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 and submitted "prevented planting" claims for 2012; NAU denied coverage.
- The policy required arbitration; an arbitrator issued a final award in January 2014 denying the Karos’ prevented‑planting claims.
- The Karos filed in Holt County District Court on May 15, 2014 seeking vacatur under 9 U.S.C. § 10(a)(4); they served notice by U.S. mail after the FAA’s 3‑month period in § 12.
- NAU moved to dismiss under state pleading rules and later defended the award; the district court denied dismissal, granted summary judgment to the Karos, and vacated the arbitration award.
- NAU appealed to the Nebraska Supreme Court, which considered whether the district court had jurisdiction to vacate the award given the Karos’ untimely service under § 12 of the FAA.
Issues
| Issue | Plaintiff's Argument (Karos) | Defendant's Argument (NAU) | Held |
|---|---|---|---|
| Whether FAA governs arbitration | Karos: federally reinsured crop policies implicate interstate commerce so FAA applies | NAU: (conceded) FAA governs | Held: FAA governs these disputes |
| Whether §12’s 3‑month notice is jurisdictional | Karos: failure to timely serve is not jurisdictional; treated procedurally; NAU waived by not raising earlier | NAU: timely service requirement is mandatory and deprives court of authority if not met | Held: §12’s notice/time requirement is jurisdictional |
| Effect of failing to comply with §12 | Karos: late service should not void district court power; relief on merits justified vacatur | NAU: late service deprives court of power to review under FAA | Held: Karos’ late service deprived district court of authority; its vacatur order was void |
| Whether appellate review may proceed from void district judgment | Karos: appealed judgment is final | NAU: (argued lack of jurisdiction below) | Held: A void district court order cannot confer appellate jurisdiction; appeal dismissed |
Key Cases Cited
- Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U.S. 576 (2008) (describing FAA’s streamlined judicial‑review scheme)
- Bowles v. Russell, 551 U.S. 205 (2007) (statutory time limits for taking an appeal are jurisdictional)
- John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (2008) (statutory filing deadline held jurisdictional)
- Sebelius v. Auburn Regional Medical Center, 568 U.S. 145 (2013) (clear‑statement rule for treating a statutory limit as jurisdictional)
- Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (2000) (sections of FAA should be read together when interpreting venue/jurisdictional provisions)
- Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010) (discussion of jurisdictional terminology)
- Piccolo v. Dain, Kalman & Quail, Inc., 641 F.2d 598 (8th Cir. 1981) (holding failure to serve notice within §12’s three months forfeits right to judicial review)