Opinion
No. 05-03-00645-CV.
May 17, 2004.
On Appeal from the 192nd District Court, Dallas County, Texas, Trial Court Cause No. 02-02847-K.
Affirmed.
Before Justices JAMES, WRIGHT, and BRIDGES.
MEMORANDUM OPINION
The Insurance Company of the State of Pennsylvania (ICSP) appeals the trial court's summary judgment in favor of the Ranger Insurance Company (Ranger). In three issues, ICSP argues the trial court erred in dismissing its claims and entering summary judgment in favor of Ranger on the grounds of limitations, res judicata, and payment in full. We affirm the trial court's judgment.
In March 1994, a mid-air collision occurred between two aircraft insured by ICSP and Ranger. Various plaintiffs filed suit thereafter, but ICSP refused to participate in the defense of those suits because it claimed its liability was precluded under an aerial photography exclusion contained in its policies. However, in December 1995, ICSP entered into a settlement funding agreement with Ranger under the terms of which ICSP agreed (1) to contribute to a fund for settling claims arising from the mid-air collision and (2) to permit the court to "resolve the coverage issues, including the relation of the policies to one another and the respective obligations of each policy to reimburse, if any. The agreement also set a maximum limit on the amount to be contributed by ICSP and Ranger.
In October 1996, ICSP filed suit against Ranger seeking judicial resolution of the coverage, policy limits, and reimbursement issues. The trial court entered summary judgment in favor of ICSP declaring that ICSP's policies did not afford coverage for the mid-air collision, and the limits for the Ranger policy were $2 million. Although the summary judgment stated that its declarations were "dispositive of all issues presented," the judgment did not address any party's reimbursement obligation or the apportionment of defense costs. This Court affirmed the trial court's summary judgment. The record shows ICSP and Ranger subsequently entered into a legal dispute concerning the amount of reimbursement Ranger should pay to ICSP. Ranger moved for summary judgment on the grounds that ICSP's claims were barred by limitations and res judicata, and Ranger had already paid in full under the settlement agreement. The trial court granted Ranger's motion, and this appeal followed.
We first address ICSP's second issue in which it argues the trial court erred in granting summary judgment and dismissing its claims on the basis that they were barred by res judicata. In reviewing the trial court's decision to grant summary judgment, we apply well-known standards. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). Res judicata precludes relitigation of claims that have been finally adjudicated or that arise out of the same subject matter and could have been litigated in the prior action. Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992). Res judicata requires proof of the following elements: (1) a prior final judgment on the merits by a court of competent jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action based on the same claims as were raised or could have been raised in the first action. Amstadt v. United States Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996). Texas follows the transactional approach to res judicata in determining what claims should have been brought, if they could have been, in a prior action. Barr, 837 S.W.2d at 630-31. Under the transactional approach, a judgment in a previous suit precludes a second action by the parties on matters actually litigated and on causes of action arising out of the same subject matter and that might have been litigated in the first suit. Id. at 630.
Here, the parties sought judicial resolution of the coverage, policy limits, and reimbursement issues beginning in 1996. On December 31, 1997, ICSP obtained a summary judgment in its favor declaring that ICSP's policies did not afford coverage, and Ranger's policies covered the underlying occurrence in the amount of $2 million. However, the summary judgment did not address ICSP'S entitlement to reimbursement. On September 12, 2000, this Court affirmed the trial court's summary judgment. Again, the issues of ICSP's entitlement to reimbursement or the amount of such reimbursement were not raised and not addressed in this Court's opinion. Subsequently, ICSP sought reimbursement from Ranger, the parties disagreed as to the amount of reimbursement, and ICSP brought the underlying suit to once again have the court interpret the parties' settlement agreement. We conclude ICSP's cause of action for reimbursement arose out of the same subject matter as the parties' previous litigation and might have been litigated in the first suit. See Amstadt, 919 S.W.2d at 652; Barr, 837 S.W.2d at 630. Accordingly, res judicata precluded relitigation of those claims, and the trial court did not err in granting summary judgment on that ground. See Nixon, 690 S.W.2d at 548-49; Barr, 837 S.W.2d at 628. We overrule ICSP's second issue. Because of our disposition of ICSP's second issue, we need not address ICSP's remaining issues. We affirm the trial court's judgment.