Robert L. Myer v. Americo Life, Inc.

Citations: 469 F.3d 731; 2006 U.S. App. LEXIS 28192; 2006 WL 3299870Docket: 06-1687

Court: Court of Appeals for the Eighth Circuit; November 15, 2006; Federal Appellate Court

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Robert L. Myer appeals the dismissal of his petition to vacate an arbitration award by the district court, which decided to abstain from jurisdiction based on Colorado River Water Conservation District v. United States. Myer had sold several companies to Americo Life, Inc. in 1998, which involved a Consulting Agreement containing an arbitration clause requiring disputes to be resolved in Dallas, Texas. In January 2004, Americo initiated arbitration against Myer for alleged breaches of non-competition and non-solicitation clauses. An arbitration panel ruled in favor of Americo in June 2005, awarding over $1.4 million in damages. Myer filed a petition to vacate the award in federal court on August 10, 2005, just after Americo sought confirmation of the award in Texas state court.

Americo moved to dismiss Myer’s federal petition, arguing for abstention based on Colorado River factors. The district court granted the dismissal on November 8, 2005. Myer's subsequent motion for reconsideration was denied in February 2006, leading to this appeal. During the federal case, the Texas state court confirmed the arbitration award on April 12, 2006. Myer's motion for a new trial in state court was denied by operation of law in July 2006. Americo contended that the appeal was moot due to the state court's confirmation, but the Eighth Circuit found it was not moot, as Myer indicated he would appeal the state court's decision, keeping the controversy active.

Res judicata bars Myer's claims due to a final judgment from the Texas state court that confirmed an arbitration award involving the same parties and issues. Myer sought to vacate the arbitration award, but the court denied this motion, establishing finality for res judicata. The elements of res judicata include a prior final judgment by a competent court, identity of parties, and a second action based on the same claims or claims that could have been raised. Myer initially claimed the Texas judgment was not final due to a pending motion for a new trial; however, this motion has been denied, establishing the judgment's finality for claim-preclusion. The ability to appeal does not affect the judgment's finality under Texas law.

Myer cited the Restatement (Second) of Judgments, § 28, to argue that relitigation is permissible due to differences in judicial procedures. This argument is rejected for two reasons: first, Texas courts are fully capable of applying Missouri law, as they frequently do with laws from other states and countries. Second, the exception in § 28(3) applies to judgments from courts of limited jurisdiction, which is not relevant to this case, as the Texas court's jurisdiction is not in question.

A judgment from a state court has preclusive effect in federal court unless there is jurisdictional uncertainty. In a case involving a patent license agreement, a state court's determination regarding the agreement's termination date is binding in a subsequent federal patent infringement action. The Texas state court had jurisdiction to confirm the arbitration award, and the federal courts share concurrent jurisdiction under the Federal Arbitration Act. Myer contends that if the Texas state court's judgment were reversed, he would be unable to seek federal review of the arbitration award due to a 90-day statute of limitations. However, the court will not reverse based on speculative future outcomes and notes that Myer could still argue for vacating the arbitration award in state court if necessary. Consequently, the Texas state court's resolution of the issues is final, and res judicata bars further consideration of Myer's claims in the district court. The court affirms the district court's judgment, rendering Myer's appeal issues unnecessary to address.

The document identifies the judges involved in the case, noting the presence of Judge Richard H. Kyle and Judge Dean Whipple. It mentions a dispute over the exact filing date of Myer's petition, which does not impact the appeal's resolution. The excerpt references the Supreme Court's ruling in *Colorado River*, allowing federal courts to dismiss federal actions in favor of parallel state actions under certain circumstances. Americo's request for judicial notice of a Texas state court judgment is granted, aligning with precedents that permit taking judicial notice of public records. Texas Rule of Civil Procedure 329b(c) establishes that a motion for a new trial is overruled by law if not decided within 75 days. The preclusive effect of the Texas judgment is determined by Texas law, as emphasized in *Canady v. Allstate Ins. Co.* The Consulting Agreement includes a Missouri choice-of-law clause. The Full Faith and Credit statute, 28 U.S.C. § 1738, ensures that judicial proceedings are recognized across states. The action is clarified as in personam against Americo to vacate an arbitration award, not in rem concerning stock rights. Myer's reference to Section 28(4) of the Restatement regarding res judicata is deemed inapplicable, as both the district court and Texas court apply the same standards under the Federal Arbitration Act.