Can You Sue Tort Claim As a Contract Claim ?
The Texas Supreme Court has recently indicated that res judicata applies to prevent a party from repackaging a tort claim as a contract claim when both are based on the same underlying conduct. Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 42 Tex. Sup. J. 1140 (1999) (Supplemental Opinion on Motion for Rehearing).
In that case, the plaintiff originally filed a lawsuit for products liability, gross negligence, and the Texas Deceptive Trade Practices Act (DTPA) violations in connection with construction work by a subcontractor.
After losing that action based on an indemnity provision of the construction contract, the plaintiff attempted a second action to recover on a contract theory. See Id.; Valero Energy Corp. v. M.W. Kellogg Constr. Co., 866 S.W.2d 252, 254 (Tex. App.--Corpus Christi 1993, writ denied).
In a related area, when the insured sues his insurer for failure to deal in good faith in the payment of a claim for underinsured motorist coverage, the court have held that the settlement of a prior contract action against the insurer for the same claim precludes the subsequent action for bad faith. Henry, 895 S.W.2d at 812-13. In addition, most other jurisdictions that use the "transactional approach" have held that the facts underlying a claim for breach of an insurance contract and a bad faith claim against the insurer are sufficiently related for purposes of res judicata. See Porn v. National Grange Mutual Ins. Co., 93 F.3d 31, 35 n.3 (1st Cir. 1996). While one is based on contract and the other sounds in tort, both claims arise out of the same general factual context involving an accident and claim for compensation under the policy. See Porn, 93 F.3d at 34-37.