Scurlock Oil Co. v. Smithwick

• Decision Date: 29 March 1990
• Docket Number: No. 13-88-493-CV,13-88-493-CV
• Citation: 787 S.W.2d 560
• Parties: SCURLOCK OIL COMPANY and Ernest Joe Lewis, Appellants, v. Maria C. SMITHWICK Individually, et al., Appellees.
• Court: Texas Court of Appeals

Page 560

787 S.W.2d 560

SCURLOCK OIL COMPANY and Ernest Joe Lewis, Appellants, v. Maria C. SMITHWICK Individually, et al., Appellees.

No. 13-88-493-CV.

Court of Appeals of Texas,

Corpus Christi.

March 29, 1990.

Rehearing Dismissed April 19, 1990.

B. Mills Latham, Law Offices of B. Mills Latham, Corpus Christi, W. James Kronzer, Houston, A.E. Pletcher, White, Huseman, Pletcher & Powers, Corpus Christi, James A. Smith, Port Lavaca, Lev Hunt, Hunt, Hermansen, McKibben & Barger, Corpus Christi, Jack Tucker, Jr., Weitinger & Tucker, Houston, Kevin D. Cullen, Cullen, Carsner & Cullen, Victoria, for appellants.

William A. Dudley, David Perry & Associates, Corpus Christi, Rodney Steinburg, Steinburg & Bryant, Houston, William R. Edwards, Edwards & Perry, Corpus Christi, for appellees.

Before DORSEY, UTTER and SEERDEN, JJ.

OPINION

DORSEY, Justice.

On December 9, 1982, at approximately 9:30 p.m., Joe Ernest Lewis was driving an eighteen-wheel tractor trailer for Scurlock Oil Company down a farm to market road when he left the road and collided with a Suburban, killing two of the Suburban's passengers, George Smithwick and Clay Dove. The Suburban was owned and operated by Ronnie Wayne Bounds, d/b/a Victoria Carrier Service; Missouri Pacific Railroad (MoPac) had hired Bounds and his vehicle to transport some of its train crew members to a worksite.

The accident resulted in the filing of three separate lawsuits, one by the representatives of Dove's estate in Matagorda County, one by Bounds in Calhoun County, and a third by the representatives of

Smithwick's estate in Nueces County. This appeal seeks relief from the judgment rendered against Scurlock and Lewis in the retrial after remand of the Nueces County suit. See Scurlock Oil Co. v. Smithwick, 701 S.W.2d 4 (Tex.App.--Corpus Christi, 1985), reversed, 724 S.W.2d 1 (Tex.1986).

In the prior Smithwick case, the

Smithwicks brought suit against Scurlock Oil Company, its truck driver, Lewis, MoPac and Ronnie Lee Bounds. The Smithwicks, however, entered into a Mary Carter agreement with Missouri Pacific whereby no matter what the verdict, the family would receive 2.5 million dollars from Missouri Pacific. The jury found that Scurlock alone, acting by and through its employee, Lewis, was negligent. On appeal, Scurlock contended that the doctrine of collateral estoppel should apply so that the jury findings in the Matagorda County case (wherein Dove's family were plaintiffs) would control the determination of fault. Scurlock entered into a Mary Carter agreement with the Matagorda County Dove plaintiffs. The jury in that case found that 90 percent of the fault for the accident lay with Missouri Pacific and only 10 percent lay with Scurlock. This Court affirmed the trial court's judgment in Scurlock, and the Supreme Court reversed and remanded the suit for new trial. Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1 (Tex.1986).

Upon retrial, the jury found that Scurlock and Lewis were independently negligent, apportioning fault 70 percent and 30 percent respectively. By their first point of error, Scurlock and Lewis contend that the trial court erred in failing to apply the doctrine of collateral estoppel to the retrial of this cause. Scurlock and Lewis would have us hold that the jury findings in the Bounds case where the plaintiff, Bounds, was found to be 100 percent negligent precludes the issue of negligence here. Secondly, appellants would have the findings in the Dove case where Bounds was found to be a borrowed employee of MoPac apply in the instant case. To combine these two prior findings would result in the conclusion that MoPac, responsible for the actions of its borrowed servant, Bounds, is 100 percent negligent and thus solely liable. Thus, appellants argue that appellees are collaterally estopped for denying the findings previously determined in the two associated suits arising out of the fatal accident. The question presented, then, is whether the trial court erred in refusing to hold that these combined findings in the prior suits are binding on the parties here.

Collateral estoppel, or issue preclusion, prohibits the relitigation of any ultimate issue actually litigated and essential to the prior judgment. Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 818 (Tex.1984); Restatement (Second) of Judgments § 27 (1982). The doctrine applies when the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in a prior suit. Bonniwell, 663 S.W.2d at 818. However, even though an issue is actually litigated and determined by a final judgment, relitigation of the issue is not necessarily precluded where significant differences exist between the two proceedings. Scurlock, 724 S.W.2d at 7; Restatement (Second) of Judgments § 27 (1982).

The party seeking to invoke the doctrine of collateral estoppel must establish that (1) the facts sought to be litigated in the second suit was fully and fairly litigated in the prior action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action. See, e.g., Bonniwell, 663 S.W.2d at 818; Dent v. Federal Sign & Signal Corp., 773 S.W.2d 599 (Tex.App.--Dallas 1989, no writ); Restatement (Second) of Judgments § 27 (1982). The burden is on appellants to present sufficient evidence to establish that the doctrine of collateral estoppel should apply. Traweek v. Larking, 708 S.W.2d 942, 945 (Tex.App.--Tyler 1986, writ ref'd n.r.e.); City of Houston v. Houston Chronicle Publishing Co., 673 S.W.2d 316, 321 (Tex.App.--Houston [1st Dist.] 1984, no writ). The party asserting collateral estoppel must introduce into evidence the judgment and pleadings from the prior suit or the doctrine will not apply. Traweek, 708 S.W.2d at 945; City of Houston, 673 S.W.2d at 321.

The initial obstacle to applying the Bounds findings in this case is that MoPac was not a party to the Bounds decision. See generally, Bounds v. Scurlock Oil Co., 730 S.W.2d 68 (Tex.App.--Corpus Christi 1987, writ ref'd n.r.e.). It was incumbent upon appellants to affirmatively establish that Bounds represented MoPac's interests in the previous suit in order to bind MoPac in the instant case. See Texas Real Estate Comm'n v. Nagle, 767 S.W.2d 691, 694 (Tex.1989). Absent evidence establishing the relationship of the parties and the issues actually litigated, the trial court properly denied the application of collateral estoppel. In the instant case, the record establishes that appellants urged the trial court to apply the doctrine of collateral estoppel in a partial motion for summary judgment. The trial court denied the motion. However, neither the Bounds judgment nor the Dove judgment was admitted into evidence during the trial on the merits of this cause. The pleadings from the two cases were also not introduced into evidence.

Assuming arguendo that the Dove and Bounds decisions were properly introduced into evidence, the trial court did not abuse its discretion in denying the application of the collateral estoppel in this case.

The Supreme Court of Texas addressed the problems which arise when complex litigation involving multiple suits and Mary Carter agreements occurs. Scurlock, 724 S.W.2d at 1. The Dove case involved a Mary Carter agreement. The Court in Scurlock, held that whether to allow collateral estoppel and issue preclusion based upon findings in a prior trial when a Mary Carter agreement is present is within the discretion of the trial court subject to that court's consideration of the "fairness factors" outlined in Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 331, 99 S.Ct. 645, 652, 58 L.Ed.2d 552 (1979). Id. at 7. The existence of a Mary Carter agreement does not prevent issue preclusion, but the trial court is to exercise its sound discretion. Id. The test for abuse of discretion is whether the trial court acted without reference to any guiding rules and principles. Downer v. Aqua-Marine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985). Pierce v. Gillespie, 761 S.W.2d 390, 398 (Tex.App.--Corpus Christi 1988, no writ) (Opinion on motion for rehearing). The pertinent guiding rules and principles here are found in Parklane Hosiery, 439 U.S. at 331, 99 S.Ct. at 651. They are:

(1) Whether use of collateral estoppel will reward a plaintiff who could have joined in the previous action but chose to "wait and see" in the hope that the first action by another plaintiff would result in a favorable judgment;

(2) Whether the defendant in the first action had the incentive to litigate the previous suit fully and vigorously;

(3) Whether the second action affords the defendant procedural opportunities unavailable in the first action that could readily cause a different result; and

(4) Whether the judgment in the first action is inconsistent with any previous decision.

That a trial judge decides a matter within his discretion differently than another judge would have in a similar circumstance does not demonstrate abuse of discretion. Pierce, at 398.

As applied to the instant case, we cannot say from the record that the trial court's decision was arbitrary. See Simon v. York Crane and Rigging Co. Inc., 739 S.W.2d 793 (Tex.1987).

In the Bounds suit, the defendants were Scurlock and Lewis. Bounds was the plaintiff, while in the action before us, he is a defendant. The outcome of his action differed from the outcome of Dove's in Matagorda County in that the jury found Bounds 100 percent negligent. In the Dove suit, the jury found that Bounds was a borrowed servant of MoPac and that MoPac was for the first time 90 percent negligent. Additionally, in this case, the court asked the jury to consider the negligence of each defendant independently of the others. Thus, the Bounds and Dove decisions involve different parties and determinations of fault. Under the circumstances, we cannot say the trial court was compelled to adopt the liability findings of...