McNeil Interests, Inc. v. James G. Quisenberry, Jr.
407 S.W.3d 381
Tex. App.2013Background
- McNeil Interests sued Quisenberry for contribution on a $600,000 Amegy note and a $100,000 McNeil Interests note after PHH defaulted, with PHH as 50/50 owner of PHH and Quisenberry; PHH pledged collateral and Quisenberry and McNeil signed guarantees; Amegy Bank foreclosed after default.
- McNeil Interests obtained a default judgment against PHH in Lawsuit No. 1; Quisenberry, as 50% PHH owner, later asserted res judicata as a defense.
- McNeil Interests later sued Quisenberry individually for contributions on the Amegy note and the McNeil Interests note; the trial court granted take-nothing based on res judicata.
- Trial court concluded PHH and Quisenberry were in privity for res judicata purposes; it also found PHH controlled Lawsuit No. 1 but held Quisenberry was not a party to Lawsuit No. 1.
- McNeil Interests appeals arguing (i) insufficient evidence of res judicata, (ii) privity does not support res judicata, and (iii) Quisenberry waived res judicata; the appellate court reverses on privity-related issues and remands the Amegy and McNeil Interests notes claims.
- Remainder of judgment as to other claims against Quisenberry and against Dianna Quisenberry affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is McNeil Interests' claim barred by res judicata? | McNeil asserts no privity; PHH's prior suit did not bind Quisenberry. | Quisenberry argues res judicata applies due to privity through PHH. | Yes, privity not established; issue sustained (res judicata not applicable) |
| Does privity through control of the prior litigation apply? | No control by Quisenberry over Lawsuit No. 1; privity not shown. | Quisenberry controlled or substantially participated in prior action. | No privity through control; issue sustained (privity not shown) |
| Does the prior representation of interests establish privity? | PHH did not represent Quisenberry in Lawsuit No. 1. | PHH represented Quisenberry as a co-obligor/guarantor. | Not established; privity through representation rejected |
| Waiver of res judicata defense by Quisenberry | McNeil contends waiver occurred; issue not necessary after privity findings. | Quisenberry waived res judicata; contends holding moot. | moot after sustaining Issues 1–2; third issue not reached |
| Effect of ruling on the Amegy note and the McNeil Interests note claims | Reversal should allow claims to proceed on those notes. | Res judicata precludes those claims. | Remand for further proceedings on Amegy note and McNeil Interests note claims |
Key Cases Cited
- Barr v. Resolution Trust Corp., 837 S.W.2d 627 (Tex. 1992) (transactional approach to claim preclusion; compels considering related claims in one suit)
- Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex. 1996) (privity exceptions: control, representation, or succession in interest)
- Benson v. Wanda Petroleum Co., 468 S.W.2d 361 (Tex. 1971) (privity limited to circumstances; mere interest not enough)
- Gracia v. RC Cola-7-Up Bottling Co., 667 S.W.2d 517 (Tex. 1984) (capacity-based limitations on privity)
- Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000) (one-satisfaction rule; single recovery for damages)