75 So. 3d 893
La.2011Background
- Wright suffered a 1973 injury, resulting in ~1.7 million in damages and a court-appointed euratrix, Mrs. Wright.
- The 1982 interdiction order allowed investment in long-term bonds with funds channeled through a Custodian Account.
- Mrs. Wright arranged investment via A.G. Edwards through Edwin Reardon; both received a copy of the court order.
- In 2002, Mrs. Wright sued Reardon and A.G. Edwards for fiduciary and securities-law violations, alleging misappropriation and mismanagement.
- A NASD arbitration stayed by court order resulted in a 2006 award of 150,000 to the succession against A.G. Edwards.
- In 2008-2010, Asher (successor) sought contempt; the First Circuit held the unconfirmed NASD award precluded Asher’s claims on res judicata grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can an unconfirmed arbitration award have res judicata effect? | Asher argues unconfirmed award lacks judicial judgment and thus cannot preclude. | Edwards contends unconfirmed award is res judicata because parties agreed to arbitrate and same conduct. | Unconfirmed arbitration award does not have res judicata effect. |
| When does res judicata attach under La. RS 13:4231? | Judgments must be valid and final to have preclusive effect; unconfirmed award is not a judgment. | Award, once accepted or final, should preclude subsequent actions. | Res judicata requires a valid and final judgment; unconfirmed awards are not judgments. |
| Are arbitration awards subject to confirmation to become judgments enforceable? | Confirmation not mandatory for preclusion; effect exists despite lack of confirmation. | Legislature intended confirmation to confer enforceable judgment; unconfirmed awards lack finality. | Judgment may be entered in conformity with confirmed awards; unconfirmed awards lack judgment status. |
Key Cases Cited
- FIA Card Services, NA v. Weaver, 62 So.3d 709 (La. 2011) (arbitration must be confirmed to be enforceable; not ministerial)
- Wooley v. State Farm Fire and Casualty Ins. Co., 893 So.2d 746 (La. 2005) (administrative decisions not final judgments for res judicata)
- State v. O'Reilly, 785 So.2d 768 (La. 2001) (constitutional limits on delegation of judicial power; arbitral awards require judicial review)
- McCarty v. Zacharie, 11 La. Ann. 474 (La. 1856) (early view that unconfirmed awards lack finality)