Continental Sav. Ass'n v. Collins

• Decision Date: 08 August 1991
• Docket Number: No. B14-90-323-CV,B14-90-323-CV
• Citation: 814 S.W.2d 829
• Parties: CONTINENTAL SAVINGS ASSOCIATION, Appellant, v. Robert L. COLLINS, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 829

814 S.W.2d 829

CONTINENTAL SAVINGS ASSOCIATION, Appellant, v. Robert L. COLLINS, Appellee.

No. B14-90-323-CV.

Court of Appeals of Texas Houston (14th Dist.).

Aug. 8, 1991.

David Lee Crawford, Houston, for appellant.

Mike O'Brien, Robert L. Collins, Daniel Kistler, Richard A. Tinsley, Houston, for appellee.

Before PAUL PRESSLER, JUNELL and ELLIS, JJ.

OPINION

JUNELL, Justice.

This is an appeal from a judgment in favor of Robert L. Collins (Collins or appellee), defendant in the trial court. Continental Savings Association (Continental or appellant) brings four points of error alleging that the trial court erred: (1) in granting summary judgment in favor of Collins based on the defense of res judicata; (2) in granting summary judgment in favor of Collins as to claims made pursuant to the Restatement of Torts (Second) § 552; (3) in entering final judgment in favor of Collins since the trial court's order addresses only the claims made pursuant to the Restatement of Torts (Second) § 552 and leaves unresolved causes of action against Collins based on the theories of negligence, misrepresentation, indemnity and breach of implied covenant not to sue; and (4) by not substituting the Resolution Trust Corporation as plaintiff. We reverse and remand.

Continental brought suit against Collins on January 27, 1988, alleging causes of action based on theories of negligence, misrepresentation, indemnity and breach of the implied covenant not to sue. The suit concerned an opinion letter written by Collins and presented to Continental in connection with a twenty-five million dollar loan to Meyerland Company, a client of Collins.

Continental made the loan to Meyerland Company. Meyerland Company and its president, William Michael Adkinson, were represented by Collins. As a condition to the loan closing, Continental required the borrower to furnish an attorney's opinion letter in a form acceptable to Continental. Collins, as attorney for Meyerland Company and Adkinson, signed and delivered the requested opinion letter to the addressee Continental. The letter, in relevant part, stated:

(a) The Loan as reflected in the Loan Documents is not usurious under applicable law in effect at this time.

(b) We have no current, actual knowledge that the Loan Documents violate, conflict with, or result in the breach of, or constitute a default under any applicable laws ...

Subsequently, Meyerland Company and Adkinson (represented by Collins as their attorney) brought suit against Continental claiming that the loan, the subject of the opinion letter, was usurious and violated state law. A judgment in that case was rendered against Meyerland Company and Adkinson on May 26, 1987. An appeal of that case is currently pending, after removal, in the United States Court of Appeals for the Fifth Circuit.

Continental then brought this suit against Collins based on the opinion letter. On December 19, 1989, the case was called to trial before the court. The judgment rendered by the trial court is the basis of this appeal.

The first hurdle that confronts this court is what decision was rendered by the trial court. Did the court grant a final judgment in favor of Collins after a trial on the merits, or did it grant a summary judgment in favor of Collins? Continental and Collins hold opposing views on this question.

Collins filed two motions for summary judgment before this case was called to trial. The first, filed in December of 1988, responded to all of Continental's alleged causes of action. The second, filed in October of 1989, asserted the defense of res judicata. The first motion was denied by the trial court by order signed January 27, 1989. On December 19, 1989, the trial court called the case for trial. However, before the trial began, the trial court reconsidered Collins' first motion for summary judgment and also heard the second. Then the court signed a judgment dated December 19, 1989, containing the following:

Defendant's Motion for Summary Judgment filed herein on December 9, 1988 is reconsidered and granted as to Plaintiff's and Intervenor's claims made pursuant to Restatement of Torts (2d) Section 552 and that Defendant's Motion for Summary Judgment filed October 26, 1989 is granted.

It is apparent from the words in the judgment and the record that what occurred was a summary judgment, not a judgment following a trial on the merits. Therefore, this court will review this case under the standard of review for a summary judgment.

In its first point of error Continental alleges the trial court erred in granting summary judgment based on the defense of res judicata raised in Collins' second motion for summary judgment. We agree.

In his second motion for summary judgment, Collins claimed that the suit filed by Continental against him is barred because of a prior judgment in the suit brought by Meyerland Company and Adkinson against Continental. ¹ Collins contends the prior suit involved the same parties, subject matter and issues, and thus, the present suit by Continental is barred by the doctrine of res judicata.

The initial question to be resolved is whether Collins provided evidence to support a summary judgment based on the defense of res judicata.

A summary judgment is not entitled to the same deference given to a judgment following a trial on the merits. When reviewing the granting of a summary judgment, the appellate court does not view the evidence in the light most favorable to the judgment of the trial court. At either the trial or appellate level, the question is not simply whether the non-movant raised a material fact issue to defeat the motion, rather, the movant must prove it was entitled to a judgment as a matter of law or this court must remand the case for a trial on the merits. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828-829 (Tex.1970); TEX.R.CIV.P. 166a(c). The standard for reviewing a summary judgment have been clearly mandated by the Texas Supreme Court:

1. The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.

2. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true.

3. Every reasonable inference must be indulged in favor of the non-movant and any doubt resolved in its favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-549 (Tex.1985); Montgomery v. Kennedy, 669 S.W.2d 309, 310-311 (Tex.1984).

To be entitled to summary judgment based on the defense of res judicata, appellee had to prove that as a matter of law there was an identity of parties, subject matter, and issues. See Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 818 (Tex.1984). Collins' summary judgment proof consisted of an affidavit by him stating that he was the attorney for Adkinson in the prior suit, a copy of the judgment from the prior suit, a copy of the opinion letter, and some extracts of testimony from the prior suit.

PARTIES

The prior suit was brought against Continental by Meyerland and Adkinson. Collins admits in his affidavit, part of his summary judgment proof, that he was the attorney for Adkinson in the prior suit. He clearly was not a party to the prior suit. Collins argues in his second motion for summary judgment that the defense of res judicata applies to parties and those in privity with them. Since Collins was not a party to the prior suit, he must be contending that he was in privity with his client Adkinson. Collins has cited no law to this court to support his contention that an attorney is in privity with his client. It would be a surprise to this court and to the lawyers of the state of Texas to learn that by virtue of mere representation a lawyer establishes privity with his client. As pointed out by Continental, does the appellee, by virtue of his implied claim of privity, accept responsibility for the money judgment rendered against his client in the prior suit? It hardly seems likely.

Collins failed to establish by competent summary judgment proof an identity of parties as required to establish res judicata. In fact, the summary judgment proof shows that he was not a party to the prior suit or in privity with a party thereto.

SUBJECT MATTER

The Texas Supreme Court has stated:

... the term "subject matter" refers to the claims or controversy at issue in the earlier suit and not to the transaction out of which the suit arose.

Griffin v. Holiday Inns of America, 496 S.W.2d 535, 537-538 (Tex.1973). Collins brought forward only the judgment in the prior suit as summary judgment proof. That is insufficient to prove as a matter of law what the issues in the prior case were. The judgment does not sufficiently describe the causes of action in the prior suit to allow the trial court to determine as a matter of law that the subject matter was the same. Further, from the briefs of both Continental and Collins, it is clear that the prior suit involved claims completely different from those in this case. While both suits arose out of the same transaction, the loan and the attorney's opinion letter,...