This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1998).




Mark A. Morris,



Robert Matheson,

d/b/a Matheson Financial Services,


Filed July 6, 1999


Norton, Judge[*]

Hennepin County District Court

File No. 95-01761

Paul W. Chamberlain, Chamberlain & Neaton, P.L.L.P., Suite 333, 445 Lake, Wayzata, MN 55391 (for appellant)

Jeffrey I. Ross, Zelle & Larson LLP, Suite 4400 City Center, 33 South Sixth Street, Minneapolis, MN 55402 (for respondent)

Considered and decided by Kalitowski, Presiding Judge, Huspeni, Judge,[*] and Norton, Judge.



Appellant contests the district court's conclusion that binding arbitration disposed of all claims alleged against respondent, and therefore res judicata barred litigation of two statutory claims. We affirm.


In May 1990, appellant Mark Morris and respondent Robert Matheson, d/b/a Matheson Financial Services, entered into a written investment advisory agreement, whereby respondent became appellant's investment advisor. By the agreement's express terms, it pertained to management of Fidelity mutual funds. From May 1990 through December 1991, respondent provided appellant with advice with respect to these funds. In January 1992, respondent advised appellant to purchase a "Secured Promissory Note" from "TR4 Trust," a California grantor trust. Appellant purchased a note from the trust in the amount of $474,000. Unbeknownst to appellant, respondent received a commission on this investment from the trust. Several months later, the trust went bankrupt, and appellant's investment became worthless.

In 1993, appellant sued respondent's brokerage firm, FCS Financial Corp., in federal court. The court ordered arbitration, and the arbitrators awarded appellant no monetary compensation. The Eighth Circuit affirmed the court's confirmation of the award.

Appellant then sued respondent in Hennepin County District Court in 1995. He alleged six counts: (1) breach of a fiduciary duty, (2) negligence, (3) violation of Minn. Stat. § 80A.02, Investment Advisor Prohibited Activities, (4) violation of Minn. Stat. § 80.A01, Misrepresentations, Omission and Fraudulent Devices, (5) common law fraud, and (6) arbitration of the claims pursuant to the investment advisory agreement.

The arbitration clause in the agreement provided:

Any controversy or claim arising out of or relating to this agreement, or the breach thereof, shall be settled by arbitration in accordance with the securities arbitration rules of the American Arbitration Association.

Appellant moved to compel arbitration and the district court granted the motion. Appellant submitted all of the claims to the arbitrators, including the statutory claims which he discussed at length. Respondent asserted to the arbitrators that none of the claims was properly before them. The arbitrators, three securities-law attorneys, heard the case over the course of two days. They granted appellant $35,000 in compensatory damages and stated that the award was "in full settlement of all claims submitted to this arbitration."

Appellant moved to confirm the award and to set the statutory claims on for trial, asserting that these claims had not been determined because they were not specifically referenced in the award. The court granted the motion and in its order stated, "the claims contained in Plaintiff's Complaint which were not addressed by the arbitrators award are hereby set on for trial."

Respondent then moved for summary judgment, on the ground that all claims had been considered, and therefore there were no claims to be tried.[1] The court first clarified its prior order confirming the award stating, "In deciding that motion, the court did not consider and determine whether or not there were any claims that were not addressed by the arbitrators to be set on for trial, but implicitly ordered that any such claims would be set on for trial." It then denied respondent's motion for summary judgment, concluding that the award was ambiguous and directed appellant to bring a motion to determine "what, if any, claims remain for trial."

A different judge was then assigned the case because the first judge retired. Appellant moved again to have the two statutory claims set for trial. Respondent again asserted that no such claims remained. The successor judge concluded that the statutory claims were barred by res judicata because the arbitration award explicitly stated that it was in "full settlement of all claims" submitted to arbitration, and there was no dispute that appellant had submitted the statutory claims to the arbitrators.[2] The court dismissed the case with prejudice. This appeal followed.


A valid and final arbitration award has the same res judicata effect as the judgment of a court. See Aufderhar v. Data Dispatch Inc., 452 N.W.2d 648, 652 (Minn. 1990) (collateral estoppel applied to bar relitigation of arbitrated issue); Quam v. United Fire & Cas. Co., 440 N.W.2d. 131, 132 (Minn. App. 1989), review denied (Minn. July 12, 1989).

This case is unusual in that two district court judges have looked at the language of the award and rendered different opinions with regard to its ambiguity. The first judge did not, however, definitively rule on what claims remained, and the second judge acted within her successor-judge authority when she revisited the issue of whether all claims had been considered. See Johnson v. Johnson, 563 N.W.2d 77, 78-79 (successor judge has the authority to take any action that the predecessor judge could have taken).

Neither party to this dispute argues that the arbitration award should be vacated, modified, or corrected; rather, they disagree as to how it should be interpreted. In such circumstances, "[a] reviewing court must have the authority to construe an arbitration award to be able to enforce the award." Ray v. City of Maple Grove, 519 N.W.2d 466, 469 (Minn. App. 1994) (citations omitted), review denied (Minn. Sept. 16, 1994).

We interpret the award to include the statutory claims. Appellant submitted and presented all claims, including the statutory claims, to the arbitrators, and the award states that it is "in full settlement of all claims submitted to arbitration." Rule 42(b) of the AAA Securities Arbitration Rules does require the award to "contain * * * a statement regarding the disposition of any statutory claim." But the phrase "in full settlement of all claims submitted to this arbitration," satisfies, however minimally, rule 42(b).

We find no authority for overruling the arbitrators' award on the basis that it did not provide a more complete accounting of the decision, when rule 50 of the AAA Security Arbitration Rules and Minnesota case law give arbitrators broad authority in applying and interpreting their own rules. See AAA Security Arbitration Rule 50 ("[t]he arbitrator shall interpret and apply these rules insofar as they relate to the arbitrator's powers"); Haekenkamp v. Allstate Ins. Co., 265 N.W.2d 821, 824 (Minn. 1978) (arbitrator is permitted to interpret rules under which his decision is made and a court of law should not interfere with such an interpretation absent evidence that arbitrator clearly exceeded his authority). Also, Minnesota statutes grant each party the opportunity to move for resubmission of the award to the arbitrators to clarify any alleged ambiguity. See Minn. Stat. § 572.16, subds. 1 (1996) (either party may move for clarification of award within twenty days of its delivery).

Appellant also asserts that several findings of fact are erroneous. But the facts alleged as error either do not relate to the issue decided or represent a disagreement with the court's legal determination rather than an erroneous fact-finding. See Hanka v. Pogatchnik, 276 N.W.2d 633, 636 (Minn. 1979) (when findings necessary for legal conclusion are adequately supported, court's inclusion of other unsupported findings is harmless error).


[*] Retired judge of the Minnesota of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] Respondent attempted to introduce affidavits of two of the three arbitrators to the effect that the statutory claims had been considered and decided. The court, however, declined to consider them, because Rule 30 of the AAA Securities Arbitration Rules prohibits ex parte communications with the arbitrators unless the parties agree, and there was no notice or consent by appellant for the communication that occurred to obtain the affidavits.

[2] The successor judge stated at the hearing that she also had not read or considered the affidavits of the arbitrators, which respondent had acquired without notice or consent from appellant.