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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

Milmar Food Group II, LLC, et al., appellees, 

v. Applied Underwriters, Inc., 

et al., appellants.

___ N.W.2d ___

Filed April 6, 2021. No. A-20-042.

1. Jurisdiction. Whether a suit should be entertained or dismissed under 

the rule of forum non conveniens depends largely upon the facts of the 

particular case and rests in the discretion of the trial court.

2. Jurisdiction: States. The doctrine of forum non conveniens (literally, 

“an unsuitable court”) provides that a state will not exercise jurisdiction 

if it is a seriously inconvenient forum for the trial of the action, provided 

that a more appropriate forum is provided to the plaintiff.

3. Jurisdiction: Words and Phrases. The doctrine of forum non conveniens refers to the discretionary power of a court to decline jurisdiction 

when the convenience of the parties and the ends of justice would be 

better served if the action were brought and tried in another forum.

4. Jurisdiction: States. A plaintiff’s choice of a forum should not be overturned except for weighty reasons, and only when trial in the chosen 

forum would establish oppressiveness and vexation to the defendant out 

of all proportion to the plaintiff’s convenience, or when the forum is 

inappropriate because of considerations affecting the court’s own administrative and legal problems.

5. Jurisdiction: States: Waiver. When parties agree to a forum selection 

clause, they waive the right to challenge the preselected forum as inconvenient or less convenient for themselves or their witnesses, or for their 

pursuit of the litigation. In essence, they waive the right to challenge the 

private interest factors. However, a trial court may consider arguments 

about public interest factors. These public interest factors include the 

administrative difficulties flowing from court congestion, the local interest in having localized controversies decided at home, and the interest 

in having the trial of a diversity case in a forum that is at home with 

the law.

Nebraska Supreme Court Online Library

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

04/06/2021 08:09 AM CDT
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

Appeal from the District Court for Douglas County: Duane 

C. Dougherty, Judge. Reversed and remanded with directions.

Jeffrey A. Silver for appellants.

Kristopher J. Covi, of McGrath, North, Mullin & Kratz, 

P.C., L.L.O., for appellees.

Bishop, Arterburn, and Welch, Judges.

Bishop, Judge.

INTRODUCTION

Milmar Food Group II, LLC; Milmar Food Group, LLC; and 

Milmar LLC (collectively Milmar) filed an action in the district 

court for Douglas County against Applied Underwriters, Inc.; 

Applied Underwriters Captive Risk Assurance Company, Inc.; 

Applied Risk Services, Inc.; Applied Risk Services of New 

York, Inc.; North American Casualty Company; Continental 

Indemnity Company; and California Insurance Company (collectively Applied), alleging nine claims based on a workers’ 

compensation reinsurance participation agreement (RPA) that 

Milmar asserts violated New York insurance law. The Douglas 

County District Court, sua sponte, dismissed Milmar’s action 

without prejudice, citing the doctrine of forum non conveniens. We reverse, and remand with directions to stay the 

present action pending Milmar’s attempt to refile its action in 

New York.

BACKGROUND

New York Lawsuit

Milmar initially filed a lawsuit against Applied in New York. 

See Milmar Food Group II, LLC v. Applied Underwriters, Inc., 

61 Misc. 3d 812, 85 N.Y.S.3d 347 (2018). As stated in the New 

York court’s opinion:

[P]laintiffs (collectively, Milmar) are affiliated New York 

companies, engaged in the production and distribution 

of food products, which are required by New York law 
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

to provide workers’ compensation insurance for their 

employees. Defendants provide products and services in 

connection with workers’ compensation insurance coverage. Beginning in 2013, Milmar was covered under a workers’ compensation program (the EquityComp Program) 

created, patented and implemented by defendants.

There are essentially three components to this Program:

1. Standard workers’ compensation insurance policies

issued to Milmar by defendants Continental Indemnity 

Company (Continental) and California Insurance 

Company (California), with rates and forms approved by 

New York’s Department of Financial Services or its pred

ecessor, the New York Insurance Department;

2. A reinsurance agreement (the Reinsurance Treaty) 

between defendant Applied Underwriters Captive Risk 

Assurance Company, Inc. (AUCRA) and affiliates of 

defendant Applied Underwriters, Inc. (AU), including 

Continental and California; and

3. A Reinsurance Participation Agreement (RPA) 

between AUCRA and Milmar.

Milmar commenced this action, complaining that the 

RPA is illegal and fraudulent, and seeking, inter alia, a 

declaratory judgment that the RPA is void and unenforceable under the New York Insurance Law, equitable rescission of the RPA and money damages for sums paid under 

the RPA in excess of premiums due under the Continental 

and California insurance policies.

Defendants move, inter alia, (1) to dismiss Milmar’s 

claims against AUCRA on the ground that the RPA designates the courts of Nebraska as the exclusive forum 

for resolving “any matter concerning this Agreement 

that is not subject to the dispute resolution provisions 

of Paragraph 13 hereof,” and (2) to dismiss Milmar’s 

claims against all remaining defendants on the ground 

that AUCRA is a necessary party who cannot be joined in 

this New York action.
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

Milmar Food Group II, LLC v. Applied Underwriters, Inc., 

61 Misc. 3d at 815-16, 85 N.Y.S.3d at 350-51 (emphasis 

in original).

The New York court ultimately determined that the RPA’s 

Nebraska forum selection clause was enforceable. It also determined that the forum selection clause should not be set aside. 

The court stated:

Milmar has not shown that trial in Nebraska would be so 

gravely difficult that it would, for all practical purposes, 

be deprived of its day in court. Applying a forum non 

conveniens analysis in accord with what it takes to be 

Nebraska law, Milmar claims only that Nebraska is not 

a reasonably convenient place for the trial of this action. 

Under New York law, however, “where a party to a contract has agreed to submit to the jurisdiction of a court, 

that party is precluded from attacking the court’s jurisdiction on forum non conveniens grounds.” (Honeywell 

Intl. Inc. v ARC Energy Servs., Inc., [152 A.D.3d 444, 

444, 55 N.Y.S.3d 658, 658 (N.Y. App. Div. 2017)]; 

Sterling Natl. Bank v Eastern Shipping Worldwide, Inc., 

[35 A.D.3d 222, 223, 826 N.Y.S.2d 235, 238 (N.Y. App. 

Div. 2006)]).

In view of the foregoing, Milmar has failed to carry 

its heavy burden under New York law of showing that 

the RPA’s Nebraska forum selection clause should be 

set aside.

Milmar Food Group II, LLC v. Applied Underwriters, Inc., 61 

Misc. 3d 812, 821-22, 85 N.Y.S.3d 347, 355 (2018).

Accordingly, the New York court dismissed Milmar’s 

claims against defendant Applied Underwriters Captive Risk 

Assurance Company (AUCRA) without prejudice and Milmar 

was “granted leave to recommence its action against AUCRA 

in the courts of the State of Nebraska.” Id. at 832, 85 N.Y.S.3d 

at 362.

The New York court further found that AUCRA was a 

necessary party to all claims asserted by Milmar, and it therefore ordered that Milmar’s claims against defendants Applied 
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

Underwriters, Applied Risk Services, Applied Risk Services 

of New York, North American Casualty Company, Continental 

Indemnity Company, and California Insurance Company 

were dismissed without prejudice for nonjoinder of defendant 

AUCRA due to the aforesaid Nebraska forum selection clause. 

The court noted

in particular that Milmar has an effective remedy in 

Nebraska because all named defendants except Applied 

Risk Services of New York, Inc.—a peripheral defend

ant against whom no specific allegations are made in 

the complaint—are Nebraska corporations, or have their 

principal place of business in Nebraska, and are therefore 

subject to general jurisdiction in the courts of Nebraska.

Id. at 833, 85 N.Y.S.3d at 362.

Nebraska Lawsuit

On March 3, 2019, Milmar filed a complaint against Applied 

in the district court for Douglas County. Milmar alleged nine 

claims against Applied based on the RPA, which Milmar 

asserts violated New York insurance law. Specifically, Milmar’s 

“Demand[s] for Relief ” were (1) “Declaratory Judgment That 

the RPA Is Void and Unenforceable Under New York Insurance 

Law § 2347,” (2) “Declaratory Judgment That the RPA Is Void 

and Unenforceable Under New York Insurance Law as an 

Unlawful Reinsurance Agreement,” (3) “Violation of New York 

Insurance Law § 4226 for Misrepresentations By Insurers,” (4) 

“Equitable Rescission of the RPA,” (5) “Fraudulent Business 

Practices Under Gen. Bus[.] Law § 349,” (6) “Common Law 

Fraud,” (7) “Negligent and/or Improper Claims Handling,” (8) 

“Violation of the Nebraska Consumer Protection Act,” and (9) 

“Violation of the Nebraska Uniform Deceptive Trade Practices 

Act.” Milmar sought declaratory relief and damages.

On April 29, 2019, Applied filed a motion to dismiss 

Milmar’s complaint pursuant to Neb. Ct. R. Pldg. § 6-1112(b)(6) 

“for the reason that [Milmar’s] Complaint fails to state a claim 

upon which relief can be granted.”
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

A hearing was held on Applied’s motion to dismiss on June 

11, 2019; however, a record was not made in connection with 

that hearing, and we therefore do not have a bill of exceptions 

from that hearing.

On December 26, 2019, the district court entered its order. 

The district court, sua sponte, invoked the doctrine of forum 

non conveniens to dismiss the case without prejudice. The 

court stated:

Although Nebraska courts have jurisdiction over the parties, resolution of the claims in this case involves analysis 

of whether the [RPA] is void under New York regulations 

relating to New York workers’ compensation insurance. 

Resolution of these issues impacts the availability of this 

type of [RPA] for workers’ compensation insurance holders in New York. These issues are complex and would be 

“best administered by the individual state’s agencies or 

courts.” . . . Additionally, the judicial system’s interest in 

obtaining the most efficient resolution of this controversy 

lies in having this case tried in the New York courts. . 

. . New York courts have greater expertise and interest 

in the matters involved in this case, including their own 

workers’ compensation insurance laws and regulations. 

Additionally, this Court takes judicial notice of the filing 

of other similar cases in its docket and determines these 

cases would consume significant judicial resources of the 

State of Nebraska.

The court found that its analysis of the issue was distinct from 

that of the New York court which

declined to set aside the forum selection clause, [but] 

did not analyze the clause under the doctrine of forum 

non conveniens as codified in [Neb. Rev. Stat.] § 25-538 

[(Reissue 2016)]. Rather, the New York court’s analysis 

reached only the issues of whether the Nebraska Choice 

of Forum Act, constitutional due process, or fraud nullified the forum selection clause.

The district court determined, sua sponte, that “the forum 

selection clause should be set aside under the doctrine of 
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

forum non conveniens and this action should be dismissed 

without prejudice and [Milmar is] given leave to file in the 

courts of the State of New York.” Accordingly, “the Court does 

not reach the merits of [Applied’s] arguments relating to its 

12(b)(6) Motion to Dismiss.”

Applied appeals.

ASSIGNMENT OF ERROR

Applied assigns, summarized, that the district court erred 

when it dismissed the complaint sua sponte on forum non conveniens grounds.

STANDARD OF REVIEW

[1] Whether a suit should be entertained or dismissed under 

the rule of forum non conveniens depends largely upon the 

facts of the particular case and rests in the discretion of the 

trial court. Christian v. Smith, 276 Neb. 867, 759 N.W.2d 

447 (2008).

ANALYSIS

[2,3] The doctrine of forum non conveniens (literally, “an 

unsuitable court”) provides that a state will not exercise jurisdiction if it is a seriously inconvenient forum for the trial of 

the action, provided that a more appropriate forum is provided 

to the plaintiff. Ameritas Invest. Corp. v. McKinney, 269 Neb. 

564, 694 N.W.2d 191 (2005). It refers to the discretionary 

power of a court to decline jurisdiction when the convenience 

of the parties and the ends of justice would be better served 

if the action were brought and tried in another forum. Id. 

Neb. Rev. Stat. § 25-538 (Reissue 2016) states, “When the 

court finds that in the interest of substantial justice the action 

should be heard in another forum, the court may stay or dismiss the action in whole or in part on any conditions that may 

be just.”

[4,5] In its analysis, the district court looked to this court’s 

opinion in Applied Underwriters v. E.M. Pizza, 26 Neb. App. 

906, 923 N.W.2d 789 (2019). While the district court noted 
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

that the legal framework of Applied Underwriters v. E.M. Pizza

involved a jurisdictional issue not applicable to the present 

case, it found Applied Underwriters v. E.M. Pizza instructive 

because “the [public interest] factors that inform[ed] analysis 

[in that case] are the same factors considered by a court analyzing convenience of the forum under the doctrine of forum 

non conveniens.” In Applied Underwriters v. E.M. Pizza, this 

court stated:

A plaintiff’s choice of a forum should not be overturned except for “‘weighty reasons,’” and only when 

trial in the chosen forum would establish oppressiveness 

and vexation to the defendant out of all proportion to 

the plaintiff’s convenience, or when the forum is inappropriate because of considerations affecting the court’s 

own administrative and legal problems. . . . [I]t is also 

appropriate for a court to consider the advantages of having trial in a forum that is at home with the state law that 

must govern the case, rather than having a court in some 

other forum untangle problems in conflict of laws, and in 

law foreign to itself. . . .

The U.S. Supreme Court recently addressed the issue 

of whether a plaintiff’s choice-of-forum clause could be 

set aside under the doctrine of forum non conveniens 

when seeking a dismissal or transfer under 28 U.S.C. 

§ 1406(a) (2012). See Atlantic Marine Constr. Co. v. 

United States Dist. Court for Western Dist. of Tex., 571 

U.S. 49, 134 S. Ct. 568, 187 L. Ed. 2d 487 (2013). In 

doing so, the Court identified both private interest factors 

and public interest factors. The Court stated that when 

parties agree to a forum selection clause, they waive the 

right to challenge the preselected forum as inconvenient 

or less convenient for themselves or their witnesses, or 

for their pursuit of the litigation. Id. In essence, they 

waive the right to challenge the private interest factors. 

However, a trial court may consider arguments about 

public interest factors. Id. These public interest factors 
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

include the administrative difficulties flowing from court 

congestion, the local interest in having localized controversies decided at home, and the interest in having the 

trial of a diversity case in a forum that is at home with 

the law. Id. These public interest factors are consistent 

with the factors the Nebraska Supreme Court identified in 

Ameritas Invest. Corp. v. McKinney, 269 Neb. 564, 694 

N.W.2d 191 (2005).

26 Neb. App. at 919-20, 923 N.W.2d at 800-01 (emphasis supplied). This court then stated:

California has a significantly greater interest in the issues 

in this case than does Nebraska and that California’s judicial system in interpreting its own workers’ compensation 

laws clearly would provide a more efficient resolution of 

the controversies within this case. . . .

. . . [A] Nebraska court would likely have to apply 

California’s complex workers’ compensation laws to this 

dispute. We find that this factor weighs heavily against a 

finding that this state is a reasonably convenient place for 

the trial of this action as required under [Neb. Rev. Stat.] 

§ 25-414(1)(b) [(Reissue 2016) of the Model Uniform 

Choice of Forum Act]. As stated by Professor Larson 

in his treatise on workers’ compensation law, due to 

the complexity of workers’ compensation laws, cases in 

which they are involved are best administered by the individual state’s agencies or courts. See 13 Arthur Larson 

& Lex K. Larson, Larson’s Workers’ Compensation Law 

§ 140.02[4] (2017). Therefore, a California court would 

be in the best position to interpret and apply its own 

workers’ compensation laws to this dispute which affects 

primarily California workers.

Finally, the judicial system’s interest in obtaining the 

most efficient resolution of this controversy lies in having this case tried in the California courts. As stated by 

counsel during oral arguments, there are numerous other 

cases stemming from similar RPA’s that are pending 
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

in the Nebraska courts, which consume this State’s judicial resources.

Applied Underwriters v. E.M. Pizza, 26 Neb. App. 906, 920-21, 

923 N.W.2d 789, 801 (2019).

As stated previously, the district court in the present case 

found that resolution of Milmar’s claims involves analysis of 

whether the RPA is void under New York regulations relating 

to New York workers’ compensation insurance. The district 

court stated, “Resolution of these issues impacts the availability of this type of [RPA] for workers’ compensation insurance 

holders in New York. These issues are complex and would 

be ‘best administered by the individual state’s agencies or 

courts’” because “New York courts have greater expertise and 

interest in the matters involved in this case, including their 

own workers’ compensation insurance laws and regulations.” 

Additionally, the district court took judicial notice of the filing of other similar cases in its docket and determined these 

cases would consume significant judicial resources of the State 

of Nebraska. The district court determined that “this is one of 

a rare set of cases in which public interest factors . . . support 

setting aside the forum selection clause [in the RPA] under the 

doctrine of forum non conveniens.” The district court then dismissed the action without prejudice and gave Milmar leave to 

file in the courts of New York.

Applied argues that the district court incorrectly applied 

the law of forum non conveniens because “[t]he Nebraska 

Supreme Court has repeatedly emphasized that a case cannot 

be dismissed on forum non conveniens grounds unless another 

forum is available to hear the dispute.” Brief for appellants at 

15. In support of its assertion, Applied refers us to Christian 

v. Smith, 276 Neb. 867, 876, 759 N.W.2d 447, 457 (2008) 

(“doctrine of forum non conveniens provides that a state will 

not exercise jurisdiction if it is a seriously inconvenient forum 

for the trial of the action, provided that a more appropriate forum is provided to the plaintiff”), and Ameritas Invest. 

Corp. v. McKinney, 269 Neb. 564, 694 N.W.2d 191 (2005) 

(same). Applied contends that Milmar has no available forum 
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

in New York because Milmar’s claims have already been dismissed by the New York courts.

Milmar agrees with Applied that the district court erred in 

dismissing this case because the court did not identify a more 

appropriate forum, given that the New York court’s decision 

“effectively precludes Milmar from pursuing its claims against 

[Applied] in New York.” Brief for appellees at 3. Milmar 

states, “Perhaps a New York court, armed with this [Nebraska] 

decision, would change the result to avoid Milmar being left 

without any forum, but that is speculation.” Id.

Both Applied and Milmar support reversal of the district 

court’s dismissal of the complaint, and both request that the 

matter be remanded back to the district court for consideration 

of Applied’s motion to dismiss for failure to state a claim. We 

agree with the parties that the dismissal should be reversed and 

the matter remanded, but we direct a different initial step on 

remand, as explained below.

Although we are reversing the district court’s dismissal of 

the action, we agree with its consideration of the public interest factors as set forth in Applied Underwriters v. E.M. Pizza, 

26 Neb. App. 906, 923 N.W.2d 789 (2019). We also agree with 

its conclusion that New York is the better forum for this action 

in light of those factors. However, the court considered those 

factors without also considering the unique circumstances 

of the present case, namely, a New York court already dismissed Milmar’s case because it determined the case should 

be heard in Nebraska based on the RPA’s forum selection 

clause. Additionally, when addressing Milmar’s claim that 

Nebraska was an inconvenient forum, that same New York 

court concluded the argument lacked merit because Milmar 

had agreed to submit to Nebraska’s jurisdiction by contract. 

Notably, however, while the New York court was not persuaded by Milmar’s apparent argument of private interest 

factors under forum non conveniens, it did not address the 

public interest factors of forum non convieniens, as the district 

court did in this action. Although the district court dismissed 

the case without prejudice and gave Milmar leave to file in 
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Nebraska Court of Appeals Advance Sheets

29 Nebraska Appellate Reports

MILMAR FOOD GROUP II v. APPLIED UNDERWRITERS

Cite as 29 Neb. App. 714

the courts of New York, it did not analyze whether New York 

is now a reasonably available forum given the circumstances 

just described.

We conclude the district court abused its discretion when 

it used the public interest factors of forum non conveniens to 

dismiss Milmar’s case without also considering whether there 

was a more appropriate forum available to Milmar. Given the 

unique circumstances present in this case, rather than dismissing the action, the district court should have stayed the action 

on the condition that the case is filed in and accepted by the 

New York courts. Section 25-538 provides, “When the court 

finds that in the interest of substantial justice the action should 

be heard in another forum, the court may stay or dismiss the 

action in whole or in part on any conditions that may be just.” 

Accordingly, we reverse the decision of the district court dismissing the case without prejudice and remand the matter with 

directions that the court stay the action on the condition that 

the case is filed in and accepted by the New York courts.

As an aside, we note that a case with similar underlying 

issues to those in Milmar’s complaint is currently working 

its way through the New York courts, which case may warrant attention on remand in the present matter to the extent 

the New York courts decline to accept Milmar’s efforts to 

refile its action in that state once the present action has been 

stayed in Nebraska. See Air-Sea Packing Group, Inc. v. Applied 

Underwriters, Inc., No. 711035 2019, 2020 WL 3507690 (N.Y. 

Sup. May 21, 2020).

CONCLUSION

For the reasons set forth above, we reverse the decision of 

the district court dismissing the case without prejudice and 

remand the matter with directions that the court stay the action 

on the condition that the case is filed in and accepted by the 

New York courts.

Reversed and remanded with directions.