25-2602.01. Validity of arbitration agreement.

532 words·~2 min read·/ne/chapter-25/25-2602-01

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)A written agreement to submit any existing controversy to arbitration is valid, enforceable, and irrevocable except upon such grounds as exist at law or in equity for the revocation of any contract.

(b)A provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable, and irrevocable, except upon such grounds as exist at law or in equity for the revocation of any contract, if the provision is entered into voluntarily and willingly.

(c)The Uniform Arbitration Act applies to arbitration agreements between employers and employees or between their respective representatives.

(d)Contract provisions agreed to by the parties to a contract control over contrary provisions of the act other than subsections

(e)and

(f)of this section.

(e)Subsections

(a)and

(b)of this section do not apply to a claim for workers' compensation.

(f)Subsection

(b)of this section does not apply to:

(1)A claim arising out of personal injury based on tort;

(2)A claim under the Nebraska Fair Employment Practice Act;

(3)Any agreement between parties covered by the Motor Vehicle Industry Regulation Act; and

(4)Except as provided in section 44-811 , any agreement concerning or relating to an insurance policy other than a contract between insurance companies including a reinsurance contract.

(g)When a conflict exists, the Uniform Arbitration Act shall not apply to the Uniform Act on Interstate Arbitration and Compromise of Death Taxes and sections 44-811 , 44-4824 , 54-404 to 54-406 , 60-2701 to 60-2709 , and 70-1301 to 70-1329 .

A delegation of arbitrability of future policyholder claims in an agreement concerning or relating to an insurance policy is invalid under subdivision (f)(4) of this section. Citizens of Humanity v. Applied Underwriters, 299 Neb. 545, 909 N.W.2d 614 (2018).

The Liability Risk Retention Act of 1986, by its terms, preempts the application of subdivision (f)(4) of this section to foreign risk retention groups. Speece v. Allied Professionals Ins. Co., 289 Neb. 75, 853 N.W.2d 169 (2014).

Under the federal McCarran-Ferguson Act, state law regulating the business of insurance controls over federal law that does not specifically govern insurance. Subsection (f)(4) of this section regulates the insurer-insured contractual relationship and, thus, the business of insurance. It is therefore not preempted by the Federal Arbitration Act. Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538 (2010).

Under the federal McCarran-Ferguson Act, subsection (f)(4) of this section is preempted by the Federal Crop Insurance Act and regulations thereunder that specifically relate to the business of insurance and require arbitration of disputes. Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538 (2010).

With specified exceptions, agreements to arbitrate future controversies concerning an insurance policy are invalid under subsection (f)(4) of this section, unless federal law preempts this provision. Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538 (2010).

The public policy of the state did not change until this section became effective on June 11, 1997. Any contract clause allowing for predispute binding arbitration entered into before that date is void as against public policy. Millennium Solutions, Inc. v. Davis, 258 Neb. 293, 603 N.W.2d 406 (1999).