Court Opinion

ID: 9771395
Source: CourtListenerOpinion
Date Created: 2023-08-29 16:41:51.885219+00
Date Added: 2024-06-11T07:31:30.003536
License: Public Domain

MALONEY, Justice,
dissenting.
I dissent. Our majority fails to apply the principle of res judicata articulated in Texas Water Rights Commission v. Crow Iron Works, 582 S.W.2d 768 (Tex.1979).
Sunbelt concedes that res judicata not only bars a second suit on claims considered in the first suit but also claims that could have been considered, provided that all the claims arise from the same subject matter. However, Sunbelt also argues that res judicata only applies “when the cause of action in the subsequent suit is identical to the cause of action asserted in the prior proceeding.” Sunbelt cites Griffin v. Holiday Inns of America, 496 S.W.2d 535, 538 (Tex.1973), as authority for its position.
The Griffin court held that a judgment against a contractor in a breach of contract action did not bar a subsequent suit in quantum meruit. Because the causes of action were different in the two lawsuits, res judicata did not bar the second lawsuit. Id. at 539. Sunbelt contends that a suit on a guaranty and a suit against a general partner on a note signed by the partnership are different causes of action, and res judi-cata should not apply.
Barr maintains that res judicata does not depend upon whether the second lawsuit seeks recovery on the same cause of action *605as the first. He asserts that Crow Iron Works establishes a different test. Crow Iron Works states:
The scope of res judicata ... precludes a second action ... not only on matters actually litigated, but also on causes of action or defenses which arise out of the same subject matter and which might have been litigated in the first suit.
582 S.W.2d at 771-72. Barr argues that the “same subject matter” or “same transaction” test is broader than the “same cause of action” test. Barr urges that the execution of the promissory note and his signing of the guaranty were part of the same transaction or subject matter. He contends that because Sunbelt could have sued him on the guaranty and on the note in the first lawsuit, res judicata bars the second lawsuit.
Griffin and Crow Iron Works differ on the scope of res judicata. The Griffin court held only that a losing contractor in a breach of contract action could sue again in quantum meruit. The Griffin court stated:
Courts generally agree that a judgment is conclusive as to all matters that were considered or should have been considered in the first suit. The problem is in determining how much of what could have been considered in the first suit, but was not, is merged in or barred by the judgment rendered. As a general rule a judgment on the merits in a suit on one cause of action is not conclusive of a subsequent suit on a different cause of action except as to issues of fact actually litigated and determined in the first suit.
Griffin, 496 S.W.2d at 538 (emphasis added). The Griffin court reasoned that, because quantum meruit and breach of contract are different causes of action, and they require proof of different facts, a judgment on the breach of contract claim did not bar the quantum meruit claim. By implication, the court ruled that the quantum meruit claim was not one that should have been considered in the breach of contract action.1
In Crow Iron Works, decided six years after Griffin, the supreme court enlarged res judicata. In 1956, the State of Texas filed a lawsuit to determine water use rights to the Rio Grande between Falcon Reservoir and the Gulf of Mexico (The Valley Water case). The trial court took judicial custody of the waters of the Rio Grande and filed a lis pendens notice in each of the four counties affected by the suit. The notice instructed anyone claiming water rights to enter the lawsuit. The judgment in the Valley Water case became final in 1970. Several years later, Crow Iron Works and others sought to increase their water usage. The Texas Water Rights Commission denied their petition. Crow Iron Works and the other plaintiffs filed suit to set aside the Commission’s order. The supreme court ruled:
All the requirements of res judicata have been shown in this cause. Although the record does not reveal whether Crow Iron Works, et al.’s predecessors ... asserted the water rights in question here, they might have asserted these rights. We therefore hold that the judgment in the Valley Water Case is res judicata of the water rights asserted by Crow Iron Works, et al.
Crow Iron Works, 582 S.W.2d at 772. The Crow Iron Works court did not mention the considerations explained in Griffin. It established a new res judicata test — whether the claims or defenses alleged in the second suit arose from the same subject matter litigated in the first lawsuit, and which might have been asserted in the prior suit. Crow Iron Works, 582 S.W.2d at 771-72.
The Supreme Court of Texas has not expressly overruled Griffin, but subsequent cases have confined it to its facts. The rule enunciated in Crow Iron Works declares the current law in Texas. We have applied that rule in recent cases. See Starnes v. Holloway, 779 S.W.2d 86, 97-98 (Tex.App.—Dallas 1989, writ denied); Vartanian Family Trust No. 1 v. Galstian Family Trust, 724 S.W.2d 126, 128 (Tex.*606App.—Dallas 1987, no writ). The Crow Iron Works “same subject matter” test also comports with the Restatement (Second) of Judgments:
When a valid and final judgment rendered in an action extinguishes the plaintiffs claim pursuant to the rules of merger or bar ... the claim extinguished includes all the rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action rose.
Restatement (Second) of Judgments § 24(1) (1982).
Until the Supreme Court of Texas determines differently, we should apply the Crow Iron Works standard. Res judicata principles bar Sunbelt’s suit against Barr in his capacity as primary obligor if: 1) Sunbelt could have asserted in the guaranty lawsuit the claims it later asserted in the partnership lawsuit and 2) the claims in the partnership lawsuit arose from the same transaction or subject matter as the claims asserted in the guaranty lawsuit. Id.; Perryco, Inc. v. FDIC, 777 S.W.2d 549, 555 (Tex.App.—El Paso 1989, no writ).
Sunbelt could have brought all of its claims against Barr in the guaranty lawsuit. “The plaintiff in his petition ... may join either as independent or as alternative claims as many claims ... as he may have against an opposing party.” Tex.R.Civ.P. 51(a). We need only determine whether execution of the promissory note and Barr’s signing of the guaranty arose from the same transaction or subject matter.
There is no universal definition of “transaction” or “subject matter,” but the Restatement (Second) provides:
What factual grouping constitutes a “transaction”, ... [is] to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage.
Restatement (Second) of Judgments § 24(2) (1982).
Barr signed the personal guaranty on the same day that the partnership executed the original (1985) promissory note. In its first amended petition in the partnership lawsuit, Sunbelt alleged that Barr signed the guaranty “as part of the same transaction” as the partnership’s execution of the first promissory note. Sunbelt still had Barr’s guaranty when it renewed the note one year later. The execution of the promissory note and Barr’s giving of the guaranty were related in time, space, origin, and motivation. Id. The validity of the note was necessary to show Barr’s liability on the guaranty. The note and the guaranty form a convenient trial unit, even if Sunbelt chose not to assert both theories in the same suit.
Restatement (Second) of Judgménts, section 25, also clarifies the definition of “transaction”:
The rule of § 24 applies to extinguish a claim by the plaintiff against the defendant even though the plaintiff is prepared in the second action
(1) To present evidence or grounds or theories of the case not presented in the first action, or
(2) To seek remedies or forms of relief not demanded in the first action.
Restatement (Second) of Judgments § 25 (1982); see also Perryco, 777 S.W.2d at 555. When read together, sections 24 and 25 compel the conclusion that the execution of the promissory note and the giving of the guaranty formed part of the same transaction or subject matter, the extension of the loan.
Sunbelt had available two different theories of liability — the promissory note and the guaranty. However, Sunbelt was entitled to only one recovery of its loan. Whether Sunbelt sued on the partnership’s note or on Barr’s guaranty, Sunbelt had only one claim against Barr, a claim for the past-due principal and interest. See McRoberts v. Tesoro Sav. & Loan Ass’n, 781 S.W.2d 705, 706 (Tex.App.—San Antonio 1989, no writ) (when the primary obligors and the guarantors are the same individu*607als, the lender is entitled to only one recovery).
When Sunbelt chose to pursue its two theories of the case in different lawsuits, it ran the risk that losing the first lawsuit would bar the second. The final judgment in the guaranty lawsuit precludes Sunbelt’s claim against Barr in the partnership lawsuit.
I would overrule both of Sunbelt’s points of error and affirm the trial court’s judgment.

. If the contractor in Griffin should have pleaded quantum meruit in the first lawsuit and did not, presumably res judicata would have barred the second lawsuit.