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Lexington Insurance Co. v. Daybreak Express Inc.

Lexington Insurance Company argued that a cargo-damage claim related back to its original action for breach of the settlement agreement. The court of appeals held that the relation-back doctrine applies to a Carmack Amendment claim. The cargo-damage claim and the breach-of-settlement claim both arose out of the same occurrence. The federal district court's holding that Lexington's breach-of-settlement claim is not preempted by the Carmack Amendment does not compel the conclusion that it is based on a wholly different transaction than the cargo-damage claim. The court of appeals' judgment is reversed and remanded. Texas Supreme Court, No. 11-0597, 01-25-2013.

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We grant in part the limited motion for rehearing by respondent Daybreak Express, Inc., withdraw our opinion of August 31, 2012, and substitute the following opinion in its place.

The principal question in this case is whether, for purposes of Section 16.068 of the Texas Civil Practice and Remedies Code, an action for cargo damage against a common carrier, brought under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, relates back to an action for breach of an agreement to settle the cargo-damage claim. The answer depends on whether the cargo-damage claim is, in the words of Section 16.068, “wholly based on a new, distinct, or different transaction or occurrence” than the breach-of-settlement claim. A divided court of appeals held that a cargo-damage claim does not relate back and is therefore barred by limitations.

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