Nebraska Machinery Company v. Cargotec Solutions, LLC

Filing 20

ORDER that Nebraska Machinery's Motion to Dismiss or Stay Arbitration and to Determine Arbitrability 6 is granted. Cargotec's Motion to Compel Arbitration and to Dismiss or, Alternatively, Stay Proceedings 15 is denied. Ordered by Magistrate Judge Thomas D. Thalken. (MLF, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
NEBRASKA MACHINERY COMPANY,
Plaintiff,

8:12CV394

vs.
ORDER
CARGOTEC SOLUTIONS, LLC, f/k/a
KALMAR INDUSTRIES, USA, LLC,
Defendant.
This matter is before the court on two motions. The first motion is the plaintiff’s,
Nebraska Machinery Company (Nebraska Machinery), Motion to Dismiss or Stay
Arbitration and to Determine Arbitrability (Filing No. 6). Nebraska Machinery filed a brief
(Filing No. 7) and index of evidence (Filing No. 8) in support of its motion. Cargotec
Solutions, LLC, formerly known as Kalmar Industries, USA, LLC (Cargotec) filed a brief
(Filing No. 13) and index of evidence (Filing No. 14) in opposition. Nebraska Machinery
filed a brief (Filing No. 17) in reply. The second motion is the Cargotec’s Motion to
Compel Arbitration and to Dismiss or, Alternatively, Stay Proceedings (Filing No. 15).
Cargotec filed a brief (Filing No. 16) in support of its motion. Nebraska Machinery filed
a brief (Filing No. 18) in opposition. Cargotec filed a brief (Filing No. 19) in reply.

BACKGROUND
This case pertains to a dispute over the terms of contracts for the sale of goods.
Specifically, Nebraska Machinery and Cargotec disagree whether the parties reached
arbitration and indemnification agreements. On March 23, 2007, Cargotec submitted
Purchase Order Number 754399 (PO No. 1) to Nebraska Machinery for CAT C6.6
engines. See Filing No. 8-2 Ex. A - PO No. 1. PO No. 1 indicated: “Standard Kalmar
terms and conditions Form F-027 and Packing & Shipping Requirements Form F-058
will apply to this order. If you do not have a copy of these forms on file, please contact
the buyer indicated.”

Id.

Form F-027 contains arbitration and indemnification

provisions. See Filing No. 8-1 Ex. A - Form F-027. Specifically, Form F-027 § 7,
entitled “HOLD HARMLESS,” provides:

Seller agrees to indemnify, save and keep harmless the
Buyer from and against any and all loss, damage, cost,
charges or expenses including attorney fees or claims for the
same which the Buyer may suffer or sustain or be in any way
subjected to on account of . . . damage to or loss from or in
any way connected with the products or services which are
provided by seller pursuant to this contract.
See Filing No. 8-1 Ex. A - Form F-027.

Section 14, entitled

“ARBITRATION,” provides:
At Buyer’s sole election, any controversy or claim arising out
of or related to this Purchase Order shall be resolved by
arbitration under the Federal Arbitration Act and according to
the Commercial Arbitration Rules of the American Arbitration
Association (AAA) . . . . Notice of demand for arbitration
shall be filed in writing with the seller and AAA.
Id. Nebraska Machinery contends it never received Form F-027. See Filing No. 7 Brief p. 4; Filing No. 8-1 - Watson Aff. ¶ 5; Filing No. 8-2 - Krisel Aff. ¶ 3. In response to
PO No. 1, on March 28, 2007, Nebraska Machinery created and sent to Cargotec a
purchase order (Nebraska Machinery PO No. 1) on a separate form and an invoice for
the sale of C6.6 engines. See Filing No. 8-2 Ex. B - Nebraska Machinery PO No. 1; Ex.
D - Nebraska Machinery Invoice No. 1. Nebraska Machinery PO No. 1 indicated the
order was “SUBJECT TO THE TERMS AND CONDITIONS ON THE REVERSE SIDE
HEREOF . . . .” See Filing No. 8-2 Ex. B - Nebraska Machinery PO No. 1. Nebraska
Machinery’s terms and conditions did not include arbitration or indemnification
provisions. See Filing No. 8-2 Ex. C - Nebraska Machinery Terms and Conditions.
Cargotec contends it received Nebraska Machinery Invoice No. 1 but never received
Nebraska Machinery PO No. 1 or terms and conditions. See Filing No. 13 - Response
p. 4-5; Filing No. 14-1 - Yohe Aff. ¶ 4.
On April 20, 2007, Cargotec submitted Purchase Order Number 754473 (PO No.
2) to Nebraska Machinery for additional CAT C6.6 engines. See Filing No. 8-2 Ex. E PO No. 2. PO No. 2 contained similar language and terms as PO No. 1. Id.; see Filing
No. 8-2 Ex. A - PO No. 1. In response to PO No. 2, on April 25, 2007, Nebraska
Machinery created and sent to Cargotec a purchase order (Nebraska Machinery PO No.
2) on a separate form and an invoice for the sale of the C6.6 engines. See Filing No. 82 Ex. F - Nebraska Machinery PO No. 2; Ex. G - Nebraska Machinery Invoice No. 2.
2

Nebraska Machinery PO No. 2 contained similar terms as Nebraska Machinery PO No.
1. Id.; see Filing No. 8-2 Ex. B - Nebraska Machinery PO No. 1. Nebraska Machinery
and Cargotec contend they did not receive the opposing party’s terms and conditions
with regard to the second purchase order. See Filing No. 8-2 - Krisel Aff. ¶ 8-9; Filing
No. 14-1 - Yohe Aff. ¶ 4. Nebraska Machinery subsequently delivered the engines to
Cargotec and Cargotec remitted payment. See Filing No. 8-2 - Krisel Aff. ¶ 10.
In May and July 2007, Cargotec, through an authorized dealer, Sharron Group,
Inc. (Sharron), sold six yard trucks to Containerport Group, Inc. (Containerport). See
Filing No. 5 - Amended Complaint ¶ 7. Cargotec equipped the yard trucks with CAT
C6.6 engines purchased from Nebraska Machinery. Id. ¶ 8-10. In early 2009, after
determining the yard trucks did not perform properly, Containerport sued Sharron. Id.
¶ 24. On July 20, 2009, Sharron filed third party claims against Cargotec and Nebraska
Machinery, among other parties. Id. ¶ 27. After Cargotec agreed to indemnify Sharron,
Cargotec was dismissed from the Containerport action. Id. ¶ 31. Subsequently, on
November 11, 2009, Cargotec sent a letter to Nebraska Machinery requesting Nebraska
Machinery indemnify Cargotec. Id. ¶ 32. On January 8, 2010, Nebraska Machinery
rejected Cargotec’s demand for contractual indemnity. Id. ¶ 33. In February 2010,
Sharron dismissed Nebraska Machinery from the Containerport action. Id. ¶ 34.
On September 29, 2012, Cargotec filed a Demand for Arbitration against
Nebraska Machinery in Kansas.

See Filing No. 5 Ex. A - Demand for Arbitration.

Cargotec alleged Nebraska Machinery “agreed to indemnify and hold harmless
[Cargotec] for all loss or damage in connection with the [engines] provided.”

Id.

Cargotec further alleged the basis for arbitration was an arbitration agreement Nebraska
Machinery entered into on March 23, 2007, and April 20, 2007. Id.
On November 8, 2012, Nebraska Machinery filed the current action against
Cargotec for declaratory relief. See Filing No. 5 - Amended Complaint. Nebraska
Machinery alleges Cargotec’s demand for arbitration and indemnity is improper. Id. On
December 7, 2012, Nebraska Machinery filed its motion seeking dismissal of Cargotec’s
arbitration proceeding, or at least a stay of the proceeding pending this court’s decision
on arbitrability. See Filing No. 6 - Nebraska Machinery’s Motion. Nebraska Machinery
alleges there is no arbitration or indemnification agreement between the parties. Id. On

3

December 21, 2012, Cargotec filed its motion seeking to compel arbitration pursuant to
the parties’ arbitration agreement. See Filing No. 15 - Cargotec’s Motion.

ANALYSIS
A.

Jurisdiction
Nebraska Machinery argues the court has jurisdiction to determine whether the

parties reached an arbitration agreement. See Filing No. 17 - Reply p. 3-6. Cargotec
argues the court does not have authority to dismiss a pending arbitration and determine
the question of arbitrability. See Filing No. 13 - Response p. 7. Cargotec argues the
parties entered into two contracts wherein they clearly and unmistakably agreed to have
an arbitrator decide the question of arbitrability.

Id. at 8, 12.

Cargotec argues

incorporation of the Commercial Rules of the American Arbitration Association (AAA
Rules) constituted “a clear and unmistakable expression of the parties’ intent to leave
the question of arbitrability to an arbitrator.” Id. (citing Fallo v. High-Tech Inst., 559
F.3d 874, 878 (8th Cir. 2009)). Cargotec argues any controversy under the contracts,
including arbitrability and indemnification, are within an arbitrator’s jurisdiction to decide.
Id. at 6-9.
“The Federal Arbitration Act, 9 U.S.C. § 4, states that a party aggrieved by the
failure of another to arbitrate under a written agreement may petition the district court for
an order compelling arbitration.” Art Etc. LLC v. Angel Gifts, Inc., 686 F.3d 654, 656
(8th Cir. 2012). “[A]rbitration is simply a matter of contract between the parties; it is a
way to resolve those disputes-but only those disputes-that the parties have agreed to
submit to arbitration.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943
(1995). If a valid arbitration agreement exists and the dispute falls within the scope of
that agreement, a dispute must be submitted to arbitration.

See Lyster v. Ryan’s

Family Steak Houses, Inc., 239 F.3d 943, 946 (8th Cir. 2001).
The issue of “whether the parties have a valid arbitration agreement at all” is a
“gateway matter” that requires judicial resolution. Green Tree Fin. Corp. v. Bazzle,
539 U.S. 444, 452 (2003) (plurality opinion); see Howsam v. Dean Witter Reynolds,
Inc., 537 U.S. 79, 83 (2002) (“[W]hether the parties have agreed to submit a particular
dispute to arbitration is typically an issue for judicial determination.”) (internal citation
omitted); see also Barker v. Golf U.S.A., Inc., 154 F.3d 788, 791 (8th Cir. 1998)
4

(stating “a court must decide whether [an] agreement to arbitrate is valid”).

The

Supreme Court noted the arbitrability determination depends on whether the parties
“agree[d] to submit the arbitrability question itself to arbitration.” Kaplan, 514 U.S. at
943. “[W]hen courts decide whether a party has agreed that arbitrators should decide
arbitrability: Courts should not assume that the parties agreed to arbitrate arbitrability
unless there is ‘clea[r] and unmistakabl[e]’ evidence that they did so.” Kaplan, 514 U.S.
at 944 (alterations in original) (citing AT & T Techs., Inc. v. Comm’s Workers of Am.,
475 U.S. 643, 649 (1986)).

“Unless the parties clearly and unmistakably provide

otherwise, the question of whether the parties agreed to arbitrate is to be decided by the
court, not the arbitrator.” AT & T Techs., 475 U.S. at 649. An “arbitration [agreement’s]
provision’s incorporation of the AAA Rules . . . constitutes a clear and unmistakable
expression of the parties’ intent to leave the question of arbitrability to an arbitrator.”
Fallo, 559 F.3d at 878.
[G]iven the principle that a party can be forced to arbitrate
only those issues it specifically has agreed to submit to
arbitration, one can understand why courts might hesitate to
interpret silence or ambiguity on the “who should decide
arbitrability” point as giving the arbitrators that power, for
doing so might too often force unwilling parties to arbitrate a
matter they reasonably would have thought a judge, not an
arbitrator, would decide.
Kaplan, 514 U.S. at 945.
Although Cargotec’s arbitration provision incorporated the AAA Rules, this court
maintains authority to determine arbitrability. In Fallo, which Cargotec argues supports
its position the arbitrator determines arbitrability, the Eighth Circuit determined “the act
of incorporating Rule 7(a) of the AAA Rules provides [clear and unmistakable] evidence
of the parties’ intent to leave the question of arbitrability to the arbitrator . . . because
Rule 7(a) expressly gives the arbitrator the power to rule on his or her own jurisdiction.”
Fallo, 559 F.3d at 876. Nevertheless “the Eighth Circuit [in Fallo] impliedly found that
even where the parties agree to leave the issue of arbitrability to the arbitrator, a federal
court retains the authority to determine the issue of validity in the first instance.” Hill v.
Antioch Co., 8:09CV275, 2009 WL 3838251 (D. Neb. Nov. 17, 2009) (citing Fallo, 559
F.3d at 878-79).

If Nebraska Machinery did not agree to Cargotec’s terms and

conditions, it follows that Nebraska Machinery did not agree to arbitration and this court
5

cannot force arbitration. See Litton Fin. Printing Div., a Div. of Litton Bus. Sys., Inc.
v. N.L.R.B., 501 U.S. 190, 208 (1991) (“[A] party cannot be forced to arbitrate the
arbitrability question.”). Absent Nebraska Machinery’s clear and unmistakable intention
to submit the question of arbitrability to an arbitrator, this court retains jurisdiction to
determine whether the parties entered into an arbitration agreement. While citing the
AAA Rules may be clear and unmistakable evidence that Cargotec intended for an
arbitrator to determine arbitrability, Nebraska Machinery did not clearly and
unmistakably agree to have an arbitrator decide the question of arbitrability because
Nebraska Machinery did not agree to Cargotec’s terms and conditions.

B.

Terms of the Contract
Nebraska Machinery argues there was no agreement to arbitrate or indemnify for

two reasons:

1) Cargotec’s terms and conditions, which included the disputed

provisions, were never received and 2) Nebraska Machinery did not accept Cargotec’s
offers and proposed counter-offers. See Filing No. 7 - Brief p. 9, 13-15; Filing No. 17 Reply p. 8. Nebraska Machinery argues its counter-offers did not include arbitration or
indemnification provisions, therefore, it did not agree to arbitration and indemnification.
Id. at 13-14.
Cargotec argues, assuming this court has jurisdiction to determine arbitrability,
which Cargotec contests, the parties entered into an arbitration agreement. See Filing
No. 13 - Response p. 9.

Cargotec argues the purchase orders incorporated by

reference Cargotec’s terms and conditions which included an arbitration provision. Id.
Cargotec argues Nebraska Machinery received and agreed to Cargotec’s terms and
conditions and is therefore bound by their agreement to arbitrate disputes. Id. at 10.
Additionally, Cargotec argues Nebraska Machinery’s recreated purchase orders do not
constitute valid counter-offers because Cargotec never received the recreated purchase
orders. Id. at 13-14.
“The Federal Arbitration Act create[s] a body of federal substantive law of
arbitrability, applicable to any arbitration agreement within the coverage of the Act.”
Donaldson Co., Inc. v. Burroughs Diesel, Inc., 581 F.3d 726, 731 (8th Cir. 2009)
(internal citation omitted). However “[w]hen deciding whether the parties agreed to
arbitrate a certain matter . . . courts generally . . . should apply ordinary state-law
6

principles that govern the formation of contracts.” Hudson v. ConAgra Poultry Co.,
484 F.3d 496, 500 (8th Cir. 2007) (citing Kaplan, 514 U.S. at 944). “Thus, state
contract law governs the threshold question of whether an enforceable arbitration
agreement exists between litigants; if an enforceable agreement exists, the federal
substantive law of arbitrability governs whether the litigants’ dispute falls within the
scope of the arbitration agreement.” Donaldson Co., 581 F.3d at 731.
The parties agree there is no discernible difference between Nebraska and
Kansas contract law. See Filing No. 7 - Brief p. 8; Filing No. 13 - Response p. 10.
Therefore this court does not need to engage in a choice of law analysis. See N & D
Fashions, Inc. v. DHJ Indus., Inc., 548 F.2d 722, 724 (8th Cir. 1976) (noting it is
unnecessary to resolve a choice-of-law issue where the states involved adopted the
Uniform Commercial Code (U.C.C.) without substantive modification); see Neb. Rev.
Stat. U.C.C. §§ 1-101, et seq., Kan. Stat. Ann. §§ 84-1-101, et seq.
“To create a contract, there must be both an offer and an acceptance; there must
also be a meeting of the minds or a binding mutual understanding between the parties
to the contract.” Gerhold Concrete Co., Inc. v. St. Paul Fire & Marine Ins. Co., 695
N.W.2d 665, 672 (Neb. 2005); see Wachter Mgmt. Co. v. Dexter & Chaney, Inc., 144
P.3d 747, 751 (Kan. 2006). “A fundamental and indispensable basis of any enforceable
agreement is that there be a meeting of the minds of the parties as to the essential
terms and conditions of the proposed contract.” Peters v. Halligan, 152 N.W.2d 103,
106 (Neb. 1967); see Dougan v. Rossville Drainage Dist., 15 P.3d 338, 352 (Kan.
2000).
The U.C.C., which Kansas and Nebraska adopted, controls whether the parties
formed a contract. Section 2-207 provides:
(1) A definite and seasonable expression of acceptance or a
written confirmation which is sent within a reasonable time
operates as an acceptance even though it states terms
additional to or different from those offered or agreed upon,
unless acceptance is expressly made conditional on assent
to the additional or different terms.
(2) The additional terms are to be construed as proposals for
addition to the contract. Between merchants such terms
become part of the contract unless:
(a) the offer expressly limits acceptance to the terms
of the offer;
(b) they materially alter it; or
7

(c) notification of objection to them has already been
given or is given within a reasonable time after notice
of them is received.
(3) Conduct by both parties which recognizes the existence
of a contract is sufficient to establish a contract for sale
although the writings of the parties do not otherwise
establish a contract. In such case the terms of the particular
contract consist of those terms on which the writings of the
parties agree, together with any supplementary terms
incorporated under any other provisions of this act.
Neb. Rev. Stat. U.C.C § 2-207; Kan. Stat. Ann. § 84-2-207.
[W]hen no contract is recognized under Subsection 2-207(1)
. . . the entire transaction aborts at this point. If, however,
the subsequent conduct of the parties - particularly,
performance by both parties under what they apparently
believe to be a contract - recognizes the existence of a
contract, under Subsection 2-207(3) such conduct by both
parties is sufficient to establish a contract, notwithstanding
the fact that no contract would have been recognized on the
basis of their writings alone.
PCS Nitrogen Fertilizer, L.P. v. Christy Refractories, L.L.C., 225 F.3d 974, 980 (8th
Cir. 2000); see also Neb. Rev. Stat. U.C.C. § 2-207 cmt. 7; Kan. Stat. Ann. § 84-2-207
cmt. 7.
If this court accepts as true Cargotec’s and Nebraska Machinery’s allegations
regarding document exchange, without discrediting either party, there are two possible
scenarios. In the first scenario, the parties did not receive each other’s terms and
conditions.

Under the first scenario, the only documents sent and received were

Cargotec’s PO No. 1 and 2 and Nebraska Machinery Invoice No. 1 and 2. In the
second scenario, the parties received all documents, including both parties’ terms and
conditions.

1.

First Scenario

Under the first scenario, Nebraska Machinery received Cargotec’s purchase
orders and Cargotec received Nebraska Machinery’s invoices. Neither party received
any terms and conditions.
Cargotec’s purchase orders constituted offers under U.C.C. § 2-206. See Neb.
Rev. Stat. U.C.C. § 2-206; Kan. Stat. Ann. § 84-2-206. Cargotec’s purchase orders
8

included the following language: “Standard [Cargotec] terms and conditions Form F027 . . . apply to this order. If you do not have a copy of [this form] on file, please
contact the buyer indicated.” See Filing No. 8-2 Exs. A and E - Purchase Orders No. 1
and 2. Form F-027 included the disputed arbitration provision. The purchase orders
properly incorporated Cargotec’s terms and conditions. See Drain v. Bd. of Educ. of
Frontier County Sch. Dist. No. 46, 508 N.W.2d 255, 260 (Neb. 1993) (recognizing
terms and conditions incorporated by reference in a contract are a valid part of a
contract); Sw. Nat. Bank v. Simpson & Son, Inc., 799 P.2d 512, 517 (Kan. App. 1990)
(same). Even if the document incorporated by reference is not attached to an offer or
present during acceptance, the document is part of a contract. See Sw. Nat. Bank, 799
P.2d at 517-19.

Therefore, if Nebraska Machinery accepted Cargotec’s offers, the

referenced terms and conditions would be part of the contract.
Nebraska Machinery’s invoices constituted acceptances of Cargotec’s purchase
orders. See Neb. Rev. Stat. U.C.C. § 2-207; Kan. Stat. Ann. § 84-2-207; see also
Transamerica Oil Corp. v. Lynes, Inc., 723 F.2d 758, 765 (10th Cir. 1983) (stating an
invoice could constitute an acceptance of an offer). Nebraska Machinery’s invoices did
not include additional or different terms. There is no indication on the invoices that
Nebraska Machinery either accepted or rejected Cargotec’s terms and conditions.
However, assuming the parties only exchanged the purchase orders and invoices, with
Cargotec’s terms and conditions being properly incorporated by reference, the parties
formed two contracts.

These contracts included arbitration and indemnification

provisions. Therefore, under this scenario, any dispute under the contract would be
decided in arbitration.

2.

Second Scenario

Under the second scenario, the parties are assumed to have received all
documents sent. This includes Cargotec’s PO Nos. 1 and 2, Form F-027, Nebraska
Machinery’s PO Nos. 1 and 2, Nebraska Machinery’s terms and conditions, and
Nebraska Machinery’s Invoice Nos. 1 and 2.
Cargotec’s purchase orders constituted offers.

Within such offers, Cargotec

incorporated by reference Form F-027, which included the disputed arbitration and
indemnification provisions.

See Filing No. 8-1 Ex. A - Form F-027.
9

In response,

Nebraska Machinery sent recreated purchase orders and invoices. See Filing No. 8-2
Exs. B and F - Nebraska Machinery’s PO Nos. 1 and 2; Exs. D and G - Nebraska
Machinery Invoices Nos. 1 and 2. Nebraska Machinery’s recreated purchase orders
included terms and conditions that did not include arbitration or indemnification
provisions provision. See Filing No. 8-2 Ex. C - Nebraska Machinery’s Terms and
Conditions.
Although Cargotec incorporated by reference its terms and conditions and
Nebraska Machinery is presumed to have received the terms and conditions under this
scenario, Nebraska Machinery nevertheless rejected Cargotec’s offers.

Nebraska

Machinery’s recreated purchase orders operated as counter-offers.

Nebraska

Machinery chose not to sign Cargotec’s purchase orders and accept Cargotec’s terms
and conditions.

Instead, Nebraska Machinery recreated the purchase orders and

conditioned its counter-offers on Nebraska Machinery’s terms and conditions.
Importantly, Nebraska Machinery did not include arbitration or indemnification
provisions evidencing an intent not to agree to arbitration and indemnification.

By

including different terms and conditions, Nebraska Machinery expressly rejected
Cargotec’s terms and conditions and showed an intent to be bound only by its own
terms and conditions. If Nebraska Machinery’s counter-offers were accepted, there is
no arbitration or indemnification agreement between the parties.
After Nebraska Machinery sent the counter-offers, Cargotec was in the position
to accept Nebraska Machinery’s counter-offers.

Cargotec did not accept Nebraska

Machinery’s counter-offers in writing. Therefore, the parties merely exchanged offers.
Accordingly, the parties’ writings did not create a contract.
However, to the extent the parties’ actions may nevertheless have created a
contract, such factual circumstances may be taken into consideration under U.C.C. § 2207(3). See Neb. Rev. Stat. U.C.C. § 2-207(3); Kan. Stat. Ann. § 84-2-207(3). The
parties behaved in a manner recognizing the existence of a contract. See Neb. Rev.
Stat. U.C.C. § 2-204 (“A contract for sale of goods may be made in any manner
sufficient to show agreement, including conduct by both parties which recognizes the
existence of such a contract.”), Kan. Stat. Ann. § 84-2-204 (same).

Nebraska

Machinery delivered the engines and Cargotec accepted, paid for, and used the
engines. Under the second scenario, the parties’ behavior formed a contract. See PCS
10

Nitrogen Fertilizer, L.P. v. Christy Refractories, L.L.C., 225 F.3d 974, 981 (8th Cir.
2000) (“The parties clearly behaved in a manner that recognized the existence of a
contract, as demonstrated by . . . delivery of the goods and . . . acceptance of, payment
for, and attempted use of the goods.”). In such a case, the “contract consist[s] of those
terms on which the writings of the parties agree.” See Neb. Rev. Stat. U.C.C. § 2207(3) cmt. 7; Kan. Stat. Ann. § 84-2-207(3) cmt. 7. Under U.C.C. § 2-207(3), the
contract incorporates terms on which the parties agree, which necessarily excludes the
disputed arbitration and indemnification provisions in Cargotec’s terms and conditions.
As the parties did not agree to arbitration and indemnification, the contract does not
include those provisions. Therefore, Nebraska Machinery is not required to submit to
arbitration.
The court finds the second scenario represents the most plausible explanation of
the parties’ interaction. The court is not persuaded by the arguments that although
each party sent all documents, each party received limited documents in return.
Although there is no evidence the parties received all the documents, there is also no
evidence disputing the parties’ assertions that all documents were sent. If Cargotec
sent Form F-027 with the purchase orders, there is a presumption Nebraska Machinery
received those documents. Similarly, if Nebraska Machinery sent the invoices with
counter-offers and terms and conditions, there is a presumption Cargotec received
those documents. See Sherrod v. State Dep’t of Corr. Servs, 557 N.W.2d 634, 639
(Neb. 1997) (“A letter properly addressed, stamped, and mailed raises a presumption
that the letter reached the addressee in the usual course of the mails.”); accord
Evenson Trucking Co. v. Aranda, 127 P.3d 292, 304 (Kan. 2006) (recognizing the law
presumes delivery of a properly addressed piece of mail).

Therefore, the court

assumes the parties received all documents sent and under that scenario, as previously
explained, the parties did not agree to arbitration.

IT IS ORDERED that:
1.

Nebraska Machinery’s Motion to Dismiss or Stay Arbitration and to

Determine Arbitrability (Filing No. 6) is granted.
2.

Cargotec’s Motion to Compel Arbitration and to Dismiss or, Alternatively,

Stay Proceedings (Filing No. 15) is denied.
11

ADMONITION
Pursuant to NECivR 72.2 any objection to this Order1 shall be filed with the Clerk
of the Court within fourteen (14) days after being served with a copy of this Order.
Failure to timely object may constitute a waiver of any objection. The brief in support of
any objection shall be filed at the time of filing such objection. Failure to file a brief in
support of any objection may be deemed an abandonment of the objection.
DATED this 25th day of January, 2013.
BY THE COURT:
s/ Thomas D. Thalken
United States Magistrate Judge

1

A review of the case law reveals that courts are divided on whether motions to compel
arbitration are dispositive for purposes of 28 U.S.C. § 636(b)(1)(A).
Non-Dispositive. In PowerShare, Inc. v. Syntel, Inc., 597 F.3d 10, 14 (1st Cir. 2010), the court
reasoned motions to compel arbitration are non-dispositive motions. In Wilken Partners, L.P. v.
Champps Operating Corp., Case No. 11-cv-1005, 2011 WL 1257480, at *1 (D. Kan. April 4, 2011) the
court decided that a “motion to compel arbitration is non-dispositive, as an Article III judge ultimately will
be required to confirm, modify or vacate any arbitration award involving the parties to [the] action.”
Accord All Saint’s Brands, Inc. v. Brewery Group Denmark, A/S, 57 F. Supp. 2d 825 (D. Minn. 1999);
Herko v. Metro. Life Ins. Co., 978 F. Supp. 141, 142 n. 1 (W.D. N.Y. 1997); SDD99, Inc. v. ASA Int’l,
Ltd., Case No. 06-CV-6089, 2007 WL 952046 (W.D. N.Y. Mar. 29, 2007); Jackman v. Jackman, Case
No. 06-1329, 2006 WL 3792109 (D. Kan. Dec. 21, 2006).
Dispositive. In Coxcom, Inc. v. Egghead Telecom, Inc., Case No. 08-CV-698, 2009 WL
4016629, at *1 (N.D. Okl. 2009), the presiding magistrate judge noted “[c]ourts generally regard a motion
to compel arbitration either as a case dispositive matter or a matter not within the statutory authority of a
U.S. Magistrate Judge to resolve by Order.” In Flannery v. Tri-State Div., 402 F. Supp. 2d 819 (E.D.
Mich. 2005), the district court reasoned that a magistrate judge’s order compelling arbitration terminated
the litigation in district court and transferred the case to another forum; therefore, the court viewed such
an order as the functional equivalent of a dispositive matter, which was reviewable de novo pursuant to
28 U.S.C. § 636(b)(1). See also Chen–Oster v. Goldman, Sachs & Co., 785 F. Supp. 2d 394, 399 (S.D.
N.Y. 2011) (finding persuasive those cases concluding that motions to compel are not case-dispositive)
and BBCM, Inc. v. Health Sys. Int’l, LLC, Case No. C10-0086, 2010 WL 4607917, at *1 (N.D. Iowa
November 4, 2010) (noting a split of authority, the magistrate judge issued a report and recommendation
“out of an abundance of caution”).
I am inclined to agree with PowerShare and Wilken; however, if the district court determines that
the present motions are dispositive matters, then my decision on that point will be reviewable de novo.
12