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

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
05/31/2019 08:07 AM CDT
- 769 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769Ronald J. Palagi, P.C., LLC, and Edrie A rlene
Wheat, appellants, v. Prospect Funding
Holdings (NY), LLC, appellee.
___ N.W.2d ___
Filed April 5, 2019. No. S-18-193.
1. Judgments: Arbitration and Award: Federal Acts: Appeal and
Error. In reviewing a decision to vacate, modify, or confirm an arbi-
tration award under the Federal Arbitration Act, 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. Summary Judgment. Summary judgment is proper when the pleadings
and evidence admitted at the hearing disclose no genuine issue regard-
ing any material fact or the ultimate inferences that may be drawn from
those facts and that the moving party is entitled to judgment as a matter
of law.
3. Summary Judgment: Appeal and Error. In reviewing a summary
judgment, an appellate court views the evidence in the light most
favorable to the party against whom the judgment is granted and gives
such party the benefit of all reasonable inferences deducible from
the evidence.
4. Arbitration and Award: Federal Acts: Contracts. Arbitration in
Nebraska is governed by the Federal Arbitration Act if it arises from
a contract involving interstate commerce; otherwise, it is governed by
Nebraska’s Uniform Arbitration Act.
5. Arbitration and Award: Federal Acts: Statutes: Contracts. When
determining if an arbitration clause is governed by Nebraska’s Uniform
Arbitration Act or the Federal Arbitration Act, the initial question is
whether the parties’ contract evidences a transaction “involving com-
merce” as defined by the Federal Arbitration Act.
6. Arbitration and Award: Contracts: Motions to Vacate. When arbi-
tration has already occurred and a party seeks to vacate, modify, or
- 770 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769confirm an award, a court’s role is limited by the act governing the
agreement.
7. Summary Judgment: Motions for Continuance: Affidavits. Neb. Rev.
Stat. § 25-1335 (Reissue 2016) provides a safeguard against an improvi-
dent or premature grant of summary judgment.
8. ____: ____: ____. As a prerequisite for a continuance, or additional
time or other relief under Neb. Rev. Stat. § 25-1335 (Reissue 2016), a
party must submit an affidavit stating a reasonable excuse or good cause
for the party’s inability to oppose a summary judgment motion. Such
affidavits should specifically identify the relevant information that will
be obtained with additional time and indicate some basis for the conclu-
sion that the sought information actually exists.
Appeal from the District Court for Douglas County: Leigh
A nn R etelsdorf, Judge. Affirmed.
Ronald J. Palagi and Donna S. Colley, of Law Offices of
Ronald J. Palagi, P.C., L.L.C., for appellants.
Adam W. Barney, of Cline, Williams, Wright, Johnson &
Oldfather, L.L.P., for appellee.
Heavican, C.J., Cassel, Stacy, Funke, and Freudenberg, JJ.,
and Pirtle and Bishop, Judges.
Stacy, J.
After selling an interest in her personal injury claim to
Prospect Funding Holdings (NY), LLC (Prospect), Edrie
Arlene Wheat settled her claim. Thereafter, a dispute arose
over the amount due Prospect. Prospect initiated arbitration
proceedings against Wheat and the law firm representing
her, identified in this case as Ronald J. Palagi, P.C., LLC
(Palagi). Neither Wheat nor Palagi participated in the arbi-
trations, and awards were eventually entered against each
of them in favor of Prospect. Wheat and Palagi brought this
interpleader action against Prospect in the district court for
Douglas County, but did not seek to vacate, modify, or cor-
rect the arbitration awards. Prospect filed a motion to confirm
the arbitration awards and a motion for summary judgment,
- 771 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769and the district court granted both. Wheat and Palagi appeal.
We affirm.
BACKGROUND
Agreement
At all relevant times, Palagi represented Wheat in connection
with her personal injury claim. On July 5, 2016, with Palagi’s
knowledge, Wheat and Prospect entered into what was cap-
tioned a “Sale and Repurchase Agreement.” Under that agree-
ment, Wheat sold Prospect the rights to any sums recovered on
her personal injury claim, up to $23,120, in exchange for a net
payment of $5,000. The agreement included a “[r]epurchase
[s]chedule” which allowed Wheat to repurchase the proceeds
of her claim for a set amount that increased every 6 months,
up through January 1, 2020. The repurchase schedule applied
a 60-percent annual percentage rate. As relevant here, Wheat
could have repurchased the proceeds of her claim on or before
January 1, 2017, for $8,840.
In the event of a breach, the agreement called for liqui-
dated damages “in the amount of twice the prospect owner-
ship amount regardless of the outcome of the legal claim
or the amount of the proceeds. In addition, [the] breaching
party shall pay for all collection costs, including reasonable
attorney’s fees and expenses of [the] non-breaching party.”
The agreement also contained an arbitration provision which
expressly referenced the Federal Arbitration Act (FAA)1 and
provided in relevant part:
The parties waive the right to trial by jury and waive
any right to pursue disputes on a class wide basis in
any action or proceeding instituted with respect to this
agreement. The parties agree that the issue of arbitra-
bility shall be decided by the arbitrator and not by any
other person. That is, the question of whether a dispute
itself is subject to arbitration shall be decided solely by
1
9 U.S.C. §§ 1 through 16 (2012).
- 772 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769the arbitrator and not, for example, by any court. In so
doing, the intent of the parties is to divest any and all
courts of jurisdiction in disputes involving the parties,
except for the confirmation of the award and enforce-
ment. The [FAA] applies to this agreement and arbi-
tration provision. We each agree that the FAA’s provi-
sions—not state law—govern all questions of whether a
dispute is subject to arbitration. Any dispute or disagree-
ment between these parties arising under this agreement
or otherwise of any nature whatsoever including, but
not limited to, those sounding in constitutional, statu-
tory, or common law theories as to the performance of
any obligations, the satisfaction of any rights, and/or the
enforceability hereof, shall be resolved through demand
by any party and/or interested party to arbitrate the dis-
pute in New York in and under the laws of the State of
New York and shall submit the same to a neutral arbi-
tration association for resolution pursuant to its single
arbitrator, expedited rules. . . . The arbitration decision
shall be final and binding in all respects and shall be
non-appealable. Any person may have a court of compe-
tent jurisdiction confirm the arbitration award as a judg-
ment of such court and enter into its record the findings
of such arbitrators for all purposes, including for the
enforcement of the award. The prevailing party in any
dispute shall be entitled to all reasonable attorneys’ fees
and costs, expenses and disbursements with respect to
such dispute.
The agreement, which was signed by Wheat as the “seller”
and a Prospect representative as the “purchaser,” included the
following paragraph which was signed by Palagi:
[Palagi] hereby certifies to [Prospect] that [Palagi] has
reviewed the terms and conditions of this Sales [sic] and
Repurchase Agreement and explained such terms and
conditions to [Wheat], including all costs and fees and
including [Wheat’s] ability to repurchase the Prospect
- 773 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769Ownership Amount according to the Repurchase Schedule
and Amount of Repurchase. I have a written fee agree-
ment with [Wheat] to pay my fees contingent on the
outcome of the case. I agree that all disputes regarding
this agreement will be resolved via arbitration and I have
explained this to [Wheat]. All proceeds of the legal claim
will be disbursed via the attorney’s trust account and the
attorney is following the written instructions of [Wheat]
with regard to this Sale and Repurchase Agreement, and
Irrevocable Letter of Directions which [the] attorney has
acknowledged.
When Wheat signed the agreement, she also signed an
“Irrevocable Letter of Direction” addressed to Palagi. This
letter generally instructed Palagi, after payment of all legal
fees, to disburse any recovery amounts to Prospect up to the
amount covered in the contract before disbursing the remainder
to Wheat. The letter also directed that if any dispute arose as
to the amount owed to Prospect, Palagi was to pay the non-
disputed amount to Prospect and hold the disputed amount
in his client trust account until the dispute was resolved
through arbitration. The letter included an attorney acknowl-
edgment of all instructions contained therein, and Palagi signed
that acknowledgment.
Settlement
In December 2016, Wheat settled her personal injury claim
for an amount which is not disclosed in the record. Palagi set
aside $8,840 of the settlement proceeds—an amount equal to
the repurchase amount at that time—in his client trust account
and disbursed the remainder of the settlement funds. The
record is unclear regarding any attempts made by Wheat or
Palagi thereafter to repurchase the proceeds under the terms of
the agreement. However, once Prospect learned it would not
be paid the full amount due under the agreement, it initiated
separate arbitration proceedings—one against Palagi and the
other against Wheat.
- 774 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769A rbitration Proceedings
and Award
After arbitration proceedings were initiated, “Arbitration
Resolution Services” sent an email to Wheat, advising that
Prospect had initiated arbitration proceedings and that Wheat
“ha[d] failed to sign into the [arbitrator’s] website and ver-
ify [her] participation in the arbitration.” The email warned,
“Unless you do so by Feb[.] 02, 2017, the arbitration will pro-
ceed without your involvement and an arbitration award may
be entered against you.” An attorney with the Palagi law firm
responded to this email, arguing generally that the agreement
was void under Nebraska law. Neither Wheat nor Palagi oth-
erwise participated in the arbitrations, and they were found by
the arbitrator to have provided “no response.”
On June 8, 2017, the arbitrator issued an award in favor of
Prospect and against Palagi in the sum of $23,120. Thereafter,
on August 3, 2017, the arbitrator issued an award in favor
of Prospect and against Wheat in the sum of $46,240, a
sum that represented the amount of liquidated damages due
under the agreement. The arbitrator found the agreement
between Wheat and Prospect was valid and enforceable and
had been breached.
Interpleader Action
Eight days after the first arbitration award was issued,
Wheat, still represented by Palagi, filed what was styled an
interpleader action in the district court for Douglas County.
The complaint alleged Palagi was in possession of $8,840
to which both Wheat and Prospect claimed entitlement. The
complaint also alleged the agreement between Wheat and
Prospect was invalid and unenforceable for a variety of rea-
sons, including that Prospect was not registered to trans-
act business in Nebraska, the agreement did not comply
with Nebraska’s Nonrecourse Civil Litigation Act,2 and the
2
Neb. Rev. Stat. §§ 25-3301 to 25-3309 (Reissue 2016).
- 775 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769interest rate charged was usurious. The complaint requested
an order directing the disputed sums to be deposited with the
court pending further determination of the proper allocation
of the funds, and also asking the court to determine the valid-
ity of the agreement and enjoin Prospect’s collection efforts
in the meantime. Palagi amended the complaint on June 27,
2017, to include the Palagi law firm as a party plaintiff and
filed a second amended complaint on November 16 to cor-
rect Prospect’s legal name. Neither the original, amended, nor
second amended complaint mentioned the arbitration proceed-
ings, and none requested the awards be vacated, modified,
or corrected.
On November 20, 2017, Prospect filed an answer raising
the affirmative defense of “[a]rbitration and [a]ward” and, in
a counterclaim, seeking judicial confirmation of the arbitration
awards. At the same time, Prospect filed a motion to confirm
the arbitration awards pursuant to 9 U.S.C. § 9 of the FAA.
Prospect also moved for summary judgment on the amended
complaint, arguing that there was no genuine issue of material
fact and that Prospect was entitled to judgment as a matter of
law on its affirmative defense of arbitration and award.
A hearing on Prospect’s motions was held January 22, 2018.
Prospect offered an affidavit which included the agreement, the
arbitration notices, and the arbitration awards. This evidence
was received without objection, and no evidence was offered in
opposition. Neither Wheat nor Palagi argued they lacked notice
of the arbitration proceedings or awards.
During the hearing, the judge observed that the operative
complaint appeared to be focused on rescinding or voiding
the agreement, remarking, “I’m concerned . . . about why the
arbitration award was not addressed within the appropriate
time frame.” Wheat’s counsel responded it was the plaintiffs’
position that “the overall contract . . . was void” and that there-
fore, Prospect “could not go forward with arbitration on a void
contract.” The court received the parties’ briefing and took the
motions under advisement.
- 776 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769Seven days later, while the motions were still under submis-
sion, Palagi filed a motion to withdraw as Wheat’s counsel,
citing a conflict of interest. At the same time, Wheat and Palagi
filed a motion seeking leave to further amend their complaint
“to make it clear that [Wheat and Palagi have] been and [are]
moving the Court to vacate, modify or correct the arbitration
award as described in the [FAA].” The motion for leave to
amend was noticed for hearing on February 13, 2018, but did
not ask the court to defer ruling on Prospect’s motions for con-
firmation and summary judgment.
On February 2, 2018, the district court entered an order
granting Prospect’s motion to confirm the arbitration awards
and also granting Prospect’s motion for summary judgment.
The court found the agreement was governed by the FAA, rea-
soning that it involved interstate commerce and that the parties
had expressly agreed the FAA would apply. The court went on
to hold:
[Wheat and Palagi] do not contend that they sought to
vacate, modify, or correct the arbitration award within
the three months provided by the FAA. Instead, [they]
argue that there is a genuine issue of material fact as to
whether the . . . [a]greement is void under Nebraska law.
However, attempts to challenge the arbitration awards
are required to have been filed within three months of
the awards. [Wheat and Palagi] did not do so. [Their]
Complaint ignores the arbitration clause and awards in
their entirety. [They] did not seek to have the arbitration
awards set aside within the time limits prescribed by the
FAA. They have waived any defenses to enforcement of
the arbitration awards and the arbitration awards are sub-
ject to confirmation.
The court thus granted both the motion to confirm and the
motion for summary judgment on the operative complaint. The
court’s February 2 order provided:
[Prospect’s] Motion to Confirm Arbitration Awards and
Motion for Summary Judgment are granted. The Court
- 777 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769orders that judgment be entered in the amount of $46,240
in favor of Prospect . . . and against Wheat and in
the amount of $23,140 in favor of Prospect . . . and
against Palagi. [Prospect’s] motion for summary judgment
on [Wheat and Palagi’s] claim is granted. [Wheat and
Palagi’s] claim is dismissed with prejudice.
The February 2, 2018, order did not address Palagi’s pend-
ing motion to withdraw as Wheat’s counsel or the pending
motion to further amend the complaint, neither of which had
yet proceeded to hearing. But 11 days later, on February 13,
a hearing on both these motions was held as originally sched-
uled. At that hearing, Wheat and Palagi also moved the court to
alter or amend the February 2 judgment.
In an order entered February 15, 2018, the district court
overruled all pending motions. It overruled the motion to
amend the complaint, finding that the proposed amendment
would not create a triable issue of fact. It overruled the motion
to alter or amend the judgment entered February 2, reasoning
the motion was not brought within 10 days as required by Neb.
Rev. Stat. § 25-1329 (Reissue 2016). And it found Palagi’s
motion to withdraw was moot because the case was effec-
tively concluded.
A timely notice of appeal was filed, and we moved the case
to our docket on our own motion.
ASSIGNMENTS OF ERROR
Wheat and Palagi assign, restated, that the trial court erred
in (1) granting Prospect’s motion for summary judgment before
discovery was concluded and (2) failing to find the agree-
ment was invalid and unenforceable for any of the following
reasons: (a) Prospect was not properly registered to transact
business in Nebraska, (b) the agreement is usurious and vio-
lates Neb. Rev. Stat. § 45-105 (Reissue 2010), (c) the agree-
ment’s liquidated damages provision violates public policy,
(d) the agreement does not comply with the Nonrecourse Civil
- 778 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769Litigation Act,3 and (e) the agreement is champertous and vio-
lates public policy.
STANDARD OF REVIEW
[1] In reviewing a decision to vacate, modify, or confirm an
arbitration award under the FAA, an appellate court is obligated
to reach a conclusion independent of the trial court’s ruling as
to questions of law.4 However, the trial court’s factual findings
will not be set aside on appeal unless clearly erroneous.5
[2,3] Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue
regarding any material fact or the ultimate inferences that may
be drawn from those facts and that the moving party is entitled
to judgment as a matter of law.6 In reviewing a summary judg-
ment, an appellate court views the evidence in the light most
favorable to the party against whom the judgment is granted
and gives such party the benefit of all reasonable inferences
deducible from the evidence.7
ANALYSIS
[4] Before addressing the arbitration issues raised by the
parties, we must decide whether our analysis is governed by
Nebraska’s Uniform Arbitration Act (UAA), or by the FAA.
Arbitration in Nebraska is governed by the FAA if it arises
from a contract involving interstate commerce; otherwise, it is
governed by the UAA.8
[5] When determining if an arbitration clause is governed by
the UAA or the FAA, the initial question is whether the parties’
3
See §§ 25-3301 to 25-3309.
4
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 115 S. Ct. 1920,
131 L. Ed. 2d 985 (1995).
5
Id.6
Colwell v. Mullen, 301 Neb. 408, 918 N.W.2d 858 (2018).
7
Id.8
State v. Henderson, 277 Neb. 240, 762 N.W.2d 1 (2009).
- 779 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769contract evidences a transaction “‘“involving commerce”’” as
defined by the FAA.9 That is because the FAA applies to any
“written provision in . . . a contract evidencing a transaction
involving commerce.”10
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.”11 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 rep-
resent a general practice subject to federal control, the same
must be said for application of the FAA.12 This concept was
reinforced by the Court in Citizens Bank v. Alafabco, Inc.,13
which held the FAA applies “if in the aggregate the economic
activity in question would . . . bear on interstate commerce in
a substantial way.”
In the instant case, we agree with the district court that the
FAA governs the parties’ agreement. Neither party argues to
the contrary. The parties specifically contracted for the FAA to
apply, and “[n]o elaborate explanation is needed . . .”14 to show
that an agreement between a foreign company and a Nebraska
resident to purchase rights involving personal injury settlement
funds affects interstate commerce.
9
Wilczewski v. Charter West Nat. Bank, 295 Neb. 254, 260, 889 N.W.2d 63,
68 (2016) (quoting Aramark Uniform & Career Apparel v. Hunan, Inc.,
276 Neb. 700, 757 N.W.2d 205 (2008), quoting 9 U.S.C. § 2).
10
9 U.S.C. § 2.
11
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)).
12
Wilczewski, supra note 9.
13
Citizens Bank, supra note 11, 539 U.S. at 57.
14
Id., 539 U.S. at 58. See, also, Wilczewski, supra note 9.
- 780 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769We thus consider the issues raised in this appeal within
the framework of the FAA. We first consider the challenges
to the validity and enforceability of the agreement and then
address the argument that summary judgment was entered
prematurely.
Judicial Confirmation
In all but their first assignment of error, Wheat and Palagi
argue the underlying agreement between Wheat and Prospect
was invalid and unenforceable. They assert a number of rea-
sons why the agreement was unenforceable, only some of
which were presented to the district court. Due to the proce-
dural posture of this case, we do not address the merits of any
of these arguments because, as explained below, the validity
and enforceability of the underlying agreement was not before
the district court on the motion to confirm arbitration.
This is not a case in which the district court was asked
to consider the enforceability of the arbitration provisions
in the context of a motion to compel arbitration or a request
to stay litigation pending arbitration. Instead, as the district
court found, the arbitration agreement was not mentioned
at all in this case until after the arbitration proceedings had
been completed and awards had been entered. Given that
procedural posture, the court’s role regarding the arbitration
was limited.
[6] When arbitration has already occurred and a party seeks
to vacate, modify, or confirm an award, a court’s role is limited
by the act governing the agreement.15 Where, as here, the FAA
governs the agreement, the court’s role is strictly confined by
9 U.S.C. §§ 9 through 11 of that act.16 As the U.S. Supreme
Court has explained, 9 U.S.C. §§ 10 and 11 provide the exclu-
sive regimes of judicial review for agreements governed by
15
See Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U.S. 576, 128 S.
Ct. 1396, 170 L. Ed. 2d 254 (2008).
16
Id.- 781 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769the FAA.17 And motions to vacate, modify, or correct an award
pursuant to §§ 10 or 11 are governed by 9 U.S.C. § 12, which
states in part that “[n]otice of a motion to vacate, modify,
or correct an award must be served upon the adverse party
or his attorney within three months after the award is filed
or delivered.”
The second amended complaint was filed November 16,
2017, several months after the arbitration awards were issued,
yet it did not mention the arbitration proceedings or seek to
modify, correct, or vacate the awards. Neither the original
complaint, the amended complaint, nor the second amended
complaint mentioned the arbitration proceedings at all, and
none sought any relief related to the arbitration proceedings.
Instead, the first time arbitration was raised in this liti-
gation was on November 20, 2017, when Prospect filed
its answer alleging the arbitration awards as an affirmative
defense and simultaneously moved to confirm the awards
and moved for summary judgment on the interpleader com-
plaint. By this time, the 3-month time limit for moving to
judicially vacate, modify, or correct the arbitration awards had
lapsed, and no one contends otherwise. Rather than moving to
vacate the arbitration awards, Wheat and Palagi continued to
focus their efforts on litigating the validity and enforceabil-
ity of the overall agreement. Eventually, while the motions
to confirm the awards and grant summary judgment were
under submission, Wheat and Palagi sought leave to amend
their operative complaint to include a request to vacate the
arbitration awards, but the district court denied such amend-
ment as futile, and no error has been assigned to that ruling
on appeal.
If Wheat and Palagi had filed a timely motion to vacate the
awards, the legal analysis required by the district court would
have been different. But this case does not require analysis
17
Id.- 782 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769of whether any grounds exist for vacating the awards against
Wheat and Palagi, because there has been no timely motion
seeking such relief. As such, the district court correctly found
it was constrained by § 9 of the FAA, which states in rel-
evant part:
[A]t any time within one year after the award is made any
party to the arbitration may apply to the court so speci-
fied for an order confirming the award, and thereupon
the court must grant such an order unless the award is
vacated, modified, or corrected as prescribed in sections
10 and 11 of this title.
The U.S. Supreme Court has said § 9 “carries no hint of
flexibility.”18 It has explained that pursuant to § 9:
On application for an order confirming the arbitration
award, the court “must grant” the order “unless the award
is vacated, modified, or corrected as prescribed in sec-
tions 10 and 11 of this title.” There is nothing malleable
about “must grant,” which unequivocally tells courts to
grant confirmation in all cases, except when one of the
“prescribed” exceptions applies.19
Thus, when Prospect moved to confirm the arbitration awards,
the district court was required to grant that motion “unless the
award is vacated, modified, or corrected as prescribed in sec-
tions 10 and 11 of this title.”20
In Hartman v. City of Grand Island,21 a case governed by the
UAA, we considered similar circumstances. There, we affirmed
a district court order confirming an arbitration award where the
party opposing the confirmation had not filed a timely motion
to vacate, modify, or correct the award as permitted under the
UAA. We noted the limited role of the court was to confirm
18
Hall Street Associates, L. L. C., supra note 15, 552 U.S. at 587.
19
Id.20
9 U.S.C. § 9.
21
Hartman v. City of Grand Island, 265 Neb. 433, 657 N.W.2d 641 (2003).
- 783 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769the award under such circumstances,22 and we did not address
the merits of challenges being raised to the validity or enforce-
ability of the award. We explained that where arbitration is
concerned, “‘“the courts are not equipped to provide the same
judicial review given to structured judgments defined by pro-
cedural rules and legal principles. Parties should be aware that
they get what they bargain for and that arbitration is far different
from adjudication.”’”23
Similar provisions under the FAA required the district court
to confirm the arbitration awards when no timely motion to
vacate, modify, or correct the awards had been filed.24 On this
record, the district court correctly found that Prospect was
entitled to confirmation of the arbitration awards, and no error
has been assigned to that confirmation on appeal.
Instead, Wheat and Palagi’s assignments of error focus on
a myriad of legal challenges to the validity and enforceability
of the underlying agreement. But they ignore that these issues
have already been resolved against them in binding arbitra-
tion, and they did not thereafter seek to vacate, modify, or
correct the arbitration award within the time period permitted
under the FAA. Given the procedural posture of this case, the
assignments of error raised by Wheat and Palagi challenging
the validity and enforceability of the underlying agreement
lack merit and are premised on a fundamental misunderstand-
ing 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.
22
Id. at 437, 657 N.W.2d at 645 (“‘[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,’” quoting Neb. Rev. Stat. § 25-2612(Reissue 2016)).
23
Id. at 437-38, 657 N.W.2d at 645-46.
24
9 U.S.C. § 9.
- 784 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769Summary Judgment Was
Not Premature
In their remaining assignment of error, Wheat and Palagi
claim the district court erred in granting summary judgment
before discovery had been completed. They argue generally
that the motion was ruled on before they had “the opportu-
nity to complete reasonable, relevant discovery,”25 but they
do not identify what discovery was incomplete or otherwise
challenge the granting of summary judgment. We confine our
analysis accordingly.
[7] Neb. Rev. Stat. § 25-1335 (Reissue 2016) provides a
safeguard against an improvident or premature grant of sum-
mary judgment,26 but Wheat and Palagi did not, at any time
before the court ruled on the summary judgment motion, seek
to invoke the protections of that statute, which provides:
Should it appear from the affidavits of a party oppos-
ing the motion that he cannot for reasons stated present
by affidavit facts essential to justify his opposition, the
court may refuse the application for judgment or may
order a continuance to permit affidavits to be obtained
or depositions to be taken or discovery to be had or may
make such other order as is just.
[8] We have explained that “[a]s a prerequisite for a con-
tinuance, or additional time or other relief, a party is required
to submit an affidavit stating a reasonable excuse or good
cause for the party’s inability to oppose a summary judgment
motion.”27 Such affidavits should specifically identify the rel-
evant information that will be obtained with additional time
and indicate some basis for the conclusion that the sought
information actually exists.28
25
Brief for appellants at 6.
26
See Lombardo v. Sedlacek, 299 Neb. 400, 908 N.W.2d 630 (2018).
27
Gaytan v. Wal-Mart, 289 Neb. 49, 55-56, 853 N.W.2d 181, 191 (2014).
28
Lombardo, supra note 26.
- 785 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
RONALD J. PALAGI, P.C. v. PROSPECT FUNDING HOLDINGS
Cite as 302 Neb. 769Here, no such motion or showing was made before Prospect’s
motion for summary judgment was submitted to and ruled on
by the district court. We can find no abuse of discretion in
failing to grant a continuance that was never requested. This
assignment of error is meritless.
CONCLUSION
Wheat and Palagi assert assignments of error challeng-
ing the validity and enforceability of the agreement between
Wheat and Prospect. But the validity and enforceability of that
agreement was determined in binding arbitration. Wheat and
Palagi did not participate in the arbitration or ask the district
court to enjoin the arbitration, and once awards were entered
against them, they did not move to vacate, modify, or correct
those awards within the time permitted by the FAA. As such,
when Prospect moved to confirm the arbitration awards under
§ 9 of the FAA, the district court was required by the FAA to
do so. Finding no merit to the assignments of error, we affirm
the judgment of the district court.
A ffirmed.
Miller-Lerman and Papik, JJ., not participating.