

Majority and Dissenting Opinions of
January 11, 2011, Withdrawn; Reversed and Rendered and Substitute Majority and
Dissenting Opinions filed May 26, 2011.

 

 
In The
 
Fourteenth Court of Appeals
                                                                                          

NO. 14-09-01032-CV

 
Daybreak Express, Inc., Appellant
V.
Lexington Insurance Co., as
Subrogee of Burr Computer Environments, Inc. AND J. SUPOR & SONS TRUCKING & RIGGING CO., Appellee
 

On Appeal from the 333rd
District Court
Harris County, Texas
Trial Court Cause No. 2005-01530

 
SUBSTITUTE MAJORITY OPINION
 
The majority and dissenting opinions issued on
January 11, 2011 are withdrawn, and the panel issues the following substitute
majority and dissenting opinions.
In this subrogation action, Lexington Insurance Co.
sued Daybreak Express, Inc. in connection with property damage that occurred
during the interstate shipment of electronic equipment owned by Burr Computer
Environments, Inc.  
The trial court found that (1) Lexington proved all
elements of a Carmack Amendment claim under 49 U.S.C. § 14706 (2006); (2) the
claim was not time-barred under the applicable New Jersey statute of
limitations; and (3) Lexington sustained damages of $85,800.  The trial court
signed a final judgment awarding damages and attorney’s fees, and Daybreak
appealed.  We reverse and render a take-nothing judgment in favor of Daybreak
because Lexington’s Carmack Amendment claim is barred by limitations under
Texas law.
BACKGROUND
Burr hired J. Supor & Sons Trucking & Rigging
Co. to transport Burr’s equipment from New Jersey to Texas.  Supor issued a
bill of lading for the shipment, which it referred to Daybreak, a New Jersey
trucking company.  Supor’s personnel loaded the equipment onto Daybreak’s
truck, and Daybreak transported the equipment to Daybreak’s New Jersey
terminal.  Daybreak transferred the bill of lading to its sister company, which
then transferred it to T. Orr Trucking, Inc.  Orr transported the equipment to
Texas.  The equipment arrived in Texas on August 15, 2002 in a damaged
condition.  
Burr presented a written claim for damages to
Daybreak on September 11, 2002.  Daybreak hired an independent adjuster from
Cunningham Lindsey to investigate Burr’s claim.  The adjuster submitted a
report to Daybreak reflecting that the adjuster and Burr had agreed to value
Burr’s claim at $166,655.  Burr contended that this valuation was a settlement
agreement.  Daybreak contacted Burr on February 6, 2003 and informed Burr that
Daybreak would pay only $5,420 for the claim.  
Burr also filed a damage claim with Supor.  Supor
paid Burr $5,000 on November 13, 2003 to meet its insurance policy deductible. 
Supor’s insurer, Lexington, paid Burr $87,500 to settle the claim on November
18, 2003.    
Lexington filed a subrogation suit against Daybreak
in Texas state court on January 6, 2005.  In its original petition, Lexington
asserted only a single state law breach of contract claim based on the alleged
settlement agreement between Burr and Daybreak.  The original petition recited
that Daybreak delivered a shipment to Burr in Texas on August 15, 2002; that a
bill of lading had been issued by Supor and consigned to Daybreak; and that
“[u]pon arrival in Houston, it was discovered the equipment had been damaged in
transit.”  Lexington alleged that “it issued a policy of cargo insurance to J.
Supor and Sons Trucking and Rigging Co., which provided coverage to Burr for
its cargo the subject of this lawsuit.”  Lexington further alleged, “When
Daybreak breached its settlement agreement with Burr, Burr submitted the claim
to Plaintiff, and Plaintiff subsequently reimbursed the loss suffered by Burr
under its policy of insurance.”  Lexington asserted that it “became subrogated
to the rights of Burr in both contract and equity.”  Lexington additionally
asserted that “it is subrogated to the causes of action of Burr both in
contract and tort, and may prosecute the claim of Burr against Daybreak.”
Daybreak removed the case to federal court, arguing
that Lexington’s claim “is a civil action pending in the State Court against a
common carrier to recover damages for alleged delay, loss, or injury to a
shipment arising under the Interstate Commerce Act.”  See 49 U.S.C. §
14706.  Lexington filed a motion to remand and contended that federal question
jurisdiction under 28 U.S.C. §§ 1331 and 1441(b) did not encompass the single
state law breach of contract action pleaded in its original petition.  See 28
U.S.C. §§ 1331, 1441(b) (2006).  In response, Daybreak conceded that “a federal
claim does not appear on the face of the original petition, but argue[d] that
federal jurisdiction is nevertheless proper under the complete preemption
doctrine.”  See Lexington Ins. Co v. Daybreak Express, Inc., 391 F.
Supp.2d 538, 540 (S.D. Tex. 2005).
United States District Judge Sim Lake concluded that
“Lexington does not seek to impose liability on Daybreak for damages arising
from the interstate transport of property.”  Id. at 541.  “Instead,
Lexington seeks to enforce an agreement it alleges Daybreak entered into in
order to settle claims for damages to a shipment of electrical equipment.”  Id. 
“Resolution of this contract claim does not turn on the rights and
responsibilities of Daybreak as a carrier in interstate commerce.”  Id. 
The federal district court also observed as follows:  “Lexington seeks to
recover in contract not for loss or damage to the electrical equipment, but
rather for breach of Daybreak’s alleged promise to settle those claims for the
specified sum.”  Id. at 541 n.8.  Accordingly, the federal
district court remanded this case on June 24, 2005.
More than two years after Daybreak rejected the
valuation of Burr’s claim, Lexington added claims for breach of contract, indemnity,
contribution, and unjust enrichment arising from the payment it made to Burr on
Supor’s behalf.  Lexington pleaded for the first time on May 4, 2007 that
Daybreak is liable for damages under the Carmack Amendment.
Following a bench trial, the trial court concluded
that the “New Jersey statute of limitations is applicable and therefore
[Lexington’s] claim is not time barred.”  The trial court found that the
equipment was “delivered to the initial carrier in good condition” and was
“damaged before delivery” to its final destination, which entitles Lexington to
damages under its Carmack Amendment claim.[1] 
See Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137–38
(1964), aff’g Mo. Pac. R.R. Co. v. Elmore & Stahl, 368 S.W.2d 99 (Tex.
1963).  The trial court awarded Lexington $85,800 in damages, representing the
amount paid to Burr less the damaged equipment’s salvage value, plus attorney’s
fees.  
ANALYSIS
I.         Applicable
Limitations Period
Daybreak contends on appeal that Lexington’s claim is
barred by limitations.  As subrogee, Lexington stepped into Burr’s shoes and is
subject to any limitations defense that would apply to Burr.  See, e.g.,
Guillot v. Hix, 838 S.W.2d 230, 232–33 (Tex. 1992) (“Because a
subrogation action is derivative, the defendant in such an action may
ordinarily assert any defense he would have had in a suit by the subrogor . . .
.  Limitations is among the defenses which may be asserted.”).  Determining the
applicable limitations period requires an examination of the federal statutory
scheme governing interstate shipments by common carriers.  
A carrier’s liability for damage to an interstate
shipment is a matter of federal law.  Mo. Pac. R.R. Co., 377 U.S. at 137. 
The applicable statutory scheme is set forth in the Carmack Amendment:
A carrier providing transportation or service . . . shall
issue a receipt or bill of lading for property it receives for transportation
under this part.  That carrier and any other carrier that delivers the property
and is providing transportation or service . . . are liable to the person
entitled to recover under the receipt or bill of lading.  The liability imposed
under this paragraph is for the actual loss or injury to the property caused by
(A) the receiving carrier, (B) the delivering carrier, or (C) another carrier
over whose line or route the property is transported . . . .
49 U.S.C. § 14706(a).  A
state court has subject matter jurisdiction to adjudicate a claim under the
Carmack Amendment.  See id. § 14706(d)(3).
Parties frequently establish the time period for
filing suit under the Carmack Amendment by agreement.  See generally Shao v.
Link Cargo (Taiwan) Ltd., 986 F.2d 700, 707–08 (4th Cir. 1993) (“The
Carmack Amendment . . . contemplates that limitations periods are terms to be
bargained over between shipper and carrier . . . .”).  Because the parties did
not do so here, we must identify the source of the applicable limitations
period.  
Daybreak asserts that the Carmack Amendment itself
establishes a two-year statute of limitations.  See 49 U.S.C. §
14706(e).  Alternatively, Daybreak argues that a “catch-all” four-year
limitation period applies.  See 28 U.S.C. § 1658(a) (2006).  Daybreak
contends that Lexington’s suit is untimely under either statute of limitations
because the Carmack Amendment claim Lexington first pleaded on May 4, 2007 (1)
was not brought within two or four years of Daybreak’s disallowance of the
written claim for damages on February 6, 2003; and (2) does not relate back to
Lexington’s claim for breach of settlement agreement filed on January 6, 2005.
We reject Daybreak’s contention that federal law
provides the applicable limitations period in the absence of an agreed
limitations period.  Daybreak relies on subsection (e), which states that “[a]
carrier may not provide by rule, contract, or otherwise . . . a period of less
than 2 years for bringing a civil action against it under this section.”  49
U.S.C. § 14706(e).  But this section does not establish a limitations period;
instead, it provides only that carriers cannot establish by contract a
limitations period of less than two years.  See La. & W.R. Co. v.
Gardiner, 273 U.S. 280, 284 (1927).[2]
The four-year “catch-all” limitations period imposed
by 28 U.S.C. § 1658 does not apply because (1) the four-year limitations period
applies to claims made possible by post-1990 legislative enactments; and (2) Carmack
Amendment claims against motor carriers have been authorized since 1935.  See
Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 382 (2004) (“We
conclude that a cause of action ‘aris[es] under an Act of Congress enacted’
after December 1, 1990 — and therefore is governed by 
§ 1658’s 4-year statute of limitations — if the plaintiff’s claim against the
defendant was made possible by a post-1990 enactment.”) (quoting 28 U.S.C. §
1658(a)); see also Motor Carrier Act of 1935, Pub. L. No. 74-255, § 219,
49 Stat. 543, 563 (“The provisions of section 20(11) [the Carmack Amendment] of
part I [the Interstate Commerce Act] shall apply with like force and effect to
receipts or bills of lading of common carriers by motor vehicle.”).  
When the governing federal statute does not provide a
limitations period, we “borrow” the most closely analogous state limitations
period.  See Graham Cnty. Soil & Water Conservation Dist. v. U.S. ex
rel. Wilson, 545 U.S. 409, 414 (2005).  There are two candidates for the
title in this case.  
The first candidate is the New Jersey statute of
limitations, which provides that an “action at law for . . . any tortious injury
to . . . personal property . . . or for recovery upon . . . liability, express
or implied” must be brought not later than six years after the day the cause of
action accrues.  N.J. Stat. Ann. § 2A:14–1 (West 2000).  The second candidate
is the Texas statute of limitations, which provides that “a person must bring
suit for . . . injury to . . . the property of another . . . not later than two
years after the day the cause of action accrues.”  Tex. Civ. Prac. & Rem.
Code Ann. § 16.003(a) (Vernon 2002).  This circumstance adds a conflict of law
component to the process of determining the applicable statute of limitations. 

The case was tried to the bench on October 18, 2007. 
After both sides rested and while closing argument was being presented, the
trial court questioned Lexington’s counsel about whether the statute of
limitations is substantive or procedural for conflict of law purposes.  The
trial court stated, “In conflicts law you have to decide whose law you’re
applying and then you have to analyze procedure versus substance.”  In response
to the trial court’s questioning, Lexington’s counsel argued that the statute
of limitations is substantive law for conflict of law purposes in this case and
that New Jersey law should apply.
Lexington reiterated this argument in Plaintiff’s
Post-Trial Brief filed on October 29, 2007.  Lexington further argued that “any
amended claims asserted in this lawsuit relate[] . . . back to the original
date of filing of suit of January 5, 2005 . . . .”  Daybreak also filed
post-trial briefing on October 29, 2007, in which it contended that (1)
Lexington’s claim is barred under a two-year or a four-year limitations period;
(2) “[t]he claims based in federal law arise from wholly separate facts and
circumstances than the state law breach of contract claim;” and (3) “Judge Sim
Lake made a clear distinction between the federal claims for property damage
and the state law claims for breach of contract.”  Lexington filed a reply on
November 1, 2007; among other things, Lexington argued that its Carmack
Amendment claim would relate back to its original petition filed in 2005 “[i]f
a Texas statute of limitations applies . . . .”   Lexington also argued that
“Judge Lake merely held that Plaintiff was only asserting a breach of contract claim
at the time, not that the contract claim was ‘wholly based on a new, distinct,
or different transaction or occurrence’” (original emphasis).
As it did in the trial court, Lexington argues on
appeal that the New Jersey statute of limitations is substantive law that should
apply under the “most significant relationship” test used in Texas, the forum
state, to decide conflict of law questions.  See Hughes Wood Prods., Inc. v.
Wagner, 18 S.W.3d 202, 205 (Tex. 2000).  Under this test, Texas courts
consider multiple factors to determine which state’s law has the most
significant relationship to the particular substantive issue to be resolved.  Id. 
Before applying the “most significant relationship” test, however, we first
must address whether the statute of limitations is procedural or substantive
for these purposes.  
Determining which state’s statute of limitations
governs is a question of law for the court to decide de novo.  See,
e.g., Hughes Wood, 18 S.W.3d at 204; Greenberg Traurig of N.Y.,
P.C., v. Moody, 161 S.W.3d 56, 70 (Tex. App.—Houston [14th Dist.] 2004, no
pet.).  Under Texas conflict of law principles, courts apply non-substantive,
procedural rules of the forum state.  See Arkoma Basin Exploration Co. v.
FMF Assocs. 1990-A, Ltd., 249 S.W.3d 380, 387 (Tex. 2008) (Texas law governed 
procedural matter of error preservation despite application of Virginia law to
other issues); PenWell Corp. v. Ken Assocs., Inc., 123 S.W.3d 756, 763
(Tex. App.—Houston [14th Dist.] 2003, pet. denied) (declining to apply Japanese
law on procedural issue because procedural matters are governed by the forum
state’s law).  A conflict of substantive law must exist to invoke the “most
significant relationship” test.  PenWell Corp., 123 S.W.3d at 763
(citing Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 419 (Tex. 1984),
and Young Ref. Corp. v. Penzoil Co., 46 S.W.3d 380, 385 (Tex.
App.—Houston [1st Dist.] 2001, pet. denied)).  “Generally, what is a matter of
substance and what is a matter of procedure is determined by the law of the
forum state according to its own laws.”  Id. at 764. 
Texas law generally treats statutes of limitations as
procedural in nature.  See California v. Copus, 309 S.W.2d 227, 230–31 (Tex.
1958) (with some exceptions, statutes of limitations are generally procedural
for conflict of law purposes); see also Johansen v. E.I. Du Pont De Nemours
& Co., 810 F.2d 1377, 1380–81 (5th Cir. 1987) (subject to Copus
exceptions, Texas considers statutes of limitations to be procedural for conflict
of law purposes); cf. Robinson v. Crown Cork & Seal Co., Inc., No.
06-0714, 2010 WL 4144587, at *9 (Tex. Oct. 22, 2010) (with some exceptions,
statutes of limitations are generally considered to be procedural for purposes
of retroactivity analysis) (citing Baker Hughes, Inc. v. Keco R. & D.,
Inc., 12 S.W.3d 1, 4 (Tex. 1999)).  If a statute creates a private right of
action and incorporates a time limit within which a claimant must initiate an
action, then the limitations period may become a substantive element of the
statutory cause of action itself.  See Copus, 309 S.W.2d at 230–31; see
also Shields v. State, 27 S.W.3d 267, 274–75 (Tex. App.—Austin 2000, no
pet.).  This exception does not apply here because the statute of limitations
at issue does not create a private right of action; instead, it restricts the
period within which an existing right may be acted upon.
Accordingly, the Texas two-year limitations period
applies here because it is a procedural rule of the forum state.  See Tex.
Civ. Prac. & Rem. Code Ann. § 16.003; see also Arkoma Basin, 249
S.W.3d at 387; Penwell Corp., 123 S.W.3d at 763–64.[3]

II.        Accrual
The
analysis thus far has focused on the length of the statute of limitations.  The
next step is to address accrual.  
When it becomes
necessary to borrow a state limitations period for a federal cause of action,
only that portion necessary to fill the gap left by Congress is to be
borrowed.  M.I.S. Eng’g v. U.S. Express Enter., 438 F. Supp.2d 1056,
1065 (D. Neb. 2006) (citing West v. Conrail, 481 U.S. 35, 39–40 & n.6
(1987)).  Although the Carmack Amendment does not provide an applicable
limitations period, it does establish when Lexington’s claim accrued.  The
Carmack Amendment states: “The period for bringing a civil action is computed
from the date the carrier gives a person written notice that the carrier has
disallowed any part of the claim specified in the notice.”  See 49
U.S.C. § 14706(e)(1); see also M.I.S. Eng’g, 438 F. Supp.2d at 1065.  Daybreak
disallowed the claim by written notice on February 6, 2003.  Therefore, the
Carmack Amendment claim accrued on that date.  
Lexington
filed its original petition on January 6, 2005, within two years of the date on
which Daybreak disallowed the damages claim.  But Lexington sued only for
breach of the alleged settlement agreement in its original petition; the
Carmack Amendment claim was not asserted until 2007.  To determine whether
Lexington’s Carmack Amendment claim was timely, we must decide next whether it
“relates back” to the claim for breach of an alleged settlement agreement filed
before expiration of the limitations period.  
III.      Relation
Back
We look to state law to determine how to apply a
state limitations period to an action accruing under federal law unless the
applicable limitations rule would be inconsistent with federal law.  See Bd.
of Regents of the Univ. of State of N.Y. v. Tomanio, 446 U.S. 478, 483
(1980) (federal section 1983 claim governed by “borrowed” state statute of
limitations as well as state rules tolling limitations period); see also
Johnson v. Ry. Exp. Agency, Inc., 421 U.S. 454, 463–64 (1975) (“Any period
of limitation . . . is understood fully only in the context of the various
circumstances that suspend it from running against a particular cause of
action. . . .  In borrowing a state period of limitations for application to a
federal cause of action, a federal court is relying on the State’s wisdom in
setting a limit, and exceptions thereto, on the prosecution of a closely
analogous claim.”).  
Because federal courts would apply Texas
relation-back rules in deciding a Carmack Amendment claim, there is no conflict
between Texas and federal law on the relation-back issue.  See, e.g., Moore
v. State of Ind., 999 F.2d 1125, 1130 (7th Cir. 1993) (“In a federal-question
case borrowing a state statute of limitations, federal law provides the
requirements for the relation back of an amendment, while state law determines
the more basic question of whether the substance of the amendment mandates that
it relate back in order to avoid the applicable statute of limitations.”); see
also Saxton v. ACF Indus., Inc., 254 F.3d 959, 963 (11th Cir. 2001) (“[W]e
join the other circuits in holding that . . . federal courts . . . apply
relation-back rules of state law where, as here, state law provides the statute
of limitations for the action.”) (citing Arendt v. Vetta Sports, Inc.,
99 F.3d 231, 236 (7th Cir. 1996), Lundy v. Adamar of N.J., Inc., 34 F.3d
1173, 1184 (3d Cir. 1994), and McGregor v. La. State Univ. Bd. of Supervisors,
3 F.3d 850, 863 n.22 (5th Cir. 1993)).
Under Texas law, the test for determining whether a
claim asserted in an amended pleading filed after limitations has run relates
back to an earlier, timely filed claim focuses on “whether the cause of action alleged
in the amended petition is wholly based upon and grows out of a new, distinct,
or different transaction or occurrence.”  Meisler v. Republic of Tex. Sav.
Ass’n, 758 S.W.2d 878, 881 (Tex. App.—Houston [14th Dist.] 1988, no writ)
(citing Leonard v. Texaco, 422 S.W.2d 160, 163 (Tex. 1967)); see also
Tex. Civ. Prac. & Rem. Code Ann. § 16.068 (Vernon 2008).  The fact that
different causes of action are asserted in the original and amended petitions
is not dispositive.  Meisler, 758 S.W.2d at 882.  Similarly, proximity
in time between separate occurrences also is not determinative.  See Harris
v. Galveston Cnty., 799 S.W.2d 766, 769 (Tex. App.—Houston [14th Dist.]
1990, writ denied) (post-operation negligence did not relate back to claims of
negligence that allegedly occurred during surgery, even though post-operation
care was necessitated by and occurred soon after surgery).
Here, the Carmack Amendment claim rests on a
transaction that centered on the transport of electrical equipment by a common
carrier from New Jersey to Texas; this transaction focuses on details of the
transport by Supor, Daybreak, Daybreak’s sister company, and Orr across state
lines that resulted in $85,800 in damages.  In contrast, the breach of contract
claim rests on a wholly separate transaction that centered on an alleged
settlement agreement; this separate transaction focuses on negotiations between
Burr and Cunningham Lindsey as Daybreak’s purported agent leading to the
alleged $166,655 settlement.  On this record, Lexington’s 2007 Carmack
Amendment claim is “wholly based on a new, distinct or different transaction”
that is independent of the settlement agreement upon which Lexington predicated
its 2005 breach of contract claim.  Therefore, Lexington’s Carmack Amendment claim
does not relate back to the breach of contract claim asserted in its original
petition.  See Meisler, 758 S.W.2d at 882 (“The cause of action alleged
in Appellant’s original petition is based on and grows out of an entirely
distinct and different transaction than that alleged in his amended petition. 
The original cause of action was based upon a contract which committed Appellee
to make a loan to FWC upon certain specified terms.  The cause of action
alleged in the fourth amended petition is based upon a deed of trust executed
to secure payment of a loan made to FWC by Appellee.”); see also Walker v.
Presidium Inc., 296 S.W.3d 687, 694–95 (Tex. App.—El Paso 2009, no pet.)
(breach of contract and extra-contractual claims pertaining to rental car
company’s failure to pay uninsured motorist benefits did not relate back to
originally-pleaded negligence claim arising out of underlying car accident).
The conclusion that the Carmack Amendment claim and
the claim for breach of a purported settlement agreement involve wholly
distinct transactions comports with Lexington’s characterization of its claims
in its court filings.  Lexington successfully argued in federal court that the
Burr-Daybreak settlement transaction was wholly distinct from the underlying
transaction to transport equipment — and, therefore, beyond the reach of
complete preemption under the Carmack Amendment:  “The sole cause of
action asserted by Lexington is for breach of the settlement agreement . . . . 
Lexington has not pled the underlying cause of action for which the settlement
was reached; in fact if the underlying cause of action is for negligence, it
would be time-barred by the Texas two-year statute of limitations . . . .” 
(original emphasis).  The federal district court agreed with Lexington. 
“Because this is not a suit to recover for loss or damage to property against a
carrier, but rather one to enforce a settlement agreement, the case will be
remanded to state court.”  Lexington Ins. Co., 391 F. Supp.2d at 541. 
In so holding, the federal district court observed that “Lexington seeks to
recover in contract not for loss or damage to the electrical equipment but
rather for breach of Daybreak’s alleged promise to settle those claims for a
specified sum.”  Id. at 541 n.8.  This conclusion also dovetails
with case law holding that a claim for damages under the Carmack Amendment
sounds in negligence.  See M.I.S. Eng’g, 438 F. Supp.2d at 1062. 
The determination that interstate transportation of
goods by a common carrier is a transaction distinct from a purported settlement
agreement does not depend on an estoppel theory or on Lexington having asserted
inconsistent positions.  Instead, this determination flows from the conclusion that
Lexington’s claim for breach of the purported settlement agreement was not subject
to complete preemption under the Carmack Amendment — and, therefore, was not
removable to federal court based on federal question jurisdiction under 28
U.S.C. § 1441(b).  See Lexington Ins. Co , 391 F. Supp.2d at 540–41.
In reaching this holding, the federal district court
cited Fifth Circuit case law discussing removability and the scope of complete
preemption under the Carmack Amendment.  Id. at 540 (citing Hoskins
v. Bekins Van Lines, 343 F.3d 769 (5th Cir. 2003)).  Hoskins upheld
removal of state law claims for negligence, breach of contract, and violations
of the Texas Deceptive Trade Practices Act arising from damage to Hoskins’s
personal belongings that occurred while Bekins was storing the belongings and
then moving them from Texas to Virginia.  Hoskins, 343 F.3d at 771, 778.
Although a preemption defense provides no basis for
removal under 28 U.S.C. § 1441(b), “the Supreme Court has construed certain
federal statutes as ‘not only preempting state law but also authorizing removal
of actions that sought relief only under state law.’”  Id. at 773
(quoting Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6-7 (2003)). 
“In these contexts, the federal statute ‘so forcibly and completely displace[s]
state law that the plaintiff’s cause of action is either wholly federal or
nothing at all.’”  Id. (quoting Carpenter v. Wichita Falls Ind. Sch.
Dist., 44 F.3d 362, 366 (5th Cir. 1995)).  The Fifth Circuit concluded that
Hoskins’s claims could be removed under 28 U.S.C. §1441(b) because “Congress
intended for the Carmack Amendment to provide the exclusive cause of action
for loss or damages to goods arising from the interstate transportation of
those goods by a common carrier.”  Id. at 778 (original emphasis). 
“Accordingly, we hold that the complete pre-emption doctrine applies.”  Id. 
“Because the Carmack Amendment provides the exclusive cause of action for such
claims, we find that Hoskins’ claims ‘only arise[] under federal law and could,
therefore be removed under § 1441.’”  Id. (quoting Beneficial,
539 U.S. at 11).
Given this backdrop, Lexington cannot convincingly argue
on appeal that “Lexington’s originally filed claim for breaching an alleged
agreement to pay for cargo damage was not ‘wholly based on a new,
distinct, or different transaction or occurrence’ from the cargo claim itself”
(original emphasis).  The expansive reach of complete preemption under the
Carmack Amendment means that any cause of action arising from the
interstate transportation of goods by a common carrier “‘is either wholly
federal or nothing at all’” regardless of how it is labeled.  Hoskins,
343 F.3d at 773 (quoting Carpenter, 44 F.3d at 366).  Therefore, Lexington’s
claim for breach of a settlement agreement would have been subject to complete
preemption under the Carmack Amendment if (as Lexington now contends in this appeal)
that claim arose from the interstate transportation of goods by a common
carrier.  See id. at 778; Lexington Ins. Co., 391 F. Supp.2d at
540–41.  Lexington’s claim for breach of the purported settlement agreement
cannot be both un-preempted and less than wholly distinct from the interstate
transportation of goods by a common carrier. 
Because Lexington’s 2007 Carmack Amendment claim arises
from a distinct transaction and does not relate back to the 2005 claim for
breach of an alleged settlement agreement, the Carmack Amendment claim is
barred by the applicable two-year limitations period.  See Tex. Civ.
Prac. & Rem. Code Ann. § 16.003; see also Carpenter, 44 F.3d at 366
(“A plaintiff with a choice between federal- and state-law claims may elect to
proceed in state court on the exclusive basis of state law, thus defeating the
defendant’s opportunity to remove, but taking the risk that his federal claims
will one day be precluded.”).
CONCLUSION
Because the only claim supported by the trial court’s
findings is barred by limitations, we must reverse the judgment of the trial
court and render a take-nothing judgment in favor of Daybreak.
                                                                                                                                                                                                                                    
                                                                        /s/        William
J. Boyce
                                                                                    Justice
 
 
Panel consists of Justices Seymore,
Boyce, and Christopher.  (Christopher, J., dissenting).
 




[1]
These findings were recited in the final judgment.  We consider findings of
fact recited in the judgment unless they are supplanted by separately filed
findings.  See In re C.A.B., 289 S.W.3d 874, 880–81 (Tex. App.—Houston
[14th Dist.] 2009, no pet.).  The trial court made no findings on any element
of any claims other than the Carmack Amendment claim, and we do not consider
the other claims here.  See Tex. R. Civ. P. 299 (“The judgment may not
be supported upon appeal by a presumed finding upon any ground of recovery . .
. no element of which has been included in the findings of fact . . . .”).


[2]
Daybreak claims that its tariff establishes a limitation period because “it
reiterated the Carmack Amendment’s two-year statute of limitations by reference
. . . .”  We need not address whether the tariff applies or incorporates a
statute of limitations under the Carmack Amendment because we conclude that the
Carmack Amendment establishes no statute of limitations.    


[3]
Relying on Computer Assoc. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453,
461 n.3 (Tex. 1996), Lexington argued in the trial court that “New Jersey’s
statute of limitations is substantive, not procedural” for conflict of law
purposes.  Lexington’s reliance on Computer Associates is misplaced. 
The cited footnote appears in an appendix to the supreme court’s opinion.  The
appendix contains an opinion from the United States Court of Appeals for the
Second Circuit in which that court certified two questions of Texas law to the
Texas Supreme Court.  In doing so, the Second Circuit recounted the case’s
procedural history beginning with the filing of the underlying suit in the
United States District Court for the District of New Jersey.  Id.  The
Second Circuit noted that “New Jersey’s choice of law rules determine which
state’s statute of limitations applies” because the case originally had been
filed in New Jersey.  Id.  The Second Circuit then stated, “New Jersey
has abandoned the prevalent rule that the statute of limitations is a
procedural matter and therefore the forum state’s statute of limitations is
applicable, regardless of which state’s substantive law applies.”  Id.
(citing Heavner v. Uniroyal, Inc., 305 A.2d 412, 415–18 (N.J. 1973), and
Warner v. Auberge Gray Rocks Inn, Ltee., 827 F.2d 938, 940–41 (3d Cir.
1987)).  If Lexington’s suit against Daybreak had been filed in a New Jersey
court, then New Jersey’s conflict of law principles would govern and require
application of an interest-based test to determine which state’s statute of
limitations would control.  See Heavner, 305 A.2d at  415–18.  But
because Lexington’s chosen forum was Texas rather than New Jersey, Texas conflict
of law principles govern this case and the statute of limitations is treated as
a controlling procedural rule under governing Texas law.  PenWell Corp.,
123 S.W.3d at 764.


