Missouri Pacific R. Co. v. Harbison-Fischer Mfg. Co.

• Decision Date: 06 July 1994
• Docket Number: HARBISON-FISCHER,No. 93-1232,93-1232
• Citation: 26 F.3d 531
• Parties: MISSOURI PACIFIC RAILROAD COMPANY, d/b/a Union Pacific Railroad Co., Plaintiff-Appellant Cross Appellee, v.MANUFACTURING CO., Defendant-Third Party Plaintiff-Appellee Cross Appellant, Custom Wire Mfg., Inc., Third Party Defendant Cross-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 531

26 F.3d 531

29 Fed.R.Serv.3d 859

MISSOURI PACIFIC RAILROAD COMPANY, d/b/a Union Pacific Railroad Co., Plaintiff-Appellant Cross Appellee, v. HARBISON-FISCHER MANUFACTURING CO., Defendant-Third Party Plaintiff-Appellee Cross Appellant Custom Wire Mfg., Inc., Third Party Defendant Cross-Appellee.

No. 93-1232.

United States Court of Appeals Fifth Circuit.

July 6, 1994.

As Amended on Denial of Rehearing Aug. 15, 1994.

Wesley S. Coddou, Houston, TX, for appellant.

Michael B. Hunter, Bishop, Payne, Lamsens, Williams & Werley, Fort Worth, TX, for Harrison.

Joel P. Smyer, Richard L. Bourland, Elizabeth F. Rogers, Bourland & Kirkman, L.L.P., Fort Worth, TX, for Custom Wire.

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

Before GOLDBERG, DAVIS, and DEMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

The district court below rendered several summary judgments in this multi-party case arising out of two consecutive leases of railroad property. We affirm two of the court's rulings, reverse one of them, and affirm the court's denial of a request for attorney's fees.

I.

In 1956, the Texas & Pacific Railway Company (TPRC) leased real property located in Forth Worth, Texas, to Harbison-Fischer Manufacturing. Upon entering the land, Harbison-Fischer built several buildings on the leased property. The lease provided that Harbison-Fischer would remove its plant and equipment within 30 days of the termination of the lease and that, if Harbison-Fischer failed to do so, TPRC could acquire title to the plant and equipment by notifying Harbison-Fischer within 30 days. The lease did not specify what would be the state of title in the event the lessor failed to give the notice to acquire title. The Missouri Pacific Railroad Company (MOPAC) later acquired TPRC, making MOPAC the lessor under the lease agreement.

On December 12, 1983, Harbison-Fischer notified MOPAC that Harbison-Fischer was terminating the lease effective January 14, 1984. On December 29, 1983, MOPAC acknowledged Harbison-Fischer's termination notice and requested that Harbison-Fischer remove its property by January 14, 1984. Harbison-Fischer, however, never removed its plant. MOPAC, meanwhile, never notified Harbison-Fischer that it elected to acquire title to the abandoned plant and equipment. At some point the following year, a machine tools company entered the abandoned property without a lease and began operations. MOPAC learned of the operations and in January 1985 sent a letter to Bill Mims, the company's head, instructing him to vacate the premises.

MOPAC then leased the plant and equipment to Custom Wire Manufacturing in July 1987 for a term of one year, with automatic renewal on an annual basis. The comprehensive, ten-page lease provided, inter alia, that Custom Wire would comply with federal environmental laws and be responsible for any costs associated with the release of oil and hazardous substances. The lease also permitted MOPAC to re-enter and re-possess the property in the event Custom Wire defaulted. Finally, the lease authorized MOPAC to take title to the plant and equipment and sell it if Custom Wire failed to remove it upon termination of the lease. The lease neither referred to the MOPAC/Harbison-Fischer lease nor conditioned any of the parties' rights and obligations upon Harbison-Fischer's approval.

The plant eventually was destroyed by fire in 1987 ¹, which either created or aggravated an environmental hazard. In November 1989, MOPAC sued Harbison-Fischer in Texas state court for various tort claims and for breach of contract due to Harbison-Fischer's failure to remove the plant. Two days later, Harbison-Fischer sued MOPAC and Custom Wire in a different state court for a declaratory judgment on both its lease with MOPAC and MOPAC's lease with Custom Wire. Harbison-Fischer also sued MOPAC and Custom Wire for attorneys' fees. The two suits were consolidated in state court in February 1990.

In August 1992, Harbison-Fischer moved for summary judgment against MOPAC and Custom Wire. Harbison-Fischer asserted that (1) MOPAC's claims against it were barred by Texas's four-year statute of limitations on contracts, and (2) the MOPAC/Custom Wire lease established that Custom Wire--and not Harbison-Fischer--was liable for any claims relating to the demolition of the plant. Custom Wire filed its own summary judgment motion in September 1992, arguing that Harbison-Fischer was not a party to the MOPAC/Custom Wire lease and, therefore, had no standing to assert that Custom Wire is liable for damages.

In October 1992, before the state trial court had ruled on Harbison-Fischer's and Custom Wire's summary judgment motions, MOPAC amended its petition, deleting the contract cause of action against Harbison- Fischer but adding an action for recovery of environmental remediation costs. ² Harbison-Fischer then removed the case to federal court because MOPAC's action for remediation costs arises under federal law. Recognizing that Harbison-Fischer and Custom Wire had not answered MOPAC's amended petition, the federal district court ordered the parties to answer and re-file their respective summary judgment motions. ³

Harbison-Fischer at the same time moved for leave to amend its notice of removal because the state court had granted summary judgment in favor of Harbison-Fischer as to MOPAC's state law tort claims against Harbison-Fischer. ⁴ In an attempt to secure the benefit of the state court's decision (which was made subsequent to Harbison-Fischer's original notice of removal), Harbison-Fischer sought to amend its notice removal to stress that it intended to remove only MOPAC's environmental remediation claim. The federal district court, however, denied Harbison-Fischer's motion, noting additionally that the state court's decision was meaningless because it was rendered after Harbison-Fischer had properly removed the case. ⁵

In December 1992, the district court granted Harbison-Fischer's summary judgment motion as to MOPAC on the basis of limitations but denied its motion as to Custom Wire. The court also denied Harbison-Fischer's claim against MOPAC and Custom Wire for attorneys' fees. The court granted Custom Wire's summary judgment motion against Harbison-Fischer. The court then entered final judgment for Harbison-Fischer and Custom Wire, stating that MOPAC and Harbison-Fischer, respectively, take nothing on their claims.

The following month MOPAC moved for a new trial, asserting that the scope of Harbison-Fischer's summary judgment motion had been limited to MOPAC's state law claims and that MOPAC's environmental remediation claim had been reserved for further deliberations. The district court denied MOPAC's motion for a new trial. ⁶ MOPAC now appeals the court's summary judgment for Harbison-Fischer. Harbison-Fischer appeals the court's summary judgment for Custom Wire and the court's denial of its claim for attorneys' fees.

II.

We review a summary judgment de novo, applying the same standard as the district court. D.E.W., Inc. v. Local 93, Laborers' Int'l. Union, 957 F.2d 196 (5th Cir.1992). Therefore, summary judgement is appropriate "if the pleadings, depositions, answers to interrogatories, and 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). In reviewing the facts contained therein, we draw all inferences in a light most favorable to the nonmoving party. McCarty v. United States, 929 F.2d 1085, 1089 (5th Cir.1991).

III.

We begin our analysis by reviewing the district court's summary judgment for Harbison-Fischer as to all of MOPAC's claims. For reasons that are apparent below, we will separate our discussion of the state law tort claims from the environmental remediation claim.

A.

MOPAC first argues that the district court improperly granted Harbison-Fischer summary judgment as to its state law tort claims because Harbison-Fischer insufficiently pleaded an essential element of its case with which it had the burden of proof at trial. Specifically, MOPAC argues that because Harbison-Fischer asserted that MOPAC's claims were barred by limitations, which is an affirmative defense, Harbison-Fischer bore the burden of establishing when MOPAC's causes of action accrued. MOPAC had three outstanding tort claims when Harbison-Fischer moved for summary judgment: (1) continuing trespass, (2) continuing nuisance, and (3) interference with contract. ⁷

MOPAC recognizes that its breach of contract action was barred by Texas's four-year contract statute of limitations but asserts that the four-year statute became irrelevant once the contract claim was deleted. The proper limitations period, MOPAC asserts, is the separate tort limitations period. MOPAC essentially argues that Harbison-Fischer failed to meet its burden by relying on the contracts limitations period rather than the torts limitations period. Thus, it concludes, the district court's ruling that MOPAC's claims were "barred by limitations" was inappropriate. MOPAC's argument is not without merit. Notwithstanding its claims to the contrary, Harbison-Fischer never outlined to the court the applicable torts statute of limitations or explained why, in its opinion, MOPAC was barred by such limitations. Because it asserted a limitations defense, Harbison-Fischer bore this burden at the summary judgment stage.

But Harbison-Fischer's omission does not require us to reverse the district court's summary judgment at this point. Although the court based its summary judgment for Harbison-Fischer on limitations, Harbison-Fischer provided an alternative basis for granting its motion: lack of ownership. Specifically, Harbison-Fischer argued that before its burden of establishing its affirmative defense arose, MOPAC had to make a threshold showing that Harbison-Fischer owned the buildings when the...