Daybreak Express, Inc. v. Lexington Insurance Co.
342 S.W.3d 795
Tex. App.2011Background
- Burr hired Supor & Sons to transport equipment from New Jersey to Texas; Daybreak (via its affiliates) received the shipment and transported it to Texas, arriving August 15, 2002 in damaged condition.
- Burr claimed damages; Burr and an adjuster valued Burr’s claim at $166,655; Daybreak offered $5,420; Burr's deductible was paid by Supor; Lexington (insurer-subrogee) paid Burr $87,500 and $5,000 from Supor’s insurer to Burr.
- Lexington filed a subrogation suit in Texas state court on January 6, 2005, initially asserting only a state-law breach-of-settlement-contract claim related to Burr–Daybreak settlement discussions.
- Daybreak removed to federal court; district court remanded, concluding Lexington’s claim alleged breach of a settlement, not a Carmack Amendment claim.
- Lexington later pleaded Carmack Amendment claim (May 4, 2007). The bench trial found New Jersey law applicable and that the Carmack claim was timely; the trial court awarded $85,800 and fees.
- The court of appeals reversed, holding the Carmack Amendment claim is barred by Texas two-year limitations; the substitute majority rendered a take-nothing judgment for Daybreak.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What limitations period governs Carmack Amendment claim? | Lexington argues New Jersey law applies; longer six-year limit. | Daybreak argues Carmack Amendment or 4-year catch-all; two-year Texas limit should apply as procedural. | Texas two-year limitation applies; Carmack claim barred. |
| Accrual date for Carmack Amendment claim? | Accrual when Daybreak disallowed claim; timely filing possible if tolling applies. | Accrual date fixed at disallowance; need relation back to timely breach claim. | Accrual on February 6, 2003; delayed assertion not timely unless relates back. |
| Relation back of Carmack Amendment claim to initial breach claim under §16.068? | Amendment relates back under Meisler/Milestone style; not a wholly new transaction. | Carmack Amendment claim rests on a distinct interstate-transport transaction; not relating back. | Carmack Amendment claim does not relate back; barred by limitations. |
| Is Carmack Amendment claim wholly distinct from the settlement-based breach claim for complete preemption/removal analysis? | Should not blur the two transactions; arguments on preemption are separate. | Under Carmack complete preemption, the underlying claim would be wholly federal; removal issues apply. | Complete preemption does not rescue timeliness; claim treated as time-barred under state law. |
Key Cases Cited
- Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134 (U.S. 1964) (Carmack Amendment liability framework; accrual principles)
- Jones v. R.R. Donnelly & Sons Co., 541 U.S. 369 (U.S. 2004) (post-1990 enactments and 4-year limitations applicability)
- Arkoma Basin Exploration Co. v. FMF Assocs. 1990-A, Ltd., 249 S.W.3d 380 (Tex. 2008) (conflicts of law; procedural vs substantive limitations in TX)
- PennWell Corp. v. Ken Assocs., Inc., 123 S.W.3d 756 (Tex. App.—Hou. [14th Dist.] 2003) (Texas borrowing of limitations for federal actions)
- Meisler v. Republic of Tex. Sav. Ass'n, 758 S.W.2d 878 (Tex. App.—Houston [14th Dist.] 1988) (relation back under Texas law)
- Hoskins v. Bekins Van Lines, 343 F.3d 769 (5th Cir. 2003) (Carmack Amendment complete preemption and removal)
- Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362 (5th Cir. 1995) (choice between federal and state claims; removal and preemption)
- Milestone Props., Inc. v. Federated Metals Corp., 867 S.W.2d 113 (Tex. App.—Austin 1993) (remedial scope of 16.068 relation-back)