Claim Preclusion Precludes Lawsuit Against Trustee
July 31, 2013Orr is the trustee of a trust of which Wall is a beneficiary. Wall sued Orr in Kentucky for actions he took as trustee. The case was sent to arbitration, and the arbitrators Wall’s claim that the trust must distribute $63,000 to her. But the arbitrators did grant Orr’s counter motion to permit him to give a cashier’s check for $63,000 made out to Wall to the arbitrators until Wall signed a release. A Kentucky trial court confirmed the order. Several years later, Wall filed suit in Collin County, Texas, claiming she is still owed the $63,000 despite the fact that she never signed the release. The Court of Appeals upheld the trial court’s conclusion that Orr wins on the affirmative defense of claim preclusion because the transactional nucleus of facts between the two cases were essentially identical. Wall argued that her claim in this suit was that the requirement that she sign a release constitutes a breach of fiduciary duty, which was not litigated in the prior suit. The court rejected this argument.
