Ronald J. Palagi, P.C. v. Prospect Funding Holdings, 925 N.W.2d 344

Wheat sold rights to her personal-injury settlement to Prospect under a written Sale and Repurchase Agreement (with a repurchase schedule and large liquidated-damages clause); Palagi, Wheat’s lawyer, signed acknowledgments and an Irrevocable Letter of Direction to hold disputed funds in trust.
Wheat settled her claim; Palagi retained $8,840 (the repurchase amount at that time) in his trust account and disbursed the remainder; Prospect initiated arbitration separately against Wheat and Palagi for unpaid amounts.
Neither Wheat nor Palagi meaningfully participated in the arbitrations despite notice; arbitrator awarded Prospect $23,120 against Palagi and $46,240 against Wheat (liquidated damages).
Wheat and Palagi filed an interpleader action in Douglas County seeking resolution of the $8,840 and challenging the underlying agreement’s validity, but they did not move to vacate, modify, or correct the arbitration awards within the FAA’s three-month window.
Prospect moved to confirm the arbitration awards under 9 U.S.C. § 9 and for summary judgment on the interpleader complaint; the district court granted both and entered judgment against Wheat and Palagi; they appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FAA or Nebraska UAA governs the arbitration	Wheat: agreement void under state law (so FAA application contested)	Prospect: FAA applies (contract involved interstate commerce and expressly invoked FAA)	FAA governs; parties contracted for FAA and transaction affects interstate commerce
Whether district court could confirm awards without addressing contract validity	Wheat: court should adjudicate contract invalidity and thus block confirmation	Prospect: confirmation is proper absent a timely motion to vacate under FAA §§10–11	Court must confirm under §9 unless award was timely vacated/modified; no timely challenge, so confirmation proper
Whether Wheat/Palagi waived defenses by failing to timely move to vacate	Wheat: substantive defenses to agreement excuse failure to move	Prospect: failure to file within 3 months forfeits those defenses in confirmation proceeding	Held that failure to move within FAA time bars relitigation in confirmation; defenses not considered on merits
Whether summary judgment was premature because discovery incomplete	Wheat: needed more discovery, should have obtained continuance under Neb. Rev. Stat. §25-1335	Prospect: no continuance or affidavit showing needed discovery was requested	Court properly granted summary judgment; plaintiffs never requested continuance or submitted affidavit showing essential facts to be obtained

First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (rule on who decides arbitrability; appellate review standard for FAA questions)
Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (FAA §§10–11 provide exclusive grounds for judicial review of awards)
Citizens Bank v. Alafabco, Inc., 539 U.S. 52 (definition of "involving commerce" for FAA application)
Hartman v. City of Grand Island, 265 Neb. 433 (confirming arbitration award where no timely challenge under state arbitration act)
Wilczewski v. Charter West Nat. Bank, 295 Neb. 254 (FAA applies where transaction affects interstate commerce)
Colwell v. Mullen, 301 Neb. 408 (summary judgment standards cited)
Lombardo v. Sedlacek, 299 Neb. 400 (§25-1335 continuance/affidavit requirements to resist premature summary judgment)
Gaytan v. Wal-Mart, 289 Neb. 49 (requirements for affidavits seeking continuance under §25-1335)