Does a prior declaratory judgment action entail res judicata effect?

   
Here is a scenario where the difference between claim and issue preclusion becomes meaningful: a prior suit of declaratory relief, and a second suit seek other type of relief.
  

DECLARATORY JUDGMENT AND RES JUDICATA: THE EXCEPTION
   

The elements for establishing res judicata, or claim preclusion, are "(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. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996).

An exception to the application of res judicata is when the original suit sought only a declaratory judgment. See Valley Oil Co. v. City of Garland, 499 S.W.2d 333, 335 (Tex. Civ. App.-Dallas 1973, writ ref'd n.r.e.). In this situation, the first judgment provides only declaratory relief and does not bar a subsequent proceeding for coercive relief stemming from the declaratory judgment. See id.; TEX. CIV. PRAC. & REM. CODE ANN. § 37.011 (Vernon 2008) (providing "[f]urther relief based on a declaratory judgment or decree may be granted whenever necessary or proper").

The rationale for this apparent departure from the usual rule of res judicata is that the losing party in a declaratory judgment action can normally be expected to recognize the rights declared by the judgment and act accordingly, but that if he fails to do so, the court should have ample power to enforce the judgment by subsequent coercive orders, whether or not such relief was sought in the original action.

Valley Oil, 499 S.W.2d at 336.

Under this exception, the only matters excluded from subsequent litigation are what was actually considered and ruled on in the original action. See Alsheikh v. Arabian Nat'l Shipping Corp., 01-08-00007-CV, 2009 WL 884795, at *2 (Tex. App.-Houston [1st Dist.] 2009, no pet.) (mem. op.). In other words, while issue preclusion (collateral estoppel) applies to prior declaratory judgment actions, claim preclusion (res judicata) does not. See id.; Barr v. Resolution Trust Corp. ex rel. Sunbelt Fed. Sav., 837 S.W.2d 627, 628 (Tex. 1992) (distinguishing between issue preclusion and claim preclusion and defining issue preclusion as preventing relitigation of particular issues already resolved in prior suit).

SOURCE: HOUSTON COURT OF APPEALS – No. 01-11-00650-CV – 1/24/2013 – CBS Outdoor, Inc. v. Potter
 

SNIPPET FROM EARLIER CASE FROM HOUSTON ADDRESSING THE SAME ISSUE:

The doctrine of res judicata bars a second suit by parties on matters actually litigated in an earlier suit, as well as claims "`which, through the exercise of diligence, could have been litigated in a prior suit.'" Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 799 (Tex.1992) (quoting Barr v. Resolution Trust Corp., 837 S.W.2d 627, 631 (Tex.1992)). Texas follows the transactional approach to res judicata, which requires claims arising out of the same subject matter to be litigated in a single lawsuit. Hallco Tex., Inc. v. McMullen County, 221 S.W.3d 50, 58 (Tex. 2006); Barr, 837 S.W.2d at 631. For res judicata to apply, there must be: (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).

Here, the third element of res judicata is not met because there is no second action concerning these claims. The reversal of Jay's motion for summary judgment made the counterclaims live again, which does not constitute res judicata because the matter of attorney's fees was never finally determined. See Tex. Water Rights Comm'n v. Crow Iron Works, 582 S.W.2d 768, 771 (Tex.1979) (stating res judicata requires cause "finally determined, without appeal").

We also note that when we rendered the declaratory judgment in favor of EOG, EOG could seek a subsequent application for relief based on rights declared in the prior judgment, "even though such relief could have been granted in the original action," unless such application was actually considered and denied in the original action. State v. Anderson Courier Serv., 222 S.W.3d 62, 66 (Tex.App.-Austin 2005, pet. denied); Valley Oil Co. v. City of Garland, 499 S.W.2d 333, 335 (Tex.Civ. App-Dallas 1973, no writ). As our sister court explained,

[T]he rationale for this apparent departure from the usual rule of res judicata is that the losing party in a declaratory judgment action can normally be expected to recognize the rights declared by the judgment and act accordingly, but that if he fails to do so, the court should have ample power to enforce the judgment by subsequent coercive orders, whether or not such relief was sought in the original action.

Valley Oil Co., 499 S.W.2d at 336; see also 3 William V. Dorsaneo III, Texas Litigation Guide § 45.03 (2008) ("After a party has obtained a declaratory judgment, a subsequent suit may be brought for further relief if it is necessary or proper. [Citation omitted.] This rule involves a departure from the strict application of res judicata, which would ordinarily bar a subsequent proceeding because coercive relief could have been granted in the original action. It is justified on the theory that the loser may be expected to recognize the rights declared by the judgment, and if not, some form of compulsion should be available."). Because the trial court never had the opportunity to consider EOG's request for attorney's fees following our declaratory judgment in favor of EOG, EOG could not be barred by res judicata to pursue that claim for relief based on rights declared by our judgment.

We hold EOG's counterclaim for attorney's fees is not barred by res judicata. We overrule Jay's second issue.

SOURCE:  Jay Petroleum, L.L.C. v. EOG Resources, Inc., 332 S.W.3d 534, 539 (Tex. App.-Houston [1st Dist.] 2009, pet. denied);

 

Can the trial court award both injunctive relief AND damages?

   

Permanent Injunction and Damages: Does a judgment awarding both violate the prohibition against dual recovery? 

  

The supreme court has specifically recognized that only when a judgment awards “both an injunction and damages as to future effects” is there an impermissible double recovery. Schneider v. Nat’l Carriers, Inc. v. Bates, 147 S.W.3d 264, 284 (Tex. 2004). In the absence of an award of future damages, there is no double recovery. See id. As one court of appeals recognized, an award of permanent injunctive relief and past damages was not a double recovery because no future damages were awarded. F.S. New Prods., Inc. v. Strong Indus., Inc., 129 S.W.3d 606, 631-32 (Tex. App.—Houston [1st Dist.] 2004), rev’d in part on other grounds, 221 S.W.3d 550 (Tex. 2006).

  

THE ONE-SATISFACTION RULE

  
A party is entitled to bring suit and seek damages on alternative theories; however, the plaintiff may not recover on both theories because these would amount to a “double recovery.” Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959 S.W.2d 182, 184 (Tex. 1998); Foley v. Parlier, 68 S.W.3d 870, 882 (Tex. App.—Fort Worth 2002, no pet.).

  

THE RULE AGAINST DUAL RECOVERY ("WINDFALL")

  
A double recovery exists when a plaintiff is awarded more than one recovery for the same injury. Waite Hill Servs., 959 S.W.2d at 184; Foley, 68 S.W.3d at 882-83. “Texas law does not permit double recovery.” Parkway Co. v. Woodruff, 901 S.W.2d 434, 441 (Tex. 1995). The prohibition against double recovery is a corollary to the one satisfaction rule, Foley, 68 S.W.3d at 883, which provides that a plaintiff may recover only for the damages suffered as a result of a particular injury. Utts v. Short, 81 S.W.3d 822, 833 (Tex. 2002).
   
SOURCE: SAN ANTONIO COURT OF APPEALS - 04-10-00602-CV – 11/23/11 

Temporary Injunction – When can the trial court judge grant immediate injunctive relief?

   
TEMPORARY INJUNCTION REQUIREMENTS 
 
Elements of claim for temporary injunctive relief A trial court has broad discretion in deciding whether to deny a temporary injunction. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). We review the denial of a temporary injunction for a clear abuse of discretion without addressing the merits of the underlying case. Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993). We will uphold the trial court’s determination against issuing injunctive relief unless the trial court’s action was so arbitrary that it exceeded the bounds of reasonable discretion. Butnaru, 84 S.W.3d at 204. In reviewing the trial court’s exercise of discretion, the appellate court must draw all legitimate inferences from the evidence in the light most favorable to the trial court’s decision. EMS USA, Inc. v. Shary, 309 S.W.3d 653, 657 (Tex. App.—Houston [14th Dist.] 2010, no pet.). When, as here, no findings of fact or conclusions of law are filed, the trial court’s determination of whether to grant or deny a temporary injunction must be upheld on any legal theory supported by the record. Id. An applicant for a temporary injunction seeks extraordinary relief. In re Tex. Natural Res. Conservation Comm’n, 85 S.W.3d 201, 204 (Tex. 2002). The sole issue before the trial court in a temporary injunction hearing is whether the applicant may preserve the status quo of the litigation’s subject matter pending trial on the merits. Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978). The status quo is the last actual, peaceable, noncontested status which preceded the pending controversy. RP & R, Inc. v. Territo, 32 S.W.3d 396, 402 (Tex. App.—Houston [14th Dist.] 2000, no pet.) What must the applicant for temporary injunctive relief show? To obtain a temporary injunction, the applicant must plead a cause of action against the defendant and show both a probable right to recover on that cause of action and a probable, imminent, and irreparable injury in the interim. EMS USA, Inc. v. Shary, 309 S.W.3d 653, 657 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (citing Butnaru, 84 S.W.3d at 204). To show a probable right of recovery, the applicant must plead and present evidence to sustain the pleaded cause of action. Id. An injury is irreparable when the injured party cannot be adequately compensated in damages or if damages cannot be measured by any certain pecuniary standard. Id. An existing legal remedy is adequate if it is as complete, practical, and efficient to the ends of justice and its prompt administration as is equitable relief. Hilb, Rogal & Hamilton Co. of Texas v. Wurzman, 861 S.W.2d 30, 32 (Tex. App.—Dallas 1993, no writ.). There is no adequate remedy at law if the plaintiff cannot calculate damages or if a defendant is incapable of responding in damages. Id. The party applying for a temporary injunction has the burden of production, which is the burden of offering some evidence that establishes a probable right to recover and a probable interim injury. Dallas Anesthesiology Associates, P.A. v. Texas Anesthesia Group, P.A., 190 S.W.3d 891, 897 (Tex. App.—Dallas 2006, no pet.). If an applicant does not discharge its burden, it is not entitled to injunctive relief. Id. The applicant for a temporary injunction bears the burden to present evidence sufficient to demonstrate a probable, imminent, and irreparable injury. The harm is irreparable when the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard. EMS USA, 309 S.W.3d at 657. Based on the evidence in the appellate record, the trial court could have reasonably concluded that monetary damages would adequately compensate appellant for any alleged loss of investment if it prevailed at trial. Daily Int’l Sales Corp. v. Eastman Whipstock, Inc., 662 S.W.2d 60, 64 (Tex. App.—Houston [1st Dist.] 1983, no writ). An applicant for a temporary injunction has the burden to establish all of the requirements for a temporary injunction. A trial court has broad discretion to determine whether the applicant met that burden. Hilb, Rogal & Hamilton Co. of Texas, 861 S.W.2d at 33. [The appellate court concludes] that, when viewed in the light most favorable to the trial court’s order, the evidence supports the trial court’s refusal to grant injunctive relief. Therefore, [the reviewing court ] concludes the trial court did not abuse its discretion by denying appellant’s application for a temporary injunction.

 SOURCE: Houston Court of Appeals - 14-10-00992-CV – 6/9/11
 
RELATED LEGAL TERMS: temporary injunction, restraining order, TRO, permanent injunction, injunctive relief

Injunctions as a Remedy: What elements must be satisfied?

PERMANENT INJUNCTIONS AS A FORM OF JUDICIAL RELIEF To obtain a permanent injunction, a plaintiff must prove (1) the existence of a wrongful act, (2) the existence of imminent harm, (3) the existence of irreparable injury, and (4) the absence of an adequate remedy at law. Jim Rutherford Investments Inc. v. Terramar Beach Community Ass'n., 25 S.W.3d 845, 849 (Tex. App.—Hous. [14 Dist.] 2000, pet. den’d). SOURCE: Waco Court of Appeals - 10-09-00276-CV - 5/11/11 TEMPORARY VS. PERMANENT INJUNCTIONS: Different rules apply Rule 683 does not apply to permanent injunctions In his final point of error, [ appellant ] argues that the trial court’s order granting permanent injunction is void because it fails to comply with the requirements of Rule 683 of the Texas Rules of Civil Procedure in that it “fails to set forth any reason for its issuance” and “fails to describe in reasonable detail . . . the act or acts sought to be restrained.” Rule 683 states that “[e]very order granting an injunction . . . shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail and not by reference to the complaint or other document, the act or acts sought to be restrained.” Tex. R. Civ. P. 683. The requirements of Rule 683 are mandatory and must be strictly followed. Qwest Commc’ns Corp. v. AT & T Corp., 24 S.W.3d 334, 337 (Tex. 2000) (per curiam); InterFirst Bank San Felipe, N.A. v. Paz Constr. Co., 715 S.W.2d 640, 641 (Tex. 1986) (per curiam); Monsanto Co. v. Davis, 25 S.W.3d 773, 788 (Tex. App.—Waco 2000, pet. dism’d w.o.j.). If an injunction order fails to comply with the requirements of Rule 683, it is void. Qwest Commc’ns Corp., 24 S.W.3d at 337; AutoNation, Inc. v. Hatfield, 186 S.W.3d 576, 581 (Tex. App.—Houston [14th Dist.] 2005, no pet.). However, it is well-established that Rule 683 applies only to temporary or ancillary injunctions and does not apply to permanent injunctions. Vaughn v. Drennon, 202 S.W.3d 308, 321 (Tex. App.—Tyler 2006, no pet.); Qaddura v. Indo-European Foods, Inc., 141 S.W.3d 882, 892 (Tex. App.—Dallas 2004, pet. denied); Shields v. State, 27 S.W.3d 267, 273 (Tex. App.—Austin 2000, no pet.); Spinuzzi v. Town of Corinth, 665 S.W.2d 530, 534 (Tex. App.—Fort Worth 1983, no writ). SOURCE: Texarkana Court of Appeals - No. 06-10-00113-CV - 5/26/11 ("Because the trial court granted a permanent injunction in this case, rather than a temporary injunction, Rule 683 does not apply. Accordingly, we overrule this point of error.")