In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-20-00226-CV
___________________________
BETTY C. BRITTON, Appellant
V.
KENNETH K. LAUGHLIN, Appellee
On Appeal from the 355th District Court
Hood County, Texas
Trial Court No. C2020069
Before Sudderth, C.J.; Birdwell and Walker, JJ.
Memorandum Opinion on Rehearing by Justice Birdwell
MEMORANDUM OPINION ON REHEARING
I. Introduction
In October 2014, Appellant Betty C. Britton agreed to sell some land to
Appellee Kenneth K. Laughlin in a contract for deed. Four years later, she sued
Laughlin on the contract, and the trial court entered a take-nothing judgment against
her and awarded damages and attorney’s fees to Laughlin. Britton’s appeal in that
case is pending before the Fourteenth Court of Appeals in Houston (No. 14-20-
00299-CV).1
In April 2020, relying on the same contract, Britton again sued Laughlin, who
raised res judicata as an affirmative defense. In a single issue, Britton argues that the
trial court erred by granting summary judgment on the affirmative defense. We
initially affirmed in part and vacated in part because Laughlin paid part of what he
owed under the parties’ contract during the pendency of the appeal. See Britton v.
Laughlin, No. 02-20-00226-CV, 2021 WL 3931981, at *3 (Tex. App.—Fort Worth
Sept. 2, 2021, no pet. h.) (mem. op.).
In her motion for rehearing of our September 2, 2021 memorandum opinion,
Britton complains that because Laughlin “finally paid what the lawsuit forced him to
pay” during the pendency of the appeal, which resulted in mooting a portion of her
appeal, she should no longer be held responsible for paying “attorney’s fees that may
1
See Supreme Court of Tex., Transfer of Cases from Courts of Appeals, Misc. Docket
No. 20-9048 (Mar. 31, 2020).
2
total $84,721.50.” We agree, withdraw our September 2, 2021 opinion and judgment,
and substitute in its place this memorandum opinion and our contemporaneously
issued judgment in which we affirm in part, vacate in part, and reverse in part the trial
court’s judgment and remand the attorney’s-fee issue to the trial court.
II. Discussion
We review a summary judgment de novo. Travelers Ins. v. Joachim, 315 S.W.3d
860, 862 (Tex. 2010). A defendant is entitled to summary judgment on the affirmative
defense of res judicata if he conclusively proves all elements of that defense: (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. Eagle Oil & Gas Co. v.
TRO-X, L.P., 619 S.W.3d 699, 705–06 (Tex. 2021); see Tex. R. Civ. P. 166a(b), (c);
Chau v. Riddle, 254 S.W.3d 453, 455 (Tex. 2008) (op. on reh’g).
A. The parties’ contract for deed
The parties’ contract for deed set out payment terms as follows:
(1) Pay monthly payments on Seller’s Bank of America note . . . with the
approximate balance of $115,000 for the real property that is a part
of this Contract for Deed (“Contract”). This loan payment is subject
to annual review, and the payment may increase according to the
terms of original note.
(2) Pay any accrued interest monthly at the rate of (10%) ten per cent
($500.00—interest on $60,000.00) shall be paid at the place as Seller
may direct, beginning on November 1, 2014 and continuing on the
same day of each following month until the $60,000 principal has
been paid in full. Purchaser may pay amounts toward the reduction
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of principal in addition to interest payments. Interest for each month
shall be calculated on the principal balance owed.
(3) Purchaser agrees to pay all amounts listed above in full on or before
the maturity date, unless otherwise extended by written agreement of
the Seller.
B. Britton’s first lawsuit
In her November 2018 lawsuit, Britton complained of Laughlin’s having
“defaulted under the contract, failing to make the payments to [her]” as required by
the contract’s second payment term, referenced as “the balloon payment.” In
February 2020, after a bench trial, the trial court entered a take-nothing judgment as
to Britton and awarded damages to Laughlin on his counterclaim against her.
C. Britton’s second lawsuit
In her April 2020 lawsuit, Britton alleged that Laughlin had defaulted under the
contract by “failing to make the payments to [her] and to the lender” as required by
both the contract’s first and second payment terms.
Laughlin answered with a general denial and the affirmative defense of
res judicata based on the February 2020 judgment, and he moved for summary
judgment on the affirmative defense. To his motion, he attached the parties’ contract,
Britton’s petitions in both cases, and the February 2020 judgment. Britton responded
with argument but no summary judgment evidence, and the trial court granted the
motion after a hearing.
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D. Laughlin’s motion to dismiss
During this appeal’s pendency, Laughlin’s counsel filed a motion to dismiss,
arguing that the appeal had become moot after Laughlin paid the Bank of America
debt in full. He attached an affidavit and evidence showing the Bank of America
debt’s payment in full and his correspondence with Britton’s counsel. See Tex. R.
App. P. 10.2. Laughlin’s counsel stated, “Having satisfied Payment Term 1, there is
nothing left for Britton to gain from this case or appeal. Laughlin’s payment gave her
all the relief she requested. The Bank of America note has been discharged, and she is
no longer the debtor.” We denied the dismissal motion.
E. Analysis
In her single issue, Britton argues that the trial court erred by entering summary
judgment for Laughlin based on res judicata of the $60,000 balloon payment when her
second petition alleged a failure to pay the Bank of America note.
There is no dispute that the parties are the same in both lawsuits.2 See Eagle Oil
& Gas Co., 619 S.W.3d at 705–06. In the first lawsuit, Britton sued Laughlin after he
failed to pay the $60,000 balloon payment. A valid judgment that was final for res
judicata purposes 3 resolved that claim. Thus, the trial court did not err when it
2
In her motion to consolidate this appeal with the one in our sister court,
Britton acknowledged that both cases involved the same parties and contract. We
denied the motion to consolidate.
3
“[A] trial court’s judgment is final for purposes of res judicata or collateral
estoppel even while the case is on appeal.” Gonzalez v. Guilbot, 315 S.W.3d 533, 536
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granted Laughlin’s summary judgment motion on that claim, which Britton raised in
both lawsuits. To the extent Britton raised this in her sole issue, we overrule it.
In the second lawsuit, Britton also complained that Laughlin had failed to make
the Bank of America payments. Regardless of this claim’s res judicata status, during
the pendency of this appeal, it became moot upon Laughlin’s payment of that debt.
Accordingly, a justiciable controversy no longer exists between the parties on this
claim. See Glassdoor, Inc. v. Andra Grp., LP, 575 S.W.3d 523, 527 (Tex. 2019). We
overrule the remainder of Britton’s sole issue as moot.
F. Attorney’s Fees
To his motion for summary judgment, Laughlin attached the parties’ contract,
which contains the following attorney’s-fees provision:
If either party retains an attorney to enforce this Contract, the prevailing
party is entitled to recover reasonable attorney’s fees and court costs and
other expenses. The term ‘prevailing party’ means the party that has
succeeded on a significant issue in the litigation and achieved a benefit
with respect to the claims at issue, taken as a whole, whether or not
damages are actually awarded to such party.
n.3 (Tex. 2010); see Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex. 1986) (op. on
reh’g) (adopting general rule that judgment is final for res judicata purposes despite
appeal); see also Tex. Beef Cattle Co. v. Green, 921 S.W.2d 203, 207 (Tex. 1996) (op. on
reh’g) (explaining reason for Scurlock rule’s adoption “was the nonsensical alternative
of retrying the same issues between the same parties in subsequent proceedings with the
possibility of inconsistent results”). In Texas Beef Cattle Co., the court explained that
the Scurlock rule “merely binds the parties . . . to the original judgment and promotes
judicial economy by forcing a losing party to follow the ordinary appeals process[]
rather than relitigating the adverse fact findings in a new lawsuit.” 921 S.W.2d at 208.
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The trial court’s judgment ordered that Britton take nothing and awarded to
Laughlin $12,921.504 in “[r]easonable and necessary attorney’s fees . . . for defending
this case through this judgment,” court costs, post-judgment interest, and the
following additional conditional attorney’s fees:
• $6,000 if Laughlin prevailed in any post-judgment motions in the trial court, along
with post-judgment interest on that award;
• $15,000 if Laughlin had to apply for any writs or engage in other collection efforts,
along with post-judgment interest on that award;
• $19,500 if Laughlin prevailed on an appeal to the intermediate court of appeals,
along with post-judgment interest on that award;
• $37,000 if Laughlin prevailed on an appeal to the supreme court, along with post-
judgment interest on that award.
Britton complains in her motion for rehearing that she might end up owing
$84,721.50 in attorney’s fees “for filing a suit that ultimately resulted in the payment
of a debt [she] alleged was not being made.”
Laughlin responded to Britton’s motion by arguing that she had failed to
preserve the attorney’s-fee issue because she did not directly challenge it in her
opening brief and that the fact that he paid the Bank of America debt during the
4
Laughlin’s attorney attached an affidavit for attorney’s fees through summary
judgment of $7,950 and estimated that Laughlin would incur an additional $4,575 in
attorney’s fees, for a total of $12,525, not the $12,921.50 awarded in the trial court’s
judgment.
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pendency of the appeal “[did] not render the trial court’s judgment in favor of
Laughlin on his res judicata defense erroneous.”
While we agree that Britton did not expressly challenge the attorney’s-fee award
in her opening brief, in her prayer for relief, she asked for “the case [to] be reversed
and remanded for retrial.” Because the supreme court has instructed us to “liberally
construe issues presented to obtain a just, fair, and equitable adjudication of the rights
of the litigants,” Kachina Pipeline Co. v. Lillis, 471 S.W.3d 445, 455 (Tex. 2015) (op. on
reh’g), and because Laughlin paid off the Bank of America debt during the pendency
of the appeal to remove Britton’s arguable issue, we think the attorney’s-fee issue on
rehearing is fairly before us. The trial court should reconsider the appropriate amount
of attorney’s fees now due under the parties’ contract. See id. (“Kachina may be
correct that there remain grounds on which a trial court may award fees. But because
we decide Kachina did not prevail on two of the primary issues in dispute, we remand
the issue to determine the appropriate award of costs and fees.”); see also Carowest
Land, Ltd. v. City of New Braunfels, 615 S.W.3d 156, 157–59 (Tex. 2020) (op. on reh’g).5
5
The supreme court recently remanded a case in the interest of justice when an
intermediate court of appeals essentially pulled the rug out from under the appellant
in its conflicting resolution of interlocutory and final-order appeals. Carowest, 615
S.W.3d at 157–59. During the interlocutory appeal, the intermediate court held that
the plaintiff’s claims were not barred by governmental immunity, but in a final
judgment after a jury trial (and some intervening case law), it held that the claims were
barred by governmental immunity after all. Id. We think paying a disputed debt
during the pendency of an appeal to remove the arguable issue and leave an appellant
on the hook for attorney’s fees (and thus manipulate the intermediate appellate court
into preserving the attorney’s-fee award) may be Carowest’s functional equivalent.
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III. Conclusion
We vacate the portion of the trial court’s judgment that applies to Britton’s
now-moot Bank of America claim, affirm the portion of the judgment pertaining to
res judicata, reverse the attorney’s-fee award, and remand the case to the trial court for
a redetermination of a reasonable and appropriate amount of attorney’s fees and costs
in light of the mooted Bank of America claim and in the interest of justice. See Tex.
R. App. P. 43.6 (stating that “[t]he court of appeals may make any other appropriate
order that the law and the nature of the case require”).
/s/ Wade Birdwell
Wade Birdwell
Justice
Delivered: November 10, 2021
9