Karo v. NAU Country Ins. Co.
297 Neb. 798
| Neb. | 2017Background
- Matt and Michael Karo held federally reinsured crop‑insurance policies serviced by NAU and submitted prevented‑planting claims for 2012; NAU denied coverage.
- The policies required arbitration; the parties arbitrated and the arbitrator denied the Karos’ claims by award dated January 21, 2014.
- The Karos filed a state‑court “Petition for Judicial Review” seeking vacatur under 9 U.S.C. § 10 on May 15, 2014 (filed and served outside the 3‑month period in 9 U.S.C. § 12).
- The Holt County District Court treated the filing as a civil action, granted summary judgment to the Karos, and vacated the arbitration award.
- NAU appealed; the Nebraska Supreme Court considered whether the FAA governs and whether the § 12 three‑month notice requirement is jurisdictional.
Issues
| Issue | Plaintiff's Argument (Karos) | Defendant's Argument (NAU) | Held |
|---|---|---|---|
| Does the FAA govern the arbitration? | FAA applies because the policies are federally reinsured and involve interstate commerce. | Agreed FAA applies. | FAA governs arbitration of federally reinsured crop insurance. |
| Is the § 12 three‑month notice requirement jurisdictional? | The time limit should be treated as a filing/claim‑processing rule (waivable). | § 9 and § 12 notice rules are mandatory and confer jurisdiction; noncompliance deprives court of power to review. | The three‑month § 12 notice requirement is jurisdictional. |
| Did the Karos satisfy the § 12 prerequisite for judicial vacatur? | Their May 15 filing (and service) sufficed for vacatur under § 10. | Filing/service occurred more than three months after the award and thus failed § 12. | Karos failed to comply with § 12; district court lacked jurisdiction to vacate. |
| Effect of lack of jurisdiction on the district court judgment and appeal | Judgment vacating award should stand; appeal is proper. | A void district‑court judgment cannot confer appellate jurisdiction. | District court judgment is void; Nebraska Supreme Court vacated that judgment and dismissed the appeal for lack of jurisdiction. |
Key Cases Cited
- Piccolo v. Dain, Kalman & Quail, Inc., 641 F.2d 598 (8th Cir. 1981) (concluded failure to serve § 12 notice within three months deprives district court of power to review).
- Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (describes FAA’s streamlined procedures and limits on judicial review).
- Bowles v. Russell, 551 U.S. 205 (U.S. 2007) (statutory time limits for appeals are jurisdictional).
- Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145 (U.S. 2013) (adopts clear‑statement/bright‑line approach to determine whether time limits are jurisdictional).
- Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (U.S. 2000) (sections governing FAA review should be read together; practical consequences of diverging readings).
- John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (U.S. 2008) (distinguishes jurisdictional time bars from waivable limitations).
- Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (U.S. 2010) (discusses jurisdictional terminology and scope).