Alexander Marble and Tile Co. (D) was hired as a subcontractor by Southern Builders, the principal contractor, for the construction of a city hall in Memphis, Tennessee. D contracted with LASA (P) to supply marble for the job. P sued D for a breach of contract for nonpayment after fully performing the contract. D filed a counterclaim against P for breach of contract, a cross-claim against Southern Builders, its surety, and the City of Memphis. P also filed a third-party complaint against the architect. Southern Builders filed a counterclaim against D. The district court dismissed D's cross-claim and third-party complaint, along with the counterclaim of the prime contractor; they did not arise out of the same transaction or occurrence that was the subject matter of the original action or a counterclaim therein. D appealed.

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