Fluor Engineers and Constructors, Inc. v. Southern Pacific Transp. Co.

• Decision Date: 20 February 1985
• Docket Number: No. 83-2756,83-2756
• Citation: 753 F.2d 444
• Parties: FLUOR ENGINEERS AND CONSTRUCTORS, INC., Plaintiffs, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, et al., Defendants-Cross Defendants-Appellees, v. NORFOLK & WESTERN RAILWAY COMPANY, Defendant-Cross Plaintiff-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 444

753 F.2d 444

1 Fed.R.Serv.3d 358

FLUOR ENGINEERS AND CONSTRUCTORS, INC., Plaintiffs, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, et al., Defendants-Cross Defendants-Appellees, v. NORFOLK & WESTERN RAILWAY COMPANY, Defendant-Cross

Plaintiff-Appellant.

No. 83-2756.

United States Court of Appeals Fifth Circuit.

Feb. 20, 1985.

Fulbright & Jaworski, Paul L. DeVerter, II, Sawnie A. McEntire, Roger Townsend, Houston, Tex., for defendant-cross plaintiff-appellant.

Crain, Caton, James & Womble, Patricia Hair, W.T. Womble, Houston, Tex., for defendants-cross defendants-appellees.

Tekell, Book & Matthews, Kenneth Tekell, Houston, Tex., for American Hoist & Derrick.

Appeals from the United States District Court for the Southern District of Texas.

Before CLARK, Chief Judge, WISDOM and HIGGINBOTHAM, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

The Norfolk & Western Railway Company appeals from a jury's determination that it negligently caused a train derailment. Perceiving no error in the proceedings below, we affirm the district court's entry of judgment on the verdict.

I

This suit arises out of a train derailment that occurred on November 30, 1975 on the Southern Pacific's San Jacinto River Bridge near Humble, Texas. The derailment was caused when a backhoe loaded on a flatcar owned by the Norfolk & Western tilted so that it hung over the side of the car and struck the truss of the bridge. The backhoe, other cargo, the railroad bridge, and various train cars sustained damages totalling over a million dollars. The tilting of the backhoe was apparently caused by a failure to lock in its movable cage when it was loaded onto the flatcar.

The backhoe was manufactured by American Hoist & Derrick Company for Fluor Engineers and was loaded onto the Norfolk & Western's flatcar by American Hoist at its facilities in Cleveland, Ohio for shipment to Fluor in Houston. The Norfolk & Western provided instructions for the loading of the car, and although these instructions suggested that the cage of the backhoe should be locked in place if a locking device was available, American Hoist failed to lock in the cage on its backhoe. The Norfolk & Western had an inspector at American Hoist's facility while the backhoe was loaded, but he apparently did not note whether the locking device had been set. Because American Hoist sealed the cage of the backhoe with plywood after loading in order to prevent its glass from breaking, the Norfolk & Western did not observe the problem when it made its final inspection upon accepting the car for shipment.

The car travelled on the Norfolk & Western's lines and the lines of two other railroads before it reached rail lines owned by the Southern Pacific, a distance of about 1,000 miles. At each interchange the railroad company assuming carriage inspected the loading of the flatcar, although the evidence was that the Southern Pacific did not make the required inspection when it accepted the car for shipment at Shreveport, Louisiana. Apparently there was at least a visual inspection of the car by employees of the Southern Pacific in Lufkin, Texas shortly before the derailment, and at that time the backhoe appeared to be properly secured. At some point in the journey between Lufkin and the San Jacinto River Bridge the cage of the backhoe broke loose from its securing cables and turned sideways causing the collision with the bridge and the derailment.

The jury found the Norfolk & Western 90% at fault in the accident, with the Southern Pacific and American Hoist at fault eight and two percent, respectively. ¹ The jury found that the Norfolk & Western had been negligent in instructing American Hoist about how properly to load the backhoe and negligent in failing to inspect the loading job. American Hoist was found negligent in failing to lock in the cage of the backhoe and the Southern Pacific was found negligent in failing to adequately inspect the flatcar. Damages of over one million dollars were assessed against the Norfolk & Western, covering damages to the backhoe, cargo, the train cars and cleanup and repair of the railroad bridge. The Norfolk & Western appeals the verdict on a number of grounds.

II

At the outset we must address a problem of limitations. The Norfolk & Western argues that the Southern Pacific's cross-action is time-barred by TEX.REV.CIV.STAT.ANN. art. 5526 (Vernon Supp.1984), the provision governing limitations in negligence actions for injury or damage to property. ² The facts surrounding the controversy are not disputed. The statute commenced running on November 30, 1975, the date of the train derailment, and on November 1, 1977, twenty-nine days before limitations ran, Fluor filed its original complaint naming the Southern Pacific and American Hoist as defendants. Fluor amended its complaint to add the Norfolk & Western as a defendant on November 15, and served the Norfolk & Western with this complaint and a summons pursuant to Fed.R.Civ.P. 4. The Southern Pacific filed its answer to Fluor's complaint on November 18 and in this same pleading asserted its cross-claim against the Norfolk & Western. The cross-claim was not served on the Norfolk & Western with a Rule 4 summons, but twenty days later, on December 8, 1977, and eight days after limitations expired, the Southern Pacific hand delivered a copy of its answer and cross-claim to the Norfolk & Western's attorney. The Norfolk & Western, having obtained an extension of time from Fluor's attorney, filed its answer to Fluor's complaint on March 8, 1978 but did not respond to the Southern Pacific's cross-claim.

Limited discovery ensued over the next two years, although none relating directly to the claims in the Southern Pacific's cross-action. Thus it was not until January of 1980, when counsel for the Southern Pacific inquired about the Norfolk & Western's failure to file an answer to the cross-claim, that the Southern Pacific learned that the Norfolk & Western considered the December 1977 service insufficient and intended to rely on limitations as a defense to that claim. The Southern Pacific then re-served the Norfolk & Western with a copy of its answer and cross-action, this time accompanied by a summons. The Norfolk & Western promptly moved to dismiss based on limitations, and the district court denied the motion, holding that although the initial in-hand service on the Norfolk & Western's attorney may have been insufficient under the requirements of Fed.R.Civ.P. 5(a), ³ the pleading and summons served on the Norfolk & Western in February 1980 amended any defects in service pursuant to Fed.R.Civ.P. 4(h). ⁴

The Norfolk & Western argues on appeal that the initial in-hand service of the cross-claim by counsel for the Southern Pacific was not sufficient under Rule 5(a) and could not have been amended under Rule 4(h) because the initial service was itself untimely. We address the timeliness issue first because if limitations expired on November 30, 1977, then none of the Southern Pacific's attempts at service were effective.

Resolution of the timeliness problem here turns on the applicability of the doctrine of tolling to the Southern Pacific's cross-claim. Because this cross-action was a pendent state law claim, the issue is governed by Texas law. Walker v. Armco Steel Corp., 446 U.S. 740, 750-51, 100 S.Ct. 1978, 1985-86, 64 L.Ed.2d 659 (1980); Calhoun v. Ford, 625 F.2d 576, 577 (5th Cir.1980). Our task is aided by a statutory provision which extends the limitations deadline here. Article 5539c, TEX.REV.CIV.STAT.ANN. (Vernon Supp.1984), provides as follows:

Counterclaims and cross-claims; period of limitation; extension.

In the event a pleading asserting a cause of action is filed under circumstances where at the date when answer thereto is required by law a counterclaim or cross-claim would otherwise be barred by the applicable statute of limitation, then the party so answering may, within 30 days following such answer date file a counterclaim or cross-claim in such cause and the period of limitation is hereby extended for such period of time provided that the counterclaim or cross-claim arises out of the same transaction or occurrence that is the subject matter of the opposing party's claim.

The statute was intended to operate in cases such as ours where the plaintiff waited to file his complaint at or near the date on which limitations expired, thereby subjecting the defending party to a limitations bar when he sought to assert counterclaims or cross-actions in his answer. See Hobbs Trailers v. J.T. Arnett Grain Co., 560 S.W.2d 85, 88-89 (Tex.1978).

The test for applicability of the statute is two-fold. First, the counterclaim or cross-action must arise out of the same transaction or occurrence as the plaintiff's claim. Second, the deadline for filing the answer in which the counterclaim or cross-action is to be asserted must expire outside of the normal limitations period. We conclude that the Southern Pacific's cross-action met both tests and that limitations did not run on its claim until January 5, 1978 ⁵ twenty-seven days after the Southern Pacific's first attempt at service on the Norfolk & Western. The claims asserted in the cross-action arose out of the same transaction or occurrence as Fluor's suit, and the Southern Pacific's answer to the amended complaint was not due until December 5, 1977--nearly a week after limitations would otherwise have expired. Its cross-action thus falls easily within the literal reach of Article 5539c. We find no indication in the limited number of decisions construing that provision that would lead us to any other conclusion. ⁶

The Norfolk & Western contends, however, that the in-hand service made on December 8, 1977, even if timely, was not effective because it was not accompanied by a summons. We agree that until the Norfolk & Western actually appeared in the lawsuit, the Southern Pacific should have served its cross-action along with a summons...