Reversed and Remanded and Memorandum Opinion filed Ju ly 12 , 2022.

In The 

## Fourteenth Court of Appeals

NO. 14

- 20

- 00574

- CV

SOUTHBAY GUNITE INC. , Appellant

V.
SOUTH POOLS INC. AND MUHAMMAD “ MIKE ” TELLO , Appellee s

On Appeal from the Co unty Civil C our t at Law No
. 1

Harris County, Texas Trial Court Cause No. 1145370

M E M O R A N D U M O P I N I O N Appellant Southbay Gunite Inc. challenges the trial court ’ s grant of a motion to dismiss for lack of subject matter jurisdiction favoring appellees South Pools
I nc. and Muh amma d Tello. Concluding the trial court erred , we reverse and remand for further proceedings.
Discussion Southbay sued appellees for collection of a construction debt, alleging2

claims f or breach of contract, quantum meruit , and violation s of the Prompt Payment Statute and Property Code trust fund rules. In their brief , a ppellees allege that in a prior lawsuit in a different court, an assignee of South bay, Ray Crain, sued appellees for the same debt and raised similar claims but also includ ed a claim under the Texas Theft Liability Act (TTLA)

. 1 Reporte dly , whe n the case was called for trial, Crain announced ready, but he then nonsuited his claims once he realized Tello was not going to appear for trial

. T he alleged agr eement on which the deb t was based was reputedly reached b etween Tello, as a representative of South Pools, and a representative of Southbay , who had since died ; Crain apparently had hoped to prove the contract at least in part through Tello ’ s testimony bu t faile d to subpoena hi m to testify

. After Crain nonsuited his claims,
t he trial court in the prior action con sidered appellees ’ assertion that it was a prevailing party in the lawsuit entitled to reasonable and necessary a ttorney ’ s fees under TTLA section 134.00 5(b) . Tex. Civ. Prac. & Rem. Cod e § 134.005(b) . The
court held that Crain nonsuited his claims to avoid an unfavorable ruling and awarded appellees their attorney ’ s fees. See, e.g. , Kelly v. Isaac , No. 05

- 19

- 00813

- CV, 2020 WL 4746589, at *6 (Tex. App.

— Dall as Aug. 17, 2020 , pet. denied ) (mem. op.). In its final judgment, the trial co urt in the prior action noted that Crain ’ s claims previousl y had been dismissed without pr ejudice , awarded attorney ’ s fees to appellees as prevailing parties under the T TLA , and stated that the judgment disposed of the defendants ’ counterclaim

. Appellees ’ m otion to d ismiss for l ack of s ubject m atter j urisdiction in the present case and th e tri al court ’ s final judgment granting th at motion are somewhat ambiguous regarding the grou nds on which the motion and judgment are based. In

1 These allegations r egarding the prior pr oceeding are c orroborated to an extent by the final judgment in the prior case , which was attached to appellees ’ answer and motion to dismiss in th e present case

.3

the motion , appellees first asserted the tr i a l court “ lack s subject matter jurisdiction

over [Southbay ’ s] claims beca use [Southbay] does not have standing to bring the claims it has asserted

. ” Appellees th en explained, “ [S outhbay] was not injured by [ appellees ’ ] alleged conduct, in that this matter was previously litigated in [the prior court

. ] Thus, [Southbay] lacks sta nding to prosecute its asserted claims. ” In its Order of Dismissal , the trial court note d that the motion to dismiss asserted a lack of standing and then granted the motion “ for the reason that the Court does not have jurisdiction of the subject matter and is unable under the law to hear this

cause

. ”
Neither the motion nor the order mentions the allegation th at Southbay had assigned its claims to Crain as a ground for determining Southbay had no standing
to sue. 2 See generally Vernco Constr., Inc. v. Nelso n , 460 S.W.3d 145, 148

– 50 (Tex. 2015) (treating plaintiff ’ s alleged assignment of contra ct rights as a jur isdictional standing issue). Instead, the motion and apparently the order were premised on the assertion the claims had already been litigated in the prior action

. As appellees appear to recognize in their brief, such argument is based on the doctrine of r es judicata.

2 The parties certainly did not e ngage on this issue in the trial court and at least Southbay does not on appeal. Although it is a gain ambiguous, appelle es suggest in their brief that Southbay did not have standing because it assigned its rights to collect the a lleged debt to Crain. Appellees also attac hed a cop y of the purported assignment from S outhbay to Crain to its brief. We , of course, cannot con sider evidence attached to a brief

. See, e.g. , WorldPeace v. Comm ’ n for Law. Discipline , 183 S.W. 3d 451, 465 n.23 (Tex. App.

— Houston [14th Dist.] 2005 , pet. denied )

. Moreover, w ithout evidence of the terms of the assignment , we cannot k now whether the assignment would pre clude Southbay from having standing in the present lawsuit. See generall y Vertical N. Am., Inc. v . Vopak Terminal Deer Park, Inc. , No. 14

- 15

- 01088

- CV , 2017 WL 4197027, at *3 (Tex. App.

— Houston [14th Dist.] Sept. 21, 2017, pet. denied) (mem. op.) (holding en tity that retained some interest in a claim, which purportedly ha d been sold to a third party, had standing to sue). We also note that in a motion for protection from discovery, appel lees suggested Crain may have reassigned the rights to collect the debt back to Southbay. Regardless, the assignment was not a ground on which the motion to dismiss was granted , an d the record is not sufficient for the issue to be considere d on appeal even if we were inclined to do
so.4

Res judicata , or claim preclusion , p reclude s the relitigati ng of claims that have been finally adjudicated and claims that could have be en litig ated in a prior action. Amstadt v. U.S. Brass Corp. , 919 S.W.2d 644, 652 (Tex. 1 996). It is an aff irmative defense requiring proof of (1) a prior final judgment on the merits by a court of competent jurisdiction; (2) identity of parties or those in pr ivity with them; and (3) a second action based on the same claims as were raised, or could have been ra ised, in the first action. Id

. Because it is an affirmative defense and a plea in bar and th us a decision on the merits , r es judicata is not properly raised in a plea to the jurisdiction or, as here, it s functional equivalent, a motion to di s miss for lack of subject matter jurisdiction. See Tex. Hwy. Dep ’ t v. Jarrell , 418 S.W.2d 486, 488 (Tex. 1967) ; Town Park Ctr., LLC v . City of Sealy , 639 S.W.3d 170, 182 (Tex. App.

— Houston [1st Dist.] 2021 , no pet. ) ; Me tro. Life Ins. Co. v. RSL Funding, LLC , No. 14

- 19

- 00 155

- CV, 2021 WL 330447, at *3 n.3 (Tex. App.

— Houston [14th Dist.] Feb. 2, 2021 , no pet. ) (mem. op.) ; City of Houston v . Johnson , 353 S.W.3d 499, 506 n .2 (Tex. App.

— Houston [14th Dist.] 2011, pet. denied)

. Such pleadings are in substance d ilatory plea s that seek dismissal of a case for lack of subject

- matter jurisdiction

. See Harris Cty. v. Sykes , 136 S.W.3d 635, 638 (Tex. 2004). When a court rules that claims are precluded by res judicata, it should enter
a t ake

- nothing judgment on tho se c laims rather than , as the court did here, di s miss the claims without prejudice. See, e.g. , Daniels v. Empty Eye, Inc. , 368 S.W.3d 743, 754 (Tex. App.

— Houston [14th Dist .] 2012 , pet. denied )

. C aselaw , however , supports the notion that under proper circumsta nces, a plea to th e jurisdiction or motion to di s miss based on res judica ta can be treated as a motion for summary judgment. See Town P ark Ctr. , 639 S.W .3 d at 182 (disc ussing cases and explaining that a plea to the jurisd iction raising re s judicata can be treat ed as a moti o n for summary judgment either when the parties agree to5

do so or all the hallmarks of a summary judgment proceeding a re followed). Here, the record re veals neither agreement on this topic n or an objection by Southbay regarding the rais ing of res judicata i n a motion to dismiss for lack o f jurisdiction.
However, even consider ing the trial court ’ s judgment as granting a motion for summary judgment, it was in error. Appellees ’ argument rests on the premise that the prior court ’ s award of atto rney ’ s fees to app ellees as prevailing parties in
t h e prior case was a determination on the merits of C rain ’ s claims in that action. It
was not. As stated above, a final judgment on the merits is a n essential elem e nt of a res judicata affirmative defense. See Amstadt , 919 S .W.2d at 652

. As also explained above, Crain nonsuited his claims in the prior action and th ose claims were dismissed without prejudice. A nonsuit with out prejudice renders the merits of the nonsuited case moot

. See Travelers Ins. Co. v. Joachim , 315 S.W.3 d 860, 862 (Tex. 2010) ; see also Villafani v. Trejo , 251 S.W.3d 466, 468

– 69 (Tex. 2008) (explaining that under Tex . R. C iv. P. 162, parties have an abs olute right to nonsuit their own claims f

or relief at any time during the litigation be fore they have int roduced all evidence other than rebuttal evidence at trial )

. Although Rule 162 permits affirmative requests for costs, attorney ’ s fees, and sanctions to remain viable in the trial court afte r a nonsuit , the r ule “ does not forestall the no nsuit ’ s effect of rendering the merits of the case moot. ” Univ. of Tex

. Med. Branch at Galveston v. Est. of Blackmon ex rel. Shultz , 195 S.W.3d 98, 101 (Tex. 2006)

. A cou rt can dismiss a case with prejudice after a nonsuit under appropriate circumstances a nd thus create a f inal judgment on the merits valid for res judicata
purposes. See , e.g. , Travelers Ins. , 315 S.W.3d at 864

- 65 ( providing , as one examp le , dismissal s afte r settlements ); Johnson ex rel. Johnson v. Chesnutt , 225 S.W.3d 737, 742 (Tex. App.

— Da llas 2007 , pet den ied ) (discussing death penalty sanctions after a nonsuit) . However, the trial co urt d id not do so in the prior action ;6

t he court merely determined that appellees were prevailing parties under the TTLA because Crain had nonsuited his claim s to avoid an unfa vorable ruling

. See Tex. Civ. Prac. & Rem. Cod e § 134.005(b)

. This entitled appellees to attorney ’ s fees but was not a ruling on the merits of Crain ’ s c laims, which had by then already been nonsuited. See Shultz , 195 S.W.3d at 101 ; see al so Epps v. Fowler , 351 S.W.3d 862, 870

– 71 (Tex. 2 011)

. 3 The trial court erred in granting appel lees ’ motion to dismiss for lack of subject matter jurisdiction and in dism issing Southbay ’ s claims. Accordingly, we sustain Southbay ’ s sole issue.

We reverse th e trial court ’ s ju dg ment and remand for further proceedings in accordance with this opinion.

/s/ Frances Bourliot Justic e

Panel consists of Justices Jewell, Bourliot, and Poissant.

3 In Epps , the supreme court identified several factors that may support an inference that a plaintiff nonsuited to avoid an unfav orable ruling , including : (1) nonsuit occurred after a defendant file d a motion for summary jud gment; (2) plaintiff fail ed to respond to requests for admission or other discovery that could support an adverse judgment; (3) plaintiff fail ed to timely id entify experts or other critical witnesses; and (4) othe r procedural obstacles exis ted that could d efeat the plaintiff ’ s claim, such as an inability to join necessary parties. 351 S.W.3d at 870

– 71 . In making that determination, a trial court is not required to determine the actual merits of the plaintiff ’ s clai ms as the claims thems elves are no longer a t issue in the case post

- nonsuit

. See Shultz , 195 S.W.3d at 101

. We additionally note that if a prevailing party determination under section 134.005(b) after a nonsuit is given res judicata effect, it would have a chilling effect on nonsuit s , encouraging p laintiffs to instead “ roll the dice ” and hope for a favorable judgment in circumstances where nonsuit would have been appropriate

. See Epps , 351 S.W.3d at 869; Klein v. Dooley , 949 S.W.2d 307, 308 (Tex. 1997)

.