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Peterson, Goldman & Villani, Inc. v. Ancor Holdings, LP

Court of Appeals of Texas, Second District, Fort Worth

July 18, 2019

Peterson, Goldman & Villani, Inc., Appellant
Ancor Holdings, LP; Timothy McKibben; Joseph Randall Keene; and Ancor Partners, Inc., Appellees

          On Appeal from the 141st District Court Tarrant County, Texas Trial Court No. 141-236257-09

          Before Sudderth, C.J.; Kerr and Birdwell, JJ.



         After a decade and a half of legal proceedings, appellant Peterson, Goldman & Villani, Inc. (PGV) is still seeking someone to satisfy a guaranty agreement. In an earlier suit, PGV obtained a judgment against the defunct company that executed the guaranty, Ancor Holdings LLC (Ancor LLC). In this suit, PGV seeks to enforce that judgment against a group of related parties-Ancor Holdings LP (Ancor LP) and its principals, who are the appellees here.

         The trial court rendered a take-nothing summary judgment in favor of appellees on grounds of res judicata, reasoning that PGV should have pressed all of its claims in the earlier suit. We hold, to the contrary, that PGV's suit to enforce the judgment does not offend res judicata. We further hold that PGV conclusively established Ancor LP's liability as a successor to Ancor LLC's judgment debt. We therefore affirm, in part, reverse and render, in part, and reverse and remand, in part.

         I. Background

         Ancor LLC was a holding company whose members were appellees Timothy McKibben and Joseph Randall Keene. At the turn of the millennium, Ancor LLC was a significant investor in a company called OpenPoint Systems, Inc., who was a borrower under a loan agreement with Bank of America. OpenPoint was struggling in early 2000. In March 2000, as part of an arrangement to restructure the loan, Ancor LLC executed a guaranty agreement in favor of Bank of America.

         In May 2000, OpenPoint filed for bankruptcy, triggering the guaranty agreement. Bank of America sold its rights under the guaranty to PGV. PGV then attempted to collect from Ancor LLC, filing suit in Dallas County. After three and a half years of arbitration, PGV obtained an arbitration award against Ancor LLC. In May 2008, a Dallas district court signed a final judgment confirming the arbitration award.

         In July 2008, PGV discovered that-unbeknownst to it and Bank of America, and in breach of a clause in the guaranty-Ancor LLC had merged with Ancor LP approximately eight years earlier, leaving Ancor LP the sole surviving entity. Peterson, Goldman & Villani, Inc. v. Ancor Holdings, LP, 420 S.W.3d 281, 283 (Tex. App.- El Paso 2013, pet. denied) (setting out these background facts). Consequently, PGV moved to modify the judgment to include Ancor LP as a judgment debtor subject to execution for the confirmed arbitration judgment. The trial court denied PGV's motion to modify. Both Ancor LLC and PGV appealed the trial court's arbitration-confirmation judgment to the Dallas Court of Appeals, which subsequently affirmed.

         While that judgment was on appeal, though, PGV filed this suit against Ancor LP and its principals, McKibben, Keene, and Ancor Partners, Inc. PGV sought satisfaction of the judgment awarded against Ancor LLC, alleging various causes of action including successor liability. Appellees asserted res judicata and limitations as defenses. The proceeding was soon transferred to a district court in Tarrant County.

         PGV moved for partial summary judgment on its declaratory-judgment and breach-of-contract claims against Ancor LP. For their part, appellees filed two motions for summary judgment in which they argued, inter alia, that PGV's claims were barred by res judicata. The trial court denied PGV's motion for partial summary judgment, granted appellees' motions for summary judgment, and dismissed PGV's claims with prejudice.

         PGV's appeal was heard on transfer before the El Paso Court of Appeals, from which we have borrowed our recitation of the background facts. See id. In pertinent part, the El Paso court held that the elements of res judicata had not been conclusively established, and therefore summary judgment could not be sustained on that basis. Id. at 284-85. The court concluded that appellees had "never addressed" the privity element of res judicata, "much less established" it conclusively. Id. at 285. For that reason and others, the court reversed the summary judgment to the extent that it disposed of PGV's contractual and declaratory-judgment claims. Id. at 287. The court affirmed the summary judgment to the extent that it disposed of PGV's other claims.[1] Id.

         On remand, PGV amended its petition; it retained its claim for successor liability while adding some new theories and nonsuiting others.[2] Appellees filed an amended answer in which they pleaded res judicata and laches, among other affirmative defenses.

         The parties once again filed dueling motions for summary judgment. Appellees focused solely on res judicata, taking pains to address privity. PGV argued that it had conclusively established Ancor LP's successor liability on the judgment. Once again, the trial court denied PGV's motion, granted appellees' motion, and dismissed all of PGV's claims with prejudice. PGV appeals.

         II. Summary Judgment Against PGV

         In its first issue, PGV asserts that the trial court erred in granting summary judgment on the basis of res judicata. PGV asserts that appellees failed to establish two of the three elements of its res judicata defense: (1) privity between Ancor LLC and the appellees here and (2) that the subsequent action is based on claims or causes of action that were or should have been raised in the first action. We agree that the claims in the subsequent suit-in particular, PGV's successor-liability claim to enforce the arbitration judgment-were not and should not have been raised in the first action. These were therefore not the type of claims that were required to be raised in the first action or be forever barred.[3]

         We review a summary judgment de novo. Travelers Ins. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding evidence contrary to the nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every reasonable inference and resolve any doubts in the nonmovant's favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A defendant is entitled to summary judgment on an affirmative defense if the defendant conclusively proves all elements of that defense. Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 508-09 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c). When both parties move for summary judgment and the trial court grants one motion and denies the other, the reviewing court should review both parties' summary judgment evidence and determine all questions presented. Mann Frankfort, 289 S.W.3d at 848. We should then render the judgment that the trial court should have rendered. See Myrad Props., Inc. v. LaSalle Bank Nat'l Ass'n, 300 S.W.3d 746, 753 (Tex. 2009); Mann Frankfort, 289 S.W.3d at 848.

         Res judicata is an affirmative defense. See Tex. R. Civ. P. 94. A defendant who moves for summary judgment on the basis of this affirmative defense therefore has the burden to prove conclusively all its elements as a matter of law. Dauz v. Valdez, 571 S.W.3d 795, 803 (Tex. App.-Houston [1st Dist.] 2018, no pet.); see Parsons v. Turley, No. 02-09-00381-CV, 2010 WL 5187704, at *2 (Tex. App.-Fort Worth Dec. 23, 2010, pet. denied) (mem. op.).

         Res judicata, also known as claim preclusion, prevents the relitigation of a finally adjudicated claim and related matters that should have been litigated in a prior suit.[4] State & Cty. Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001). The policies behind the claim-preclusion doctrine reflect the need to bring all litigation to an end, prevent vexatious litigation, maintain stability of court decisions, promote judicial economy, and prevent double recovery. Engelman Irrigation Dist. v. Shields Bros., Inc., 514 S.W.3d 746, 750 (Tex. 2017). The elements of the res judicata defense are as follows: (1) a prior final determination on the merits by a court of competent jurisdiction; (2) identity of parties, or those in privity with them, in the prior and subsequent actions; and (3) the subsequent action is based on claims or causes of action that were or should have been raised in the first action. Travelers Ins., 315 S.W.3d at 862. Our focus here is the third element.

         In determining whether a claim or cause of action should have been raised in a prior action, Texas follows the transactional approach. Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007). Under this approach, we look to whether the subsequent claim or cause of action arises out of the same subject matter-the same "transaction, or series of connected transactions, out of which" the original suit arose. Id. (quoting Barr v. Resolution Tr. Corp. ex rel. Sunbelt Fed. Sav., 837 S.W.2d 627, 631 (Tex. 1992)). Determining the scope of the "subject matter" or "transaction" of the prior suit requires "an analysis of the factual matters that make up the gist of the complaint, without regard to the form of action." Id. This should be done pragmatically, "giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a trial unit conforms to the parties' expectations or business understanding or usage." Id.

         Here, the two lawsuits did not involve a common time, origin, motivation, or domain. The two lawsuits involve different parties and are predicated on two different agreements, executed at different times and for different purposes. The guaranty agreement was executed in March 2000 by Bank of America and Ancor LLC to shore up Bank of America's loan to OpenPoint. The merger agreement was executed in September 2000 by Ancor LLC and Ancor LP in order to restructure McKibben and Keene's holdings in a different organizational form. The two agreements are each self-contained, with no internal references between each other. "Where claims arise at different times through separate transactions not made in the context of a continuing legal relationship, res judicata may not apply, even where the parties and subject matter of the transactions are the same." Pinebrook Props., Ltd. v. Brookhaven Lake Prop. Owners Ass'n, 77 S.W.3d 487, 497 (Tex. App.-Texarkana 2002, pet. denied); see Karle v. Innovative Direct Media Ltd., 309 S.W.3d 762, 766 (Tex. App.- Dallas 2010, no pet.) (determining res judicata did not apply because the "two lawsuits arose under different facts and different contracts"); Tex. Beef Cattle Co. v. Green, 860 S.W.2d 722, 724 (Tex. App.-Amarillo 1993, writ denied) (concluding that res judicata did not apply because the two suits concerned separate cattle transactions that were executed months apart). Moreover, as appellees emphasized during the initial proceeding, PGV did not have a "continuing legal relationship" with Ancor LP. See Pinebrook Props., 77 S.W.3d at 497. In their summary judgment briefing, appellees argued, "Ancor LLC and Ancor LP are not the same entity . . . and [they] never have been." They further argued, "These are two distinct entities, and a merger did not render them 'one and the same' for purposes of PGV's lawsuit." Ancor LP thus made clear that its "expectations or business understanding" were to be treated as separate from Ancor LLC for purposes of the guaranty agreement. See Citizens Ins., 217 S.W.3d at 449.

         As such, the two proceedings entailed two discrete sets of proof. The first proceeding revolved around the interpretation of Ancor LLC's guaranty agreement, as well as evidence concerning the value of OpenPoint's collateral. The second proceeding was to focus on the distinct terms of the merger agreement and the successor liability of Ancor LP. Such claims would not necessarily have made a convenient unit for trial. And if a purpose of res judicata is to prevent repetitive litigation, we note that PGV's claims did not require any issues related to OpenPoint or Ancor LLC's guaranty to be duplicated in this second suit.[5] See Engelman Irrigation, 514 S.W.3d at 750. PGV could simply allege that it had a valid judgment to enforce against appellees, without delving into detail concerning the origins of that judgment.

         Such a lawsuit would not be forbidden, for res judicata does not bar actions brought to enforce prior judgments. See Matthews Constr. Co. v. Rosen, 796 S.W.2d 692, 694 (Tex. 1990); In re Estate of Lynch, 395 S.W.3d 215, 227 (Tex. App.-San Antonio 2012, pet. denied); McCarroll v. My Sentinel, LLC, No. 14-08-01171-CV, 2009 WL 4667403, at *2 (Tex. App.-Houston [14th Dist.] Dec. 10, 2009, no pet.) (mem. op.); Walker v. Anderson, 232 S.W.3d 899, 912 (Tex. App.-Dallas 2007, no pet.). Applying the doctrine of res judicata in a suit to enforce a judgment would "pervert ...

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