Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


3-24-2004

Olick v. Dippel
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-3093




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Recommended Citation
"Olick v. Dippel" (2004). 2004 Decisions. Paper 916.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/916


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                                                              NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT

                                    ___________

                                    No. 03-3093
                                    ___________

                                THOMAS W. OLICK

                                           v.

                       EDISON DIPPEL; JEAN DIPPEL;
                      WAYNE DIPPEL; PATSY LAROSA;
                     WAYNE GRIFFITHS; THOMAS NIKLES


                          Thomas Nikles, Joseph DiMento and
                              DiMento General Agency,

                                           Appellants


                                    ___________

          ON APPEAL FROM THE UNITED STATES DISTRICT COURT
             FOR THE EASTERN DISTRICT OF PENNSYLVANIA
                           (D.C. Civil No. 93-cv-01495)
               District Judge: The Honorable Clifford Scott Green

                                    ___________

                     Submitted Under Third Circuit LAR 34.1(a)
                                 March 11, 2004

                 BEFORE: SLOVITER, NYGAARD, Circuit Judges.
                         and SHADUR,* District Judge.




* Honorable Milton I. Shadur, Senior District Judge for the United States District
Court for the Northern District of Illinois, sitting by designation.
                                  (Filed March 24, 2004)

                                       ___________

                               OPINION OF THE COURT
                                    ___________


NYGAARD, Circuit Judge.

              Thomas Nikles, Joseph DiMento, and the DiMento General Agency

(collectively, “the appellants”) appeal the District Court’s order confirming an arbitration

award entered by the National Association of Securities Dealers Dispute Resolution

(“NASD”) in favor of appellee Thomas W. Olick. Appellants argued before the NASD

and the District Court that the award was precluded on res judicata grounds. Their

arguments were rejected below and they appealed. We will affirm.

                                             I.

              This case is one in a series of lawsuits arising out of allegedly fraudulent

transactions by dealers at John Hancock Distributors, Inc. (“Hancock”). At the time of

the transactions, Olick and Nikles were representatives of Hancock. DiMento, through

the DiMento General Agency, was the Hancock agent responsible for supervising Olick

and Nikles.

              A group of plaintiffs led by John Carroll sued Hancock, Olick, DiMento,

the DiMento General Agency, and fifteen others, advancing claims under several state

and federal statutes. The District Court in the Carroll lawsuit denied, as untimely and

meritless, Olick’s motion seeking to assert cross-claims against DiMento and Hancock


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and third-party claims against Nikles. Appellants’ App. at 101. The Court later

dismissed the case with prejudice. Appellants’ App. at 148.

              Before the Court ruled in Carroll, Olick filed a federal lawsuit alleging that

Nikles had slandered and defamed him, interfered with business relations, and committed

RICO violations. The District Court remanded the case to NASD arbitration.

Appellants’ App. at 64. In arbitration, the case against Nikles was consolidated with a

similar lawsuit brought by Olick against Hancock, DiM ento, and Larry Carter.

              Hancock sought a declaration from the District Court that the claims to be

arbitrated were barred under res judicata, because they arose from the same facts as those

asserted in the cross-claim in Carroll. The District Court dismissed Hancock’s

complaint, but on appeal we stated that “the federal courts must intervene in the

arbitration process when faced with res judicata objections stemming from a prior federal

judgment.” John Hancock Mut. Life Ins. Co. v. Olick, 

, 139 (3d Cir. 1998).

On remand, the District Court granted Hancock’s motion for summary judgment on the

basis that Olick’s claims were barred under res judicata. Appellants’ App. at 92. We

affirmed. John Hancock Distribs., Inc. v. Olick, 

(Table) (3d Cir. Sept. 10,

1999) (per curiam), Appellants’ App. at 103. The NASD thus removed Hancock and

Carter from the case awaiting arbitration. Appellants’ App. at 110.

              As the only remaining defendants in the case, appellants asserted a res

judicata defense. Appellants’ App. at 112. The NASD arbitrator rejected the defense and

entered an award in favor of Olick. The appellants filed a motion in the District Court to


                                             3
vacate the arbitration award, but this motion was denied. Appellants’ App. at 3.

Appellants appealed and we dismissed because the appeal was not from a final order.

Appellants’ App. at 180. Appellants now appeal from a final order of the District Court

confirming the award entered by the NASD. Appellants’ App. at 3. We have jurisdiction

pursuant to 28 U.S.C. § 1291 and 9 U.S.C. § 16(a)(1)(D).

                                               II.

               Appellants argue that by rejecting their res judicata claim, the District

Court has created a direct conflict with the earlier opinion, affirmed by this court,

dismissing Hancock and Carter from the lawsuit on the basis of res judicata. According

to appellants, they meet the requirements to apply res judicata: (1) there was a final

judgment on the merits in Carroll; (2) involving the same parties or, as here, their privies;

and (3) the cause of action and underlying facts were the same. See, e.g., In re Cont’l

Airlines, Inc., 

, 232 (3d Cir. 2002). Appellants thus ask us to reverse the

District Court’s order refusing to vacate the arbitration award and to rule as a matter of

law that Olick’s claims against appellants are barred by res judicata.

               Addressing appellants’ concern that the arbitration panel acted in manifest

disregard of the law by refusing to apply res judicata, the District Court stated “the

arbitration panel did not disregard the Third Circuit’s order . . . , but . . . apparently

[found] that one or more of the required elements of res judicata had not been met. Even

assuming arguendo that this decision is in error, it is not in manifest disregard of the law.”




                                                4
Appellants’ App. at 8. Like the District Court, we do not see a conflict between the

earlier decision granting summary judgment to Hancock and the result here.

              In Hancock, we held that the courts, rather than an arbitrator, should make

decisions about the applicability of res judicata based on a prior federal judgment. That

decision, however, was dependent upon the procedural posture in that 

(noting that in addition to asking the arbitration panel to dismiss the claim based on

res judicata, “Hancock filed a complaint in the District Court,” and thus the arbitration

proceeding is still pending). “[F]ederal courts must intervene in the arbitration process

when faced with res judicata objections stemming from a prior federal judgment.” 

(emphasis added).

              In the present case, appellants did not make a motion to the District Court

alleging res judicata, but instead argued that doctrine only as a defense before the

arbitrator. This distinction from Hancock is determinative. Appellants’ plea to the

District Court after the arbitration award was entered, in the form of a motion to vacate,

was too little too late. The District Court had no authority to vacate the arbitration award

under the Federal Arbitration Act, 9 U.S.C. § 10(a). Thus, appellants resorted to the

judicially created doctrine that allows a District Court to vacate an award made in

“manifest disregard of the law.” Dluhos v. Strasberg, 

, 370 (3d Cir. 2003)

(quotation omitted). Under that extremely deferential standard, the District Court was

unable to analyze the res judicata issue anew, and thus correctly held that it could not

vacate the award.


                                             5
                                           III.

             For the reasons set forth, we will affirm the District Court’s order

confirming the arbitration award.




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