Riverdale Development Co. v. Ruffin Building Systems

Riverdale Development Company, LLC (Riverdale) (plaintiff) contracted with May Construction Company (May) to build an office building. The contract included an arbitration provision stating that all contract disputes would be resolved through arbitration. May purchased materials for the project from Ruffin Building Systems, Inc. (Ruffin) (defendant) and had Ruffin construct a pre-engineered metal building on the site. A dispute arose between May and Riverdale over completion of the project. May initiated arbitration under the construction contract, but Riverdale filed suit in Arkansas state court against May for negligence, fraud, and other claims. Riverdale then amended the complaint and added Ruffin as a defendant. Riverdale and May arbitrated their dispute, and the arbitrator issued an award in May’s favor, denying all of Riverdale’s claims in their entirety. May filed a motion in court to dismiss Riverdale’s claims against it, arguing that Riverdale’s claims were already adjudicated through arbitration and therefore barred by collateral estoppel. The trial court granted the motion. Ruffin filed a motion for summary judgment, similarly alleging that no issues of material fact existed because Riverdale’s claims had been presented and determined in arbitration with May. The trial court agreed and granted summary judgment for Ruffin. Riverdale appealed to the Arkansas Supreme Court, claiming that a nonparty to an arbitration could not use that arbitration to bar claims against the nonparty under collateral estoppel.