In The
Court of Appeals
Ninth District of Texas at Beaumont
_________________
NO. 09-12-00335-CV
_________________
ERIC PAYNE, ZENOBIA PAYNE, BARRY JACKSON,RHONDA SMITH,
MICHAEL THOMAS AND JOETTA DARBY, Appellants
V.
JEFFERSON COUNTY, TEXAS AND
SHERIFF MITCH WOODS IN HIS OFFICIAL CAPACITY, Appellees
________________________________________________________________________
On Appeal from the 136th District Court
Jefferson County, Texas
Trial Cause No. D-177,687
________________________________________________________________________
MEMORANDUM OPINION
Appellants, Eric Payne, Zenobia Payne, Barry Jackson, Rhonda Smith,
Michael Thomas, and Joetta Darby, challenge the trial court’s rendition of
summary judgment in favor of appellees, Jefferson County, and Sheriff Mitch
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Woods (referred to collectively as “the County”). 1 In their sole issue, Appellants
contend that the trial court erred in granting summary judgment in favor of
Appellees on their defenses of res judicata and collateral estoppel. We affirm the
trial court’s judgment.
I. Factual and Procedural Background
Appellants were all employees of the Jefferson County Sheriff’s Office and
Jefferson County, Texas on September 22, 2005, when a Jefferson County judge
issued a Mandatory Evacuation Order requiring all Jefferson County residents to
evacuate due to Hurricane Rita’s predicted landfall. All Appellants, except Eric
Payne, missed a number of days from work after the hurricane. Thereafter, the
Sheriff’s Office terminated Zenobia Payne, Smith, Thomas, Jackson, and Darby
for failing to report to work during or following the hurricane. While Eric Payne
did not miss work as a result of the hurricane, he was demoted for “‘violating [the]
chain of command and interfering with [the] integrity of Department[,]’” and he
ultimately resigned from service.
1
Appellants contend they brought suit in state court under both Chapters 21
and 22 of the Texas Labor Code. See generally Tex. Lab. Code Ann. §§ 21.001-
.556 (West 2006); Tex. Lab. Code Ann. §§ 22.001-.004 (West 2006). However, in
Appellants’ petition, contained in the appellate record, Appellants only alleged a
cause of action under Chapter 22 of the Texas Labor Code.
2
Appellants filed this state court action on September 14, 2006, alleging that
the County violated Chapter 22 of the Texas Labor Code when it disciplined or
otherwise terminated them for their compliance with the County’s Mandatory
Evacuation Order. On October 4, 2006, Appellants also filed a federal court
action. In the federal court action, they alleged causes of action under Title VII,
the Age Discrimination in Employment Act (ADEA), and the Civil Rights Act of
1991 for employment discrimination based on race, age, and gender, as well as for
retaliation. In the federal action, Appellants did not specifically plead a cause of
action under the Texas Labor Code. However, the state-law claims were included
in the federal court’s final pretrial order, 2 which supplants all previous pleadings,
and controls all subsequent action in the federal litigation. See McGehee v.
Certainteed Corp., 101 F.3d 1078, 1080 (5th Cir. 1996) (“‘It is a well-settled rule
that a joint pretrial order signed by both parties supersedes all pleadings and
governs the issues and evidence to be presented at trial.’” (quoting Branch-Hines v.
Hebert, 939 F.2d 1311, 1319 (5th Cir. 1991))). A United States Magistrate Judge
2
In the federal court’s final pretrial order, it identified as one of Appellants’
contentions that, “[a]t the time, Texas Statutory law, Tex. Labor Code §22.002
provided that ‘an employer may not discharge or in any other [manner]
discriminate against an employee who leaves the …place of employment to
participate in a general public evacuation ordered under an Emergency Evacuation
Order[.]’” The pretrial order also reflects that the parties jointly submitted and
agreed to the order.
3
conducted a bench trial of Appellants’ federal case, which resulted in a take-
nothing judgment. See generally 28 U.S.C. § 636(c); Fed. R. Civ. P. 73. While
Appellants filed an appeal, the Fifth Circuit dismissed the appeal for want of
prosecution.
Thereafter, on May 18, 2012, the County filed a “Motion for Judgment”3 in
the state court action contending that the state action was barred by the doctrines of
res judicata and collateral estoppel. The County argued that Appellants alleged
identical facts and claims in the state lawsuit as they had in the federal suit. As
evidence, the County attached court documents from the federal case, including:
the Final Pretrial Order; the Findings of Fact and Conclusions of Law; the Final
Judgment; a letter from the federal court clerk dismissing the appeal of the federal
case for want of prosecution; and the civil docket sheet from the federal case. In
response, Appellants argued that res judicata was not appropriate because the
federal court abstained from ruling on the State court claims. In support of their
contention, Appellants attached a number of court documents from the federal
case. Among the evidence they submitted was their original complaint, the order of
the U.S. Court of Appeals dismissing their appeal for want of prosecution, and the
reporter’s record of the bench trial held before the Federal Magistrate Judge. The
3
The parties agreed that the County’s “Motion for Judgment” would be
treated as a motion for summary judgment.
4
trial court granted the County’s motion for judgment and issued a letter ruling
explaining his decision. This appeal followed.
II. Standard of Review
The movant for summary judgment has the burden of showing that there is
no genuine issue of material fact and that it is entitled to summary judgment as a
matter of law. Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d
546, 548 (Tex. 1985). When a defendant moves for summary judgment it must
disprove at least one element of the plaintiff’s cause of action or plead and
conclusively establish each essential element of its affirmative defense, thereby
defeating the plaintiff’s cause of action. Sci. Spectrum, Inc. v. Martinez, 941
S.W.2d 910, 911 (Tex. 1997); Cathey v. Booth, 900 S.W.2d 339, 341(Tex. 1995).
When deciding whether there is a disputed, material fact issue precluding summary
judgment, evidence favorable to the non-movant will be taken as true. Nixon, 690
S.W.2d at 548-49. Every reasonable inference must be indulged in favor of the
non-movant and any doubts must be resolved in its favor. Id. at 549.
III. Res Judicata
Where, as here, the original judgment was entered in a federal proceeding,
federal law controls the preclusive effect of the federal court judgment on a later
state court proceeding. See Russell v. SunAmerica Sec., Inc., 962 F.2d 1169, 1172
5
(5th Cir. 1992); Eagle Props., Ltd. v. Scharbauer, 807 S.W.2d 714, 718 (Tex.
1990). “Under res judicata, a final judgment on the merits of an action precludes
the parties or their privies from relitigating issues that were or could have been
raised in that action.” Allen v. McCurry, 449 U.S. 90, 94, 101 S. Ct. 411, 66 L. Ed.
2d 308 (1980). “‘[W]hen two actions are pending which are based on the same
claim, or which involve the same issue, it is the final judgment first rendered in one
of the actions which becomes conclusive in the other action . . . regardless of
which action was first brought.’” Hogue v. Royse City, Texas, 939 F.2d 1249, 1255
(5th Cir. 1991) (quoting from RESTATEMENT (SECOND) OF JUDGMENTS § 14, cmt.
a); see also Ellis v. Amex Life Ins. Co., 211 F.3d 935, 937-38 (5th Cir. 2000). To
establish the defense of res judicata, a defendant must show: (1) the parties are
identical in both suits; (2) the prior judgment was rendered by a court of competent
jurisdiction; (3) there is a final judgment on the merits; and (4) the same cause of
action is involved in both cases. Meza v. Gen. Battery Corp., 908 F.2d 1262, 1265
(5th Cir. 1990). In analyzing the elements to establish a res judicata defense, we
note that Appellants do not contest that the parties in both the state and federal
cases are identical. There is also no dispute that the federal court had competent
original jurisdiction. Because the County met the first two prongs of the test, we
only analyze the remaining two prongs.
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A. Final Judgment on the Merits
The Fifth Circuit has held that “[a] final judgment is one that ‘ends the
litigation on the merits and leaves nothing for the court to do but execute the
judgment.’” Moreau v. Harris Cnty., 158 F.3d 241, 244 (5th Cir. 1998) (quoting
Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S. Ct. 2454, 57 L. Ed. 2d
351 (1978)). “‘[E]ven if the second suit is for a different cause of action, the right,
question, or fact once so determined must, as between the same parties or their
privies, be taken as conclusively established, so long as the judgment in the first
suit remains unmodified.’” Landmark Land Co. v. Office of Thrift Supervision,
990 F.2d 807, 811 (5th Cir. 1993) (quoting S. Pac. R.R. Co. v. United States, 168
U.S. 1, 48-49, 18 S. Ct. 18, 42 L. Ed. 355 (1897)). Appellants dispute that the
federal court chose to exercise its supplemental jurisdiction over the state-law
claims, and thus they contend that the court never disposed of the state-law claims
presented in State court.
In determining the finality of judgments, the Fifth Circuit has “advocated a
practical interpretation that looked to the intention of the district court and held that
if the judgment reflects an intent to dispose of all issues before the district court,
we will characterize that judgment as final.” DIRECTV, Inc. v. Budden, 420 F.3d
521, 525 (5th Cir. 2005) (internal quotation marks and citations omitted). If a party
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abandons one of its claims, a judgment that disposes of all remaining theories is
final so long as it is apparent that the district court intended the judgment to
dispose of all claims. Chiari v. City of League City, 920 F.2d 311, 314 (5th Cir.
1991).
In DIRECTV, the federal district court granted summary judgment to
DIRECTV (DTV) on one of its claims, but did not explicitly address its other
claims. DIRECTV, 420 F.3d at 524. On appeal, DTV argued that because the
district court only disposed of one of DTV’s claims, the decision below was not
final. Id. The court explained the general rule that when a district court only
addresses one claim in a multi-claim situation, the judgment is not final unless the
court abides by the provisions of Rule 54 of the Federal Rule of Civil Procedure.
Id. The court noted that the district court did not follow Rule 54, but concluded the
judgment was nevertheless final because DTV had abandoned its remaining
claims, and the district court intended to dispose of all claims before it. Id. at 525-
26.
This case is similar to DIRECTV. In reviewing the bench trial transcript, we
note that Appellants did not argue or specifically present evidence in support of
their state-law claims. Appellants rely heavily on the County’s proposed findings
of fact and conclusions of law wherein the County proposed to the federal court
8
that it decline to exercise jurisdiction over the state-law claims. Appellants argue
that the federal court adopted the County’s proposition and declined to exercise its
supplemental jurisdiction. There is no evidence in the record that the federal court
declined to exercise its supplemental jurisdiction, nor is there a finding of fact or
conclusion of law that would support the court’s decision to decline jurisdiction.4
Cf. El Paso Natural Gas Co. v. Am. Petrofina Co. of Tex., 733 S.W.2d 541, 552
(Tex. App.—Houston [1st Dist.] 1986, writ ref’d n.r.e.) (concluding that when a
federal court specifically declined to exercise pendent jurisdiction over certain
4
Section 1367 provides that Federal courts have supplemental jurisdiction
over state-law claims when they are joined with a claim over which the federal
court has original “federal question” jurisdiction, and when the claims “are so
related to claims in the action within such original jurisdiction that they form part
of the same case or controversy under Article III of the United States
Constitution.” 28 U.S.C. § 1367(a). Subpart (c) provides that district courts may
decline to exercise supplemental jurisdiction if:
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over
which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has
original jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons
for declining jurisdiction.
Id. § 1367(c).
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state claims, then the federal judgment did not operate as res judicata in the state
action dealing with those claims). In reviewing Appellants’ proposed findings of
fact to the federal court, we note that Appellants listed their claims against the
County, but did not include their state-law claims. Likewise, Appellants did not
propose to the court any conclusions of law regarding their state-law claims. There
is also no evidence in the record that Appellants asked the federal court to amend
or make additional findings of fact and conclusions of law upon realization that the
state-law claims were not represented in the judgment.5 See Fed. R. Civ. P. 52(b).
Appellants appealed the federal court’s judgment to the Fifth Circuit, but there is
no evidence in the record that the judgment or parties attempted to comply with the
requirements of Rule 54(b) of the Federal Rule of Civil Procedure to allow for
appeal of only part of their claims. See Fed. R. Civ. P. 54(b). The basis behind
5
The Federal Rules of Civil Procedure establish steps for amending the
court’s findings or motioning the court to make additional findings. See Fed. R.
Civ. P. 52(b). If Appellants found the federal court’s findings deficient or
inadequate in any way, the proper remedy was to request additional findings to
clarify the federal court’s intentions. Where the trial court fails to make findings, or
to find on a material issue, and an appeal is taken, the appellate court will normally
remand the action for appropriate findings to be made. See Icicle Seafoods, Inc. v.
Worthington, 475 U.S. 709, 714, 106 S. Ct. 1527, 89 L. Ed. 2d 739 (1986) (“If the
Court of Appeals believed that the District Court had failed to make findings of
fact essential to a proper resolution of the legal question, it should have remanded
to the District Court to make those findings.”). However, as noted above,
Appellants’ appeal was dismissed pursuant to Rule 42.3 of the Fifth Circuit Rules
for want of prosecution. See 5TH CIR. R. 42.3.
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Appellants’ decision not to pursue their state-law claims during the federal trial is
not clear from the appellate record. We construe Appellants’ failure to urge its
state-law claims during trial before the federal court as an intention to abandon that
portion of their case. See Farias v. Bexar Cnty. Bd. of Trs., 856 S.W.2d 218, 224
(Tex. App.—San Antonio 1993, writ denied) (citing Casto v. Arkansas-Louisiana
Gas Co., 597 F.2d 1323, 1326 (10th Cir. 1979)).
We further conclude that the federal court intended to dispose of the entire
case when it entered judgment. The federal court’s order was stylized “Final
Judgment.” While this alone is not dispositive, it is suggestive of the court’s
intention. In its findings of fact and conclusions of law, the federal court identified
Appellants’ claims against the County, but missing from its discussion is any
reference to the state-law claims. In the judgment, the court ordered, “Plaintiffs
take nothing of and from their claims against the Defendants.” The court further
ordered, “All relief which is not specifically granted herein, and all pending
motions not previously ruled upon, are denied.” The judgment also directed the
clerk of the court to close the case. Based on this evidence, we conclude that
Appellants abandoned their state-law claims and that the federal court intended to
treat those claims as abandoned. “An order that effectively ends the litigation on
the merits is an appealable final judgment even if the district court does not
11
formally include judgment on a claim that has been abandoned.” Jones v. Celotex
Corp., 867 F.2d 1503, 1503-04 (5th Cir. 1989). We conclude that the federal court
judgment is a final judgment disposing of all claims. “The principle of res judicata
works to prohibit relitigation of abandoned causes of action.” Farias, 856 S.W.2d
at 224. The County satisfied the third element of its res judicata defense.
B. Same Cause of Action
In analyzing the fourth prong of the res judicata test, the federal court
applies the transactional test of Section 24 of the Restatement (Second) of
Judgments. Southmark Props. v. Charles House Corp., 742 F.2d 862, 870-71 (5th
Cir. 1984) (citing RESTATEMENT (SECOND) OF JUDGMENTS § 24). The issue then is
whether the two actions under consideration are based on “‘the same nucleus of
operative facts.’” In re Baudoin, 981 F.2d 736, 743 (5th Cir. 1993) (quoting In re
Howe, 913 F.2d 1138, 1114 (5th Cir. 1990)). Under the transactional test, when a
plaintiff’s claim is extinguished by a final judgment “the claim extinguished
includes all rights of the plaintiff to remedies against the defendant with respect to
all or any part of the transaction, or series of connected transactions, out of which
the action arose.” Southmark Props., 742 F.2d at 871 n.12. “The existence of
numerous legal theories, or the availability of numerous remedies arising out of a
series of events, do not create multiple transactions for res judicata purposes.”
12
Farias, 856 S.W.2d at 223 (citing Southmark Props., 742 F.2d at 871). The court
looks at “the factual predicate of the claims asserted, not the legal theories upon
which the plaintiff relies.” Eubanks v. F.D.I.C., 977 F.2d 166, 171 (5th Cir. 1992).
When considering the facts of both the federal and state cases, it is apparent
that the same “transaction” is at issue in both suits. In both cases, Eric Payne
alleged the County wrongfully and constructively discharged him because of
decisions he made, while on duty, that were related to the hurricane evacuation
order. In both cases, the remaining Appellants alleged that the County wrongfully
disciplined and ultimately terminated each of them for complying with the
Mandatory Evacuation Order and not timely returning to work. In both cases, their
claims arise out of the same incident—the Sheriff’s reaction to their decisions not
to return to work as scheduled. Both the state and federal claims seek to recover for
the same injuries—damages associated with Appellants’ unemployment and their
inability to obtain comparable jobs in the workforce. We conclude the two actions
share the same nucleus of operative facts and the County met the fourth prong of
its res judicata defense.
IV. Conclusion
Because we conclude that the trial court properly granted summary
judgment on res judicata, we need not address Appellants’ remaining issue. See
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Tex. R. App. P. 47.1. We affirm the trial court’s final judgment in favor of
Jefferson County and Sheriff Mitch Woods.
AFFIRMED.
______________________________
CHARLES KREGER
Justice
Submitted on May 22, 2013
Opinion Delivered September 5, 2013
Before Gaultney, Kreger, and Horton, JJ.
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