Houtex Ready Mix Concrete & Materials v. Eagle Construction & Environmental Services, L.P.

226 S.W.3d 514, 2006 Tex. App. LEXIS 10466, 2006 WL 3513651
Court of Appeals of Texas·Decided December 7, 2006·No. 01-05-00963-CV·Published·Cited by 50 cases

Opinion

OPINION

JANE BLAND, Justice.

Houtex Ready Mix Concrete & Materials (“Houtex”) appeals a summary judgment and two separate sanction awards of attorney’s fees in favor of Eagle Construction & Environmental Services, L.P. (“Eagle”). Houtex contends (1) the trial court erred in granting summary judgment, (2) the trial court abused its discretion in awarding Eagle $1,500 in attorney’s fees in the final judgment as a sanction for filing a *518 groundless lawsuit, and (3) the trial court abused its discretion in awarding Eagle an additional $2,500 in interim attorney’s fees as a sanction after vacating an earlier summary judgment. We conclude that (1) the trial court properly granted Eagle’s motion for summary judgment on Houtex’s breach of contract and declaratory relief claims but erred in granting it on Houtex’s Deceptive Trade Practices Act (“DTPA”) claim, and (2) the $2,500 sanction was within the trial court’s discretion but the $1,500 sanction was not. We therefore affirm in part and reverse in part.

Background

In March 2004, Houtex contracted with Eagle for Eagle to clean up the scene where a Houtex truck had overturned on a freeway in Harris County. A dispute arose about performance and payment. In July 2004, Eagle sued Houtex in an East-land County Justice of the Peace Court, asserting breach of contract, fraudulent inducement, fraud, misrepresentation, sworn account, unjust enrichment, and quantum meruit. Two months later, Hou-tex sued Eagle in Harris County Civil Court at Law No. 4 in this case, seeking declaratory relief regarding the same contract.

Houtex failed to answer or appear in the Eastland County lawsuit. Eagle obtained a default judgment against Houtex in the justice court. Eagle then moved for summary judgment in this action, asserting that Houtex’s claims are barred by res judicata and collateral estoppel, based on the Eastland County Justice Court judgment. The trial court granted summary judgment after Houtex failed to appear at the hearing on the motion. The trial court later vacated this order, but awarded Eagle $2,500 in attorney’s fees as a sanction for costs Eagle incurred in attending the hearing.

Eagle amended its motion for summary judgment and filed an additional motion for sanctions, again asserting res judicata and collateral estoppel, and asserting that this lawsuit is frivolous. The day before the hearing on the motion, Houtex amended its original petition, asserting claims for breach of contract and DTPA violations.

The trial court granted summary judgment to Eagle and awarded it another $1,500 in attorney’s fees, as well as appellate attorney’s fees.

Summary Judgment

Standard of Review

Our review of a summary judgment is de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). Under the traditional standard for summary judgment, a movant has the burden to show that no genuine issue of material fact exists and that the trial court should grant judgment as a matter of law. Tex.R. Civ. P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999). We view all evidence in a light favorable to the nonmovant and indulge every reasonable inference in the nonmovant’s favor. Provident Life, 128 S.W.3d at 215. A defendant moving for summary judgment on an affirmative defense must prove each element of its defense as a matter of law, leaving no issues of material fact. Garza v. Exel Logistics, Inc., 161 S.W.3d 473, 475 n. 10 (Tex.2005). Res judicata and collateral estoppel are affirmative defenses. Tex.R. Civ. P. 94.

Res judicata prevents parties and those in privity with them from relit-igating a case that a competent tribunal has adjudicated to finality. Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 206 (Tex.1999). Res judicata bars claims or defenses that, through dili *519 gence, should have been litigated in the earlier suit but were not. Id. at 206-07. “The doctrine is intended to prevent causes of action from being split, thus curbing vexatious litigation and promoting judicial economy.” Id. at 207. Res judica-ta requires: (1) a prior final judgment on the merits by a court of competent jurisdiction, (2) identity of parties or those in privity with them, and (3) a second action based on the same claims that were raised or could have been raised in the first action. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex.1996); see also Jones v. First Bank of Anson, 846 S.W.2d 107, 110 (Tex.App.-Eastland 1992, no writ) (holding that default judgment can be used to assert res judicata); Mendez v. Haynes Brinkley & Co., 705 S.W.2d 242, 245-46 (Tex.App.San Antonio 1986, writ refd n.r.e.) (applying collateral estoppel after default judgment).

A party asserting collateral estop-pel must establish that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action, (2) those facts were essential to the judgment in the first action, and (3) the parties were cast as adversaries in the first action. John G. & Marie Stella Kenedy Mem’l Found, v. Dewhurst, 90 S.W.3d 268, 288 (Tex.2002).

Judgments from justice courts, however, are not accorded the same common law finality as judgments from other courts. Rather, section 31.005 of the Texas Civil Practice and Remedies Code abrogates the general common law rules of res judicata and collateral estoppel for justice courts and small claims courts. See Harrill v. A.J. 's Wrecker Serv., Inc., 27 S.W.3d 191, 195 (Tex.App.Dallas 2000, pet. dism’d w.o.j.); Brown v. Henderson, 941 S.W.2d 190, 192 (Tex.App. Corpus Christi 1996, no writ). The statute provides:

A judgment or a determination of fact or law in a proceeding in small claims court or justice of the peace court is not res judicata and does not constitute a basis for estoppel by judgment in a proceeding in a county court or statutory county court, except that the judgment rendered is binding on the parties thereto as to recovery or denial of recovery.

Tex. Civ. PRAC. & Rem.Code Ann. § 31.005 (Vernon 1997). Texas courts have interpreted this statute to mean that the doctrines of res judicata and collateral estop-pel only bar claims “actually litigated” in courts of limited jurisdiction. 1 Brown, 941 *520 S.W.2d at 192;

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Houtex Ready Mix Concrete & Materials v. Eagle Construction & Environmental Services, L.P., 226 S.W.3d 514, 2006 Tex. App. LEXIS 10466, 2006 WL 3513651 (Tex. Ct. App. 2006).

226 S.W.3d 514 (Houtex Ready Mix Concrete & Materials v. Eagle Construction & Environmental Services, L.P.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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