Articles Posted in Arbitration & Mediation

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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

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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

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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

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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

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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

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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

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In 2010, Plaintiffs purchased real estate from Charter West National Bank. Plaintiffs later filed suit, alleging that Charter West represented that the property would be free and clear of all liens but manipulated the language of the deed to reflect that the conveyance was subject to liens of record. Charter West moved to compel arbitration pursuant to the real estate purchase agreement, which contained an arbitration clause. Plaintiffs filed an objection asserting that the arbitration clause was void because it failed to comply with Nebraska’s Uniform Arbitration Act, and the Federal Arbitration Act (FAA) was inapplicable because the transaction did not involve interstate commerce. The district court denied the motion to compel arbitration without prejudice based on a lack of evidence that the transaction affected interstate commerce as to trigger the provisions of the FAA. Charter West appealed. The Supreme Court dismissed the appeal on the grounds that there was no final, appealable order entered by the district court capable of appellate review. View "Wilczewski v. Charter West Nat'l Bank" on Justia Law

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Shasta Linen Supply, a California corporation, applied for workers’ compensation insurance coverage from Applied Underwriters, a Nebraska corporation. Shasta accepted Applied’s proposed policy through an agreement entitled a Request to Bind Coverages & Services. On the same day, Shasta entered into a Reinsurance Participation Agreement (RPA) with Applied Underwriters Captive Risk Assurance Company (AUCRA), Applied’s subsidiary and a British Virgin Islands corporation. The request to bind and the RPA contained conflicting provisions regarding the parties’ arbitration process for resolving disputes. After a dispute arose regarding the amount of money that Shasta owed to Applied, the American Arbitration Association (AAA) acknowledged receipt of AUCRA’s demand for arbitration. Shasta filed a complaint seeking a declaratory judgment that the request to bind required arbitration by "JAMS" in Omaha, Nebraska and injunctive relief from the AAA arbitration. The court determined that it had jurisdiction to decide which contract provision controlled and issued a temporary injunction and stay of the AAA arbitration until it decided the parties’ rights. Applied and AUCRA appealed, arguing that the court erred in exercising jurisdiction over the parties’ contract dispute and granting a temporary injunction. The Supreme Court dismissed the appeal, holding that the court’s temporary injunction and stay was an interlocutory order that was not appealable. View "Shasta Linen Supply, Inc. v. Applied Underwriters, Inc." on Justia Law

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William Gross executed an agreement with David Fiala, Ltd. (FuturesOne) setting forth the terms of Gross’ employment with FuturesOne. The agreement contained an arbitration provision. FuturesOne later filed a complaint against Gross and three other individuals who had signed similar agreements with FuturesOne, alleging that after the defendants had resigned from FuturesOne they failed to pay amounts owed to FuturesOne and violated the agreement by competing with FuturesOne. Gross moved to compel arbitration. The district court denied the motion, concluding that the claims in this action were not subject to arbitration under the arbitration provision of the agreement. The Supreme Court reversed, holding that the district court erred as a matter of law when it failed to determine that the arbitration provision was ambiguous and to thereafter resolve the ambiguity by considering appropriate extrinsic evidence. Remanded. View "David Fiala Ltd. v. Harrison" on Justia Law

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At issue in this case was whether federal law preempts Neb. Rev. Stat. 25-2602.01(f)(4), which generally prohibits mandatory arbitration clauses in insurance contracts. Here, Allied Professionals Insurance Company (APIC), which is registered with the Nebraska Department of Insurance as a foreign risk retention group, issued a professional liability insurance policy to Dr. Brett Speece that included a provision requiring binding arbitration. After Speece filed an action seeking a declaration that APIC was obligated to provide coverage for his defense in a Medicaid proceeding, APIC filed a motion to compel arbitration. The district court overruled the motion, concluding that the arbitration clause in the policy was not valid and enforceable pursuant to section 25-2602.01, and that neither the Federal Arbitration Act (FAA) nor the Liability Risk Retention Act of 1986 (LRRA) preempted the state statute. The Supreme Court reversed the district court’s order overruling APIC’s motion to compel arbitration, holding (1) the FAA does not preempt section 25-2602.01(f)(4), but the LRRA does preempt application of the Nebraska statute to foreign risk retention groups; and (2) therefore, the district court erred when it determined that section 25-2602.01(f)(4) prohibited enforcement of the arbitration clause in the parties’ insurance contract in this case. View "Speece v. Allied Prof’ls Ins. Co." on Justia Law