Robert R. Burchfield v. Prosperity Bank
408 S.W.3d 542
| Tex. App. | 2013Background
- Prosperity Bank sued guarantors Woodall, Burchfield, Waymel, Welkie after foreclosure on two notes totaling $1,125,199.
- Woodall defaulted; Prosperity obtained a default judgment for the entire deficiency.
- Waymel and Welkie settled, paying $135,000 and receiving Woodall’s default judgment assignment; Prosperity had not collected from Woodall before the assignment.
- Prosperity later sued Burchfield for the remaining deficiency of $132,805.18 under Burchfield’s guaranty.
- Guarantee agreements provide joint and several liability and allow suits against any one or more guarantors without impairing others.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is res judicata a bar to the underlying suit against Burchfield? | Burchfield asserts privity and same transaction bar. | Burchfield argues Woodall’s judgment precludes further recovery. | No; no privity and separate suit allowed. |
| Does the one-satisfaction/double recovery rule bar Prosperity’s claim? | Bank already made whole via Woodall’s judgment. | Double recovery prevents further liability after satisfaction. | Not applicable; separate liability remains for unpaid deficiency. |
| Does contract language limit suits to a single joint suit? | Language implies a single suit against all guarantors. | Phrase “single suit” not explicitly limiting; may sue separately. | Guarantee permits separate suits without impairing others. |
Key Cases Cited
- Barr v. Resolution Trust Corp., 837 S.W.2d 627 (Tex. 1992) (double recovery and transaction-based bar considerations in res judicata)
- Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex. 1996) (privity and viable basis for res judicata analysis)
- Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430 (Tex. 2007) (transactional approach; scope of res judicata)
- Gaughan v. Spires Council of Co-Owners, 870 S.W.2d 552 (Tex. App.—Houston [1st Dist.] 1993) (privity not established by shared interests alone)
- Houtex Ready Mix Concrete Materials v. Eagle Constr. & Envtl., 226 S.W.3d 516 (Tex. App.—Houston [1st Dist.] 2006) (res judicata principles applied to contractor context)