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Frohberg Electric Co. Inc. v. Grossenburg Implement, Inc.

Supreme Court of Nebraska

July 28, 2017

FROHBERG ELECTRIC COMPANY, INC., A NEBRASKA CORPORATION, APPELLEE,
v.
GROSSENBURG IMPLEMENT, INC., A NEBRASKA CORPORATION, AND KIEHM CONSTRUCTION, INCNC., A MINNNNESOTA CORPORATION, APPELLANTS.

         1. Contracts. The meaning of a contract and whether a contract is ambiguous are questions of law.

         2. Arbitration and Award. Arbitrability presents a question of law.

         3. Judgments: Appeal and Error. When reviewing questions of law, an appellate court resolves the questions independently of the lower court's conclusions.

         4. Arbitration and Award: Contracts: Appeal and Error. Where an issue concerns the formation or existence of an arbitration agreement and not its validity, enforceability, or scope, an appellate court applies state law.

         5. Arbitration and Award: Federal Acts: Contracts. The Federal Arbitration Act's application is triggered only if a contract involving interstate commerce actually contains an arbitration clause.

         6. Arbitration and Award: Federal Acts: Contracts: States. In a contract involving interstate commerce, the equal-treatment principle of the Federal Arbitration Act applies in determining whether a valid arbitration agreement exists: States may not apply a state rule discriminating against arbitration and are required to place arbitration agreements on equal footing with all other contracts.

         7. Contracts. In interpreting a contract, a court must first determine, as a matter of law, whether the contract is ambiguous.

         8.__ .A contract written in clear and unambiguous language is not subject to interpretation or construction and must be enforced according to its terms.

         9. Contracts: Words and Phrases. A contract is ambiguous when a word, phrase, or provision in the contract has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings.

         [297 Neb. 357]10. Arbitration and Award: Federal Acts: Contracts. If a contract containing an arbitration clause involves interstate commerce, the Federal Arbitration Act governs the contract.

         11. Contracts: States: Words and Phrases. Contracts involving interstate commerce include contracts for services between parties of different states.

         12. Appeal and Error. An appellate court is not obligated to engage in an analysis that is not necessary to adjudicate the case and controversy before it.

         Appeal from the District Court for Wayne County: James G. Kube, Judge. Reversed and remanded with directions.

          Timothy Engler, of Rembolt Ludtke, L.L.R, for appellants.

          David E. Copple and Michelle M. Schlecht, of Copple, Rockey, McKeever & Schlecht, P.C., L.L.O., for appellee.

          Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, Kelch, and Funke, JJ.

          Cassel, J.

         INTRODUCTION

         This is an appeal from an order denying a motion to compel arbitration of a construction dispute. A subcontractor sued the project's owner and general contractor, which in turn sought to compel arbitration. The appeal turns on whether the subcontract effectively incorporated a mandatory arbitration clause from the general contract, thereby mandating the subcontractor to arbitrate. Because we conclude that it did, we reverse, and remand with directions.

         BACKGROUND

         Parties and Governing Contracts

         Grossenburg Implement, Inc. (Owner), a Nebraska corporation, executed a standard form contract (the general [297 Neb. 358] contract) with Kiehm Construction, Inc. (Contractor), a Minnesota corporation, for the construction of several structures on Owner's property in Wayne County, Nebraska. The general contract included a mandatory arbitration clause for "any Claim . . . not resolved by mediation pursuant to [the general conditions].''

         Contractor then subcontracted with Frohberg Electric Company, Inc. (Subcontractor), a Nebraska corporation, to provide electrical services and materials in constructing the structures. The subcontract referenced the existence of the general contract and stated, "Contractor has made available to . . . Subcontractor all of the above ...


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