Res Judicata Bars Multiple Suits Over Same Subject Matter

Posted on by Trey Wilson -- San Antonio Real Estate Attorney
                        
                            San Antonio REal Estate Attorney                         
                    

OBJECTIVE OF RES JUDICATA OR CLAIM PRECLUSION

“The doctrine of res judicata, also known as claim preclusion, bars lawsuits that arise out
of the same subject matter as a prior suit when, with the use of diligence, that subject matter could have been litigated in the prior suit.” Eagle Oil & Gas Co. v. TRO-X, L.P., 619 S.W.3d 699, 705 (Tex. 2021).

Generally, res judicata prevents a plaintiff from abandoning claims and subsequently asserting them when the claims could have been litigated in the prior suit. Jeanes v. Henderson, 688 S.W.2d 100, 103 (Tex.1985); see also State & County Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex.2001).

“The doctrine is necessary to bring an end to litigation, prevent vexatious litigation,
maintain stability of court decisions, promote judicial economy, and prevent double recovery.”

Texas courts have recognized that the doctrine prevents needless, repetitive litigation, John G. and Marie Stella Kenedy Mem’l Found. v. Dewhurst, 90 S.W.3d 268, 288-89 (Tex.2002) (citing Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979)), and in doing so, “advance[s] the interest[s] of the litigants (who must pay for each suit), the courts (who must try each suit), and the public (who must provide jurors and administration for each suit).” Schneider Nat’l Carriers, Inc., v. Bates, 147 S.W.3d 264, 278 (Tex.2004).

ELEMENTS FOR PROVING RES JUDICATA

“Res judicata requires proof of three elements:

(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 as were raised or could have been raised in the first action.”

Rosetta Res. Operating, LP v. Martin, 645 S.W.3d 212, 225 (Tex. 2022)

BURDEN OF PROOF

“The party asserting the defense of res judicata has the burden of proving each element of the defense.” Eagle Oil & Gas Co., 619 S.W.3d at 706.

PRIOR FINAL JUDGMENT

“[A] final judgment on an action extinguishes the right to bring suit on the transaction, or series of connected transactions, out of which the action arose.”Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430 (Tex. 2007).

For any rational and workable judicial system, at some point litigation must come to an end, so that parties can go on with their lives and the system can move on to other disputes. tanolind Oil & Gas Co. v. State, 136 Tex. 5, 145 S.W.2d 569, 570 (1940). The Texas Supreme Court has recognized the “fundamental rule that it is the purpose of the law to put an end to litigation and expedite the administration of justice.”

As stated in Permian Oil Co. v. Smith,

The principle of res adjudicata is founded in public policy and is as old as English jurisprudence. Fundamentally its purpose is to expedite justice by putting an end to litigation; and to preserve the sanctity of the judgments of the courts by making them immune to collateral attack. Once a court has exercised its functions of decision on an issue over which it has jurisdiction, and that decision becomes final, the parties thereto and their privies cannot escape its binding effect. Lacking this anchorage of finality a judicial system would be little more than a rule of fiat…. It must be borne in mind that the purpose of the law remains constant to prevent the failure of justice as a result of permitting the retrial between the same parties or their privies of a cause of action or of an issue which has been finally disposed of.[31]

Ordinarily, therefore, a final judgment is the end point of litigation.

IDENTITY OF PARTIES OR THOSE IN PRIVITY

“Generally people are not bound by a judgment in a suit to which they were not parties.”
Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996).

“The doctrine of res judicata creates an exception to this rule by forbidding a second suit arising out of the same subject matter of an earlier suit by those in privity with the parties to the original suit.” Id. at 652–53. “The purposes of the exception are to ensure that a defendant is not twice vexed for the same acts, and to achieve judicial economy by precluding those who have had a fair trial from relitigating claims.” Id. at 653.

“Privity turns on the circumstances of the case.” FFGGP, Inc. as Tr. of Windward Trace
9131 Land Tr. v. MTGLQ Invs., LP, 646 S.W.3d 30, 37–38 (Tex. App.—San Antonio 2022, no
pet.).

“People can be in privity in at least three ways:

(1) they can control an action even if they are not parties to it;

(2) their interests can be represented by a party to the action; or

(3) they can be successors in interest, deriving their claims through a party to the prior action.”

Amstadt, 919 S.W.2d at 653. “Privity exists if the parties share an identity of interests in the basic legal right that is the subject of litigation.” Id.

COULD CLAIMS  HAVE BEEN RAISED IN THE FIRST ACTION?

“To determine whether a claim could have been raised in a prior suit, [courts] use a
‘transactional approach to res judicata, which requires claims arising out of the same subject matter to be litigated in a single lawsuit.’” Alanis, 2022 WL 3907925, at *3. (quoting Hallco Tex., Inc. v. McMullen County, 221 S.W.3d 50, 58 (Tex. 2006)).

To determine the scope of the “subject matter” or “transaction” of the prior suit, [courts] examine the factual basis of the claim or claims in the prior litigation and analyze the “factual matters that make up the gist of the complaint.” Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007); Alanis, 2022 WL 3907925, at *3.  This should be done pragmatically, giving due consideration to “whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a trial unit conforms to the parties’ expectations or business understanding or usage.”
Daccach, 217 S.W.3d at 449. “Any cause of action which arises out of those same facts should,
if practicable, be litigated in the same lawsuit.” Id.

A judgment in an earlier suit “precludes a second action by the parties and their privies 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.” Texas Water Rights Comm. v. Crow Iron Works, 582 S.W.2d 768, 771-72 (Tex.1979).

“If the second plaintiff[] seek[s] to relitigate the matter which was the subject of the earlier litigation, res judicata bars the suit even if the second plaintiff[] do[es] not allege causes of action identical to those asserted by the first.” Amstadt, 919 S.W.2d at 653.