Karo v. NAU Country Ins. Co.
297 Neb. 798
| Neb. | 2017Background
- Matt and Michael Karo held federally reinsured crop-insurance policies serviced by NAU Country; they claimed prevented-planting losses for 2012 due to wet conditions.
- NAU denied the claims; the parties submitted the dispute to binding arbitration under the policy’s mandatory arbitration clause.
- An arbitrator issued a final award denying the Karos’ prevented-planting claims on January 21, 2014. The Karos received the award January 23, 2014.
- The Karos filed a “Petition for Judicial Review” in Holt County District Court to vacate the award under 9 U.S.C. § 10 on May 15, 2014 and served NAU by U.S. mail—outside the three-month notice window of 9 U.S.C. § 12.
- The district court vacated the arbitration award under § 10(a)(4). NAU appealed; the Nebraska Supreme Court granted bypass review.
Issues
| Issue | Plaintiff's Argument (Karos) | Defendant's Argument (NAU) | Held |
|---|---|---|---|
| Does the Federal Arbitration Act (FAA) govern the dispute? | FAA applies because the crop-insurance contracts are federally reinsured and involve interstate commerce. | FAA governs; arbitration arises from interstate commerce. | FAA governs arbitration of federally reinsured crop-insurance disputes. |
| Is the §12 three-month notice requirement jurisdictional? | The time limit is a precondition but can be treated as a waivable claim-processing rule. | §12’s notice/time requirements are mandatory and jurisdictional; failure deprives court of power. | §12’s notice/time requirement is jurisdictional. |
| Did the Karos comply with §12? | Filing on May 15, 2014 served by mail satisfied notice for vacatur. | Karos filed and served outside the three-month window; noncompliant with §12. | Karos failed to serve notice within three months; §12 precondition was not met. |
| Consequence of failing §12 precondition — can district court vacate and may the Supreme Court hear the appeal? | The vacatur should stand; appealable to state supreme court. | Court lacked authority to vacate; any such order is void and cannot confer appellate jurisdiction. | District court lacked jurisdiction; its vacatur order is void; appeal dismissed for lack of jurisdiction. |
Key Cases Cited
- Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (describing FAA’s streamlined procedures and limited judicial review)
- Bowles v. Russell, 551 U.S. 205 (U.S. 2007) (statutory time limits for taking appeals are jurisdictional)
- John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (U.S. 2008) (statutory filing limitation treated as jurisdictional)
- Piccolo v. Dain, Kalman & Quail, Inc., 641 F.2d 598 (8th Cir. 1981) (failure to serve §12 notice within three months deprives court of power to review)
- Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (U.S. 2000) (interpreting FAA provisions together; venue/notice provisions analyzed in context)
- Sebelius v. Auburn Reg. Med. Ctr., 568 U.S. 145 (U.S. 2013) (clear-statement/bright-line rule for labeling statutory limits jurisdictional)