Court Opinion

ID: 9779390
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:49:17.673945+00
Date Added: 2024-06-11T07:33:26.020155
License: Public Domain

ON MOTION FOR REHEARING
EVANS, Chief Justice.
In their motion for rehearing, the appel-lees have raised several complaints that warrant further discussion.
The appellees contend that we erroneously overruled their reply point two, because of our decision that the appellees failed to offer evidence in support of their affirmative defenses of res judicata, collateral es-toppel, and release. The appellees argue that the res judicata and collateral estoppel issues were properly presented to the trial court by the tender of the “judgment roll” in the prior shareholder’s derivative litigation. The appellees further assert that the trial court accepted this offer of proof, acknowledged that the records had been placed in evidence, and excluded the evidence from the jury’s consideration only to avoid prejudice to either side. The appel-lees argue that the binding effect of the prior judgment and settlement agreements presented questions of law for the court, rather than the jury, and that the judgments in the prior proceedings must be given conclusive effect “not only on the matter actually raised and litigated, but on every other issue which might have been litigated as an incident to or in connection with that litigation.”
We will assume, for the purpose of this discussion, that the prior judgment and releases were properly presented in evidence before the trial court. We will also assume that the trial court considered such “evidence” as a basis for its decision, notwithstanding the recitations in the memorandum opinion indicating that the basis of the court’s decision was that “no evidence” existed to support the jury’s verdict.
The appellees cite, in support of their contention that the judgment in the prior litigation should be given conclusive effect, Vartanian Family Trust v. Galstian Family Trust, 724 S.W.2d 126, 128 (Tex.App. — Dallas 1987, no writ). In that case, two families, the Vartanians and the Gals-tians, entered into an agreed settlement of litigation involving the use of joint venture funds, and pursuant to the settlement, a final order was entered dismissing with prejudice the claims of all parties. Under the settlement agreement, an apartment unit, which had been managed by the joint venture, was awarded to the Vartanian family, who then sold it to a third party. Several years after entry of judgment, the Vartanian’s purchaser brought suit, alleging the fraudulent concealment of the existence of termites in the apartment unit; the Vartaniens, in turn, sued the Galstians for contribution and indemnity. The trial court granted a summary judgment based on the Galstein’s defense of res judicata, and the Vartanians appealed. Affirming the trial court’s judgment, the Dallas Court of Appeals concluded that the prior judgment was binding and conclusive, notwithstanding the Vartanien’s claim that their claim of fraud in the inducement was never presented in the prior action and that at the time of the prior action, the Vartanians lacked notice of the potential claim. Id. In its decision, the Dallas Court of Appeals broadly stated that a prior judgment is conclusive “not only on the matters raised and litigated but also on every other matter which the parties might have litigated and had decided as an incident to or essentially connected with the subject matter of the litigation.” Id.
We recognize the general rule that a prior judgment, valid on its face, must be given conclusive effect until it is set aside by a bill of review proceeding. McEwen v. Harrison, 162 Tex. 125, 345 S.W.2d 706 (1961). We also recognize the rule that a valid judgment is res judicata in all subsequent actions between the same parties involving “the points at issue and adjudi*126cated in the first suit.” Abbott Laboratories v. Gravis, 470 S.W.2d 639, 642 (Tex.1971). Thus, res judicata bars the subsequent litigation “of all issues connected to a cause of action or defense which, with the use of diligence, might have been tried in the former action, as well as those that were actually tried.” Id.; Ogletree v. Crates, 363 S.W.2d 431 (Tex.1963).
But this rule of issue preclusion applies only when the cause of action in the subsequent suit is identical to the cause of action asserted in the prior proceeding. Griffin v. Holiday Inns of America, 496 S.W.2d 535, 538 (Tex.1973). That is, the earlier judgment is res judicata of the second suit only if the claim or controversy at issue in the earlier suit is identical to the “subject matter” of the second action. Id. at 537; Freeman v. McAninch, 87 Tex. 132, 27 S.W. 97 (1894). Therefore, a judgment rendered on one claim or cause of action is not necessarily conclusive of all claims or causes of action later asserted against the same party, even though they may relate to the same property or arise out of the same transaction. Griffin, 496 S.W.2d at 538.
Courts generally agree that a judgment is conclusive as to all matters that were considered or should have been considered in the 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.
The cause of action asserted by the appellants in this case is quite different from the claims asserted by appellants, as stockholders of Tapco, in their earlier derivative actions. In those actions, the appellants sought an accounting and other relief because of the alleged mismanagement of Tapco by Amoldy, a corporate officer. In the present case, the appellants sought damages against Arnoldy because of his alleged misrepresentation and concealment of facts regarding his intended sale of company assets, which caused the appellants to relinquish their stock for less than the full market value. Although the appellants’ claims arose out of the same transaction, i.e., the settlement of the pre-existing litigation, their cause of action in this case is not the same as their claims asserted in the derivative lawsuits.
We therefore conclude that the appellants’ cause of action asserted here is not so substantially similar to that asserted in the prior actions, that the issues presented here should have been brought and decided in the prior action. See Gilbert v. Fireside Enter., Inc., 611 S.W.2d 869, 880 (Tex.Civ.App. — Dallas 1980, no writ) (concurring op.). See also Buck v. Rogers, 709 S.W.2d 283 (Tex.App. — Corpus Christi 1986, no writ) (suit for breach of contract and common law fraud and to obtain declaratory judgment on contract held not barred by prior judgment incorporating settlement agreement); Dobbs v. Navarro, 506 S.W.2d 671 (Tex.Civ.App. — Houston [1st Dist.] 1974, no writ) (judgment in suit to enforce insurance policy held not a bar to a subsequent suit to impose a constructive trust for insured’s fraudulent payment of premiums); Griffin v. Holiday Inns of America, 496 S.W.2d at 535 (suit on quantum meruit based on contract not barred by prior action on the contract); Carruth v. Allen, 368 S.W.2d 672 (Tex.Civ.App. — Austin 1963, no writ) (judgment against plaintiff based on contractual obligations not a bar to subsequent action for fraud in inducement of contract).
We therefore reaffirm our previous denial of appellees’ reply point two.
We next consider the appellees’ contention, asserted in their fifth cross-point, that the trial court erred in admitting testimony of the appellants’ expert, Dr. James Vinson, concerning the market value of their stock. In our earlier opinion, we concluded that the appellees had not brought forward the deposition testimony of Dr. Vinson showing the extent of his testimony about matters that were the subject of appellees’ interrogatories, and we *127pointed out that it was the appellees’ duty to bring forward such testimony for this Court’s review. Tex.R.App.P. 50(d). We accordingly held that the appellees had waived their fifth cross-point of error.
In their motion for rehearing, the appel-lees refer to their designation of matters to be included in the appellate record, which is contained in a supplemental transcript, and argue that because of this designation, it was the district clerk’s duty to prepare and transmit Dr. Vinson’s deposition to this Court. We have again examined all materials filed in the record of this appeal, and we do not find a copy of Dr. Vinson’s deposition. Because it was the appellees’ clear duty to make the deposition a part of the record for this Court’s review, we again deny their fifth cross-point of error. See Attorney General of Texas ex rel. State of California v. Segree, 694 S.W.2d 383, 384 (Tex.App. — Corpus Christi 1985, no writ).
The appellees also contend in their motion for rehearing that this Court erroneously treated their cross-point two as raising only “no evidence” contentions. Under that cross-point, the appellees assert that the evidence is insufficient to support the jury’s findings to the first five special issues because the “only testimony” supporting those findings is that of the witness, Anna Paige. The appellees argue, under this cross-point, that the witness’ testimony was so discredited, it is “simply insufficient” to support the jury’s answers.” Having reconsidered the appellees' contentions, in the light of the entire record, we again conclude that the weight and credibility of this testimony was a matter for the jury, and that it was not so discredited and incredible as to have no probative effect. Because this is the sole argument asserted by the appellees under this cross-point, we again deny it.
We have given due consideration to the other contentions advanced by the appel-lees regarding the alleged errors in our original opinion, and those contentions are overruled.
The appellees have also filed a motion seeking leave to amend their brief and to file a supplemental transcript, asserting charges of improper communications between appellants’ counsel and the jury. These allegations, and the affidavits filed in support thereof, are sharply contested by the appellants’ response and controverting affidavits. The charges and counter-charges contained in these documents give rise to serious concern about whether there were improper communications with and undue pressure placed on the jury, both before and after the verdict.
We have concluded that the appellees’ motions for leave to amend and file supplemental transcript should be denied. First, we note that the appellees did not file these motions until after we rendered our judgment in the case, although appellees admit they had such information before the issuance of our judgment. In this respect, we do not deem the appellees’ explanation of the need for maintaining confidentiality as a justifiable reason for their failure to make their complaint known to this Court, before rendition of our judgment.
But more importantly, the matters asserted in the appellees’ motions present contentions outside the record, which are raised here for the first time on rehearing. We conclude that these matters are not properly before us for review. See Holmquest v. Priesmeyer, 574 S.W.2d 173, 179 (Tex.Civ.App. — Houston [1st Dist.] 1978, no writ) (op. on reh’g); Brotherhood of R.R. Trainmen v. Luckie, 286 S.W.2d 712, 718 (Tex.Civ.App. — Dallas 1955, writ ref’d n.r.e.) (op. on reh’g); City of Fort Worth v. Burnett, 115 S.W.2d 436, 442 (Tex.Civ.App. —Fort Worth 1938, no writ) (op. on reh’g). To determine the truth of such allegations obviously requires an evidentiary determination beyond the scope of this review. See I & G.N. Ry. Co. v. Anderson County, 59 Tex. 654 (1883) (op. on reh’g). Thus, the contentions advanced should properly be resolved by appropriate bill of review proceedings, where evidence may be presented and a thorough factual determination made. See Winters Mut. Aid Ass’n v. Reddin, 49 S.W.2d 1095 (Tex.Comm’n.App. 1932, holding approved). Such a bill of review proceeding may be conducted simultaneously with the appellate process. See *128American Standard Life Ins. Co. v. Denwitty, 256 S.W.2d 864, 868 (Tex.Civ.App.— Dallas 1953, writ dism’d); Smith v. Rogers, 129 S.W.2d 776 (Tex.Civ.App. — Galveston 1939, no writ); 4 R. McDonald, Texas Civil Practice in District and County Courts, sec. 18.27.6 (rev. 1984).
We therefore deny the appellees’ motions for leave to file the amended brief and supplemental transcript and grant the appellants’ motions to strike those documents from the appellate record. In accordance with this ruling, we deny the appellants’ motion to seal the supplemental record and order that such materials be returned to the appellees.
This ruling is made without prejudice to the appellees' right to initiate bill of review proceedings in the trial court relating to the matters asserted in the amended brief and supplemental transcript.
The motion for rehearing is overruled.
LEVY, J., recused.