{ "id": 5369977, "name": "RIVERDALE DEVELOPMENT COMPANY, LLC v. RUFFIN BUILDING SYSTEMS, INC.", "name_abbreviation": "Riverdale Development Co. v. Ruffin Building Systems, Inc.", "decision_date": "2004-02-12", "docket_number": "03-244", "first_page": "90", "last_page": "105", "citations": [ { "type": "official", "cite": "356 Ark. 90" }, { "type": "parallel", "cite": "146 S.W.3d 852" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "21 Conn. L.Rptr. 140", "category": "reporters:state", "reporter": "Conn. L. Rptr.", "year": 1997, "opinion_index": 0 }, { "cite": "440 U.S. 147", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6180409 ], "weight": 4, "year": 1979, "pin_cites": [ { "parenthetical": "internal brackets and quotation marks omitted" } ], "opinion_index": 0, "case_paths": [ "/us/440/0147-01" ] }, { "cite": "505 N.E.2d 908", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 1987, "pin_cites": [ { "page": "909" } ], "opinion_index": 0 }, { "cite": "920 F. Supp. 1094", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 7808638 ], "weight": 5, "year": 1996, "pin_cites": [ { "page": "1097" }, { "page": "1098" } ], "opinion_index": 0, "case_paths": [ "/f-supp/920/1094-01" ] }, { "cite": "88 Cal. Rptr. 2d 366", "category": "reporters:state", "reporter": "Cal. Rptr. 2d", "year": 1999, "opinion_index": 0 }, { "cite": "982 P.2d 229", "category": "reporters:state_regional", "reporter": "P.2d", "weight": 11, "year": 1999, "pin_cites": [ { "page": "235" }, { "page": "236" }, { "page": "239", "parenthetical": "emphasis in original" }, { "parenthetical": "emphasis in original" }, { "page": "240", "parenthetical": "citations omitted; emphasis in original" }, { "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "21 Cal.4th 815", "category": "reporters:state", "reporter": "Cal. 4th", "case_ids": [ 884882 ], "year": 1999, "opinion_index": 0, "case_paths": [ "/cal-4th/21/0815-01" ] }, { "cite": "789 A.2d 162", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 408461 ], "weight": 6, "year": 2002, "pin_cites": [ { "page": "167" }, { "page": "169" }, { "page": "172" }, { "page": "173" } ], "opinion_index": 0, "case_paths": [ "/nj-super/347/0202-01" ] }, { "cite": "758 A.2d 452", "category": "reporters:state_regional", "reporter": "A.2d", "weight": 6, "year": 2000, "pin_cites": [ { "page": "454" }, { "page": "456" }, { "page": "457" }, { "page": "458" }, { "page": "548" } ], "opinion_index": 0 }, { "cite": "340 F. Supp. 141", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 3600149 ], "weight": 2, "year": 1971, "pin_cites": [ { "page": "146" } ], "opinion_index": 0, "case_paths": [ "/f-supp/340/0141-01" ] }, { "cite": "439 U.S. 322", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11330171 ], "year": 1979, "opinion_index": 0, "case_paths": [ "/us/439/0322-01" ] }, { "cite": "352 Ark. 534", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1159699 ], "weight": 4, "year": 2003, "opinion_index": 0, "case_paths": [ "/ark/352/0534-01" ] }, { "cite": "311 Ark. 450", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1897007 ], "weight": 7, "year": 1993, "opinion_index": 0, "case_paths": [ "/ark/311/0450-01" ] }, { "cite": "313 Ark. 632", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1914623 ], "weight": 2, "year": 1993, "opinion_index": 0, "case_paths": [ "/ark/313/0632-01" ] }, { "cite": "314 Ark. 578", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1912748 ], "weight": 2, "year": 1993, "opinion_index": 0, "case_paths": [ "/ark/314/0578-01" ] }, { "cite": "333 Ark. 53", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 703822 ], "weight": 2, "year": 1998, "opinion_index": 0, "case_paths": [ "/ark/333/0053-01" ] }, { "cite": "337 Ark. 206", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1240957 ], "weight": 4, "year": 1999, "opinion_index": 0, "case_paths": [ "/ark/337/0206-01" ] }, { "cite": "349 Ark. 177", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1513777 ], "weight": 2, "year": 2002, "opinion_index": 0, "case_paths": [ "/ark/349/0177-01" ] }, { "cite": "98 S.W.3d 520", "category": "reporters:state_regional", "reporter": "S.W.3d", "year": 2003, "opinion_index": 0 }, { "cite": "352 Ark. 76", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1159675 ], "year": 2003, "opinion_index": 0, "case_paths": [ "/ark/352/0076-01" ] }, { "cite": "341 Ark. 879", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1257731 ], "weight": 2, "year": 2000, "opinion_index": 0, "case_paths": [ "/ark/341/0879-01" ] }, { "cite": "345 Ark. 239", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 939043 ], "weight": 2, "year": 2001, "opinion_index": 0, "case_paths": [ "/ark/345/0239-01" ] } ], "analysis": { "cardinality": 1117, "char_count": 28367, "ocr_confidence": 0.729, "pagerank": { "raw": 3.7646727827612475e-07, "percentile": 0.8958452790104752 }, "sha256": "4a89c85ebace69b91dcc7ab4ec618665670b4c8ea835aa29b52786d9bf9950b5", "simhash": "1:b3efceae325e9ce4", "word_count": 4450 }, "last_updated": "2023-07-14T17:43:53.781338+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "RIVERDALE DEVELOPMENT COMPANY, LLC v. RUFFIN BUILDING SYSTEMS, INC." ], "opinions": [ { "text": "Tom Glaze, Justice.\nThis appeal requires us to determine the preclusive effect of an arbitration award with respect to one who was not a party to the arbitration. Because this is an issue of first impression in this state, our jurisdiction is proper under Ark. Sup. Ct. R. 1-2(b)(1). This is also a subsequent appeal following other appeals decided by this court. See May Constr. Co. v. Riverdale Develop. Co., 345 Ark. 239, 45 S.W.3d 815 (2001); May Constr. Co. v. Thompson, 341 Ark. 879, 20 S.W.3d 345 (2000).\nOn August 30, 1996, appellant Riverdale Development Company (\u201cRiverdale\u201d) entered into a contract with May Construction Company (\u201cMay\u201d) for construction of a commercial office building located at 2102 Brookwood Drive in Little Rock. Included in the project was May\u2019s erection of a pre-engineered metal building manufactured by appellee Ruffin Building Systems, Inc. (\u201cRuffin\u201d), a Louisiana company from which May purchased the materials for construction.\nDisputes began arising between May and Riverdale regarding the completion of the project. The contract between May and Riverdale contained a provision requiring arbitration of contract disputes between the parties, and on May 13, 1999, May initiated arbitration with Riverdale pursuant to the construction contract. However, on May 25, 1999, Riverdale filed suit against May in Pulaski County Circuit Court, and one year later, on May 19, 2000, Riverdale filed an amended complaint that also named Ruffin as a defendant. The complaint raised claims of negligence, breach of implied warranties, defective product, and fraud and constructive fraud.\nAlthough Riverdale initially contested arbitration, River-dale and May eventually arbitrated their dispute in a hearing that lasted from July 22-26, 2002. The arbitrator ultimately ruled in May\u2019s favor, finding that May did not materially breach the contract between the parties, and was excused from further performance by Riverdale\u2019s wrongful exclusion of May from the project site. Although the arbitrator noted some conflicts in the testimony regarding the alleged defects in the building and the design of the building and its mechanical and structural components, the arbitrator found that May\u2019s witnesses were more credible. All of Riverdale\u2019s claims were denied in their entirety, and Riverdale was ordered to pay May the balance owing on the contract, plus attorney\u2019s fees. The arbitrator\u2019s findings were issued on August 8, 2002.\nJust prior to the arbitrator\u2019s decision, May filed a motion in the circuit court case to dismiss Riverdale\u2019s claims against it, arguing that the pleadings in the arbitration case and the circuit court case mirrored each other, and that Riverdale\u2019s circuit court claims were barred under res judicata and collateral estoppel; the trial court agreed and granted the motion on August 16, 2002. On August 14, 2002, after the arbitrator\u2019s decision was issued on August 8, Ruffin filed a motion for summary judgment, contending that there were no genuine issues of material fact, because Riverdale\u2019s claims were \u201cbarred under the doctrine of collateral estoppel, since all issues material to this case have been fully presented and determined . . . before the American Arbitration Association.\u201d\nFollowing a hearing on October 22, 2002, the trial court entered its order granting Ruffin\u2019s motion for summary judgment, holding that \u201ca third party such as Ruffin is entitled to rely upon an arbitration award such as [the one] here under the doctrines of collateral estoppel or res judicata, even though not a party to the contract providing for arbitration and even though [Riverdale] did not agree to bind itself to an arbitration award with regard to other parties.\u201d From this order, Riverdale brings this appeal, raising as its sole point the argument that the trial court erred in granting. summary judgment in favor of Ruffin on the grounds of collateral estoppel based on a finding in an arbitration proceeding to which Ruffin was not a party.\nSummary judgment is to be granted by a trial court only when it is clear that there are no genuine issues of material fact to be litigated, and the party is entitled to judgment as a matter of law. Craighead Elec. Coop. Corp. v. Craighead County, 352 Ark. 76, 98 S.W.3d 520 (2003); Cole v. Laws, 349 Ark. 177, 76 S.W.3d 878 (2002); George v. Jefferson Hosp. Ass\u2019n, Inc., 337 Ark. 206, 987 S.W.2d 710 (1999). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id. On appellate review, we determine if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of its motion leave a material fact unanswered. Id. This court views the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Adams v. Arthur, 333 Ark. 53, 969 S.W.2d 598 (1998).\nThe questions to be answered in this case are (1) whether collateral estoppel will apply to bar Riverdale\u2019s suit against Ruffin, a third party who was not involved in the arbitration, and (2) whether, if collateral estoppel does apply, the elements have been established. Collateral estoppel, or issue preclusion, bars relitigation of issues, law, or fact actually litigated in the first suit. Crockett & Brown, P.A. v. Wilson, 314 Ark. 578, 864 S.W.2d 244 (1993); John Cheeseman Trucking, Inc. v. Pinson, 313 Ark. 632, 855 S.W.2d 941 (1993). For collateral estoppel to apply, the following four elements must be met: 1) the issue sought to be precluded must be the same as that involved in the prior litigation; 2) that issue must have been actually litigated; 3) the issue must have been determined by a valid and final judgment; and 4) the determination must have been essential to the judgment. Crockett & Brown, supra; Fisher v. Jones, 311 Ark. 450, 844 S.W.2d 954 (1993). Unlike res judicata, collateral estoppel does not require mutuality of parties before the doctrine is applicable. Id. (citing Fisher v. Jones, supra).\nOrdinarily, collateral estoppel is relied upon by a defendant to preclude a plaintiff from relitigating an issue that has previously been decided adversely to the plaintiff. Johnson v. Union Pacific Railroad, 352 Ark. 534, 104 S.W.3d 745 (2003). This \u201cdefensive collateral estoppel\u201d is the manner in which the doctrine is sought to be applied in the present case. Another form of collateral estoppel, \u201coffensive collateral estoppel,\u201d is more controversial, although it has been specifically approved by this court. See Johnson v. Union Pacific, supra. Offensive collateral estoppel occurs when a plaintiff seeks to foreclose the defendant from litigating an issue the defendant has previously litigated unsuccessfully in an action with another party. Johnson, 352 Ark. at 545 (citing Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322 (1979)). The Johnson court concluded that this rule should be available only in limited cases, and that the trial court should be given broad discretion to determine if it should be applied.\nThe present case, however, does not involve the use of offensive collateral estoppel; instead, the court is only concerned with the defensive application of the doctrine. On appeal, River-dale argues that a private arbitration decision should have no collateral estoppel effect in favor of third parties, and that to hold otherwise would defeat principles of fairness and equity and produce unjust results. In making its argument, Riverdale relies primarily on four cases: Federal Folding Wall Corp. v. National Folding Wall Corp., 340 F. Supp. 141 (S.D.N.Y. 1971); Young v. Metropolitan Prop. & Cas. Ins. Co., 758 A.2d 452 (Conn. App. 2000); Pace v. Kuchinsky, 789 A.2d 162 (N.J. 2002); and Vandenberg v. Superior Court, 21 Cal.4th 815, 982 P.2d 229, 88 Cal. Rptr. 2d 366 (1999).\nHowever, these cases are neither instructive nor applicable here. The first two \u2014 Federal Folding Wall and Young \u2014 involve the use of offensive collateral estoppel. In Federal Folding Wall, National Folding Wall lost a case in arbitration, wherein an arbitrator had determined that National had lost the right to use the trade name \u201cFairhurst.\u201d Subsequent to that decision, Federal sued National, alleging that National had infringed upon Federal\u2019s right to use the \u201cFairhurst\u201d name. In its lawsuit, Federal sought a summary judgment on the basis of the arbitrator\u2019s award, but the trial court denied the motion, stating without explanation that [t] he award of the arbitrators... is not res judicata as to'any issues before the court.\u201d Federal Folding Wall Corp., 340 F. Supp. at 146.\nIn the case of Young v. Metropolitan Property & Casualty, supra, the Connecticut court of appeals declined to apply offensive collateral estoppel to bind a non-party to an arbitration to the results of the arbitration. In that case, the plaintiff, Young, was involved in a car accident. The car he was driving belonged to his employer, and was insured through defendant Metropolitan. Young\u2019s own insurance carrier was Continental. Young and Continental engaged in arbitration regarding the amount and availability of underinsured motorist coverage; although the two parties invited Metropolitan to participate in the arbitration, Metropolitan declined. The arbitration proceeding resulted in an award of damages for Young. Following the decision of the arbitrator, Young filed a motion for summary judgment against Metropolitan, arguing that Metropolitan was collaterally estopped from contesting the arbitration award as to damages. The trial court denied his motion. Young, 758 A.2d at 454.\nOn appeal, the Connecticut court of appeals affirmed the trial court, holding that there was insufficient privity between Metropolitan and Continental. Specifically, the court noted that, \u201calthough both Continental and [Metropolitan] are interested in the same question and in proving or disproving the same set of facts, each has, by separate and distinct contracts, chosen the process to determine those facts using its own preferred method.\u201d Id. at 456. In addition, the court emphasized the contractual nature of arbitration. The court pointed out that Continental had included an arbitration provision in its insurance contract, but Metropolitan had not; in addition, Metropolitan had also declined to be included in the arbitration between Continental and Young. Finally, the court noted that the interests of the two insurers were different, as were their respective, incentives to fully participate in the arbitration proceedings. The court further held that \u201c[a] trial in which one party contests a claim against another should be held to estop a third person only when it is realistic to say that the third person was fully protected in the first trial.\u201d Id. at 457. Accordingly, the court held that, because Metropolitan had not participated in the prior proceeding, it would be foreclosed from challenging facts already decided against it; thus, Metropolitan did not have a full and fair opportunity to litigate its claim. Id. at 458. The Young court relied on two factors: 1) Young was seeking to apply collateral estoppel offensively in an unfair manner; and 2) there was no privity between Continental and Metropolitan, and Metropolitan was therefore denied the opportunity to litigate the issue of liability in the prior proceeding. However, this case provides no help to Riverdale for two reasons: first, Young involves an offensive use of collateral estoppel, while the present case involves the defensive application of the doctrine; and second, unlike Metropolitan in the Young case, Riverdale had an opportunity to litigate the issues raised in its proceeding before the arbitrator.\nNext, Riverdale relies on Pace v. Kuchinsky, supra. In Pace, the New Jersey court declined to give preclusive effect to a prior arbitration decision. There, plaintiff/appellant Pace had sustained spinal injuries in a car wreck. Pace sued both the driver of the other car, Kuchinsky, and Pace\u2019s own insurer, State Farm, alleging that State Farm had failed to provide certain \u201cpersonal injury protection\u201d (\u201cPIP\u201d) benefits under his policy. Pace eventually dismissed the action against State Farm after State Farm confirmed that there were no medical bills outstanding. Some months later, one of Pace\u2019s doctors filed a PIP arbitration claim against State Farm, seeking payment of outstanding medical bills. Pace testified at the arbitration hearing, but did not consider himself as being present \u201cas a party.\u201d The arbitrator determined that Pace had failed to prove that his back problems were the result of the accident (as opposed to degenerative changes), and concluded that any medical expenses incurred by Pace after April of 1999 were not State Farm\u2019s responsibility. Pace, 789 A.2d at 167.\nA month or so later, Kuchinsky moved to dismiss Pace\u2019s claims for back injury, arguing that the issue had been decided in the arbitration proceedings. Although the trial court granted Kuchinsky\u2019s motion, the New Jersey Superior Court reversed. In concluding that the trial court erred, the superior court pointed out that Pace had never been informed that the outcome of the arbitration hearing could have a potential effect on his right to have a trial by jury. Id. at 169. Further, the court noted that Pace had never had his \u201cday in court\u201d on the specific issue in question. \u201cUnless expressly waived, a full and fair hearing requires representation by the party\u2019s own counsel, thereby insuring presentation of the specific issue to be decided in the very manner that the party chooses. [Citation omitted.] This is especially so where the party sought to be precluded was not the identical party in the prior proceeding.\u201d Id. at 172. Therefore, the New Jersey court held that the scope of the PIP arbitration between the doctor and State Farm was limited to the doctor\u2019s claims for payment, and the scope of the issue as presented \u201cneither afforded [Pace] an adequate opportunity, to be heard nor an incentive to demand a full and fair adjudication concerning his lumbar injuries and whether his resulting surgery and disability, if any, were causally related to the accident.\u201d Id. at 173. Again, however, this case is not helpful to Riverdale, primarily because the issues litigated before the arbitrator are the same as those raised in Riverdale\u2019s circuit court complaint, and Riverdale did have the opportunity to fully and fairly adjudicate its case before the arbitrator.\nFinally, Riverdale relies extensively on the California case of Vandenberg v. Superior Court, supra. Briefly, the facts of that case were that Vandenberg leased a parcel of property from Boyd and used the land for a car dealership. In 1988, Vandenberg discontinued the leases and returned the property to Boyd. To prepare the property for sale, Boyd removed three underground waste oil storage tanks; in the process, he discovered contamination of soils and groundwater underneath the property. Boyd sued Vandenberg, alleging numerous causes of action including breach of contract, negligence, waste, trespass, and other claims. Vandenberg tendered defense of the suit to his insurers, but many of the policies contained pollution exclusions, under which property damage caused by a pollutant or contaminant was not covered except for a \u201csudden and accidental\u201d discharge. Vandenberg, 982 P.2d at 235.\nOfVandenberg\u2019s insurers, only USF&G agreed to provide a defense. During settlement proceedings, Vandenberg, Boyd, and USF&G reached an agreement to resolve the Boyd litigation. Boyd released all claims against Vandenberg except those based on the theory that the contamination constituted a breach of the lease agreement. Boyd and Vandenberg agreed to resolve the breach of lease issues through arbitration or trial. USF&G agreed to defend Vandenberg, but the ultimate issues of coverage and indemnity obligations were specifically reserved for future resolution. Id. Following arbitration, the arbitrator ruled for Boyd, finding that the contamination was not a \u201csudden and accidental\u201d discharge. Vandenberg\u2019s insurers rejected Vandenberg\u2019s request for indemnification, and he then sued his insurers for failure to defend. Id. USF&G responded, arguing that it had no duty to defend because the discharges were not sudden and accidental; USF&G further contended that further litigation regarding the \u201csudden and accidental\u201d issue was precluded by principles of collateral estoppel. The trial court granted USF&G\u2019s motion for summary judgment, but the California court of appeals reversed. Id. at 236.\nUpon review by the Supreme Court of California, the court held that a private arbitration award cannot have nonmutual collateral estoppel effect unless the arbitral parties so agree. In reaching this decision, the court considered all the attendant public policy arguments on both sides of the issue, and concluded that fairness mandated that collateral estoppel could not be invoked by a nonparty to the prior litigation. The court noted that California\u2019s statutory scheme, while favoring arbitration in some instances, \u201cnowhere specifies that, despite the arbitral parties\u2019 failure to so agree, a private arbitration award may be binding in favor of nonparties in litigation involving different causes of action.\u201d Id. at 239 (emphasis in original). Notably, the California court said, arbitrators, \u201cunless specifically required to act in conformity with rules of law, may base their decision upon broad principles of justice and equity, and in doing so may expressly or impliedly reject a claim that a party might successfully have asserted in a judicial action.\u201d Id. (emphasis in original). The \u201cinformal and imprecise nature of arbitration,\u201d although an advantage in some instances, \u201ccan be [a] serious, unexpected disadvantage]] if issues decided by the arbitrator are given leveraged effect in favor of strangers to the arbitration.\u201d Id. The court also noted that investing an arbitration decision with collateral estoppel effect does not serve the policy reasons for applying the principles of estoppel:\n[T]he primary purposes of collateral estoppel are to preserve the integrity of the judicial system, promote judicial economy, and protect litigants from harassment by vexatious litigation. But because a private arbitrator\u2019s award is outside the judicial system, denying the award collateral estoppel effect has no adverse impact on judicial integrity. Moreover, because private arbitration does not involve the use of a judge and a courtroom, later relitigation does not undermine judicial economy by requiring duplication of judicial resources to decide the same issue. Finally, when collateral estoppel is invoked by a nonparty to the private arbitration, the doctrine does not serve the policy against harassment by vexatious litigation. In such cases, the doctrine is asserted not to protect one who has already once prevailed against the same opponent on the same cause of action, but simply to gain vicarious advantage from a litigation victory won by another.\nId. at 240 (citations omitted; emphasis in original).\nThe California court did recognize, however, that \u201cmost other courts addressing the issue, have taken a contrary approach.\u201d Id. The court wrote that the predominant view is as follows:\n[UJnless the arbitral parties agreed otherwise, a judicially confirmed private arbitration award will have collateral estoppel effect, even in favor of nonparties to the arbitration, if the arbitrator actually and necessarily decided the issue sought to be foreclosed and the party against whom estoppel is invoked has full incentive and opportunity to litigate the matter.\nId. (emphasis added). The court ultimately concluded, however, that it would not adopt this approach.\nRiverdale, both before this court and in the trial court, relies heavily on the policy arguments addressed by the California court. However, the trial court here recognized that the California approach is the minority view, and declined to follow it. We do the same. Arkansas has recognized and approved the defensive application of collateral estoppel, even where there is no mutuality of parties. See Fisher v. Jones, supra. Further, it is settled that, except in certain limited situations, \u201ca valid and final award by arbitration has the same effects under the rules of res judicata, subject to the same exceptions and qualifications, as a judgment of a court.\u201d Restatement (Second) of Judgments \u00a7 84 (1982). The comments to \u00a7 84 of the Restatement indicate that \u201cthere is good reason to treat the determination of the issues in an arbitration proceeding as conclusive in a subsequent proceeding, just as determinations of a court would be so treated.\u201d Id., cmt c. The comment explains as follows:\nWhen arbitration affords opportunity for presentation of evidence and argument substantially similar in fomi and scope to judicial proceedings, the award should have the same effect on issues necessarily determined as a judgment has. Economies of time and effort are thereby achieved for the prevailing party and for the tribunal in which the issue subsequently arises.\nId.\nOther jurisdictions have adopted and followed this reasoning. In Ray v. Continental Western Ins. Co., 920 F. Supp. 1094 (D. Nev. 1996), the district court held that, where the party to be estopped had an opportunity to, and did, fully and fairly litigate the issue before the arbitrator, the decision of the arbitrator should be given preclusive effect in a subsequent judicial proceeding. There, the Rays were covered by a policy of automobile insurance issued by Continental. Mrs. Ray was involved in a car accident with Regina Elliff. The Rays sued Elliff for negligence in state court, but the parties agreed to submit the case to binding arbitration. After an adversarial hearing, the arbitrator found that Elliff was liable for the accident, and awarded the Rays a total of $17,123 in damages. Ray, 920 F. Supp. at 1097. The Rays subsequently sued Continental for underinsured motorist benefits, claiming a total of $135,260 in damages. Continental moved for summary judgment, arguing that the arbitrator\u2019s decision as to the Rays\u2019 damages was conclusive, and the Rays were not entitled to any underinsured benefits under the policy. Id.\nThe federal district court agreed, stating that it was evident that the Rays had an opportunity to fully litigate their claims before the arbitrator. The parties presented witnesses, deposition testimony, medical reports, and other exhibits, and they contested damages as well'as liability. Further, the court noted that the arbitrator had considered the Rays\u2019 arguments regarding the amount of their damages, and had awarded damages for medical expenses, pain and suffering, and loss of consortium. Id. at 1098. Because the same issues had already been fully and fairly litigated, the court granted the arbitrator\u2019s decision preclusive effect, and granted Continental\u2019s motion for summary judgment. Id.\nLikewise, in Bailey v. Metropolitan Property & Liability Ins. Co., 505 N.E.2d 908 (Mass. App. Ct. 1987), the Appeals Court of Massachusetts relied on \u00a7 84 of the Restatement and held that the plaintiff was barred from recovery under principles of issue preclusion. The plaintiff in that case, Bailey, was a passenger in a car when he was injured in a wreck, and he received the limits of the car owner\u2019s personal injury protection, medical payment coverage, and optional bodily injury coverage. The insurer, Allstate, refused to pay Bailey any of the $10,000 available under the owner\u2019s underinsurance coverage. Bailey and Allstate went to arbitration on the issue, and the arbitrator awarded Bailey $7,500. Bailey, 505 N.E.2d at 909.\nLater, Bailey sued Metropolitan (which insured Bailey\u2019s own vehicle), seeking payment under the underinsurance provisions in the Metropolitan policy. Metropolitan denied the claims on the grounds that the arbitrator\u2019s award precluded Bailey from further pursuing the issue of damages. Although the trial court ruled in Metropolitan\u2019s favor on another issue, the Massachusetts appellate court affirmed on the basis of issue preclusion, noting first the following:\nA fundamental precept of common-law adjudication, embodied in the related doctrines of collateral estoppel and res judicata, is that a right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction . . . cannot be disputed in a subsequent suit between the same parties or their privies.\nId. at 910 (citing Montana v. United States, 440 U.S. 147 (1979)).\nLike Arkansas, Massachusetts does not require an identity of defendants for issue preclusion to operate. Id. Thus, the Bailey court noted, the inquiry was simply \u201cwhether the issue on which preclusion is sought has been the product of full litigation and careful decision.\u201d Id. Citing Restatement \u00a7 84 and its comment, the Massachusetts court further stated that it saw \u201cno reason why the rule should not extend as well to a defendant who was not a party to the earlier arbitration if the plaintiff had a full and fair opportunity in the arbitration to litigate the issue, and if equitable considerations otherwise warrant precluding relitigation. \u201d Id. (internal brackets and quotation marks omitted).\nWe are persuaded by the reasoning of the Massachusetts court, and we hold that a party not involved in a prior arbitration may use the award in that arbitration to bind his opponent if the party to be bound, or a privy, was before the arbitrator, had a full and fair opportunity to litigate the issue, and the issue was actually decided by the arbitrator or was necessary to his decision.\nThus, we must now determine whether these elements have been satisfied in the case before us. Clearly, Riverdale, as the party to be bound, was before the arbitrator. The hearing before the arbitrator lasted for five days, during which time both Riverdale and May put on extensive testimony and other evidence. The issues raised and addressed in the arbitration proceedings were the same as those alleged in the circuit court complaint. In its lawsuit against May and Ruffin, Riverdale made numerous allegations against both defendants. Notably, Riverdale listed seventeen specific structural deficiencies and defects that it had noted and reported \u201cto the defendants May and Ruffin.\u201d In addition, as noted above, the complaint asserted causes of action in negligence, breach of implied warranties, defective product, and fraud against both May and Ruffin. Further, the arbitrator\u2019s award itself stated that there was conflicting evidence and'testimony about the design of the building and its mechanical and structural components. The arbitrator resolved these conflicts in the testimony and evidence in May\u2019s favor, and concluded that there was \u201cno credible evidence of Riverdale\u2019s damages for repairs or for the cost of correcting defects. As a result, Riverdale [was] not entitled to an award of. . . damages.\u201d Thus, it is apparent that Riverdale was before the arbitrator, had a full and fair opportunity to litigate the issues it raised, and those issues were actually decided by the arbitrator and were necessary to the decision. Therefore, we have no hesitancy in holding that the trial court properly concluded that Riverdale was collaterally estopped from further litigating these same issues against Ruffin.\nAffirmed.\nThe Connecticut court further distinguished the situation in Young from another case involving the defensive application of collateral estoppel, pointing out that in Russo v. Allstate Ins. Co., 21 Conn. L.Rptr. 140 (1997),the plaintiffhad\u201chadafull and fair opportunity to litigate his [prior arbitration] claim.\u201d Therefore,\u201cit was fair to preclude him, on the basis of the accepted public policy reason behind collateral estoppel, from relitigating the same issue with a second party.\u201d Young, 758 A.2d at 548.", "type": "majority", "author": "Tom Glaze, Justice." } ], "attorneys": [ "Kaplan, Brewer, Maxey & Haralson, P.A., by: Philip E. Kaplan, for appellant.", "Williams & Anderson PLC, by: David M. Powell and Sarah M. Priebe, for appellee." ], "corrections": "", "head_matter": "RIVERDALE DEVELOPMENT COMPANY, LLC v. RUFFIN BUILDING SYSTEMS, INC.\n03-244\n146 S.W.3d 852\nSupreme Court of Arkansas\nOpinion delivered February 12, 2004\nKaplan, Brewer, Maxey & Haralson, P.A., by: Philip E. Kaplan, for appellant.\nWilliams & Anderson PLC, by: David M. Powell and Sarah M. Priebe, for appellee." }, "file_name": "0090-01", "first_page_order": 112, "last_page_order": 127 }