IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 96-50303
Summary Calendar
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MARSHALL CONTRACTORS, INC.,
Plaintiff-Appellant,
VERSUS
INTEGRATED GAS SYSTEMS, INC.;
RON WEST; SCOTT SOLGERE; WILLIAM “SPUD” O’NEAL;
ROD GOERGEN; and RANDOLPH GASQUE,
Defendants-Appellees.
_________________________
Appeal from the United States District Court
for the Western District of Texas
(A-95-CV-177)
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December 11, 1996
Before SMITH, DUHÉ, and BARKSDALE, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
Marshall Contractors, Inc. (“Marshall”), appeals a summary
judgment in favor of Integrated Gas Systems, Inc. (“IGS”), Ron
West, Scott Solgere, William “Spud” O’Neal, Rod Goergen, and
Randolph Gasque (collectively, the “Named Defendants”). Finding no
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited circumstances
set forth in 5TH CIR. R. 47.5.4.
error, we affirm.
I.
This action arises out of a subcontract between Marshall and
IGS, pursuant to a $6.8 million construction contract between
Marshall, as general contractor, and the University of Texas.
After it ceased performing under the subcontract and abandoned the
construction project, IGS filed an action against Marshall for
breach of contract (the “Original Action”). Marshall counter-
claimed in the Original Action, alleging that IGS breached its
obligations under the contract by, among other things, falsely
indicating that it had completed certain subprojects and had paid
various subcontractors accordingly, based upon which representa-
tions Marshall paid monies to IGS.
Nearly fourteen months after the Original Action had been
filed, Marshall sought to amend its counterclaim to add the Named
Defendants in their individual capacities and to add fraud claims
arising out of the same operative facts. The district court denied
this motion, and Marshall filed the instant action (the “Instant
Action”) separately alleging the fraud claims excluded from the
counterclaim. The district court stayed the Instant Action pending
resolution of the Original Action.
A jury found in favor of Marshall in the Original Action but
awarded Marshall no damages for breach of contract. After a final
judgment had been entered in the Original Action, IGS filed a
2
motion for summary judgment alleging that the Instant Action was
barred by res judicata. The district court granted the motion.
II.
Marshall objects to the summary judgment.2 The district court
found that the issues presented in the Instant Action involved the
same claims and causes of action as those litigated previously in
the Original Action and thus held that claim preclusion prevented
Marshall from bringing the instant action.
We review a grant of summary judgment de novo. See Hanks v.
Transcontinental Gas Pipe Line Corp., 953 F.2d 996, 997 (5th Cir.
1992). Summary judgment is appropriate “if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” FED. R. CIV. P. 56(c).
Claim preclusion insures the finality of judgments, thereby
conserving judicial resources and protecting litigants from
multiple lawsuits. See United States v. Shanbaum, 10 F.3d 305, 310
(5th Cir. 1994). Claim preclusion is available only where (1) the
parties in the subsequent action are identical (or in privity with)
parties in the prior action; (2) the judgment in the prior action
2
Because of the confusion inherent in res judicata as applied to claims
versus res judicata as applied to issues, we use the term “claim preclusion”
throughout this opinion to refer to the former.
3
was rendered by a court of competent jurisdiction; (3) the prior
action concluded with a final judgment on the merits; and (4) the
same claim or cause of action was involved in the both actions.
See Eubanks v. FDIC, 977 F.2d 166, 169 (5th Cir. 1992). If each of
the four conditions is satisfied, the movant may invoke claim
preclusion to prevent the affected party “from raising any claim or
defense in the later action that was or could have been raised in
support of or in opposition to the cause of action supported in the
prior action.” See Shanbaum, 10 F.3d at 310.
Because the fourth element only is contested, we must
determine whether Marshall’s Instant Action involves the same
claims or causes of action present in the Original Action.3
According to Marshall, the focus of the Instant Action “goes beyond
whether IGS breached the contract . . . . This case is about how
IGS and the individual defendants induced Marshall (and the
University of Texas) to release project funds to IGS by knowingly
and intentionally misrepresenting material facts regarding the
completion of the project and the status of vendor payables.”
Thus, Marshall posits that because it sounds primarily in tort,
instead of in contract (as did the Original Action), the Instant
3
Marshall contends for the first time on appeal that the first
conditionSSidentical partiesSS is not satisfied because in the instant action it
is suing individual employees of IGS for their allegedly fraudulent behavior,
whereas in the first action Marshall sued IGS in its corporate capacity for beach
of contract. Because the “identical parties” prong requires only that the
parties be in privity with one another, the element is satisfied. See Shanbaum,
10 F.3d at 310.
4
Action is wholly separate and distinct from the former.
“Two lawsuits, however, involve 'different causes of action'
for res judicata purposes when the theories of recovery, the
operative facts, and the measure of recovery differ.” Schmueser v.
Burkburnett Bank, 937 F.2d 1025, 1031 (5th Cir. 1991) (citation
omitted).4 A final judgment on an action extinguishes the right to
bring suit on the transaction, or series of connected transactions,
out of which the action arose. See Barr v. Resolution Trust Corp.,
837 S.W.2d 627 (Tex. 1992) (adopting the transactional approach to
claim preclusion).
It is undisputed that the fraud claims that Marshall alleges
in the Instant Action arise out of the same transactionSSnamely,
the subcontract between Marshall and IGS for the University of
Texas construction projectSSas did the breach of contract claims in
the Original Action. Furthermore, Marshall admits in its reply
brief that the very fraudulent actions that Marshall alleges in the
Instant ActionSSnamely, that IGS and certain Named Defendants
induced Marshall to release project funds to IGS by misrepresenting
that work had been completed and that subcontractors had been paid
accordinglySSwere the subject, in part, of the Original Action.
Whether the duties allegedly owed to Marshall by IGS and the named
defendants and allegedly breached in the instant torts action are
4
Marshall interprets Schmueser incorrectly to hold that a separate theory
of recovery alone is sufficient to avoid claim preclusion. The conjunctive “and”
in the quoted sentence indicates otherwise; all three elements must be present
to give rise to a different cause of action. See Schmueser, 937 F.2d at 1031.
5
legally independent of those imposed by contract is immaterial; the
causes of action arise out of the same transaction and the same
operative facts and thus are res judicata.5
Ultimately, Marshall’s Instant Action is characterized more
properly as an attempt to revisit the denial of its motion to amend
its complaint (some fourteen months after filing the original
complaint) to add the instant claims in the Original Action: “The
case management of this action has denied Marshall its day in
court. Marshall originally tried to amend its pleadings to add the
present claims and parties as counterclaims in the Original Lawsuit
but was denied.” We refuse to upset a final judgment and to expose
IGS to further legal actions when Marshall could have so had its
day in court by exercising a modicum of due diligence in preparing
its original complaint or, if necessary, by appealing the denial of
its motion to amend.
AFFIRMED.
5
Marshall does raise, however, one wholly separate claim not litigated in
the first actionSSthat IGS converted Marshall’s property, which was intended to
be used on the construction project, and used such property on one or more of
IGS’s other projects. Although not identical to the previously litigated issues,
this claim is similarly barred by claim preclusion because it arises out of the
same operative facts as the other claims litigated in the first action.
6