      TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                                       NO. 03-14-00125-CV



                                  William Voges III, Appellant

                                                  v.

                         Mark Campbell d/b/a Classic Street, Appellee


     FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT
      NO. D-1-GN-12-003702, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING



                             MEMORANDUM OPINION


               William Voges III sued Mark Campbell d/b/a Classic Street in Travis County district

court, asserting both breach-of-contract and deceptive-trade-practices claims arising from an

automobile-repair transaction. Campbell, appearing pro se, filed a motion to dismiss on the grounds

that (1) Voges’s claims are barred by res judicata based on an earlier suit that Voges’s grandfather

prosecuted against Campbell in small-claims court, (2) Voges lacks standing because he held no

interest in the automobile at the relevant times and was not a party to any repair-services agreement,

and (3) there is no valid oral or written contract. After a non-evidentiary hearing, the trial court

granted Campbell’s motion to dismiss based on res judicata, holding that Voges was in privity with

his grandfather in relation to the small-claims-court proceeding. We will reverse and remand for

further proceedings.
                                        BACKGROUND

               The parties apparently do not dispute that Voges’s grandfather, in his own name, sued

Campbell in small-claims court, seeking $1,949.95 in damages for automobile repair work that

Campbell allegedly failed to complete or completed incorrectly. Campbell attached unauthenticated

copies of the small-claims-court petition and judgment to his motion to dismiss, and both documents

reflect that Voges was not a named party. Campbell has not asserted otherwise. The judgment

Campbell provided indicates that he prevailed in that matter and that Voges’s grandfather recovered

nothing on his claims.

               Shortly after that litigation concluded, Voges sued Campbell in district court to

recover more than $13,000 for damages to the same automobile. Voges also sought treble damages

under the Texas Deceptive Trade Practices-Consumer Protection Act, exemplary damages, and

attorney’s fees. See Tex. Bus. & Com. Code § 17.50(b)(1); Tex Civ. Prac. & Rem. Code §§ 38.001,

41.003(a)(2). A comparison of the small-claims-court petition and Voges’s petition reveals that the

two lawsuits are based on the same transaction and a common nucleus of operative facts, but

Voges’s petition alleges that more extensive damage to the vehicle resulted from Campbell’s

negligence and fraud, in addition to allegations of faulty or incomplete repair work. Based

on the revised damages and additional claims Voges has asserted, his claims exceed the

amount-in-controversy jurisdictional limits for the small-claims court. See Act of June 15, 2007,

80th Leg., R.S., ch. 383, § 3, 2007 Tex. Gen. Laws 685, 686 (conferring jurisdiction on small-claims

courts when amount in controversy does not exceed $10,000, exclusive of costs), repealed by Act

of July 19, 2011, 82d Leg., 1st C.S., ch. 3, § 5.06(a), 2011 Tex. Gen. Laws 5206, 5225 (effective



                                                 2
May 1, 2013) (current version at Tex. R. Civ. P. 500.3(a) setting amount-in-controversy limit at

$10,000 exclusive of interest and court costs, but including attorney’s fees). Voges contends that

res judicata does not bar any of his claims because (1) he was not a party to the small-claims-court

proceeding, (2) there is no evidence that he was in privity with his grandfather for purposes of that

litigation, and (3) he could not have litigated all of his claims in the small-claims-court proceeding

because his damages exceed that court’s jurisdictional limitations.


                                           DISCUSSION

               Res judicata prevents parties and those in privity with them from relitigating a case

that a competent tribunal has adjudicated to finality. Ingersoll–Rand Co. v. Valero Energy Corp.,

997 S.W.2d 203, 206 (Tex. 1999). Res judicata generally bars claims or defenses that, through

diligence, could have been litigated in the earlier suit but were not. Id. at 206–07; Getty Oil

v. Insurance Co. of N. Am., 845 S.W.2d 794, 798 (Tex. 1992). “The doctrine is intended to prevent

causes of action from being split, thus curbing vexatious litigation and promoting judicial economy.”

Ingersoll–Rand Co., 997 S.W.2d at 207. 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 that were raised or

could have been raised in the first action.” Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex.

1996). A litigant is generally not bound by a judgment in a suit to which he was not a party unless

he was in privity with a party to the original suit. McGee v. McGee, 936 S.W.2d 360, 364 (Tex.

App.—Waco 1996, writ denied).




                                                  3
               Regardless of party or privity status, however, judgments from small-claims courts

are not accorded the same common-law finality as judgments from district courts. Under section

31.004 of the Texas Civil Practice and Remedies Code,


       [a] judgment or a determination of fact or law in a proceeding in a lower trial court
       [e.g., a small-claims court] is not res judicata and is not a basis for estoppel by
       judgment in a proceeding in a district court, except that a judgment rendered in a
       lower trial court is binding on the parties thereto as to recovery or denial of recovery.


Tex. Civ. Prac. & Rem. Code § 31.004(a); see id. § 31.004(c).

               This Court has held that


       [i]n the situation where a litigant brings a lawsuit in a district court subsequent to
       filing suit in a court of limited jurisdiction, section 31.004 of the civil practice and
       remedies code modifies the common law so that “res judicata bars only those claims
       that were actually litigated in the limited-jurisdiction court.”


Kizer v. Meyer, Lytton, Alen & Whitaker, Inc., 228 S.W.3d 384, 391 (Tex. App.—Austin 2007, no

pet.) (quoting Wren v. Gusnowski, 919 S.W.2d 847, 848 (Tex. App.—Austin 1996, no writ)). The

purpose of section 31.004 is to narrow the preclusive effect of judgments from courts of limited

jurisdiction by precluding a subsequent suit on claims actually tried in such courts but not “any other

claim that could have been joined and tried but were not.” Webb v. Persyn, 866 S.W.2d 106, 107

(Tex. App.—San Antonio 1993, no writ). Section 31.004 thus abrogates the common-law rules of

res judicata for small-claims-court judgments and does not bar subsequent prosecution of unlitigated

claims simply because they could have been litigated in the lower court. See, e.g., id.; McClendon

v. State Farm Mut. Auto. Ins. Co., 796 S.W.2d 229, 232 (Tex. App.—El Paso 1990, writ denied).



                                                  4
Therefore, in accordance with section 31.004, if the pleadings in the underlying lawsuit here include

claims not actually adjudicated in the small-claims court, then res judicata and collateral estoppel

do not bar those pleaded claims even if Voges was in privity with his grandfather with respect to the

prior judgment.

                If Voges was in privity with his grandfather, the claims actually litigated in

small-claims court would not survive even under section 31.004. Therefore, the threshold issue in

this case is whether the trial court erred in dismissing Voges’s claims based on a finding of privity.

                For purposes of res judicata, the term “privity” refers to parties who (1) exert control

over the original action even if they are not parties to it, (2) have interests that were represented by

a party to the original action, or (3) are successors in interest who derive their claims through a party

to the prior action. HECI Exploration Co. v. Neel, 982 S.W.2d 881, 890 (Tex. 1998); Benson v.

Wanda Petroleum Co., 468 S.W.2d 361, 363 (Tex. 1971); McNeil Interests, Inc. v. Quisenberry,

407 S.W.3d 381, 388 (Tex. App.—Houston [14th Dist.] 2013, no pet.). The existence of privity

turns on the particular circumstances of each case, see Getty Oil, 845 S.W.2d at 800, but “privity is

not established by the mere fact that persons may happen to be interested in the same question or in

proving the same state of facts,” Benson, 468 S.W.2d at 363; see McNeil Interests, 407 S.W.3d at

388-90 (50% ownership interest in business did not give rise to privity relationship for purposes of

res judicata and owner acting in representative capacity to hire attorney and serve as corporate

representative did not constitute control by owner in individual capacity).

                The trial court expressly found that (1) Voges participated in the previous litigation

to such a degree that he exercised control in that litigation and (2) his interests were fully represented



                                                    5
and litigated on his behalf by his grandfather in the lower-court proceeding. The evidentiary record

to support these findings, however, is nonexistent. In fact, no evidence was admitted at the dismissal

hearing and no testimony was given. There is no evidence that Voges’s grandfather instituted

the small-claims court proceeding on Voges’s behalf or in a representative capacity. Nor is

there evidence that Voges himself exerted any control over the prior litigation or that he is a

successor-in-interest to his grandfather. At the dismissal hearing, Campbell stated, but did not testify

under oath, that Voges was present at the hearing before the small-claims court and had argued the

case on his grandfather’s behalf. Even if such participation could constitute sufficient “control” to

bind Voges to the outcome of the prior proceeding, there is no competent evidence of that fact. The

record is simply devoid of any evidence that would support a finding of privity. Accordingly, there

is no evidence to support the trial court’s conclusion that Voges’s claims are barred by res judicata.


                                           CONCLUSION

                Because the record contains no evidence that Voges was a party to the

small-claims-court litigation or in privity with a party to that proceeding, we reverse the trial court’s

dismissal order and remand the cause to the trial court for further proceedings.1




        1
          We do not hold that privity cannot be established in this case; we hold only that the trial
court’s finding of privity is not supported by the present record.

                                                   6
                                           _____________________________________________

                                           J. Woodfin Jones, Chief Justice

Before Chief Justice Jones, Justices Rose and Goodwin

Reversed and Remanded

Filed: October 28, 2014




                                              7
