## IN THE SUPREME COURT O F TEX AS

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O N P E T I T I O N F O R R E V I E W F R O M T H E C O U R T O F A P P E A L S F O R T H E F O U R T E E N T H D I S T R I C T O F T E X A S

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P ER CURIAM The princ ipal question in this case is whether , for pur poses of Section 16.068 of the Te x as Civil Practice and Remedie s Code, an ac tion for ca rg o damag e ag ainst a common carrie r, broug ht under the Carmac k Amendment to the I nterstate Commerce Act, 49 U.S.C. § 14706, rela tes back to

an action for brea ch of an ag ree ment to settle the car g o-dama g e claim. T h e an s we r depends on whether the car g o-dama g e claim is, in the words of Section 16.068, “wholly based on a new, distinct,

o r differ ent transac tion or occur renc e” than the brea ch-of -settlement claim. A divided court o f appea ls held that a car g o-dama g e claim does not rela te back and is there fore barr ed by limit ations. 342 S.W .3d 795 (Tex. App.–Houston [14t h Dist.] 2011). We disag ree and acc ording ly reve rse the judgme nt of the cour

t of appe als and re nder judg ment for the pla intiff.J

. Supor and S on Trucking and R igg ing Company eng ag ed respondent Day brea k Ex press, I nc. to tran s p o rt computer equipment belong ing to Bur r Computer Environments, I nc. from New J erse y to Texas. Wh en t h e s hipment arr ived, Bur r claimed it was damag ed. Despite Bur r’s contention that Day

brea k’s ad j u s t er had ag ree d on Day brea k’s behalf to settle the claim for $166,655, Day

brea k would pay only $5,420. Bur r also asser

ted a claim ag ainst Supor, whose insurer, petitioner L exington I nsuranc e Co., paid Bur r $87,500. Then, as subrog ee, L exington sued Day brea k, but only

for br eac hing the settlement ag ree ment, not for dama g ing B urr’ s equipment. An interstate car

rier’ s responsibility for go o d s i t t ranspor ts is g overne d by the Carmac k Amendment. Enac ted in 1906, the Carmac k Amendment “super sedes all state laws as to the rig hts and liabiliti es and exemptions cre ated by such transac tion.” Adams Express Co. v. Croninger , 226 U. S

. 4 9 1 , 5 0 5 (1913) (interna l quotation marks omitted). Be cause the only action ag ainst an interst ate common car

rier for car g o damag e is under fede ral law, Day brea k remove d the case to fede ral court. I t cited Hoskins v. Bek ins Van Lines , 343 F.3d 769, 778 (5th Cir. 2003), which states: Congr ess intended for the Carmac k Amendment t o p ro v i de the exc lusive cause of action for loss or damages to goods arising from the inters t ate transportat ion of those goods by a co mm o n carrier. Acc ording ly , we hold that the complete pre- emption doctrine applies. Be cause the Carmac k Amendment p ro v ides the exclusive cause of action for such claims,

. . . claims [for such loss or damag es] “only arise[ ] under fede ral lawand [can], theref ore, be remove d . . . .” (empha sis in original, c itation omit ted). B ut the fede ral c ourt distinguished Hoskins:

I n the present case , by

contra st, L exington does not seek to impose liability on Day brea k for damag es arising from the interstate transport of pr operty
. I nstead, L exington seeks to enfor ce an ag ree ment it alleg es Day brea k enter ed into in order to settle claims for da

mag es to a shipment of e lectric al equipment. Resolution of this contra ct claim does not turn on the rig hts and responsibilities of Day brea k as a car rier in interstate commerc e. The point of the alleg ed settlement ag ree ment was prec isely
2that L exington’s subrog or would not pursue the cl ai m s that may fall under the

Carmac k Amendment. Be cause this is not a suit to rec over for loss o r d am age to proper ty ag ainst a car

rier but r ather one to e nforc e a settlement ag ree ment, the case will be rema

nded to state c ourt. Lexington Ins. Co. v. Daybre ak Express, Inc. , 391 F. Supp. 2d 538, 541 (S.D. Tex. 2005) (footnote omitted). Although L exington succe ssfully avoided r emoval by

not asser ting a car g o-dama g e claim,

on rema nd, it amende d its petition to asser t one. L exington filed i ts amende d p l eading more than four y ear s after

Day brea k reje cted B urr’ s claim, and Day brea k contende d the claim was barre d by limit ations. But L exington argued that the car g o-dama g e claim rela ted back to its orig inal action for brea ch of the settlement ag ree ment, which was filed within two y ear s of Day brea k’s reje ct i o n of Bur r’s claim and not barr ed by limit ations. The rela tion-back doctrine, codified in Section 16.068,
states: I f a filed pleading relates to a cause of action

. . . that is not subject to a plea of limit ation when the pleadingis filed, a subseque nt amendment or supplement to the pleading that chang es the fac ts or g rounds of liability or defe nse is not subject to a plea of limit ation unless the amendment or supplement is wholly based on a new, distinct, or differ ent transa ction or occ urre nce. T E X . C I V . P R A C . & R E M . C O D E § 16.068. The trial c ourt ag ree d with L exington, and afte r a bench trial, rende red judg ment ag ainst Day brea k for $85,800. A divided court of appea ls rev er s ed

. 3 42 S.W .3d 795 (Tex. App.–Houston [14t h Dist.] 2011). The court held that Section 16.068 applies to a Carmac k Amendment claim. Id

. at 803-804. Since the p ar ties do not argue to the contra ry , we assume this is corr ect. The majority then conclude d that the carg o-dama g e and brea ch-of -settlement claims wer e based on wholly di fferent

3transac tions, one cente ring on the transport of Bur r’s equipment and the other on the exis tence of a settlement ag ree ment. Id. at 804. Fur ther, the court rea soned, if the shipment and settlement wer e not differ ent transac tions, the Carmac k Amendment would pree mpt the brea ch-of -settlement claim and re moval would have be en prope r. The expansive rea ch of complete pree mption under the Carmac k Amendment means that any cause of action arising from the i nterstate transporta tion of g oods by a common ca rr i er “is either wholly fede ral or nothing at all” reg ardle ss of how it is l ab eled.

. . . L exington’s claim for brea ch of the purported settlement ag ree m en t can n o t be both un-pre empted and less than wholly distinct from the interstate transporta tion of g oods by a common ca

rrier

. Id

. at 806 (quoting Hoskins , 343 F.3d at 773, emphasis in orig inal, internal quotation marks partially omitted). “Tra nsaction or occur

renc e” is a conce pt fundame ntal to modern civil proce dure. See, e.g., T E X . R. C I V . P. 38 (third-pa rty prac tice), 40 (joinder) , 50 (plea ding) , 97 (counte rcla ims and crossclaims); T E X . C I V . P R A C . & R E M . C O D E § 16.068 (limitations); Barr v. Resolution Trust Corp. , 837 S.W .2d 627 (Tex. 1992) (re s judicata)

. The United States Su p reme Court has observe d that “‘[t] ransa ction’ is a word of flexibl e meaning

. I t may compre hend a series of m an y o cc u rr ence s, depending not so much upon the immediateness of their connec tion as upon their logic al relationship.” Moore v. N.Y

. Cotton Exc h. , 270 U.S. 593, 610 (1926). Rule 15(c) (1)(B) of the Fe dera l Rules of Ci v i l P rocedure employ s a standard simil ar to Section 16.068, allowing rela tion back of a c laim, pleaded by amendment, “ that arose out of the conduct, transac tion, or occurre nce set out — or attempted to be set out — in the orig inal pleading .” F E D . R. C I V . P. 15(c) (1)( B)

. “[T] he

sear ch

. . . is for a common core of operative fac ts in the two pleading s.” 6 C H A R L E S A L A N W R I G H T ,

4A R T H U R R. M I L L E R , & M A R Y K. K A N E , F E D E R A L P R A C T I C E & P R O C E D U R E § 1497 (3rd ed. 2010). “Although n o t expressly mentioned in the rule, the courts also inquire into whether the opposing party has bee n put on notice re g arding the claim or defense raised by the amende d pleading .” Id .; see also 2 R O Y W. M C D O N A L D & E L A I N E A. G R A F T O N C A R L S O N , T E X A S C I V I L P R A C T I C E § 10.18 (2d ed. 2002) (“The inquiry applied should be the pr ag matic one of notice . . . .”)

. I n the pre sent case , the carg o-dama g e claim and the breac h-of- settlement claim both arose
out of t he same occur

renc e: Day

break ’s s h i p m ent of Bur

r’s computer equipment. The settlement

was an eff

ort to rea ch ag ree ment on the dama ges re co v er able under the Carmac k Amendment. Although L exington might re cover on the bre ach- of-se ttlement claim without proving the amount

o f damag e to the equipment, that damag e was the basis for the settlement ag ree ment. Day break

m i gh t we l l argue that it is unrea sonable to believe that it ag ree d to pay thirty times more th an i t actua lly paid. Day

brea k had fair notice that the amount of dama ge m i ght be in issue, as well as whether an ag ree ment had bee n rea ched. The court of appea ls’ conclusion that the two claims are based on two separ ate transac tions is contradicte d by our decision in Leonard v. Texac o, Inc. , 422 S.W .2d 160 (Tex. 1967). Ther e, a surfa ce owner sued the mineral lessee for proper ty damag es caus ed b y the lessee’ s seismic operations. L ater , afte r limit ations had run, the surfa ce owner amende d his pe tition to add a claim that the lessee had brea ched an ag ree ment to pay for the damag es, possibly to avoid having to prove neg lige nce. I d

. at 1 6 1 , 162; see Humble Oil & Ref. Co. v. W illiams , 420 S.W .2d 133, 134 (Tex. 1967) (“A person who seeks to rec over from the lessee for damag es to the surfa ce has the burden of alleg ing and proving either specific acts of neg lige nce or that more of the land was used by the lessee
5than was rea sonably nece ssary .”). I n Leonard , the surfa ce owner preva iled on the contra ct claim at

trial, but the court of civil appea ls reve rsed, holding under Section 16.068’s prede ce s sor, which contained the same relation-back standard, that the contra ct claim did not rela te back to the proper ty damag e claim and was there fore barr ed by limit ations. We disag ree d. I d. at 162. Thoug h the initial claim “sounded in tort and allege d an ex cessive use of land” and the late r cla im “set up a promise to pa y . . . damag es” that sounded in c ontrac t, w e conclude d: “ it c annot be said” that the latter was “wholly based upon a

nd g rowingout of a diff

ere nt transac tion or occur renc e.” Id . at 163. I n Leonard , as in the prese nt c ase, one claim ce ntere d on damag e to prope rty and the other

on an alleg ed ag ree ment to pay for the damag e. And in eac h case , the require ments for proof of the
two claims wer e somewhat differ ent. But the claims in eac h case s arose out of the same occur renc e and involved the same injury to proper ty
. Leonard ’s holding that the two claims wer e not based on wholly differ ent transa ctions fore closes the c ourt of appe als’ contr ary conclusion in this case. The fede ral district court’s holding that L exington’s brea ch-of -settlement cla i m i s not pree mpted by the Carmac k Amendment does not compel the conclusion that it is based on a wholly differ ent transac tion than the car g o-dama g e claim. Aga i n , “‘[t] ransa ction’ is a word of flexibl e meaning .” Moore , 270 U.S. at 6 1 0

. P re em p tion assure s uniform, predic table standards of responsibility for common car riers i n transac tions involving interstate shipments. Relation back allows an untimely claim not wholly based on a differ ent transac tion than a timely claim. The two principles ser

ve diffe rent purpose s. We hold that under S ec t i o n 1 6

. 068, L exington’s car g o-dama g e claim was not barr ed by limit ations. Acc ording ly , we g rant L exington’s petition for revie w, and without hear ing oral
6argument, reve rse the judgme nt of t he court of appeals and rende r j udg ment for L exington, as t he

trial court did. T E X . R. A P P . P. 59.1.

Opinion delivere d: Aug ust 31, 2012

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