NO. 07-07-0039-CV
IN THE COURT OF=20
APPEALS
FOR THE SEVENTH =
DISTRICT OF=20
TEXAS
AT =
AMARILLO
PANEL D
OCTOBER 15, =
2008
______________________________
JOHNNY RODRIGUEZ, JR.,=20
APPELLANT
V.
ICON BENEFIT =
ADMINISTRATORS,=20
INC., APPELLEE
_________________________________
FROM THE COUNTY COURT =
AT LAW NO.=20
3 OF LUBBOCK COUNTY;
NO. 2006-598,648; =
HONORABLE PAULA=20
LANEHART, JUDGE
_______________________________
Before QUINN, C.J., and =
CAMPBELL=20
and PIRTLE, JJ.DISSENTING=20
OPINION
&=
nbsp;I=20
respectfully disagree with the conclusion reached by my learned=20
colleagues. While I acknowledge that this Court has previously =
determined=20
that an order of dismissal, which erroneously states that it is =
granted=20
=E2=80=9Cwith prejudice,=E2=80=9D operates as a bar to further =
prosecution under the=20
doctrine of res judicata, ![3DFootnote=20](3D"http://www.7thcoa.courts.state.tx.us/opinions/07-07-0039-cvdissent=)
I cannot, =
in good=20
conscience, follow that authority. I would overturn Labrie =
and=20
reverse the judgment of the trial court.
&=
nbsp;Appellant,=20
Johnny Rodriguez, Jr., challenges a summary judgment rendered in =
favor of=20
Appellee, ICON Benefit Administrators, Inc. By two points of =
error, he=20
maintains (1) the trial court erred in granting summary judgment =
under a=20
theory of res judicata as there was never a decision on the =
merits=20
of his claims and because two new and different causes of action =
were=20
plead against ICON, and (2) the trial court denied him his due =
process=20
rights under both the Texas and United States Constitutions by =
granting=20
summary judgment on a theory of res judicata without a full =
and=20
fair hearing on the merits of his causes of action.
Background
&=
nbsp;On=20
March 21, 2003, Rodriguez, a City of Lubbock employee, filed suit =
in the=20
99th District Court of Lubbock County, against John Leza for =
injuries he=20
sustained in an automobile collision in April 2001. After =
discovery=20
progressed, Rodriguez and Leza agreed to submit the dispute to =
mediation.=20
At mediation, on September 30, 2003, the parties signed a =
settlement=20
agreement pursuant to Rule 11 of the Texas Rules of Civil =
Procedure=20
whereby Leza agreed to pay $6,500 to settle all claims arising out =
of the=20
collision. In return, Rodriguez agreed to indemnify Leza from any =
party=20
claiming an interest in the settlement proceeds. Rodriguez also =
agreed to=20
provide Leza either a release or a negotiated settlement of the =
claims of=20
HMO Blue, the City of Lubbock=E2=80=99s health insurance provider, =
and ICON, the=20
workers=E2=80=99 compensation carrier.
&=
nbsp;Unable=20
to reach an agreement with ICON, Rodriguez did not execute the =
settlement=20
documents and instead, on January 8, 2004, without leave of court, =
filed=20
an amended petition adding ICON as a defendant and alleging DTPA =
and=20
Insurance Code violations. On July 1, 2004, Leza filed the =
mediation=20
settlement agreement with the court and moved to enforce the =
agreement=20
pursuant to Rule 11. On August 6, 2004, the court held a hearing; =
however,=20
neither Rodriguez nor ICON, nor their respective counsel appeared. =
At that=20
hearing Leza=E2=80=99s counsel stated, =E2=80=9Cwe would like the =
Court to sever this case=20
as regards the claims that are asserted between the original =
Plaintiff,=20
Rodriguez, and Leza; allow us to tender the settlement money into =
the=20
Registry of the Court, pending disposition of the claims between =
Rodriguez=20
and [ICON]. . . .=E2=80=9D Without further argument, the trial =
court responded,=20
=E2=80=9CWell, you know, I=E2=80=99ve got a real interesting =
proposition for the=20
Plaintiff=E2=80=99s lawyers. I don=E2=80=99t see any Leave of =
Court to bring a new party=20
into this lawsuit. . . . So I think we=E2=80=99re going to grant =
your relief. Got=20
an Order?=E2=80=9D Thereafter, on August 12, 2004, without ICON =
having requested=20
any relief, the trial court signed its judgment enforcing the =
mediation=20
agreement and dismissing Rodriguez=E2=80=99s claims against both =
Leza and ICON,=20
with prejudice. Rodriguez appealed the trial court=E2=80=99s order =
without=20
contesting the =E2=80=9Cwith prejudice=E2=80=9D provision, and by =
opinion dated February=20
17, 2006, this Court affirmed the trial court=E2=80=99s =
order.
&=
nbsp;Thereafter,=20
on March 17, 2006, Rodriguez filed the underlying suit against =
ICON in the=20
County Court At Law No. 3 of Lubbock County asserting the DTPA and =
Insurance Code violations alleged in the previous suit and adding =
new=20
claims for fraud, breach of contract, and declaratory judgment. =
ICON=20
pleaded the affirmative defense of res judicata as a bar to =
Rodriguez=E2=80=99s suit and moved for summary judgment. The trial =
court granted=20
summary judgment and Rodriguez now appeals that =
judgment.
Standard of =
Review
&=
nbsp;ICON moved for summary =
judgment=20
based solely on the affirmative defense of res judicata. =
Thus, to=20
be entitled to summary judgment, ICON had the burden to prove each =
element=20
of that defense as a matter of law. Tex. R. Civ. P. 166a(c);=20
Shah v. =
Moss, =
67 S.W.3d=20
836, 842 (Tex. 2001); Randall=E2=80=99s =
Food Markets, Inc.=20
v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995).
&=
nbsp;An=20
appellate court reviews an order granting summary judgment =
de novo. Valence =
Operating Co. v.=20
Dorsett, 164=20
S.W.3d 656, 661 (Tex. 2005). In reviewing a summary judgment, this =
Court=20
must apply well-established standards which are: (1) the movant =
for=20
summary judgment has the burden of showing that there is no =
genuine issue=20
of material fact and that it is entitled to judgment as a matter =
of=20
law; (2) =
in deciding=20
whether there is a disputed material fact issue precluding summary =
judgment, evidence favorable to the non-movant will be taken as=20
true; and =
(3) every=20
reasonable inference must be indulged in favor of the non-movant =
and any=20
doubts resolved in its favor. Am. Tobacco Co. v. =
Grinnell,=20
951 S.W.2d 420, 425 (Tex. 1997) (citing Nixon v. Mr. Prop. =
Mgmt.=20
Co., 690 S.W.2d 546, 548-49 (Tex. 1985)).
&=
nbsp;Res Judicata
&=
nbsp;The=20
doctrine of res judicata bars the relitigation of claims =
that have=20
been finally adjudicated or that arise out of the same subject =
matter and=20
could have been litigated in the prior action. Igal v. =
Brightstar=20
Information Technology Group, Inc., 250 S.W.3d 78, 86 (Tex. =
2008). For=20
res judicata to apply, the following elements must be =
present: (1)=20
a prior final judgment on the merits by a court of competent =
jurisdiction;=20
(2) the same parties or those in privity with them; and (3) a =
second=20
action based on the same claims as were raised or could have been =
raised=20
in the first action. Id.
&=
nbsp;Much=20
of the difficulty associated with application of the doctrine of =
res=20
judicata is due to the common confusion of several related =
theories,=20
the imprecise and inconsistent use of the term in legal writings, =
and the=20
application of the doctrine to bar a claim or cause of action not =
actually=20
litigated. Barr v. Resolution Trust Corp., ex rel. =
Sunbelt=20
Federal Savings, 837 S.W.2d 627, 628 (Tex. 1992). Generally speaking, =
res=20
judicata is a=20
generic term for a group of related concepts concerning the =
conclusive=20
effect to be given a final judgment. Id. Res judicata =
claims=20
fall into two principal categories: (1) claim preclusion =
(typically=20
referred to as res judicata); and (2) issue preclusion =
(typically=20
referred to as collateral estoppel). Id. at 628. As =
previously=20
stated, res judicata, or claim preclusion, prevents the=20
relitigation of a claim or cause of action that has been actually=20
litigated in a previous suit, as well as related claims =
=E2=80=9Cwhich, through=20
the exercise of diligence, could have been litigated in a prior =
suit.=E2=80=9D=20
Hallco Texas, Inc. v. McMullen County, 221 S.W.3d 50, 58 =
(Tex.=20
2006) (quoting Getty Oil Co. v. Insurance Co. of North America, =
845=20
S.W.2d 794, 799 (Tex. 1992)). Issue preclusion, or =
collateral=20
estoppel, prevents relitigation of particular issues that have =
already=20
been resolved in previous litigation. Barr, 837 S.W.2d at =
628. The=20
sum and substance of the doctrine of res judicata is that=20
once a matter has been distinctly put in issue and directly =
determined by a court of competent jurisdiction, then the matter =
cannot be=20
relitigated, thereby reducing unnecessary litigation and promoting =
confidence and reliance in the finality of litigation. Allen v. =
McCurry, 449 U.S. 90, 95, 101 S.Ct. 411, 66 L.Ed.2d 308 =
(1980).=20
&=
nbsp;Generally,=20
a dismissal with prejudice functions as an adjudication on the =
merits and=20
operates as if the case had been fully tried and decided. See =
Ritchey=20
v. Vasquez, 986 S.W.2d 611, 612 (Tex. 1999). Therefore, an =
order=20
dismissing a case with prejudice would ordinarily have full res =
judicata effect, barring subsequent relitigation of the same =
causes of=20
action or issues between the same parties. See Barr, 837 =
S.W.2d at=20
630-31. However, the dismissal of a claim for failure to comply =
with a=20
procedural rule, such as misjoinder, is not a dismissal on the =
merits.=20
See Thomas v. Knight, 52 S.W.3d 292, 295 =
(Tex.App.--Corpus=20
Christi 2001, pet. denied). Rather, it is merely an exercise of =
the trial=20
court=E2=80=99s discretion, and if the error can be remedied, =
dismissal with=20
prejudice is unwarranted. See Hickman v. Adams, 35 S.W.3d =
120,=20
124-25 (Tex.App.=E2=80=93Houston [14th Dist.] 2000, no =
pet.).=20
Therefore, the dismissal of a claim with prejudice, for failure to =
comply=20
with a procedural rule that could be remedied, is not a dismissal =
on the=20
merits and it is not entitled to res judicata effect. =
&=
nbsp;Appellant=E2=80=99s=20
failure to properly join ICON could have been remedied; therefore, =
the=20
trial court=E2=80=99s dismissal with prejudice was improper. =
Because Rodriguez=E2=80=99s=20
claims against ICON were not actually litigated in the previous =
suit, and=20
because the trial court=E2=80=99s unwarranted dismissal with =
prejudice cannot be=20
asserted as a final determination on the merits, the doctrine of =
res=20
judicata is not applicable to the facts of this case. =
&=
nbsp;Stated=20
differently, the summary judgment proof in the instant case does =
not=20
conclusively establish that a final judgment on the merits =
was=20
entered in the first suit. See Stubbs v. Patterson Dental=20
Laboratories, 573 S.W.2d 274 (Tex.Civ.App.=E2=80=93Eastland =
1978, no writ). In=20
Stubbs, the defendant asserted that the prior dismissal of =
the=20
plaintiff=E2=80=99s claims =E2=80=9Cwith prejudice=E2=80=9D was =
sufficient to support the trial=20
court=E2=80=99s granting of summary judgment on the basis of =
res judicata.=20
In finding that the dismissal with prejudice was not a final =
judgment on=20
the merits, the appellate court, inter alia, observed:
when confronted with an =
order=20
containing a notation of =E2=80=9Cdismissed with =
prejudice=E2=80=9D where the dismissal=20
order [is] clearly not on the merits, . . . it [is] the nature of =
the=20
action and the character of the judgment that determines whether =
it is=20
res judicata, and if the judgment is clearly not on the =
merits, the=20
words =E2=80=9Cwith prejudice=E2=80=9D add nothing to the effect =
of the judgment.=20
Id. at =
277.
&=
nbsp;Here,=20
ICON argues that because Rodriguez did not attack the propriety of =
the=20
=E2=80=9Cwith prejudice=E2=80=9D statement in his first appeal, =
the order rendered by the=20
district court constitutes a final determination on the merits. =
This=20
reasoning improperly constrains our de novo review of the =
summary=20
judgment record. Applying the appropriate standards, our task is =
to=20
determine whether ICON conclusively established each element of =
its=20
affirmative defense of res judicata. By necessity, that =
includes a=20
determination of whether the order rendered by the district court=20
constitutes a final determination on the merits. The summary =
judgment=20
record clearly establishes that the district court=E2=80=99s order =
of dismissal=20
was based solely upon the failure of Rodriguez to obtain leave of =
court to=20
add ICON as a defendant, and not upon the merits of his claim =
against=20
ICON. Furthermore, the district court=E2=80=99s order of dismissal =
was issued=20
sua sponte, without ICON ever seeking dismissal or a =
determination=20
of the merits of Rodriguez=E2=80=99s claim. That being the case, =
it follows that=20
the district court=E2=80=99s order cannot serve as a basis for the =
affirmative=20
defense of res judicata. Because ICON has not conclusively=20
established the first element of its res judicata defense, =
the=20
trial court erred in granting summary =
judgment. New Claims
&=
nbsp;In=20
the second case filed in county court, Rodriguez also added claims =
for=20
fraud, breach of contract, and declaratory judgment in addition to =
the=20
DTPA and Insurance Code violations which were asserted in the =
previous=20
suit. Notwithstanding the fact that these claims could have been =
brought=20
in the earlier litigation, the same considerations that bar =
application of=20
the doctrine of res judicata to the original claims also =
bar=20
application of the doctrine to these claims.
&=
nbsp;Because=20
the doctrine of res judicata has no application to the =
facts of=20
this case, I would sustain point of error one.Due Process Claim
A fundamental precept of common law =
adjudication,=20
embodied in the doctrine of res judicata, is the concept =
that=20
res judicata cannot apply when the party against whom the =
earlier=20
decision is asserted did not have a =E2=80=9Cfull and fair =
opportunity=E2=80=9D to=20
litigate the issue in the earlier case. Montana v. United =
States,=20
440 U.S. 147, 153, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979). =
Because=20
Rodriguez did not have a full and fair opportunity to litigate his =
claims=20
against ICON, due process considerations should bar application of =
the=20
doctrine of res judicata to the facts of this case. =
Accordingly, I=20
would also sustain point of error two.Conclusion
<=
/SPAN>Accordingly,=20
I would reverse the judgment and remand this cause to the trial =
court for=20
further proceedings consistent with this dissenting=20
opinion.
&=
nbsp; &n=
bsp; &nb=
sp; &nbs=
p; =
; =
Patrick=20
A. Pirtle
&=
nbsp; &n=
bsp; &nb=
sp; &nbs=
p; =
; =
Justic=
e |