Drummond v. State Farm Mut. Auto. Ins. Co.

RobeRt Wayne DRummonD anD Gayle DRummonD,
appellants , v. state FaRm mutual automobile
insuRance company, appellee .
785 N.W.2d 829
Filed July 23, 2010. 	No. S-09-931.
1. Judgments: Statutes: Appeal and Error. Statutory interpretation is a matter of
law in connection with which an appellate court has an obligation to reach an
independent, correct conclusion irrespective of the determination made by the
trial court.
2. Arbitration and Award: Appeal and Error. In reviewing a district court’s deci-
sion to vacate, modify, or confirm an arbitration award under Nebraska’s Uniform
Arbitration Act, an appellate court is obligated to reach a conclusion independent
of the trial court’s ruling as to questions of law.
3. Words and Phrases. As a general rule, the use of the word “shall” is considered
to indicate a mandatory directive, inconsistent with the idea of discretion.
Appeal 	from 	the 	District 	Court 	for 	Lancaster 	County:
K aRen b. F loWeRs, Judge. Reversed and remanded for further
proceedings.
Jeffry D. Patterson, of Bartle & Geier Law Firm, for
appellants.
Stephen S. Gealy and Jarrod P. Crouse, of Baylor, Evnen,
Curtiss, Grimit & Witt, L.L.P., for appellee.
H eavican, 	c.J., 	WRiGHt, 	connolly, 	G eRRaRD, 	stepHan,
mccoRmacK, and milleR-leRman, JJ.
H eavican, c.J.
INTRODUCTION
Robert Wayne Drummond and Gayle Drummond made
application to the district court for confirmation of an arbitra-
tion award under Neb. Rev. Stat. § 25-2612 (Reissue 2008).
The Drummonds received the award after arbitration of their
claims for underinsured motorist coverage. State Farm Mutual
Automobile Insurance Company (State Farm) moved the dis-
trict court to strike the Drummonds’ application for confirma-
tion on the grounds that State Farm had paid the arbitration
award in full and that as such, confirmation of the award was
moot. The Drummonds appeal from that order. We reverse the
258 	280 NEBRASkA REPORTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:47 AM CST

decision of the district court and remand the cause for fur-
ther proceedings.
BACkGROUND
On April 29, 2003, Robert was in San Diego, California,
attending a professional conference. While loading his luggage
into the back of a taxicab, the taxicab suddenly accelerated
in reverse, running over Robert and trapping him beneath it.
Robert suffered significant physical injuries as a result, includ-
ing permanent impairment of his left arm, left shoulder, and
right knee. Robert also suffers from chronic pain syndrome,
depression, and posttraumatic stress disorder.
The Drummonds retained the services of an attorney in
San Diego regarding their personal injury action. The liabil-
ity insurer for the taxicab driver tendered $100,000, the limit
of his liability coverage. The Drummonds then notified State
Farm that they intended to make a claim for underinsured
motorist benefits pursuant to their policy with State Farm. State
Farm evaluated the claim and determined that damages were
no more than $300,000, and so tendered payment of $200,000
as a full settlement of all claims. The Drummonds refused to
completely settle all their claims, but accepted $200,000 as a
payment for the undisputed amount.
State Farm and the Drummonds eventually agreed to submit
the issue of the full extent of the Drummonds’ damages to arbi-
tration. The arbitration hearing was held on October 3, 2008,
before a single arbitrator selected by State Farm. On October
21, the arbitrator issued an award finding that Robert’s dam-
ages were $899,285.59 and that Gayle’s loss of consortium
damages were $115,000. The arbitrator gave State Farm credit
for $300,000 paid.
State 	Farm 	paid 	the 	award 	set 	by 	the 	arbitrator. The
Drummonds then requested that State Farm pay attorney fees
expended in the arbitration action. State Farm refused. On
April 16, 2009, the Drummonds applied to the Lancaster
County District Court for confirmation of the arbitrator’s
award, citing § 25-2612. State Farm filed a motion to strike
the Drummonds’ application, arguing that its payment of the
award rendered the matter moot. The district court agreed with
DRUMMOND v. STATE FARM MUT. AUTO. INS. CO. 	259
Cite as 280 Neb. 258

State Farm and granted the motion to strike. The Drummonds
have appealed.
ASSIGNMENT OF ERROR
The Drummonds assign, consolidated and restated, that the
district court erred in refusing to confirm the arbitration award
upon the Drummonds’ application because it concluded that the
Drummonds’ application for confirmation was moot.
STANDARD OF REVIEW
[1] Statutory interpretation is a matter of law in connection
with which an appellate court has an obligation to reach an
independent, correct conclusion irrespective of the determina-
tion made by the trial court.1
[2] In reviewing a district court’s decision to vacate, modify,
or confirm an arbitration award under Nebraska’s Uniform
Arbitration Act, an appellate court is obligated to reach a con-
clusion independent of the trial court’s ruling as to questions
of law.2
ANALYSIS
The Drummonds allege that the district court erred when
it refused to confirm their arbitration award because it deter-
mined the issue was moot. The Drummonds argue that under
§ 25-2612, which is part of Nebraska’s Uniform Arbitration
Act, the district court had no choice but to confirm the arbitra-
tion award. In their request for confirmation, the Drummonds
stated they sought confirmation in order to obtain attorney fees
under Neb. Rev. Stat. § 44-359 (Reissue 2004) and could only
do so once a judgment was entered against State Farm. State
Farm contended in its motion to strike that the district court
was correct in deciding the issue was moot because it had paid
the award in full. We note that the issue of attorney fees is not
before us at this time.
Section 25-2612 states, “Within sixty days of the application
of a party, the court shall confirm an award, unless within the
1 Japp v. Papio-Missouri River NRD, 271 Neb. 968, 716 N.W.2d 707
(2006).
2 State v. Henderson, 277 Neb. 240, 762 N.W.2d 1 (2009).
260 	280 NEBRASkA REPORTS

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.”
Neb. Rev. Stat. § 25-2613 (Reissue 2008) provides the proce-
dure for vacating an award, while Neb. Rev. Stat. § 25-2614
(Reissue 2008) provides the procedure for modifying or cor-
recting an award.
Nebraska has not yet addressed this particular issue, but
in its order, the district court cited three cases from other
jurisdictions that have. In Stewart Title Guar. Co. v. Tilden,3
a Wyoming case, a confirmation of an arbitration award was
sought. The Wyoming court stated that the purpose of confirm-
ing an arbitration award is to provide a judgment that can then
be enforced through court proceedings.4 Although the language
“‘shall confirm’” was present in the Wyoming statute, the court
held that because the award had been paid, the case was moot
and the trial court had no jurisdiction over the matter.5
Keahey v. Plumlee6 involved a dispute over a commission
from a real estate sale. Real estate agents were awarded a
commission, and when payment was not made, they sought
to confirm the award. Appellant objected, citing a statute that
prevented a real estate broker from suing on his or her own
behalf. The Arkansas appellate court found that confirmation
of an arbitration award could not be likened to filing suit and
that confirmation was intended to be a means of enforcing an
unsatisfied award.7
The facts in Keahey are clearly distinguishable from the
present case, as Keahey did not involve seeking confirmation
of a satisfied arbitration award.8 Murphy v. National Union Fire
Ins. Co.9 involved a statute much the same as that of Nebraska
3 Stewart Title Guar. Co. v. Tilden, 64 P.3d 739 (Wyo. 2003).
4 Id.
5 Id. at 741.
6 Keahey v. Plumlee, 94 Ark. App. 121, 226 S.W.3d 31 (2006).
7 Id.
8 Id.
9 Murphy v. National Union Fire Ins. Co., 438 Mass. 529, 781 N.E.2d 1232
(2003).
DRUMMOND v. STATE FARM MUT. AUTO. INS. CO. 	261
Cite as 280 Neb. 258

and Wyoming, and the court there held that satisfaction of an
award rendered confirmation a moot issue.
The reasoning in Tilden and Murphy has been specifically
rejected by some courts, however. These courts cite to the plain
language of Nebraska’s Uniform Arbitration Act requiring
courts to confirm an arbitration award regardless of whether
the award has been satisfied.10 Quoting a federal district court
case, the Hawaii Supreme Court stated:
“But whether these awards have been satisfied—a fact
disputed by plaintiff—has no bearing on whether the
arbitration awards should be confirmed. . . . Indeed, as
the defendants themselves have pointed out subsequent
to the briefing, a court may confirm an arbitration award
against a party even when the party has complied with
that award. . . .”11
We find this reasoning persuasive.
[3] Section 25-2612 clearly states that unless a party moves
for modification or vacation of an arbitration award within 60
days, “the court shall confirm an award.” (Emphasis supplied.)
We also note that as a general rule, the use of the word “shall”
is considered to indicate a mandatory directive, inconsistent
with the idea of discretion.12 We find that § 25-2612 does not
allow for the exercise of discretion by the court when a request
of confirmation is made where there has been no application
for vacation or modification. And because the award had not
yet been confirmed under § 25-2612, the district court erred
in determining that the case was moot.13 Therefore, when a
party applies for confirmation of an award under § 25-2612, a
10 Mikelson v. United Services Auto Ass’n, 122 Haw. 393, 227 P.3d 559
(2010); Bernstein Family Ltd. Partnership v. Sovereign Partners, L.P., 66
A.D.3d 1, 883 N.Y.S.2d 201 (2009); Marchelletta v. Seay Construction
Services, Inc., 265 Ga. App. 23, 593 S.E.2d 64 (2004); Kutch v. State Farm
Mutual Auto. Ins. Co., 960 P.2d 93 (Colo. 1998); Wolfe v. Farm Bureau
Ins. Co., 128 Idaho 398, 913 P.2d 1168 (1996).
11 Mikelson, supra note 10, 122 Haw. at 396, 227 P.3d at 562 (quot-
ing District Council No. 9 v. APC Painting, Inc., 272 F. Supp. 2d 229
(S.D.N.Y. 2003)).
12 State v. Alford, 278 Neb. 818, 774 N.W.2d 394 (2009).
13 See Mikelson, supra note 10.
262 	280 NEBRASkA REPORTS

district court shall confirm the award unless a party has moved
for vacation, modification, or correction of the award.
CONCLUSION
The plain language of § 25-2612 requires that a court
confirm an arbitration award upon application of a party. We
therefore reverse the district court’s decision granting State
Farm’s motion to strike and remand the cause for proceedings
consistent with this opinion.
R eveRseD anD RemanDeD FoR
FuRtHeR pRoceeDinGs.
DAVIO v. NEBRASkA DEPT. OF HEALTH & HUMAN SERVS. 	263
Cite as 280 Neb. 263
JenniFeR Davio, inDiviDually anD on beHalF oF all otHeRs
similaRly situateD, appellee anD cRoss -appellant,
v. nebRasKa D epaRtment oF H ealtH anD
Human seRvices et al ., appellants
anD cRoss -appellees.
786 N.W.2d 655
Filed July 23, 2010. 	No. S-09-985.
1. Administrative Law: Statutes: Appeal and Error. To the extent that the mean-
ing and interpretation of statutes and regulations are involved, questions of law
are presented, in connection with which an appellate court has an obligation
to reach an independent conclusion irrespective of the decision made by the
court below.
2. Jurisdiction: Appeal and Error. A jurisdictional question which does not
involve a factual dispute is determined by an appellate court as a matter of law,
which requires the appellate court to reach a conclusion independent of the lower
court’s decision.
3. Pleadings: Notice. Under the liberalized rules of notice pleading, a party is
only required to set forth a short and plain statement of the claim showing that
the pleader is entitled to relief. The party is not required to plead legal theo-
ries or cite appropriate statutes so long as the pleading gives fair notice of the
claims asserted.
4. Justiciable Issues. The required showing of a case or controversy is made when
the plaintiff shows the existence of a justiciable controversy and an interest in
the subject matter of the action, i.e., that there is a controversy between persons
whose interests are adverse and that the plaintiff is a person whose rights, status,
or other legal relations are affected by the challenge.
5. Class Actions. A class action cannot be employed to circumvent affirmative
defenses or to revive claims which are no longer viable.