# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 7- 10 45

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Sco tt A. Seld in

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt
Derry Seld in ; Trac i Se ld in Mo se r

ll ll ll ll ll ll ll ll ll ll l In te rv en or Pla in ti ff s

v.

The od or e M. Sel di n; Sta nl ey C. Sil ve rm an ; M ark Sch lo ss be rg

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

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No. 1 7- 10 47

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Sco tt A. Seld in

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e
Derry Seld in ; Trac i Se ld in Mo se r

ll ll ll ll ll ll ll ll ll ll l

In te rv en or

Pla in ti ff s - Ap pe ll an ts

v.

The od or e M. Sel di n; Sta nl ey C. Sil ve rm an ; M ark Sch lo ss be rg

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es__ __ __ __ __ __ App eal s fr om

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of Ne br as ka - Om ah a

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Su bm it te d: Nov em

be r 16 , 20 17 Fil ed : J an ua ry

2, 2 01 8

__ __ __ __ __ __ Befo re BENTON, SHEPHERD, and KELLY , Cir cu it Ju dg es

.

__ __ __ __ __ __ SHEPHERD, Cir cu it Ju dg e.

In 20 10
, feu di ng m em

be rs of th e Sel di n fam il y en te red in to a Sep arat io n Agr eem en t to di vi de joi nt ly own ed as se ts

. The Sep arat io n Agr eem en t co nt ai ne d an arb it rat io n cl au se , req ui rin g th e pa rti es to arb it rat e an y cl ai m s in vo lv in g th ei r joi nt ly

own ed pr op ert y

. Rat he r th an arb it rat in g, App el l a n t S c o tt Sel di n (“ Sco tt ”) fil ed a la wsu it fo r an acco un ti ng of a tru st th at he cl ai m s was no t in cl ud ed in th e Sep arat io n Agr eem en t. The di st ric t co ur t di sm is se d hi s cl ai m , fin di ng th at th e fed eral co ur ts la ck ed su bjec t m at te r juri sd ic ti on to he ar t he laws ui t. We dis ag ree.

I. Ba ck gr ou nd

Mi ll a r d Sel di n (“ Mil la rd ”), Sco tt ’s fat he r, crea te d th e Mi ll ard Sel di n Ch il dr en ’s Mas te r Trus t (“ MSCM Trus t ”) i n 1 9 9 2

. The od or e Sel di n an d St an le y Si lv e r man ( t o g et he r “ Appel le es ”) were de si gn at ed as two of th e tru st ees fo r th e MSC M Trus t. Sco tt , al on g w i th hi s si bl in gs , Derry Sel di n an d Traci Sel di n Mo se r (to ge th er “ In terv eno rs ”), were th e be ne fic ia rie s of th e tru st

. The MSC M Trus t
req ui red an an nu al acco un ti ng of th e tru st as se ts

. S c o t t al le ge s th at App el le es

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-br each ed th ei r fid uc ia ry du ti es as tru st ees an d ne ve r su bm it te d a tru st rep or t to Sco tt

or Int erv en or s. Th e tr us t was di ss ol ve d i n 2 00 2.

I n Feb ru ary 20 10
, Sco tt an d Mi ll ard en te red in to th e Sep arat io n Agr eem e n t wi t h A p p e l l e es in or de r to sp li t th e as se ts in whi ch th ey ha d joi nt in te res ts

. The Sep arat io n Agr eem en t in cl ud ed an arb it rat io n cl au se to se tt le an y di sp ut es ari si ng ou t of or rel at in g to th e Sep arat io n Agr eem en t or th e pa rti es ’ joi nt own ers hi p pr op ert ie s

or en ti ti es

. In Octo be r 20 11
, th e pa rti es in it ia te d arb it rat io n pr oc eed in gs

. In Feb ru ary 20 12
, th e pa rti es ag reed to m ed ia te , us in g th e arb it rat or as th e m ed ia t o r

. The

m ed ia ti on fel l ap art , an d th e arb it rat io n res um ed

. Fo ll owi ng t h e m ed ia ti on , Sco tt be ga n lo dg in g co m

pl ai nt s ag ai ns t th e arb it rat or /m ed ia to r, cal li ng fo r hi s res ig na ti on , bu t t he arb it rat or /m ed ia to r refu se d.

Sco tt th en fil ed th ree se pa ra te la wsu it s ag ai ns t App el le es in th e Dou gl as Co un ty, Neb ras ka Dis tri ct Co ur t reg ard in g th e pa rti es ’ joi nt in te res ts , an d each of th e la wsu it s was di sm is se d. Sco tt fil ed hi s fir st st at e co ur t la wsu it in Apr il 20 12
, al le gi ng

c l a im s th at were al read y pe nd in g in arb it rat io n. Am on g hi s cl ai m s was a cau s e o f

act io n fo r a fu ll acco un ti ng fro m 19 87 to pr es en t. The co ur t di sm is se d Sco tt ’s cl ai m , fin di ng th at he was re qu ire d t o s ub m it to arb it rat io n.

In Ju ne 20 12
, Sco tt fil ed a se co nd st at e co ur t la wsu it
, am en di ng th e co m pl ai nt

on Octo be r 10
, 20 12

. In Mar ch 20 13
, th e st at e co ur t si m il arl y di sm is se d th e se co nd la wsu it
, or de rin g th e pa rti es to res ol ve th ei r is su es th ro ug h arb it rat io n. In Sep te m be r 20 12
, Sco tt fil ed a de m an d wit h th e Am eri can Arb it rat io n Ass oc ia ti on (th e “ AAA ”) f o r t he di sq ua li fic at io n of th e arb it rat or

. The AAA re affi rm ed th e arb it rat or

. Sco tt fil ed a Mo ti on to Reco ns id er o r Cl ari fy Ru li ng , and th e AAA den ie d t he m ot io n.

In Decem be r 20 12 , S co tt fil ed a th ird la wsu it as ki ng th e st at e co ur t t o v acat e th e AAA ru li ng or to en

joi n arb it rat io n, rem ov e th e arb it rat or , an d rei ns ta te th e fir st la wsu it

. In Apr il 20 13
, th e st at e co ur t di sm is se d th e th ird la wsu it

. S c o t t a pp eal ed

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-each of th e la wsu it s. Pen di ng t h e a p p e a ls
, th e arb it rat or st ep pe d do wn, an d th e

de si gn at ed rep la cem en t arb it rat or refu se d to se rv e. The pa rti es ag reed to se le ct a ne w arb it rat or th ro ug h th e AAA. App el le es m ov ed to di smis s th e ap pe al s as m oo t, an d

on Aug us t 2 8, 2 01 3, t he Nebr as ka Su pr em e Co ur t g ran te d t he ir m ot io n.

In Octo be r 20 13
, a ne w arb it rat or was ap po in te d, an d th e a r bi tra ti on

r e c o mm e n ced

. On Ju ly 29
, 20 16
, Sco tt fil ed a la wsu it in fed eral co ur t ag a i n s t App el le es , r eq ue st in g a n a cco un ti ng of t he MSCM Trus t. In te rv en or s at te m pt ed to in te rv en e, bu t th ei r m ot io n was de ni ed

. App el le es fil ed a m ot io n to di sm is s fo r la ck of su bjec t m at te r juri sd ic ti on

. The di st ric t co u r t g r a nt ed App el le es ’ m ot io n to di sm is s, ho ld in g th at th e co ur t di d no t ha ve juri sd ic ti on be cau se th ere was a bi nd in g arb it rat io n ag reem en t whi ch ga ve th e arb it rat or th e au th or it y to fir st de ci de th e ex te nt of hi s juri sd ic ti on

. Fu rth erm or e, th e co ur t st at ed it di d no t ha ve juri sd ic ti on be cau se

res jud ic at a an d is su e pr ecl us io n ap pl ie d. Fi na ll y , th e co ur t al so fo un d th at th e Ro ok er-F el dm an do ct rin e b arre d t he co ur t fr om he ari ng Sco tt ’s cla im

.

On Apr il 27 , 2 01 7, aft er al l of th e br ie fin g was su bm it te d fo r th is ap pe al , t he arb it rat or en te re d a F in al Award
, fin di ng th at th e App el le es are en ti tl ed to reco ve r fro m Sco tt a ne t am ou nt of $2 ,97 7,0 31
, pl us po st -awar d si m pl e in te res t fro m th e da te

o f t h e a w ard

. On May 23
, 20 17
, App el le es fil ed a Mo ti on to Co nf irm Arb it rat io n 1
Award as J ud gm en t i n s ta te co ur t.

II . Dis cus si on

The so le is su e de ci d e d i n th is ap pe al is whe th er th e di st ric t co ur t erre d in
gr an ti ng App el le es ’ m ot io n to di sm is s fo r la ck of su bjec t m at te r juri sd ic ti on

. “ W e

W e gr an t App el le es ’ Mo ti on fo r Ju di ci al Not ic e, req ue st in g th a t th is Co ur t 1

reco gn iz e th at th e arb it rat or en te red hi s Fi na l Award an d th at App el le es ha ve m ov ed fo r th e award to be co nf

irmed as jud gm en t.

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-rev ie w de no vo th e gr an t of a m ot io n to di sm is s fo r la ck of su bjec t m at te r juri sd ic ti on

un de r Ru le 12 (b )(1 ).” Ci ty of Ben ke lm an v. Bas el in e Eng ’g C o r p

. , 8 67 F.3 d 87 5, 8 7 9- 80 (8 th Ci r. 20 17 ) (q uo ti ng Great Ri ve rs Hab it at All ia nc e v. FEMA, 6 1 5 F

. 3 d 98 5, 9 88 (8t h C ir. 2 01 0) ).

The di st ric t co ur t gr an te d App el le es ’ 12 (b )(1 ) m ot io n, fin di ng th at th e co ur t la ck ed su bjec t m at te r jur isdic ti on to he ar Sco tt ’s cl ai m be cau se th e pa rti es ha d en te red in to an arb it rat io n ag r e e men t

. Th i s cas e is co nt ro ll ed by ou r de ci si on in Ci ty of
Ben ke lm an v. Bas el in e Eng in eeri ng Co rp ., whe re we he ld th at a Ru le 12 (b )(1 ) m ot io n
to di sm is s fo r la ck of su bjec t m at te r juri sd ic ti on is no t th e ap pr op ria te m ech an is m to

us e to at te m

pt to co m pe l arb it rat io n. Ben ke lm an , 86 7 F.3 d at 88 0- 81

. An arb it rat io n
ag reem en t al on e, wit ho ut ot he r st at ut or y or bi nd in g juri sd i c t i o n a l li m it at io ns , do es

no t di ve st th e fed eral co ur ts of su bjec t m at te r juri sd ic ti on

. I d. (h ol di ng th at “ an

a r b i tra ti on ag reem en t ha s no rel ev an ce to th e qu es ti on of whe th er a gi ve n cas e

sa ti sf ie s co ns ti tu ti on al or st at ut or y defi nit ion s of j ur isd ic ti on ”). Rat he r, Ru le 12 (b )(6 )

or R u l e 5 6 m ot io ns are th e ap pr op ria te m ean s fo r pa rti es se ek in g to co m pe l arb it rat io n. Id . at 8 81

.

Here, th e pa rti es en te red an arb it rat io n ag reem en t, b u t t h e ex is te nc e of th at
ag reem en t al on e do es no t de pr iv e th e fed eral co ur ts of juri sd ic ti on

. Bec au se a va li d arb it rat io n cl au se al on e do es no t st rip th e fed eral co ur ts of su bjec t m at te r juri sd ic ti on ,
we fin d th at th e di st ric t co ur t erre d in di sm is si ng Sco tt ’s cl ai m on th at ba si s. See id

. The ap pr op ria te pr oc ed ur e wou ld ha ve be en fo r th e di st ric t co ur t to s t ay or di sm is s th e cas e b as ed on a Ru le 12 (b )(6 ) or Ru le 56 m ot io n p en di ng arb it rat io n. Se e id

.

The di st ric t co ur t al te rn at iv el y st at ed th at it la ck ed su bjec t m at te r juri sd ic ti on

ov er Scot t’s clai m be cau se res jud ic at a an d c ol la te ral es to pp el ap pl y

. The Su pr em e Co ur t ha s st at ed th at “ [p ]reclu si on , of co ur se , is no t a juri sd ic ti on al m at te r.” Exx on M o b i l C o rp

. v. Sau di Bas ic In du s. Co rp ., 54 4 U.S. 28 0, 29 3 (2 00 5) ; se e al so In r e Ath en s/ Alp ha Gas Co rp ., 71 5 F.3 d 23 0, 23 5 (8 th Ci r. 20 13 ) (s ta ti ng th at res jud ic at a

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-is a “ no n-

juri sd ic ti on al qu es ti on ”). Bec au se pr ecl us io n is no t a juri sd ic ti on al m at te r, th e di st ric t co ur t erre d whe n it fo u n d t h a t res jud ic at a an d co ll at eral es to pp el were

su ffi ci en t gr ou nd s to gr an t a Ru le 12 (b )(1 ) m ot io n. Rat he r, Ru le 12 (b )(6 ) or Ru le 56

m ot io ns are th e m or e ap pr op ri a t e ve hi cl es fo r a di sm is sa l ba se d on pr ecl us io n. S e e A

. H. ex rel

. Hub ba rd v. Mi dwe st Bu s Sal es , In c., 82 3 F.3 d 44 8, 45 3 (8 t h C i r

. 20 16 ) (Ru le 12 (b )(6 )); Sm it h v. Uni te d St at es , 36 9 F.2 d 49
, 53 (8 th Ci r. 19 66 ) (Ru le
56 ).

The di st ric t co ur t a l s o fo un d it la ck ed su bjec t m at te r juri sd ic ti on ba se d on Ro ok er-F el dm an

. To th e ex te nt th at Sco tt is a “ st at e co ur t lo se r” who is ch al le ng in g th e st at e co ur t’s or de r fo r hi s acco un ti ng cl a i ms t o be arb it rat ed
, we ag ree wit h th e di st ric t co ur t th at Ro ok er-F el dm an wo u l d a p p l y , ba rri ng hi s cl ai m in fed eral co ur t. See Exx on Mo bi l, 54 4 U.S. at 28 4. Howev er, we th in k th at it is un ne ces sa ry to reac h th e qu es ti on of whe th er Ro ok er-F el dm an ap pl ie s he re be cau se th e arb it rat io n to whi ch Sco tt was or de red to su bm it ha s al read y be en co m pl et ed

. Thu s, on rem an d th e di st ric t co u r t m ay he ar a ch al le ng e to th e en fo rcem en t of th e arb it rat io n award
, bu t

m ay no t co ns id er whe th er th e st at e co ur t’s o rd er t o a rb it rat e acc ou nt in g c la im s was
ap pr op ria te

. Fu rth erm or e, fo r th e sa m e reas on s, we fin d it is un ne ces sa ry to co ns id er In te rv en or s’ app eal of t he de ni al of t he ir m ot io n t o i nt erv en e.

II I. Co ncl us io n

W e rev ers e an d rem an d to th e di st ric t co ur t fo r fu rth er pr oc eed in gs co ns is te nt wit h t hi s o pi ni on

.

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