TEXAS REAL ESTATE COMMISSION, Petitioner, v. Wesley M. NAGLE, Independent Executor of the Estate of Martha A. Neal, Deceased, et al., Respondents.
No. C-7100.
Supreme Court of Texas.
March 8, 1989.
Rehearing Denied April 12, 1989.
767 S.W.2d 691
We will first review the evidence with regard to the issue of whether Marathon‘s interference was done in a “bona fide exercise of its own rights.” Sterner produced evidence at trial that he was terminated “per Marathon‘s directive” because he was on a list of people who were not authorized to come into its plant. The deposition testimony of J.A. Burks, construction superintendent for F, B & D, indicates that Sterner was not fired because of inadequate job performance. This evidence, coupled with Sterner‘s testimony regarding his conversation with one of Marathon‘s safety personnel, constitutes some evidence that Marathon‘s interference was not done in the bona fide exercise of its own rights. Therefore, our inquiry with regard to this issue need go no further.
We now turn to the issue of whether Marathon possessed an equal or superior right to that of Sterner in the subject matter of his employment contract. The construction contract between Marathon and F, B & D provides:
“In the performance of all work, [F, B & D] is an independent contractor with sole right to supervise, manage, control and direct the performance of the details. Marathon is interested only in the results to be obtained....”
This contract, admitted into evidence, is some evidence that Marathon did not possess an equal or superior right to that of Sterner in the subject matter of his employment contract. Because there is also some evidence its management directly ordered Sterner‘s dismissal, Marathon‘s action went beyond an assertion of its right to control the premises. We conclude, therefore, that Marathon failed to establish its affirmative defense of legal justification or excuse as a matter of law.
We affirm the court of appeals’ holding that the terminable-at-will status of a contract is no defense to an action for tortious interference with its performance. We reverse its ruling that there is no evidence to support the jury‘s failure to find that Marathon acted with legal justification or excuse. This cause is remanded to the court of appeals for a determination of whether the jury‘s failure to find that Marathon acted with legal justification or excuse is against the great weight and preponderance of the evidence.
Larry W. Hicks and Marc H. Robert, Hicks & Associates, El Paso, for respondents.
ON MOTION FOR REHEARING
RAY, Justice.
We grant the petitioner‘s motion for rehearing. Our former opinion and judgment of October 12, 1988, are withdrawn and the following opinion is substituted.
The Texas Real Estate Commission appeals from a judgment in favor of Wesley Nagle, independent executor of the estate of Martha Neal, deceased, awarding payment out of the real estate recovery fund, a fund established to reimburse aggrieved persons damaged by certain acts of licensed real estate brokers or salesmen or their agents. The principal issue before us concerns the nature of proof required to show entitlement to an order directing payment out of the fund. More specifically, the issue is whether the commission, whose duty it is to administer the fund, is bound by the findings of fact made in the original action between the plaintiff, estate, and the defendant, real estate broker. The court of appeals has held that the commission waived any complaint regarding the evidence supporting the estate‘s claim to reimbursement from the fund because the commission did not specifically object to the estate‘s request that the trial court take judicial notice of its prior findings from the original action between the estate and broker. 740 S.W.2d 37. We reverse the judgment of the court of appeals because the
The Texas Real Estate Commission is charged with the administration and enforcement of “The Real Estate License Act.”
A person who has a judgment against a real estate broker which is uncollectable may file a verified claim in the court in which the judgment was rendered and, upon notice to the commission and the judgment debtor, apply for an order directing payment out of the fund.
The estate initiated the original litigation by filing suit against Fontaine Graham. Graham had served as independent co-executrix of the estate for over twenty years until her removal in 1984. During this same period Graham was a licensed real estate broker. Following a bench trial, the trial court rendered judgment against Graham in the amount of $112,797.16.
When the judgment against Graham proved uncollectable, the estate served written notice on the Texas Real Estate Commission of its intent to obtain a court order directing payment out of the real estate recovery fund. The attorney general, on behalf of the commission, answered and denied that the fund was liable, because Graham was acting in her capacity as executrix, rather than as a licensed real estate broker, when she defrauded the estate. The act exempts from its provisions certain persons and transactions.
The trial court conducted a hearing on the estate‘s application for payment from the fund, but no evidence was taken. Instead, the parties argued over the application of the act to Graham, who was both a licensed real estate broker and an executrix. The parties also argued over the propriety of the court binding the commission to the findings of fact made in the original action between the estate and Graham. The estate asked the court to take judicial notice of its prior findings. The commission objected to this, asserting that it should not be bound by the prior findings because the commission had not been a party to the original litigation and had not had an opportunity to contest the material issues.
During the hearing, the trial court did not expressly rule on the estate‘s request for judicial notice, but at the conclusion of the hearing the court did grant the estate‘s application. The order signed by the judge directed the commission to pay the estate $50,000, the maximum allowable under the act.
The commission appealed, complaining that the trial court had erred by not requiring the estate to produce evidence that it was entitled to recover from the fund. The court of appeals disagreed and affirmed the judgment of the trial court, concluding that it was entirely proper for the trial
The error committed in this cause is the treatment of previous findings of fact and conclusions of law in the original action between the estate and Graham as evidence at the subsequent hearing between the estate and the fund. A court may take judicial notice of its own records and judgments, but the use to which such records may be put is circumscribed by the doctrines of res judicata and collateral estoppel. Victory v. State, 138 Tex. 285, 158 S.W.2d 760, 763 (1942); Nolan v. Bettis, 577 S.W.2d 551 (Tex.Civ.App.-Austin 1979, writ ref‘d n.r.e.); Barnett v. Maida, 523 S.W.2d 325 (Tex.Civ.App.-Beaumont 1975, writ ref‘d n.r.e.).
Although not expressly acknowledged, the court of appeals has applied the doctrine of collateral estoppel to preclude the commission from litigating certain issues. Collateral estoppel bars relitigation of an issue of fact actually litigated and essential to the judgment in a prior action between the parties. Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 818 (Tex. 1984); Restatement (Second) of Judgments, § 27 (1982). The initial obstacle to applying collateral estoppel here is that the commission was not a party to the original litigation. Because the commission did not participate in the prior litigation, it was the estate‘s burden to show that Graham represented the commission‘s interests before the estate could benefit from collateral estoppel.
In the past we have discussed this requirement in terms of privity. Benson v. Wanda Petroleum Co., 468 S.W.2d 361 (Tex.1971). Privity does not exist merely when persons are interested in the same question, but requires an identity of interest in the legal right actually litigated. Id. at 363. What identity of interest then do Graham and the commission share in the present case?
The estate argues that the statute itself binds the commission to the findings made in the earlier trial. In this regard our attention is directed to section 8, part 5 of the act, which provides:
When the real estate commission receives notice of entry of a final judgment and a hearing is scheduled under Part 3(d) of this section, the commission may notify the Attorney General of Texas of its desire to enter an appearance, file a response, appear at the court hearing, defend the action, or take whatever other action it deems appropriate on behalf of, and in the name of, the defendant, and take recourse through any appropriate method of review on behalf of, and in the name of, the defendant. In taking such action the real estate commission and the attorney general shall act only to protect the fund from spurious or unjust claims or to insure compliance with the requirements for recovery under this section.
The purpose of this language is merely to confer standing on the commission to intervene in the original action if that course can best accomplish the commission‘s purpose—“to protect the fund from spurious or unjust claims or to insure compliance with the requirements for recovery under (the act).”
The commission is charged with the responsibility of administering the fund for the purpose of “reimbursing aggrieved persons” and of protecting “the fund from spurious or unjust claims.”
In an ordinary adversarial proceeding the failure of a party bearing the burden of proof to carry that burden by the presentation of evidence would result in a rendition of judgment against that party. This, however, is not an ordinary adversarial proceeding. The commission is not concerned with protecting the fund against all claims, only against spurious and unjust ones. Recovery against the fund may be warranted if the estate can prove that it was defrauded by Graham while she was acting as a real estate broker. It is in the interest of justice to remand this cause to the trial court to give the estate an opportunity to develop its proof. See Morrow v. Shotwell, 477 S.W.2d 538 (Tex.1972);
The judgment of the court of appeals is reversed because the findings of fact and conclusions of law from the previous litigation are not evidence and do not obligate the commission to make payment from the real estate recovery fund. The cause is remanded to the trial court for further proceedings.
MAUZY, J., dissents on rehearing joined by SPEARS, J.
HIGHTOWER, J., not sitting.
MAUZY, Justice, dissenting on rehearing.
I respectfully dissent.
The Commission complains it should not be bound by the findings from the previous lawsuit, since it was not a defendant during that trial and had no opportunity to contest the evidence upon which the trial court‘s findings were based.
Contrary to the court‘s interpretation, the language of section 8, part 5 of the Act simply provides for the Texas Real Estate Commission to assume the defendant‘s position for the limited purpose of application for payment from the recovery fund.
For the above reasons, I dissent.
SPEARS, J., joins in this dissent.