Applied Underwriters v. E.M. Pizza ( 2019 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
02/19/2019 09:06 AM CST
- 906 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
A pplied Underwriters Captive R isk Assurance Company,
Inc., an Iowa corporation, appellant, v. E.M. Pizza, Inc.,
a California corporation, appellee.
___ N.W.2d ___
Filed February 12, 2019. No. A-17-1301.
1. Jurisdiction: Rules of the Supreme Court: Pleadings: Appeal and
Error. When reviewing an order dismissing a party from a case for
lack of personal jurisdiction under Neb. Ct. R. Pldg. § 6-1112(b)(2), an
appellate court examines the question of whether the nonmoving party
has established a prima facie case of personal jurisdiction de novo.
2. Motions to Dismiss: Appeal and Error. In reviewing the grant of a
motion to dismiss, an appellate court must look at the facts in the light
most favorable to the nonmoving party and resolve all factual conflicts
in favor of that party.
3. Due Process: Jurisdiction: States. When determining whether a court
has personal jurisdiction over a party, it must first determine whether a
state’s long-arm statute is satisfied, and if the long-arm statute is satis-
fied, whether minimum contacts exist between the defendant and the
forum state for personal jurisdiction over the defendant without offend-
ing due process.
4. Constitutional Law: Jurisdiction: States. Nebraska’s long-arm statute,
Neb. Rev. Stat. § 25-536 (Reissue 2016), provides that a court may
exercise personal jurisdiction over a person who has any contact with or
maintains any relation to this state to afford a basis for the exercise of
personal jurisdiction consistent with the Constitution of the United States.
5. Due Process: Jurisdiction: States. The Due Process Clause protects an
individual’s liberty interest in not being subject to the binding judgments
of a forum with which he or she has established no meaningful contacts,
ties, or relations.
6. ____: ____: ____. Due process is satisfied where the nonresident
defend­ant’s minimum contacts are such that the defendant should rea-
sonably anticipate being haled into court there.
- 907 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
7. Jurisdiction: States. A court exercises two types of personal jurisdic-
tion depending upon the facts and circumstances of the case: general
personal jurisdiction and specific personal jurisdiction.
8. ____: ____. A court has general personal jurisdiction over a nonresident
defendant if the defendant has engaged in continuous and systematic
business connections with the forum state.
9. ____: ____. Specific personal jurisdiction arises where the nonresident
defendant’s contacts with the forum state are neither continuous nor sys-
tematic, but the plaintiff’s claim arises from the defendant’s minimum
contacts with the forum.
10. ____: ____. If a court determines that a defendant has sufficient mini-
mum contacts with the forum state, the court must then weigh the facts
of the case to determine whether exercising personal jurisdiction would
comport with fair play and substantial justice.
11. ____: ____. When determining whether exercising personal jurisdiction
over a nonresident defendant would be fair and reasonable, a court may
consider the burden on the defendant, the interest of the forum state, the
plaintiff’s interest in obtaining relief, the judicial system’s interest in
obtaining the most efficient resolution of controversies, and the shared
interest of the several states in furthering fundamental substantive
social policies.
12. Jurisdiction: States: Contracts. Where a choice-of-forum clause is a
necessary component of the court’s exercise of personal jurisdiction,
then the court would have no jurisdiction but for the fact that the parties
have consented to its exercise by the choice-of-forum agreement, and
the standards contained in the Model Uniform Choice of Forum Act,
Neb. Rev. Stat. § 25-413 et seq. (Reissue 2016), apply.
13. Jurisdiction: States. A plaintiff’s choice of a forum should not be over-
turned 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 admin-
istrative and legal problems.
14. ____: ____. In determining whether a state is a reasonably convenient
place for the trial of an action under Neb. Rev. Stat. § 25-414(1)(b)
(Reissue 2016), courts are required to consider both private and public
interest factors.
15. Appeal and Error. Errors must be both assigned and argued to be
addressed by an appellate court.
Appeal from the District Court for Douglas County: Duane
C. Dougherty, Judge. Affirmed.
- 908 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
Jeffrey A. Silver for appellant.
Kristopher J. Covi, of McGrath, North, Mullin & Kratz,
P.C., L.L.O., for appellee.
Moore, Chief Judge, and R iedmann and Welch, Judges.
R iedmann, Judge.
I. INTRODUCTION
This appeal requires us to determine whether an Iowa cor-
poration made a prima facie case to establish that the Nebraska
courts have personal jurisdiction over a California corpora-
tion under either Nebraska’s long-arm statute, Neb. Rev. Stat.
§ 25-536 (Reissue 2016), or the Model Uniform Choice of
Forum Act (Choice of Forum Act), Neb. Rev. Stat. § 25-413
et seq. (Reissue 2016). The district court for Douglas County
determined personal jurisdiction was lacking and sustained a
motion to dismiss. For the following reasons, we affirm.
II. BACKGROUND
Applied Underwriters Captive Risk Assurance Company,
Inc. (AUCRA), brought suit against E.M. Pizza, Inc., to recover
$483,000.88 that AUCRA claimed it was owed under the par-
ties’ “Reinsurance Participation Agreement” (RPA). AUCRA
is an Iowa corporation with its principal place of business in
Omaha, Nebraska. E.M. Pizza is a California corporation with
its principal place of business in California. AUCRA is an
indirect subsidiary of Applied Underwriters, Inc. (Applied),
a Nebraska corporation with its principal place of business
in Omaha.
Applied offers workers’ compensation insurance programs
nationwide, one of which is “EquityComp.” EquityComp pro-
vides workers’ compensation insurance “with a risk reten-
tion component through Applied’s captive, AUCRA.” The risk
retention component is effected through an RPA. E.M. Pizza,
through its insurance agent, submitted a workers’ compensation
application to Applied in Omaha. In response to the applica-
tion, Applied generated an EquityComp workers’ compensation
- 909 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
program proposal and rate quotation, as well as a compensation
program summary and scenarios, which were sent by Applied
to E.M. Pizza.
E.M. Pizza’s president executed a request for service, allow-
ing Applied to debit E.M. Pizza’s bank accounts for pay-
ments due under the EquityComp program, and additionally
executed an executive officer exclusion form and sent the
form to Applied in Omaha. Subsequently, California Insurance
Company, an indirect subsidiary of Applied, issued work-
ers’ compensation and employer’s liability insurance policies
to E.M. Pizza for the period of July 1, 2013, through July
1, 2014. The policies were renewed annually through July
1, 2017. The policies were underwritten and issued from
Applied’s office in Omaha. Each month, E.M. Pizza reported
its payroll to Applied in Omaha so that workers’ compensation
premiums could be calculated. Further, all customer service
questions from E.M. Pizza were directed to Applied’s office in
Omaha and responded to by customer service representatives
in Omaha.
The reinsurance/risk sharing component of the EquityComp
program was executed by the RPA. Paragraph 13(B) of the
RPA contained a forum selection clause stating:
Any legal suit, action or proceeding arising out of, related
to or based upon this agreement, or the transactions
contemplated hereby or thereby must only be instituted
in the federal courts of the United States of America or
the courts of the State of Nebraska, in each case located
in Omaha and the county of Douglas, and each party
irrevocably submits to the exclusive jurisdiction of such
courts in any such suit, action or proceeding. Service of
process, summons, notice or other document by mail to
such party’s address set forth herein shall be effective
service of process for any suit, action or other proceed-
ing brought in any such court. The parties irrevocably
and unconditionally waive any objection to the laying of
venue of any suit, action or any proceeding in such courts
- 910 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
and irrevocably waive and agree not to plead or claim in
any such court that any such suit, action or proceeding
brought in any such court has been brought in an incon-
venient forum.
AUCRA alleges that E.M. Pizza owes $483,000.88 under
the RPA, and it brought suit to collect the funds. E.M. Pizza
filed a motion to dismiss the action for lack of personal
jurisdiction, pursuant to Neb. Ct. R. Pldg. § 6-1112(b)(2).
E.M. Pizza asserted that it does not currently, nor has it ever,
transacted any business within the State of Nebraska; had any
officers, directors, employees, sales people, or property located
in Nebraska; contracted to supply services or things within
Nebraska; caused any tortious injury by any act or omission in
Nebraska; or contracted to insure any person, property, or risk
within Nebraska. Further, E.M. Pizza asserted that the workers’
compensation policy and ancillary documents at issue in this
case were all purchased through an agent in California and that
the policies at issue are all for workers’ compensation coverage
for employees solely in California.
Following a hearing on the motion to dismiss at which the
only evidence submitted by the parties was in the form of affi-
davits with accompanying exhibits, the district court entered
an order dismissing the suit for lack of personal jurisdiction. It
found that the court did not have jurisdiction under Nebraska’s
long-arm statute or the Choice of Forum Act. Specifically,
as to the Choice of Forum Act, the district court found that
although E.M. Pizza failed to present a compelling case that
jurisdiction in the Nebraska courts would be so burdensomely
inconvenient to deny it due process, subjecting E.M. Pizza to
this court’s jurisdiction would not comport with “‘fair play and
substantial justice.’” AUCRA timely appealed.
III. ASSIGNMENTS OF ERROR
AUCRA asserts, restated and renumbered, that the district
court erred in finding that (1) it lacked personal jurisdiction
over E.M. Pizza under Nebraska’s long-arm statute and (2) it
- 911 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
lacked personal jurisdiction over E.M. Pizza under the Choice
of Forum Act.
IV. STANDARD OF REVIEW
[1] When reviewing an order dismissing a party from a case
for lack of personal jurisdiction under § 6-1112(b)(2), an appel-
late court examines the question of whether the nonmoving
party has established a prima facie case of personal jurisdiction
de novo. Nimmer v. Giga Entertainment Media, 298 Neb. 630,
905 N.W.2d 523 (2018).
[2] In reviewing the grant of a motion to dismiss, an appel-
late court must look at the facts in the light most favorable to
the nonmoving party and resolve all factual conflicts in favor
of that party. Id.
V. ANALYSIS
AUCRA asserts that the Nebraska courts can exercise per-
sonal jurisdiction over E.M. Pizza under both the long-arm
statute and the Choice of Forum Act. We analyze each of these
in turn starting with the long-arm statute, because the Choice
of Forum Act, by its terms, applies only when Nebraska courts
would have no jurisdiction but for the fact that the parties have
consented to its exercise by the choice-of-forum agreement.
See, § 25-414; Ameritas Invest. Corp. v. McKinney, 269 Neb.
564, 694 N.W.2d 191 (2005).
1. Nebraska’s Long-A rm Statute
[3,4] When determining whether a court has personal juris-
diction over a party, it must first determine whether a state’s
long-arm statute is satisfied, and if the long-arm statute is sat-
isfied, whether minimum contacts exist between the defendant
and the forum state for personal jurisdiction over the defendant
without offending due process. See RFD-TV v. WildOpenWest
Finance, 288 Neb. 318, 849 N.W.2d 107 (2014). Nebraska’s
long-arm statute, § 25-536, provides that a court may exer-
cise personal jurisdiction over a person who has any contact
with or maintains any relation to this state to afford a basis
- 912 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
for the exercise of personal jurisdiction consistent with the
Constitution of the United States. VKGS v. Planet Bingo, 285
Neb. 599, 828 N.W.2d 168 (2013). It was the intention of the
Legislature to provide for the broadest allowable jurisdiction
over nonresidents under Nebraska’s long-arm statute. Id. Thus,
when a state construes its long-arm statute to confer jurisdic-
tion to the fullest extent permitted by the Due Process Clause,
the inquiry collapses into the single question of whether exer-
cise of personal jurisdiction comports with due process. VKGS
v. Planet Bingo, supra.
[5,6] The Due Process Clause protects an individual’s lib-
erty interest in not being subject to the binding judgments of
a forum with which he or she has established no meaningful
contacts, ties, or relations. Burger King Corp. v. Rudzewicz,
471 U.S. 462, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985). To
subject an out-of-state defendant to personal jurisdiction in
the forum court, due process requires the defendant to have
minimum contacts with the forum state so as not to offend
traditional notions of fair play and substantial justice. VKGS
v. Planet Bingo, supra. Due process is satisfied where the
nonresident defendant’s minimum contacts are such that the
defendant should reasonably anticipate being haled into court
there. See id. Further, whether a forum state court has personal
jurisdiction over a nonresident defendant depends on whether
the defendant’s actions created substantial connections with the
forum state, resulting in the defendant’s purposeful availment
of the forum state’s benefits and protections. Id.
[7,8] A court exercises two types of personal jurisdiction
depending upon the facts and circumstances of the case: gen-
eral personal jurisdiction and specific personal jurisdiction.
Nimmer v. Giga Entertainment Media, 298 Neb. 630, 905
N.W.2d 523 (2018). A court has general personal jurisdiction
over a nonresident defendant if the defendant has engaged in
continuous and systematic business connections with the forum
state. See id. When a court is exercising general personal juris-
diction, the plaintiff’s claim does not have to arise directly
- 913 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
from the defendant’s conduct in the forum state. See id. In the
present case, E.M. Pizza did not engage in continuous and sys-
tematic business connections in Nebraska, and AUCRA does
not appear to assert otherwise. Thus, if the court has personal
jurisdiction over E.M. Pizza, it can be only under specific per-
sonal jurisdiction.
[9] Specific personal jurisdiction arises where the nonresi-
dent defendant’s contacts with the forum state are neither con-
tinuous nor systematic, but the plaintiff’s claim arises from the
defendant’s minimum contacts with the forum. See id. Whether
a forum state court has personal jurisdiction over a nonresident
defendant depends on whether the defendant’s contacts with
the forum state are the result of unilateral acts performed by
someone other than the defendant, or whether the defendant
himself acted in a manner which creates substantial connec-
tions with the forum state. Quality Pork Internat. v. Rupari
Food Servs., 267 Neb. 474, 675 N.W.2d 642 (2004).
[10] If a court determines that a defendant has sufficient
minimum contacts with the forum state, the court must then
weigh the facts of the case to determine whether exercising
personal jurisdiction would comport with fair play and sub-
stantial justice. See VKGS v. Planet Bingo, 285 Neb. 599, 828
N.W.2d 168 (2013).
(a) Evaluation of Minimum Contacts
Here, the district court found that E.M. Pizza had sufficient
minimum contacts with Nebraska; however, it found that it was
not fair and reasonable to exercise personal jurisdiction over
E.M. Pizza. We agree.
E.M. Pizza has sufficient minimum contacts with Nebraska.
It is undisputed that E.M. Pizza is not a Nebraska corporation
and does not have a principal place of business in Nebraska.
It is also undisputed that no representative of E.M. Pizza ever
entered Nebraska for the purpose of negotiating the RPA or
any other related agreement between the parties. However,
E.M. Pizza did, through an agent, submit an application for
- 914 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
insurance to Applied at its office in Omaha. Further, E.M.
Pizza, through its president, executed and faxed a request for
service to Applied in Omaha, allowing Applied to debit E.M.
Pizza’s bank accounts for amounts due under the insurance
program. On behalf of E.M. Pizza, its president additionally
executed and faxed to Applied an executive officer exclusion
form. Moreover, E.M. Pizza submitted monthly payroll reports
to Applied in Omaha and directed all of its customer service
questions to Applied’s office in Omaha.
These contacts are sufficient to satisfy the due process
requirement that a nonresident defendant have minimum con-
tacts with the forum state. E.M. Pizza reached out to Nebraska
to receive workers’ compensation insurance from Applied,
thus purposefully availing itself to the Nebraska courts. E.M.
Pizza’s contacts with Nebraska were not the result of unilateral
acts by anyone other than itself. E.M. Pizza argues that the
minimum contacts found by the district court were not suf-
ficient, primarily because such contacts were not directed at
AUCRA, the plaintiff in this action, but at Applied, AUCRA’s
parent company. However, the fact remains that E.M. Pizza
directed its conduct and contacts to an entity within the state.
The law does not require that a defendant’s conduct be directed
to a specific plaintiff in the forum state; it just requires the
defendant to have such minimum contacts with the forum that
the defendant could reasonably expect to be haled to court in
the forum. See Quality Pork Internat. v. Rupari Food Servs.,
supra (finding that nonresident corporation that transacts busi-
ness with Nebraska corporation through nonresident third party
is subject to personal jurisdiction).
The RPA is an integral part of the workers’ compensation
policy that E.M. Pizza obtained through Applied. As stated by
AUCRA, “[t]his case involves a workers’ compensation pro-
gram under the name and style [EquityComp] offered through
Applied. The [p]rogram provides workers’ compensation
insurance with a risk retention component through Applied’s
captive, AUCRA. The risk retention component is effected
- 915 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
through [an RPA].” Brief for appellant at 7. In order to “effect
the reinsurance/risk sharing component of the [p]rogram,”
E.M. Pizza was required to execute the RPA. Id. at 8. See,
also, Citizens of Humanity v. Applied Underwriters, 299 Neb.
545, 570, 909 N.W.2d 614, 632 (2018) (identifying RPA as
“mandatory component of a program of workers’ compensa-
tion insurance”). Because the RPA was a requirement to obtain
the insurance requested through Applied, it is proper to con-
sider E.M.’s contacts with Applied in determining whether it
could reasonably expect to be haled into court in Nebraska for
an alleged breach of the RPA. Consequently, the district court
was correct in finding that E.M. Pizza had sufficient minimum
contacts with the forum state.
(b) Evaluation of Reasonableness
Having determined that E.M. Pizza has sufficient minimum
contacts with the forum, we next must determine whether
it is fair and reasonable for the forum court to exercise per-
sonal jurisdiction over the nonresident defendant. See VKGS
v. Planet Bingo, 285 Neb. 599, 828 N.W.2d 168 (2013). The
district court determined that it was not fair and reasonable to
exercise personal jurisdiction over E.M. Pizza, and we agree.
[11] When determining whether exercising personal juris-
diction over a nonresident defendant would be fair and reason-
able, a court may consider the burden on the defendant, the
interest of the forum state, the plaintiff’s interest in obtain-
ing relief, the judicial system’s interest in obtaining the most
efficient resolution of controversies, and the shared interest
of the several states in furthering fundamental substantive
social policies. See id. These other considerations sometimes
serve to establish the reasonableness of jurisdiction upon a
lesser showing of minimum contacts than would otherwise be
required. Id.
Here, the district court determined it would not be fair and
reasonable for a Nebraska court to exercise jurisdiction over
E.M. Pizza. First, a Nebraska court exercising jurisdiction over
- 916 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
E.M. Pizza would be required to make a choice of law deter-
mination between Nebraska law and California law. Despite
AUCRA’s arguments to the contrary, a Nebraska court would
likely apply California law to the dispute. It has been held by
courts in both Nebraska and California that the RPA is inextri-
cably intertwined with the underlying insurance contract; thus,
California’s workers’ compensation laws will likely govern the
RPA. See Citizens of Humanity v. Applied Underwriters, supra.
See, also, Citizens of Humanity v. Applied Underwriters, 17 Cal.
App. 5th 806, 226 Cal. Rptr. 3d 1 (2017). A California court
is better positioned than a Nebraska court to apply California’s
complex workers’ compensation laws. Moreover, the RPA or
portions thereof have been found invalid by the California
appellate courts and the California Insurance Commissioner
for several reasons, including the failure to file it and have
it approved by the California Insurance Department before it
was issued. See Nielsen Contracting v. Applied Underwriters,
22 Cal. App. 5th 1096, 232 Cal. Rptr. 3d 282 (2018) (identify-
ing Insurance Commissioner’s administrative decision Shasta
Linen Supply, Inc. v. California Insurance Commission, file
No. AHB-WCA-14-13 (Cal. Ins. Commr. June 22, 2016),
finding RPA invalid), and Citizens of Humanity v. Applied
Underwriters, 17 Cal. App. 5th 806, 226 Cal. Rptr. 3d 1
(2017). Thus, California has a significant interest in continu-
ing to oversee cases involving this RPA. While the California
decisions are not binding on this court, they are persuasive.
A Nebraska court exercising jurisdiction under a similar RPA
would not further fundamental substantive social policies, nor
would it further the judicial system’s interest in obtaining the
most efficient resolution of the controversy.
Second, California has a substantially greater interest in han-
dling the dispute than does Nebraska. The underlying contract
provides workers’ compensation insurance for a California
employer to be provided to California employees. California
courts certainly have a strong interest in hearing disputes con-
cerning California employers and California employees. The
- 917 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
affidavit of E.M. Pizza’s president stated that E.M. Pizza pur-
chased the workers’ compensation policy and ancillary docu-
ments through a broker in California. At no time did anyone
associated with E.M. Pizza speak or communicate with anyone
in Nebraska. While obtaining insurance through a California
agent from a Nebraska corporation was sufficient to create
minimum contacts with Nebraska, it is not enough to make it
fair and reasonable for a Nebraska court to exercise personal
jurisdiction over E.M. Pizza. Moreover, E.M. Pizza has no
employees or offices in Nebraska and is not authorized to
conduct business in Nebraska; nor has it caused any tortious
injury in Nebraska. Although Nebraska does have an interest in
providing a forum for Nebraska corporations to seek redress,
the judicial system’s interest in obtaining the most efficient
resolution of the controversy and the shared interest of the
several states in furthering fundamental substantive social poli-
cies both strongly favor California as the appropriate forum for
this action.
The district court was correct in determining that it did not
have personal jurisdiction over E.M. Pizza, because despite
E.M. Pizza’s sufficient minimum contacts with Nebraska, it
would not be fair and reasonable to exercise personal jurisdic-
tion under Nebraska’s long-arm statute.
2. Choice of Forum Act
We turn next to the question of whether the facts establish
a prima facie showing that the forum selection clause confers
personal jurisdiction over E.M. Pizza in Nebraska. We con-
clude that they do not.
Paragraph 13(B) of the RPA states:
Any legal suit . . . must only be instituted in the federal
courts of the United States of America or the courts of the
State of Nebraska, in each case located in Omaha and the
county of Douglas, and each party irrevocably submits to
the exclusive jurisdiction of such courts in any such suit,
action or proceeding.
- 918 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
[12] Whether the above clause provides a Nebraska court
with jurisdiction is analyzed under the Choice of Forum Act,
specifically § 25-414, which states in part:
(1) If the parties have agreed in writing that an action
on a controversy may be brought in this state and the
agreement provides the only basis for the exercise of
jurisdiction, a court of this state will entertain the action
if (a) the court has power under the law of this state to
entertain the action; (b) this state is a reasonably conve-
nient place for the trial of the action; (c) the agreement as
to the place of the action was not obtained by misrepre-
sentation, duress, the abuse of economic power, or other
unconscionable means; and (d) the defendant, if within
the state, was served as required by law of this state in
the case of persons within the state or, if without the state,
was served either personally or by certified mail directed
to his last-known address.
(Emphasis supplied.) Where a choice-of-forum clause is a
necessary component of the court’s exercise of personal juris-
diction, then the court would have no jurisdiction but for
the fact that the parties have consented to its exercise by
the choice-of-forum agreement, and the standards contained
in the Choice of Forum Act apply. Ameritas Invest. Corp. v.
McKinney, 269 Neb. 564, 694 N.W.2d 191 (2005).
Here, because a Nebraska court does not have jurisdic-
tion over E.M. Pizza under Nebraska’s long-arm statute,
the only basis for jurisdiction is the forum selection clause,
which must be valid under § 25-414. The district court
found, and the parties agree, that subsections (a), (c), or (d)
of § 25-414(1) were not in dispute. The dispute involved
§ 25-414(1)(b), which requires a finding that “this state is a
reasonably convenient place for the trial of the action.” Our
Supreme Court has held that considerations relevant to the
forum non conveniens doctrine are appropriate to aid in the
construction of this section. See Ameritas Invest. Corp. v.
McKinney, supra.
- 919 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
[13] A plaintiff’s choice of a forum should not be overturned
except for “‘weighty reasons,’” and only when trial in the cho-
sen 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. Id.
at 574, 694 N.W.2d at 202. When determining whether to dis-
rupt a plaintiff’s choice of forum, a trial court should consider
practical factors that make trial of the case easy, expeditious,
and inexpensive, such as the relative ease of access to sources
of proof, the cost of obtaining attendance of witnesses, and the
ability to secure attendance of witnesses through compulsory
process. Ameritas Invest. Corp. v. McKinney, supra. However,
it 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. Id.
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 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
- 920 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
is at home with the law. Id. These public interest factors are
consistent with the factors the Nebraska Supreme Court identi-
fied in Ameritas Invest. Corp. v. McKinney, 269 Neb. 564, 694
N.W.2d 191 (2005).
Here, the district court applied the standard set forth in
Ameritas Invest. Corp. v. McKinney, supra, and stated that it
did “not see that there would be any greater disadvantage or
substantially more inconvenience for [E.M. Pizza] to have to
defend this case in Nebraska than there would be for [AUCRA]
to have to pursue its cause of action against [E.M. Pizza] in the
State of California.” This is a correct analysis of the private
factors to be weighed in determining whether this state is a
reasonably convenient place for the trial of the action. AUCRA
argues that once the court made this determination, it should
have found personal jurisdiction under the forum selection
clause. We disagree.
[14] We read Ameritas Invest. Corp. v. McKinney, supra, and
Atlantic Marine Constr. Co. v. United States Dist. Court for
Western Dist. of Tex., supra, to require courts to consider both
private and public interest factors when determining whether
this state is a reasonably convenient place for the trial of the
action under § 25-414(1)(b). This is what the district court did,
albeit under the verbiage of “‘fair play and substantial jus-
tice.’” In doing so, the district court concluded that 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. We agree.
As set out above, 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 § 25-414(1)(b). As
stated by Professor Larson in his treatise on workers’ compen-
sation law, due to the complexity of workers’ compensation
- 921 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
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 work-
ers’ 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 in the Nebraska courts, which
consume this State’s judicial resources.
We find, on our de novo review of the record, that AUCRA
did not make a prima facie showing of jurisdiction and that the
district court did not err in granting E.M Pizza’s motion to dis-
miss. Although each party would be equally burdened regard-
less of the forum chosen, the fact that a Nebraska court would
be required to apply California workers’ compensation laws to
a dispute that primarily affects California workers necessitates
that AUCRA’s forum selection clause be disregarded. Under
§ 25-414, Nebraska does not have to be the most convenient
forum, but it must be a reasonably convenient forum, and we
determine that it is not.
Although E.M. Pizza argues that the entire RPA is void and
unenforceable, the Nebraska Supreme Court recently exam-
ined an arbitration provision found in a similar RPA involving
AUCRA. See Citizens of Humanity v. Applied Underwriters,
299 Neb. 545, 909 N.W.2d 614 (2018). The Supreme Court
found that the arbitration provision was unenforceable under
Nebraska insurance law; however, it did not strike down the
RPA as a whole. Id. Thus, we confine our analysis to the valid-
ity of the forum selection clause and leave the validity of the
RPA for another day.
[15] Finally, AUCRA argues that if we find the district
court did not err in dismissing the complaint, it should have
- 922 -
Nebraska Court of A ppeals A dvance Sheets
26 Nebraska A ppellate R eports
APPLIED UNDERWRITERS v. E.M. PIZZA
Cite as 26 Neb. Ct. App. 906
done so without prejudice. However, AUCRA did not assign
this as error. Errors must be both assigned and argued to be
addressed by an appellate court. See Priesner v. Starry, 300
Neb. 81, 912 N.W.2d 249 (2018). Therefore, we do not address
this argument.
VI. CONCLUSION
The district court did not err in granting E.M. Pizza’s motion
to dismiss, because the Nebraska courts do not have jurisdic-
tion under Nebraska’s long-arm statute and AUCRA did not
present a prima facie basis for personal jurisdiction under the
Choice of Forum Act. We therefore affirm the order of the dis-
trict court.
A ffirmed.