Lund-Ross Constructors v. Duke of Omaha

33 Neb. App. 73Nebctapp

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Nebraska Court of Appeals Advance Sheets
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LUND-ROSS CONSTRUCTORS v. DUKE OF OMAHA
Cite as 33 Neb. App. 73
Lund-Ross Constructors, Inc., a Nebraska
corporation, appellant, v. The Duke of
Omaha, LLC, a Georgia limited liability
company, et al., appellees.
___ N.W.3d ___
Filed July 30, 2024. 	No. A-23-660.
1. Jurisdiction: Appeal and Error. A jurisdictional issue that does not
involve a factual dispute presents a question of law.
2. 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.
3. Judgments: Appeal and Error. When reviewing questions of law, an
appellate court resolves the questions independently of the lower court’s
conclusions. However, the trial court’s factual findings will not be set
aside on appeal unless clearly erroneous.
4. Arbitration and Award: Federal Acts: Motions to Vacate. Congress
enacted the Federal Arbitration Act to provide for expedited judicial
review to confirm, vacate, or modify arbitration awards.
5. ____: ____: ____. The Federal Arbitration Act favors arbitration agree-
ments, and this applies in both state and federal courts. Under the act’s
framework, once an arbitrator comes to a decision and makes an award,
the parties have several options. The parties can request the court to
confirm the award pursuant to 9 U.S.C. § 9 (2018), vacate the award
under 9 U.S.C. § 10 (2018), or modify the award pursuant to 9 U.S.C.
§ 11 (2018).
6. Arbitration and Award: Judgments. The purpose of confirming an
arbitration award is to provide a judgment that can then be enforced
through court proceedings.
7. Arbitration and Award: Motions to Vacate. When arbitration has
already occurred and a party seeks to vacate, modify, or confirm an
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award, an extraordinary level of deference is given to the underlying
award itself.
8. Arbitration and Award: Federal Acts: Motions to Vacate. The Federal
Arbitration Act sets forth four grounds under which a court may vacate
an arbitration award, and in the absence of one of these grounds, the
award must be confirmed.
9. Jurisdiction: Appeal and Error. Before reaching the legal issues
presented for review, it is the power and duty of an appellate court to
determine whether it has jurisdiction over the matter before it.
10. 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.
11. Arbitration and Award: Federal Acts: Jurisdiction: Appeal and
Error. The determination of whether the Federal Arbitration Act or
Nebraska’s Uniform Arbitration Act governs the arbitration merely
establishes the framework for the jurisdictional analysis and does not
answer whether an appellate court has jurisdiction over an appeal.
12. Arbitration and Award: Federal Acts: Final Orders: Appeal and
Error. When the Federal Arbitration Act applies, Nebraska courts deter-
mine finality for purposes of appeal by applying state procedural rules.
13. ____: ____: ____: ____. In order to determine whether state law gov-
erns the finality for purposes of appeal of an order under the Federal
Arbitration Act, courts must first apply state procedural rules to deter-
mine if the order is final for purposes of appeal and then determine
whether the result of that inquiry would undermine the goals and poli-
cies of the act.
14. Jurisdiction: Legislature: Appeal and Error. For an appellate court
to have jurisdiction over an appeal, the Legislature must specifically
provide appellate jurisdiction. Unless a Nebraska statute provides for an
appeal, such right does not exist.
15. Arbitration and Award: Final Orders: Appeal and Error. To deter-
mine whether an order on an arbitration award is appealable, an appellate
court first considers whether it is an appealable order under Nebraska’s
Uniform Arbitration Act and, if not, whether it is a final order under
Neb. Rev. Stat. § 25-1902 (Cum. Supp. 2022).
16. Final Orders: Appeal and Error. Under the final order statute, the
three types of final orders which may be reviewed on appeal are (1) an
order affecting a substantial right in an action that, in effect, determines
the action and prevents a judgment; (2) an order affecting a substantial
right made during a special proceeding; and (3) an order affecting a
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substantial right made on summary application in an action after a judg-
ment is rendered.
17. ____: ____. To determine if an order denying a motion to vacate is a
final order, appellate courts consider whether the order affected a sub-
stantial right. Whether an order affects a substantial right depends on
whether it affects with finality the rights of the parties in the subject
matter. It also depends on whether the right could otherwise effectively
be vindicated. An order affects a substantial right when the right would
be significantly undermined or irrevocably lost by postponing appel-
late review.
18. Arbitration and Award: Motions to Vacate. The denial of a motion to
vacate an arbitration award does not affect a substantial right because
following the denial of the motion to vacate, the unsuccessful party’s
recourse would then be a motion to confirm the award.
19. Judgments: Intent. The meaning of a court’s judgment is a question of
law that must be determined from all parts thereof, read in its entirety,
and must be construed as a whole so as to give effect to every word and
part, if possible, and bring all of its parts into harmony as far as this can
be done by fair and reasonable interpretation.
20. Arbitration and Award: Federal Acts: Contracts: Appeal and Error.
When the Federal Arbitration Act applies, an appellate court must
also determine whether the result of the appealability inquiry would
undermine the goals and policies of the act. The purpose of the act is
to replace judicial indisposition to arbitration with a national policy
favoring it and placing arbitration agreements on equal footing with all
other contracts.
21. Arbitration and Award: Motions to Vacate. Under Nebraska’s proce-
dural law for arbitration under Nebraska’s Uniform Arbitration Act, a
district court is authorized to sua sponte confirm the award following
its denial of a motion to vacate. This procedure under the act not only
allows the court to confirm an award without a request from the parties,
but requires it.
22. Arbitration and Award: Intent. The Federal Arbitration Act contains
no express preemptive provision, nor does it reflect a congressional
intent to occupy the entire field of arbitration.
23. Arbitration and Award: Appeal and Error. Where the application of
state appellate procedural rules produces a different outcome than would
be provided under the Federal Arbitration Act, its goals and policies are
not undermined if the state rules only affect the timing of the appeal.
24. Appeal and Error. An appellate court will not consider an argument or
theory that is raised for the first time on appeal. Thus, when an issue
is raised for the first time in an appellate court, it will be disregarded
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inasmuch as a lower court cannot commit error in resolving an issue
never presented and submitted to it for disposition.
25. Arbitration and Award: Contracts: Proof: Appeal and Error. A
party seeking relief under 9 U.S.C. § 10(a)(4) (2018) of the Federal
Arbitration Act bears a heavy burden. It is not enough to show that the
arbitrator committed an error, or even a serious error. Because the par-
ties bargained for the arbitrator’s construction of their agreement, an
arbitral decision even arguably construing or applying the contract must
stand, regardless of a court’s view of its (de)merits. Only if the arbitra-
tor acts outside the scope of his or her contractually delegated authority
by issuing an award that simply reflects the arbitrator’s own notions of
economic justice, rather than drawing its essence from the contract, may
a court overturn the determination. Thus, the sole question on judicial
review is whether the arbitrator interpreted the parties’ contract, not
whether the arbitrator construed it correctly.
26. Arbitration and Award: Federal Acts: Motions to Vacate: Proof.
Pursuant to 9 U.S.C. § 10(a)(3) (2018) of the Federal Arbitration Act,
vacatur is appropriate where the arbitrator’s misbehavior prejudiced the
rights of any party to the proceeding. Parties seeking to vacate an award
for misconduct under this section must show that they were deprived of
a fair hearing. While a fair hearing does not require the arbitrator to hear
all evidence tendered by the parties, the arbitrator must give each of the
parties to the dispute an adequate opportunity to present its evidence
and arguments.
27. Arbitration and Award: Motions to Vacate. A court may vacate an
award only if the arbitrator’s refusal to hear pertinent and material evi-
dence prejudiced the rights of the parties to the arbitration proceedings.
28. Arbitration and Award. The arbitrator must provide an opportunity for
the parties to present some evidence to support their claims and counter
the other party’s.
29. ____. An invalid portion of an arbitration award may be severed from
the remainder of the award.
30. Arbitration and Award: Appeal and Error. A court reviewing an
arbitration award under the Federal Arbitration Act can confirm and/or
vacate the award, either in whole or in part.
Appeal from the District Court for Douglas County: Molly
B. Keane, Judge. Affirmed in part, and in part vacated.
Justin D. Eichmann, of Houghton, Bradford & Whitted, P.C.,
L.L.O., for appellant.
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Cite as 33 Neb. App. 73
Justin W. Pritchett and Steven R. Hogan, of Fraser Stryker,
P.C., L.L.O., for appellee A Raymond Plumbing, Inc.
Pirtle, Chief Judge, and Riedmann and Bishop, Judges.
Pirtle, Chief Judge.
I. INTRODUCTION
Lund-Ross Constructors, Inc. (Lund-Ross), entered into an
agreement with The Duke of Omaha, LLC (the Duke), to be
the general contractor for the construction of an apartment
complex. Lund-Ross then hired A Raymond Plumbing Inc.
(Raymond) as a subcontractor. After the Duke withheld pay-
ment to Lund-Ross, Lund-Ross withheld payment to Raymond.
Pursuant to an arbitration clause in their contracts, the Duke
and Lund-Ross proceeded to arbitration. After the arbitration
hearing, Raymond submitted a counterclaim.
The arbitrator entered an award finding that the Duke owed
Lund-Ross $307,103 and that Lund-Ross owed Raymond
$215,508.31. Citing procedural irregularities, Lund-Ross filed
a motion to vacate or modify the award in the district court
for Douglas County, requesting that the court enter an order
vacating the award, or at least that portion which provided
for any award made in favor of Raymond. The district court
denied the motion after finding that none of the grounds for
vacatur under the Federal Arbitration Act (FAA) were present.
See 9 U.S.C. §§ 1 through 16 (2018 & Supp. VI 2022). Lund-
Ross now appeals the district court’s denial of its motion. For
the following reasons, we affirm in part the award in favor
of Lund-Ross, and we vacate in part the arbitration award in
favor of Raymond.
II. BACKGROUND
On February 28, 2017, Lund-Ross entered into a contract
with the Duke to be the general contractor for the construc-
tion of an apartment complex in Omaha, Nebraska. This
agreement had a binding arbitration clause where any claims
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between the parties would be resolved through arbitration
governed by the FAA.
On May 3, 2017, Lund-Ross subcontracted Raymond to
provide the plumbing services for the apartment complex.
As part of that agreement, Raymond agreed to arbitrate any
claims against Lund-Ross or the Duke. Additionally, this
contract had a “pay-if-paid” provision that stated if payment
was withheld from Lund-Ross by the Duke, Lund-Ross would
withhold payment to Raymond.
After the completion of the apartment complex, the Duke
notified Lund-Ross that it was going to withhold $952,599
from its final payment. Accordingly, Lund-Ross withheld pay-
ment from Raymond. Lund-Ross and Raymond both pro-
ceeded to file construction liens for the amounts owed to
them. Lund-Ross’ lien was for $952,599 and Raymond’s was
for $215,508.31. Lund-Ross then filed suit against the Duke,
and Raymond filed suit against the Duke and Lund-Ross.
Both lawsuits were stayed pending the contractual arbitra-
tion. However, because Raymond failed to submit a proposed
scheduling order, its suit was eventually dismissed for lack of
prosecution and was never refiled.
On May 11, 2021, Lund-Ross filed a demand for arbitration
against the Duke where it alleged breach of contract, quantum
meruit, and unjust enrichment. As part of this demand, Lund-
Ross included Raymond as a respondent. On June 1, the Duke
filed a counterclaim against Lund-Ross in the arbitration pro-
ceedings for breach of contract, breach of express warranty,
and indemnification.
Over the next 1½ years, the appointed arbitrator held pro-
gression conferences and entered four scheduling orders on
July 26 and December 13, 2021, and March 25 and September
15, 2022. Over this period, Raymond was in contact with
Lund-Ross’ counsel and agreed to pay a portion of the hear-
ing fees so that its counsel could observe the hearing and
answer any of the arbitrator’s questions about its involvement
in the underlying controversy. Raymond did not otherwise
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participate in the proceedings and even acknowledged in an
email to the other parties that it did not intend to be an active
participant. Accordingly, leading up to the hearing, Raymond
never provided a statement of its claim, discovery requests, a
witness list, an exhibit list, or a prehearing brief.
The arbitration hearing occurred from January 9 to 11, 2023.
Other than the claims outlined by Lund-Ross and the Duke, no
other claims or causes of action had been filed in the proceed-
ings or were pending before the arbitrator at the hearing. While
no record of the hearing was made, the arbitrator’s order and
Raymond’s attorney’s affidavit state that the parties generally
agreed Raymond’s work was satisfactory and the only reason
Raymond was not being paid was because Lund-Ross did not
have a contractual obligation to pay Raymond until it had been
paid by the Duke.
On January 11, 2023, Raymond’s principal testified at the
hearing and attempted to assert claims against Lund-Ross.
But upon cross-examination, the principal acknowledged that
Raymond never filed any claims in the arbitration proceed-
ings and never revived its lawsuit against the Duke and Lund-
Ross. After hearing this testimony, the arbitrator stopped the
cross-examination and determined that it did not have jurisdic-
tion over Raymond’s claims because they were never filed.
Raymond’s principal then left the hearing.
On January 30, 2023, Lund-Ross and the Duke were noti-
fied that Raymond had paid an administrative fee and the
arbitrator had granted Raymond’s request to file a coun-
terclaim against Lund-Ross in the arbitration proceedings.
On February 3, Raymond filed an answer and counterclaim
against Lund-Ross for breach of contract, breach of implied
covenant of good faith and fair dealing, and quantum meruit/
unjust enrichment. Within these claims, Raymond alleged
that Lund-Ross owed it at least $215,508.31. Lund-Ross filed
an objection to Raymond’s counterclaim, arguing that it was
untimely, and motioned to strike it.
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On March 9, 2023, without responding to Lund-Ross’ objec-
tion and motion to strike, the arbitrator entered his award that
found the Duke owed Lund-Ross $307,103 and Lund-Ross
owed Raymond $215,508.31. On March 29, Lund-Ross filed a
“Motion to Modify/Correct Arbitration Award” with the arbi-
trator requesting that Raymond’s award be removed. Raymond
filed an objection to this motion, and on April 28, the arbitra-
tor ultimately denied the motion.
On May 23, 2023, Lund-Ross filed a motion to vacate
or modify the arbitration award in the district court. In its
motion, Lund-Ross argued the award should be vacated pur-
suant to 9 U.S.C. § 10(a) of the FAA due to the arbitrator’s
misconduct and misbehavior in allowing Raymond to file its
claims after the hearing concluded and refusing to receive
evidence in opposition to those claims. The district court
denied Lund-Ross’ motion and, in its order, stated:
Here, although the Court recognizes [Lund-Ross’]
concerns regarding their ability to present and rebut
evidence regarding [Raymond’s] claims, the Court does
not find that one of the four grounds under which a
court may vacate an arbitration award [outlined in 9
U.S.C. § 10(a)] is present. Therefore, the award must be
confirmed.
Following this order, Raymond filed a motion to clarify
whether the district court’s order confirmed the arbitration
award or merely indicated that it would be confirmed upon
the subsequent filing of a motion to confirm. That motion was
not answered before Lund-Ross appealed the district court’s
denial of its motion to vacate.
On December 22, 2023, Raymond motioned for this court
to summarily dismiss Lund-Ross’ appeal. Raymond argued
that because the district court’s order on Lund-Ross’ motion
to vacate was not a final, appealable order, we did not have
jurisdiction over the appeal. On January 8, 2024, we denied
Raymond’s motion to dismiss and directed the parties to
address the jurisdiction issue in their briefs.
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III. ASSIGNMENTS OF ERROR
Lund-Ross assigns, consolidated, restated, and reordered,
that the district court erred in (1) failing to determine Raymond
waived its right to arbitrate its claims and (2) failing to vacate
the arbitration award at least as to the portion providing an
award in favor of Raymond pursuant to 9 U.S.C. § 10 because
the arbitrator (a) was guilty of misbehavior that caused it
prejudice under § 10(a)(3) and (b) exceeded his powers or so
imperfectly executed them that a mutual, final, and definite
award was not made under § 10(a)(4).
IV. STANDARD OF REVIEW
[1] A jurisdictional issue that does not involve a factual
dispute presents a question of law. See Cinatl v. Prososki, 307
Neb. 477, 949 N.W.2d 505 (2020).
[2] 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. Id.
[3] When reviewing questions of law, an appellate court
resolves the questions independently of the lower court’s con-
clusions. See id. However, the trial court’s factual findings
will not be set aside on appeal unless clearly erroneous. Id.
V. ANALYSIS
[4-6] This matter involves the parties’ arbitration under
the FAA. Congress enacted the FAA to provide for “‘expe-
dited judicial review to confirm, vacate, or modify arbitra-
tion awards.’” Seldin v. Estate of Silverman, 305 Neb. 185,
200, 939 N.W.2d 768, 783 (2020). The FAA favors arbitra-
tion agreements, and this applies in both state and federal
courts. Seldin v. Estate of Silverman, supra. Under the FAA’s
framework, once an arbitrator comes to a decision and makes
an award, the parties have several options. The parties can
request the court to confirm the award pursuant to 9 U.S.C.
§ 9, vacate the award under 9 U.S.C. § 10, or modify the
award pursuant to 9 U.S.C. § 11. The purpose of confirming
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an arbitration award is to provide a judgment that can then be
enforced through court proceedings. Cinatl v. Prososki, supra.
[7] When 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.” Seldin
v. Estate of Silverman, 305 Neb. at 200, 939 N.W.2d at 783
(internal quotation marks omitted). The U.S. Supreme Court
has instructed that under the FAA, a court may vacate an arbi-
trator’s decision “only in very unusual circumstances.” Seldin
v. Estate of Silverman, 305 Neb. at 201, 939 N.W.2d at 783
(internal quotation marks omitted).
[8] The FAA sets forth four grounds under which a court
may vacate an arbitration award, and in the absence of one of
these grounds, the award must be confirmed. Seldin v. Estate of
Silverman, supra. Those grounds are as follows:
“(1) where the award was procured by corruption,
fraud, or undue means;
“(2) where there was evident partiality or corruption in
the arbitrators, or either of them;
“(3) where the arbitrators were guilty of misconduct
in refusing to postpone the hearing, upon sufficient cause
shown, or in refusing to hear evidence pertinent and mate-
rial to the controversy; or of any other misbehavior by
which the rights of any party have been prejudiced; or
“(4) where the arbitrators exceeded their powers, or
so imperfectly executed them that a mutual, final, and
definite award upon the subject matter submitted was not
made.”
Id. at 201, 939 N.W.2d at 783, quoting 9 U.S.C. § 10(a).
1. Jurisdiction
The parties first contest whether we have proper juris-
diction over this appeal. Before evaluating the legal issues
presented for review, it is the duty of an appellate court to
determine whether it has jurisdiction over the matter before
it. McPherson v. Walgreens Boot Alliance, 314 Neb. 875, 993
N.W.2d 679 (2023).
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Raymond 	asserts 	we 	lack 	jurisdiction 	over 	the 	appeal
because the district court’s order was not a final, appealable
order. Raymond contends that an order denying a motion to
vacate an arbitration award is not an appealable order under 9
U.S.C. § 16(a) of the FAA, nor is it a final order under Neb.
Rev. Stat. § 25-1902 (Cum. Supp. 2022). As to the latter argu-
ment, Raymond asserts the appeal cannot be perfected until
the district court rules on a motion to confirm and finalizes
the rights of the parties. Until that occurs, it argues this is an
interlocutory appeal for which we lack jurisdiction.
In response, Lund-Ross essentially argues that the district
court’s order is a final, appealable order because it both denied
its motion to vacate and confirmed the award. And, in the
alternative that the court’s order did not confirm the award,
Lund-Ross cites various cases from the Eighth Circuit where
it considered appeals from the denials of motions to vacate
arbitration awards without questioning whether it had appellate
jurisdiction under the FAA.
[9-12] Before reaching the legal issues presented for review,
it is the power and duty of an appellate court to determine
whether it has jurisdiction over the matter before it. Seldin v.
Estate of Silverman, 305 Neb. 185, 939 N.W.2d 768 (2020).
Arbitration in Nebraska is governed by the FAA if it arises
from a contract involving interstate commerce; otherwise, it
is governed by Nebraska’s Uniform Arbitration Act (UAA).
Seldin v. Estate of Silverman, supra. In this matter, it is
uncontested that the arbitration involved interstate commerce
and was governed by the FAA. However, the determination of
whether the FAA or the UAA governs the arbitration merely
establishes the framework for the jurisdictional analysis and
does not answer whether we have appellate jurisdiction over
this appeal. See McPherson v. Walgreens Boot Alliance, supra.
This is so because even when the FAA applies, Nebraska
courts determine finality for purposes of appeal by apply-
ing state procedural rules. McPherson v. Walgreens Boot
Alliance, supra.
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[13,14] As the Nebraska Supreme Court provided in Webb v.
American Employers Group, 268 Neb. 473, 481, 684 N.W.2d
33, 41 (2004):
[T]o determine whether state law governs the finality for
purposes of appeal of an order . . . under the FAA, we
must first apply our state procedural rules to determine if
the order is final for purposes of appeal and then deter-
mine whether the result of that inquiry would undermine
the goals and policies of the FAA.
For this court to have jurisdiction over an appeal, the Legislature
must specifically provide appellate jurisdiction. McPherson
v. Walgreens Boot Alliance, supra. In other words, unless a
Nebraska statute provides for an appeal, such right does not
exist. Id.
[15] In Cinatl v. Prososki, 307 Neb. 477, 949 N.W.2d 505
(2020), the Supreme Court applied state procedural rules to
determine if it had jurisdiction over an appeal from the denial
of a motion to vacate an arbitration award that was governed
by the UAA. In finding that the order denying the motion to
vacate was not a final, appealable order, the court stated, “To
determine whether the [order is] appealable, we first consider
whether [it is an] appealable order[] under the [UAA] and, if
not, whether [it is a] final order[] under . . . § 25-1902.” Cinatl
v. Prososki, 307 Neb. at 486, 949 N.W.2d at 514.
[16] The court first decided that Neb. Rev. Stat. § 25-2620(a)
(Reissue 2016) of the UAA was silent as to whether denials
of a motion to vacate were appealable. See Cinatl v. Prososki,
supra. As such, it proceeded to evaluate its jurisdiction under
Nebraska’s final order statute, § 25-1902. Under the final
order statute, the three types of final orders which may be
reviewed on appeal are (1) an order affecting a substantial
right in an action that, in effect, determines the action and
prevents a judgment; (2) an order affecting a substantial right
made during a special proceeding; and (3) an order affect-
ing a substantial right made on summary application in an
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action after a judgment is rendered. See Cullinane v. Beverly
Enters. - Neb., 300 Neb. 210, 912 N.W.2d 774 (2018).
[17] To determine if the order denying the motion to vacate
was a final order, the court considered whether the order
affected a substantial right. Whether an order affects a sub-
stantial right depends on whether it affects with finality the
rights of the parties in the subject matter. Cinatl v. Prososki,
supra. It also depends on whether the right could otherwise
effectively be vindicated. Id. An order affects a substantial
right when the right would be significantly undermined or
irrevocably lost by postponing appellate review. Id.
[18] Citing to a case from the Hawaii Supreme Court, the
Cinatl court concluded that the denial of the motion to vacate
did not affect a substantial right because following the denial
of the motion to vacate, “the unsuccessful movant’s recourse
would then be a motion to confirm the award.” 307 Neb. at
488, 949 N.W.2d at 515 (citing Salud v. Financial Sec. Ins.
Co., Ltd., 69 Haw. 427, 745 P.2d 290 (1987)). It continued to
indicate that because a motion to confirm the award should
occur swiftly after a denial of a motion to vacate, the unsuc-
cessful movant would be able to perfect the appeal and obtain
appellate review of the order confirming the award. Cinatl v.
Prososki, supra. Thus, the court stated, “though not immedi-
ately appealable, an unsuccessful movant for judicial vacatur
should not have to wait long to obtain appellate review.” Id.
at 489, 949 N.W.2d at 516.
In the current matter, Lund-Ross maintains that the holding
in Cinatl is inapplicable because the district court’s order in
this case both denied its motion to vacate and confirmed the
award. Accordingly, Lund-Ross argues that there is nothing
left for the court to decide. Raymond opposes this conten-
tion and asserts that the district court’s order did not confirm
the award.
[19] The meaning of a court’s judgment is a question of
law that must be determined from all parts thereof, read in its
entirety, and must be construed as a whole so as to give effect
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to every word and part, if possible, and bring all of its parts
into harmony as far as this can be done by fair and reasonable
interpretation. See Bayne v. Bayne, 302 Neb. 858, 925 N.W.2d
687 (2019). We determine that because the district court con-
cluded its order by stating, “Therefore, the award must be
confirmed,” the court’s order confirmed the arbitration award.
Because the court’s order confirmed the arbitration award,
there is nothing left for the district court to decide. As such,
we conclude the district court’s denying Lund-Ross’ motion
to vacate and confirming the award affected a substantial right
and was a final, appealable order.
[20] While we have concluded that the district court’s order
denying vacatur and confirming the award is appealable under
Nebraska’s procedural rules, Webb v. American Employers
Group, 268 Neb. 473, 684 N.W.2d 33 (2004), instructs that
when the FAA applies, we must also determine whether the
result of the appealability inquiry would undermine the goals
and policies of the FAA. See McPherson v. Walgreens Boot
Alliance, 314 Neb. 875, 993 N.W.2d 679 (2023). As articu-
lated by the U.S. Supreme Court, the purpose of the FAA is
to “replace judicial indisposition to arbitration with a ‘national
policy favoring [it] and plac[ing] arbitration agreements on
equal footing with all other contracts.’” Hall Street Associates,
L. L. C. v. Mattel, Inc., 552 U.S. 576, 581, 128 S. Ct. 1396,
170 L. Ed. 2d 254 (2008).
[21] Here, we recognize that utilizing Nebraska’s state
procedural rules may yield a different result compared to the
application of the FAA. Applying Nebraska’s procedural law
for arbitration under the UAA, the district court was autho-
rized to sua sponte confirm the award following its denial of
Lund-Ross’ motion to vacate. Neb. Rev. Stat. § 25-2613(d)
(Reissue 2016) of the UAA states “If the application to vacate
is denied and no motion to modify or correct the award is
pending, the court shall confirm the award.” In statutory
interpretation, “shall,” generally, is considered mandatory and
inconsistent with the idea of discretion. Prokop v. Lower
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Loup NRD, 302 Neb. 10, 921 N.W.2d 375 (2019). Therefore,
the procedure under the UAA not only allowed the court to
confirm the award without a request from the parties, but
required it.
In contrast, the FAA does not contain a similar provision
allowing trial courts to confirm the arbitration award in the
absence of a pending motion to vacate or modify. And federal
courts do not all agree as to whether a court can confirm an
arbitration award under the FAA in the absence of a specific
motion requesting it. Several federal courts have found that
an explicit motion to confirm is not necessary and, instead,
treated motions to dismiss the opposing parties’ motions to
vacate as the practical equivalents of a motion to confirm.
See Maidman v. O’Brien, 473 F. Supp. 25 (S.D.N.Y. 1979).
See, also, Sanluis Developments v. CCP Sanluis, L.L.C., 556
F. Supp. 2d 329 (S.D.N.Y. 2008); General Elec. Co. v. Anson
Stamping Co. Inc., 426 F. Supp. 2d 579 (W.D. Ky. 2006).
Likewise, one federal court treated a motion for summary
judgment as an implicit motion to confirm. See Andrea Doreen
v. Building Material Local Union 282, 250 F. Supp. 2d 107
(E.D.N.Y. 2003).
However, in at least one decision, the U.S. District Court
for the District of Nebraska has signaled that a formal motion
to confirm is necessary to confirm an arbitration award under
the FAA because 9 U.S.C. § 9 requires a specific factual find-
ing of “an agreement by the parties for the entry of a judg-
ment on the award.” Riddle v. Wachovia Securities, LLC, No.
8:05CV87, 2006 WL 83101 at *2 (D. Neb. Jan. 12, 2006).
While this case involved a different procedural posture, the
court explained that the parties needed to file a formal motion
to confirm and that the mere opposition to a motion to
vacate and a footnote in an opposing brief seeking confirma-
tion were not the functional equivalents of a motion seeking
confirmation.
[22,23] Despite this potential disparity in outcomes between
Nebraska’s procedural rules and the FAA, we determine that
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our decision regarding the finality of the district court’s order
does not undermine the goals and policies of the FAA. As the
Supreme Court has stated, “‘The FAA contains no express pre-
emptive provision, nor does it reflect a congressional intent
to occupy the entire field of arbitration.’” Kremer v. Rural
Community Ins. Co., 280 Neb. 591, 602, 788 N.W.2d 538, 549
(2010) (quoting Volt Info. Sciences v. Leland Stanford Jr. U.,
489 U.S. 468, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989)).
Additionally, the Nebraska Supreme Court has twice indicated
that where the application of state appellate procedural rules
produces a different outcome than would be provided under
the FAA, the FAA’s goals and policies are not undermined if
the state rules only affect the timing of the appeal.
In Kremer v. Rural Community Ins. Co., supra, the court
found that an order compelling arbitration was appealable
under Nebraska’s final order statute but was not appealable
under the FAA. Although the outcomes under the FAA and
our state procedural rules were different, Kremer held that the
state procedures only impacted the timing of the appeal and
did not interfere with the parties’ substantive rights to enforce
their agreement. Because of this, the court found that allow-
ing an immediate appeal did not undermine the goals of the
FAA. Similarly, in McPherson v. Walgreens Boot Alliance,
314 Neb. 875, 993 N.W.2d 679 (2023), the court found that
the FAA would allow an interlocutory appeal from an order
staying arbitration where Nebraska’s procedural rules would
not. Despite this incongruence, the court cited to Kremer in
deciding that applying the state procedural rule did not under-
mine the goals of the FAA because it only impacted the tim-
ing of the appeal, not the substantive rights of the parties to
enforce the agreement.
In the matter at hand, our decision that the district court’s
order confirmed the arbitration award and thus affected a sub-
stantial right only affects the timing of the appeal and does
not impact the substantive rights of the parties. Accordingly,
we 	conclude 	that 	the 	district 	court’s 	order 	was 	a 	final,
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appealable order under Nebraska’s final order statute and that
allowing the appeal does not undermine the goals and objec-
tives of the FAA. Therefore, we find that we have appellate
jurisdiction over this appeal.
2. Waiver
Lund-Ross assigns the district court erred in failing to find
that Raymond waived its right to arbitrate. Lund-Ross gener-
ally asserts that by not participating in the arbitration until
after the hearing, Raymond acted inconsistently with its right
and, therefore, waived its right to partake in the arbitration.
[24] Although Lund-Ross objected to Raymond’s claims
as untimely and prejudicial, it did not specifically claim that
Raymond had waived its right to participate in the arbitra-
tion; therefore, Lund-Ross did not properly raise this argument
either in the arbitration proceeding or in its motion to vacate
filed in the district court. An appellate court will not consider
an argument or theory that is raised for the first time on appeal.
Eletech, Inc. v. Conveyance Consulting Group, 308 Neb. 733,
956 N.W.2d 692 (2021). Thus, when an issue is raised for the
first time in an appellate court, it will be disregarded inasmuch
as a lower court cannot commit error in resolving an issue
never presented and submitted to it for disposition. Id. Because
Lund-Ross did not raise the issue of waiver in its motion to
vacate, the argument was never presented to the district court.
Without a ruling from the district court, we are unable to find
that it committed error. Therefore, we conclude that Lund-
Ross’ assignment of error pertaining to the alleged waiver of
Raymond’s right to arbitration fails.
3. Failure to Vacate Arbitration Award
Lund-Ross assigns the district court erred in failing to vacate
the arbitration award under 9 U.S.C. § 10 because the arbitrator
exceeded his powers and/or imperfectly executed them under
§ 10(a)(4) and was guilty of misbehavior that prejudiced its
rights under § 10(a)(3).
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(a) Exceeded Powers or
Imperfectly Executed Them
Lund-Ross argues the award should be vacated under 9
U.S.C. § 10(a)(4) of the FAA because the arbitrator exceeded
his powers and/or so imperfectly executed them that a mutual,
final, and definite award was not made.
[25] A party seeking relief under 9 U.S.C. § 10(a)(4) bears
a heavy burden. Oxford Health Plans LLC v. Sutter, 569 U.S.
564, 133 S. Ct. 2064, 186 L. Ed. 2d 113 (2013). It is not
enough to show that the arbitrator committed an error, or even
a serious error. Id. Because the parties bargained for the arbi-
trator’s construction of their agreement, an arbitral decision
even arguably construing or applying the contract must stand,
regardless of a court’s view of its “(de)merits.” Id., 569 U.S.
at 569. Only if the arbitrator acts outside the scope of his or
her contractually delegated authority by issuing an award that
simply reflects the arbitrator’s own notions of economic jus-
tice, rather than drawing its essence from the contract, may a
court overturn the determination. Id. Thus, the sole question
on judicial review is whether the arbitrator interpreted the par-
ties’ contract, not whether the arbitrator construed it correctly.
Id. See, also, City of Omaha v. Professional Firefighters Assn.,
309 Neb. 918, 963 N.W.2d 1 (2021) (stating that same stan-
dard of judicial review applies under the UAA).
We determine that Lund-Ross is not entitled to relief under
9 U.S.C. § 10(a)(4) because the record demonstrates the
arbitrator interpreted the contract between the parties. In his
award, the arbitrator stated:
There was no testimony by Lund-Ross or The Duke that
. . . Raymond failed to meet any of its obligations under
the subcontract between the parties. There was testimony
that Lund[-]Ross withheld from [Raymond] the amount
of $215,508.31, based on the “pay-if[-]paid” provision
under its subcontract with Lund-Ross based on the with-
holding of The Duke from Lund-Ross in the amount
of $952,599. This arbitration resolved the withholding
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issue and I find that [Raymond] is now entitled to pay-
ment of the amount withheld.
This language shows the arbitrator’s award was based on his
interpretation of the agreement between the parties and the
evidence presented to him. Although we acknowledge Lund-
Ross’ assertions that it was prevented from presenting certain
evidence, our task here is limited to deciding whether the arbi-
trator was arguably adhering to contract interpretation when
he made the award. We determine that he was. Therefore, we
conclude the district court did not err in not vacating the arbi-
tration award under 9 U.S.C. § 10(a)(4).
(b) Misbehavior That Prejudiced
Lund-Ross’ Rights
Lund-Ross argues the award should be vacated under 9
U.S.C. § 10(a)(3) of the FAA because the arbitrator was guilty
of misbehavior that prejudiced its rights. Lund-Ross con-
tends the arbitrator misbehaved by preventing the full cross-
examination of Raymond’s principal, not providing any notice
of Raymond’s counterclaims until after the hearing, and not
allowing Lund-Ross the opportunity to present evidence in
opposition to Raymond’s counterclaims.
Raymond contends this assignment of error should fail
because this is the first time that Lund-Ross has argued the
arbitration should be vacated under 9 U.S.C. § 10(a)(3).
When an issue is raised for the first time in an appellate
court, it will be disregarded inasmuch as a lower court can-
not commit error in resolving an issue never presented and
submitted to it for disposition. Eletech, Inc. v. Conveyance
Consulting Group, 308 Neb. 733, 956 N.W.2d 692 (2021).
Lund-Ross’ motion to vacate did not specifically state that
it sought vacation under this section of the FAA. However,
its motion claimed the arbitrator’s actions were “extremely
prejudicial” and laid out factual allegations claiming that the
arbitrator allowed Raymond to file counterclaims without
notifying Lund-Ross and did not allow Lund-Ross to present
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evidence in opposition to those claims. Seemingly because of
the wide breadth of these allegations, the district court found
it necessary to analyze whether vacatur was proper under
each of the four grounds provided within 9 U.S.C. § 10 of
the FAA. Therefore, because Lund-Ross’ motion to vacate
contained factual allegations encompassing § 10(a)(3) and the
district court did, in fact, decide that vacation was improper
under that section, we conclude that this assignment of error
is properly before us.
[26,27] Pursuant to 9 U.S.C. § 10(a)(3) of the FAA, vacatur
is appropriate where the arbitrator’s misbehavior prejudiced
the rights of any party to the proceeding. See Seldin v. Estate
of Silverman, 305 Neb. 185, 939 N.W.2d 768 (2020). Parties
seeking to vacate an award for misconduct under this sec-
tion must show that they were deprived of a fair hearing. Id.
While a fair hearing does not require the arbitrator to hear all
evidence tendered by the parties, the arbitrator must give each
of the parties to the dispute an adequate opportunity to pre-
sent its evidence and arguments. Hoteles Condado Beach Etc.
v. Union De Etc., 763 F.2d 34 (1st Cir. 1985); Global Gold
Min., LLC v. Ayvazian, 612 Fed. Appx. 11 (2d Cir. 2015). In
other words, a court may vacate an award only if the arbitra-
tor’s refusal to hear pertinent and material evidence prejudiced
the rights of the parties to the arbitration proceedings. Three
S Delaware v. DataQuick Information Systems, 492 F.3d 520
(4th Cir. 2007); Mical v. Glick, 581 Fed. Appx. 568 (7th Cir.
2014); Aviles v. Charles Schwab & Co., Inc., 435 Fed. Appx.
824 (11th Cir. 2011).
Three frequently cited and persuasive decisions by the First,
Second, and Fifth Circuits illustrate the kinds of refusals to
consider evidence that have run afoul of 9 U.S.C. § 10(a)(3).
The first is Hoteles Condado Beach Etc. v. Union De Etc.,
supra, where an employee was fired and criminally charged
for exposing himself to a guest. In the employment arbitra-
tion that followed, the guest refused to testify without her
husband present. The arbitrator denied her request, so in lieu
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of the woman’s live testimony, the arbitrator permitted the
hotel to introduce a transcript of the couple’s testimony during
the criminal case. But the arbitrator then refused to give the
transcript any weight and found in the employee’s favor. The
First Circuit found that this constituted misconduct because
the “testimony was unquestionably relevant” and no other evi-
dence was available to substantiate or to refute the company’s
charges. Id. at 40.
The second case is Tempo Shain Corp. v. Bertek, Inc., 120
F.3d 16, 17 (2d Cir. 1997), where the Second Circuit found
that an arbitration panel’s refusal to wait for a witness with
“crucial testimony” constituted misconduct under 9 U.S.C.
§ 10(a)(3). The witness was temporarily unavailable due to a
family medical problem, but because the panel deemed that
his testimony would be cumulative to other evidence, it did
not continue the hearing. The Second Circuit found that there
was no reasonable basis to think the testimony was cumulative
and that therefore, the arbitrator committed misbehavior that
prejudiced one of the parties by excluding evidence “plainly
‘pertinent and material to the controversy.’” Tempo Shain
Corp. v. Bertek, Inc., 120 F.3d at 20.
Lastly, in Gulf Coast Indus. Workers Union v. Exxon Co.,
USA, 70 F.3d 847 (5th Cir. 1995), an employer hired an
investigator to search for drugs in its refinery. After the inves-
tigator found marijuana in one of the employee’s vehicles,
the employee refused to take a drug test and was fired. In
the ensuing arbitration, the company attempted to introduce
test results to prove the discovered substance was marijuana.
However, the arbitrator said that was unnecessary because
the test results were already in evidence. After the hearings
were complete, the arbitrator ordered the employee to be
reinstated because the employer had not proved the substance
was marijuana.
In its finding that this constituted misconduct, the Fifth
Circuit stated, “not only did the arbitrator refuse to con-
sider evidence of the positive drug test, he prevented [the
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company] from presenting additional evidence by misleading
it into believing that [the test results] had been admitted as a
business record.” Id. at 850. The court continued to explain
that the arbitrator’s use of the company’s failure to present
evidence, which he told them not to present, as a predicate
for ignoring the test results was misconduct that fell squarely
within the scope of 9 U.S.C. § 10(a)(3).
Although these cases are not perfectly analogous to the
current matter, the present case is an example of a similarly
inexplicable refusal to hear “evidence pertinent and material
to the controversy.” See 9 U.S.C. § 10(a)(3). The arbitra-
tor not only cut short Lund-Ross’ ability to cross-examine
Raymond’s principal at the hearing, but he fully denied its
ability to offer any evidence in response to Raymond’s coun-
terclaims. While the arbitrator and Raymond state there was
no complaint with the quality of Raymond’s work product, an
issue existed as to whether Raymond’s delay on the project
contributed to the liquidated damages assessed against Lund-
Ross. If it did, this issue was certainly pertinent and material
to the controversy.
[28] While the case law from various jurisdictions unani-
mously supports the proposition that an arbitrator does not
need to consider every piece of relevant evidence presented
to them, the arbitrator must provide an opportunity for the
parties to present some evidence to support their claims and
counter the other party’s evidence. See Global Gold Min., LLC
v. Ayvazian, 612 Fed. Appx. 11, 14 (2d Cir. 2015) (“[f]airness
requires arbitrators to give a party an ‘adequate opportunity to
present its evidence and argument’”). We do not believe that
the arbitrator’s limiting the cross-examination of Raymond’s
principal, allowing Raymond to file its counterclaims after
the hearing had already concluded over Lund-Ross’ objection,
refusing to consider evidence in opposition to those counter-
claims, and proceeding to award Raymond the exact amount it
sought are indica of a fundamentally fair hearing.
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Therefore, we determine that by allowing Raymond to file
its counterclaim after the hearing and then subsequently refus-
ing to consider Lund-Ross’ evidence in opposition to the
counterclaim, the arbitrator was guilty of misconduct and
misbehavior that prejudiced Lund-Ross’ rights. See Cong. of
Holy Family Cath. Ch. v. Mickey Const., 500 So. 2d 802 (La.
App. 1986) (court found allowing untimely counterclaim to be
filed and accepting evidence on it at arbitration hearing sup-
ported vacatur of award on basis that arbitrators were guilty
of any other misbehavior by which rights of any party have
been prejudiced). Accordingly, we conclude that the district
court erred in not vacating the arbitration award in favor of
Raymond pursuant to 9 U.S.C. § 10(a)(3) of the FAA. This
would leave the award in favor of Lund-Ross undisturbed. The
question then becomes whether partial vacatur of an award is
allowed under the FAA and Nebraska law.
[29] Neither party provided authority on this particular
issue, nor did we locate any Nebraska or Eighth Circuit
cases on point. However, Connecticut has a long history of
allowing arbitration awards to be severed. The Connecticut
Supreme Court has routinely found that “an invalid portion
of an arbitration award may be severed from the remainder of
the award.” Blondeau v. Baltierra, 337 Conn. 127, 174, 252
A.3d 317, 348 (2020). The court has stated that (1) “‘[when]
specific questions have been submitted to the arbitrators, we
have held that the portion of the arbitrators’ award that was
entirely outside the submission was void’”; (2) “‘when an
arbitrator exceeds his authority, the award is void only to the
extent that he does so, if the part [that] is void can be sepa-
rated from the rest without injustice and without affecting the
merits of the part of the award [that] is within the submis-
sion’”; and (3) “‘[i]f several distinct matters are submitted
[to arbitration], the award as to some of them may be good
while it is void as to the residue.’” Id. at 174, 252 A.3d at
348-49. See, also, Bodner v. United Services Auto. Ass’n, 222
Conn. 480, 610 A.2d 1212 (1992); Local 63, Textile Workers
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Union v. Cheney Brothers, 141 Conn. 606, 109 A.2d 240
(1954); Parmelee v. Allen, 32 Conn. 115 (1864), overruled
on other grounds, Alexson v. Foss, 276 Conn. 599, 887 A.2d
872 (2006).
[30] The Second Circuit has similar case law that directly
references 9 U.S.C. § 10 of the FAA. “A court reviewing an
arbitration award under the FAA ‘can confirm and/or vacate the
award, either in whole or in part.’” Scandinavian Reinsurance
v. Saint Paul, 668 F.3d 60, 71 (2d Cir. 2012). While that opin-
ion does not provide any further discussion regarding the issue,
it cited a prior Second Circuit opinion that did. See D.H. Blair
& Co., Inc. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006). In that
prior opinion, the court stated:
Because “[a]rbitration awards are not self-enforcing,”
they must be given force and effect by being converted
to judicial orders by courts; these orders can confirm
and/or vacate the award, either in whole or in part. . . .
Here, [the party] petitioned the court to confirm in part
and vacate in part the arbitration award. That request
simply sought to give effect to the arbitration award. The
partial vacatur of the award sought . . . does not alter
the nature of the action, which we believe is properly
considered to involve “enforcing” the arbitration award.
Id. at 104. The court ultimately reversed the decision of the
district court, but did not take issue with the proposed proce-
dure of only partially vacating the award.
Based upon the authority cited above, we believe the proper
result here is to affirm the award in favor of Lund-Ross’
claim against the Duke, but to vacate the award in favor of
Raymond’s claim against Lund-Ross.
VI. CONCLUSION
We conclude that we have jurisdiction over this appeal
under our state procedural rules and that Raymond did not
waive its right to arbitration. We further conclude that the
district court did not err in refusing to vacate the arbitration
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award under 9 U.S.C. § 10(a)(4), but did err in not vacat-
ing the award under § 10(a)(3) as to Raymond. We therefore
affirm that part of the district court’s decision in favor of
Lund-Ross and against the Duke, and we vacate that part of
the decision of the district court in favor of Raymond and
against Lund-Ross.
Affirmed in part, and in part vacated.

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