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 filed prevented‑planting claims for 2012 acreage; NAU denied coverage.
- The policies required arbitration; an arbitrator held an evidentiary hearing and issued a final award on January 21, 2014, denying the Karos’ claims.
- The Karos filed a state‑court “petition for judicial review” (treated as an FAA §10 vacatur application) on May 15, 2014 and served NAU by U.S. mail — more than three months after the award.
- NAU moved to dismiss early on; the court denied the motion, later granted summary judgment for the Karos, and vacated the arbitration award under FAA §10(a)(4).
- NAU appealed to the Nebraska Supreme Court, which first considered whether the district court had jurisdiction to entertain the untimely vacatur.
Issues
| Issue | Plaintiff's Argument (Karos) | Defendant's Argument (NAU) | Held |
|---|---|---|---|
| Does the FAA govern arbitration of federally reinsured crop‑insurance disputes? | FAA applies because policies involve interstate commerce. | Same. | FAA governs. |
| Is the §12 notice/time requirement (serve notice within 3 months) jurisdictional? | The 3‑month rule may be a claim‑processing deadline and waivable. | The §12 notice/time is mandatory and jurisdictional; failure deprives court of power. | The 3‑month §12 requirement is jurisdictional. |
| Did the Karos’ failure to serve within 3 months deprive the district court of authority to vacate the award? | The district court nevertheless could review and vacate on merits (manifest disregard/exceeding powers). | Untimely service deprived the court of jurisdiction; vacatur void. | Karos’ untimely service deprived the court of jurisdiction; district court judgment is void. |
| Does a void district‑court vacatur confer appellate jurisdiction? | Implicitly argued appealable order exists. | A void order cannot confer appellate jurisdiction. | A void order cannot confer appellate jurisdiction; appeal dismissed. |
Key Cases Cited
- Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (describing FAA’s streamlined judicial‑review scheme)
- Bowles v. Russell, 551 U.S. 205 (U.S. 2007) (statutory time limits for filing appeals are jurisdictional)
- John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (U.S. 2008) (statutory filing deadline held jurisdictional)
- Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145 (U.S. 2013) (clear‑statement rule for jurisdictional time limits)
- Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (U.S. 2000) (read FAA sections together; venue/notice interpretation)
- Piccolo v. Dain, Kalman & Quail, Inc., 641 F.2d 598 (8th Cir. 1981) (failure to serve under §12 within 3 months forfeits judicial review)
- Florasynth, Inc. v. Pickholz, 750 F.2d 171 (2d Cir. 1984) (importance of timely vacatur to preserve arbitration’s speed and finality)