You need to close the file before you can open it again, something like this should work:
Dim myTeamCount As Int16 = 0
Dim myTextFile As New System.IO.FileStream(OpenFileDialog1.FileName, IO.FileMode.Open)
Dim myReader As New System.IO.StreamReader(myTextFile)
Dim List As New List(Of String)
Do While myReader.Peek >= 0
If myReader.ReadLine.Length > 16 Then
MessageBox.Show("Record Longer Than 16 Characters in This File - " & myReader.ReadLine & " - Edit & Retry.", "ERROR")
myReader.Close()
Me.Refresh()
Exit Do
End If
myTeamCount = myTeamCount + 1
List.Add(myReader.ReadLine)
Loop