Amberson v. McAllen

Case Type:
Case Status:
No. 22-50788 (5th Circuit, Jul 12,2023) Published
The Fifth Circuit affirmed the bankruptcy court and district court's (W.D. Tex) ruling that a "disclaimer" contained in an arbitration award did not inhibit the award's preclusive effect based on the doctrine of collateral estoppel.
Procedural context:
Appellee commenced an adversary proceeding under 11 U.S.C. § 523(a), seeking a ruling that the Appellant could not seek to discharge an arbitration award based on the doctrine of collateral estoppel. The bankruptcy court granted summary judgment with respect to the Appellee's claim, and the district court affirmed. The Appellant timely appealed.
Appellee won a multi-million-dollar arbitration award against his former attorney and son-in-law, Appellant. Soon thereafter, Appellant filed for bankruptcy and sought to discharge the amounts awarded against him. Appellee initiated an adversary proceeding against Appellant under 11 U.S.C. § 523(a) and moved for summary judgment, arguing that the award has a preclusive effect under the doctrine of collateral estoppel. The bankruptcy court granted summary judgment for the Appellant and the district court affirmed. The Appellee challenged the district court’s ruling, arguing that a “disclaimer” within the award made collateral estoppel inappropriate. The “disclaimer” stated that the “reasoned Award” was “not in the form of formal Findings of Fact and Conclusions of Law as entered by a court.” But the “disclaimer” also stated that the arbitrator had entered this “reasoned Award” based on a consideration of “all the arguments, claims, and defenses asserted by both sides” and the credibility of the witnesses. The Appellee argued that this “disclaimer” amounted to instruction to future tribunals to not give collateral estoppel effect to the award. The Fifth Circuit disagreed. First, the Fifth Circuit found that the so-called “disclaimer” was included because the parties had requested a reasoned award. Second, the Court held that nothing in the “disclaimer” suggested that the arbitrator doubted his findings but instead showed that the arbitrator had gone to lengths to assure that he had considered all the arguments, claims, and defenses. Third, the Fifth Circuit held that at no point in the 53-page, single-spaced award was there “express instruction” to future tribunals to not grant the award preclusive effect. Thus, the Fifth Circuit held that the award had collateral estoppel effect and affirmed the district court.
Graves, Higginson, and Douglas,

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