Frohberg Electric Company, Inc. v. Grossenburg Implement, Inc., and Kiehm Construction, Inc.

Summary

The Nebraska Supreme Court held that a subcontract unambiguously incorporated a mandatory arbitration provision from the general contract. Because the subcontract involved interstate commerce, the Federal Arbitration Act applied, and the parties were required to pursue mediation before arbitration. The court reversed the district court and remanded with directions to stay the action and compel arbitration.

Holdings

1. The subcontract unambiguously incorporated a mutually binding arbitration agreement from the general contract, notwithstanding that the provision appeared under the heading "The Contractor Agrees as Follows."
2. The incorporated agreement required the parties to attempt mediation as a condition precedent to binding arbitration, and the dispute was subject to that process.
3. The Federal Arbitration Act governed the subcontract because the contract contained an arbitration clause and involved interstate commerce.
4. The district court should have granted the motion to compel arbitration and stayed the action pending mediation and, if necessary, arbitration.

Questions Presented

1. Whether the subcontract unambiguously incorporated the general contract's arbitration and mediation provisions.
2. Whether the subcontract's arbitration agreement was governed by the Federal Arbitration Act because it involved interstate commerce.
3. Whether the defendants were entitled to an order staying the action and compelling mediation followed by arbitration.

Disposition

reversed_and_remanded