Home › Case briefs › Civil Procedure

United States v. Heyward-Robinson Co.

United States Court of Appeals for the Second Circuit · 1970 · Civil Procedure

Civil ProcedureCounterclaimsAncillary JurisdictionCompulsory CounterclaimsPreservation of ErrorHarmless ErrorRule 13(a)compulsory counterclaim

Facts

The dispute involved two excavation subcontracts between the same parties, one on a federal Navy job and one on a non-federal Stelma job. D’Agostino sued on the Navy job under the Miller Act, while Heyward counterclaimed for overpayments and completion costs on both jobs, and D’Agostino asserted a reply counterclaim for money allegedly due on the Stelma job. At trial, the two subcontracts were treated together because the parties' dealings were intertwined: both jobs were covered by a single insurance policy, progress payments were made on a lump-sum basis without allocation between the jobs, and Heyward's termination letters addressed both jobs together. The jury found Heyward had breached the subcontracts before October 19, 1965, and awarded D’Agostino recovery in quantum meruit.

Issue

Whether the federal court had jurisdiction over the Stelma-related counterclaims, even though they lacked an independent basis of federal jurisdiction, because they were compulsory counterclaims under Rule 13(a). The appeal also raised whether certain evidentiary and jury-instruction rulings required reversal.

Rule

Under Rule 13(a), a counterclaim is compulsory if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim. That standard is interpreted broadly to require not absolute identity of facts but only a logical relationship between the claims; if such a relationship exists, the counterclaim is compulsory and falls within ancillary jurisdiction without any independent basis of federal jurisdiction. In addition, appellate review of jury instructions is generally barred unless a party distinctly objects before the jury retires as required by Rule 51, and nonprejudicial trial error is disregarded under 28 U.S.C. § 2111 and Rule 61.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nolan Ridge Builders, a Colorado corporation, sued Sierra Masonry, a New Mexico corporation, in federal court in Denver under a federal payment-bond statute for unpaid work on a military warehouse project in Colorado Springs. Sierra counterclaimed for losses on a separate private factory project in Pueblo, alleging both subcontracts were between the same parties, ran at the same time, used a single payment ledger, and allowed withholding on one project for defaults on the other.

If there is no diversity jurisdiction over the private-project dispute, does the federal court most likely have subject-matter jurisdiction over Sierra's counterclaim?

Explanation. Under the majority's Rule 13(a) analysis, the test is broad and practical: a counterclaim is compulsory when it has a logical relationship to the opposing party's claim, not only when the facts are identical. Where two projects are intertwined through common parties, overlapping performance, cross-withholding rights, and unified accounting, the private-project counterclaim arises from the same transaction or occurrence in the broad Rule 13(a) sense. As a compulsory counterclaim, it falls within ancillary federal jurisdiction even without an independent basis.