Thursday, December 15, 2011

Are res judicata and collateral estoppel one and the same?

Court of appeals says res judicata and collateral estoppel are separate and distinct bases for summary judgment. Therefore, if the trial court grants summary judgment on both (or does not say which), the appellant may lose on appeal if he or she focuses only on one ground, but neglects to challenge and brief the other. In a case in which the First Court of Appeals issued a new opinion (on motion for rehearing) today, it would not have made a difference. But next time, it may.

McSchaffry v. Amegy Bank NA (Tex. App. - Houston [1st Dist.] Dec. 15, 2011, no pet. h.)(Opinion by Justice Jane Bland)

Mark McShaffry v. Amegy Bank National Association; Amegy Corporation; LBM-Jones Road, L.P; LBM-Jones Road GP, Inc; WDJ Management, LLC; Gerald Peter Jacob and Lee Gittleman -- Appeal from 125th District Court of Harris County (Hon. Kyle Carter)


When multiple grounds for summary judgment exist and the trial court does not specify the ground on which it granted summary judgment, an appellant must negate on appeal all possible grounds. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); Ellis v. Precision Engine Rebuilders, Inc., 68 S.W.3d 894, 898 (Tex. App.—Houston [1st Dist.] 2002, no pet.). If the appellant fails to negate each possible ground upon which the judgment may have been granted, an appellate court must uphold the summary judgment. See Ellis, 68 S.W.3d at 898. An appellant also may assert a general complaint that the trial court erred in granting summary judgment. See Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970). McShaffry, however, makes no such assertion.

LBM moved for summary judgment against McShaffry on the grounds of res judicata and collateral estoppel. Res judicata and collateral estoppel are independent affirmative defenses. Because the order granting summary judgment did not specify the particular grounds on which it was rendered; McShaffry must defeat each of these grounds. See Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

Res judicata has been used as a broad term for the related concepts of claim preclusion (res judicata) and issue preclusion (collateral etoppel). Barnes v. United States Parcel Serv., Inc., No. 01-09-00648-CV, 2010 WL 6808024, at *4 (Tex. App. Houston—[1st Dist.] June 23, 2011); see Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992). However, within this doctrinal umbrella there are two distinct legal theories—namely res judicata and collateral estoppel. Barr, 837 at 628. Res judicata prevents the relitigation of a claim or cause of action that has been finally adjudicated in a prior lawsuit. Id. Collateral estoppel, or issue preclusion, prevents relitigation of a fact issue resolved in a prior dispute. Id. Although claim preclusion and issue preclusion are related concepts, each provides a distinct affirmative defense. Therefore, McShaffry must negate on appeal both grounds upon which the trial court’s judgment may have been granted.

We conclude that McShaffry has not briefed the alternative ground of collateral estoppel. See Williams v. Crum & Forster Commercial Ins., 915 S.W.2d 39, 42–43 (Tex. App.—Dallas 1995) (noting that issue is waived when appellant fails to cite legal authority in support of issue, as required by rules of appellate procedure, and thereby affirming summary judgment because appellant had not properly challenged each ground asserted in support of summary judgment), rev’d on other grounds, 955 S.W.2d 267 (Tex. 1997). McShaffry confines his appeal to res judicata, asserting that “[t]he trial court erred in granting Appellees’ res judicata Motion for Summary Judgment because McShaffry did not have a claim against Appellees until after the trial court entered a Judgment resolving all claims against all parties in the previous lawsuit.” McShaffry offers no legal analysis, argument, citations to the record, nor any authorities to support his contention on appeal that his claims are not barred by collateral estoppel. See TEX. R. APP. P. 38.1(h). Because the trial court could have granted summary judgment on the basis that McShaffry’s claims were barred by either res judicata or collateral estoppel, and McShaffry did not brief the collateral estoppel ground, we must affirm the summary judgment. See Ellis, 68 S.W.3d at 898; Iglesia Hispana Nueva Vida Houston, Inc. v. Rosin, No. 01-06-00048-CV, 2007 WL 1633723, at *3 (Tex. App.—Houston [1st Dist.] June 7, 2007, no pet.) (mem. op.) (affirming summary judgment on collateral estoppel because appellant did not address it as possible ground for trial court’s summary judgment ruling); McIntyre v. Wilson, 50 S.W.3d 674, 681–82 (Tex. App.—Dallas 2001, pet. denied) (upholding summary judgment because trial court could have granted summary judgment on ground that appellant failed to adequately brief, by offering no discussion on issue, making passing reference to ground in other issues, and citing generally to law review article).

Nonetheless, we conclude that the trial court properly granted summary judgment based on res judicata. Res judicata prevents parties and those in privity with them from relitigating a case that a competent tribunal has adjudicated to finality. Ingersoll–Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 206 (Tex. 1999). Res judicata bars claims or defenses that could have been litigated in the earlier suit but were not. Id. at 206–07. “The doctrine is intended to prevent causes of action from being split, thus curbing vexatious litigation and promoting judicial economy.” Id. at 207. Under the doctrine of res judicata, a party is precluded from litigating a claim in a pending action if: (1) in a previous action, a court of competent jurisdiction rendered a final determination on the merits of a claim; (2) the parties that litigated the prior claim are identical to or in privity with the parties litigating the pending claim; and (3) the pending claim (a) is identical to the prior claim or (b) arises out of the same subject matter as the prior claim and could have been litigated in the previous action. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010); Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996).

Judgments—except judgments void for lack of jurisdiction—are not subject to collateral attack; they may only be challenged on direct attack by appeal. Browning v. Placke, 698 S.W.2d 362, 363 (Tex. 1985). A collateral attack, unlike a direct attack, seeks to avoid the effect of a judgment in a later proceeding not instituted for the purpose of modifying or vacating the judgment, but instituted in order to obtain some relief that the judgment currently stands as a bar against. Henderson v. Chambers, 208 S.W.3d 546, 550 (Tex. App.—Austin 2006, no pet.) (holding that wife’s suit based on fraud claim was collateral attack on prior judgment); see Kendziorski v. Saunders, 191 S.W.3d 395, 408 (Tex. App.—Austin 2006, no pet.) (“A collateral attack . . . ‘is an attempt to avoid the effect of a judgment in a proceeding brought for some other purpose.’”) (quoting Employers Cas. Co. v. Block, 744 S.W.2d 940, 943 (Tex. 1988)). “[T]he prohibition against collateral attack extends to claims that false swearing or fraud of a party to the judgment renders it voidable.” In re Cantu, 961 S.W.2d 482, 486 (Tex. App.—Corpus Christi 1997, no writ) (citing Glenn v. Dallas Cnty. Bois D’Arc Island Levee Dist., 268 S.W. 452 (Tex. 1925); Kaphan v. Fid. & Deposit Co. of Md., 564 S.W.2d 459, 462 (Tex. Civ. App.—Houston [1st Dist.] 1978, writ ref’d n.r.e.)).

McShaffry sued LBM alleging that LBM interfered with a contract between McShaffry, Brindsen and Gerow by settling with Brindsen and assigning the county court judgment to him. McShaffry also alleged that LBM engaged in fraud by procuring false testimony in the county court. According to McShaffry, Brindsen paid LBM to settle the breach of commercial lease claim in exchange for LBM’s participation in a county court trial. LBM then assigned the resulting judgment to Brindsen so that Brindsen could obtain more money from McShaffry than he could have under their agreement. In all material respects, McShaffry’s claims in this case attack the judgment against him in the county court, because each of them stems from allegations that LBM obtained perjured testimony, with Brindsen’s help, in the earlier suit. McShaffry was a party to the suit, but chose not to appear at the trial. McShaffry’s claims present a collateral attack on the county court judgment: they are in substance claims that the county court proceedings were intrinsically fraudulent. But he makes no showing that he could not raise have raised these claims before the county court, during the proceeding to which he was a party. See Browning v. Prostok, 165 S.W.3d 336, 346 (Tex. 2005) (holding that bondholders’ claims that directors fraudulently undervalued company in earlier bankruptcy proceeding were intrinsic to bankruptcy court’s order and collateral attack on the judgment); see also Henderson, 208 S.W.3d at 550 (holding that wife’s suit based on claims her ex husband and lawyers fraudulently mischaracterized property was collateral attack on prior judgment). Because McShaffry’s claims represent an attack on the integrity of the county court proceedings—proceedings that involved the same nucleus of operative facts and to which he was a party—his claims present an impermissible collateral attack and are res judicata. [1] See Browning, 165 S.W.3d at 346; see also Henderson, 208 S.W.3d at 550.


We conclude that the trial court’s judgment, as based on collateral estoppel grounds, was not challenged on appeal; the judgment may stand on this basis alone. Further, the trial court properly granted summary judgment based on the affirmative defense of res judicata. Accordingly, we affirm the judgment of the trial court.

Jane Bland


Panel consists of Chief Justice Radack and Justices Bland and Huddle.

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