Drago Daic, Trustee v. Nauru Phosphate Royalties (texas), Inc.

STOVER, Justice,

dissenting.

I respectfully dissent. The instant suit seeks, inter alia, to enforce payment on a note. The parties to the note, who are also parties in this suit, are the maker, Nauru, and the payees, Montgomery 666 (“M-666”) and Drago Daic, Trustee. DDI, the respondent in the arbitration proceeding, is neither a party to this suit nor to the note.

Nauru’s arbitration demand and complaint were instituted against DDL The plaintiffs in the instant suit, M-666 and Drago Daic, Trustee, were not made parties to the arbitration proceeding. Although the record of the arbitration proceeding contains references to the promissory note, the essence of Nauru’s complaint at arbitration was that DDI breached the development agreement between Nauru and DDI.

Nauru’s position is that even though M-666 and Drago Daic, Trustee, were not parties in the arbitration proceeding, the arbitration award nonetheless is res judi-*703cata as to their claims; being in privity with DDI, they are collaterally estopped from suing now on those issues. I do not find the record bears that out. The fact that Drago Daic is the sole shareholder in DDI, that he is the trustee of the 3-D Trust, that there is intertwining ownership of various corporations connected with Drago Daic, does not, without more, mean that he acted in his individual capacity in his dealings with those entities. I do not find such statements, or evidence to that effect in the record, to be sufficiently conclusive to establish that Drago Daic, individually, controlled M-666 or Drago Daic, Trustee, or that the interests of Drago Daic, individually, were the same as M-666, DDI, and Drago Daic, Trustee. As a result, I would hold that Nauru has not met its summary judgment burden and has not established as a matter of law its affirmative defenses of res judicata and collateral estoppel.

Furthermore, I would note, as did Judge Ross Sears in his amended dissent to the arbitration award, that the failure to make M-666 and Drago Daic, Trustee, parties to the arbitration process and the attempt now to bind them to the results of an arbitration proceeding in which they were not parties smacks of the denial of due process and thereby abridges a fundamental constitutional right. See U.S. Const, amend. XIV, § 1; Tex. Const, art. I, § 19. It is apparent, at least to me, that fair play, being the test of due process, is lacking in this case.

Respectfully, I dissent.