Wilczewski v. Charter West Nat. Bank , 295 Neb. 254 ( 2016 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
12/09/2016 09:08 AM CST
- 254 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
Michael J. Wilczewski and Michelle A. Wilczewski,
appellants, v. Charter West National Bank,
a National Banking Association, appellee.
___ N.W.2d ___
Filed December 9, 2016. No. S-15-1051.
1. Arbitration and Award. Arbitrability presents a question of law.
2. Judgments: Jurisdiction. A jurisdictional issue that does not involve a
factual dispute presents a question of law.
3. Judgments: Appeal and Error. When reviewing questions of law, an
appellate court resolves the questions independently of the lower court’s
conclusions.
4. Arbitration and Award: Federal Acts: Statutes: Contracts. When
determining whether an arbitration clause is governed by Nebraska’s
Uniform Arbitration Act or the Federal Arbitration Act, the initial ques-
tion is whether the parties’ contract evidences a transaction “involving
commerce” as defined by the Federal Arbitration Act.
5. Arbitration and Award: Federal Acts: States. There does not have
to be a multistate transaction for the Federal Arbitration Act to be
applicable.
6. Constitutional Law: Arbitration and Award: Federal Acts: States.
Because Congress’ Commerce Clause power may be exercised in indi-
vidual cases without showing any specific effect upon interstate com-
merce where in the aggregate the economic activity in question would
represent a general practice subject to federal control, the same must be
said for application of the Federal Arbitration Act.
7. Banks and Banking: Real Estate: States. Generally, residential real
estate lending affects interstate commerce.
8. Deeds: Merger: Fraud. The doctrine of merger does not apply where
there has been fraud or mistake.
9. Arbitration and Award: Dismissal and Nonsuit. Where all of the
contested issues are subject to arbitration, a court has discretion to
- 255 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
consider whether dismissal is more appropriate than staying a case pend-
ing arbitration.
10. Courts: Pretrial Procedure: Time. Because of the individualized
nature of the administration of justice, trial courts must necessarily be
given wide discretion to ensure that the goal of timely disposition of
cases is reached in a manner consistent with fairness to all parties.
11. Dismissal and Nonsuit: Appeal and Error. In determining whether
dismissal is more appropriate than staying a case, a court should
consider the case’s procedural history and the situation at the time of
dismissal.
12. Pretrial Procedure: Appeal and Error. Discovery orders are not gen-
erally subject to interlocutory appeal because the underlying litigation
is ongoing and the discovery order is not considered final.
Appeal from the District Court for Douglas County: W.
Russell Bowie III, Judge. Affirmed.
John D. Stalnaker, Robert J. Becker, and Ashley A. Buhrman,
of Stalnaker, Becker, & Buresh, P.C., for appellants.
Jeffrey A. Silver for appellee.
Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy,
K elch, and Funke, JJ.
Per Curiam.
I. INTRODUCTION
A bank foreclosed its loan on residential real estate and
resold the property under a written contract containing an
arbitration clause. The buyers appeal from an order compel-
ling arbitration of their lawsuit against the bank. Because the
Federal Arbitration Act (FAA)1 extends to the full reach of
Congress’ Commerce Clause power and the bank’s activity fell
within its reach, the buyers’ claims arising from the purchase
of residential real estate were subject to the arbitration clause.
And because we find no merit to the buyers’ other arguments,
we affirm the order compelling arbitration.
1
9 U.S.C. § 1 et seq. (2012).
- 256 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
II. BACKGROUND
Michael J. Wilczewski and Michelle A. Wilczewski bought
residential real estate from Charter West National Bank
(Charter). The property is located in Douglas County, Nebraska.
The purchase agreement for this transaction contained an arbi-
tration clause.
1. Complaint
After the Wilczewskis learned that another bank had a supe-
rior lien against the real estate, they sued Charter for money
damages. They asserted theories of fraudulent misrepresen-
tation, negligent misrepresentation, common-law fraud, and
quantum meruit or unjust enrichment. Their complaint alleged
that despite Charter’s knowledge of the other bank’s lien,
Charter represented the property would be conveyed free and
clear of all liens. And the complaint alleged that without their
knowledge, Charter “manipulated” the language of the deed to
make it subject to liens of record.
But the Wilczewskis’ complaint also alleged facts showing
the full extent of Charter’s activity leading to acquisition of its
title and its later sale of the property to them. The following
list summarizes the Wilczewskis’ alleged facts:
• The prior owners’ 2004 purchase of the real estate;
• the prior owners’ 2004 purchase money loan from the other
bank, secured by a deed of trust;
• the prior owners’ 2006 loan from Charter, secured by another
deed of trust;
• the prior owners’ 2008 bankruptcy and the bankruptcy court’s
authorization of Charter’s foreclosure in 2009;
• completion of a trustee’s sale by Charter in 2009;
• Charter’s issuance of a trustee’s deed in foreclosure of the
deed of trust, thereby conveying title to the real estate to
itself as the purchaser;
• the October 2010 purchase agreement between Charter and
the Wilczewskis; and
• the November 30, 2010, deed from Charter to the Wilczewskis.
- 257 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
2. Motion to Compel A rbitration
Charter filed a motion to compel arbitration pursuant to the
purchase agreement. The arbitration clause provided: “Any
controversy or claim between the parties to this Nebraska
Purchase Agreement, its interpretation, enforcement or breach,
including but not limited to claims arising from tort, shall be
settled by binding arbitration . . . .”
The Wilczewskis objected to Charter’s motion to compel
arbitration on five grounds, which were later narrowed to two:
(1) that the Wilczewskis’ claims did not fall within the scope
of the arbitration clause and (2) that the arbitration clause was
void because it failed to comply with the notice provision
under Nebraska’s Uniform Arbitration Act (UAA).2 In connec-
tion with the second ground, the Wilczewskis contended that
the transaction did not involve interstate commerce and that
thus, the FAA did not apply to their claims.
The district court initially denied Charter’s motion without
prejudice. Charter appealed this order, but we concluded that
it was not a final, appealable order and dismissed the appeal.3
Upon remand, the district court conducted an evidentiary hear-
ing on the motion to compel arbitration.
3. District Court’s Order
After the evidentiary hearing, the district court sustained
Charter’s motion to compel arbitration. The court noted the
strong public policy in favor of arbitration and construed the
arbitration clause broadly. The court found that the clause was
broad enough to encompass all of the Wilczewskis’ claims.
And, relying upon one of our decisions,4 the court concluded
that the agreement was a transaction “‘involving commerce’”
2
Neb. Rev. Stat. § 25-2601 et seq. (Reissue 2016).
3
Wilczewski v. Charter West Nat. Bank, 290 Neb. 721, 861 N.W.2d 700
(2015).
4
Aramark Uniform & Career Apparel v. Hunan, Inc., 276 Neb. 700, 757
N.W.2d 205 (2008).
- 258 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
as defined by the FAA and, therefore, that the FAA rather than
Nebraska’s UAA, applied. After finding that the FAA con-
trolled, the court determined that the clause was not void for
failure to comply with Nebraska’s UAA notice requirement.
Having sustained Charter’s motion to compel arbitration, the
court dismissed the case.
The Wilczewskis timely appealed, and we granted their peti-
tion to bypass the Nebraska Court of Appeals.
III. ASSIGNMENTS OF ERROR
The Wilczewskis assign, reordered, that the district court
erred in (1) finding that the FAA preempted the UAA, (2)
finding that the arbitration clause applied to their claims, (3)
dismissing the instant litigation instead of staying the matter
pending arbitration, and (4) not allowing a “full opportunity for
discovery on the issue of arbitrability.”
IV. STANDARD OF REVIEW
[1-3] Arbitrability presents a question of law.5 Likewise,
a jurisdictional issue that does not involve a factual dispute
pre­sents a question of law.6 And when reviewing questions of
law, an appellate court resolves the questions independently of
the lower court’s conclusions.7
V. ANALYSIS
At oral argument, Charter conceded that the purchase agree-
ment did not conform to Nebraska’s UAA. But it contended
that the FAA applies and preempts the UAA. Thus, Charter’s
motion to compel cannot succeed unless the FAA applies to
Charter’s activity. Because this is the main issue before us, we
address it first.
5
Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538
(2010).
6
In re Interest of Octavio B. et al., 290 Neb. 589, 861 N.W.2d 415 (2015).
7
See In re Interest of Enyce J. & Eternity M., 291 Neb. 965, 870 N.W.2d
413 (2015).
- 259 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
1. A pplicability of FAA
The Wilczewskis argue that Charter’s activity here does
not affect interstate commerce. The heart of their argument
is that “[t]he subject Real Estate is located in Nebraska, the
Wilczewskis are residents of Nebraska, and the claims made
by the Wilczewskis against Charter . . . involve statements
made in Nebraska by representatives of Charter . . . located
in Nebraska.”8
But that argument focuses on only part of Charter’s activ-
ity. Charter was not a single-family occupant of residential
real estate. Clearly, it would not have been engaged in sell-
ing the real estate but for its lending activity. Lending money
secured by residential real estate plainly includes a risk of
nonpayment and, in that event, the necessity of enforcing a
lender’s deed of trust. And where a nonjudicial foreclosure
results in a lender’s taking title to residential real estate,
the subsequent sale of that real estate is sure to follow. In
general, collection of a lender’s loan is the only reason it
would acquire title to residential real estate and the only rea-
son it would sell the real estate to someone else, such as the
Wilczewskis.
Thus, whether the FAA reaches Charter’s activity depends
upon how the activity is viewed. And to determine the answer
to that question, we turn to the case law driven by decisions of
the U.S. Supreme Court.
(a) Reach of FAA
[4] The FAA provides at 9 U.S.C. § 2:
A written provision in any . . . contract evidencing a
transaction involving commerce to settle by arbitration
a controversy thereafter arising out of such contract or
transaction . . . shall be valid, irrevocable, and enforce-
able, save upon such grounds as exist at law or in equity
for the revocation of any contract.
8
Brief for appellants at 26.
- 260 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
Therefore, when determining whether an arbitration clause is
governed by Nebraska’s UAA or the FAA, the initial ques-
tion is whether the parties’ contract evidences a transaction
“‘involving commerce’” as defined by the FAA.9
The U.S. Supreme Court has “interpreted the term ‘involv-
ing commerce’ in the FAA as the functional equivalent of the
more familiar term ‘affecting commerce’—words of art that
ordinarily signal the broadest permissible exercise of Congress’
Commerce Clause power.”10 For this reason, the Court has
consistently found that the FAA “embodies Congress’ intent to
provide for the enforcement of arbitration agreements within
the full reach of the Commerce Clause.”11
A succession of U.S. Supreme Court cases leads to this
inescapable conclusion. First, the Court held that the FAA
is “based upon and confined to the incontestable federal
foundations of ‘control over interstate commerce and over
admiralty.’”12 Second, the Court determined that Congress
had withdrawn the power of the states to require a judicial
forum for the resolution of claims which the contracting par-
ties agreed to resolve by arbitration.13 Third, the Court’s later
decisions reiterated the FAA’s applicability to matters of state
9
Aramark Uniform & Career Apparel v. Hunan, Inc., supra note 4, 276
Neb. at 704, 757 N.W.2d at 209 (quoting 9 U.S.C. § 2).
10
Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56, 123 S. Ct. 2037, 156 L.
Ed. 2d 46 (2003) (quoting Allied-Bruce Terminix Cos. v. Dobson, 513 U.S.
265, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995)).
11
Perry v. Thomas, 482 U.S. 483, 490, 107 S. Ct. 2520, 96 L. Ed. 2d 426
(1987). See, also, Citizens Bank v. Alafabco, Inc., supra note 10; Circuit
City Stores, Inc. v. Adams, 532 U.S. 105, 121 S. Ct. 1302, 149 L. Ed. 2d
234 (2001).
12
Prima Paint v. Flood & Conklin, 388 U.S. 395, 405, 87 S. Ct. 1801, 18
L. Ed. 2d 1270 (1967) (quoting H.R. Rep. No. 96, 68th Cong. 1st Sess. 1
(1924), and S. Rep. No. 536, 68th Cong., 1st Sess. 3 (1924)).
13
Southland Corp. v. Keating, 465 U.S. 1, 104 S. Ct. 852, 79 L. Ed. 2d 1
(1984).
- 261 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
law.14 Finally, the Court expressly rejected the argument that
the FAA’s commerce language “carv[ed] out an important stat-
utory niche in which a State remains free to apply its antiarbi-
tration law or policy.”15 The Court emphasized that “the word
‘involving’ is broad and is indeed the functional equivalent of
‘affecting.’”16 Thus, the Court settled the question of the reach
of the FAA—it extends to the full reach of the Commerce
Clause.17 And in doing so, the Court read the FAA as insist-
ing that the transaction in fact involved interstate commerce,
even if the parties did not contemplate an interstate commerce
connection.18 Thus, to summarize, in the words of a case
note criticizing the U.S. Supreme Court’s decision, the Court
“[took] the final step in the federalization of the FAA.”19
This progression of cases demonstrates that the scope of
the FAA is well settled at the federal level as having the same
reach as Congress’ Commerce Clause power. And, as the dis-
trict court noted, this court previously recognized the U.S.
Supreme Court’s interpretation of the FAA’s “expansive scope”
and concluded that the “FAA’s reach is as broad as Congress’
Commerce Clause authority.”20
14
See, e.g., Perry v. Thomas, supra note 11 (FAA preempted California
statute providing that actions for collection of wages could be maintained
without regard to existence of private arbitration agreement); Dean Witter
Reynolds Inc. v. Byrd, 470 U.S. 213, 105 S. Ct. 1238, 84 L. Ed. 2d 158
(1985) (FAA required federal courts to compel arbitration of pendent
arbitrable claims).
15
Allied-Bruce Terminix Cos. v. Dobson, supra note 10, 513 U.S. at 273.
16
Id., 513 U.S. at 273-74.
17
Allied-Bruce Terminix Cos. v. Dobson, supra note 10.
18
Id.
19
Scott R. Swier, Note, The Tenuous Tale of the Terrible Termites: The
Federal Arbitration Act and the Court’s Decision to Interpret Section Two
in the Broadest Possible Manner: Allied-Bruce Terminix Companies, Inc.
v. Dobson, 41 S.D. L. Rev. 131, 159 (1996).
20
Aramark Uniform & Career Apparel v. Hunan, Inc., supra note 4, 276
Neb. at 705-06, 757 N.W.2d at 210.
- 262 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
[5,6] For these reasons, there does not have to be a multi-
state transaction for the FAA to be applicable. Congress has
the power to regulate purely local activities that are part of an
economic class of activities that have a substantial effect on
interstate commerce.21 Because “Congress’ Commerce Clause
power ‘may be exercised in individual cases without showing
any specific effect upon interstate commerce’” where “in the
aggregate the economic activity in question would represent
‘a general practice . . . subject to federal control,’”22 the same
must be said for application of the FAA.
(b) Application to Resale
After Foreclosure
Given the Court’s explanation that the Commerce Clause
reaches economic activity that, in the aggregate, would rep-
resent a general practice subject to federal control, it seems
clear to us that Charter’s activities at issue fell within that
realm. Charter engaged in lending money secured by resi-
dential real estate. As the Wilczewskis’ complaint makes
clear, Charter’s sale of the subject real estate was not an iso-
lated transaction from one homeowner to another. Rather, the
resale to the Wilczewskis was the direct result of Charter’s
loan to the prior owners, its foreclosure of its deed of trust,
its acquisition of title at the trustee’s sale, and the necessity
of selling the real estate to recover the moneys lent to the
prior owners.
As the U.S. Supreme Court said, “No elaborate explana-
tion is needed to make evident the broad impact of commer-
cial lending on the national economy or Congress’ power to
regulate that activity pursuant to the Commerce Clause.”23
21
See Gonzales v. Raich, 545 U.S. 1, 125 S. Ct. 2195, 162 L. Ed. 2d 1
(2005).
22
Citizens Bank v. Alafabco, Inc., supra note 10, 539 U.S. at 56-57 (quoting
Mandeville Farms v. Sugar Co., 334 U.S. 219, 68 S. Ct. 996, 92 L. Ed.
1328 (1948)).
23
Id., 539 U.S. at 58.
- 263 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
The Court has also said, “[B]anking and related financial
activities are of profound local concern. . . . Nonetheless, it
does not follow that these same activities lack important inter-
state attributes.”24
[7] It makes no difference that the purpose of Charter’s
loan to the prior owners was to finance residential real estate.
Here also, no elaborate explanation is needed to make evi-
dent the broad impact of residential real estate lending on
the national economy. The nationwide impact of residential
real estate lending was a central focus of the Housing and
Economic Recovery Act of 2008,25 which Congress passed
in response to a national financial crisis.26 Generally, resi-
dential real estate lending affects interstate commerce. And
the sale to the Wilczewskis was merely the last step of
Charter’s loan, foreclosure, acquisition of title, and resale of
its security.
To be clear, it is not the parties’ legal status that brings
the transaction within the scope of the Commerce Clause.
In other words, whether Charter derives its banking powers
from a federal- or state-issued charter makes no difference in
our analysis.
Similarly, other tangential details associated with the trans-
action do not control. Charter’s brief sets forth a litany of
multistate connections regarding homeowner’s insurance, title
insurance, document transmission via the Internet, issuance of
a cashier’s check from another state, use of the Federal Reserve
wire system, checks drawn on out-of-state bank accounts, and
the like. The district court relied, at least in part, on these
aspects. But they are only incidental—they do not define the
24
Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 38, 100 S. Ct. 2009,
64 L. Ed. 2d 702 (1980).
25
12 U.S.C. § 4501 et seq. (2012).
26
See Pagliara v. Federal Home Loan Mortgage Corp., No. 1:16-cv-337
(JCC/JFA), 2016 WL 4441978 (E.D. Va. Aug. 23, 2016) (memorandum
opinion).
- 264 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
scope of Charter’s activity. And we are focused on Charter’s
program or activity of residential real estate lending, which
included the sale to the Wilczewskis.
(c) Distinguishing Other
Courts’ Decisions
We are aware that a few courts have declined to compel
arbitration of disputes arising from individual residential real
estate transactions.27 However, we believe the situation before
us is significantly different. None of the cases declining
to compel arbitration involved a comprehensive practice or
activity of lending money on residential real estate, enforcing
liens, acquiring title, and reselling. The other cases merely
addressed individual sales of residential real estate. As we
have already explained, Charter’s activity is that of a lender
of money on residential real estate, which culminated in the
sale to the Wilczewskis. We need not decide and do not sug-
gest whether the FAA applies to a simple contract for the sale
of residential real estate.
2. A pplicability of
A rbitration Clause
Having found that the FAA applies to this purchase agree-
ment, we must now consider whether all of the Wilczewskis’
27
See, Garrison v. Palmas Del Mar Homeowners Ass’n, Inc., 538 F. Supp.
2d 468 (D.P.R. 2008) (FAA generally does not apply to residential real
estate transactions having no substantial or direct connection to interstate
commerce); Saneil v. Robards, 289 F. Supp. 2d 855 (W.D. Ky. 2003)
(agreement to sell real estate between in-state buyer and out-of-state seller
did not involve interstate commerce); SI V, LLC v. FMC Corp., 223 F.
Supp. 2d 1059 (N.D. Cal. 2002) (agreement to sell real estate between
in-state buyer and out-of-state seller did not involve interstate commerce);
Cecala v. Moore, 982 F. Supp. 609 (N.D. Ill. 1997) (lack of out-of-
state transactions incident to sale of real estate evidenced no interstate
commerce); Bradley v. Brentwood Homes, Inc., 398 S.C. 447, 730 S.E.2d
312 (2012) (development of residential real estate was inherently intrastate
transaction not affecting interstate commerce).
- 265 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
claims are covered by the agreement’s arbitration clause. We
have already quoted its broad language.
The Wilczewskis argue that their claims do not fall within
the scope of the arbitration clause. They assert that the claims
for misrepresentation and fraud relate to events leading up to
the parties’ entering into the agreement, but do not involve
any controversies arising out of “‘interpretation, enforcement
or breach’” of the agreement.28 Further, the Wilczewskis cite
to our decision in Washa v. Miller29 for the proposition that a
cause of action for unjust enrichment is only recognized in the
absence of an agreement between the parties. They maintain
that their claims for unjust enrichment could not have arisen
under the agreement and, therefore, are not governed by the
arbitration clause.
Yet, as Charter points out, the Wilczewskis themselves cite
the agreement within the factual portion of their complaint
and, again, in each of their four separate theories of recovery.
The Wilczewskis allege that they were improperly induced to
enter into the agreement. In so doing, they made the agree-
ment a relevant issue and an essential piece of the proceed-
ing. Accordingly, we agree with the district court that based
upon the Wilczewskis’ complaint, their claims came within
the scope of the arbitration clause. And the Wilczewskis
have not pointed to any language of the purchase agree-
ment suggesting that the parties intended to withhold from
arbitration the claim of fraud in inducement of the entire
contract.30
[8] Next, the Wilczewskis argue that under the doctrine of
merger, the agreement merged into the deed and, therefore,
28
Brief for appellants at 11.
29
Washa v. Miller, 249 Neb. 941, 546 N.W.2d 813 (1996).
30
See Prima Paint v. Flood & Conklin, supra note 12.
- 266 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
the arbitration clause is ineffective. We have held that “‘[t]he
doctrine of merger does not apply where there has been fraud
or mistake.’”31 Because the Wilczewskis were claiming
common-law fraud and fraudulent and negligent misrepre-
­
sentation, the doctrine of merger did not apply. We need not
decide, as several other states’ courts have done, whether the
merger doctrine does not apply for other reasons.32
3. Dismissal of Pending Case
The Wilczewskis allege that even if their claims were sub-
ject to arbitration, the court should have stayed the case pend-
ing arbitration rather than dismissing it.
The FAA provides:
If any suit . . . be brought in any of the courts of the
United States upon any issue referable to arbitration under
an agreement in writing for such arbitration, the court in
which such suit is pending . . . shall on application of one
of the parties stay the trial of the action until such arbi-
tration has been had in accordance with the terms of the
agreement . . . .”33
Currently, the federal circuit courts are split on the issue of
whether a stay is mandatory once a court compels arbitration
pursuant to this section. However, there is a slight majority
of the courts that allow dismissal, despite the mandatory lan-
guage of the statute, where all the contested issues between
the parties will be resolved by arbitration and the parties will
31
Newton v. Brown, 222 Neb. 605, 616, 386 N.W.2d 424, 432 (1986)
(quoting Bibow v. Gerrard, 209 Neb. 10, 306 N.W.2d 148 (1981)). See,
also, Purbaugh v. Jurgensmeier, 240 Neb. 679, 483 N.W.2d 757 (1992).
32
See, e.g., Thomas v. Sloan Homes, LLC, 81 So. 3d 309 (Ala. 2011); Drees
Co. v. Osburg, 144 S.W.3d 831 (Ky. App. 2003); Homeowners Ass’n v.
Pilgrims Landing, LC, 221 P.3d 234 (Utah 2009).
33
9 U.S.C. § 3 (emphasis supplied).
- 267 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
not be prejudiced by dismissal.34 The U.S. District Court for
the District of Nebraska, in reviewing similar actions, has also
recognized that a court has discretion to dismiss a case rather
than stay pending arbitration.35
[9] While we have not yet issued an opinion specifically
addressing this issue, we have previously affirmed an order of
the district court that compelled arbitration under the FAA and
dismissed the action.36 Upon reviewing the federal court deci-
sions and with our own understanding of a court’s inherent
authority to manage its docket, we are persuaded that where
all of the contested issues are subject to arbitration, a court has
discretion to consider whether dismissal is more appropriate
than staying a case pending arbitration.
[10,11] Because of the individualized nature of the admin-
istration of justice, trial courts must necessarily be given
wide discretion to ensure that the goal of timely disposi-
tion of cases is reached in a manner consistent with fairness
to all parties.37 In determining whether dismissal is more
appropriate than staying a case, a court should consider
34
See, Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072 (9th Cir.
2014); Green v. SuperShuttle Intern., Inc., 653 F.3d 766 (8th Cir. 2011);
Choice Hotels Intern. v. BSR Tropicana Resort, 252 F.3d 707 (4th Cir.
2001); Bercovitch v. Baldwin School, Inc., 133 F.3d 141 (1st Cir. 1998);
Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161 (5th Cir. 1992). But
see, Katz v. Cellco Partnership, 794 F.3d 341 (2d Cir. 2015); Halim v.
Great Gatsby’s Auction Gallery, Inc., 516 F.3d 557 (7th Cir. 2008); Lloyd
v. Hovensa, LLC., 369 F.3d 263 (3d Cir. 2004); Adair Bus Sales, Inc. v.
Blue Bird Corp., 25 F.3d 953 (10th Cir. 1994).
35
See, Herd Co. v. Ernest-Spencer, Inc., No. 8:09CV397, 2010 WL 76371
(D. Neb. Jan. 5, 2010) (unpublished opinion) (citing Kalinski v. Robert W.
Baird & Co., Inc., 184 F. Supp. 2d 944 (D. Neb. 2002)).
36
See State ex rel. Bruning v. R.J. Reynolds Tobacco Co., 275 Neb. 310,
746 N.W.2d 672 (2008), abrogated on other grounds, Kremer v. Rural
Community Ins. Co., supra note 5.
37
Talkington v. Womens Servs., 256 Neb. 2, 588 N.W.2d 790 (1999).
- 268 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
the case’s procedural history and the situation at the time
of dismissal.38
The Wilczewskis allege that dismissal is inappropriate in
this case because it is possible their claims may not be heard
in arbitration. Specifically, they contend that if the case is
dismissed and they submit a demand for arbitration, Charter
“may assert [the Wilczewskis] are out of time to arbitrate. This
litigation has been pending since April 9, 2014. To allow pro-
cedural delays to result in the Wilczewskis being banned from
pursuing redress in any forum would be unjust.”39
Under different circumstances, that might be true. But,
here, the district court has already issued an order compel-
ling arbitration at Charter’s request. In making that request,
Charter waived its right to assert that its own demand was
untimely. And the Wilczewskis have not directed our atten-
tion to anything in the evidence that would suggest otherwise.
Thus, the Wilczewskis’ concern is unfounded. Accordingly,
the district court did not abuse its discretion in dismissing
the case.
4. Denial of Full Discovery
In appealing from the district court’s October 16, 2015,
order sustaining Charter’s motion to compel arbitration, the
Wilczewskis have also attempted to appeal from the district
court’s August 17 order granting in part and denying in part
their request for full discovery.
[12] In this appeal, we clearly lack jurisdiction of the
discovery order. Discovery orders are not generally subject
to interlocutory appeal because the underlying litigation is
ongoing and the discovery order is not considered final.40 Of
course, we have held that an order compelling arbitration is
38
See id.
39
Brief for appellants at 29.
40
Furstenfeld v. Pepin, 287 Neb. 12, 840 N.W.2d 862 (2013).
- 269 -
Nebraska Supreme Court A dvance Sheets
295 Nebraska R eports
WILCZEWSKI v. CHARTER WEST NAT. BANK
Cite as 295 Neb. 254
a final order.41 And while it is possible that arbitrability may
include an issue of fact, that is not the situation here. All of
the pertinent facts derive from the Wilczewskis’ complaint.
For that reason, we express no opinion whether there are
any circumstances under which a discovery order regarding
arbitrability would fall within the scope of an appeal from an
order compelling arbitration.
VI. CONCLUSION
Because the purchase agreement was governed by the FAA
and the Wilczewskis’ claims were subject to the arbitration
clause, we conclude that it was necessary to sustain Charter’s
motion to compel arbitration. We also conclude that the district
court had discretion to dismiss rather than stay the case and
that the district court did not abuse its discretion in doing so.
And we lack jurisdiction to address the district court’s order
denying full discovery. For these reasons, we affirm the order
of the district court.
A ffirmed.
41
See Kremer v. Rural Community Ins. Co., supra note 5.