Juan Alvarez Gottwald v. Rosa Delgado Dominguez De Cano, Mario Sergio Delgado Dominguez, Blanca Delgado De Urquidi, and Patricia Alvarez Ozuna

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
————————————

No. 08-23-00274-CV
————————————

Juan Alvarez Gottwald, Appellant
v.
Rosa Delgado Dominguez De Cano, Mario Sergio Delgado Dominguez,
Blanca Delgado De Urquidi, and Patricia Alvarez Ozuna, Appellees

On Appeal from the 171st District Court
El Paso County, Texas
Trial Court No. 2013DCV4096

DISSENTING OPINION
This case turns on whether, for purposes of res judicata, Alvarez individually was in privity

with Axiom in the Mexican suit. 1 I cannot agree with the majority opinion that such privity was

established “by [1] the parties’ trial stipulation, by [2] sufficient evidence of Alvarez’s control of

the Mexican suit [in his individual capacity], and by [3] sufficient evidence that Axiom represented

1
Privity is part of the second element of res judicata. See Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652
(Tex. 1996) (“[Res judicata] requires proof of the following elements: (1) a prior final judgment on the merits . . .; (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.”) (emphasis added).
Alvarez’s [individual] interests in that suit.”2 In my view, the record conclusively establishes the

opposite, i.e., that no such privity existed on any of these grounds. Because the parties’ stipulation

was expressly restricted to privity between Axiom and Alvarez in his corporate representative

capacity, because Alvarez controlled the litigation in his corporate representative capacity, and

because Axiom and Alvarez individually do not have an identity of shared interests, I would

conclude that Alvarez’s individual claims are not barred by res judicata. Moreover, the

consequences of the majority opinion’s conclusion are inconsistent with the purpose of res

judicata. For these reasons, I respectfully dissent.

I. THE PARTIES’ STIPULATION

In the trial court, the parties entered into a qualified stipulation that Alvarez was in privity

with Axiom in the Mexican suit in a representative capacity but not in an individual capacity:

The Delgados’ counsel: Mr. Alvarez is in privity with Axiom with respect to the
filing of the Mexican suit ‘cause he was not a party
individually in his individual capacity but he was as the
legal representative, sole administrator, and sole director
of Axiom in privity with Axiom in the first Mexican suit.

Alvarez’s counsel: Your Honor, we agree that there is privity. We reserve
the right to argue about the scope of the privity, but yes,
there is privity. 3

The trial court disregarded the stipulation’s qualified nature and instead treated it as

unconditional and absolute, concluding that “it is clear and stipulated on the record by the Parties

that Axiom and Juan Alvarez Gottwald are in uncontroverted privity.” But capacity matters. “A

party appearing in an action in one capacity, individual or representative, is not thereby bound by

2
“[P]eople can be in privity [if] . . . : (1) they can control an action . . .; (2) their interests can be represented by a party
. . .; or (3) they can be successors in interest[.]” Amstadt, 919 S.W.2d at 653. The successors element is not at issue
here.
3
Alvarez’s counsel later emphasized that “Axiom has no relationship as an entity with Mr. Alvarez’s personal harm
that he suffered as a result of this fraud.”

2
or entitled to the benefits of the rules of res judicata in a subsequent action in which he appears in

another capacity.” Restatement (Second) of Judgments § 36(2) (Am. Law Inst. 1982); see also

Gracia v. RC Cola–7–Up Bottling Co., 667 S.W.2d 517, 519 (Tex. 1984) (adopting § 36(2)). By

ignoring the capacity qualification at the heart of the parties’ stipulation, which was restricted to

privity in Alvarez’s representative capacity, the trial court construed it to extend to privity in his

individual capacity. Finding no fault with this approach, the majority opinion holds that “the trial

court did not err in relying on the parties’ trial stipulation on privity,” i.e., in concluding that

Alvarez’s individual claims were barred by res judicata.

Both sides stipulated that Alvarez was in privity with Axiom in the Mexican suit because

he appeared as its legal representative, administrator, and director, and not in his individual

capacity. Stipulations are conclusive as to the facts stipulated. Perry v. Brooks, 808 S.W.2d 227,

229 (Tex. App.—Houston [14th Dist.] 1991, no writ). As courts, our duty to enforce such a

stipulation is purely ministerial. Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d

882, 887–88 (Tex. 2019). Accordingly, neither this Court nor the trial court had discretion to

disregard the parties’ stipulation in whole or part.

Beyond the parties’ binding stipulation, I disagree with the majority opinion’s analysis

concluding that legally sufficient evidence showed that Alvarez controlled the Mexican suit in his

individual capacity and that his individual interests were represented in that suit. 4

II. CONTROL

In terms of control, noting that “privity may exist when a person controls an action,” citing

Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 653 (Tex. 1996), the majority opinion cites the

following testimony as evidence that Alvarez individually controlled the Mexican suit:

4
I do not address other issues raised by the Delgados, e.g., the reporter’s record’s omission of certain exhibits, which
Alvarez argues are either clearly irrelevant or included elsewhere in the appellate record.

3
Counsel: It was you, as the sole administrator of Axiom, that filed suit against
the Delgados, wasn’t it?
Alvarez: I am the sole administrator of Axiom, but--but I did it through an
attorney.
Counsel: Correct. You didn’t represent Axiom, but you were the representative
of Axiom.
Alvarez: I was the representative of Axiom, yes.
Counsel: So you were directly involved in the Mexican suit?
Alvarez: Well, only that I signed the lawsuit, yes.
Counsel: Yes, sir. And Axiom filed the Mexican suit at your direction ‘cause
you are the sole director of Axiom, correct?
Alvarez: They--they did sue at my direction, yes.
Counsel: And when we say that you’re the sole director, I think the exact
wording in the Mexican suit is that you sued in the capacity of sole
administrator. Do you recall that?
Alvarez: Yes. That’s my only title in the company--sole administrator.
Counsel: Does that mean that you’re the sole owner of Axiom?
Alvarez: No. I’m the administrator--the sole administrator.
Counsel: But you direct all the corporate activities of Axiom?
Alvarez: Yes. Well, yeah. Yes, I do.
Counsel: And in this lawsuit, you’re being referred to as a sole director . . . As
the sole director, that means there’s no other board of directors?
Alvarez: There’s no board of directors.
However, none of this testimony is probative of whether Alvarez individually was in

privity with Axiom; to the contrary, this testimony substantiates that Alvarez acted in the Mexican

suit in a representative capacity, i.e., on Axiom’s behalf as its “administrator,” “representative,”

and “director.”

The majority opinion acknowledges that “the capacity in which parties appear is relevant

in a privity analysis” but maintains that “the analysis focuses on the shared interests,” and here

“Axiom (or Alvarez in his representative capacity), appeared on behalf of interests that included

Alvarez’s individual interests.” But whether a party’s interests were represented in a suit (see

4
analysis below) is a different consideration from whether the party controlled the suit.

The majority opinion further notes that “Alvarez, without answering to any fellow

directors, exercised more than mere participation in the Mexican suit and had more than mere

knowledge of the Mexican suit—it was initiated at his direction.” (emphasis in original). However,

the opinion cites no evidence that Alvarez initiated the Mexican suit—or took any other action in

that suit—in his individual rather than in a representative capacity. See McNeil Interests, Inc. v.

Quisenberry, 407 S.W.3d 381, 389–90 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (“If

Quisenberry, as a fifty-percent owner and the registered agent for service of process, had hired an

attorney for PHH and served as its corporate representative at trial, all of these actions would

necessarily be in Quisenberry’s representative capacity.”) (emphasis added).

While the majority opinion cites no case in which a party was barred by res judicata as a

result of having exercised control over an earlier suit in which the party appeared in a different

capacity, it does discuss McGowen v. Huang, 120 S.W.3d 452 (Tex. App.—Texarkana 2003, pet.

denied), a case which went the other way. There, the Texarkana Court of Appeals held that a

guardian who had appeared in an individual capacity in a prior case was not barred by res judicata.

Id. at 463. According to the majority opinion, McGowen is distinguishable because “[a] guardian’s

powers . . . are not plenary, but are restricted by duties owed to the ward and the necessity to obtain

court approval for most actions,” whereas the powers exercised here by Alvarez were not similarly

limited, given that he was “the sole administrator of Axiom and thereby, does not answer to a

board of directors,” and “directs all corporate activities of Axiom.”

However, a corporative representative’s powers are no more plenary than a guardian’s, and

such a representative is similarly restricted by duties owed to the entity represented, creating a

clear legal separation between the individual’s two different capacities. Matter of Estate of Poe,

648 S.W.3d 277, 286–87 (Tex. 2022) (internal citations omitted) (“[T]he . . . affairs of a

5
corporation are managed through a board of directors. Directors owe a fiduciary duty to their

corporations . . . . A director’s fiduciary status creates three broad duties: duties of obedience,

loyalty, and due care. These fiduciary duties run to the corporation, not to individual

shareholders.”); id. at 287 (“[A] director’s fiduciary duty includes a duty to dedicate ‘uncorrupted

business judgment for the sole benefit of the corporation.’”) (citing Ritchie v. Rupe, 443 S.W.3d

856, 868 (Tex. 2014)); see also Flying Diamond-W. Madisonville L.P. v. GW Petroleum, Inc., No.

10-07-00281-CV, 2009 WL 2707405, at *6 (Tex. App.—Waco Aug. 26, 2009, no pet.) (mem. op.)

(“The sole argument advanced . . . against the application of res judicata . . . is that the prior

litigation by Levine in his individual capacity did not bar him filing suit on behalf of the

Madisonville Partnership in a derivative capacity as a limited partner.”; “The fact that Levine was

involved in both suits in different capacities is not sufficient to bar a claim by res judicata.”).

Notably, the majority opinion does not suggest that the legal separation between Axiom as

a corporate entity and Alvarez individually was vitiated by anything Alvarez did or did not do in

relation to the Mexican suit. Rather, the opinion focuses on Alvarez’s pre-suit conduct, noting that

he “paid $2,189,000 from Axiom’s account to secure his personal release,” i.e., he “decided, and

was able, to pay the large, disputed amount by cashier’s check drawn on Axiom’s account.”

According to the opinion, “[t]his conduct demonstrates Alvarez’s control and unfettered access to

substantial corporate funds as sole director and without accountability to a board, and for the sole

benefit of his individual release.” However, Alvarez’s ability to control Axiom’s funds does not

warrant disregarding the legal separation between them. Penhollow Custom Homes v. Kim, 320

S.W.3d 366, 373 (Tex. App.—El Paso 2010, no pet.) (“[M]ere control and ownership of all the

stock of a corporation is not a sufficient basis for ignoring the corporate fiction.”); see also id. at

372 (“An individual’s standing as an officer, director, or majority shareholder of an entity in and

of itself is insufficient to support a finding of alter ego.”) Further, payment of the $2,188,759.68

6
was not “for the sole benefit of [Alvarez’s] individual release,” as this payment also resolved the

underlying real property dispute between Axiom and the Delgados, giving Axiom ownership of

the property, which it later developed. The fact that Alvarez benefited individually from Axiom’s

payment to the Delgados is not evidence that he acted outside his representative capacity at that

point, and certainly is not evidence that he individually controlled the subsequent Mexican suit.

Because neither the majority opinion nor the Delgados point to any evidence that Alvarez acted

individually or on his own behalf in the Mexican suit, I cannot agree with the majority opinion’s

conclusion that he did so. 5

III. IDENTITY OF SHARED INTERESTS

Finally, noting that parties can be in privity if “their interests can be represented by a party

to the action,” the majority opinion cites evidence that both lawsuits arose “from the same ‘nucleus

of operative facts’ and the same transactions.” However, the same-nucleus-of-operative-facts

standard pertains to res judicata’s fourth element under federal law (“the same cause of action is

involved in both cases” 6), which corresponds to the doctrine’s third element under Texas law

(whether “the same claims . . . were raised or could have been raised in the first action” 7). See

5
In support of its conclusion that Alvarez, individually “actively and openly participated in the prior proceedings to
such an extent that it was clear that [he] had the right to direct them,” the majority opinion cites Maxson v. Travis
Cnty. Rent Account, 21 S.W.3d 311, 316 (Tex. App.—Austin 1999, pet. dism’d) and Dairyland Cnty. Mut. Ins. Co. v.
Est. of Basnight, 557 S.W.2d 597, 602 (Tex. App.—Waco 1977, writ refused n.r.e.). However, in Maxson, privity was
held not to exist because the parties in question merely participated as witnesses in the prior proceeding, and in
Dairyland the party in question was barred only in the specific capacity in which he appeared in the prior proceeding.
See Maxson, 21 S.W.3d at 316 (“Although the record indicates that Plaintiffs were aware of the 1988 suit and, in some
instances, participated as witnesses, these facts alone cannot establish privity under a control-of-litigation theory.”);
Dairyland, 557 S.W.2d at 602 (“Although the judgment did not recite that it was against ‘Herbin T. Molbert,
Administrator . . . ,’ nevertheless said judgment was binding upon him as such by virtue of his active participation[.]
Since the judgment was binding on him as Administrator, it was not void and not subject to collateral attack.”)
(emphasis added).
6
See Cervantes v. El Paso Healthcare Sys., Ltd., 645 S.W.3d 843, 847 (Tex. App.—El Paso 2022, no pet.) (“Under
federal law, the doctrine of res judicata will apply if: (1) the parties are identical in both suits; (2) the prior judgment
is 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.”) (citing Eagle Props., Ltd. v. Scharbauer, 807 S.W.2d 714, 718 (Tex. 1990)).
7
See Amstadt, 919 S.W.2d at 652 (“[Res judicata] requires proof of . . .: (1) a prior final judgment on the merits . . .;
(2) identity of parties or those in privity with them; and (3) a second action based on the same claims as were raised

7
Cervantes v. El Paso Healthcare Sys., Ltd., 645 S.W.3d 843, 847–48 (Tex. App.—El Paso 2022,

no pet.) (“In determining whether two lawsuits involve the same claim or cause of action, federal

courts utilize what is known as the transactional test,” under which “[t]he critical question is

whether the plaintiff bases the two actions on the ‘same nucleus of operative facts.’”) (citing Test

Masters Educational Services, Inc., v. Singh, 428 F.3d 559, 571 (5th Cir. 2005)).

Under both federal and Texas res judicata law, privity is part of a different element separate

and apart from the same-claims element. 8 Further, while in evaluating privity, we examine “the

interests the parties shared,” Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 653 (Tex. 1996),

privity is not established by the mere fact that the parties may be interested in the same question

or in proving the same facts, Rosenberger v. LeMaster, 678 S.W.3d 549, 560 (Tex. App.—Houston

[14th Dist.] 2023, no pet.). Rather, the parties must “share an identity of interests in the basic legal

right that is the subject of litigation.” Amstadt, 919 S.W.2d at 653 (emphasis added). Thus, where

the parties’ interests are overlapping, no privity exists if the party in the second suit has an interest

that is “separate and apart” from those of the party in the first suit. See Fincher v. Wright, 141

S.W.3d 255, 261 (Tex. App.—Fort Worth 2004, no pet.) (holding that while attorney and client

had mutual interests, “[b]ecause [attorney] Holloway [also] had an interest . . . separate and apart

from his client’s, . . . [they] were not in privity”).

Here, the majority opinion points to evidence of overlapping interests, i.e., that “Axiom

sought the return of $2,189,000.00 in the Mexican lawsuit, and Alvarez, in his individual capacity,

and Axiom, sought the very same amount in the [Texas] trial court.” But the crucial question is

whether, in the Mexican suit, Axiom (or Alvarez on its behalf) represented or could have

or could have been raised in the first action.”).
8
See footnote 4 (first versus fourth element under federal law) and footnote 5 (second versus third element under
Texas law) above.

8
represented Alvarez’s non-overlapping individual interests, i.e., those reflected in his claims for

intentional infliction of emotional distress and abuse of process, as well as conspiracy to commit

the same. The Delgados point to no evidence that Axiom or Alvarez as its director represented or

could have represented such interests in the Mexican suit. Nor does the majority opinion. As a

result, I cannot agree that privity is supported by evidence that Axiom represented Alvarez’s

individual interests in the Mexican litigation.

IV. PURPOSE OF RES JUDICATA

Res judicata aims to “bring an end to litigation, prevent vexatious litigation, maintain

stability of court decisions, promote judicial economy, and prevent double recovery.” Citizens Ins.

Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007). But it does not exist to bar claims

brought by a party acting in a different capacity than in an earlier suit where there is no evidence

of control or a singular identity of shared interests across the two capacities, as the majority opinion

holds today. See Restatement (Second) of Judgments § 36(2) (Am. Law Inst. 1982) (a party

appearing in different capacities in different actions “is not [] bound by or entitled to the benefits

of the rules of res judicata”); Gracia, 667 S.W.2d at 519 (adopting § 36(2)); see also Fincher, 141

S.W.3d at 261 (no privity exists if the party in the second suit has an interest that is “separate and

apart” from those of the party in the first suit).

Further, by concluding that Alvarez individually was in privity with Axiom in the Mexican

suit because the two suits involved “the same nucleus of operative facts,” the opinion effectively

eliminates the second element of res judicata, i.e., identity of the same parties or those in privity

with them.

Eliminating the privity element will either prevent parties from later bringing legitimate

claims or encourage the expansion of litigation by forcing all persons who may have a claim related

to the basic facts of any given suit to join that suit and bring all possible claims to avoid later being

9
barred by res judicata. While not every “nucleus of operative facts” gives rise to potential claims

by multiple claimants who are strangers to each other, some do, and some give rise to a great many

such claimants. I cannot join the majority opinion’s approach to res judicata, under which

claimants may find themselves unexpectedly and unfairly barred, and ultimately large and

unwieldly lawsuits may result from joinder by unnecessary parties seeking to avoid being barred.

V. CONCLUSION

I respectfully dissent from the majority opinion’s affirmance of the trial court’s dismissal

of Alvarez’s suit based on res judicata.

LISA J. SOTO, Justice

September 30, 2025
Before Salas Mendoza, C.J., Palafox and Soto, JJ.
Soto, J., dissenting

10