Opinion ID: 420022
Heading Depth: 1
Heading Rank: 1

Heading: The Relationship of Railroad Concrete and Florida East Coast Railway Company

Text: 4 The facts in this case were stipulated. Railroad Concrete is a wholly owned subsidiary of the Florida East Coast Railway Company [Florida East Coast]. Florida East Coast is a class I railroad engaged in the transportation of freight by rail. In 1964 Florida East Coast decided to install concrete ties on its tracks. It began purchasing the ties from American Concrete Crosstie Corporation [American Concrete]. Later, it also entered into a contract to purchase ties from Maule Industries. Eventually, American Concrete leased property from Florida East Coast and built a manufacturing plant on the leased property which was adjacent to Florida East Coast's mainline track south of Jacksonville, Florida. 5 On September 30, 1971, Florida East Coast formed Railroad Concrete. Railroad Concrete purchased American Concrete's plant and machinery at the Jacksonville site. Railroad Concrete leases the property upon which the plant is situated from Florida East Coast. Railroad Concrete hired some of the personnel who had been employed by American Concrete. The manager of Railroad Concrete's manufacturing plant is the only employee of Florida East Coast who was hired by Railroad Concrete. He was retained as a Florida East Coast employee in order to maintain his seniority with the railroad. 6 All equipment used by Railroad Concrete is owned by it except one three quarter ton pick-up truck. Equipment is maintained by outside contractors with the exception of trucks which are maintained by Florida East Coast Highway Dispatch Company, another subsidiary of Florida East Coast. The charges for maintenance are billed to Railroad Concrete. All materials used in the manufacturing process are paid for by Railroad Concrete. However, Railroad Concrete can use the Florida East Coast stores whenever necessary; it is billed for the items it purchases. In addition, Florida East Coast welds the steel frames used in Railroad Concrete's manufacturing process and sells them to Railroad Concrete. Both accounting and personnel records are maintained for Railroad Concrete by the Florida East Coast accounting department; Railroad Concrete pays for these services. Insurance claims are also handled for Railroad Concrete by a Florida East Coast clerk. Railroad Concrete's employees do not generally perform work for Florida East Coast but do perform activities on an occasional emergency basis. 7 Since its inception, Railroad Concrete has principally manufactured concrete crossties. It conducts all of its operations at the Jacksonville plant. Although Railroad Concrete sells some of its ties to third parties, approximately 90% of its output is sold to Florida East Coast. The price of the ties includes a profit for Railroad Concrete.