Note: Decisions of a three-justice panel are not to be considered as precedent before any tribunal. 

ENTRY ORDER

SUPREME COURT DOCKET NO. 2015-193

OCTOBER TERM, 2015

Alfred Lunde } APPEALED FROM:

}

} Superior Court, Lamoille Unit,

 v. } Civil Division

}

}

Bonnie Batchelder &

Batchelder Associates, P.C.

}

}

DOCKET NO. 150-7-14 Lecv

Trial Judge: Dennis R. Pearson

In the above-entitled cause, the Clerk will enter:

This case follows separate legal proceedings surrounding the dissolution of a real estate 

partnership in which plaintiff Alfred Lunde was the general partner. Lunde filed suit against the 

accountant retained by the partnership’s court-appointed receiver, alleging that the accountant

personally and through her firm committed professional negligence. Based on the pleadings, the 

court granted judgment to defendants, concluding that Lunde failed to establish that defendants 

owed him the requisite duty of care necessary to maintain a professional negligence action, and

that the action was barred by collateral estoppel. On appeal, Lunde argues that the court erred in 

concluding that defendants owed no legal duty to Lunde and that collateral estoppel applies. We 

affirm.

In its analysis, the court assumed that the allegations in Lunde’s verified complaint were 

true, and drew for background on the final court decision in the related case from which Lunde’s 

allegations in this case arose. See O’Rourke v. Lunde, 2014 VT 88, 197 Vt. 360 (setting forth 

facts of related case). Lunde was the sole general partner in a partnership created to manage 

rental housing. The partnership ended per the terms of the partnership agreement in December 

2009. At that point, the proceeds were to be distributed fifty percent to the general partner and 

the remainder to the limited partners. When Lunde did not promptly liquidate the partnership’s 

assets, the limited partners filed suit in superior court requesting appointment of a receiver to 

wind up the partnership’s business, liquidate assets, and distribute the proceeds. In March 2011,

the court appointed a receiver. Although the receivership was initially limited, Lunde was 

removed as a general partner after he failed to cooperate. 

In January 2012, Lunde filed a demand for arbitration pursuant to an arbitration clause in 

the partnership agreement. The court referred the matter for arbitration, but reserved the issue of 

attorney’s fees. The arbitration was to determine the proper apportionment of the net proceeds 

from the liquidation of the partnership assets. Lunde claimed that construction companies 

affiliated with Lunde performed work for the partnership and that the partnership owed debts to 

him personally for this work. Lunde did not attend the final hearing before the arbitrator. At that 

hearing, defendant Bonnie Batchelder testified as accountant for the receiver about the debts that 
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Lunde claimed were owed to him in his personal capacity. She did not support Lunde’s view 

that the debts were owed to him personally. Because Lunde had not been present at the hearing, 

the arbitrator held the record open for ten days to allow Lunde an opportunity to offer additional

evidence regarding his absence or his claims. Lunde did not submit any additional 

documentation to the arbitrator. In January 2013, the arbitrator issued an award, distributing the 

partnership assets and concluding that Lunde’s share would be surcharged with receiver’s fees, 

arbitration costs, and attorney’s fees. The superior court confirmed the order and denied Lunde’s 

motions to vacate. The court also made a final attorney’s fees award. Lunde appealed the 

arbitration decision to this Court, challenging the court’s jurisdiction to appoint a receiver, the 

denial of his motion to vacate the arbitration award, and the assessment of certain fees and costs. 

This Court affirmed, but remanded to correct a mathematical error in the attorney’s fees award. 

Id. ¶¶ 47-48. 

Lunde then filed suit against the accountant retained by the partnership’s receiver, 

alleging professional negligence. Lunde alleged that the accountant deleted payments owed to 

him in the partnership’s accounts. Defendants moved for judgment on the pleadings, arguing 

that they owed no duty of care to Lunde, and that he was collaterally estopped from challenging 

the substance of the accounting because it had already been litigated and decided in the 

arbitration proceeding. 

The trial court granted judgment to defendants, concluding that defendants did not owe 

Lunde the requisite duty of care necessary to maintain a professional negligence action, and that 

the action was barred by collateral estoppel because the same issue regarding the proper amounts 

owed to Lunde was already resolved by a final judgment. Lunde challenges both conclusions on 

appeal.

On appeal from a grant of judgment on the pleadings under Rule of Civil Procedure 

12(c),“this Court takes as true all well-pleaded factual allegations in the nonmovant’s pleadings 

and all reasonable inferences to be drawn from them, and takes as false all contravening 

assertions in the movant’s pleadings.” Knight v. Rower, 170 Vt. 96, 98 (1999); see V.R.C.P. 

12(c) (allowing party to move for “judgment on the pleadings”). If the pleadings contain no 

allegation that would permit recovery, then judgment will be affirmed. Knight, 170 Vt. at 98. 

We first address the issue of collateral estoppel. “Collateral estoppel, or issue preclusion, 

bars the subsequent relitigation of an issue that was actually litigated and decided in a prior case 

where that issue was necessary to the resolution of the dispute.” Scott v. City of Newport, 2004 

VT 64, ¶ 8, 177 Vt. 491 (mem.) (quotation omitted). To apply collateral estoppel, the following 

elements must be shown:

(1) preclusion is asserted against one who was a party or in privity 

with a party in the earlier action; (2) the issue was resolved by a 

 



 The trial court indicated that because it had not excluded matters outside the pleadings, 

it was considering the motion as one for summary judgment and gave all parties a chance to 

respond. V.R.C.P. 12(c) (allowing motion to dismiss to be converted to motion for summary 

judgment if information outside pleadings is presented to court and not excluded, and requiring 

notice to parties). It appears that the only document the court considered outside of the pleadings 

was this Court’s decision in O’Rourke v. Lunde, 2014 VT 88. We need not reach the question of 

whether consideration of this prior order converts the motion into one for summary judgment 

because on appeal the parties do not challenge the court’s process and, in any event, the different 

standard of review would not change the outcome.
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final judgment on the merits; (3) the issue is the same as the one 

raised in the later action; (4) there was a full and fair opportunity to 

litigate the issue in the earlier action; and (5) applying preclusion 

in the later action is fair.

Id. (quotation omitted). 

Here, the trial court concluded that all of these elements were satisfied. First, preclusion 

is being asserted against Lunde, who was a party in the prior proceeding. Second, the issue of 

whether Lunde was personally owed money held by the partnership was resolved in the 

arbitration proceeding. Third, the issue now raised—whether certain monies were owed to 

Lunde personally—is the same. Fourth, there was a full and fair opportunity to litigate the 

issues. And, fifth, application of the doctrine is fair. 

Lunde concedes that this Court has held that collateral estoppel applies to matters that 

were adjudicated in an arbitration proceeding, but contends that enforcement by a third party is a 

different matter, and that because defendants in this case were not parties to the arbitration matter 

they should not be able to use collateral estoppel in this later proceeding. In support, Lunde 

relies on Vandenberg v. Superior Court, 982 P.2d 229, 240 (Cal. 1999), in which the California 

Supreme Court held that a private arbitration award, even confirmed by judicial order, could not 

have the effect of collateral estoppel in favor of a third party unless the arbitral parties had so 

agreed. The court explained that enforcing judgments made in the context of a contracted 

arbitration proceeding did not meet the general goals of collateral estoppel—preserving the 

integrity of the judicial system, promoting judicial economy, and protecting vexatious 

litigation—because the initial private award is outside the judicial system, and therefore the 

subsequent case does not result in duplication of judicial resources or additional litigation. Id. 

We have previously held that a final adjudication from an arbitration proceeding can be 

used to collaterally estop the relitigation of issues finally decided subject to the same conditions 

as any other judgment. In Agway, Inc. v. Gray, 167 Vt. 313, 316 (1997), this Court held that

since “an arbitration is in the nature of a judicial inquiry, and thus has the same force and effect 

of an adjudication in terms of estopping the same parties from relitigating the same subject.” 

While that case did not directly address whether collateral estoppel could be asserted by a third 

party to the arbitration award, a blanket exception barring third parties from asserting estoppel 

based on a private arbitration award is not supported by Agway. In that case, we explained that 

the question of whether to enforce the terms of the arbitration award are the same as for any 

award—an arbitration proceeding will collaterally estop future litigation if “the parties were 

afforded a full and fair opportunity to litigate.” Id. at 316. In Agway, this Court cited 

approvingly to the Restatement (Second) of Judgments, for the proposition that “[A] 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.” Restatement (Second) of Judgments § 

84(1) (1982). 

Just as this Court has previously explained that a third party can assert collateral estoppel

to bar relitigation of an issue already decided by a prior court proceeding, so can a third party use 

a prior arbitration award to bind another party as long as the general requirements for collateral 

estoppel are met. See Trepanier v. Getting Organized, Inc., 155 Vt. 259, 264-65 (1990)

(explaining that collateral estoppel does not require mutuality of both parties). Vandenberg does 

not persuade us otherwise. The court in that case acknowledged that some other commentators 

and most other courts had taken a contrary approach. Vandenberg, 982 P.2d at 240; see Bailey 

v. Metro. Prop. & Liab. Ins. Co., 505 N.E.2d 908, 910 (Mass. Ct. App. 1987) (holding that “party 
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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.”). Further, allowing arbitration awards to be used in this manner meets the intended 

policy goals by promoting efficiency and reducing duplicity of litigation. See Riverdale Dev. 

Co. v. Ruffin Bldg. Sys., Inc., 146 S.W.3d 852, (Ark. 2004) (holding that party not involved in 

prior arbitration could bind opponent if party to be bound had full opportunity to litigate and 

issue was decided by arbitrator).

Turning to the elements of collateral estoppel, Lunde argues that collateral estoppel

should not apply because it would be unfair and because the issues raised in this case are 

different from those raised in the arbitration proceeding. Lunde has presented no reason why 

application of collateral estoppel would be unfair in this case. There was a full and fair 

opportunity to litigate issues in the arbitration proceeding. Although Lunde did not attend the 

hearing and challenge the evidence presented, the opportunity certainly existed. 

Further, the issues raised in this case are the same as those decided in the arbitration. 

Lunde’s complaint here asserts that defendants “unreasonably failed or refused to acknowledge 

the validity of debts owed to plaintiff.” Lunde contends that the specific claim made in this 

case—that defendants committed professional negligence in refusing to acknowledge the validity 

of certain debts owed to Lunde—was not and could not have been brought in the context of the 

arbitration proceeding. In order to prevail in this case, Lunde has to establish that the partnership 

owed him money, and that defendant was negligent in not crediting it to him in her accounting as 

receiver. The validity of the claimed debts is a necessary element in this case, and is exactly 

what the arbitrator decided in concluding that certain debts were not owed to Lunde personally. 

Therefore, Lunde is estopped from further litigating this issue, and the trial court properly 

granted dismissal on the pleadings.

Because we conclude that Lunde’s claims are barred by collateral estoppel, we do not

reach the question of whether defendants owed Lunde a duty of care. 

Affirmed. 

BY THE COURT:

_______________________________________

Paul L. Reiber, Chief Justice

_______________________________________

Beth Robinson, Associate Justice

_______________________________________

Harold E. Eaton, Jr., Associate Justice