Court Opinion

ID: 4635626
Source: CourtListenerOpinion
Date Created: 2020-11-24 15:05:23.375705+00
Date Added: 2024-06-11T07:58:25.075151
License: Public Domain

In the
                                Missouri Court of Appeals
                                           Western District
STEVEN PINKERTON,                                         )
                                                          )
                    Respondent,                           )    WD83594
                                                          )
v.                                                        )    OPINION FILED:
                                                          )    November 24, 2020
TECHNICAL EDUCATION                                       )
SERVICES, INC.,                                           )
                                                          )
                     Appellant.                           )

                 Appeal from the Circuit Court of Jackson County, Missouri
                          The Honorable Patrick W. Campbell, Judge

 Before Division Four: Cynthia L. Martin, Chief Judge, Presiding, Karen King Mitchell,
                       Judge and Anthony Rex Gabbert, Judge

       Technical Education Services Inc., an affiliate of Aviation Institute of

Maintenance, et al., ("AIM"), appeals the trial court's order denying AIM's motion to

dismiss, or in the alternative, to compel arbitration.1 AIM asserts three points on appeal

challenging the trial court's determination that AIM is collaterally estopped from seeking

to compel arbitration. We affirm the trial court's order.

       1
           An order denying a motion to compel arbitration is appealable under section 435.440.
                         Factual and Procedural Background

      AIM, a Virginia-based corporation, operates aviation maintenance trade schools

throughout the United States, one of which is located in Kansas City, Missouri. In 2009,

Steven Pinkerton ("Pinkerton") enrolled at AIM's Kansas City, Missouri trade school. In

doing so, he signed an enrollment agreement which included an arbitration provision that

provided as follows:

      Arbitration Agreement: I agree that any controversy, claim or dispute of
      any sort arising out of or relating to matters including, but not limited to:
      student admission, enrollment, financial obligations and status as a student,
      which cannot be first resolved by way of applicable internal dispute
      resolution practices and procedures, shall be submitted for arbitration, to be
      administered by the American Arbitration Association located within
      Virginia Beach, Virginia, in accordance with its commercial arbitration
      rules. All fees and expenses of arbitration shall be shared equally and any
      award rendered in favor of a student will be limited to the total amount paid
      to the School by the student. Any award or determination rendered by the
      arbitrator(s) shall be final and entered as a judgment by a court of
      competent jurisdiction.

Six months later, Pinkerton signed a new enrollment agreement when he switched to a

different program within AIM's school. The new enrollment agreement contained the

same arbitration provision.

      In 2014, Pinkerton filed a lawsuit in the Circuit Court of Jackson County,

Missouri, against AIM; Adrian Rothrock, an admissions representative; and W. Gerald

Yagen, the school's owner, alleging the school engaged in deception, misrepresentation,

and fraud. AIM moved to dismiss the suit, or in the alternative, to compel arbitration and

stay the proceedings. AIM contended that the arbitration provision required delegation to

an arbitrator of all threshold arbitrability disputes, including whether the arbitration

                                            2
clause is enforceable.     The trial court granted AIM's motion to compel arbitration,

concluding that the arbitration provision required delegation of threshold arbitrability

disputes to an arbitrator, including Pinkerton's contention that the arbitration provision

was unenforceable because it was unconscionable.

        Pinkerton sought a writ of prohibition from the Missouri Supreme Court to require

the trial court to overrule the motion to compel arbitration because he had raised issues

involving the validity and enforceability of the arbitration provision that could not be

delegated to an arbitrator for determination. State ex rel. Pinkerton v. Fahnestock, 531
S.W.3d 36, 39-40 (Mo. banc 2017). The Supreme Court found that "[t]he arbitration

agreement clearly and unmistakably evidence[d] the parties' intent to delegate threshold

issues of arbitrability to the arbitrator," and that the trial court properly sustained AIM's

motion to compel arbitration. Id. at 53. The Supreme Court thus ordered the parties to

proceed to arbitration. Id.

        Pinkerton's lawsuit proceeded to arbitration. Pinkerton and AIM jointly selected

the Honorable Gary Oxenhandler to serve as the arbitrator. On November 15, 2018,

Judge Oxenhandler issued an arbitrator's decision denoted as a "judgment" which ruled

that:

        Arbitration is supposed to be a fair process, a process that affords all parties
        the process they are due. Such is not the case here. For the reasons stated
        above, the Arbitrator finds the Arbitration Agreement unconscionable and
        unenforceable. This case is remanded to the Courts for appropriate action.
        Arbitration dismissed.

Pinkerton filed the arbitrator's decision with the trial court as an attachment to a motion to

lift the stay of proceedings imposed when arbitration had been compelled. AIM did not

                                               3
oppose lifting the stay, and did not challenge the arbitration decision. The trial court

granted Pinkerton's motion, lifted its stay, and the parties resumed litigation of

Pinkerton's lawsuit in the trial court.

         On July 23, 2019, Pinkerton voluntarily dismissed his lawsuit without prejudice

pursuant to Rule 67.02.2 Three days later, Pinkerton re-filed his lawsuit, naming the

same parties and asserting the same causes of action as had been asserted in his original

lawsuit filed in 2014.

         AIM once again moved to dismiss, or alternatively, to compel arbitration and stay

the proceedings. AIM argued that the arbitration provision in the enrollment agreement

was enforceable and that any challenges to enforceability of the provision had been

delegated to the arbitrator for determination. Pinkerton argued that AIM was collaterally

estopped from seeking to compel arbitration because an arbitrator had already found the

arbitration provision to be unconscionable and unenforceable. AIM argued it was not

collaterally estopped from seeking to compel arbitration because the arbitrator's decision

was not a final judgment, and because Pinkerton's voluntary dismissal of the 2014 lawsuit

"wipe[d] the slate clean," negating any preclusive effect of the arbitrator's decision.

         The trial court denied AIM's motion to compel arbitration. The trial judge found

that for purposes of collateral estoppel, the pertinent issue was whether the arbitration

provision was enforceable, and that "[t]he prior action resulted in a final, valid judgment

on that issue" when the arbitrator issued his decision. The trial court also found that

          2
            All Rule references are to Missouri Court Rules, Volume I -- State 2019 unless otherwise noted. Rule
67.02 permits the plaintiff in a lawsuit to voluntarily dismiss his or her lawsuit without prejudice, without order of
the court, prior to the swearing of a jury in a jury tried matter, or before the introduction of evidence at trial in a
court tried matter.

                                                            4
Pinkerton had established the remaining elements of collateral estoppel. Thus, the trial

court concluded that AIM was collaterally estopped from seeking to compel arbitration

because the arbitration provision had been determined to be unenforceable. The trial

court also concluded that Pinkerton's voluntary dismissal of the 2014 lawsuit did not

negate the preclusive effect of the "valid final judgment regarding the enforceability of

the arbitration provision."

       AIM appeals.

                                  Standard of Review

       "We review the circuit court's denial of a motion to compel arbitration de novo."

Fogelsong v. Joe Machens Auto. Group Inc., 600 S.W.3d 288, 293 (Mo. App. W.D.

2020) (citing Soars v. Easter Seals Midwest, 563 S.W.3d 111, 113 (Mo. banc 2018).

"Upon such review, we must first determine whether a valid arbitration agreement

exists." Sniezek v. Kansas City Chiefs Football Club, 402 S.W.3d 580, 583 (Mo. App.

W.D. 2013) (citing Nitro Distributing, Inc. v. Dunn, 194 S.W.3d 339, 345 (Mo. banc

2006). If the trial court's ruling on the motion to compel arbitration includes "factual

findings that bear on the existence, scope, or revocability of the arbitration agreement,

then we will affirm the factual findings if they are supported by substantial evidence and

are not against the weight of the evidence." Id. (citing Whitworth v. McBride & Son

Homes, Inc., 344 S.W.3d 730, 736 (Mo. App. W.D. 2011). The party asserting the

existence of a valid and enforceable contract to arbitrate bears the burden of proving that

proposition. Id.

                                            5
                                         Analysis

       AIM raises three points on appeal challenging the trial court's conclusion that AIM

was collaterally estopped from seeking to compel arbitration. In its first point, AIM

argues that the trial court committed legal error because collateral estoppel is an issue of

arbitrability which had been delegated to the arbitrator for determination. AIM's second

point asserts that even if the trial court properly determined the issue of collateral

estoppel instead of referring that matter to arbitration, the trial court erred because the

arbitrator's decision was not a final judgment on the merits. In its third point, AIM

claims that the trial court erred in concluding that Pinkerton's voluntary dismissal of the

2014 lawsuit did not negate the preclusive effect, if any, of the arbitrator's decision. We

address the points in turn.

Point One: Because the arbitrator's decision controls whether an arbitration
agreement exists between Pinkerton and AIM, the trial court properly determined the
collateral estoppel effect of the arbitrator's decision

       It is uncontested that the arbitration provision AIM now seeks to enforce was

determined by an arbitrator to be unenforceable in connection with Pinkerton's 2014

lawsuit. In other words, an arbitrator previously determined that no valid arbitration

agreement exists between the parties because the arbitration provision was

unconscionable. "Arbitration is a matter of contract under the Federal Arbitration Act

(FAA)." Soars v. Easter Seals Midwest, 563 S.W.3d 111, 114 (Mo. banc 2018) (citing

AT&T Mobility, LLC v. Concepcion, 563 U.S. 333, 339 (2011). "'[A] party cannot be

required to arbitrate a dispute that it has not agreed to arbitrate[,]' and arbitration will

only be compelled where ‘a valid arbitration agreement exists . . . .'"          Hughes v.

                                             6
Ancetry.com, 580 S.W.3d 42, 47 (Mo. App. W.D. 2019) (quoting NutraPet Sys., LLC v.

Proviera Biotech, LLC, 542 S.W.3d 410, 413-14 (Mo. App. W.D. 2017).

       As such, the ultimate issue we must resolve is the preclusive effect of the

arbitrator's decision that no valid arbitration agreement exists between Pinkerton and

AIM. However, the initial issue we must resolve is who, as between an arbitrator and the

trial court, was required to determine the preclusive effect of the arbitrator's decision.

AIM views the preclusive effect of the arbitrator's decision as an issue of enforceability

of an arbitration agreement that must be determined by an arbitrator based on the

arbitration agreement's delegation language. See Pinkerton, 531 S.W.3d at 53. Pinkerton

contends that the trial court was required to determine the preclusive effect of the

arbitrator's decision because a trial court must first determine that an agreement to

arbitrate exists before it can delegate matters regarding enforceability of the agreement to

an arbitrator for determination. See Theroff v. Dollar Tree Stores, Inc., 591 S.W.3d 432,

440 (Mo. banc 2020) ("[T]he circuit court cannot delegate [a] matter to an arbitrator

whose very existence depends upon an agreement."). We conclude that Theroff controls

the resolution of this dispute, and that because the preclusive effect of the arbitrator's

decision will control whether an arbitration agreement exists, the trial court properly

determined whether AIM was collaterally estopped by the arbitrator's decision.

       In Theroff, the Supreme Court held that in the absence of an agreement to

arbitrate, a delegation provision is not effective. Id. at 439-40. The Court was reviewing

a trial court's refusal to compel arbitration where the party opposing arbitration, who was

blind, denied affixing her digital signature to documents at the time she was hired, and

                                             7
alleged that the employer's representative did so without her assent, as the nature of the

documents were not explained to her. Id. at 435. Though it was uncontested that the

documents included an arbitration provision, whether the employee assented to the

arbitration provision by affixing her digital signature was contested. Id. at 437. The

Court framed the issue before it as one of first impression, and noted that "[u]nlike the

standard scenario in which there is no dispute about whether a party signed an arbitration

agreement, when a party disputes signing, the court must first decide the existence of an

agreement to arbitrate." Id. (citing Chastain v. Robinson-Humphrey Co., 957 F.2d 851,

854 (11th Cir. 1992) (noting that the trial court must determine in first instance whether

an agreement to arbitrate exists where signature is contested) (abrogated on other grounds

by Larsen v. Citibank FSB, 871 F.3d 1295, 1303 n.1 (11th Cir. 2017)). Noting that

Theroff challenged the existence of any agreement to arbitrate, the Supreme Court

concluded that because the "existence of the agreement to arbitrate is a prerequisite to

compelling arbitration," the trial court properly determined this issue. Id. at 439.

       The decision in Theroff was not unanimous. In one dissenting opinion, a minority

of the court held that a controversy over signature is a contract formation issue that must

be referred to the arbitrator in the presence of an unchallenged delegation provision in the

arbitration agreement. Id. at 442-46 (Powell, J., dissenting). In a separate dissent, a

minority of the court wrote separately to emphasize that assent to a contract, whether

challenged based on signature or otherwise, is always a contract formation issue, and that

the delegation provision in Theroff's arbitration agreement expressly delegated to an

arbitrator disputes involving contract formation. Id. at 446-48 (Fischer, J., dissenting).

                                              8
We believe, however, that the circumstances in this case are even more compelling than

those in Theroff. Here, an arbitrator determined that the arbitration provision included in

the enrollment agreement Pinkerton signed was not enforceable, and thus that no valid

agreement to arbitrate existed. If the arbitrator's decision binds AIM, then there exists no

valid arbitration agreement to enforce, including the agreement's delegation provision.

Consistent with Theroff, where the very existence of an arbitration agreement is

challenged, it is for the trial court to make that determination and not an arbitrator. In

fact, this result is compelled by section 435.355.1 which provides that:

       On application of a party showing an agreement described in section
       435.350, and the opposing party's refusal to arbitrate, the court shall order
       the parties to proceed with arbitration, but if the opposing party denies the
       existence of the agreement to arbitrate, the court shall proceed summarily
       to the determination of the issue so raised . . . .

(Emphasis added.)

       AIM disregards Theroff, and insists that the preclusive effect of the arbitrator's

decision had to be determined by the arbitrator. AIM relies on Melnuk v. Hillman, a

recent opinion which held, as a matter of first impression, that an arbitrator, rather than

the trial court, was required to decide the collateral estoppel effect of a previous

arbitration award on a second arbitration demand. 593 S.W.3d 674, 681 (Mo. App. E.D.

2020). But AIM's reliance on Melnuk is misplaced. Melnuk did not hold that the

collateral estoppel effect of a prior arbitration decision must always be determined by an

arbitrator in the face of a second arbitration demand. More importantly, Melnuk did not

involve a scenario where the collateral estoppel effect of an earlier arbitration decision

was central to determining whether an arbitration agreement even exists.

                                             9
      In Melnuk, the owners of a limited liability company entered into a buy-sell

agreement where Hillman agreed to purchase Melnuk's 50% interest. Id. at 676. The

buy-sell agreement and the operating agreement for the limited liability company each

contained an arbitration provision. Id. at 677. The buy-sell agreement contemplated that

Hillman would give Melnuk a promissory note for a portion of the purchase price, and

that the note balance could be adjusted by subsequent contingent liabilities. Id. at 676.

One such liability involved amounts paid to key employees pursuant to a phantom option

plan in the event of any change of control of ownership. Id. The "change of control"

provision in the phantom option plan was modified after the buy-sell agreement was

entered into from "greater than fifty percent" to "fifty percent or more." Id. at 676-77.

As a result, nearly $300,000 was paid out by Hillman to key employees, and Hillman

notified Melnuk that the balance Hillman owed on the promissory note was being

correspondingly reduced. Id. at 677. Melnuk disagreed with the adjustment, and claimed

he had not signed the amendment to the phantom option plan modifying the definition of

"change of control." Id.

      Hillman initiated an arbitration proceeding seeking a declaratory judgment that the

"change of control" contingent liability adjustments were valid under the buy sell

agreement. Id. at 677-78.    Melnuk denied the validity of the change of control

adjustments, and also asserted counterclaims seeking upward adjustments of the

promissory note balance for reasons unrelated to the change of control payments. Id. at

678. The arbitrator entered an arbitration award which stated that the issues presented in

the arbitration were "ten potential adjustments" of the principal amount owed by Hillman

                                           10
to Melnuk on the promissory note. Id. The arbitrator concluded that the moneys paid to

key employees "met the contractual definition of a contingent liability adjustment" in the

promissory note, resulting in a reduction of the amount due on the note. Id. However,

the arbitrator expressly noted in the award that no opinion was being expressed as to

whether Melnuk might have a claim for breach of fiduciary duty or some other cause of

action relating to improper modification of the "change of control provision," and noted

that such claims were "beyond the scope of this arbitration." Id.

       The arbitrator's award was confirmed in early 2018. Id. Almost a year later,

Melnuk filed a lawsuit seeking damages from Hillman on theories of breach of fiduciary

duty, fraud, and conspiracy arising out of the alleged unauthorized amendment of the

"change of control" provision in the phantom option plan. Id. Hillman moved to compel

arbitration. Id. Melnuk argued the earlier arbitration award determined that his claims

were beyond the scope of the arbitration clauses in the parties' operating and buy/sell

agreements. Id. at 687-79.    Neither party contested the existence of an arbitration

agreement. The only issue was whether the scope of the arbitration agreement had been

resolved by the earlier arbitrator's decision.

       The trial court denied Hillman's motion to compel arbitration. Id. at 679. On

appeal, the Eastern District characterized the dispute between the parties as whether

Hillman was collaterally estopped by the arbitration award to compel a second

arbitration. Id. Specifically, the parties disputed whether the arbitrability of Melnuk's

damage claims had been decided by the first arbitration award, and whether an arbitrator

or the court should determine this issue. Id. at 680.

                                                 11
       The Eastern District noted that determining whether an arbitrator or a court should

"determine[] the collateral estoppel effect of a prior arbitration award . . . is an issue of

first impression." Id. After analyzing federal decisions relevant to the issue, the court

concluded that "[a]n arbitrator must decide whether Hillman is collaterally estopped by

the [earlier arbitration award] from compelling arbitration of Melnuk's claims for

damages not because the parties agreed to submit threshold questions of arbitrability to

an arbitrator but because evaluating Melnuk's collateral estoppel defense is a 'procedural

question[] which grow[s] out of the dispute and bear[s] on its final disposition.'" Id. at

682 (quoting Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84-85 (2002))

(emphasis added).

       Melnuk thus cannot be read as urged by AIM for the proposition that an

affirmative defense raising the collateral estoppel effect of an earlier arbitration award

must always be referred for determination by an arbitrator pursuant to a delegation

provision.   In fact, Melnuk expressly dispels this conclusion. At best, Melnuk simply

holds that "the merits of an argument challenging the scope of the issues resolved in a

prior arbitration award 'must be presented to and resolved by [a] . . . second arbitration

proceeding.'" Id. at 681 (quoting W & T Travel Servs., LLC v. Priority One Servs., Inc.,

69 F. Supp. 3d 158, 171 (D.D.C. 2014)).

       Here, there is no dispute regarding the scope of the issues resolved by the prior

arbitration award. The parties agree that the prior arbitration award determined the

enforceability of the arbitration provision in the enrollment agreement by concluding the

provision was unenforceable because it was unconscionable. The exact same issue is

                                             12
now framed by Pinkerton's opposition to AIM's motion to compel arbitration in

Pinkerton's re-filed case.3 Melnuk is therefore of no assistance to AIM as it did not

address whether an arbitration agreement exists. Instead, because the trial court first had

to determine that an arbitration agreement existed before it could compel arbitration in

Pinkerton's refiled case, the trial court did not err in determining the collateral estoppel

effect of the arbitrator's decision on that very issue.

        AIM's first point on appeal is denied.

Point Two: The arbitrator's decision was a judgment on the merits

        AIM next argues that even if the trial court properly determined the preclusive

effect of the prior arbitration decision instead of referring that issue to an arbitrator, the

trial court erroneously found the arbitrator's decision collaterally estopped AIM because

the arbitrator's decision was not a judgment on the merits.

        "'Collateral estoppel, or issue preclusion, is used to preclude the relitigation of an

issue that already has been decided in a different cause of action.'" Matter of Invenergy

Transmission LLC, 604 S.W.3d 634, 639 (Mo. App. W.D. 2020) (quoting Brown v.

Carnahan, 370 S.W.3d 637, 658 (Mo. banc 2012). Four elements must be shown in

order to give a prior adjudication preclusive effect:

        (1) the issue decided in the prior action was identical to the issue presented
        in the later action; (2) the prior action resulted in a judgment on the merits;4
        (3) the party against whom estoppel is asserted was a party or was in privity

         3
           In its second point on appeal, AIM concedes that the issue is the enforceability of the arbitration
agreement.
         4
           Some Missouri cases add the word "final" before the word judgment in describing this element. See, e.g.,
Fischer ex rel. Scarborough v. Fischer, 34 S.W.3d 263, 265 (Mo. App. W.D. 2000). As we explain, however,
inclusion of the word "final" is immaterial. What matters is whether a determination that is binding on the parties
has been made on an issue--not whether the determination is "final" as in final for purposes of appeal.

                                                        13
         with a party to the prior action; and (4) the party against whom collateral
         estoppel is asserted had a full and fair opportunity to litigate the issue in the
         prior action.

U-Haul Company of Missouri v. Carter, 567 S.W.3d 680, 684 (Mo. App. W.D. 2019)

(citing James v. Paul, 49 S.W.3d 678, 682 (Mo. banc 2001). AIM concedes that only the

second element, whether the prior adjudication resulted in a judgment on the merits, is at

issue in this case.5

         "'For the purposes of collateral estoppel, an arbitration award may constitute a

final judgment on the merits.'" Melnuk, 593 S.W.3d at 680 (quoting Graybar Elec. Co.,

Inc. v. Federal Ins. Co., 567 F. Supp. 2d 1116, 1123 (E.D. Mo. 2008).                                              AIM

acknowledges this point, but asserts that the arbitrator's decision was not a "merits"

decision, and thus cannot constitute a judgment on the merits for purposes of collateral

estoppel. AIM relies on State v. Purvis to contend that the arbitrator merely decided

where Pinkerton's dispute should be litigated, and was thus not a judgment on the merits

because it was a "judgment rendered upon some preliminary or merely technical point, or

by default, and without trial." 739 S.W.2d 589, 591 (Mo. App. S.D. 1987).

         Purvis is readily distinguishable. In Purvis, the Southern District concluded that

the State was not collaterally estopped to prove probable cause in a driving while

intoxicated case even though an administrative hearing officer determined in a related

license suspension proceeding that there was "no evidence in [the] file on probable

         5
           We agree that the trial court correctly concluded that the remaining three elements for collateral estoppel
have been established. The issue decided in the arbitration proceeding was enforceability of the arbitration
agreement, and this is the identical issue presented to us. Further, the parties are identical, and AIM had a full and
fair opportunity to litigate the issue in arbitration. Therefore, we analyze whether the prior arbitration resulted in a
judgment on the merits.

                                                           14
cause." Id. at 590-91. The Southern District concluded that the administrative hearing

officer's decision was ambiguous, as it could not be determined whether the hearing

officer weighed evidence to find, on the merits, that probable cause was not established,

or instead concluded that probable cause was not demonstrated because a statutory

requirement relevant only to administrative suspension proceedings had not been

satisfied. Id. Because it was impossible to say that in making a probable cause finding,

the hearing officer relied on anything "other than the preliminary and technical basis of

deficiencies in the arresting officer's report," the court declined to treat the hearing

officer's decision as a judgment on the merits. Id. at 591.

         In stark contrast, the arbitrator's decision entered in connection with Pinkerton's

2014 lawsuit was plainly a determination on the merits regarding the enforceability of the

parties' arbitration agreement. The arbitrator dismissed the arbitration proceeding after

finding there was no valid arbitration agreement to enforce because the agreement was

unconscionable. This was not a preliminary or technical determination, but a substantive

determination on an ultimate issue that AIM insisted be heard by an arbitrator. Purvis is

of no assistance to AIM.6

         AIM next argues that even if the arbitrator's decision was on the merits, it was not

a judgment. AIM relies on State ex rel. Henderson v. Asel, where our Supreme Court

addressed what constitutes a judgment, and held that "a judgment is a legally enforceable

         6
           AIM also relies on Med. Shoppe Int'l, Inc. v. J-Pral Corp., 662 S.W.2d 263, 275 (Mo. App. E.D. 1983), as
additional support for the proposition attributed to Purvis. AIM's reliance is misplaced. Medicine Shoppe Int'l
simply concluded that J-Pral Corporation was not collaterally estopped from raising the issue of personal jurisdiction
because, when the trial court dismissed Medicine Shoppe's petition for want of personal jurisdiction, "no decision on
the merits" on the issue of personal jurisdiction had yet been entered by the arbitration tribunal. Id.

                                                         15
judicial order that fully resolves at least one claim in a lawsuit and establishes all the

rights and liabilities of the parties with respect to that claim." 566 S.W.3d 596, 598 (Mo.

banc 2019). AIM argues that the arbitrator's decision was not a judicial order, and

therefore cannot be a "judgment" on the merits. AIM's argument disregards authority for

the proposition that an arbitration award may constitute a judgment on the merits for

purposes of collateral estoppel. See Melnuk, 593 S.W.3d at 680. Moreover, while

Henderson refers to a judgment as a "judicial order," it did so in the context of addressing

when a judgment is appealable. 566 S.W.3d at 598-99. Henderson did not address what

constitutes a judgment for purposes of collateral estoppel, and cannot be read to limit

"judgments" for that purpose to judicial orders.7

        Finally, AIM argues that other courts have ruled that "a decision on a motion to

compel arbitration is not a final judgment on the merits that gives rise to collateral

estoppel."      Pearson v. P.F. Chang's Bistro, Inc., No. 13-cv-2009-JLS, 2015 WL
12910914, at *4 n.4 (S.D. Cal. Feb. 23, 2015); Lotsoff v. Wells Fargo Bank, No. 18-cv-

02033-AJB-JLB, 2019 WL 4747667, at *4 (S.D. Cal. Sept. 30, 2019). Neither case is

binding on this court. Fogelsong, 600 S.W.3d at 295 n.3 ("This Court is not bound by the

decisions of federal district courts.") (citing Godat v. Mercantile Bank of Nw. Cty., 884
S.W.2d 1, 4 n.1 (Mo. App. E.D. 1994)).                      In any event, both decisions are readily

distinguishable. Though Pearson noted in a footnote that a state court's order denying a

         7
           AIM also relies on our Supreme Court's conclusion that an order sustaining partial summary judgment on
only some issues in a case, including issues of arbitrability and consideration, "was not a final judgment" for
purposes of appeal. Sanford v. CenturyTel of Mo., LLC, 490 S.W.3d 717, 719 (Mo. banc 2016). However, as with
Henderson, a discussion of when judgments are appealable cannot be fairly read to either contemplate, or be
controlling on, the issue of what constitutes a judgment on the merits for purposes of collateral estoppel.

                                                       16
defendant's motion to compel arbitration was not a "final judgment on the merits"

supporting collateral estoppel in the same plaintiff's later filed federal court action, there

is no basis from this vague reference to determine the basis for the state court's order, and

more importantly, whether the order found there to be no valid arbitration agreement in

existence. 2015 WL 12910914, at *4 n.4. And though Lotsoff rejected a plaintiff's

argument that the defendant was collaterally estopped to compel arbitration where the

same arbitration provision had been declared unenforceable, it is plain that the

"enforceability" determination was not only made in another case involving different

parties, but as well that the determination was not yet final and was being appealed. 2019
WL 4747667, at *4.

       We conclude that the arbitrator's decision finding the arbitration provision in the

enrollment agreement to be unenforceable was a judgment on the merits. This conclusion

is supported by Cooper v. Yellow Freight System, Inc., 589 S.W.2d 643, 645 (Mo. App.

E.D. 1979), and by Pratt v. Purcell Tire & Rubber Co., 846 S.W.2d 230, 233 (Mo. App.

E.D. 1993), both of which expressly addressed the preclusive effect of a previous

arbitrator's decision, and both of which concluded that "where there has been a final and

binding arbitration between the parties," the facts determined in the arbitration

proceeding may not be relitigated. Pratt, 846 S.W.2d at 233 (citing Cooper, 589 S.W.2d

at 645).

       In Cooper, a trucking company terminated a driver for reckless driving resulting in

an accident, and an arbitration proceeding sustained the termination on the same grounds.
589 S.W.2d at 644. The driver then filed suit, alleging, inter alia, that the reason

                                             17
provided for his termination was false because he did not drive recklessly resulting in an

accident. Id. The Eastern District affirmed the trial court's grant of summary judgment

for the defendant because the issue of whether or not the driver drove recklessly, was "the

identical issue litigated by the two parties" in arbitration, and collateral estopped

therefore barred the driver from relitigating the issue. Id. at 645 ("[i]f the procedure used

to settle the dispute is one of the party's own choosing, as it was here, and was a final and

binding arbitration between the parties, the courts may not relitigate facts determined in

the arbitration proceeding.")

       Similarly, in Pratt, a mechanic alleged, in both an arbitration proceeding and in a

suit for damages, that his former employer denied his reinstatement in retaliation after he

filed a workers' compensation claim. 846 S.W.2d at 230. The issue presented to the

arbitrator was whether the employer had unjustly refused to allow the mechanic to return

to work. Id. at 232.   The arbitrator found that the employer had not acted in a

discriminatory manner. Id. The Eastern District affirmed the trial court's subsequent

grant of summary judgment in the employer's favor on the grounds that collateral

estoppel precluded relitigating the reason for the employer's refusal to reinstate the

mechanic because the same issue had already been litigated by the parties in a final and

binding arbitration proceeding. Id. at 233 (citing Cooper, 589 S.W.2d at 645).

       Cooper and Pratt thus hold that when a specific issue has been litigated in an

arbitration proceeding, and where the arbitrator's decision expressly resolves that issue,

the parties are collaterally estopped from relitigating the same issue in a subsequent

proceeding.      Not surprisingly, the Eastern District in Melnuk acknowledged this

                                             18
precedent, and differentiated the circumstances in Melnuk (where the scope of what was

determined in a prior arbitration was contested) from the circumstances in Cooper and

Pratt, thus reinforcing that "a party is barred from asserting a claim identically presented

and determined in a prior arbitration proceeding." 593 S.W.3d at 682 (citing Cooper, 589
S.W.2d at 645; Pratt, 846 S.W.2d at 233).

       Here, AIM moved to compel arbitration in Pinkerton's 2014 lawsuit. In response,

Pinkerton generally challenged the validity of the arbitration agreement and specifically

challenged the validity of the delegation provision.      Our Supreme Court found the

arbitration agreement to "clearly and unmistakably evidence the parties' intent to delegate

threshold issues of arbitrability to the arbitrator." Pinkerton, 531 S.W.3d at 53. The

Court thus ordered the parties to proceed to arbitration, after concluding that the

delegation provision was valid and enforceable under the FAA "'leaving any challenge to

the validity of the [a]greement as a whole,' or to the other provisions within the

arbitration agreement, 'for the arbitrator.'" Id. at 52-53 (quoting Rent-A-Center, West,

Inc. v. Jackson, 561 U.S. 63, 72 (2010)). The parties thereafter agreed upon an arbitrator,

and that arbitrator subsequently issued a written decision, denominated a judgment,

which finally concluded that the arbitration agreement was unconscionable and

unenforceable, requiring dismissal of the arbitration proceeding. AIM did not challenge

the arbitrator's determination, and did not oppose Pinkerton's filing of the arbitrator's

decision with the trial court in connection with a request to lift the stay of proceedings.

The arbitrator's decision finally resolved the issue of enforceability of the arbitration

agreement, and constitutes a judgment on the merits with respect to that issue. The trial

                                            19
court properly concluded that AIM is collaterally estopped to relitigate that issue in

Pinkerton's re-filed lawsuit.

       Point two on appeal is denied.

Point Three: Pinkerton's voluntary dismissal of his 2014 lawsuit without prejudice did
not vacate the arbitrator's decision

       Finally, AIM contends that even if the trial court properly concluded that the

arbitrator's decision was a judgment on the merits, when Pinkerton voluntarily dismissed

the 2014 lawsuit, his action "wiped the slate clean" as if Pinkerton never brought the

2014 lawsuit, and thus vacated the arbitrator's decision.

       AIM relies on Williams v. Southern Union Co., 364 S.W.3d 228, 235 (Mo. App.

W.D. 2011). In Williams, the trial court partially sustained a defendant's motion to

dismiss two of the plaintiff's claims. Id. at 230. The plaintiff subsequently dismissed the

lawsuit without prejudice pursuant to Rule 67.02, and then refiled the suit, reasserting the

previously dismissed claims. Id. at 230-31.    We found that the plaintiff was not

collaterally estopped to reassert the previously dismissed claims because her voluntary

dismissal of the initial lawsuit "wiped the slate clean," as if the suit had never been filed.
Id. at 234-35. Central to this holding, however, is the fact that pursuant to Rule 74.01(b):

       [A]ny order or other form of decision, however designated, that adjudicates
       fewer than all the claims or the rights and liabilities of fewer than all the
       parties shall not terminate the action as to any of the claims or parties, and
       the order or other form or decision is subject to revision at any time before
       the entry of judgment adjudicating all the claims and rights and liabilities of
       all the parties.

Thus, our reference to "wiping the slate clean" in connection with the plaintiff's voluntary

dismissal of the initial lawsuit without prejudice pursuant to Rule 67.02 simply

                                             20
acknowledged that interlocutory rulings by a trial court have no preclusive effect in a

refiled lawsuit because they did not yet have a preclusive effect in the initial lawsuit.8

         In contrast, the arbitration compelled by AIM in Pinkerton's 2014 lawsuit was a

distinct and independent proceeding. It resulted in a final decision that resolved all issues

before the arbitrator by virtue of the arbitrator's conclusion that the arbitration agreement

was unenforceable. The arbitrator's decision was final, and was not subject to revision by

the trial court. See Cornerstone Propane, L.P. v. Precision Investments, L.L.C., 126
S.W.3d 419, 423-24 (Mo. App. S.D. 2004) (quoting R.L. Hulett & Co. v. Barth, 884
S.W.2d 309, 311 (Mo. App. E.D. 1994) ("[a]n arbitration award . . . finally concludes and

binds the parties on the merits of all matters properly within the scope of the award, both

as to law and facts, and the courts will have no inquiry as to whether the determination

thereon was right or wrong, for the purposes of interfering with the award."). Moreover,

AIM did not challenge the arbitrator's decision. Pinkerton's motion to lift the stay of

proceedings attached the arbitrator's decision.                      Though Pinkerton's motion was not

expressly titled as a motion to confirm the arbitrator's decision, the motion's success

depended on recognition of the arbitration award as final and binding, as the trial court

          8
            AIM similarly relies on Lewis v. Department of Social Services, 61 S.W.3d 248, 256 n.4 (Mo. App. W.D.
2001). In Lewis, our court evaluated potential error in the modification of a child support award, rather than
collateral estoppel; however, in a footnote, our court explained that:

         [a]lthough the order of the probate judge is contained in the record and reference is made to the
         order, this court notes that the findings contained therein are not binding on . . . this court. The
         collateral estoppel doctrine prohibits relitigation of an issue only if, inter alia, there has been a
         final judgment on the merits. Fischer ex rel. Scarborough v. Fischer, 34 S.W.3d 263, 264 (Mo.
         App. 2000). Since Mr. Lewis voluntarily dismissed his motion for modification of visitation and
         child support prior to final adjudication, the order of the probate judge does not constitute a final
         judgment on the merits.
Id. As with Williams, the court's comments merely recognize that interlocutory rulings by a trial court do not have
preclusive effect because they remain subject to change.

                                                           21
could not otherwise have lifted the stay and proceeded with Pinkerton's lawsuit. See

Pinkerton, 531 S.W.3d at 53. (ordering the parties to arbitrate Pinkerton's lawsuit,

including Pinkerton's claims regarding enforceability of the arbitration agreement). AIM

could have challenged the arbitrator's decision by moving to vacate or modify the

decision as authorized by 9 U.S.C. section 9 pursuant to one of the limited grounds

described in 9 U.S.C. sections 10 and 11. AIM did not do so, leaving the trial court with

no authority but to abide by the arbitrator's decision. See, e.g., Lobel Fin. Inc. v. Bothel,

570 S.W.3d 87, 91 (Mo. App. W.D. 2018) (observing that a trial court has no authority

but to confirm an arbitration award unless the award is vacated or modified or corrected

as provided by 9 U.S.C. sections 10 and 11); Cargill v. Poeppelmeyer, 328 S.W.3d 774,

776 (Mo. App. S.D. 2010) (holding that a "court must confirm [an arbitration] award

unless the opposing party moves to vacate or modify the award," and that "the party

challenging an arbitration award has the burden of demonstrating that the award is not

valid.").

       Pinkerton's subsequent decision to voluntarily dismiss his lawsuit without

prejudice did not operate to vacate the arbitrator's decision fully and finally resolving the

arbitration proceeding. AIM's argument to the contrary suggests a party has the power to

unilaterally vacate an arbitrator's final decision by voluntarily dismissing related

litigation. There is no authority for that proposition, which would frustrate the primary

purpose of arbitration to efficiently reach a final and binding decision. See Decker v.

Kamil, 100 S.W.3d 115, 117 (Mo. App. E.D. 2003).

                                             22
       The trial court did not err in concluding that Pinkerton's voluntary dismissal

without prejudice pursuant to Rule 67.02 did not "wipe the slate clean" of the arbitrator's

final decision regarding the enforceability of the arbitration agreement.

       Point Three on appeal is denied.

                                        Conclusion

       The trial court's order refusing to compel arbitration is affirmed.

                                           __________________________________
                                           Cynthia L. Martin, Judge

All concur

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