Opinion ID: 4584659
Heading Depth: 1
Heading Rank: 5

Heading: jurisdiction

Text: [4-8] 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. 5 For an appellate court to acquire jurisdiction of an appeal, the party must be appealing from a final order or a judgment. 6 A judgment is the final determination of the rights of the parties in an action. 7 Every direction of the court made or entered in writing and not included in a judgment is an order. 8 While all judgments 9 not incorrectly designated as such 10 are appealable, an order may be appealed only if a statute expressly makes the order appealable or the order falls within the statutory definition of a final order. 11 Cinatl’s October 10, 2019, notice of appeal purported to appeal from three orders. He sought to appeal the January 28 3 Picard v. P & C Group 1, 306 Neb. 292, 945 N.W.2d 183 (2020). 4 Garlock v. 3DS Properties, 303 Neb. 521, 930 N.W.2d 503 (2019). 5 Cullinane v. Beverly Enters. - Neb., 300 Neb. 210, 912 N.W.2d 774 (2018). 6 State v. Fredrickson, 306 Neb. 81, 943 N.W.2d 701 (2020). 7 Neb. Rev. Stat. § 25-1301(1) (Cum. Supp. 2018). 8 State v. Fredrickson, supra note 6. 9 See § 25-1301(1) (defining judgment). 10 See Neb. Rev. Stat. § 25-1315(1) (Reissue 2016). 11 See State v. Fredrickson, supra note 6. - 486 - Nebraska Supreme Court Advance Sheets 307 Nebraska Reports CINATL v. PROSOSKI Cite as 307 Neb. 477 order denying his application to vacate the arbitrator’s award, the August 12 order overruling his motion for new trial (in connection with the denial of the application to vacate), and the September 10 order confirming the arbitration award. Prososki challenges our jurisdiction of the first two of those orders. To determine whether the orders are appealable, we first consider whether they are appealable orders under the Uniform Arbitration Act (UAA) 12 and, if not, whether they are final orders under Neb. Rev. Stat. § 25-1902 (Reissue 2016 & Supp. 2019). 13 Both parties base their arguments on the UAA, seemingly treating the contract as having agreed to arbitration based upon that law. We see no reason to do otherwise. The UAA contains a statute addressing appeals. Under § 25-2620(a), an appeal may be taken from the following: (1) An order denying an application to compel arbitration made under section 25-2603; (2) An order granting an application to stay arbitration made under subsection (b) of section 25-2603; (3) An order confirming or denying confirmation of an award; (4) An order modifying or correcting an award; (5) An order vacating an award without directing a rehearing; or (6) A judgment or decree entered pursuant to the provisions of the [UAA]. Section 25-2620(a)(3) identifies an order confirming an award as an appealable order. Cinatl filed an appeal within 30 days of the September 2019 order confirming the arbitration award, and there is no dispute we have jurisdiction to consider that order. [9] Whether the January 2019 order denying Cinatl’s application to vacate is appealable is not as clear cut. While the 12 Neb. Rev. Stat. §§ 25-2601 to 25-2622 (Reissue 2016 & Cum. Supp. 2018). 13 See Pearce v. Mutual of Omaha Ins. Co., 293 Neb. 277, 876 N.W.2d 899 (2016). - 487 - Nebraska Supreme Court Advance Sheets 307 Nebraska Reports CINATL v. PROSOSKI Cite as 307 Neb. 477 UAA explicitly allows an appeal from an order vacating an arbitration award, 14 it is silent as to whether a party may appeal an order denying an application to vacate. We have stated that when § 25-2620 is silent regarding the appealability of an arbitration-related order, we look to the general final order statute to determine whether the order is final and appealable. 15 [10] Under our final order statute, 16 to be a final order subject to appellate review, the lower court’s order must (1) affect a substantial right and determine the action and prevent a judgment, (2) affect a substantial right and be made during a special proceeding, (3) affect a substantial right and be made on summary application in an action after a judgment is rendered, or (4) deny a motion for summary judgment which was based on the assertion of sovereign immunity or the immunity of a government official. 17 Because this appeal clearly does not involve the last category, we first determine whether the order affected a substantial right of one or more parties. 18 [11] The inquiry of whether a substantial right is affected focuses on whether the right at issue is substantial and whether the court’s order has a substantial impact on that right. 19 Whether an order affects a substantial right depends on whether it affects with finality the rights of the parties in the subject matter. 20 It also depends on whether the right could otherwise effectively be vindicated. 21 An order affects a substantial right when the right would be significantly undermined or irrevocably lost by postponing appellate review. 22 14 § 25-2620(a)(5). 15 See Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538 (2010). 16 See § 25-1902. 17 See State v. Fredrickson, supra note 6. 18 See id. 19 See id. 20 Id. 21 Id. 22 Id. - 488 - Nebraska Supreme Court Advance Sheets 307 Nebraska Reports CINATL v. PROSOSKI Cite as 307 Neb. 477 Prososki contends that Cinatl needed to file an appeal from the order denying the application to vacate the arbitrator’s award. According to Prososki, the right to challenge the validity of an award through an application to vacate is an essential legal right, because without a possible modification or correction, the only right to challenge an award is to apply for an order vacating the award. But this argument overlooks the unquestionable appealability of an order confirming the award 23 and the intent behind limiting the types of appealable arbitration orders. Appellate review of an arbitrator’s award is necessarily limited, because to allow full scrutiny of such awards would frustrate the purpose of having arbitration at all—the quick resolution of disputes and the avoidance of the expense and delay associated with litigation. Strong deference is due an arbitrative tribunal; when parties agree to arbitration, they agree to accept whatever reasonable uncertainties might arise from the process. 24 Other state courts have determined that no appeal can be taken from an order denying an application to vacate and that such an order may be reviewed upon an appeal from an order confirming the award. 25 The Hawaii Supreme Court instructed that upon the denial of a motion to vacate, the unsuccessful movant’s recourse would then be a motion to confirm the award. 26 It explained that because the trial court has already reviewed the award and decided no grounds exist for vacating it, a confirmation should follow. 27 The movant could then 23 See § 25-2620(a)(3). 24 Hartman v. City of Grand Island, 265 Neb. 433, 657 N.W.2d 641 (2003). 25 See, e.g., Mid-Wilshire Associates v. O’Leary, 7 Cal. App. 4th 1450, 9 Cal. Rptr. 2d 862 (1992); Salud v. Financial Sec. Ins. Co., Ltd., 69 Haw. 427, 745 P.2d 290 (1987); Nelson Paving Co., Inc. v. Hjelle, 207 N.W.2d 225 (N.D. 1973). See, also, Ayers v. R.A. Murphy Co., 163 Ohio App. 3d 497, 839 N.E.2d 80 (2005). 26 See Salud v. Financial Sec. Ins. Co., Ltd., supra note 25. 27 See id. - 489 - Nebraska Supreme Court Advance Sheets 307 Nebraska Reports CINATL v. PROSOSKI Cite as 307 Neb. 477 perfect an appeal and obtain appellate review of the order confirming the award. 28 The purpose of confirming an arbitration award is to provide a judgment that can then be enforced through court proceedings. 29 “Upon the granting of an order confirming, modifying, or correcting an award, a judgment or decree shall be entered in conformity therewith and be enforced as any other judgment or decree.” 30 Ideally, confirmation should occur swiftly, although the court has 60 days from a party’s application to do so. 31 Thus, though not immediately appealable, an unsuccessful movant for judicial vacatur should not have to wait long to obtain appellate review. We conclude the January 2019 order denying the application to vacate the arbitrator’s award did not affect a substantial right of Cinatl. For the same reasons, we conclude the August order overruling the motion for new trial (which asked the court to vacate the January 2019 order and which, because there was no trial in the district court, we treat as a motion to reconsider) did not affect a substantial right and was not a final order. The rights at issue in an interlocutory determination denying judicial vacatur of an arbitration award can be adequately vindicated through an appeal of the order confirming the award. Because these prior orders were interlocutory, Cinatl properly waited until entry of an appealable order—the order confirming the arbitration award—to challenge them. Failing to Vacate Award and Order Rehearing [12] Having determined that we have jurisdiction over the order denying Cinatl’s application to vacate, we consider 28 Id. 29 Drummond v. State Farm Mut. Auto. Ins. Co., 280 Neb. 258, 785 N.W.2d 829 (2010), citing Stewart Title Guar. Co. v. Tilden, 64 P.3d 739 (Wyo. 2003). 30 § 25-2615. 31 See § 25-2612. - 490 - Nebraska Supreme Court Advance Sheets 307 Nebraska Reports CINATL v. PROSOSKI Cite as 307 Neb. 477 Cinatl’s arguments that the district court erred by failing to vacate the award and order a rehearing. When arbitration has already occurred and a party seeks to vacate, modify, or confirm an award, an extraordinary level of deference is given to the underlying award itself. 32 The UAA sets forth grounds for vacating an award. Section 25-2613 provides in relevant part: (a) Upon application of a party, the court shall vacate an award when: (1) The award was procured by corruption, fraud, or other undue means; (2) There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party; (3) The arbitrators exceeded their powers; (4) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor, refused to hear evidence material to the controversy, or otherwise so conducted the hearing, contrary to the provisions of section 25-2606, as to prejudice substantially the rights of a party; (5) There was no arbitration agreement and the issue was not adversely determined in proceedings under section 25-2603, and the party did not participate in the arbitration hearing without raising the objection; or (6) An arbitrator was subject to disqualification pursuant to section 25-2604.01 and failed, upon receipt of timely demand, to disqualify himself or herself as required by such section. The fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award. Of these enumerated grounds, Cinatl asserted only that the arbitrator exceeded his or her powers. He argues on appeal that 32 Seldin v. Estate of Silverman, 305 Neb. 185, 939 N.W.2d 768 (2020). - 491 - Nebraska Supreme Court Advance Sheets 307 Nebraska Reports CINATL v. PROSOSKI Cite as 307 Neb. 477 the arbitrator’s decision should be vacated due to the absence of a finding on fraud, but that does not fit under his asserted ground for judicial vacatur. Cinatl contends that the arbitrator exceeded his authority by rendering a decision based upon defenses not raised in the pleadings. Cinatl argues that because Prososki never asserted any affirmative defenses, the arbitrator should have rejected suggestions that Cinatl’s cause of action may be time barred or barred by estoppel. Cinatl points to references in the arbitrator’s conclusions of law concerning delay, estoppel, and waiver. [13] The arbitrator’s decision determined that rescission was unavailable due to the nature of the relief requested and the changed circumstances. The purpose of rescission is to place the parties in a status quo, that is, return the parties to their position which existed before the rescinded contract; hence, rescission may be unavailable unless the parties can be placed substantially in the status quo. 33 The arbitrator remarked on the inability to return the parties to the status quo. Its decision stated that “[d]uring the time he operated the practice, Cinatl’s ability to return [Dr.] Prososki to pre-sale status quo diminished with each passing day.” It further stated that Cinatl “took what was a going concern orthodontic practice and rendered it difficult if not impossible to return [Dr.] Prososki or his estate to status quo.” The arbitrator observed that “[t]he practice closed, leaving patients without their orthodontist and having to find another—in effect, vanishing the practice” and that Dr. Prososki had passed away. The arbitrator determined that “Cinatl simply cannot restore the status quo at the time of closing of the contract.” We find no merit to Cinatl’s argument that the arbitrator decided the matter based on unpled defenses. Accordingly, even if we were to assume that the arbitrator would have exceeded his power by deciding the matter based on unpled defenses, the court did not err in overruling Cinatl’s application to vacate and not ordering a rehearing. 33 Kracl v. Loseke, 236 Neb. 290, 461 N.W.2d 67 (1990). - 492 - Nebraska Supreme Court Advance Sheets 307 Nebraska Reports CINATL v. PROSOSKI Cite as 307 Neb. 477 Confirmation of Award As mentioned, Cinatl appealed the court’s confirmation of the award. He contends that the court approved the arbitrator’s errors in failing to properly analyze or consider his fraud claim, failing to grant rescission, and failing to issue a just award. [14,15] But under the circumstances, the district court had no option other than to confirm the award. The UAA does not allow for the exercise of discretion by the court when a request for confirmation is made and there is no pending application for vacation, modification, or correction. 34 Under § 25-2612, “the court shall confirm an award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which case the court shall proceed as provided in sections 25-2613 [vacating an award] and 25-2614 [modifying or correcting an award].” (Emphasis supplied.) Here, Cinatl sought to vacate the award, but the court denied his request. “If the application to vacate is denied and no motion to modify or correct the award is pending, the court shall confirm the award.” 35 As a general rule, the word “shall” in a statute is considered mandatory and is inconsistent with the idea of discretion. 36 Under the circumstances, the court properly confirmed the award. Failing to Review Record From Arbitration Hearing Cinatl argues that the court erred and violated his right to procedural due process by failing to review the record from the arbitration hearing, which he first offered during the hearing on Prososki’s motion to confirm the arbitrator’s award. But as discussed above, the court was obligated to confirm the award, because the court had already denied Cinatl’s application to vacate and there was no pending motion to modify or correct 34 See Garlock v. 3DS Properties, supra note 4. 35 § 25-2613(d) (emphasis supplied). 36 Glasson v. Board of Equal. of City of Omaha, 302 Neb. 869, 925 N.W.2d 672 (2019). - 493 - Nebraska Supreme Court Advance Sheets 307 Nebraska Reports CINATL v. PROSOSKI Cite as 307 Neb. 477 the award. We find no error or due process violation by the district court. Failing to Rule Upon Admissibility of Exhibit 101 Finally, Cinatl argues that the court erred by failing to rule upon the admissibility of an exhibit. During a hearing on the application to vacate, Cinatl offered exhibit 101, his affidavit, in which he swore that the statements in the application to vacate were true to the best of his knowledge. He represented during the hearing that his affidavit was “merely intended to be a verification of the allegations set forth in his application to vacate award.” Cinatl attached two documents to the affidavit: (1) a copy of his application to vacate the arbitrator’s award and (2) a copy of the arbitrator’s decision. Prososki objected to the exhibit. The court took the offer of exhibit 101 under advisement. The record contains no ruling on its admissibility. During a later hearing on the motion for new trial, Cinatl argued that the record was incomplete because it did not show whether the court received exhibit 101. [16] We find no reversible error by the court in failing to rule on the admissibility of the exhibit. In a civil case, the admission or exclusion of evidence is not reversible error unless it unfairly prejudiced a substantial right of the complaining party. 37 Before the court took the offer of the exhibit under advisement, it observed that the court file contained both the arbitrator’s decision and the application to vacate. At one time, every pleading of fact in a civil action had to be verified by the affidavit of the party, his or her agent, or attorney. 38 But such verification has not been required for half a century. 39 Because 37 In re Interest of Vladimir G., 306 Neb. 127, 944 N.W.2d 309 (2020). 38 See, Neb. Rev. Stat. § 25-824 (1943); AVG Partners I v. Genesis Health Clubs, ante p. 47, 948 N.W.2d 212 (2020). 39 See AVG Partners I v. Genesis Health Clubs, supra note 38, citing 1969 Neb. Laws, L.B. 375. - 494 - Nebraska Supreme Court Advance Sheets 307 Nebraska Reports CINATL v. PROSOSKI Cite as 307 Neb. 477 the court’s record contained the documents attached to Cinatl’s affidavit and his verification of the statements in his application to vacate was unnecessary, he suffered no prejudice by the court’s failure to rule on the exhibit’s admissibility.