Court Opinion

ID: 195858
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:50:59+00
Date Added: 2024-06-11T08:01:49.758060
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UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           
                                                     
No. 94-1658

                         KENNETH P. WOLF,

                      Plaintiff, Appellant,

                                v.

                       GRUNTAL & CO., INC.,

                       Defendant, Appellee.

                                           
                                                     

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                    FOR THE DISTRICT OF MAINE

           [Hon. D. Brock Hornby, U.S. District Judge]
                                                               

                                           
                                                     

                              Before

                  Cyr and Stahl, Circuit Judges,
                                                         

                 and DiClerico,* District Judge.
                                                         

                                           
                                                     

   George S. Isaacson, with whom Brann & Isaacson  and Peter D. Lowe
                                                                              
were on brief for appellant.
   Joseph  P. Moodhe,  with  whom Debevoise  & Plimpton,  Ariadne D.
                                                                              
Makris, John  P.  McVeigh, Preti,  Flaherty,  Beliveau &  Pachios  and
                                                                         
Lionel G. Hest were on brief for appellee.
                      

                                           
                                                     

                         January 25, 1995
                                           
                                                     

                  
                            

   *Chief  Judge  of  the  District  of  New  Hampshire,  sitting by
designation.

          CYR,  Circuit Judge.  Plaintiff Kenneth P. Wolf appeals
                    CYR,  Circuit Judge.  
                                       

a  summary judgment order dismissing his Rule 10b-5 claim against

defendant-appellee  Gruntal  &  Co.  ("Gruntal"),  a   securities

brokerage firm,  for fraudulently  mismanaging Wolf's  investment

accounts  in violation  of Section  10(b) of  the Securities  and

Exchange Act of  1934, 15 U.S.C.   78j(b).  As the district court

erred in  ruling that  Wolf's claim was  precluded by  an earlier

arbitral  award, we vacate  the judgment  and remand  for further

proceedings. 

                                I
                                          I

                            BACKGROUND
                                      BACKGROUND
                                                

          Viewed in the  light most favorable to  appellant Wolf,

see Velez-Gomez  v. SMA  Life Assurance Co.,  8 F.3d  873, 874-75
                                                     

(1st  Cir. 1993),  the  summary  judgment  record  discloses  the

following  facts.   In March  1988, Wolf  opened cash  and margin

accounts with Gruntal  at its branch  office in Portland,  Maine.

Wolf signed a Customer Agreement ("Agreement") which contained an

arbitration clause:  "[a]ny  controversy  between  [Gruntal]  and

[Wolf] arising out of or relating  to this contract or the breach

thereof, shall be settled by  arbitration. . . .  Notwithstanding
                                                                           

the  foregoing, arbitration  shall  not  be  mandated  on  claims
                                                                           

asserting violation(s)  of Federal  securities/commodities laws."
                                                                         

Agreement   16  (emphasis added).  Paragraph 17  further provided

that "th[e]  agreement and its  enforcement would be  governed by

                                2

 New York  law without giving effect to external  law."  Id.   17.
                                                                     

Thereafter, between 1988  and 1990, a Gruntal  agent fraudulently

mismanaged  Wolf's  accounts,  causing a  loss  approximating  $1

million.

          In December  1991,  Wolf initiated  the present  action

against  Gruntal  in the  United  States District  Court  for the

District  of Maine.    The  complaint  asserted  seven  state-law

claims, as  well as  one federal claim  under the  Securities and

Exchange Act of 1934, 15 U.S.C.   78j(b); Rule 10b-5, 17 C.F.R.  

                                3

 240 (1993).1   Gruntal moved to stay the  district court proceed-

ings pending arbitration on all eight claims.  

          The district court ruled that the arbitration clause in

the Agreement unambiguously permitted Wolf  to forego arbitration
                                               

and to litigate the Rule 10b-5 claim  in district court, but that

the seven state-law  claims were arbitrable.  Since  no party had

sought to compel arbitration, however, the district court refused
                    
                              

     1Rule  10b-5,  promulgated  pursuant  to  section  78(j)(b),
provides in pertinent part:

     It shall  be unlawful for  any person, directly  or in-
     directly, by the use of any means or instrumentality of
     interstate commerce, or of the mails, or of any nation-
     al securities exchange,                                

     (a)  to employ  any  device,  scheme,  or  artifice  to
     defraud,

     (b) to make any untrue  statement of a material fact or
     to omit to state a  material fact necessary in order to
     make  the statements made, in the  light of the circum-
     stances under which they were made, not misleading, or

     (c) to engage in any  act, practice, or course of busi-
     ness which  operates  or would  operate as  a fraud  or
     deceit upon any person, 

     in connection with the purchase  or sale of any securi-
     ty.

17 C.F.R.   240 (1993).  
     The Rule  10b-5  claim  alleged  that  Gruntal's  fraudulent
scheme  was  comprised  of three  basic  components:  (1) Gruntal
misrepresented  that its  investments would  comport  with Wolf's
low-risk investment objectives; (2) Gruntal fraudulently extended
the  one-month  term  of Wolf's  margin  account,  without Wolf's
knowledge or  consent, in  order to  promote Gruntal's  interests
(i.e., by  using Wolf's credit  to manipulate the price  of stock
               
(Secor/Novametrix)  in waging  its own  "trading  war"); and  (3)
Gruntal  repeatedly  concealed  the unauthorized  margin  account
activity  by  using  Wolf's investment  and  "safekeeping" assets
(e.g.,  treasury bills) as  collateral for his  burgeoning margin
               
account indebtedness to Gruntal. 

                                4

 to stay its proceedings on  the Rule 10b-5 claim pending arbitra-

tion and the parties proceeded with discovery.  

          In March 1993,  Wolf submitted a unilateral  demand for

arbitration on the seven state-law  claims; in December 1993,  he

recovered a  $200,000 arbitral  award against  Gruntal.   Gruntal

thereafter  moved for  summary judgment  in  the district  court,

contending  that the final arbitral award on the state-law claims

precluded the Rule 10b-5 claim  under the doctrine of res judica-
                                                                           

ta. 
            

          The district court  granted summary judgment.   Wolf v.
                                                                        

Gruntal & Co., No. 91-426-P-H, 1994 U.S. Dist. LEXIS 7627 (D. Me.
                       

May 24,  1994).  It correctly concluded that the Rule 10b-5 claim

and the seven  state-law claims arose out of  the same "operative

nucleus  of fact"  (i.e., the  ongoing  account mismanagement  by
                                  

Gruntal).  Id.  at *4 (citing Kale  v. Combined Ins. Co.  of Am.,
                                                                          

924  F.2d  1161, 1166  (1st Cir.),  cert. denied,  112 S.  Ct. 69
                                                          

(1991)).   As  "Gruntal [had]  made  clear that  it would  accept

arbitration  of the  [Rule  10b-5]  claim,"  the  district  court

envisioned no  "jurisdictional obstacle"  in the  event Wolf  had

elected to  submit the Rule  10b-5 claim to arbitration.   Conse-

quently,  the court  reasoned, the  final arbitral  award  on the

state-law  claims precluded  the Rule  10b-5  claim because  Wolf

"could have" presented the federal  claim to arbitration.  Id. at
                                                                        

*5, 6-7 (citing Restatement (Second) of Judgments   84 (1982)).
                                                           

          Wolf argues that  he reasonably relied on  the district

court's  retention of "exclusive"  (i.e., sole  and indefeasible)
                                                  

                                5

 jurisdiction over  the Rule  10b-5 claim  and, as  a consequence,

that he was victimized by  an unfair procedural ambush.  Although

we reject  Wolf's characterization,2  we hold  that the  district

court erred  in  ruling that  the  federal securities  claim  was

precluded by the arbitral award on the state-law claims. 

                                II
                                          II

                            DISCUSSION
                                      DISCUSSION
                                                

A.   Standards Of Review
          A.   Standards Of Review
                                  

          We review a  grant of summary  judgment de novo,  under
                                                                   

the  identical legal standards  governing the district  court, in

order to  determine whether "the pleadings,  depositions, answers

to interrogatories,  and admissions  on file,  together with  the

affidavits, if any, show that there is no genuine issue as to any

material fact and  that the moving party is  entitled to judgment
                                                                           

as a matter of law."  Fed. R. Civ. P. 56(c) (emphasis added); see
                                                                           

Jirau-Bernal  v. Agrait, 37  F.3d 1, 3  (1st Cir. 1994).   As the
                                 

preclusive effect of a prior "judgment" is a question of New York

                    
                              

     2The  district  court  did  not  purport  to  oust   or  bar
concurrent  arbitral jurisdiction over the Rule 10b-5 claim.  See
                                                                           
Wolf,  1994 U.S. Dist. LEXIS  7627, at *5-6.   Rather, its ruling
              
simply recognized that  the district court did  possess jurisdic-
tion over Wolf's Rule 10b-5 claim. 

                                6

 law,3 it  too is subject to de novo  review.  See, e.g., Gonzalez
                                                                           

v. Banco Central Corp., 27 F.3d 751, 755 (1st Cir. 1994). 
                                

                    
                              

     3Citing instead to federal decisional law addressing certain
generic  res judicata  concepts, see,  e.g.,  Pujol v.  Shearson/
                                                                           
American Express,  Inc., 829 F.2d  1201, 1206-07 (1st  Cir. 1987)
                                 
(prior  arbitral awards may have preclusive effect), the district
court did  not consider which  jurisdiction's law should  guide a
                                                       
federal court in  assessing the preclusive effect of  a state-law
based arbitral award  which has not been confirmed  in a judicial
                                                            
proceeding.   Had Wolf's arbitral  award been confirmed by  a New
York court, the  resulting judgment presumably would  be entitled
                                             
to the  same preclusive effect  in federal court  as it would  be
accorded by a New York court.  See 28 U.S.C.    1738 ("full faith
                                            
and credit"); see also, e.g.,  Oliveras v. Miranda Lopo, 800 F.2d
                                                                 
3, 6 (1st Cir. 1986) (citing Migra  v. Warren City Sch. Dist. Bd.
                                                                           
of Educ.,  465  U.S.  75,  81 (1984));  Restatement  (Second)  of
                                                                           
Judgments     84(1),  86.    As section  1738's  "full faith  and
                   
credit"  provision does not apply to unconfirmed arbitral awards,
                                     
however, see McDonald v.  City of West Branch, 466 U.S. 284, 287-
                                                       
88  (1984) (for res  judicata purposes, unless  an arbitral award
                                       
has received  judicial confirmation, it  is not the product  of a
"judicial proceeding" as defined in 28 U.S.C.   1738), it afford-
ed no support for the  district court's ruling that Wolf's uncon-
firmed arbitral award  was entitled  to preclusive  effect.   Cf.
                                                                           
Wolf, 1994 U.S.  Dist. LEXIS 7627, at *4 (citing  Pujol, 829 F.2d
                                                                 
1201, 1204 (1st  Cir. 1987) (where final arbitral  award had been
confirmed by state court)).  
                   
     Moreover, since it  is now settled law  that the contracting
parties may  accede  (or object)  to  an arbitral  submission  of
federal securities claims  based on Rule 10b-5,  see Shearson/Am.
                                                                           
Express, Inc. v. McMahon, 482 U.S. 220, 227-38 (1987) (Rule 10b-5
                                  
claims  not presumptively nonarbitrable), we can discern no sound
reason for not according  comparable legal effect to  the reason-
able  expectations of the contracting parties  as embodied in the
choice-of-law  clause in their Agreement.  See Volt Info. Scienc-
                                                                           
es, Inc.  v. Board of  Trustees of Leland Stanford  Junior Univ.,
                                                                          
489 U.S. 468, 478 (1989) (arbitration law "simply requires courts
to  enforce privately  negotiated agreements  to  arbitrate, like
                                                                           
other  contracts,  in  accordance  with  their terms")  (emphasis
                          
added);  McCarthy v.  Azure, 22  F.3d  351, 356  (1st Cir.  1994)
                                     
(citing Restatement (Second) of the Conflict of Laws   187 (1971)
                                                              
(courts  should   generally  respect   contractual  choice-of-law
provisions)).  We  therefore defer to the  emphatic choice-of-law
provision  in the  Wolf-Gruntal  Agreement,  see  supra  pp.  2-3
                                                                 
(contract  "governed by  New York  law without  giving  effect to
external  law"),  which  necessarily  encompassed  New  York  res
                                                                           
judicata principles.  
                  

                                7

 B.   Res Judicata
          B.   Res Judicata
                           

          Res  judicata  is  not implicated  if  the  forum which
                                 

rendered the prior  "judgment" (viz., the arbitral  award) lacked
                                             

"jurisdiction"  over  the putatively  precluded claim  (viz., the
                                                                     

Rule 10b-5  claim).  See,  e.g., Fiore v. Oakwood  Plaza Shopping
                                                                           

Ctr., Inc., 592  N.Y.S.2d 720, 720-21 (App. Div.  1993); Handy v.
                                                                        

Westbury  Teachers Ass'n, 480 N.Y.S.2d 728, 731 (App. Div. 1984);
                                  

see also Nottingham Partners v.  Trans-Lux Corp., 925 F.2d 29, 34
                                                          

(1st  Cir. 1991); Kale, 924 F.2d at 1167; Pasterczyk v. Fair, 819
                                                                      

F.2d 12, 14 (1st Cir. 1987).  

          Unlike  collateral  estoppel  (issue  preclusion),  res
                                                                           

judicata (claim  preclusion)  normally bars  (i) relitigation  of
                  

claims actually asserted in a tribunal of competent jurisdiction,

see Restatement  (Second) of  Judgments    26(1)(c) (1982),4  and
                                                 

(ii) litigation of  claims that arose from the same set of opera-

tive facts  and could have  been raised in the  prior proceeding.
                                                 

See,  e.g., Hodes  v. Axelrod,  515 N.E.2d  612, 616  (N.Y. 1987)
                                       

(adopting  "pragmatic"  transaction  test  for determining  which

claims  could have  been raised  in prior  proceeding); see  also
                                                                           

                    
                              

     4Among  the circumstances in which claim preclusion does not
obtain are those in which "[t]he plaintiff was unable to rely  on
a certain theory  of the case or to seek a certain remedy or form
of  relief in the first action because  of the limitations on the
                                                                           
subject  matter jurisdiction  of the  courts  or restrictions  on
                                                                           
their authority  to entertain  multiple theories  or demands  for
                                                          
multiple remedies or forms of relief in a single action,  and the
plaintiff  desires in the second action to rely on that theory or
to seek  that remedy  or form  of relief  . .  . ."   Restatement
                                                                           
(Second) of Judgments   26(1)(c) (emphasis added). 
                               

                                8

 Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981).
                                                

C.   Arbitral Awards
          C.   Arbitral Awards
                              

          Final  arbitral awards are entitled to the same preclu-

sive effect as state court judgments, at least as concerns claims

and issues actually raised.  See Rembrandt Indus., Inc. v. Hodges
                                                                           

Int'l, Inc., 344  N.E.2d 383, 384 (N.Y. 1976);  see also Khandhar
                                                                           

v. Elfenbein,  943 F.2d 244, 247 (2d  Cir. 1991) (N.Y. law); Katz
                                                                           

v. Financial Clearing & Servs. Corp., 794 F. Supp. 88, 94 (S.D.N-
                                              

.Y. 1992) (same);  cf. Pujol v. Shearson/American  Express, Inc.,
                                                                          

829 F.2d 1201, 1206-07 (1st Cir. 1987); infra note 6 and accompa-
                                                       

nying text.   By the same token, we conclude that New York recog-

nizes the same "jurisdictional" limitation upon the reach of  res
                                                                           

judicata coverage  with respect  to prior  arbitral awards  as is
                  

generally applied to final judgments, cf. Restatement (Second) of
                                                                           

Judgments   26(1)(c), supra note 4.  We explain.  
                                     

          Because  arbitral awards are not "judgments" per se, it
                                                                       

cannot be presumed,  as the district court did,  that an arbitral

tribunal  acquired competent  authority over  the putative  "pre-

cluded" claim for  res judicata purposes.  Unlike  federal courts
                                         

of limited jurisdiction and state courts of general jurisdiction,

wherein  a litigant, with  standing, unilaterally may  invoke the
                                                           

appropriate judicial  tribunal's jurisdiction based  on extrinsic

constitutional, statutory,  or common  law  authority, see  Cine-
                                                                           

Source, Inc.  v. Burrows,  581 N.Y.S.2d 9,  10 (App.  Div. 1992),
                                  

arbitral tribunals' authority over particular "claims" is for the

                                9

 most part predetermined  by contract; that is,  by written agree-
                                                                           

ment of  the parties.   Id.  (noting, as  basis for  limiting res
                                                                           

judicata effect  of arbitral  awards, that  "the authority of  an
                  

arbitrator to decide a controversy  is derived entirely from  the

consent of the parties").  
                 

          Arbitral "claims" comprise two subsets for purposes  of

the jurisdictional analysis  required under the  present analogue

to  Restatement     26(1)(c).   First,  where  the  parties  have

contracted   to  submit   all   disputes   or  controversies   to
                                       

arbitration,  either  party  may  compel  arbitration  simply  by
                              

submitting  a unilateral "demand for arbitration," relying on the
                                  

broad-based agreement to arbitrate as the sole source of arbitral
                                                               

authority.  See, e.g., N.Y. Civ. Prac. L. & R.    7503(c) (1993);
                               

Cohen v. Cohen, 233 N.Y.S.2d  787, 791 (App. Div. 1962) (describ-
                        

ing  arbitration proceedings which may be commenced on unilateral

"demand").   Second, even  where the contract  either includes no

arbitration  clause or excludes particular kinds of "claims" from

arbitration, the contracting  parties later may agree  in writing

to  arbitrate  any  or all  such  otherwise  nonarbitrable claims

("uncovered  claims"), simply by  entering into a  joint arbitral

"submission."  Id.   As arbitral "jurisdiction" is dependent upon
                            

a written agreement  between the parties,5 however,  any exercise

of arbitral  authority over uncovered claims    absent a "meeting
                    
                              

     5Although there no  longer exists an  impenetrable extrinsic
"jurisdictional" obstacle to  arbitral authority over Rule  10b-5
claims, see McMahon,  482 U.S. at 227-38, supra  note 3, arbitral
                                                         
authority over such  a claim nonetheless depends  upon the mutual
consent of the parties.

                                10

 of the minds" duly memorialized in a joint arbitral submission   

would constitute an exces de pouvoir.   See N.Y. Civ. Prac. L.  &
                                                     

R.    7501 (putative  agreements to  arbitrate are  unenforceable
                                                                           

unless reduced to writing).

D.   The Scope of the Arbitration Clause
          D.   The Scope of the Arbitration Clause
                                                  

          The arbitration clause in the Agreement, which provides

that  "arbitration  shall  not be  mandated  on  claims asserting

violation(s)  of  Federal  securities/commodities  laws,"  places

Wolf's Rule 10b-5  claim squarely into the latter  category.  Cf.
                                                                           

Church v. Gruntal & Co., 698 F. Supp. 465, 468-69 (S.D.N.Y. 1988)
                                 

(holding  that identical  contract language  excluded  Rule 10b-5
                                  

claim from arbitration).   As the district  court recognized, the

Agreement  expressly  provided  that  all non-federal  securities
                                                               

disputes were to be arbitrated but conferred no arbitral authori-

ty over the Rule 10b-5 claim.  Nor did the Agreement require Wolf
                                                                      

to  initiate an arbitral "submission" encompassing the Rule 10b-5

claim.   See Rembrandt  Indus., Inc. v.  Hodges Int'l,  Inc., 359
                                                                      

N.Y.S.2d  807, aff'd,  344  N.E.2d at  384  ("Where, however,  [a
                              

'compulsory' counterclaim,  arising from  the same  transaction,]

not  passed upon  by the  arbitrators is  the subject of  a later

action;  obviously the  [arbitral] award  is  not a  bar to  that

action."); Cine-Source,  581 N.Y.S.2d  at 10  (rejecting, in  the
                                

context  of a broad-based arbitration clause, the contention that

"res judicata  applies not only  to [claims] which  were actually

decided in  arbitration but also  to those which could  have been
                                                                           

asserted .  . . ."); Lopez  v. Parke Rose Management  Sys., Inc.,
                                                                          

                                11

 526  N.Y.S.2d 156,  158  (App. Div.  1988)  ("[T]he doctrines  of

collateral estoppel and res judicata apply to arbitration awards,

. . . [h]owever, where an issue  not passed upon by an arbitrator

is the subject of a subsequent action, the  award is not a bar to

that  action .  . . .");  Conforti &  Eisele, Inc. v.  William J.
                                                                           

Scully, Inc., 469 N.Y.S.2d 400, 400-01  (App. Div. 1983) (holding
                      

no res  judicata effect  to "limited"  arbitral submission,  even
                          

where  plaintiff presented, then withdrew, the same "claims" from
                                                   

the first arbitrator during arbitration).6  

           As  the proponent of the res judicata defense, Gruntal
                                                          

was charged with the burden of proving, see Rembrandt, 344 N.E.2d
                                                               

at  384 (claim  and issue  preclusion); see  also Kaufman  v. Eli
                                                                           

Lilly  & Co.,  482 N.E.2d  63, 67  (N.Y. 1985)  (same, collateral
                      

estoppel);  Clark  v.  Scoville, 91  N.E.  800,  802  (N.Y. 1910)
                                         

(same); cf. also Blonder-Tongue Lab., Inc.  v. University of Ill.
                                                                           

Found., 402 U.S.  313, 350 (1971); Clark  v. Bear Stearns &  Co.,
                                                                          

966 F.2d 1318, 1321 (9th Cir. 1992), at a bare minimum, cf. supra
                                                                           

note 6,  that the arbitral forum possessed  jurisdiction over the

Rule 10b-5  claim at  the time Wolf  demanded arbitration  on the
                                                                           

state-law claims.  Notwithstanding the prediction indulged by the
                          

                    
                              

     6Indeed, as  indicated in  the accompanying  text, the  cir-
cumstances in these New York  cases suggest a far narrower appli-
cation of  res judicata  principles in  the  context of  arbitral
                                 
awards than need  be deployed here.  Thus,  even in circumstances
where either party  could have  submitted a  particular claim  or
                      
issue to compelled arbitration pursuant to a broad-based, written
arbitration  clause conferring  "jurisdiction"  upon an  arbitral
forum, the  governing preclusion  principles under  New York  law
would bar  only claims or  issues actually submitted  to arbitra-
                                                              
tion.  

                                12

 district  court     that  Gruntal  would  have been  amenable  to

arbitration in  March 1993     the Rule 10b-5 claim  was mutually
                                                                           

withheld   from  arbitration  under  the  express  terms  of  the
                  

Agreement, and no joint arbitral submission was ever attempted or

memorialized between Wolf and Gruntal.  

          Under  New York law, see, e.g., Cine-Source, 581 N.Y.S.
                                                               

2d at  10, absent  a bilateral, written  submission, an  arbitral
                                                 

forum  (unlike a judicial forum exercising its presumptive juris-
                                                                    

diction)  could not acquire "jurisdiction" over Wolf's Rule 10b-5

claim.  Consequently, the arbitral award could not preclude later
                                                            

litigation of  the Rule 10b-5  claim in  federal district  court.

See, e.g., Clark, 966 F.2d  at 1321 ("[P]ursuant to the  terms of
                          

Bear  Stearns'  [contractual]  agreement  with Clark  .  .  . the

arbitration panel did  not have subject matter  jurisdiction over

Clark's federal claims, [and]  Clark could not have  brought them

in  the prior  [arbitration]  proceeding.").7    Of  course,  had
                    
                              

     7The  district court apparently misapprehended the thrust of
the Clark  case citation to  Dean Witter Reynolds, Inc.  v. Byrd,
                                                                          
470 U.S. 213, 220 n.6  (1985), for the overbroad proposition that
enforcement  of an  arbitration agreement  "ousts"  a court  from
jurisdiction over the entire dispute.   See Wolf, 1994 U.S. Dist.
                                                          
LEXIS 7627, at  *7 (citing Clark, 966  F.2d at 1321).   Viewed in
                                          
context,  the Clark citation  to Byrd merely  emphasized that the
                                               
Federal  Arbitration Act  had been  enacted  to "ensure  judicial
enforcement  of privately made  agreements to arbitrate"  even if
                                                                           
that  "require[ed] piecemeal  resolution when  necessary  to give
                                                  
effect to  an arbitration agreement."   Byrd, 470 U.S.  at 220-21
                                                      
(quoting Moses H. Cone  Memorial Hosp. v. Mercury Constr.  Corp.,
                                                                          
460  U.S. 1, 24-25 (1983)) (emphasis added).   Thus, in Clark, as
                                                                       
here, the district court retained exclusive jurisdiction over the
                                                     
Rule 10b-5  claim absent a  written, bilateral  agreement to  the
contrary. 
     Gruntal  cites  Kelly  v. Merrill  Lynch,  Pierce,  Fenner &
                                                                           
Smith, 985 F.2d  1067, 1069-70 (11th Cir.), cert.  denied, 114 S.
                                                                   
Ct 600 (1993), to no avail.  There, the "precluding" judgment had

                                13

 Gruntal wished to impress the ensuing arbitral award with preclu-

sive effect vis-a-vis the Rule 10b-5 claim, it could have endeav-

ored to persuade Wolf to join an arbitral submission.  See Ticker
                                                                           

v. Trager,  482 N.Y.S.2d  535, 536 (App.  Div. 1984) ("No  one is
                   

under a duty to resort to arbitration unless by clear language he

has so agreed.") (quoting Lehman  v. Ostrovsky, 264 N.Y. 130, 132
                                                        

(1934)).

                               III
                                         III

                            CONCLUSION
                                      CONCLUSION
                                                

          Although Wolf incorrectly  represents that the district

court ousted or impeded arbitral jurisdiction over the Rule 10b-5

claim, see supra note 2, the district court nonetheless  retained
                          

exclusive  jurisdiction over  the  Rule  10b-5  claim  absent  an
                   

enforceable  arbitral  submission  encompassing  the  Rule  10b-5

claim.  Consequently,  Gruntal was not entitled to  judgment as a

matter of law, see Jirau-Bernal,  37 F.3d at 3, and  the district
                                         

court judgment dismissing the  Rule 10b-5 claim on claim  preclu-

sion grounds must be vacated. 

                    
                              

been  rendered by a  federal district court  presumptively vested
with "federal question" jurisdiction over the plaintiff's  uncov-
ered Rule 10(b)(5)  claim, as well  as with pendent  jurisdiction
over his four  state-law claims.  As the  defendant's consent was
                                                                       
not necessary to  enable plaintiff Kelly to assert  his state-law
claims in  the federal  district court  action, res judicata  did
                                                                      
indeed  preclude  later  arbitration  of  the  pendent  state-law
claims.  Id.
                      

                                14

           The district  court judgment is  vacated.  The  case is
                    The district  court judgment is  vacated.  The  case is
                                                                           

remanded for  further proceedings  consistent with  this opinion.
          remanded for  further proceedings  consistent with  this opinion.
                                                                          

Costs to appellant.
          Costs to appellant.
                            

                                15