SCOTT T. BOYD, M.D., APPELLANT, AND GREAT PLAINS DIAGNOSTICS, LLC, APPELLEE, v. JOHN COOK, M.D., ET AL., APPELLEES.
No. S-17-177
Nebraska Supreme Court
Filed February 2, 2018
298 Neb. 819
Nebraska Supreme Court Advance Sheets
298 Nebraska Reports
Jurisdiction: Appeal and Error. When a jurisdictional question does not involve a factual dispute, determination of a jurisdictional issue is a matter of law which requires an appellate court to reach a conclusion independent from the trial court’s. - Actions: Arbitration and Award: Appeal and Error. While a court’s decision to issue a stay in an action is generally reviewed under an abuse of discretion standard of review, the decision whether to stay proceedings and compel arbitration is a question of law that an appellate court reviews de novo.
- Jurisdiction: Appeal and Error. Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it.
- Jurisdiction: Legislature: Appeal and Error. In order for an appellate court to have jurisdiction over an appeal, appellate jurisdiction must be specifically provided by the Legislature.
- Judgments: Final Orders: Words and Phrases. A final judgment is one that disposes of the case either by dismissing it before hearing is had upon the merits, or after trial by rendition of judgment for the plaintiff or defendant.
- Judgments: Words and Phrases. Every direction of a court or judge, made or entered in writing and not included in a judgment, is an order.
- Final Orders: Appeal and Error. The only three types of final orders which may be reviewed on appeal are (1) an order which affects a substantial right and which determines the action and prevents a judgment, (2) an order affecting a substantial right made during a special proceeding, and (3) an order affecting a substantial right made on summary application in an action after judgment is rendered.
Final Orders. Under Neb. Rev. Stat. § 25-1315 (Reissue 2016) , an order that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties is not final and is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.- Dismissal and Nonsuit: Final Orders. Generally, an order of dismissal is a final, appealable order.
- Actions: Appeal and Error. An order issuing a stay within an action is generally not appealable.
- Actions: Dismissal and Nonsuit: Final Orders. A stay that is tantamount to a dismissal of an action or has the effect of a permanent denial of the requested relief is a final order.
- Jurisdiction: Words and Phrases. Subject matter jurisdiction is the power of a tribunal to hear and determine a case in the general class or category to which the proceedings in question belong and to deal with the general subject matter involved.
- Jurisdiction. Parties cannot confer subject matter jurisdiction upon a judicial tribunal by either acquiescence or consent, nor may subject matter jurisdiction be created by waiver, estoppel, consent, or conduct of the parties.
- ____. A lack of subject matter jurisdiction may be raised at any time by any party or by the court sua sponte.
- ____. Just as parties may not confer subject matter jurisdiction on a court by consent, neither may parties deprive a court of subject matter jurisdiction by their own agreement.
- Arbitration and Award: Contracts: Venue. Arbitration provisions are properly understood as contractual agreements between parties to resolve their disputes in an arbitral venue.
- Arbitration and Award: Contracts: Parties. A contractual arbitration provision creates a contractual right which may be enforced only by a party to the contract.
- Arbitration and Award: Contracts: Waiver. Like other contractual rights, an agreement to arbitrate can be waived by the parties.
- Arbitration and Award: Contracts. Arbitration provisions are not self-executing.
Appeal from the District Court for Douglas County: SHELLY R. STRATMAN, Judge. Reversed and remanded for further proceedings.
Steven A. Klenda and Geoffrey N. Blue, of Klenda, Gessler & Blue, L.L.C., and Robert W. Futhey and Mark Laughlin, of
James J. Frost, of McGrath, North, Mullin & Kratz, P.C., L.L.O., for appellees.
HEAVICAN, C.J., MILLER-LERMAN, CASSEL, STACY, KELCH, and FUNKE, JJ.
CASSEL, J.
I. INTRODUCTION
Nearly 3 years into litigation between two doctors and various associated business entities, the district court determined that because of arbitration and venue provisions in an employment contract, it lacked jurisdiction. The court indefinitely stayed a claim for dissolution of one entity and dismissed all other claims. This appeal followed. Because the arbitration provision, which neither party sought to enforce, did not deprive the court of jurisdiction, we reverse, and remand for further proceedings.
II. BACKGROUND
John Cook, M.D., owned Midwest Pain Clinic, P.C. (Midwest Pain). In early 2012, Midwest Pain employed Scott T. Boyd, M.D., as an anesthesiologist. Midwest Pain and Boyd detailed the terms of Boyd’s employment in a written contract.
The employment contract contained a jurisdiction and venue provision: “Except as set forth in [an arbitration provision], the [c]ourt located in Union County, South Dakota, shall have jurisdiction and be the venue of all disputes between [Midwest Pain] and [Boyd], whether such disputes arise from this [a]greement or otherwise.” And it contained an arbitration provision stating that “any dispute or controversy arising out of the interpretation or operation” of the contract “shall be resolved by arbitration” as set forth in the agreement.
Based on Boyd’s experience operating a urinalysis laboratory, Boyd, Cook, and Cook’s son, Jacob Cook (Jacob), formed Great Plains Diagnostics, LLC (Great Plains), in early 2013.
Disputes arose regarding access to documents and billing data, billing procedures, and billing codes assigned to services provided. In October 2013, Jacob resigned his positions at both Midwest Pain and Great Plains to take another job out of state. That same month, offers regarding a partnership and a draft separation agreement were refused.
Things apparently came to a head in early January 2014. On January 10, Boyd’s employment with Midwest Pain was terminated and he was locked out of Great Plains’ offices.
In April 2014, Cook and Jacob sued to dissolve Great Plains. They sought dissolution, the appointment of a receiver to wind up Great Plains’ business, and an order enjoining Boyd from disposing of any of Great Plains’ assets.
Additional claims, styled as counterclaims, followed. Boyd and Great Plains eventually asserted 10 different claims against Cook, Jacob, Midwest Pain, and other associated entities. Midwest Pain asserted a counterclaim against Boyd, and it made a separate counterclaim with another entity against Great Plains.
Cook, Jacob, Midwest Pain, and two other entities moved for summary judgment on 7 of the 10 claims made by Boyd and Great Plains, which motion, in February 2016, the district court overruled in part and sustained in part. The court granted summary judgment on four of the claims by Boyd and Great Plains and on two other claims as to Boyd, but not as to Great Plains. And the court denied summary judgment on one of the claims.
In January 2017, the district court dismissed sua sponte all of the claims in the case other than the dissolution proceeding as to Great Plains. The court noted that Boyd’s employment
Boyd appealed the district court’s order of dismissal and its prior order sustaining in part the motion for summary judgment. We moved the appeal to our docket.
III. ASSIGNMENTS OF ERROR
Boyd’s assignments of error, restated, are that the district court erred by (1) dismissing the case for lack of jurisdiction, (2) granting summary judgment on his claim under the Nebraska Wage Payment and Collection Act, and (3) granting summary judgment on his fraudulent inducement claim. Cook and others take no position on the district court’s sua sponte dismissal, but argue that this court lacks appellate jurisdiction to review the latter two assignments of error relating to the district court’s partial grant of summary judgment. In the alternative, they argue that the district court correctly granted summary judgment on the claims from which Boyd appeals.
IV. STANDARD OF REVIEW
[1] When a jurisdictional question does not involve a factual dispute, determination of a jurisdictional issue is a matter of law which requires an appellate court to reach a conclusion independent from the trial court’s.1
[2] While a court’s decision to issue a stay in an action is generally reviewed under an abuse of discretion standard of
V. ANALYSIS
1. JURISDICTION
[3] Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it.4 To determine whether we have appellate jurisdiction to review the district court’s order of dismissal or its prior summary judgment order, we first recall principles of Nebraska law governing appellate jurisdiction.
(a) Nebraska Appellate Jurisdiction
[4] Under the Nebraska Constitution, this court has only “such appellate jurisdiction as may be provided by law.”5 That is to say, “in order for this court to have jurisdiction over an appeal, appellate jurisdiction must be specifically provided by the Legislature.”6
[5,6] The Legislature has provided that appellate courts have jurisdiction to review the judgments and final orders of the district courts.7 And the Legislature has defined a “judgment”
[7] “Final orders” are also defined by statute:
An order affecting a substantial right in an action, when such order in effect determines the action and prevents a judgment, and an order affecting a substantial right made in a special proceeding, or upon a summary application in an action after judgment, is a final order which may be vacated, modified or reversed, as provided in this chapter.11
Thus, the only three types of final orders which may be reviewed on appeal are (1) an order which affects a substantial right and which determines the action and prevents a judgment, (2) an order affecting a substantial right made during a special proceeding, and (3) an order affecting a substantial right made on summary application in an action after judgment is rendered.12
Also,
(b) Finality of District Court’s Dismissal
[8] As an initial matter, our appellate review in this case encompasses only the district court’s dismissal and stay order and not its prior summary judgment order. As we read the court’s dismissal order, it dismissed all nondissolution claims, including those claims on which it previously granted summary judgment. Under
Before reviewing the appealability of the dismissal order under the general final order statute, we first note that the order is not made appealable by the provisions of Nebraska’s Uniform Arbitration Act.
Neither is the order here reviewable as a judgment. The district court’s order was not a “final determination of the rights of the parties in an action”19 because it did not determine all of the parties’ rights. The order left the dissolution proceeding unresolved, staying that claim pending the outcome of arbitration.20
[9] It necessarily follows that we have jurisdiction to review the court’s dismissal order only if it constitutes a final order. Had the district court’s order simply dismissed all claims, it would unquestionably be a final order. Generally, an order of
Thus, whether we have jurisdiction turns on whether the order staying the dissolution proceeding is a final order. If the stay is not a final order, then the district court’s order under § 25-1315 would be one that “adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties” and would therefore not be final. If the stay is a final order, then the dismissal and stay order does not fall within § 25-1315 and we have appellate jurisdiction to review it.
[10,11] An order issuing a stay within an action is generally not appealable.22 But we have held that a stay that is “tantamount to a dismissal of an action or has the effect of a permanent denial of the requested relief” is a final order.23 In Kremer v. Rural Community Ins. Co.,24 we concluded that a court order under Nebraska’s Uniform Arbitration Act staying an action has the same effect as a dismissal because “[t]he parties cannot litigate their dispute in state courts.” Though the order at issue here is distinct from the one in Kremer, we reach the same conclusion.
In Kremer, the trial court, on the defendant’s motion, compelled arbitration and stayed the case. Here, the court’s order was issued sua sponte and did not compel arbitration, but dismissed most claims because of the arbitration provision and stayed the remaining claim, for dissolution of Great Plains, pending the result of arbitration. The order staying the dissolution proceeding was tantamount to a dismissal of that
Because both the stay of the dissolution proceeding and the dismissal of all other claims were final, the order staying and dismissing claims disposed of all claims as to all parties within the meaning of § 25-1315. We have jurisdiction to review the district court’s order.
2. DISTRICT COURT’S DISMISSAL AND STAY ORDER
Boyd argues that the district court erred by dismissing the nondissolution claims and staying the dissolution proceeding, while the appellees take no position on the correctness of the court’s order. Boyd argues that the employment contract’s arbitration provision had been waived by the parties by extensively litigating the claims subject to the provision and that the venue and jurisdiction provision did not deprive the district court of subject matter jurisdiction. We agree that the district court’s dismissal and stay order was erroneous.
[12-14] When the district court concluded that it lacked jurisdiction, it did not specify whether it was referring to personal or subject matter jurisdiction. But the court appeared to be referring to the latter. Subject matter jurisdiction is the power of a tribunal to hear and determine a case in the general class or category to which the proceedings in question belong and to deal with the general subject matter involved.25 American courts long ago adopted the “‘no-waiver, no-consent’ rule” for subject matter jurisdiction from the English
[15] Just as parties may not confer subject matter jurisdiction on a court by consent, neither may parties deprive a court of subject matter jurisdiction by their own agreement.29 A court’s subject matter jurisdiction derives from the constitutional and statutory sources of its authority, not the agreement of the litigants that appear before it.30
[16] The district court erred in concluding that the arbitration and jurisdiction and venue provisions of the employment agreement deprived it of subject matter jurisdiction. As a basic principle of law, a contractual agreement can do no such thing.31 While some older case law inaptly referred to arbitration agreements as “oust[ing the] courts of jurisdiction,”32 such provisions are properly understood as contractual agreements between parties to resolve their disputes in an arbitral
And the employment contract here does not even purport to deprive the court of subject matter jurisdiction. The arbitration clause provides that disputes between Boyd and Midwest Pain are to be resolved by arbitration. And the jurisdiction
[17-19] Finally, from the premise that a contractual arbitration provision merely creates a contractual right, it necessarily follows that this right may be enforced only by a party to the contract.40 Here, neither party sought to enforce the arbitration provision, yet the court dismissed or stayed all claims in the case in an attempt to push the dispute into arbitration. But like other contractual rights, an agreement to arbitrate can be waived by the parties.41 Arbitration provisions are not self-executing.42 It is improper for a court to try to enforce such a contractual right on behalf of the parties.43 We need not decide whether the extensive litigation that has occurred in this case constitutes a waiver of the arbitration agreement because neither party sought to enforce the arbitration agreement in the first place. Waiver of a contractual provision is a defense to enforcement of that provision, but a party must first seek to invoke the provision before it is necessary to consider the
VI. CONCLUSION
For the reasons set forth above, we reverse the stay and dismissal order and remand the cause for further proceedings.
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.
WRIGHT, J., not participating.
