Opinion
No. 05-06-00339-CV
Opinion Filed August 27, 2007.
On Appeal from the County Court at Law No. 2, Dallas County, Texas, Trial Court Cause No. 04-12405-B.
Before Justices WRIGHT, RICHTER, and LANG.
MEMORANDUM OPINION
Charlee Springs appeals the summary judgment granted in favor of Chase Auto Finance Corporation f/k/a Chase Manhattan Automotive Finance Corporation. In a single issue, Springs contends the trial court erred by granting Chase's motion for summary judgment because, among other things, the doctrine of res judicata does not bar her breach of contract suit against Chase. We conclude Springs's suit is barred and affirm the trial court's judgment.
Background
Springs went to Friendly Chevrolet in February 2003. She traded in her Cavalier and signed a lease agreement for a Chevrolet Trailblazer. She signed a lease agreement with U.S. Bank and took possession of the Trailblazer. After U.S. Bank declined financing, the financing was arranged with Chase. Springs later sued Friendly Chevrolet alleging violations of the Texas Deceptive Trade Practices Act and negligent misrepresentation. In her petition, she alleged that Friendly contacted her, as a previous customer, and offered to sell her another vehicle. At the dealership, the sales representative offered to lease her a Trailblazer. Because Springs was going to trade in her vehicle which was not paid off, there was going to be a deficiency. The sales representative told Springs she would receive rebates to cover the deficiency and also assured her that the only difference between buying and leasing was "$100 less per month for leasing." The sales representative also told Springs she could turn in the vehicle in thirty-six months and walk away. Springs alleged that Friendly's assurances were not true, and obtained a default judgment, which this Court affirmed. See Friendly Chevrolet, Ltd. v. Springs, 05-04-00523-CV (Tex.App.-Dallas Feb. 10, 2005, no pet.).
After the default judgment was entered, Springs sued Chase seeking rescission of the lease agreement. In her petition, she alleged that when she sought financing from Chase, Chase "declined the terms of the contract and submitted a counter-offer," she refused Chase's counter-offer, and requested the return of her trade-in vehicle from Friendly Chevrolet. Springs further alleged that she "never signed or authorized a lease agreement with Chase" and only paid the payments under protest.
Thereafter, Chase filed a motion for summary judgment alleging it was entitled to judgment as a matter of law because, among other things, res judicata precluded Springs's suit. Springs responded to the motion claiming Chase was not a party to the prior litigation and her claims against Chase involved issues that could not have been litigated in the prior proceeding. After considering the summary judgment evidence, the trial court granted Chase's motion. This appeal followed.
We review a summary judgment de novo to determine whether a party's right to prevail is established as a matter of law. Dickey v. Club Corp. of Am., 12 S.W.3d 172, 175 (Tex.App.-Dallas 2000, pet. denied). The standards for reviewing a "traditional" summary judgment under rule 166a(c) are well established. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). When, as here, a defendant moves for summary judgment on its affirmative defenses, it must conclusively prove all the essential elements of its defense as a matter of law, leaving no genuine issues of material fact. Seagraves v. City of McKinney, 45 S.W.3d 779, 782 (Tex.App.-Dallas 2001, no pet.). A matter is conclusively established if ordinary minds could not differ as to the conclusion to be drawn from the evidence. Triton Oil Gas Corp. v. Marine Contractors Supply, Inc., 644 S.W.2d 443, 446 (Tex. 1982). Once the defendant establishes its right to summary judgment as a matter of law, the burden shifts to the plaintiff to present evidence raising a genuine issue of material fact, thereby precluding summary judgment. Muckelroy v. Richardson Indep. Sch. Dist., 884 S.W.2d 825, 828 (Tex.App.-Dallas 1994, writ denied).
The doctrine of res judicata, or claim preclusion, bars a second action by parties and their privies on matters actually litigated in a previous suit, as well as claims "which, through the exercise of diligence, could have been litigated in a prior suit." Hallco Texas, Inc. v. McMullen County, 221 S.W.3d 50, 58 (Tex. 2007) (citing Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992)). Res judicata requires proof of the following 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. Amstadt v. United States Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996).
Texas follows the transactional approach to res judicata in determining what claims should have been brought in a prior action. Barr, 837 S.W.2d at 630-31. Under the transactional approach, a judgment in a previous suit precludes a second action by the parties on matters actually litigated and causes of action arising out of the same subject matter that could have been litigated in the first suit. Id. at 630. Whether a transaction or series of transactions exist 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 trial unit conforms to the parties' expectations or business understanding or usage." Id. at 631. When, as here, there is a legal relationship, such as under a lease or contract, all claims arising from that relationship arise from the same subject matter and are subject to res judicata. See Genecov Group, Inc. v. Addicks-Fairbanks Road Sand Co., 144 S.W.3d 546, 553 (Tex.App.-Tyler 2003, pet. denied); Weiman v. Addicks-Faribanks Road Sand Co., 846 S.W.2d 414, 419 (Tex.App.-Houston [14th Dist.] 1992, writ denied). Such claims should be combined if they involve common core facts. Genecov, 144 S.W.3d at 553. When the same facts are involved, two trials should be avoided by combining all of the matter existing between the parties in one suit. Id.
Chase's summary judgment evidence shows a final judgment was rendered on the merits in the 2003 lawsuit against Friendly Chevrolet. Chase's evidence also shows that Friendly Chevrolet assigned the lease to Chase, and thus, the parties are in privity. Amstadt, 919 S.W.2d at 653. Finally, we conclude this suit involves a series of connected transactions that arise from the same legal relationship. Springs sued Friendly Chevrolet for violations of the Deceptive Trade Practices Act and negligent misrepresentation in connection with the lease of the Trailblazer. Springs has now sued Chase, the assignee of the lease, seeking recission of the same lease. Thus, both Springs's suits involve the same core facts and are derived from the same transaction. After reviewing the record in this case, we conclude Chase met its summary judgment burden to prove its affirmative defense of res judicata.
In reaching this conclusion, we necessarily reject Springs's argument that res judicata is not applicable in this case because the financing agreement with Chase contains an arbitration clause. Springs, without citing authority for its proposition, claims that because Chase could, and did, ask for arbitration in this case, there is no advantage to the court system to have Friendly and Chase in the same suit and, thus, res judicata does not apply. The advantage to the court system is one of several policy reasons behind res judicata, it is not, however, an element of the doctrine. See Barr, 837 S.W.2d at 629 (policies behind doctrine reflect need to bring all litigation to an end, prevent vexatious litigation, maintain stability of court decisions, promote judicial economy, and prevent double recovery). To be entitled to its affirmative defense, Chase is not required to show each policy reason articulated by the courts is applicable. We have concluded Chase has met its summary judgment burden to show each of the elements of the doctrine of res judicata. Springs did not respond with summary judgment evidence raising a genuine issue of material fact. Thus, we conclude the trial court did not err by granting summary judgment on that basis. We overrule Springs's first issue.
While the motion for summary judgment was pending, Chase filed a motion to compel arbitration to which Springs objected. After a hearing, the trial court denied Chase's motion to compel arbitration. Chase then filed a motion to reconsider. Although the docket sheet indicates the motion to reconsider was denied, the record contains an order dated December 1, 2005 compelling the parties to arbitration. However, a month later, the trial court granted the parties' joint motion asking to reset the January 3, 2005 trial setting and then granted Chase's motion for summary judgment on February 15, 2006.
Accordingly, we affirm the trial court's judgment.