Noah's Ark Processors v. UniFirst Corp.
310 Neb. 896
| Neb. | 2022Background
- UniFirst and Nebraska Prime Group LLC (Prime) entered a customer service agreement (CSA) that required arbitration of “all disputes of whatever kind” and required any purchaser to assume CSA obligations.
- Noah’s Ark Processors (Noah’s) acquired Prime’s plant assets by foreclosure and began operating the meatpacking plant on January 2, 2015; Noah’s never informed UniFirst of the ownership change.
- UniFirst continued providing services under the CSA, invoiced and was paid on accounts labeled “Nebraska Prime,” provided new routes and quotes at Noah’s request, and UniFirst proposed a renewal referencing “Nebraska Prime/WR Reserve.”
- Noah’s terminated the CSA in January 2018; UniFirst demanded arbitration seeking approximately $141,054.01; Noah’s sued in district court seeking a declaration it was not bound by the CSA or arbitration clause.
- The district court held a bench trial, found Noah’s non‑signatory conduct warranted equitable estoppel (false impressions, silence about ownership change, invoicing and payment patterns, CFO acknowledgment of remaining term), denied waiver of arbitration, and ordered Noah’s to arbitrate; the Nebraska Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument (Noah's) | Defendant's Argument (UniFirst) | Held |
|---|---|---|---|
| Whether Noah’s (a non‑signatory) is bound by the CSA via equitable estoppel | Noah’s: No evidence of deception or reliance; not a signatory so not bound | UniFirst: Noah’s conduct created the false impression UniFirst was still dealing with Prime and UniFirst relied to its detriment | Held: Affirmed—elements of equitable estoppel met and Noah’s estopped from denying CSA |
| Whether the billing disputes fall outside the CSA arbitration scope | Noah’s: Some garment disputes involve items not listed in CSA so are for the court | UniFirst: Arbitration clause is broad—“all disputes of whatever kind” covers the claims | Held: Affirmed—arbitration clause is broad; disputes covered and go to arbitrator |
| Whether UniFirst waived arbitration or breached CSA by naming wrong arbitration venue | Noah’s: UniFirst’s demand for arbitration in Kansas (not Lincoln) waived arbitration / breached CSA | UniFirst: Venue selection was a mistake; acted consistently with right to arbitrate; no prejudice to Noah’s | Held: Affirmed—trial court correctly found no waiver; appellate court declined to consider a new waiver/breach argument raised first on appeal |
| Whether trial court admitted hearsay in error | Noah’s: Several statements and documents were hearsay and prejudicial | UniFirst: Statements admitted for their effect on the listener, as agent admissions, or as business records | Held: Affirmed—no abuse of discretion; admissibility or weight was proper; no prejudice to Noah’s |
Key Cases Cited
- Amend v. Nebraska Pub. Serv. Comm., 298 Neb. 617 (2018) (appellate courts need not analyze unnecessary issues)
- Good Samaritan Coffee Co. v. LaRue Distributing, 275 Neb. 674 (2008) (standards for reviewing legal questions about arbitration)
- VKGS v. Planet Bingo, 309 Neb. 950 (2021) (appellate review standards for hearsay rulings)
- PRM Energy Systems, Inc. v. Primenergy, L.L.C., 592 F.3d 830 (8th Cir. 2010) (non‑signatory may be estopped from avoiding contract if it selectively relies on it)
- Cullinane v. Beverly Enters.-Neb., 300 Neb. 210 (2018) (two‑step analysis for enforcing arbitration: formation and scope)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (courts decide questions of arbitrability and contract interpretation)