                                Fourth Court of Appeals
                                       San Antonio, Texas
                                                 OPINION
                                          No. 04-14-00301-CV

                                      CITY OF SAN ANTONIO,
                                             Appellant

                                                    v.

                                            Gerard CORTES,
                                                Appellee

                      From the 285th Judicial District Court, Bexar County, Texas
                                   Trial Court No. 2014-CI-05707
                              Honorable Laura Salinas, Judge Presiding

Opinion by:       Karen Angelini, Justice

Sitting:          Karen Angelini, Justice
                  Marialyn Barnard, Justice
                  Patricia O. Alvarez, Justice

Delivered and Filed: April 29, 2015

REVERSED AND RENDERED

           The City of San Antonio appeals the trial court’s denial of its motion to abate and to compel

arbitration. We reverse.

                                             BACKGROUND

           In his amended petition, Appellee Gerard Cortes, a San Antonio firefighter, alleged that

the current Collective Bargaining Agreement (CBA), which was agreed to by the City and the

Union, sets forth health benefits for active San Antonio firefighters like Cortes. According to

Cortes’s petition, on or about April 2, 2014, he received a letter from his fire chief that described
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a “dependent verification process” conducted by the City in order “to verify the eligibility of

dependents on [Cortes’s] medical benefit plan.” The letter signed by the fire chief stated that the

demand for dependent verification “should be considered a directive from [his] office” and that

“full cooperation is expected.” Cortes alleged that “[b]ecause the demand to provide the

documentation is a ‘directive,’ the failure to follow this directive results in disciplinary actions,

including suspension or termination.” According to Cortes’s petition, the directive by the fire chief

“and the potential disciplinary action” exceeded the fire chief’s statutory authority under section

143.051 of the Texas Local Government Code to discipline members of the San Antonio Fire

Department. Further, Cortes alleged that by demanding verification of dependents, the City

unilaterally altered his health benefits and thus (1) denied Cortes his right to organize and bargain

collectively with his public employer regarding a condition of his employment in violation of

section 174.023 of the Texas Local Government Code, and (2) breached the obligation to negotiate

in good faith in violation of section 174.105. Cortes sought declaratory and injunctive relief.

       In response to the lawsuit, the City filed a motion to abate and to compel arbitration. It later

filed a supplement to its motion. The trial court denied the motion, and the City then filed this

interlocutory appeal.

                                      STANDARD OF REVIEW

       The CBA in this case is governed by the Federal Arbitration Act. See City of San Antonio

v. Int’l Ass’n of Fire Fighters, Local 624, Nos. 04-12-00783-CV & 04-13-00109-CV, 2013 WL

5508408, at *3 (Tex. App.—San Antonio Oct. 2, 2013, no pet.). Generally, we review a trial

court’s ruling on a motion to compel arbitration for abuse of discretion, affording deference to the

court’s factual determinations, but reviewing legal questions de novo. Garcia v. Huerta, 340

S.W.3d 864, 868 (Tex. App.—San Antonio 2011, pet. denied). Thus, the existence and the

applicability of an arbitration agreement is a question of law reviewed under a de novo standard.
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Id. If the arbitration agreement includes the claims at issue and the opposing party cannot prove

any defense preventing arbitration, “the trial court has no discretion but to compel arbitration and

stay its own proceedings.” In re FirstMerit Bank, 52 S.W.3d 749, 754 (Tex. 2001).

       In order to succeed in its motion to compel arbitration, the City had to demonstrate that a

valid arbitration agreement existed and that Cortes’s claims fell within the scope of the agreement.

See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003). In determining “whether a

party’s claims fall within an arbitration agreement’s scope, we focus on the [petition]’s factual

allegations rather than the legal causes of action asserted.” In re FirstMerit Bank, 52 S.W.3d at

754. And, generally, any doubts about the scope of an arbitration agreement must be decided in

favor of arbitration. In re D. Wilson Constr. Co., 196 S.W.3d 774, 782 (Tex. 2006).

       Once the existence of a valid arbitration agreement is established, a strong presumption in

favor of arbitration arises, In re FirstMerit Bank, 52 S.W.3d at 753, and “an order to arbitrate the

particular grievance should not be denied unless it may be said with positive assurance that the

arbitration clause is not susceptible of an interpretation that covers the asserted dispute,” Wright v.

Universal Mar. Serv. Corp., 525 U.S. 70, 78 (1998) (citations omitted). To rebut this presumption,

the party opposing arbitration bears the burden of raising an affirmative defense to enforcement of

the agreement to arbitrate. J.M. Davidson, Inc., 128 S.W.3d at 227; see In re AdvancePCS Health

L.P., 172 S.W.3d 603, 607 (Tex. 2005) (discussing affirmative defenses in context of arbitration

agreements).

                                            DISCUSSION

       The City argues that the trial court erred in denying its motion to compel arbitration because

the doctrine of res judicata prevents Cortes from relitigating the issue of whether his claims should

be referred to arbitration. The City emphasizes that Cortes’s claims are identical to those already

brought by the Union and are related to the same CBA. In City of San Antonio v. International
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Association of Fire Fighters, Local 624, Nos. 04-12-00783-CV & 04-13-00109-CV, 2013 WL

5508408, at *1 (Tex. App.—San Antonio Oct. 2, 2013, no pet.), the Union filed a lawsuit “alleging

that the City had violated Chapter 174 of the Texas Local Government Code by unilaterally

altering the prerequisites for health-insurance coverage of firefighters and their dependents without

engaging in good-faith collective bargaining with the Union.” Specifically, the Union alleged that

“the City unilaterally changed the CBA’s terms by: (1) requiring active enrollment in order for the

firefighters to continue receiving health-care benefits; and (2) threatening termination of coverage

for currently covered dependents unless the firefighters provide additional information.” Id. The

City filed a motion to compel, arguing that under the terms of the CBA, the Union’s claims had to

be compelled to arbitration. Id. After the trial court denied the motion and the City filed its

interlocutory appeal, this court considered whether the Union’s claims fell within the scope of the

CBA’s arbitration agreement. Id. at *3.

       This court then looked at the arbitration provision contained within the CBA, Article 30.

Id. at *4. Article 30 states the following:

               The purpose of this Article is to provide a just, equitable, and
               expeditious method for resolving disputes between the City and the
               Union (or employees) concerning all aspects of the employment
               relationship between the City and bargaining unit employees, and
               concerning the bargaining relationship between the City and the
               Union. To that end, the parties hereby agree and stipulate as follows:

               A. All disputes concerning the interpretation and/or application of
                  the terms of this Agreement shall be submitted, if at all, to the
                  grievance/arbitration procedure as called for herein. Failure to
                  initially pursue grievance/arbitration in these instances shall be
                  the basis for a plea in abatement in response to any suit or claim
                  filed with a court of law and/or administrative agency.

               B. Employee claims of violation of statutory or constitutional rights
                  may be submitted to the grievance/arbitration procedure or may
                  be pursued by means of judicial and/or administrative appeal;
                  provided that once the employee has elected to file a lawsuit
                  and/or administrative claim, all issues raised by the dispute or
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                     claim will be resolved in such lawsuit and/or administrative
                     process, and no grievance may be filed concerning the same
                     subject matter. It is recognized that claims falling under this
                     subparagraph may be included with related claims of contract
                     violations. In such circumstances, the City shall not be entitled
                     to abatement of a suit involving the contract claims, related to
                     the statutory or constitutional claims asserted, for failure to
                     grieve such contract matters initially. If the employee elects to
                     use the grievance/arbitration procedure to raise statutory or
                     constitutional claims, such matters may not thereafter be
                     appealed to court except as provided by this Article. 1

This court noted that pursuant to this language, (1) disputes based on the “interpretation and/or

application” of the CBA must be submitted to the arbitration procedure, and (2) “employees have

the choice to pursue claims based on a statutory violation using either the arbitration procedure or

a judicial forum, even if related contract claims are also made.” Id.

        In explaining why its claims did not fall within the scope of the arbitration agreement, the

Union argued that its claims were not based on the interpretation or application of the CBA because

it had not brought claims for violations of the CBA but was instead asking “the trial court to

determine the meaning of provision of Chapter 174 and to declare a violation of those provisions.”

Id. at *6. This court, however, concluded that the Union’s claims did fall within the scope of the

arbitration agreement. Id. This court explained that when determining whether the Union’s claims

fell within the scope of the arbitration provision, “we focus on the complaint’s factual allegations

rather than the legal causes of action asserted.” Id. at *5 (quoting In re FirstMerit Bank, 52 S.W.3d

749, 754 (Tex. 2001)). Because the Union sought “a judicial declaration that the City has, without

authority, changed health-care benefit eligibility without bargaining collectively,” a court could

not “make such a declaration without first interpreting the current CBA provisions regarding



1
  Article 30 contains two other subparagraphs, C and D, which relate respectively to the filing of (1) employment
discrimination claims and (2) disciplinary matters subject to the appeals procedure provided by chapter 143 of the
Texas Local Government Code.

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health-care benefits, and then determining whether the information or action required by the City

alters or changes the CBA’s current provisions.” Id. This court thus concluded the Union’s claims

fell within the scope of the arbitration agreement. Id. Neither party appealed this court’s decision

and mandate issued. Thereafter, Cortes filed the underlying lawsuit containing the same allegations

as the lawsuit filed by the Union. The City argued in its motion to abate and compel arbitration

that because Cortes is in privity with the Union, he is bound by this court’s holding in City of San

Antonio v. International Association of Fire Fighters, Local 624, 2013 WL 5508408, at *5, under

the principles of res judicata and/or collateral estoppel, and cannot relitigate the issue of whether

these claims can be resolved in a judicial forum or should be compelled to arbitration.

       “Broadly speaking, res judicata is the generic term for a group of related concepts

concerning the conclusive effects given final judgments.” Barr v. Resolution Trust Corp., 837

S.W.2d 627, 628 (Tex. 1992). “Within this doctrine, there are two principal categories: (1) claim

preclusion (also known as res judicata); and (2) issue preclusion (also known as collateral

estoppel).” Id. “Res judicata, or claims preclusion, prevents the relitigation of a claim or cause of

action that has been finally adjudicated, as well as related matters that, with the use of diligence,

should have been litigated in the prior suit.” Id. “Issue preclusion, or collateral estoppel, prevents

relitigation of particular issues already resolved in a prior suit.” Id. It “is designed to promote

judicial efficiency and to prevent inconsistent judgments by preventing any relitigation of an

ultimate issue of fact.” Texas Dep’t of Public Safety v. Petta, 44 S.W.3d 575, 579 (Tex. 2001). The

City argues that the trial court erred in denying its motion to abate and compel arbitration in this

case because the issue of whether these claims should be compelled to arbitration was already

determined by our prior opinion.

       Under both federal and Texas law, collateral estoppel applies when (1) the issue of fact or

law sought to be litigated in the second action was fully and fairly litigated in the first action; (2)
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that issue of fact or law was essential to the judgment in the first action; and (3) the party against

whom the doctrine is asserted was a party or was in privity with a party in the first action. See

Taylor v. Sturgell, 553 U.S. 880, 892 (2008); Sysco Foods Servs., Inc. v. Trapnell, 890 S.W.2d

796, 801-02 (Tex. 1994); see also John G. & Marie Stella Kenedy Mem’l Found. v. Dewhurst, 90

S.W.3d 268, 288 (Tex. 2002) (explaining elements of collateral estoppel under federal and Texas

law are the same). With regard to the first element, the issue of whether the parties should be

compelled to arbitration pursuant to the CBA was fully and fairly litigated in the first proceeding.

See International Association of Fire Fighters, 2013 WL 5508408, at *1-*8. Cortes argues that he

has brought one additional claim that was not brought by the Union in the first lawsuit. However,

collateral estoppel “bars successive litigation of an issue of fact or law actually litigated and

resolved in a valid court determination essential to the prior judgment, even if the issue recurs in

the context of a different claim.” Taylor, 553 U.S. at 892 (citation omitted) (emphasis added). Thus,

even though Cortes added a slightly different claim, it is based on the same facts as the first

proceeding and collateral estoppel would still apply. See Proctor v. Dist. of Columbia, No. 13-

00985, 2014 WL 6676232, at *6 (D.D.C. Nov. 25, 2014) (holding that teacher’s claims, including

one based on age discrimination, must be dismissed under collateral estoppel because even though

the prior suit by the Union had contained no allegation regarding age discrimination, the teacher’s

age discrimination allegation simply “attempt[ed] to pour new wine into old wine skins,”

“precisely th[e] type of argumentation” “forbid[den]” by issue preclusion).

       Secondly, that issue was essential to our judgment in the first appeal, and our judgment

was not appealed. Cortes argues that there is not yet a final judgment on the merits with regard to

the case brought by the Union. However, for purposes of collateral estoppel there need not

necessarily be a final judgment on the merits. Instead, the test for finality is “whether the

conclusion in question is procedurally definite.” Van Dyke v. Boswell, O’Toole, Davis &
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Pickering, 697 S.W.2d 381, 385 (Tex. 1985) (quoting RESTATEMENT (SECOND) OF JUDGMENTS

§ 13, comment (g) (1982)). “The factors to be considered in answering this question include

whether ‘the parties were fully heard, [whether] the court supported its decision with a reasoned

opinion [and whether] the decision was subject to appeal or was in fact reviewed on appeal.’” Id.

(quoting RESTATEMENT (SECOND)         OF   JUDGMENTS § 13, comment (g) (1982)) (alteration in

original). In the prior case brought by the Union, the parties were fully heard at the trial court and

at this court in the interlocutory appeal. And, because neither party filed a petition for discretionary

review in the supreme court, mandate was issued. Thus, the prior appeal meets all these elements.

So, while the merits of the case brought by the Union have not resulted in a final judgment, the

issue of whether the parties should be compelled to arbitration is final for purposes of collateral

estoppel.

       Lastly, Cortes was in privity with the Union, the party in the first action, and is thus bound

by this court’s ruling in the first appeal that the parties should be compelled to arbitration under

the CBA. Collateral estoppel may not be asserted against one who was not a party in the first case.

See Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 329 (1971). “The rules that

identify the parties affected by issue preclusion . . . are often described as rules of ‘privity’ and

‘mutuality.’” 18 Charles Alan Wright, FEDERAL PRACTICE & PROCEDURE: JURISDICTION § 4416

(2d ed.). “The term ‘privity’ signifies that the relationship between two or more persons is such

that a judgment involving one of them may justly be conclusive upon the others, although those

others were not party to the lawsuit.” Gill & Duffus Servs., Inc. v. A.M. Nural Islam, 675 F.2d 404,

405 (D.C. Cir. 1982). Union members are considered to be in privity with their union for purposes

of collateral estoppel. See Hitchens v. Cnty. of Montgomery, 98 Fed. Appx. 106, 114 (3d Cir. 2004)

(“[C]ourts have held union members to be in privity with the union and have held that a decision

against a union can bind union members in a subsequent action.”); Heade v. Wash. Metro. Area
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Transit Auth., No. 09-02460, 2010 WL 938462, at *2 n.2 (D.C.C. 2010) (“Plaintiff’s contention

that the arbitration’s findings do not bar her claim because she was not a party to that proceeding

is also without merit . . . [because] she was in privity with her union.”), aff’d, 2010 WL 3521596

(D.C. Cir. 2010) (affirming and stating appellant was in privity with the union). Thus, individual

members of labor unions can be bound by judgments in suits brought by the union in its

representative capacity. Meza v. Gen. Battery Corp., 908 F.2d 1262, 1268 (5th Cir. 1990).

       Because collateral estoppel prevents relitigation of the underlying issue in this appeal, we

reverse the trial court’s order on the City’s motion to abate and to compel arbitration, render

judgment granting the motion, and abate the underlying lawsuit “until the exhaustion of remedies

provided for in this [CBA] have been completed to finality.” International Ass’n of Fire Fighters,

2013 WL 5508408, at *8.


                                                     Karen Angelini, Justice




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