Anh Phan v. CL Invs., 01-20-00551-CV
| Court | Court of Appeals of Texas |
| Writing for the Court | Gordon Goodman Justice |
| Parties | ANH PHAN, Appellant v. CL INVESTMENTS, LLC; CUC THU DO; AND MANTENON PHAN, Appellees |
| Docket Number | 01-20-00551-CV |
| Decision Date | 02 December 2021 |
ANH PHAN, Appellant
v.
CL INVESTMENTS, LLC; CUC THU DO; AND MANTENON PHAN, Appellees
No. 01-20-00551-CV
Court of Appeals of Texas, First District
December 2, 2021
On Appeal from the 215th District Court Harris County, Texas Trial Court Case No. 2019-76626
Panel consists of Justices Goodman, Landau, and Countiss.
MEMORANDUM OPINION
Gordon Goodman Justice
This appeal arises from the second lawsuit between Anh Phan and appellees CL Investments, LLC; Cuc Thu Do; and Mantenon Phan. Anh, the appellant, sued the appellees to collect on a promissory note; the trial court rendered summary judgment for the appellees and denied Anh's motion for summary judgment. We
reverse, render judgment for Anh, and remand to the trial court for a determination of the recoverable interest, costs, and attorney's fees.
BACKGROUND
In March of 2018, Anh wired $50, 000 to CL Investments. Cuc Thu Do and Mantenon Phan, the sole members and managers of CL Investments, used the money to purchase a piece of property on behalf of the company, and so they signed a promissory note and deed of trust in favor of Anh. The appellees began making monthly payments to Anh according to the terms of the promissory note. Anh, however, believed the money she gave to the appellees was in exchange for a partnership interest in a real estate investment, not a loan. She believed that when the appellees used the money to purchase the property, they fraudulently converted her $50, 000 partnership interest into a loan and promissory note, and she lost the value of her investment. Anh demanded immediate repayment of her money, and when that demand was unsuccessful, she filed the first lawsuit.
In the first lawsuit, Anh asserted two claims: breach of contract and fraud. She claimed that there had been an oral agreement between the appellees and herself to form a partnership to invest the money she gave them and that the appellees breached that agreement when they converted her $50, 000 into a promissory note without her consent. She also claimed that the appellees committed fraud by misrepresenting how they intended to use her money.
The appellees filed a counterclaim seeking a declaratory judgment that the promissory note and deed of trust were invalid and unenforceable. In response to the appellees' requests for admissions, Anh admitted that the promissory note and deed of trust were invalid and unenforceable. The appellees then moved for partial summary judgment on this counterclaim; Anh did not respond to the motion. The trial court granted the appellees' motion for partial summary judgment. Three days later, the appellees recorded a release of the deed of trust based on the court's order. The appellees stopped making monthly payments under the promissory note.
In response to discovery abuses, the trial court granted the appellees' third motion for sanctions; the court struck Anh's petition and dismissed her claims with prejudice on January 31, 2019. Thereafter, the appellees filed a nonsuit of their claims without prejudice. On February 5, 2019, the trial court took notice of the nonsuit and dismissed the claims without prejudice.
Eight months later, Anh filed the second lawsuit against the same parties in the same trial court. In this lawsuit, she asserted one claim: a claim to collect on the promissory note. The appellees moved for summary judgment on two related grounds: (1) res judicata barred this second suit; and (2) the trial court's summaryjudgment order in the first lawsuit declared the promissory note invalid and unenforceable. Anh also moved for summary judgment on her claim to collect on the promissory note. The trial court granted the appellees' motion and denied Anh's
motion, rendering final judgment for the appellees. Anh now appeals the trial court's granting and denying of those summary-judgment motions.
STANDARD OF REVIEW
We review a trial court's summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). Under the traditional standard for summary judgment, the movant has the burden to show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166A(C); KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). A defendant moving for traditional summary judgment on an affirmative defense must conclusively establish each element of the affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). In conducting our review, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all of the evidence presented. Goodyear Tire &Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per curiam).
When both parties move for summary judgment and the trial court grants one motion and denies the other, the unsuccessful party may appeal both the successful party's motion and the denial of her own motion. Holmes v. Morales, 924 S.W.2d 920, 922 (Tex. 1996).
We must review both sides' summary-judgment evidence, determine all questions presented, and render the judgment that the trial court should have rendered. Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 124 (Tex. 2010). We may affirm the summary judgment or reverse and render judgment on the unsuccessful party's motion. Holmes, 924 S.W.2d at 922. When, as here, a summary-judgment order does not specify the grounds on which it was granted, we will affirm the judgment if any one of the theories advanced before the trial court is meritorious. Provident Life &Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003).
DISCUSSION
Anh raises two issues on appeal: she claims the trial court erred in granting the appellees' summary-judgment motion on the ground of res judicata and that the trial court erred in denying her summary-judgment motion to collect on the promissory note.
A. Anh's Promissory-Note Claim is Not Barred by Res Judicata
The appellees moved for summary judgment in the second lawsuit on the affirmative defense of res judicata. The appellees argued that because Anh's claim in the second lawsuit arose out of the same facts that formed the basis of the first lawsuit-the transfer of $50, 000-the claim in the second lawsuit is now barred. Anh, however, argues that the factual basis for the two claims is different: the first
lawsuit was based on the appellees' alleged agreement to form a partnership with Anh, but the second lawsuit was based on their nonpayment of the promissory note. Further, she claims there was no final determination on the merits in the first lawsuit.
Res judicata, or claim preclusion, is an affirmative defense that prevents the relitigation of a claim that has been finally adjudicated and any claims that should have been litigated in a prior suit. Barr v. Resolution Tr. Corp. ex rel. Sunbelt Fed. Sav., 837 S.W.2d 627, 628 (Tex. 1992). A party asserting res judicata must prove: (1) a prior final determination on the merits by a court of competent jurisdiction; (2) identity of the parties or those in privity with them; and (3) a second action based on the same claims as were or could have been raised in the first action. Joachim, 315 S.W.3d at 862.
The second element of res judicata, identity of the parties, is not in dispute, and so we consider only the first and third elements.
1. There was no prior final determination on the merits
The appellees argue there was a final determination on the merits in the first lawsuit because (1) the trial court dismissed Anh's claims with prejudice; and (2) the trial court granted the appellees' motion for partial summary judgment to declare the promissory note invalid and unenforceable.
In the first lawsuit, Anh brought claims for breach of contract and fraud relating to an alleged oral agreement. Those claims have been finally determined on
the merits because the trial court dismissed the claims with prejudice, and dismissal with prejudice is a final determination on the merits. See Mossler v. Shields, 818 S.W.2d 752, 754 (Tex. 1991) (per curiam) ("[I]t is well established that a dismissal with prejudice functions as a final determination on the merits."). An order dismissing a claim with prejudice has "full res judicata and collateral estoppel effect." Lentworth v. Trahan, 981 S.W.2d 720, 722 (Tex. App.-Houston [1st Dist.] 1998, no pet.).
Anh's claim in the second lawsuit, however, was to collect on the promissory note, a claim she did not bring in the first lawsuit and thus a claim that has not been dismissed with prejudice. The appellees argue that the trial court in the first lawsuit issued a final determination on the merits declaring the promissory note invalid and unenforceable when it granted their motion for partial summary judgment, and therefore Anh cannot now maintain a claim based on the promissory note. However, because of the interlocutory nature of the partial summary judgment, an irregularity in the order granting the partial summary judgment, and the appellees' nonsuit of the claim, there has been no final determination on the merits regarding whether the promissory note is invalid and unenforceable.
(a) The partial summary judgment was interlocutory
In the first lawsuit, the appellees moved for a partial summary judgment to declare the promissory note invalid and unenforceable. A partial summary judgment
on only some of the issues in a case is an interlocutory order; it becomes final only on the disposition of the remaining issues in the case. See Newco Drilling Co. v. Weyand, 960 S.W.2d 654, 656 (Tex. 1998) (per curiam); Chase Manhattan Bank, N.A. v. Lindsay, ...
To continue reading
Request your trial