Lexplug logoLexplug

LASA Per L'Industria Del Marmo Soc. Per Azioni v. Alexander

United States Court of Appeals Sixth Circuit
414 F.2d 143 (1969)
ELI5:

Rule of Law:

Under Federal Rule of Civil Procedure 13(g), a cross-claim is permissible if it bears a logical relationship to the transaction or occurrence that is the subject matter of the original action. All claims arising from a common nucleus of operative facts, such as a single construction project, are considered to be part of the same transaction or occurrence.


Facts:

  • The City of Memphis hired Southern Builders, Inc. as the prime contractor for the construction of a new City Hall.
  • Southern Builders subcontracted with Alexander Marble and Tile Company (Alexander) to supply and install all marble for the project.
  • Alexander then entered into a contract with LASA, an Italian company, for the supply of the marble.
  • During construction, disputes arose; Alexander alleged that Southern Builders failed to properly prepare the concrete base for the marble and wrongfully required work to be performed in inclement weather.
  • Alexander also claimed that the project's architect, A. L. Aydelott, provided improper specifications and interfered with its work.
  • LASA alleged it was not fully paid for the marble it delivered for the project.
  • Southern Builders ultimately terminated its subcontract with Alexander before the marble installation was complete.

Procedural Posture:

  • LASA sued Alexander, Southern Builders, Continental Casualty Company, and the City of Memphis in the U.S. District Court for the Western District of Tennessee to recover a balance due for marble supplied.
  • Defendant Alexander filed a counterclaim against LASA for breach of contract.
  • Defendant Southern Builders filed a counterclaim against LASA for damages related to the marble.
  • Defendant Alexander filed a cross-claim against its co-defendants Southern Builders, Continental Casualty, and the City of Memphis for breach of contract and other damages.
  • Alexander also filed a third-party complaint, which the court treated as a cross-claim under Rule 13(h), against the project architect, A.L. Aydelott, for negligence and tortious interference.
  • The District Court granted motions to dismiss Alexander's cross-claims against Southern Builders and Aydelott, ruling they did not arise from the same transaction or occurrence as LASA's original claim.
  • Alexander, as appellant, appealed the dismissal to the U.S. Court of Appeals for the Sixth Circuit.

Locked

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Under Federal Rule of Civil Procedure 13(g), do cross-claims for breach of a subcontract, wrongful termination, and tortious interference arise from the same transaction or occurrence as an original claim for payment for materials supplied for the same construction project?


Opinions:

Majority - Judge Phillips

Yes. The cross-claims arise from the same transaction or occurrence as the original claim because they are all logically related to the central issue of who is responsible for the problems that arose during the marble installation for the Memphis City Hall project. The Federal Rules of Civil Procedure, particularly Rule 13, are intended to be construed liberally to avoid circuity of action and to dispose of the entire subject matter from one set of facts in a single action. The Court adopts the 'logical relationship' test from Moore v. N.Y. Cotton Exchange, under which 'transaction' is a flexible term that may comprehend a series of occurrences connected by their logical relationship. Here, although the claims involve different subcontracts and legal theories (contract and tort), they all relate to the same project, will involve much of the same evidence, and address the recurring question of blame for the project's failures. Any potential for confusion or complexity can be managed by the District Court through its power under Rule 42(b) to order separate trials.


Dissenting - Senior Judge McAllister

No. The cross-claims do not arise from the same transaction or occurrence as the original action. The original action by LASA is a simple contract claim for payment due. The cross-claims filed by Alexander against Southern Builders and the architect are distinct tort claims for wrongful conduct, malicious interference, and business disparagement. The set of facts and the evidence required to prove the contract claim (delivery, price, payment) are entirely different from and have no connection to the proof required for the tort claims (malicious conduct, wrongful termination). A cross-claim is only proper if the same issues of fact would determine both claims; here, the legal issues (contract vs. tort) and factual proofs are entirely separate, meaning the claims do not arise from the same transaction and should not be joined.



Analysis:

This decision reinforces the federal courts' preference for resolving all related disputes in a single action, prioritizing judicial economy over concerns about complexity. By broadly interpreting 'transaction or occurrence' through the 'logical relationship' test, the court established a significant precedent for complex, multi-party commercial and construction litigation. This approach encourages parties to bring all claims stemming from a common project or event, regardless of the specific legal theory, into one federal lawsuit. The opinion also highlights Rule 42(b) as the proper tool for managing trial complexity, rather than dismissing related claims at the pleading stage.

G

Gunnerbot

AI-powered case assistant

Loaded: LASA Per L'Industria Del Marmo Soc. Per Azioni v. Alexander (1969)

Try: "What was the holding?" or "Explain the dissent"