Big M Construction Company, Inc. v. Machinery Transport, Inc.--Appeal from 4th District Court of Rusk County

NO. 12-00-00368-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS

BIG M CONSTRUCTION COMPANY, INC.,

 
APPEAL FROM THE FOURTH

APPELLANTS

 

V.

 
JUDICIAL DISTRICT COURT OF

MACHINERY TRANSPORT, INC.,

APPELLEES

 
RUSK COUNTY, TEXAS

Big M Construction Co., Inc. sued Machinery Transport, Inc. for breach of contract and contribution or indemnity for damages it paid to Tallyho Plastics, Inc. pursuant to a judgment rendered against both Big M and Machinery Transport in a prior lawsuit. In a bench trial, Big M's claims were denied. On appeal, Big M complains that, among other things, the trial court erred when it held the second suit was barred by res judicata, and that Big M failed to plead a viable cause of action. We affirm.

 

Background

Tallyho hired Big M to set up an injection molding machine in Jacksonville, Texas. However, the machine first had to be transported from Omaha, Nebraska to Texas. Big M went through a broker to hire Machinery Transport, which assumed responsibility for transporting the machine. On the way, the driver was involved in an accident, and the machine was severely damaged. It was eventually transported back to Omaha. Tallyho sued Big M and Machinery Transport. Big M filed a cross-claim against Machinery Transport for contribution or indemnity. The jury found against Big M, but not Machinery Transport on breach of contract. There was no jury question concerning contribution or indemnity. Big M appealed to this court, but did not ask that we send the case back to the trial court to address its cross-action. We held that the case was given to the jury on the wrong theory of recovery (it should have been tried under the Carmack Amendment, 49 U.S.C.S. 10101 et seq.), but we also held that it was harmless since the measure of damages was substantially the same as under a breach of contract claim. Further, we substituted our finding that Machinery Transport was also liable for the damages caused to the machine, since it was conclusively proven that Machinery Transport failed to comply with the agreement to transport the machine to Jacksonville. We also held that Machinery Transport was jointly and severally liable to Tallyho for those damages. Tallyho Plastics, Inc. v. Big M Construction Co. et al., 8 S.W.3d 789 (Tex. App.-Tyler, 1999, no pet.).

Big M paid the judgment, but Machinery Transport refused to reimburse Big M for any portion of the $142,758.00. Big M filed suit in Rusk County (the original suit was brought in Cherokee County). In its findings of fact & conclusions of law, the trial court found that Machinery Transport did not plead the defense of res judicata, but that it did make several objections to the introduction of evidence concerning the issue of responsibility for the accident - ergo, it was tried by implied consent, and Big M is consequently barred from seeking to require Machinery Transport to pay some or all of the judgment Tallyho recovered from Big M in the Cherokee County case. The trial court went on to find that even if not barred by res judicata, Big M could not recover because Big M's claims are preempted by the Carmack Amendment, and Big M did not plead the Carmack Amendment, but instead pleaded common law contribution or indemnity based upon breach of contract.

Trial by Implied Consent

In issue seven, Big M complains that the trial court erred in finding that Machinery Transport's affirmative defense of res judicata was tried by implied consent and in finding that the Cherokee County case was res judicata as to the present action. We acknowledge that Machinery Transport failed to raise the affirmative defense of res judicata by pleading. Generally, res judicata must be pleaded or be waived. Tex. R. Civ. P. 94; Green v. Parrack, 974 S.W.2d 200, 202 (Tex. App.-San Antonio 1998, no pet.). However, "when issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings." Tex. R. Civ. P. 67; Mastin v. Mastin, 2001 Tex. App. LEXIS 5891, at *10 (Tex. Aug. 29, 2001). Trial by consent is intended to cover the exceptional case where it clearly appears from the record as a whole that the parties tried the unpleaded issue. Mastin, at *11. To determine whether the issue was tried by consent, the court must examine the record not for evidence of the issue, but rather for evidence of trial of the issue. Id. The trial court has broad discretion in determining whether an unpleaded claim has been tried by implied consent of the parties. Whatley v. Dallas, 758 S.W.2d 301, 306 (Tex. App.-Dallas 1988, writ denied). The trial court is to exercise that discretion liberally in favor of justice. Id.

In Mastin v. Mastin, the affirmative defense of lack of notice of intent to accelerate a debt was not pleaded. However, the Supreme Court held that lack of notice was tried by implied consent because, for one, the issue was brought to the attention of the trial court during the bench trial. Also, when the plaintiff introduced the mortgage statement into evidence, the defendant objected to the attempt to accelerate on the basis that he was not given proper notice. The plaintiff responded to the defendant's argument. The Court held that there was not simply evidence of lack of notice, but that

it was clear in the record that, under these circumstances, the issue was actually tried. Id. at *11-12.

Application of Law to Facts of this Case

In the instant case, Machinery Transport objected twice to questions regarding the assignment of responsibility for the damage to the machine. The first objection is as follows:

 

I'm going to object to that, Your Honor. As the Court is aware, our position in this case is one of - the fact that - the undisputed fact that these issues that Mr. Fenley is talking about now, such as responsibility and who's at fault and who's not at fault have already been tried and decided by a jury in Cherokee County. In fact, we're prepared to offer up to the Court, when it's our time to present our case in chief, the Charge of the court in that case clearly reflecting the jury's findings on all these issues; therefore, I object to this question and to this line of questioning as to who's responsible for what damage. That's already been tried and decided.

 

Machinery Transport also lodged the following objection:

 

Object, Your Honor. That's been tried and decided. There's absolutely no finding against the driver or Machinery Transport to attribute any damage to this piece of equipment.

 

Of even more import to the issue of implied consent is Big M's response to Machinery Transport's first objection:

 

Your Honor, the case was tried, decided, appealed, and the Court of Appeals specifically determined that Machinery Transport was joint and severally liable for the damages to the piece of equipment to Tallyho. This case is based on the contribution theory in that Big M has paid the damages, and because Machinery Transport is jointly and severally liable, that they are responsible for all or at least a portion of the damages that have been paid under that judgement, because they were jointly and severally liable.

 

Under theories of contribution, we have a quasi equitable subrogation for a nontort in contract, which permits us to either take a pro rata basis for the responsibility, or try and determine the issues of responsibility for the Court to determine as to what amount that they're responsible for. In presenting the testimony, we're entitled to present the testimony about who had custody, possession and control for the Court to make a decision, how much in excess of the reasonable amount Big M paid and how much Machinery Transport should have to pay, because they were joint and severally liable for the damages. That's why this particular line of questioning is important for the Court's decision to determine what that basis is.

 

It is clear that the gist of Big M's argument was that the jury's findings and the previous judgment were of no consequence and thus res judicata holds no sway, since this court, in the appeal of the Cherokee County judgment, held both Big M and Machinery Transport jointly and severally liable for the damages.

In addition to the objections and response to objections, the trial court took judicial notice of the Charge from the Cherokee County trial. Furthermore, Machinery Transport introduced the pleadings in the Cherokee County case, including Big M's cross-claim for contribution and indemnity, the Charge of the Court and the Judgment in that case. Big M objected to none of this evidence. Thus, based upon the record as a whole, we hold that the trial court did not abuse its discretion when it found that the affirmative defense of res judicata was tried by implied consent.

 

Res Judicata

Big M asserts that judgment was improperly granted on the basis of res judicata. Specifically, it argues that the claim for indemnity or contribution could not have been asserted in the Cherokee County trial because the claims had not yet accrued. The principle of res judicata precludes relitigation of claims that have finally been adjudicated or that arise out of the same subject matter and could have been litigated in the prior action. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996). A party asserting res judicata must prove (1) a prior final judgment on the merits by a court of competent jurisdiction, (2) an identity of parties or those in privity with them, and (3) a second action based on the same claims as were raised or could have been raised in the first action. Id. Big M does not argue that the first two elements of res judicata are not present in this case. Therefore, we will discuss only the third element.

Second Action Based Upon Same Claims

The Supreme Court has specifically held that an indemnity claim will be barred if the indemnitee sought the same relief by cross-claim in the underlying case. Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 208-9 (Tex. 1999); see also State and County Mutual Fire Ins. Co. v. Miller, 2001 Tex. LEXIS 2, at *6 (Tex. Jan. 18, 2001)(res judicata acts to bar a party's claim in a subsequent suit if the co-parties had "issues drawn between them" in the first action; the filing of a cross-action by one co-party against another co-party in the first action serves the function of drawing the issues between the co-parties); Getty Oil v. Ins. Co. of North America, 845 S.W.2d 794, 799-800 (Tex. 1992)(indemnitee barred by res judicata from maintaining a claim against an indemnitor because indemnitee had sought the same relief under a different theory in an earlier suit). In the Cherokee County suit, Big M cross-filed against Machinery Transport for indemnity and contribution. In its appeal to this court, Big M failed to appeal its cross-claim, which could have and should have been tried in the Cherokee County case. Big M's failure to pursue its contribution or indemnity claims to a final conclusion in the Cherokee County case bars it from re-asserting these same claims in the subsequent Rusk County action based upon principles of res judicata. We hold, therefore, that res judicata bars Big M's claims against Machinery Transport in the instant case, and overrule issue seven.

 

Carmack Amendment

In issue five, Big M asserts that the trial court erred when it found that Big M had not pleaded for relief under the Carmack Amendment. We disagree. In the appeal of the Cherokee County judgment, we held that the parties were governed by the Carmack Amendment. Tallyho Plastics, Inc., 8 S.W.3d at 793. If a transaction is governed by the Carmack Amendment, state and common law causes of action involving the same transaction are preempted by the federal statute. Accura Systems, Inc. v. Watkins Motor Lines Inc., 98 F.3d 874, 876 (5th Cir. 1996); Moffit v. Bekins Van Lines, 6 F.3d 305, 307 (5th Cir. 1993). In the instant case, Big M pleaded common law contribution and breach of contract. It claimed a right of indemnity only in its damage paragraph. And in a review of the whole record, we see no evidence that the Carmack Amendment was tried by implied consent. Therefore, Big M's claims against Machinery Transport fail because it did not plead the Carmack Amendment. Consequently, we overrule issue five.

Because we hold that Big M's claims against Machinery Transport are barred by res judicata and/or failure to plead the Carmack Amendment, it is unnecessary to address Big M's additional issues. We affirm the judgment of the trial court.

 

JIM WORTHEN

Justice

 

Opinion delivered September 28, 2001.

Panel consisted of Davis, C.J., Worthen, J., and Griffith, J.

 
(DO NOT PUBLISH)