Signal 88 v. Lyconic , 310 Neb. 824 ( 2022 )


Menu:
  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    02/18/2022 01:06 AM CST
    - 824 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    Signal 88, LLC, appellant, v.
    Lyconic, L.L.C., appellee.
    ___ N.W.2d ___
    Filed February 4, 2022.   No. S-19-1069.
    1. Arbitration and Award: Appeal and Error. In reviewing a decision
    to vacate, modify, or confirm an arbitration award, an appellate court is
    obligated to reach a conclusion independent of the trial court’s ruling as
    to questions of law. However, the trial court’s factual findings will not
    be set aside on appeal unless clearly erroneous.
    2. Courts: Appeal and Error. Upon reversing a decision of the Nebraska
    Court of Appeals, the Nebraska Supreme Court may consider, as it
    deems appropriate, some or all of the assignments of error that the Court
    of Appeals did not reach.
    3. Arbitration and Award: Appeal and Error. Judicial review of an arbi-
    tration award is severely limited.
    4. Arbitration and Award. When a court modifies or corrects an arbitra-
    tion award, it shall do so to effectuate the intent of the arbitrator.
    5. Arbitration and Award: Appeal and Error. When possible, courts
    should avoid remanding on the basis of ambiguity because of the inter-
    est in prompt and final arbitration.
    6. Records: Appeal and Error. Where an ambiguity can be resolved by
    the record, the district court need not remand for clarification; but where
    the ambiguity is not resolved by the record, the court must remand for
    clarification.
    7. Arbitration and Award: Presumptions: Intent: Appeal and Error.
    When an arbitration award is reviewed by a court, every reasonable
    presumption and intendment will be made in favor of the award and of
    the arbitrator’s acts and proceedings.
    8. Arbitration and Award. An award does not become so vague and
    indefinite as to be unenforceable simply because a party can argue that
    a portion of it may be unclear or ambiguous.
    - 825 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    Petition for further review from the Court of Appeals,
    Bishop, Arterburn, and Welch, Judges, on appeal thereto
    from the District Court for Douglas County, Marlon A. Polk,
    Judge. Judgment of Court of Appeals reversed and remanded
    with directions.
    Michael T. Eversden and Brian McKernan, of McGrath,
    North, Mullin & Kratz, P.C., L.L.O., for appellant.
    Michael S. Degan, of Kutak Rock, L.L.P., for appellee.
    Heavican, C.J., Cassel, Stacy, Funke, Papik, and
    Freudenberg, JJ., and Thompson, District Judge.
    Funke, J.
    INTRODUCTION
    Signal 88, LLC, filed a contract action against Lyconic,
    L.L.C., in the district court for Douglas County. The district
    court ordered the dispute to be submitted to arbitration. After
    the arbitrator rendered a decision, pursuant to 
    Neb. Rev. Stat. § 25-2612
     (Reissue 2016), Lyconic moved the district court to
    confirm the arbitrator’s award. Eventually, the court entered
    judgment on the award.
    On appeal, the Nebraska Court of Appeals found the award
    to be ambiguous, vacated the judgment, and remanded the mat-
    ter to the district court with directions to remand the matter to
    the arbitrator for clarification. 1 Lyconic petitioned for further
    review. For reasons we explain, we find merit to the petition
    for further review. The Court of Appeals’ decision is reversed,
    and the matter is remanded with directions.
    BACKGROUND
    Contract
    Signal 88 is a franchisor that operates a security services
    franchise system in Nebraska. Lyconic develops software
    1
    Signal 88 v. Lyconic, 
    29 Neb. App. 533
    , 
    956 N.W.2d 308
     (2021).
    - 826 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    programs for use in the security services industry. In 2011,
    Lyconic contracted with Signal 88 to provide software and
    services to assist Signal 88 in operating its business. The
    initial contract was for a 3-year term, with Signal 88 reserv-
    ing rights of renewal. Signal 88 would pay Lyconic $25,000
    per month for the first 12 months and $30,000 per month for
    the remaining 24 months. In the event the contract was ter-
    minated, Lyconic would provide Signal 88 up to 180 days of
    post­termination services (termination assistance), in order to
    “achieve a smooth transition of all records[,] data[,] and serv­
    ices without disruption to [Signal 88’s] [b]usiness.” Signal 88
    would pay for termination assistance at “Lyconic’s then current
    hourly rate.”
    The parties executed two addendums. “Addendum #1”
    decreased the service fee from $30,000 to $25,000 per month.
    “Addendum #2” set a month-to-month term at the renewal rate
    of $25,000 per month, required 30 days’ notice prior to termi-
    nation, and reduced Lyconic’s termination assistance obligation
    to up to 30 days following termination. Addendum #2 granted
    Signal 88 the right to extend termination assistance longer than
    30 days, provided Signal 88 gave an equivalent amount of
    notice before termination.
    In February 2016, Signal 88 notified Lyconic of its intent
    to terminate the contract, setting the termination date for June
    30. Lyconic then advised it would not renew the agreement
    beyond the current monthly term, expiring March 6, and would
    provide termination assistance until April 6. In a March 1 cor-
    respondence to Lyconic, Signal 88 disputed Lyconic’s notice to
    terminate and stated it would terminate the agreement July 1,
    and it requested that termination assistance be extended for 122
    days after the termination date.
    Arbitration
    Signal 88 filed its contract action against Lyconic seeking
    declaratory and injunctive relief. Pursuant to the terms of the
    contract, the district court ordered arbitration. On April 25,
    - 827 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    2016, the arbitrator issued a written opinion finding Signal 88’s
    March 1 letter effectively terminated the agreement as of July
    1. Specifically, the arbitrator stated:
    In providing this notice Signal 88 provided 122 days
    advance notice and therefore can request an equal amount
    of days of termination assistance. Accordingly, Lyconic’s
    obligation to provide termination assistance extends 122
    days from the termination date, expiring November 11,
    2016. Signal 88 is obligated to pay for Lyconic’s services
    at the renewal rate of $25,000 per month.
    Thereafter, Signal 88 notified Lyconic that it would not
    require termination assistance after June 2, 2016.
    District Court Proceedings
    On May 5, 2016, Lyconic applied “for an [o]rder confirm-
    ing the arbitration award and entry of judgment thereon.”
    In its application, Lyconic alleged that the arbitrator deter-
    mined that “Signal 88 is obligated to pay Lyconic $25,000
    per month through November 11, 2016.” While that applica-
    tion was pending, Lyconic also filed an answer to the original
    lawsuit, acknowledging the arbitration award, but including a
    counterclaim, which it alleged was not resolved by arbitration.
    Lyconic subsequently amended its counterclaim to add addi-
    tional allegations that following the arbitrator’s decision, but
    prior to the termination date, Signal 88 hacked into Lyconic’s
    computers, downloaded information, and wrongfully disclosed
    confidential information.
    On May 31, 2016, the court informed the parties in an email
    that it would grant Lyconic’s application to confirm the arbitra-
    tion award and directed Lyconic to prepare and submit a pro-
    posed order. However, no such order was entered.
    On August 23, 2019, both parties filed motions labeled as
    a motion for partial summary judgment. Lyconic’s motion
    asserted that “[t]he arbitrator further determined that Signal 88
    was obligated to pay Lyconic for 122 days of Termination
    Assistance at the rate of $25,000 per month.” (Emphasis
    - 828 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    supplied.) Signal 88’s motion sought judgment regarding
    Lyconic’s amended counterclaims.
    At a hearing on the motions, the court discussed the lan-
    guage of the arbitration award and stated that although the
    court agreed with the arbitrator’s findings that Signal 88’s
    March 1, 2016, letter terminated the agreement as of July 1
    and that Signal 88 was obligated to pay Lyconic during the
    termination assistance period, the court disagreed with the
    arbitrator’s determination regarding Signal 88’s liability. The
    court explained that under its own interpretation of the par-
    ties’ agreement,
    termination assistance is not the same as services [and the
    agreement] does specifically say that Lyconic would be
    entitled to the then currently hourly rate for the provision
    of its termination assistance.
    So the Court believes that Signal 88 should pay the 122
    days of termination assistance at Lyconic’s then current
    hourly rate as provided for in [the agreement].
    At the conclusion of the hearing, the district court announced
    it would grant Lyconic’s motion to confirm the award, but
    would also move forward with a bench trial over Lyconic’s
    counterclaims. Following trial, the court issued an “Order
    Granting Application for Confirmation of Arbitration Award
    & Entry of Judgment.” The court’s order stated: “Lyconic
    moved for confirmation of the arbitrator’s award within the
    applicable time frame and given that the record does not show
    that a party moved for vacation, modification or correction of
    the arbitrator’s award, this Court must confirm the award.”
    The court quoted the text of § 25-2612 in full: “Within sixty
    days of the application of a party, 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 and 25-2614.” In confirming the arbi-
    trator’s decision, the court’s order stated, “[T]he Arbitrator
    - 829 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    found that Signal 88 is obligated to pay Lyconic for 122 days
    of Termination Assistance at the renewal rate of $25,000 per
    month.” (Emphasis supplied.) The court then proceeded to
    enter judgment in favor of Lyconic and against Signal 88 in the
    amount of $109,166.67 with interest accruing at the rate of 1.5
    percent per month as of November 26, 2016.
    Signal 88 moved for a new trial or to alter or amend the judg-
    ment, arguing the court should have simply “confirm[ed] the
    arbitration decision.” At the hearing on the motion, Signal 88
    argued the court should grant a “new trial and then remand
    the issue of termination assistance to the arbitrator to clarify.”
    Signal 88 argued the court “has the power to remand under
    [
    Neb. Rev. Stat. § 25-2610
     (Reissue 2016)].” The court issued
    an order denying the motion. Signal 88 appealed.
    Court of Appeals
    On appeal, Signal 88 assigned and argued that the “trial court
    erred in modifying rather than simply confirming the arbitra-
    tion award.” Signal 88 argued that by entering a $109,166.67
    judgment against it, the trial court had “dramatically exceeded
    its authority in modifying the arbitration award, and its deci-
    sion should therefore be reversed.” 2 Signal 88 argued that
    because there was no motion to vacate, modify, or correct the
    award, “the trial court had no discretion and was required to
    confirm the award.” 3
    Signal 88 also assigned and argued that if Lyconic’s posi-
    tion prevailed, then the “trial court erred in not remanding the
    question of termination assistance to the arbitrator.” 4 Signal 88
    argued that if the court found the award to be ambiguous, a
    remand to the arbitrator would still be appropriate.
    The Court of Appeals recognized that the district court
    adopted Lyconic’s interpretation of the arbitration decision
    2
    Brief for appellant at 20.
    3
    
    Id. at 22
    .
    4
    
    Id. at 37
    .
    - 830 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    and that the language in the district court’s order did not track
    with the language used by the arbitrator. The court cited our
    decision in Cinatl v. Prososki, 5 in which we held that without
    a pending application to modify, vacate, or correct an arbitra-
    tion award, a district court shall confirm the award. The appel-
    late court acknowledged there was no application to modify,
    vacate, or correct the award, but found the proper issue for
    resolution in this case was “clarification,” 6 alluding to 
    Neb. Rev. Stat. § 25-2610
     (Reissue 2016).
    The court determined that the arbitrator’s award was ambig-
    uous and, based upon Domino Group v. Charlie Parker Mem.
    Foundation, 7 concluded that the best course was to vacate the
    judgment and have the district court remand the matter to the
    arbitrator for clarification.
    ASSIGNMENTS OF ERROR
    Lyconic petitions for further review. Lyconic assigns, sum-
    marized, that the Court of Appeals erred in reversing, vacating,
    and remanding the judgment with instructions to refer the mat-
    ter to the arbitrator and erred in finding ambiguity.
    STANDARD OF REVIEW
    [1] In reviewing a decision to vacate, modify, or confirm
    an arbitration award, an appellate court is obligated to reach
    a conclusion independent of the trial court’s ruling as to ques-
    tions of law. 8 However, the trial court’s factual findings will
    not be set aside on appeal unless clearly erroneous. 9
    [2] Upon reversing a decision of the Nebraska Court of
    Appeals, the Nebraska Supreme Court may consider, as it
    5
    Cinatl v. Prososki, 
    307 Neb. 477
    , 
    949 N.W.2d 505
     (2020).
    6
    Signal 88, 
    supra note 1
    , 29 Neb. App. at 546, 956 N.W.2d at 317.
    7
    Domino Group v. Charlie Parker Mem. Foundation, 
    985 F.2d 417
     (8th Cir.
    1993).
    8
    Signal 88, 
    supra note 1
    .
    9
    
    Id.
    - 831 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    deems appropriate, some or all of the assignments of error that
    the Court of Appeals did not reach. 10
    ANALYSIS
    [3] Before considering the arbitration issues before us, we
    note that the parties generally argue that this matter is gov-
    erned by Nebraska’s Uniform Arbitration Act (UAA). 11 As
    such, we limit our discussion to the UAA. In Nebraska, judicial
    review of an arbitration award is severely limited. 12 Section
    25-2612 provides that “[w]ithin sixty days of the application
    of a party, 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 and 25-2614.”
    Confirmation of an arbitration award finalizes the award and
    makes the award a judgment of the court. 13 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. 14
    In the instant matter, everyone agrees that § 25-2612 gov-
    erns Lyconic’s motion to confirm and that there was no request
    to vacate, modify, or correct the award. Both the trial court
    and the Court of Appeals recognized this in their analyses.
    Despite this recognition, neither court followed the legislative
    commands of § 25-2612 and each court erred, respectively, in
    10
    McEwen v. Nebraska State College Sys., 
    303 Neb. 552
    , 
    931 N.W.2d 120
    (2019).
    11
    
    Neb. Rev. Stat. §§ 25-2601
     to 25-2622 (Reissue 2016).
    12
    See State v. Henderson, 
    277 Neb. 240
    , 
    762 N.W.2d 1
     (2009), disapproved
    on other grounds, Seldin v. Estate of Silverman, 
    305 Neb. 185
    , 
    939 N.W.2d 768
     (2020).
    13
    86 Am. Jur. Trials 111, § 263 (2002 & Supp. 2021), citing Bacardi Intern.
    Ltd. v. V. Suarez & Co., Inc., 
    719 F.3d 1
     (1st Cir. 2013); R & Q Reinsurance
    Co. v. Utica Mut. Ins. Co., 
    18 F. Supp. 3d 389
     (S.D.N.Y. 2014).
    14
    § 25-2615.
    - 832 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    failing to do so. We conclude that the district court erred in
    modifying rather than confirming the award and that the Court
    of Appeals, though correct in vacating the judgment, erred in
    finding the arbitrator’s award to be ambiguous and erred in
    instructing that the matter be remanded to the arbitrator.
    Courts must give extreme deference to the arbitrator’s con-
    clusions; the standard of judicial review of arbitral awards is
    among the narrowest known to law. 15 A court may not overrule
    an arbitrator’s decision simply because the court believes that
    its own interpretation of the contract, or the facts, would be the
    better one. 16
    The role of the court in the arbitration process is spe-
    cifically addressed and limited by the UAA. 17 To allow full
    judicial scrutiny of an arbitration award would frustrate the
    purpose of having arbitration at all—the quick resolution of
    disputes and the avoidance of the expense and delay associ-
    ated with litigation. 18 Strong deference is due to an arbitra-
    tive tribunal, because when parties agree to arbitration, they
    agree to accept whatever reasonable uncertainties might arise
    from the process. 19 Where arbitration is contemplated, the
    courts are not equipped to provide the same judicial review
    given to structured judgments defined by procedural rules
    and legal principles. Parties should be aware that they get
    15
    Mid Atlantic Capital Corp. v. Bien, 
    956 F.3d 1182
     (10th Cir. 2020). See
    Health Plan of Nevada v. Rainbow Med., LLC, 
    120 Nev. 689
    , 
    100 P.3d 172
    (2004) (citing cases).
    16
    Oxford Health Plans LLC v. Sutter, 
    569 U.S. 564
    , 
    133 S. Ct. 2064
    , 
    186 L. Ed. 2d 113
     (2013); W. R. Grace & Co. v. Rubber Workers, 
    461 U.S. 757
    ,
    
    103 S. Ct. 2177
    , 
    76 L. Ed. 2d 298
     (1983); Steelworkers v. Enterprise Corp.,
    
    363 U.S. 593
    , 
    80 S. Ct. 1358
    , 
    4 L. Ed. 2d 1424
     (1960); Intern. Broth. of
    Elec. Workers v. O.K. Elec. Co., 
    793 F.2d 214
     (8th Cir. 1986).
    17
    Hartman v. City of Grand Island, 
    265 Neb. 433
    , 
    657 N.W.2d 641
     (2003).
    18
    
    Id.,
     citing Jones v. Summit Ltd. Partnership Five, 
    262 Neb. 793
    , 
    635 N.W.2d 267
     (2001).
    19
    
    Id.
    - 833 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    what they bargain for and that arbitration is far different from
    adjudication. 20
    In Cinatl, 21 this court addressed a court’s obligation with
    respect to confirming an award when there is no pending
    motion to modify or correct an award. There, the district court
    denied a timely application to vacate an arbitration award.
    Several months later, the court granted an amended motion to
    confirm the arbitrator’s award, noting there was no pending
    motion to modify or correct the award. On appeal, we affirmed
    and explained that when an 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. 22 We noted that the UAA does not allow for the
    exercise of discretion by the court when a request for confirma-
    tion is made and there is no pending application for vacation,
    modification, or correction. 23
    In Garlock v. 3DS Properties, 24 this court held that the trial
    court erred in granting one party’s request to vacate an arbitra-
    tion award over another party’s request to confirm the award,
    because no party sought to modify the award and the mov-
    ant offered no evidence in support of the request for vacatur.
    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.” (Emphasis
    supplied.) As a general rule, the word “shall” in a statute is
    considered mandatory and is inconsistent with the idea of
    discretion. 25
    20
    Id.
    21
    Cinatl, 
    supra note 5
    .
    22
    
    Id.
    23
    
    Id.,
     citing Garlock v. 3DS Properties, 
    303 Neb. 521
    , 
    930 N.W.2d 503
    (2019).
    24
    Garlock, 
    supra note 23
    .
    25
    Cinatl, 
    supra note 5
    .
    - 834 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    The present case is reminiscent of this court’s decision in
    Ronald J. Palagi, P.C. v. Prospect Funding Holdings, 26 which
    concerned a motion to confirm an arbitration award under the
    Federal Arbitration Act. After an arbitration was completed, a
    personal injury claimant brought an interpleader action regard-
    ing settlement proceeds, but did not move to vacate, modify, or
    correct the award of arbitration. The district court confirmed
    the award, and the claimant argued on appeal that the arbitra-
    tion agreement was invalid and unenforceable. We rejected the
    claimant’s arguments, finding they had “ignore[d] that these
    issues have already been resolved against them in binding arbi-
    tration, and they did not thereafter seek to vacate, modify, or
    correct the arbitration award within the time period permitted
    under the [Federal Arbitration Act].” 27 We found the claimant’s
    arguments lacked merit, because they were “premised on a
    fundamental misunderstanding of the limited role of the court
    once an arbitration award is entered, a motion to confirm is
    filed, and there has been no timely motion to vacate, modify,
    or correct the award.” 28
    Here, pursuant to § 25-2612, Lyconic requested confirma-
    tion of the award on May 5, 2016. The court held a hearing
    on May 18. In an email, on May 31, the court stated it would
    grant the application but did not enter an order doing so. Not
    until September 6, 2019, did the court confirm the award and
    reduce it to a judgment. When the court did confirm the award,
    it adopted Lyconic’s interpretation of the award, which was
    inaccurate and was a modification rather than confirmation of
    the award.
    Recall that the arbitrator’s award stated, in relevant part,
    “Lyconic’s obligation to provide termination assistance extends
    122 days from the termination date, expiring November 11,
    26
    Ronald J. Palagi, P.C. v. Prospect Funding Holdings, 
    302 Neb. 769
    , 
    925 N.W.2d 344
     (2019).
    27
    
    Id. at 783
    , 925 N.W.2d at 354.
    28
    Id.
    - 835 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    2016. Signal 88 is obligated to pay for Lyconic’s services
    at the renewal rate of $25,000 per month.” (Emphasis sup-
    plied.) However, the district court’s order stated, in relevant
    part, “[T]he Arbitrator found that Signal 88 is obligated to pay
    Lyconic for 122 days of Termination Assistance at the renewal
    rate of $25,000 per month.” (Emphasis suppled.)
    Lyconic misconstrued the arbitrator’s findings regarding ter-
    mination assistance, which resulted in the court’s entering a
    monetary judgment against Signal 88. Though, as mentioned,
    there was no formal motion to modify the award, we agree
    with Signal 88’s argument that by adopting Lyconic’s position,
    the district court modified rather than confirmed the award. We
    conclude the district court erred in doing so and exceeded the
    appropriate role of the court under the UAA. The purpose of
    arbitration is to resolve disputes, not to create new ones. 29
    [4] When a court modifies or corrects an arbitration award,
    it shall do so to effectuate the intent of the arbitrator. 30 Courts
    are not to modify or correct matters affecting the merits which
    reflect the intent of the arbitrator. 31
    Lyconic’s misconstruction of the award implied that an
    ambiguity existed in the court’s language that needed to
    be resolved. The Court of Appeals to an extent accepted
    Lyconic’s framing of the issues when it said that the parties
    had “simply assert[ed] different interpretations and mean-
    ings to the words used by the arbitrator in its award.” 32 But
    a more accurate description of the dispute would be that
    Lyconic asserted its interpretation, and Signal 88 asserted that
    29
    Bell Aerospace Co. Div. of Textron v. Local 516, Int. U., Etc., 
    500 F.2d 921
    (2d Cir. 1974).
    30
    See Gen. Acc. Ins. Co. v. MSL Enterprises, 
    143 N.C. App. 453
    , 
    547 S.E.2d 97
     (2001).
    31
    
    Id.
     See, Gas Aggregation Services v. Howard Avista, 
    319 F.3d 1060
     (8th
    Cir. 2003); Office & Prof. Employees v. Brownsville Gen. Hosp., 
    186 F.3d 326
     (3d Cir. 1999).
    32
    Signal 88, 
    supra note 1
    , 29 Neb. App. at 543, 956 N.W.2d at 316.
    - 836 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    Lyconic’s interpretation should be disregarded and the award
    should be confirmed as intended by the arbitrator. As the Court
    of Appeals correctly pointed out, “[a]lthough Signal 88 assigns
    [10] assignments of error, they can generally be restated as
    claiming that the district court erred by modifying the arbitra-
    tor’s award, rather than simply confirming it.” 33 The appellate
    court then found the award ambiguous and determined that
    the district court’s confirmation of the award needed to be
    vacated and the matter resubmitted to the arbitrator to resolve
    the ambiguity.
    Despite there being no explicit provision in the UAA for a
    remand for an ambiguous award, the Court of Appeals prop-
    erly noted that § 25-2610 authorizes an arbitrator to clarify an
    award upon submission by the court. Additionally, case law in
    other jurisdictions has uniformly established that a remand to
    the arbitrator is appropriate in cases where the award is ambig-
    uous. 34 An award may be recommitted for clarification where
    it is ambiguous to such an extent that it is impossible to deter-
    mine its meaning and intent. 35 “An ambiguous award should be
    remanded to the arbitrators so that the court will know exactly
    what it is being asked to enforce.” 36
    [5,6] However, remand for clarification is not the preferred
    course. 37 When possible, courts should avoid remanding on
    33
    Id. at 541, 956 N.W.2d at 314.
    34
    M & C Corp. v. Erwin Behr GmbH & Co., 
    326 F.3d 772
     (6th Cir. 2003);
    Hyle v. Doctor’s Associates, Inc., 
    198 F.3d 368
     (2d Cir. 1999); Colonial
    Penn Ins. Co. v. Omaha Indem. Co., 
    943 F.2d 327
     (3d Cir. 1991); LLT
    Intern., Inc. v. MCI Telecommunications Corp., 
    69 F. Supp. 2d 510
    (S.D.N.Y. 1999).
    35
    6 C.J.S. Arbitration § 231 (2016).
    36
    Americas Ins. Co. v. Seagull Compania Naviera, 
    774 F.2d 64
    , 67 (2d Cir.
    1985).
    37
    See, Flender Corp. v. Techna-Quip Co., 
    953 F.2d 273
    , 280 (7th Cir. 1992)
    (“remand for clarification is a disfavored procedure”); Colonial Penn Ins.
    Co., supra note 34; Ethyl Corp. v. United Steelworkers of America, 
    768 F.2d 180
     (7th Cir. 1985); Gen. Acc. Ins. Co., supra note 30.
    - 837 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    the basis of ambiguity because of the interest in prompt and
    final arbitration. 38 Where an ambiguity can be resolved by the
    record, the district court need not remand for clarification; but
    where the ambiguity is not resolved by the record, the court
    must remand for clarification. 39
    The record indicates that the parties’ agreement obligated
    Lyconic to provide software services to Signal 88 at the rate
    of $25,000 per month. Additionally, upon termination of the
    agreement, Lyconic would provide termination assistance at
    its then-hourly rate. Nothing in the parties’ agreement, the
    addendums thereto, or the arbitrator’s award would support
    Lyconic’s contention that Signal 88 was obligated to pay
    $25,000 per month for termination assistance. When viewed in
    context, the record establishes the arbitrator intended its award
    to merely determine the effective termination date to be July
    1, 2016, and that Lyconic was obligated to provide termination
    assistance until November 11.
    [7,8] When an arbitration award is reviewed by a court,
    every reasonable presumption and intendment will be made
    in favor of the award and of the arbitrator’s acts and proceed-
    ings. 40 An award does not become so vague and indefinite as
    to be unenforceable simply because a party can argue that a
    portion of it may be unclear or ambiguous. 41
    38
    Teamsters Local No. 579 v. B & M Transit, Inc., 
    882 F.2d 274
     (7th Cir.
    1989).
    39
    See, id.; Fischer v. CGA Computer Associates, Inc., 
    612 F. Supp. 1038
    (S.D.N.Y. 1985); Foster v. City of Fairbanks, 
    929 P.2d 658
     (Alaska 1996);
    SCSJ Enters. v. Hansen & Hansen Enters., 
    319 Ga. App. 210
    , 
    734 S.E.2d 214
     (2012); Osborn v. Packard, 
    117 P.3d 77
     (Colo. App. 2004); 2 Martin
    Domke et al., Domke on Commercial Arbitration §§ 40:10 and 40:11 (3d
    ed. 2021).
    40
    Kellogg v. Middlesex Mut. Assurance Co., 
    326 Conn. 638
    , 
    165 A.3d 1228
    (2017). See Foster, supra note 39.
    41
    Broth. Ry. Carmen v. Belt Ry. Co. of Chicago, 
    658 F. Supp. 136
     (N.D. Ill.
    1987).
    - 838 -
    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    SIGNAL 88 v. LYCONIC
    Cite as 
    310 Neb. 824
    We conclude that the arbitrator’s intent was clear, that the
    award is unambiguous, and that clarification is unnecessary.
    As such, the Court of Appeals erred in finding the award
    ambiguous and in ordering a remand to the arbitrator for
    clarification.
    CONCLUSION
    For the foregoing reasons, we reverse the Court of Appeals’
    decision and remand the matter with directions to vacate the
    district court’s order and instruct the district court to confirm
    the arbitrator’s award as written.
    Reversed and remanded with directions.
    Papik, J., not participating in the decision.
    Miller-Lerman, J., not participating.
    

Document Info

Docket Number: S-19-1069

Citation Numbers: 310 Neb. 824

Filed Date: 2/4/2022

Precedential Status: Precedential

Modified Date: 2/18/2022

Authorities (29)

William H. Hyle, Jr. v. Doctor's Associates, Inc. , 198 F.3d 368 ( 1999 )

americas-insurance-company-as-subrogee-of-universal-petroleum-company , 774 F.2d 64 ( 1985 )

Office & Professional Employees International Union, Local ... , 186 F.3d 326 ( 1999 )

M & C Corporation, a Michigan Corporation, D/B/A Connelly ... , 326 F.3d 772 ( 2003 )

colonial-penn-insurance-company-v-the-omaha-indemnity-company-mutual-of , 943 F.2d 327 ( 1991 )

bell-aerospace-company-division-of-textron-inc-v-local-516 , 500 F.2d 921 ( 1974 )

Teamsters Local No. 579 v. B & M Transit, Inc. , 882 F.2d 274 ( 1989 )

Domino Group, Inc. v. Charlie Parker Memorial Foundation , 985 F.2d 417 ( 1993 )

Osborn v. Packard , 117 P.3d 77 ( 2004 )

international-brotherhood-of-electrical-workers-local-no-265-v-ok , 793 F.2d 214 ( 1986 )

Ethyl Corporation v. United Steelworkers of America, Afl-... , 768 F.2d 180 ( 1985 )

Flender Corporation v. Techna-Quip Company and Robert J. ... , 953 F.2d 273 ( 1992 )

General Accident Insurance Co. of America v. MSL ... , 143 N.C. App. 453 ( 2001 )

Brotherhood Railway Carmen v. Belt Railway Co. , 658 F. Supp. 136 ( 1987 )

Signal 88 v. Lyconic , 310 Neb. 824 ( 2022 )

State v. Henderson , 277 Neb. 240 ( 2009 )

Jones v. Summit Limited Partnership Five , 262 Neb. 793 ( 2001 )

Hartman v. City of Grand Island , 265 Neb. 433 ( 2003 )

Ronald J. Palagi, P.C. v. Prospect Funding Holdings , 302 Neb. 769 ( 2019 )

Cinatl v. Prososki , 307 Neb. 477 ( 2020 )

View All Authorities »