Speece v. Allied Professionals Ins. Co.

Summary

The Nebraska Supreme Court held that the Federal Arbitration Act does not preempt Nebraska’s prohibition on mandatory arbitration clauses in insurance contracts. However, the court held that the Liability Risk Retention Act of 1986 preempts application of that Nebraska statute to foreign risk retention groups because it regulates the operation of such groups. The court reversed the order denying Allied Professionals Insurance Company’s motion to compel arbitration and remanded for further proceedings.

Holdings

1. The denial of a motion to compel arbitration is a final, appealable order because it affects a substantial right and is made in a special proceeding.
2. The Federal Arbitration Act does not preempt Neb. Rev. Stat. § 25-2602.01(f)(4).
3. The Liability Risk Retention Act of 1986 preempts application of Neb. Rev. Stat. § 25-2602.01(f)(4) to foreign risk retention groups.
4. The court did not decide whether the arbitration clause was unconscionable because the district court had not decided that issue and no cross-appeal presented it for review.

Questions Presented

1. Whether the denial of APIC's motion to compel arbitration was a final, appealable order.
2. Whether the Federal Arbitration Act preempts Neb. Rev. Stat. § 25-2602.01(f)(4), which generally prohibits mandatory arbitration clauses in insurance contracts.
3. Whether the Liability Risk Retention Act of 1986 preempts application of Neb. Rev. Stat. § 25-2602.01(f)(4) to a foreign risk retention group.
4. Whether the court should decide the unconscionability of the arbitration clause when the district court had not addressed that issue.

Disposition

reversed_and_remanded