Olivarez v. Broadway Hardware, Inc., 1229

Citation564 S.W.2d 195
Decision Date31 March 1978
Docket NumberNo. 1229,1229
PartiesMaria OLIVAREZ, Individually and next friend of Nora Linda Olivarez, Appellants, v. BROADWAY HARDWARE, INC., Appellee.
CourtCourt of Appeals of Texas. Court of Civil Appeals of Texas
OPINION

NYE, Chief Justice.

This is an appeal from a summary judgment rendered in the 93rd District Court of Hidalgo County which sustained defendant Broadway Hardware, Inc.'s motion predicated on the doctrine of res judicata. Plaintiffs have perfected their appeal to this Court.

The record shows that Maria Olivarez, individually and on behalf of her daughter, Nora Olivarez, sued defendant, Broadway Hardware, Inc., for damages Nora sustained when a pellet rifle sold by the defendant discharged while in the hands of Nora's brother. The pellet lodged in Nora's right eye causing personal injury and damages. Plaintiffs' petition alleged several grounds of strict liability to the effect that the rifle was inherently and imminently dangerous because it had no separate safety lock, and was defectively designed. In addition, the petition alleged negligence on the part of the defendant Broadway Hardware for selling the weapon without giving adequate warnings.

Prior to the filing of this suit, Maria Olivarez, (again as a plaintiff) had instituted a diversity suit in Federal District Court (individually, and on behalf of her daughter, Nora Olivarez), against the pellet gun's manufacturer and distributor, Dianawerk, Mayer & Granmelspacher, and Winchester Western Division of the Olin Corporation, respectively. Plaintiffs contended in the Federal Court action that the rifle was defectively designed because an ordinary person viewing or holding the rifle could not determine whether it was loaded or cocked for firing; and that defendants failed to give adequate written warnings or instructions concerning the use of the pellet rifle which did not contain a separate safety lock. This federal suit was tried before a jury resulting in a take nothing judgment for the plaintiffs based on the jury's general verdict. This suit against Broadway Hardware (the retailer of the pellet gun in question) followed.

Defendant Broadway Hardware's motion for summary judgment was based on the proposition that the facts and issues placed in controversy in the plaintiffs' suit against Broadway Hardware had previously been litigated in plaintiffs' federal suit against the manufacturer and distributor and that the Federal Court's final judgment was res judicata as to the issues represented in plaintiffs' present suit. Defendant's motion for summary judgment was supported by certified copies of plaintiffs' original complaint, the Court's pretrial order setting forth the factual contentions of plaintiffs Olivarez and defendants manufacturer and distributor, the jury's general verdict and the judgment. Plaintiffs filed a reply in opposition to defendant Broadway Hardware's motion contending that the principles of res judicata were not applicable in this particular case. After a hearing, the trial court granted defendant's motion for summary judgment.

Summary judgment may be granted upon a proper plea of res judicata. DeBord- v. Muller, 446 S.W.2d 299, 300-301 (Tex.Sup.1969). Applying the familiar summary judgment rules, such a judgment may be upheld only if the record establishes a right thereto as a matter of law and if there exist no genuine issues of material fact to be tried by the fact finder. Gonzales County Savings & Loan Association v. Freeman, 534 S.W.2d 903 (Tex.Sup.1976). The question before us on appeal is whether the movant, through proper summary judgment evidence, has met his burden to establish that as a matter of law, there is no genuine issue of fact as to one or more of the essential elements of plaintiffs' cause of action. Farley v. Prudential Insurance Co., 480 S.W.2d 176 (Tex.Sup.1972).

In two points of error on appeal, plaintiffs specifically contend that: 1) the former Federal District Court's judgment is not a bar to the present suit against Broadway Hardware because Broadway Hardware was not a party to the former action; and 2) that there are material issues of fact concerning Broadway Hardware's duty to warn. Defendant Broadway Hardware argues here that, as a retailer of the pellet rifle in question, it is in privity with the manufacturer and distributor who were parties to the prior Federal Court suit and, therefore, summary judgment was proper on the basis of either res judicata or collateral estoppel.

A statement of the traditional general principle of res judicata is as follows:

"(A) question of fact or of law, distinctly put in issue and directly determined by a court of competent jurisdiction as a ground of recovery or defense in a suit or action between parties sui juris, is conclusively settled by the final judgment or decree therein, so that it cannot be further litigated in a subsequent suit between the same parties or their privies, whether the second suit be for the same or a different cause of action. State of Oklahoma v. State of Texas, 256 U.S. 70, 86, 41 S.Ct. 420, 422, 65 L.Ed. 831 (1920)."

Hammonds v. Holmes, 559 S.W.2d 345, 346 (Tex.Sup.1977); Abbott Laboratories v. Gravis, 470 S.W.2d 639, 642 (Tex.Sup.1971); Marange v. Marshall, 402 S.W.2d 236, 239-40 (Tex.Civ.App. Corpus Christi 1966, writ ref'd n. r. e.).

There is a difference between the effect of a judgment as a bar against the prosecution of a second action upon the same claim or demand, and its effect as an estoppel in another action between the same parties or their privies on a different claim or a different cause of action. In the former case, a judgment rendered on the merits constitutes an absolute bar to a subsequent action. As stated by the Supreme Court in Houston Terminal Land Co. v. Westergreen, 119 Tex. 204, 27 S.W.2d 526, 527 (1930):

"It is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose."

Collateral estoppel, often referred to as estoppel by judgment, also operates to prevent a question of law or an issue of fact which has once been litigated and adjudicated in a court of competent jurisdiction from being relitigated in a subsequent suit between the same parties or those in privity with them. Swilley v. McCain, 374 S.W.2d 871, 874 (Tex.Sup.1964); Fireman's Fund Ins. Co. v. Bybee, 322 S.W.2d 657, 659 (Tex.Civ.App. Eastland 1959, writ dism'd w. o. j.).

Originally, mutuality was essential to the invocation of collateral estoppel. Kirby Lumber Corporation v. Southern Lumber Co., 145 Tex. 151, 196 S.W.2d 387 (1946). However, the Texas Courts have apparently abandoned the requirement of mutuality and have retained the requirement of privity only to the party against whom the plea of collateral estoppel is made in the second case. See Hardy v. Fleming, 553 S.W.2d 790, 792 (Tex.Civ.App. El Paso 1977, writ ref'd n. r. e.). See also Seguros Tepeyac, S. A., Compania Mexicana v. Jernigan, 410 F.2d 718 (5th Cir. 1969), cert. denied, 396 U.S. 905, 90 S.Ct. 219, 24 L.Ed.2d 181 (1969), and compare Benson v. Wanda Petroleum Co., 468 S.W.2d 361 (Tex.Sup.1971). So long as an essential issue of fact has been determined and adjudicated, the judgment therein will estop the parties or their privies from relitigating the same issue in a subsequent suit even though the subsequent suit is couched as a different type of a cause of action. Benson v. Wanda Petroleum Co., supra at 362; Kirby Lumber Corp. v. Southern Lumber Co., supra at 388. The doctrine of collateral estoppel may, where numerous issues of fact are raised in the subsequent action, operate to bar only one or more issues of fact if such fact issues were previously determined in the prior action. On the other hand, if there is only a single issue of fact in the second action on which the judgment hinges, and that fact issue had been previously litigated, the doctrine will also bar in toto the second action. Hardy v. Fleming, 553 S.W.2d 790, 793 (Tex.Civ.App. El Paso 1977, writ ref'd n. r. e.).

To determine the applicability of either of the above mentioned principles to this case, our threshold inquiry is to determine whether Broadway Hardware is in privity with the manufacturer and distributor of the pellet rifle in question. If we answer this inquiry in the affirmative, it is clear that the former federal judgment will bar plaintiffs from prosecuting this second action against Broadway Hardware. Abbott Laboratories v. Gravis, 470 S.W.2d 639, 640 (Tex.Sup.1971); Houston Terminal Land Co. v. Westergreen, supra. If we answer this question in the negative, we must then consider the extent to which Broadway Hardware can invoke the doctrine of collateral estoppel to the multi-faceted cause of action pled by the plaintiffs. For the reasons stated hereafter, we find that privity does not exist between Broadway Hardware and the former federal defendants. Therefore, the doctrine of res judicata is not applicable.

Generally, there is no prevailing definition of privity which can automatically be applied to all cases. Benson v. Wanda Petroleum Co.,supra at 363; Marange v. Marshall, supra. Section 83 of the Restatement of Judgments (1942) states that a person who is not a party but who is in privity with the parties in an action terminating in a valid judgment is bound by the rules of res judicata. A comment to this section says in part:

"Privity is a word which expresses the idea that as to certain matters and in certain circumstances persons who are not parties to an action but who are connected with it in their interests are affected by the judgment with reference to interests involved in...

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