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" for 2012 due to wet conditions.
- NAU denied coverage; the parties proceeded to binding arbitration under the policy's mandatory arbitration clause.
- The arbitrator issued a final award in favor of NAU on January 21, 2014, denying the Karos' prevented‑planting claims.
- The Karos filed a petition in Holt County District Court on May 15, 2014 to vacate the award under 9 U.S.C. § 10(a)(4); they served notice by U.S. mail after the three‑month period set by 9 U.S.C. § 12.
- The district court vacated the arbitration award; NAU appealed to the Nebraska Supreme Court, which sua sponte considered whether the court had jurisdiction given the § 12 notice deadline.
Issues
| Issue | Plaintiff's Argument (Karos) | Defendant's Argument (NAU) | Held |
|---|---|---|---|
| Whether FAA governs dispute | FAA applies because policies are federally reinsured | Same | FAA governs arbitration here |
| Whether § 12’s 3‑month notice is jurisdictional | § 12 is a statute of limitations/claim‑processing rule; NAU waived by not raising earlier | § 12 is jurisdictional; failure to comply deprives court of authority | § 12 notice requirement is jurisdictional |
| Effect of failure to serve notice within 3 months | Late service should be subject to waiver/equitable doctrines; district court can reach merits | Untimely service deprives court of power to review; award cannot be vacated under FAA | Untimely service deprived district court of power; judgment vacating award is void |
| Consequence for appealability of district court order | District court’s vacatur is a valid final judgment; NAU may appeal | Void orders do not create appellate jurisdiction | District court judgment vacating award is vacated and appeal dismissed for lack of jurisdiction |
Key Cases Cited
- Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008) (describes FAA's streamlined, limited judicial review of arbitration awards)
- Bowles v. Russell, 551 U.S. 205 (2007) (statutory time limits for filing appeals are jurisdictional)
- John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (2008) (distinguishes jurisdictional time bars from ordinary limitations defenses)
- Sebelius v. Auburn Regional Medical Center, 568 U.S. 145 (2013) (adopts clear‑statement rule for labeling statutory time limits as jurisdictional)
- Piccolo v. Dain, Kalman & Quail, Inc., 641 F.2d 598 (8th Cir. 1981) (holding that failure to serve § 12 notice within three months deprives court of power to review award)
- Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (2000) (courts should read FAA provisions together when construing venue/notice requirements)
- Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010) (defines "jurisdiction" as adjudicatory authority relevant to analysis)
- Vaden v. Discover Bank, 556 U.S. 49 (2009) (FAA creates substantive law but does not itself confer federal‑court jurisdiction)