
the agreement was made, or did the obligation to indemnify
arise at some later dater date when damnification occurred.
The district court found that under Ohio law, Philip Carey had
to suffer a damnification before Dana was required to
indemnify Philip Carey for S&K’s tortious conduct.
The Trust argues that the district court erred in this regard
because Dana agreed to indemnify Philip Carey for all
"liabilities" that it may suffer as a result of S&K’s conduct,
and not for all "losses," thereby rendering the triggering point
of Dana’s obligation at the time the liabilities accrued, and
not at the point when Philip Carey actually suffered a loss.
The Trust maintains that there are two types of
indemnification agreements % one which covers losses
thereby requiring the indemnitee to suffer an out-of-pocket
loss before the indemnitor is required to pay, and one which
covers liabilities thereby requiring the indemnitee to protect
against liabilities when they accrue % and that because the
Agreement provided that Dana would indemnify Philip Carey
for any of S&K’s liabilities, Philip Carey did not have to
actually suffer a loss before Dana’s obligation as an
indemnitor was triggered. The Trust relies upon Wilson v.
Stilwell, 9 Ohio St. 467 (1869) in support of its position. The
Trust further contends that the district court’s interpretation
of Wilson was erroneous. We disagree with the Trust in all
respects.
In Wilson, the provision in question provided:
The condition of this obligation is such that whereas
the above-bounden John M. Tooker has agreed to pay all
the liabilities of the late firm of J. M. Tooker & Co. If
the said John M. Tooker shall settle up and liquidate all

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