Weddell v. Sharp

Appellant Rolland Weddell and nonparty Michael Stewart were former business partners. When disputes arose between the partners, they agreed to informally settle their disputes by presenting them to a panel of attorneys (Respondents). Respondents issued a decision resolving the parties’ disputes that was largely favorable to Stewart. Thereafter, Stewart filed suit against Appellant seeking a declaratory judgment that Respondents’ decision was valid and enforceable. Appellant proceeded to confess judgment. Appellant later filed this action against Respondents asserting causes of action stemming from Respondents’ conduct in the dispute-resolution process. Respondents moved to dismiss the complaint contending that dismissal was warranted on claim preclusion principles. The district court granted the motion, finding that the three factors for claim preclusion articulated by the Supreme Court in Five Star Capital Corp. v. Ruby had been satisfied. The Supreme Court affirmed after modifying the privity requirement established in Five Star to incorporate the principles of nonmutual claim preclusion, holding that because Respondents established that they should have been named as defendants in Stewart’s declaratory relief action and Appellant failed to provide a good reason for not doing so, claim preclusion applied in this case. View "Weddell v. Sharp" on Justia Law