Thomas v. Thomas

• Decision Date: 24 May 1995
• Docket Number: No. 03-94-00358-CV,03-94-00358-CV
• Citation: 902 S.W.2d 621
• Parties: Diana Jane THOMAS, Appellant, v. Hubert Michael THOMAS, Appellee.
• Court: Texas Court of Appeals

Page 621

902 S.W.2d 621

Diana Jane THOMAS, Appellant, v.Hubert Michael THOMAS, Appellee.

No. 03-94-00358-CV.

Court of Appeals of Texas Austin.

May 24, 1995.

Rehearing Overruled Aug. 16, 1995.

LaNelle L. McNamara[Signed brief]McNamara & McNamara, Waco, for appellant.

Ron Moss[Signed brief]Law Offices of Charles Herring, Jr. & Associates, Austin, for appellee.

Before CARROLL, C.J., and ABOUSSIE and JONES, JJ.

CARROLL, Chief Justice.

This is an appeal from a judgment in a suit involving the collection of installment payments under an alimony contract entered into as part of the divorce settlement between appellantDiana Jane Thomas and appelleeHubert Michael Thomas.Appellee filed suit for declaratory judgment, claiming that all rights and obligations of the parties under the alimony contract had been fully and finally resolved in a prior proceeding in Limestone County.Appellant filed a counterclaim in which she alleged breach of contract.The trial court granted appellee's motion for partial summary judgment, concluding that appellee no longer had a contractual obligation to make alimony payments and that the doctrines of res judicata, collateral estoppel, and judicial estoppel barred appellant's recovery in this suit.We will affirm the trial court's judgment.

BACKGROUND

Appellant and appellee were divorced in 1989.As part of the divorce settlement appellee agreed to pay contractual alimony to appellant.In December 1991, appellant sued appellee in Limestone County, alleging breach of the alimony contract as well as anticipatory repudiation of the contract and seeking judgment for all payments due, both past and future, under the alimony contract (the "Limestone County litigation").The case went to trial on November 9, 1992, and at the conclusion of the evidence, the trial court submitted to the jury questions on both breach and repudiation accompanied by instructions as to the meanings of each.The question and answers to Question Two were, in pertinent part:

Did Mike Thomas materially breach and/or repudiate the contract, if any, you have found in response to QuestionNo. 1?

(a) Breach: Yes

(b) Repudiation: Yes

The jury assessed $100,000 in damages for breach of contract but found zero damages for repudiation.The trial court granted appellee's motion for judgment notwithstanding the verdict, thereby reducing the damages for breach of contract to $68,000 for the past due and unpaid alimony payments for August 1991 through November 1992.Appellant filed a motion for severance and new trial on the issue of anticipatory repudiation, which was overruled by operation of law.She did not appeal from the judgment, which thus became final.

In April 1993, appellant sent appellee a demand letter for alimony payments due under the same alimony contract that was the subject of the Limestone County litigation.In response, appellee filed a suit for declaratory relief, requesting a Travis County district court to find that the rights and obligations of the parties under the alimony contract had been fully and finally adjudicated in the Limestone County lawsuit.Appellant counterclaimed to collect the contractual alimony payments that she alleged were due and unpaid from December 1992 forward.She then filed a motion for partial summary judgment on her suit to recover the unpaid alimony installments, reserving the issue of attorney's fees for hearing.Appellee responded by filing a motion for partial summary judgment, contending that appellant's prior suit for anticipatory breach terminated the contract and that her suit for breach of contract was barred by res judicata, collateral estoppel, and judicial estoppel.The trial court granted appellee's motion and rendered a partial summary judgment.After a trial on the attorney's fees issue, the trial court rendered a final order awarding appellee declaratory relief and attorney's fees.

DISCUSSION

Appellant contends that the trial court erred in granting appellee's motion for partial summary judgment and in denying her own motion.She asserts in her first, second, and third points of error that the trial court erred in holding that her cause of action was barred by the doctrines of res judicata, collateral estoppel, and judicial estoppel.In her fourth, fifth, and seventh points of error, she argues that the trial court erred in holding that all rights and obligations of the parties had been fully and finally resolved in the Limestone County litigation, in holding that appellee's contractual obligations under the contract were terminated after November 1992, and in denying her motion for partial summary judgment.

Appellant asserts that the entire case turns on the doctrine of election of remedies, not on the issues of res judicata, collateral estoppel, or judicial estoppel.Appellant contends in her brief:

Unless this Court finds that Appellant's claim is somehow barred because the judgment entered in the first case was necessarily based on a finding that Appellant elected her remedy to sue for collection of installments due under the contract in the future by asserting a cause of action for anticipatory breach of the alimony contract, Appellant must prevail on this appeal.

We agree that this case does not turn on issues of res judicata or judicial estoppel, and thus we begin by addressing appellant's fourth, fifth, and seventh points of error.We will address collateral estoppel as an alternate basis for our decision in a later section of this opinion.

A.Election of Rights

The central issue on appeal is whether appellant foreclosed her right to later sue on the alimony contract when she"elected" to sue for anticipatory repudiation in the Limestone County litigation.This issue turns on the doctrine of election of rights, not election of remedies.Courts have frequently failed to distinguish between a choice of inconsistent substantive rights afforded by law and a choice of inconsistent remedies.However, this distinction is important:

The doctrine of estoppel by election of inconsistent rights or remedies does not seem to have been extensively discussed by the courts of this state, and there is some confusion in the decisions.While the courts of our state have not clearly recognized it, yet there is an important distinction between an election of rights and an election of remedies.One is a choice between inconsistent substantive rights, while the other is a choice between forms of action or procedure.

Seamans Oil Co. v. Guy, 114 Tex. 42, 262 S.W. 473, 474(Comm'nApp.1924, judgm't adopted)(emphasis added).¹The general rule applicable to election is as follows:

If one having a right to pursue one of several inconsistent remedies makes his election, institutes suit, and prosecutes it to final judgment or receives anything of value under the claim thus asserted, or if the other party has been affected adversely, such election constitutes an estoppel thereafter to pursue another and inconsistent remedy.And where the right in the subsequent suit is inconsistent with that set up in the former suit, as distinguished from a merely inconsistent remedy, the party is estopped though the former suit may not have proceeded to judgment.

Seamans Oil Co. v. Guy, 115 Tex. 93, 276 S.W. 424, 426(1925)(emphasis added).See alsoMooers v. Richardson Petroleum Co., 146 Tex. 174, 204 S.W.2d 606, 609-10(1947);Stanolind Oil & Gas Co. v. State, 114 S.W.2d 699, 708(Tex.Civ.App.--Austin1937), rev'd on other grounds, 136 Tex. 5, 133 S.W.2d 767(1939);Stine v. Producers' Oil Co., 203 S.W. 126, 129(Tex.Civ.App.--Amarillo 1918, no writ).

Under Texas law, when one party repudiates a contract, the nonrepudiating party has the right to accept the repudiation and bring a cause of action for damages immediately, or to keep the contract alive and sue for damages as they accrue.SeeContinental Casualty Co. v. Boerger, 389 S.W.2d 566, 569-70(Tex.Civ.App.--Waco1965, writ dism'd);see alsoHardin Assocs., Inc. v. Brummett, 613 S.W.2d 4, 6(Tex.Civ.App.--Texarkana 1980, no writ)(noting that upon repudiation, nonrepudiating party has right to maintain action at once for entire breach and thus receive in damages present value of future payments due under contract).These are inconsistent, substantive rights.Thus, when the nonrepudiating party decides to file a suit for unaccrued future damages immediately upon repudiation of the contract, that party resolves the right to recover such future contract payments "into a mere cause of action for damages," giving up the right to later sue on the contract.Greenwall Theatrical Circuit Co. v. Markowitz, 97 Tex. 479, 79 S.W. 1069, 1071(1904).²"[A] contract cannot be thus treated, for one purpose, as subsisting, and, for another purpose, as at an end.Upon such a repudiation ... the other may make his choice between the two courses open to him, but can neither confuse them together nor take both."Id.79 S.W. at 1071-72.If the nonrepudiating party accepts the renunciation as terminating the agreement, that party may not later sue on the contract.Humphrey v. Showalter, 283 S.W.2d 91, 94(Tex.Civ.App.--Eastland1955, writ ref'd n.r.e.).

In the present case, appellant"elected" to terminate the contract when she chose to sue for anticipatory repudiation instead of waiting to enforce the contract and sue to collect the alimony installments as they became due and unpaid.³Not only did appellant elect to sue for unaccrued future damages instead of waiting to enforce the contract, but she also chose not to appeal the Limestone County verdict of zero damages for anticipatory repudiation and accordingly allowed it to become a final judgment.Thus, the Travis County district court correctly determined that all contractual obligations between appellant and appellee had been terminated and that appellee had no obligation to make alimony payments after November 1992.We accordingly overrule appellant's fourth, fifth, and...