1 District Judge of the Northern District of Texas, sitting

by designation.

1 United States Court of Appeals,

Fifth Circuit.

No. 93-1773.

Ruby Pauline HENDERSON, et al., Plaintiffs-Appellees,

v.

NORFOLK SOUTHERN CORPORATION, et al., Defendants,

Atchison, Topeka & Santa Fe Railway Company and Norfolk Southern

Railway Company, Defendants-Appellants.

June 26, 1995.

Appeal from the Uni ted States District Court for the Northern

District of Texas.

Before DAVIS and JONE S, Circuit Judges, and CUMMINGS, District

Judge. 1

W. EUGENE DAVIS, Circuit Judge:

The defendants appeal an adverse judgment rendered in favor of

the survivors of Roy Lee Henderson for both compensatory and

punitive damages following a bench trial. Mr. Henderson died as a

result of injuries he suffered when his tractor-trailer overturned.

The district court concluded that the accid ent resulted from the

combined neglig ence and gross negligence of the defendants. The

central issue on appeal is whether the district cou rt's findings

are clearly erroneous. For the reasons stated below, we find no

clear error except with respect to the district court's gross

negligence findings. We therefore affirm the judgment except for

the punitive damages award, which we vacate.

I.2 The system is comprised of an interconnected network of

truck and railroad shipping routes. Trucks typically transport

cargo over short distances. For longer routes, however, truck

trailers are "piggy-backed" on flat-bed railroad cars and shipped

by rail for a portion of the trip.

3 While each railroad company generally owns a fleet of truck

trailers, the trailers are interchangeable. As with railroad

cars, railroad companies freely operate trailers owned by other

railroad companies. An independent trucking company typically

owns and operates the tractor portion of the truck.

2 Roy Lee Henderson worked as an independent truck driver

h auling freight for various railroad companies as part of the

s o-called truck-railroad "piggy-back" system of transportation. 2

On the day of the accident, Henderson picked up a trailer loaded

with crushed glass at the Atchison, Topeka & Santa Fe Railway

Company ("Santa Fe") Terminal in Garland, Texas. Although the

trailer was owned by Norfolk Souther n Railway Company ("Norfolk

Southern"), Santa Fe was operating it at the time. 3 After leaving

the Santa Fe terminal, Mr. Henderson encountered a de tour on

Interstate Highway 35E requiring him to exit onto the frontage

road. Shortly after Mr. Henderson exited the highway, the rear

tandem wheels of the tractor-trailer left the paved portion of the

frontage road, causing both the tractor and trailer to roll over.

Mr. Henderson suffered multiple injuries, including a fracture of

his right hip and contusions to his lungs. He suffered a fatal

heart attack shortly after surgery on his hip.

Mr. Henderson's widow, Ruby Henderson, and Henderson's

children subsequently brought a wrongful death action against Santa

Fe and Norfolk Southern. The plaintiffs alleged that the

defendants were negligent and grossly negligent in failing to4 The owner's manual issued by the trailer's manufacturer

recommended maintenance every 20,000 miles or every four months.

The defendants concede that they did not follow these

recommendations at the time of the accident.

3 properly inspect and maintain the trailer involved in the accident.

The plaintiffs' theory at trial was that the trailer's "slider

sub-assembly," a key component in the trailer's suspension system,

was defective. The plaintiffs contended that this defect prevented

the rear tandem wheels of the trailer from "tracking" directly

behind the tractor, a phenomena known as "off-tracking" or

"dog-tracking."

The plaintiffs' lead expert, Richar d Turner, testified that

the rear tandem wheels of Henderson's trailer drifted off the paved

portion of the road into a muddy ditch along the right side of the

frontage road because the trailer was off-tracking over a foot to

the right. As the trailer slipped into the ditch, both the tractor

and trailer turned sideways and rolled over. Turner attributed the

cause of the off-tracking to a defect in the trailer's slider

sub-assembly. He concluded that the defendants were negligent

because they failed t o regularly inspect and maintain the slider

sub-assembly according to the trailer manufacturer's maintenance

recommendations. 4

Turner based his explanation of the accident in part on the

testimony of several eyewitnesses. Two truck drivers who were

following Henderson's truck testified that they observed

Henderson's trailer off-tracking by over a foot shortly before the

accident. According to their testimony, Henderson slowed to4

between 25-35 miles per hour after exiting the highway. They

o bserved the trailer sliding into the ditch and the resulting

r ollover, and testified that the tractor's wheels never left the

pavement before the rollover. Turner also based his conclusion on

evidence of excessive wear on the trailer's right tires, which he

testified is consistent with off-tracking.

The defendants challenged Turner's explanation of the accident

at trial and argued that the accident occurred becaus e Henderson

was speeding when he exited the highway and negligently allowed the

right wheels of the tractor-trailer to drift off the frontage road.

The defendant s' experts testified that Henderson allowed the

tractor-trailer to drift off the frontage road and then

overcompensated by turning sharply to the left in order to return

the tractor-trailer to the frontage road. They testified that

Henderson's maneuver caused the tractor-trailer to ro ll over

because of his high rate of speed. These experts based their

conclusions in part on the testimony of an eyewitness who testified

that Henderson was traveling in excess of 50 miles per hour shortly

b efore the accident. Finally, an engineer for the trailer

manufacturer testified that his inspection of the trailer revealed

no defects in the slider sub-assembly.

At the close of the bench trial, the district court found in

favor of the plaintiffs. The court found that the accident was

caused by off-tracking, and that the off-tracking resulted from a

defect in the trailer's slider su b-assembly. The court thus

rejected the defendants' theory that Henderson's speed and5 Santa Fe alternatively argues that the district court erred

in holding that it had a legal duty to inspect its trailers for

latent defects. The existence of a legal duty is generally a

question of law subject to de novo review. See Hayes v. United

States, 899 F.2d 438, 443 (5th Cir.1990) (applying Texas law to

state law claims). Because Santa Fe concedes that it has a duty

to conduct a reasonable inspection for other than latent defects,

See 11 Tex.Jur.3d, Carriers § 705 at 793 (1981) (citing Gulf,

W.T. & P.R. Co. v. Wittnebert, 101 Tex. 368, 108 S.W. 150

(1908)), and because Judge Buchmeyer did not hold that the defect

in this case was latent, we are convinced that Santa Fe's

5 inattentiveness caused the accident. The court concluded that the

defendants were negligent for failing to properly inspect and

maintain the trailer, and a warded the plaintiffs $1,250,000 in

compensatory damages. The court further found that the defendants

were grossly negligent an d awarded the plaintiffs an additional

$1,250,000 in punitive damages. The court then allocated the

$2,500,000 in total damages 50% to Santa Fe and 50% to Norfolk

Southern pursuant to Texas' comparative negligence st atute. The

defendants timely appealed.

II.

A.

Santa Fe and Norfolk Southern first challenge the district

court's detailed findings relating to the cause of the accident and

the defendant s' failure to properly inspect and maintain the

trailer. The defendants also challenge the district court's

allocation of fault between Santa Fe and Norfolk Southern, and

argue that the court should have allocated some of the fault to

He nderson. We review the district court's factual findings for

clear error. A nderson v. City of Besse mer City, N.C., 470 U.S.

564, 573, 105 S.Ct. 1504, 1511, 84 L. Ed.2d 518 (1985). 5 We mustargument is essentially a breach of duty question subject to the

clearly erroneous standard. See Hayes, 899 F.2d at 447 (whether

an inspection is reasonable is a question of fact, not a question

of law subject to de novo review). Thus, if a reasonable

inspection would have uncovered the defect, the railroad breached

its duty under Texas law.

6 accept the district court's factual findings if they are plausible

when viewed in light of t he entire record. P rice v. Austin

Independent School Dist., 945 F.2d 1307, 1312 (5th Cir.1991).

Ordinarily, "[w]hen a trial judge's finding is based on his

decision to credit the testimony of one of two or more witnesses,

each of whom has told a coherent and facially plausible story that

is not contradicted by extrinsic evi dence, that finding, if not

internally inconsistent, can virtually never be clear error." I d.

After carefully reviewing the record, we conclude that the

district court did not clearly err in finding that the defendants'

negligence was the proximate cause of the accident. The district

court found the plaintiffs' eyewitnesses more credible because the

court believed that they were in the best position to observe the

speed and mov ement of Henderson's tractor-trailer before the

rollover. The court also found Turner's testimony more credible

because it was the only expert testimony that was consistent with

the testimony of the plaintiffs' eyewitnesses. A district court's

assessment of the relative credibility of opposing expert witnesses

is entitled to deference. S ee Gulf Consolidated Services, Inc. v.

Corinth Pipeworks, S.A., 898 F.2d 1071, 1077 (5th Cir.), cert.

denied, 498 U.S. 900, 111 S.Ct. 256, 112 L.Ed.2d 214 (1990).

Turner's testimony is consistent with the eye witness accounts of6 The district court's allocation of fault under Texas'

comparative negligence statute is a question of fact subject to

the clearly erroneous standard. See Spruiell v. Schlumberger

Ltd., 809 S.W.2d 935, 940 (Tex.App.—Texarkana 1991, no writ).

7 the accident and the physical evidence of excessive tire-wear and

damage to the slider sub-asse mbly. We conclude, therefore, that

the district court did not clearly err in crediting T urner's

testimony over the testimony of the defendants' experts.

We also agree that the district court did not clearly err in

apportioning the compensatory damages 50% to Santa Fe and 50% to

Norfolk Southern pursuant to Texas' comparative negligence statute,

Texas Civil Practice & Remedies Cod e §§ 33.001 e t seq. 6 As

explained above, the district court was entitled to credit Turner's

explanation of the accident, and Turner testi fied that neither

Henderson's speed nor inattentiveness contributed to the accident.

Turner also testified t hat the inspection and maintenance

procedures of Santa Fe and Norfolk Southern were deficient. The

district court was thus entitled to find that the defendants were

equally responsible for failing to detect and correct the defect in

the trailer's slider sub-assembly. Therefore, the district court

did not clearly err in finding Henderson free of fault and

allocating liability for the plaintiffs' compensatory damages 50%

to Santa Fe and 50% to Norfolk Southern.

B.

Santa Fe and Norfolk Southern next argue that the district

court clearly erred in finding them grossly negligent and awarding

the plaintiffs pu nitive damages. The district court cited three7 The AAR's Interchange Rules Committee develops rules and

standards governing the interchange of railroad cars and truck

trailers.

8 pri ncipal grounds for its gross negligence finding. First, the

court found that the defendants ignored the trailer manufacturer's

recommendation that the trailer be perio d ically inspected and

maintained. The court also credited Turner's testimony that the

defendants' failure to inspect and maintain the slider sub-assembly

created a "significant hazard." Finally, the court found that the

defendants ignored maintenance and inspection guidelines issued by

the Association of American Railroads ("AAR") in 1987. 7 According

to the guidelines:

Failure to check for proper locking pin engagement prior to

driving away and failure to take proper preventative

maintenance measures ca n lead to slider malfunction and

possible accident, resulting in property damage, personal

injury, or even death.

Based on these warnings and Turner's testimony, the court concluded

that "both defendants exhibited a wont of care with respect to the

inspection and maintenance of their respective tr ailers to the

degree that it does show actual conscious indifference to the

rights, welfare and safety of the persons affected by it, including

cartage drivers like Mr. Henderson and the traveling public."

Under Texas law, a plaintiff may obtain punitive damages upon

showing that the defendant was grossly negligent. S ee Wal-Mart

Stores, Inc. v. Alexander, 868 S.W.2d 322, 326 (Tex.1993). The

standard for proving gross negligence under T exas law is

considerably more stringent than the "reasonable person" standard

for ordinary negligence. I d. The Texas Supreme Court recently9

formulated a two-prong requirement for proving gross negligence:

(1) viewed objectively from the standpoint of the actor, the

act or omission must involve an extreme degree of risk,

considering the probability and magnitude of the potential

harm to others, and (2) the actor must have actual, subjective

awareness of the risk involved, but nevertheless proceed with

conscious in difference to the rights, safety, or welfare of

others.

Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 23 (Tex.1994).

Proof of both prongs is required before a plaintiff may recover

punitive damages. I d. Based on our review of the record, we

conclude that the plaintiffs' evidence is insufficient to satisfy

Moriel 's first prong.

To satisf y Moriel 's first prong, the plaintiff must prove

that the defendant's conduct involved an "extreme risk of harm."

Id. Whether a defendant's conduct poses an extreme risk of harm

requires consideration of both the magnitude of the potential harm

to the plaintiff and the likelihood that serious harm will occur:

As we said in Wal-Mart, the "extreme risk" prong is not

satisfied by a remote possibility of injury or even a high

probability of minor harm, but rather "the likelihood of

serious injury to the plaintiff."

Moriel, 879 S.W.2d at 22 (quoting Wal-Mart, 868 S.W.2d at 326-327).

The plaintiff must thus show that the defendant's conduct created

a strong likelihood o f serious harm, "such as death, grievous

physical injury, or financial ruin." Id. at 24.

The record does not support the plaintiffs' contention that

the defendants' conduct created an extreme risk. The record

supports the district court's finding that off-tracking was the

cause of the accident, and that the off-tracking resulted from a

defect in the trailer's slider assembly. However, the record fails10

to show that off-tracking poses an extreme risk of serious injury.

Indeed, in testifying that Henderson was free of negligence despite

his failure to notify anyone of the off-tracking, the plaintiffs'

experts conceded that most truck driv ers do not consider

off-tracking to be particularly hazardous . Significantly, the

record does not reflect any evidence of serious accidents resulting

from off-tracking. See Wal-Mart, 868 S.W.2d at 327 (holding that

a defect in the defendant's parking lot did not create an extreme

risk of harm because the record revealed no evidence that the

defect had caused any serious injuries before the plaintiff's

accident).

The plaintiffs counter by arguing that off-tracking is too

narrow a focus for evaluating the risk of the defendants' conduct.

They contend that off-tracking is merely a symptom of the

defendants' failure to properly inspect and maintain the trailer.

They argue that punitive damages should be based on the defendants'

failure to implement a system-wide in s pection and maintenance

pr ogram to ensure that their trailers are safe. Without such a

program, the plaintiffs argue, the likelihood of a serious accident

is significant given the volume of the defendants' traffic. To

support their position, the plaintiffs point to the 1 987 AAR

maintenance guidelines. The plaintiffs contend that the warnings

in these guidelines establish that the defendants' omissions posed

significant risks beyond mere off-tracking.

The plaintiffs' attempt to broaden the scope of the

defendants' omissions does not alter our analy sis under M oriel.11

Howeve r broadly the plaintiffs choose to characterize the

defendants' omissions, Moriel requires them to prove not only that

the defendants' omissions created a risk of serious harm, but also

that the likelihood of the harm occurring was more than remote.

879 S.W.2d at 22. The record supports the plaintiffs' contention

that a slider malfunction could have caused m ore severe problems

than off-tracking. For example, the record suggests that a

catastrophic disengagement of the slider sub-assembly could cause

the trailer to separate from the tractor and that such an accident

could result in serious injuries.

However, the plaintiffs' argument must ultimately fail because

the record does not establish that such a catastrophic accident was

likely to occur as a result of the defendants' failure to inspect

and maintain their trailers. The record contains no evidence

demonstrating that such accidents occur regularly . At most, the

record suggests that the defendants' omissions might pose a remote

possibility of serious injury. The Texas Supreme Court expressly

rejected such a broad definition of gross negligence in Wal-Mart,

868 S.W.2d at 327. According to the court, the potential for

serious injury is present for virtually all negligent conduct.

Such a broad definition of "extreme risk" would thus "eliminate any

meaningful distinction between negligence and gross negligence."

Id. Therefore, the mere fact that the defendants' conduct creates

the p otential for serious injury is not sufficient to satisfy

Moriel 's first prong.

We conclude that the plaintiffs failed to establish that the12

defendants were grossly negligent under the standards set forth in

Moriel. The district court thus clearly erred in finding the

defendants grossly negligent and awarding the plaintiffs punitive

damages.

III.

For the reasons stated above, we AFFIRM the district court's

judgment in all respects except for its award of punitive damages,

which we VACATE. We REMAND this case to the district court for

entry of judgment consistent with this opinion.

AFFIRMED in part; VACATED and REMANDED in part.