Movie Poster House, Inc. v. Heritage Auctions, Inc.
05-14-01260-CV
| Tex. App. | May 8, 2015Background
- Kenneth Mauer loaned William Hughes >$600,000 secured by collectibles; Mauer perfected a UCC-1 against that collateral. Hughes owned 50% of Movie Poster House, Inc. (MPH).
- After Hughes defaulted, Mauer obtained judgment and sought garnishment from Heritage Auctions, alleging Heritage held collateral; Heritage claimed Hughes’s interest was consumed by charges.
- Mauer sued Heritage (2009) for fraud and related claims; MPH intervened (2012), alleging some consigned memorabilia actually belonged to MPH and seeking an accounting and recovery of proceeds.
- Heritage compelled arbitration under the parties’ consignment agreement; an arbitrator issued an award finding Heritage owed MPH $29,949.46 and $70,000 in attorneys’ fees, and declined to permit untimely amended claims for additional damages or missing/damaged inventory.
- MPH did not appeal the arbitration award but later filed suit incorporating the award and adding new claims (breach, conversion, DTPA, fraud). Heritage moved for summary judgment arguing res judicata/collateral estoppel; the trial court granted summary judgment and dismissed MPH’s claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrator abused discretion by denying MPH leave to amend claims in arbitration | Arbitrator wrongly refused to allow amendment and new damage claims | Arbitrator acted within arbitration rules; FAA limits judicial review of awards | Dismissed (MPH did not seek to vacate award; FAA’s statutory vacatur grounds do not include this complaint) |
| Whether MPH’s later district-court claims are barred by res judicata | New causes of action arise separately and were not adjudicated in arbitration | Claims arise from same facts and could have been litigated in arbitration; arbitration award is final | Affirmed: claims barred by res judicata |
| Whether identity/privity exists between parties for res judicata | MPH contends it is distinct from prior proceeding | Parties are identical or in privity; arbitration award treated as court judgment | Court found identity/privity satisfied |
| Whether collateral estoppel prevents MPH’s claims | MPH argues issue preclusion doesn’t apply | Heritage contends issues were litigated/arbitrated and decided | Court did not reach collateral estoppel after res judicata ruling |
Key Cases Cited
- Myer v. Americo Life, Inc., 232 S.W.3d 401 (Tex. App.—Dallas 2007) (arbitration review under FAA is highly deferential)
- Sarofim v. Trust Co., 440 F.3d 213 (5th Cir. 2006) (describing narrow judicial review of arbitration awards)
- Roehrs v. FSI Holdings, Inc., 246 S.W.3d 796 (Tex. App.—Dallas 2008) (FAA limits grounds for vacating arbitration awards to statutory bases)
- Travelers Ins. Co. v. Joachim, 315 S.W.3d 860 (Tex. 2010) (standard of review for summary judgment is de novo)
- Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex. 1996) (elements of res judicata)
- Barr v. Resolution Trust Corp., 837 S.W.2d 627 (Tex. 1992) (subject matter of suit defined by factual basis and gist of complaint)
- Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc., 294 S.W.3d 818 (Tex. App.—Dallas 2009) (arbitration award treated like judgment of court of last resort)