Court Opinion

ID: 9665614
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:53:01.760345+00
Date Added: 2024-06-11T13:01:00.710677
License: Public Domain

OPINION ON MOTION FOR REHEARING
On rehearing, we supplement our original opinion. Southern argues we should affirm the trial court judgment because the judgment against Monterey House bars a suit by Finger even if the directed verdict against Finger was error. Southern makes two arguments: any error in directing a verdict against Finger was harmless error, and a suit by Finger is barred by the doctrine of collateral estoppel.
Southern admits that the damages due to Finger were separate from those due to Monterey House. On the issue of liability, however, Southern contends their interests were the same. Thus, Southern argues, collateral estoppel bars a retrial by Finger.
We disagree.
Collateral Estoppel
The policies behind the doctrine of collateral estoppel reflect the need to bring all litigation to an end, prevent vexatious *895litigation, maintain stability of court decisions, promote judicial economy, and prevent double recovery. Benson v. Wanda Pet. Co., 468 S.W.2d 361, 363 (Tex.1971). Due process requires that collateral estoppel operate only against persons who have had their day in court, either as parties in the earlier suit or those in privity with a party. Id. Within the general doctrine of res judicata, there are two principal categories: (1) claim preclusion (also known as res judicata), and (2) issue preclusion (also known as collateral estoppel). Barr v. RTC, 837 S.W.2d 627, 628 (Tex.1992). This case presents a question of collateral estoppel, or issue preclusion.1
Collateral estoppel prevents the re-litigation of a particular fact issue which was resolved in an earlier suit. Id. 628; Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 818 (Tex.1984). To invoke the doctrine of collateral estoppel a party must establish: (1) the same facts sought to be litigated in the second suit were fully and fairly litigated in the first suit; (2) those facts were essential to the judgment in the first action; and (3) the parties or their privies were cast as adversaries in the first action. Id.; see also El Paso Nat. Gas Co. v. Berryman, 858 S.W.2d 362, 364 (Tex.1993).
The doctrine of collateral estoppel applies only to issues actually litigated in the earlier proceeding. Benson, 468 S.W.2d at 362. It applies when the party (or those in privity with him) against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the first suit. Eagle Props., Ltd. v. Scharbauer, 807 S.W.2d 714, 721 (Tex.1990).
Privity is not established by the mere fact that persons may happen to be interested in the same question or in proving the same set of facts. Benson, 468 S.W.2d at 363. There is no prevailing definition of privity which can be automatically applied to cases involving issue preclusion. Getty Oil Co. v. Insurance Co. of N. Am., 845 S.W.2d 794, 800 (Tex.1992); Benson, 468 S.W.2d at 363. Privity connotes those who are in law so connected with a party to the judgment as to have such an identity of interests that the party to the judgment represented the same legal right. Benson, 468 S.W.2d at 363.
In Benson, Mrs. Benson and her husband were riding in an automobile driven by the Porters when the car collided with a truck owned by Wanda Petroleum. Initially, the Porters and Mrs. Benson filed separate lawsuits against Wanda Petroleum, but they were consolidated. Just before trial, Mrs. Benson took a non-suit. In the Porters’ lawsuit the jury found that Wanda Petroleum was not negligent and Porter was. When Mrs. Benson re-filed her lawsuit, the trial court granted a summary judgment in favor of Wanda Petroleum. Id. The Supreme Court held collateral estoppel did not prevent Mrs. Benson from suing Wanda Petroleum for the following list of reasons: Mrs. Benson was not a party to the Porter suit; the Porters did not represent her interests; Mrs. Benson did not exercise any control over the Porter suit; and Mrs. Benson did not have any beneficial interest in the recovery. In summary, the court held the privity relationship was not sufficient to support the application of the rules of res judicata. Id. at 364. Similarly, in Bonniwell, when a jury found Beech Aircraft was not liable in a suit for negligence and products liability, filed by one of many plaintiffs involved in an airplane crash, the jury’s finding did not preclude the Bonniwell plaintiffs from filing suit with the same causes of action. Bonniwell, 663 S.W.2d at 819.
As in both Benson and Bonniwell, the two plaintiffs in this case suffered damages from the same incident. As in Benson, when Monterey House litigated liability it was found negligent and Southern was absolved of negligence. As in Benson and Bon-niwell, Finger is entitled to his day in court. Although Finger may have been in privity with Monterey House as to some of the damages, Finger was not a party to Monte-rey House’s suit once he was directed out; Monterey House did not represent Finger’s interests; Finger did not exercise any con-*896trol over Monterey House’s suit. In summary, Finger’s privity relationship with Mon-terey House did not bar the lawsuit.
Finger’s cause of action against Southern should have been tried with that of Monterey House. It was Southern, however, who prevented a joint trial by moving for an instructed verdict. Southern’s stated reason for the instructed verdict was that Finger admitted he did not have any damages. That reason was erroneous; Finger admitted only that insurance proceeds paid for the rebuilding, he did not admit that he had no damages. Having caused the error which resulted in Finger’s removal from the lawsuit, Southern now argues that it was harmless.
Southern contends that Finger had his day in court and the case was fully adjudicated. We disagree. The defense spent much of final argument telling the jury that Finger’s damages were not involved in the lawsuit; that the only jury question on damages was for Monterey House; that the Monterey House’s damages were limited to $10,000, which represented its deductible; that the jury could not consider the insurance company’s payment to rebuild the restaurant because it was not a party (“Travelers should not get 50 cents”).
Even if collateral estoppel applied in this ease, we have the discretion to refuse to apply it if it would be unfair. Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 7 (Tex.1986). In exercising that discretion, we are to consider the fairness factors outlined by the United States Supreme Court in Parklane Hosiery Co. v. Shore, 439 U.S. 322, 330-31, 99 S.Ct. 645, 651, 58 L.Ed.2d 552 (1979). Scurlock Oil, 724 S.W.2d at 7; see also Scurlock Oil Co. v. Smithwick, 787 S.W.2d 560, 563 (Tex.App.—Corpus Christi 1990, no writ). Those factors (and our answers) are:
1. Whether the use of collateral estoppel will reward a plaintiff who could have been joined in the earlier suit but chose to “wait and see.” No.
2. Whether the defendant in the first suit had the incentive to litigate that suit fully and vigorously. Yes.
3. Whether the second suit will afford the defendant procedural opportunities unavailable in the first suit that could cause a different result. No.
4.Whether the judgment in the first suit is inconsistent with any other earlier decision. No.
We hold that Finger’s suit is not barred by the first suit. We reverse and remand for trial.
COHEN, J., requested a vote to determine if the case should be heard en banc, pursuant to Tex.R.App.P. 79(d), (e) and Tex.R.App. P. 90(e).
OLIVER-PARROTT, C.J., and HUTSON-DUNN, MIRABAL, O’CONNOR, WILSON and HEDGES, JJ., voted against en banc consideration.
ANDELL, J., did not participate.
COHEN and DUGGAN, JJ., dissented from the denial of en banc consideration.
OPINION FROM DENIAL OF MOTION FOR REHEARING EN BANC

. Even the Supreme Court acknowledges that its opinions on res judicata are difficult to reconcile. Barr, 837 S.W.2d at 629.