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Nebraska Supreme Court Advance S

300 Nebraska Report

HEINEMAN v. EVANGELICAL LUTH. GOOD SAM. SOC.

Cite as 300 Neb. 187

Mark Heineman, appellee, v. The Evangelica

Good Samaritan Society, doing business

Samaritan Society-Scribner, et al., app

___ N.W.2d ___

Filed June 8, 2018. No. S-17-983.

1. Arbitration and Award. Arbitrability presents a question of law.

2. Judgments: Appeal and Error. When reviewing questions of law, 

an appellate court resolves the questions independently of the lower 

court’s conclusions.

3. Trial: Evidence: Appeal and Error. Generally, it is not the function 

of an appellate court to review evidence which was not presented to the 

trial court.

4. Evidence: Records: Appeal and Error. A bill of exceptions is the only 

vehicle for bringing evidence before an appellate court; evidence which 

is not made a part of the bill of exceptions may not be considered.

5. Actions: Judicial Notice: Records: Appeal and Error. An appellate 

court may take judicial notice of a document, including briefs filed in 

an appeal, in a separate but related action concerning the same subject 

matter in the same court.

6. Contracts: Consideration. Consideration is sufficient to support a 

contract if there is any detriment to the promisee or any benefit to 

the promisor.

7. Arbitration and Award: Federal Acts: Contracts. If a contract containing an arbitration clause involves interstate commerce, the Federal 

Arbitration Act, 9 U.S.C. § 1 et seq. (2012), governs the contract.

8. Contracts: States: Words and Phrases. Contracts involving interstate 

commerce include contracts for services between parties of different states.

9. Federal Acts: Contracts: Arbitration and Award: States. The Federal 

Arbitration Act, at 9 U.S.C. § 2 (2012), preempts inconsistent state laws 

that apply solely to the enforceability of arbitration provisions in contracts evidencing a transaction involving commerce.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

08/24/2018 01:09 AM CDT
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300 Nebraska Report

HEINEMAN v. EVANGELICAL LUTH. GOOD SAM. SOC.

Cite as 300 Neb. 187

Appeal from the District Court for Dodge County: Geoffre

C. Hall, Judge. Reversed and remanded with directions

Nicholas A. Buda, Steven D. Davidson, and Lindsay K. 

Lundholm, of Baird Holm, L.L.P., and, on brief, Thomas E. 

Johnson for appellants.

Douglas R. Novotny, of Novotny Law, L.L.C., for appellee.

Heavican, C.J., Cassel, Stacy, Funke, and Papik, 

Schreiner, District Jud

Cassel, J.

INTRODUCTION

A nursing home resident filed suit for personal injuries 

against the facility and several of its employees. The defendants moved to dismiss and compel arbitration pursuant to 

an arbitration agreement signed by the resident at the time 

of admission. The district court declared that the arbitration 

agreement was void and unenforceable on state law grounds 

and for being contrary to public policy. Because the court erred 

in both respects, we reverse, and remand with directions.

BACKGROUND

Mark Heineman filed a personal injury action against The 

Evangelical Lutheran Good Samaritan Society, doing business as Good Samaritan Society-Scribner, and several of its 

employees (collectively Evangelical Lutheran), for injuries he 

sustained as a resident at the Good Samaritan Society-Scribner 

nursing home. Heineman is a Nebraska resident and The 

Evangelical Lutheran Good Samaritan Society is a nonprofit 

North Dakota corporation with its principal place of business 

in South Dakota.

Evangelical Lutheran filed motions to dismiss or stay the 

proceedings and to compel arbitration pursuant to an arbitration clause within the admission agreement Heineman had 

signed before he was admitted as a resident in the nursing 
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HEINEMAN v. EVANGELICAL LUTH. GOOD SAM. SOC.

Cite as 300 Neb. 187

home. The signature on the second page of the arbitration section was dated February 11, 2015.

The agreement included a “Resolution of Legal Disputes” 

section in which Heineman agreed to arbitrate “[a]ny legal 

controversy, dispute, disagreement or claim arising between 

the Parties” by checking a box next to, “YES I DO wish to 

arbitrate disputes and I received a copy of this Resolution of 

Legal Disputes.” In addition to permitting the signor to either 

opt into or out of the arbitration clause, the contract stated 

that the agreement to arbitrate disputes was not a condition 

of admission or of continued stay. The arbitration agreement 

further provided: “This arbitration provision binds all parties whose claims may arise out of or relate to treatment or 

service provided by the center including any spouse or heirs 

of the Resident.” And by signing the agreement, Heineman 

agreed that the “Resolution of Legal Disputes” provision shall 

be governed by and interpreted under the Federal Arbitration 

Act (FAA).1

The district court held two hearings on the motions to dismiss and compel arbitration. The hearings were conducted 

on affidavits, one at each hearing, offered by Evangelical 

Lutheran. They were substantially identical. Heineman did not 

offer any evidence.

After reviewing the language of the agreement, the court 

determined that the arbitration clause lacked “mutuality of 

obligation” by the parties. In doing so, the court relied on De 

Los Santos v. Great Western Sugar Co.2 It further found the 

arbitration clause unenforceable for failure to strictly conform 

to the requirements of Nebraska’s Uniform Arbitration Act 

(UAA).3 Finally, it relied on 42 C.F.R. § 483.70(n)(1) (2017) 

to find that the federal government “has taken action to eliminate preemptory arbitration clauses in nursing care facility 

1 9 U.S.C. § 1 et seq. (2012).

2 De Los Santos v. Great Western Sugar Co., 217 Neb. 282, 348 N.W.2d 842 

(1984).

3 Neb. Rev. Stat. § 25-2601 et seq. (Reissue 2016).
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HEINEMAN v. EVANGELICAL LUTH. GOOD SAM. SOC.

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contracts wherein the facility receives Medicaid funding.” 

Consequently, it also found the arbitration clause to be void 

and unenforceable as contrary to public policy and overruled 

the motions.

Evangelical Lutheran appealed, and we moved the case to 

our docket.4

ASSIGNMENTS OF ERROR

Evangelical Lutheran assigns that the district court erred in 

(1) failing to find that the arbitration clause was governed by 

the FAA, (2) finding that the arbitration clause was void and 

unenforceable under the UAA, (3) finding that the arbitration 

clause lacked mutuality of obligation between the parties, (4) 

finding that the arbitration clause was void and unenforceable 

on public policy grounds, and (5) failing to dismiss or stay the 

action and compel arbitration.

STANDARD OF REVIEW

[1,2] Arbitrability presents a question of law.5 When reviewing questions of law, an appellate court resolves the questions 

independently of the lower court’s conclusions.6

ANALYSIS

“Mutuality of Obligati

The district court found that the arbitration agreement lacked 

“mutuality of obligation,” thereby making it unenforceable. We 

understand “mutuality of obligation” to be the equivalent of 

mutuality of consideration.7

4 See Neb. Rev. Stat. § 24-1106(3) (Supp. 2017).

5 Citizens of Humanity v. Applied Underwriters, 299 Neb. 545, 909 N.W.2d 

614 (2018).

6 Frohberg Elec. Co. v. Grossenburg Implement, 297 Neb. 356, 900 N.W.2d 

32 (2017).

7 See, Black’s Law Dictionary 1179 (10th ed. 2014) (defining “mutuality of 

obligation”); Joseph M. Perillo, Calamari and Perillo on Contracts § 4-12 

(6th ed. 2009).
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HEINEMAN v. EVANGELICAL LUTH. GOOD SAM. SOC.

Cite as 300 Neb. 187

The district court relied on De Los Santos v. Great Western 

Sugar Co.,

8

 but the situation there was significantly different. 

There, the processing company promised to pay for transportation of sugar beets but only to the extent loaded on the 

contractor’s trucks. In the absence of a specified quantity, the 

processing company had no obligation to use the contractor’s 

services. Here, as we discuss below, the language of the agreement imposed reciprocal obligations.

Evangelical Lutheran argues that there was sufficient consideration and that both Evangelical Lutheran and Heineman 

were mutually bound by the arbitration agreement. It argues 

that the language of the agreement applies to “‘any legal controversy, dispute, disagreement, or claim of any kind,’ not just 

to claims brought by . . . Heineman.”9 Therefore, it contends 

that Evangelical Lutheran would also be required to submit its 

claims to arbitration pursuant to the agreement.

In response to this argument, Heineman argues that 

Evangelical Lutheran is not actually bound by the arbitration 

agreement. To support this response, he cites to county and district court cases outside of our record. He asserts that in those 

cases, Evangelical Lutheran filed suit against its residents 

without first attempting arbitration. And he asks us to take 

judicial notice of the complaints filed in those cases as proof

of this lack of mutuality of obligation.

[3,4] But to expand the record in this fashion would be 

improper, because, generally, it is not the function of an 

appellate court to review evidence which was not presented 

to the trial court.10 A bill of exceptions is the only vehicle 

for bringing evidence before an appellate court; evidence 

which is not made a part of the bill of exceptions may not 

be considered.11

8 De Los Santos v. Great Western Sugar Co., supra note 2.

9 Brief for appellants at 22.

10 See, e.g., U.S. v. Oatman, 702 Fed. Appx. 478 (8th Cir. 2017).

11 In re Estate of Radford, 297 Neb. 748, 901 N.W.2d 261 (2017).
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HEINEMAN v. EVANGELICAL LUTH. GOOD SAM. SOC.

Cite as 300 Neb. 187

[5] It is true that we have held that an appellate court may 

take judicial notice of a document, including briefs filed in an 

appeal, in a separate but related action concerning the same 

subject matter in the same court.12 But Heineman’s request 

goes much further. Because we see no reason to expand 

this precedent, we overrule Heineman’s motion to take judicial notice.

[6] And without the extraneous material, his argument collapses. Consideration is sufficient to support a contract if 

there is any detriment to the promisee or any benefit to the 

promisor.13 In this case, the language of the arbitration agreement applies equally to claims brought by Heineman and by 

Evangelical Lutheran. Because both parties are subject to the 

same detriment and benefit as mutual promisees and promisors, consideration was sufficient. The district court erred in 

finding that the agreement was unenforceable for insufficient 

consideration or “no mutuality of obligation.”

Applicability o

Having determined that an enforceable arbitration agreement existed, we now turn to consider whether the arbitration 

clause was subject to the requirements of the FAA or UAA.

[7,8] If a contract containing an arbitration clause involves 

interstate commerce, the FAA governs the contract.14 And we 

have held that contracts involving interstate commerce include 

contracts for services between parties of different states.15

Here, there is no question that the admission agreement 

involved interstate commerce. Heineman conceded as much 

at oral argument, and the agreement itself stated that it was “a 

12 See, Pennfield Oil Co. v. Winstrom, 276 Neb. 123, 752 N.W.2d 588 

(2008); Jessen v. Jessen, 259 Neb. 644, 611 N.W.2d 834 (2000).

13 City of Omaha v. City of Elkhorn, 276 Neb. 70, 752 N.W.2d 137 (2008).

14 See Wilczewski v. Charter West Nat. Bank, 295 Neb. 254, 889 N.W.2d 63 

(2016).

15 See Frohberg Elec. Co. v. Grossenburg Implement, supra note 6.
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transaction involving interstate commerce.” Consequently, the 

FAA governs this contract.

[9] Because the FAA, at 9 U.S.C. § 2, preempts inconsistent 

state laws that apply solely to the enforceability of arbitration provisions in contracts evidencing a transaction involving 

commerce,16 the arbitration agreement did not need to strictly 

comply with the language of the UAA. For this reason, the district court erred in finding the arbitration agreement void and 

unenforceable on UAA grounds.

Public Po

Lastly, we consider the district court’s holding that the 

arbitration agreement was void and unenforceable as contrary 

to public policy. The only authority on which the court relied 

was a federal regulation17 which provides that “[a] facility must not enter into a pre-dispute agreement for binding 

arbitration with any resident or resident’s representative nor 

require that a resident sign an arbitration agreement as a condition of admission to the [long-term care] facility.”18

However, this provision of the regulation did not become 

effective until November 28, 2016,19 long after the date of 

the agreement in the case before us, which was signed on 

February 11, 2015. And the U.S. Supreme Court has made 

clear that retroactivity is not favored in the law and has 

held “administrative rules will not be construed to have retroactive effect unless their language requires this result.”20

Moreover, as Evangelical Lutheran points out, implementation 

16 See Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538 

(2010).

17 42 C.F.R. § 483.70.

18 42 C.F.R. § 483.70(n)(1).

19 See Medicare and Medicaid Programs; Reform of Requirements for LongTerm Care Facilities, 81 Fed. Reg. 68,688 (Oct. 4, 2016).

20 Bowen v. Georgetown University Hospital, 488 U.S. 204, 208, 109 S. Ct. 

468, 102 L. Ed. 2d 493 (1988).
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of the regulation has been enjoined by a federal court.21 Thus, 

Heineman’s public policy argument rests on retroactive application of a federal regulation, which has no plain language 

mandating retroactivity and which has been enjoined by a 

federal court from being placed into effect. At oral argument, 

Heineman conceded that neither the U.S. Congress nor the 

Nebraska Legislature had enacted legislation encompassing 

the public policy articulated in the enjoined regulation. We 

decline his invitation to impose such a policy based upon 

the “common law.” The district court erred in using the 

regulation as a basis to conclude that the agreement was void 

and unenforceable.

CONCLUSION

Because the arbitration agreement was valid and enforceable and governed by the FAA, the district court should have 

sustained the motions to dismiss and compel arbitration. But, 

in sustaining the motions, the district court could exercise its 

discretion to stay rather than dismiss the case.22 Accordingly, 

we reverse the district court’s order and remand the cause with 

directions that the court enter an order compelling arbitration pursuant to the agreement and either dismissing or 

staying the action.

Reversed and remanded with direct

Miller-Lerman, J., not participati

21 American Health Care Association v. Burwell, 217 F. Supp. 3d 921 (N.D. 

Miss. 2016), appeal dismissed ___ F.3d ___ (5th Cir. June 2, 2017).

22 See Wilczewski v. Charter West Nat. Bank, supra note 14.