Articles Posted in Arbitration & Mediation

by
The Supreme Court affirmed the decision of the arbitration board finding that a discount to wholesale customers who renewed their contractual relationship with Nebraska Public Power District (NPPD) was not discriminatory or an abuse of NPPD’s statutory rate-setting authority. Appellants were political subdivisions engaged in the distribution of electricity to retail electric customers and were wholesale customers of NPPD. Appellants brought this complaint after they elected not to renew their contractual relationship, alleging that the discount was discriminatory and that NPPD breached the implied covenant of good faith and fair dealing by charging them a different rate. The arbitration board determined that the discount was reasonable and nondiscriminatory and that NPPD did not breach the contract or the covenant of good faith and fair dealing. The Supreme Court affirmed, holding that NPPD’s rate structure was fair, reasonable, and nondiscriminatory and that the rate structure did not constitute a breach of contract or the implied covenant of good faith. View "In re Application of Northeast Nebraska Public Power District" on Justia Law

by
The Supreme Court reversed the district court’s declaration that the arbitration agreement at issue in this case was void and unenforceable on state law grounds and for being contrary to public policy, holding that the court erred in both respects. Plaintiff sued Defendants, a nursing home and its employees, for injuries he sustained as a resident at the nursing home. Defendants filed motions to compel arbitration pursuant to an arbitration cause within the admission agreement Plaintiff had signed upon being admitted as a resident in the nursing home. The district court overruled the motions, concluding that the arbitration clause (1) lacked mutuality of obligation by the parties, (2) was unenforceable for failure to strictly conform to the requirements of Nebraska’s Uniform Arbitration Act, Neb. Rev. Stat. 25-2601 et seq., and (3) was void and unenforceable as contrary to public policy. The Supreme Court reversed, holding that the arbitration agreement was valid and enforceable and governed by the Federal Arbitration Act. View "Heineman v. Evangelical Lutheran Good Samaritan Society" on Justia Law

by
The Supreme Court reversed the ruling of the district court granting Applied Underwriters Captive Risk Assurance Company, Inc.’s (AUCRA) motion to stay a court case filed by Citizens of Humanity, LLC and CM Laundry, LLC (collectively, Citizens) pending arbitration, including arbitration on the issue arbitrability. Underlying this litigation was a dispute in which AUCRA claimed that it was owed money from Citizens. Citizens filed a complaint against AUCRA in the district court. AUCRA filed a motion to dismiss or, in the alternative, to stay this action pending arbitration. The district court sustained the motion to stay this action pending arbitration. The Supreme Court reversed, holding that Neb. Rev. Stat. 25-2602.01(f)(4) invalidated the delegation provision in the parties’ agreement, which had the effect of referring the issue of arbitrability to the arbitrator and operated to reserve issues of arbitrability for the court to decide. The court remanded the cause for further proceedings, including the enforceability of the remainder of the arbitration provision. View "Citizens of Humanity, LLC v. Applied Underwriters Captive Risk Assurance Co." on Justia Law

by
The Supreme Court affirmed the district court’s denial of a motion to compel arbitration, although for different reasons than those of the district court. In denying the motion to compel arbitration, the district court concluded that the agreement to arbitrate concerned or related to an insurance policy and was thus unenforceable under Neb. Rev. Stat. 25-2602.01(f)(4). On appeal, Appellant argued that the district court erred in denying the motion to compel arbitration and in determining that arbitration agreement concerned or related to an insurance policy. The Supreme Court affirmed, holding that there was a failure of proof regarding the arbitration itself because the record did not show that the relevant parties agreed to submit future disputes to binding arbitration. View "Zweiback Family L.P. v. Lincoln Benefit Life Co." on Justia Law

by
The district court erred in concluding that because of arbitration and venue provisions in an employment contract between the parties, it lacked jurisdiction. Nearly three years into the litigation in this case, the Douglas County District Court indefinitely stayed a claim for dissolution of one business entity, a party in the case, and dismissed sua sponte all other claims, noting that the employment contract contained arbitration and venue provisions that were outside the district court’s jurisdiction. The Supreme Court reversed the stay and dismissal order and remanded the case for further proceedings, holding that because no party sought to enforce the arbitration agreement, it was error for the district court to do so on its own accord. View "Boyd v. Cook" on Justia Law

by
The district court erred in concluding that because of arbitration and venue provisions in an employment contract between the parties, it lacked jurisdiction. Nearly three years into the litigation in this case, the Douglas County District Court indefinitely stayed a claim for dissolution of one business entity, a party in the case, and dismissed sua sponte all other claims, noting that the employment contract contained arbitration and venue provisions that were outside the district court’s jurisdiction. The Supreme Court reversed the stay and dismissal order and remanded the case for further proceedings, holding that because no party sought to enforce the arbitration agreement, it was error for the district court to do so on its own accord. View "Boyd v. Cook" on Justia Law

by
The district court lacked jurisdiction to vacate an arbitration award under the Federal Arbitration Act (FAA). Matt Karo and Michael Karo obtained federally reinsured crop insurance policies serviced by NAU Country Insurance Company (NAU). The Karos submitted “prevented planting” claims under their crop insurance policies alleging that they were unable to plant corn on certain acres due to wet conditions. NAU denied the Karos’ prevented planting claims. The parties then submitted their disputes to binding arbitration pursuant to a mandatory arbitration clause in the crop insurance policies. The arbitrator denied coverage. The Karos then sought to vacate the arbitration award under section ten of the FAA. The district court vacated the arbitration award, finding that the arbitrator exceeded his powers and manifestly disregarded the law. The Supreme court vacated the district court’s judgment and dismissed this appeal for lack of jurisdiction, holding that the district court lacked jurisdiction to enter a judgment vacating the arbitration award under the FAA because the Karos failed to comply with the three-month notice requirement of section twelve of the FAA. View "Karo v. NAU Country Insurance Co." on Justia Law

by
The Supreme Court reversed the district court’s conclusion that, in this construction dispute, the express terms of a subcontract did not bind the subcontractor to the dispute resolution process within the general contract, and therefore, there was no arbitration agreement between the subcontractor and the project’s owner and general contractor. The Supreme Court held that the owner and general contractor’s motion to compel arbitration in the manner provided for in the general contract should have been sustained because the subcontract included a mutually agreed-to arbitration clause governed by the Federal Arbitration Act, and the subcontractor’s claims were governed by the clause. The court remanded with directions that the court stay the action and compel arbitration pursuant to the agreement. View "Frohberg Electric Co. v. Grossenburg Implement, Inc." on Justia Law

by
Bank foreclosed its loan on residential real estate and resold the property to Buyers. The purchase agreement for the transaction contained an arbitration clause. After Buyers learned that another bank had a superior lien against the real estate they sued Bank for damages. Bank filed a motion to compel arbitration pursuant to the purchase agreement. The district court sustained the motion. The Supreme Court affirmed, holding (1) the purchase agreement was governed by the Federal Arbitration Act, and Buyers’ claims were subject to the arbitration clause; and (2) there was no merit to Buyers’ other arguments. View "Wilczewski v. Charter West National Bank" on Justia Law

by
Kevin Pearce (Appellant) worked as an agent of Mutual of Omaha Insurance Company. Appellant used his personal computers to conduct work for Mutual and stored both personal and client information on the computers. After Appellant’s agency relationship was terminated, Mutual retained Pearce’s personal computers and files, allegedly to protect confidential client information. Pearce refused to give Mutual the passwords to his computers, and Mutual refused to return the computers until the confidential information was removed. Mutual turned Pearce’s computers and files over to Continuum Worldwide Corporation, a security firm, for safekeeping. Appellant then filed a replevin action against Mutual and Continuum (Appellees). Appellees filed a motion to stay and compel arbitration asking the district court to order Appellant to participate in an already-filed arbitration with another entity related to the same issues. Appellant filed his own motion to compel arbitration in the replevin action seeking an order requiring Appellees to participate in the pending arbitration underway between Appellant and the third party. The district court denied Appellant’s motion to compel arbitration. Appellant appealed. The Supreme Court dismissed the interlocutory appeal, holding that the order denying Appellant’s motion to compel arbitration was not a final, appealable order for the Court to review. View "Pearce v. Mutual of Omaha Ins. Co." on Justia Law