Justia Arbitration & Mediation Opinion SummariesArticles Posted in Supreme Court of Georgia
Adventure Motorsports Reinsurance, Ltd., et al. v. Interstate National Dealer Services, Inc.
The Georgia Supreme Court granted certiorari review to consider whether the Court of Appeals erred in reversing a trial court’s order confirming an arbitration award against Interstate National Dealer Services, Inc. (“INDS”), in favor of Southern Mountain Adventures, LLC (“Dealer”), and Adventure Motorsports Reinsurance Ltd. (“Reinsurer”). The dispute arose from the parties’ contractual relationship pursuant to which Dealer sold motorsports vehicle service contracts, which were underwritten and administered by INDS, to Dealer’s retail customers, and Reinsurer held funds in reserve to pay covered repair claims. The Supreme Court concluded the Court of Appeals erred in reversing the confirmation of the award because the arbitrator manifestly disregarded the law in rendering the award. In Case No. S21G0015, the Supreme Court reversed the Court of Appeals’ decision reversing the order confirming the arbitration award on that basis, and remanded for resolution of INDS’s argument that the arbitrator overstepped his authority in making the award. In Case No. S21G0008, the Supreme Court vacated the Court of Appeals’ decision dismissing as moot Dealer and Reinsurer’s appeal of the trial court’s failure to enforce a delayed-payment penalty provided in the arbitration award, and remanded for reconsideration of that issue. View "Adventure Motorsports Reinsurance, Ltd., et al. v. Interstate National Dealer Services, Inc." on Justia Law
Innovative Images, LLC v. Summerville et al.
Innovative Images, LLC sued its former attorney James Summerville, Summerville Moore, P.C., and The Summerville Firm, LLC (collectively, the “Summerville Defendants”) for legal malpractice. In response, the Summerville Defendants moved to dismiss the suit and to compel arbitration in accordance with the parties’ engagement agreement, which included a clause mandating arbitration for any dispute arising under the agreement. The trial court denied the motion, ruling that the arbitration clause was “unconscionable” and thus unenforceable because it had been entered into in violation of Rule 1.4 (b) of the Georgia Rules of Professional Conduct (“GRPC”) for attorneys found in Georgia Bar Rule 4-102 (d). The Court of Appeals reversed, holding that the arbitration clause was not void as against public policy or unconscionable. The Georgia Supreme Court concluded after review that regardless of whether the Summerville Defendants violated GRPC Rule 1.4 (b) by entering into the mandatory arbitration clause in the engagement agreement without first apprising Innovative of the advantages and disadvantages of arbitration, the clause was not void as against public policy because Innovative did not argue, and no court has held, that such an arbitration clause could never lawfully be included in an attorney-client contract. For similar reasons, the Supreme Court held the arbitration clause was not substantively unconscionable, and on the limited record before it, Innovative did not show the clause was procedurally unconscionable. Accordingly, the Court affirmed the appellate court's judgment. View "Innovative Images, LLC v. Summerville et al." on Justia Law
Brown v. RAC Acceptance East, LLC
After RAC Acceptance East, LLC swore out a warrant for Mira Brown’s arrest for theft by conversion of furniture that she had rented from RAC, Brown filed a lawsuit against RAC alleging malicious prosecution and other torts. The trial court entered an order granting RAC’s motion to compel Brown to arbitrate her claims pursuant to the arbitration agreement incorporated into the parties’ rental agreement. The Court of Appeals affirmed that order, concluding that whether RAC had waived its right to demand arbitration by its conduct in initiating the related criminal proceeding against Brown was a matter for the court to decide and that the trial court had correctly ruled that RAC did not waive arbitration. The Georgia Supreme Court granted certiorari, and affirmed the Court of Appeals’ judgment on the ground that the delegation provision in the parties’ arbitration agreement clearly gave the arbitrator, not the courts, the authority to determine that RAC did not waive by prior litigation conduct its right to seek arbitration, and the arbitrator’s decision on the waiver question could not be properly challenged as legally erroneous. View "Brown v. RAC Acceptance East, LLC" on Justia Law
Sun Trust Bank v. Lilliston
In 2001, appellant SunTrust Bank entered into a loan agreement with L-T Adventures, Inc. (“LTA”); this agreement did not include an arbitration provision. In 2005, SunTrust entered into a subsequent agreement with Jedon Lilliston (a co-owner of LTA) and her former husband in a transaction guaranteed by LTA. In connection with this second loan, the parties entered into a “Swap Agreement.” The Swap Agreement included an arbitration clause, providing, inter alia, that “any party may demand arbitration.” Following a dispute concerning interest charges associated with both transactions, Lilliston and LTA filed suit against SunTrust in April 2013. In January 2015, the plaintiffs voluntarily dismissed their action; at no point before the action was dismissed did SunTrust demand arbitration. Lilliston and LTA filed a renewal action, pursuant to OCGA 9-2-61 (a). SunTrust answered the complaint and moved to compel arbitration based on the provision in the Swap Agreement. The question presented in this case was whether a party’s demand for arbitration in a renewal action could be deemed waived based on that party’s conduct in the earlier, original litigation; the Court of Appeals answered this question in the affirmative. The Georgia Supreme Court concluded, however, that a renewal suit filed pursuant to OCGA 9-2-61 (a) was a de novo action, thus, a party’s conduct in the original action had no bearing on the question of waiver in the recommenced action. Accordingly, the Court reversed the judgment of the Court of Appeals. View "Sun Trust Bank v. Lilliston" on Justia Law
United Health Services of Georgia, Inc. v. Norton
Bernard Norton, by and through Kim Norton, brought a wrongful death action against a number of defendants who were affiliated with a nursing home in which his wife, Lola Norton, died. Bernard claimed that negligent treatment caused Lola’s death. The defendants filed a motion to dismiss the complaint or, in the alternative, to stay the proceedings and compel arbitration of all claims in accordance with an agreement entered into by Lola at the time she was admitted to the nursing home. The trial court granted the motion to stay and compel arbitration, and Bernard appealed, contending that, as a wrongful death beneficiary, he could not be bound to Lola’s arbitration agreement. The Court of Appeals reversed the trial court and found that Lola’s beneficiaries were not required to arbitrate their wrongful death claims against the defendants. The Supreme Court granted certiorari to determine whether an arbitration agreement governed by the Federal Arbitration Act (“FAA”) and entered into by a decedent and/or her power of attorney, which bound the decedent and her estate to arbitration, was also enforceable against the decedent’s beneficiaries in a wrongful death action. The Court found that such an arbitration agreement did bind the decedent’s beneficiaries with respect to their wrongful death claims, and, accordingly, reversed the Court of Appeals. View "United Health Services of Georgia, Inc. v. Norton" on Justia Law
Rollins v. Rollins
Glen and Danielle Rollins divorced in December 2013, and they agreed at that time to submit to binding arbitration of their respective claims to certain furniture and furnishings in the marital home. The arbitrator rendered an award in July 2014, and Glen promptly moved for judicial confirmation. While his motion was pending, in August 2014, the trial court ordered Danielle to account for some of the furniture and furnishings that the arbitrator had awarded to Glen that he could not find. Dissatisfied with her accounting, Glen filed a motion to hold Danielle in contempt of the August 2014 order. In April 2015, the trial court found Danielle was in willful contempt of the August 2014 order in at least one respect, and it entered an initial contempt order that directed Danielle to show cause why she ought not be incarcerated for her contempt. Danielle appealed the initial contempt order, both by filing an application for discretionary review with the Supreme Court, and by filing a notice of direct appeal. In May 2015, the Supreme Court denied the application for discretionary review. The direct appeal was not docketed until November 2015. In December 2015, the Supreme Court dismissed the direct appeal, explaining that any appeal of the initial contempt order had to come by application, and noting that it already had denied an application for discretionary review. In the meantime, the trial court held a final hearing on the motion for contempt and entered a final order on November 24, 2015, finding Danielle in contempt of the August 2014 order in additional respects, directing her to immediately surrender any property awarded to Glen, ordering her to pay Glen for any such property that had gone missing or was damaged, and ordering her to pay fines for 34 separate instances of contempt. The trial court also awarded Glen attorney fees. Danielle then applied for discretionary review of the final contempt order, and the Supreme Court granted her application. Danielle argued that the trial court was without jurisdiction to enter a final contempt order while her direct appeal from the initial contempt order still was pending with the Supreme Court. The Supreme agreed, reversed and remanded for further proceedings. View "Rollins v. Rollins" on Justia Law
Bickerstaff v. SunTrust Bank
A mandatory arbitration clause is contained in each deposit agreement for customers of appellee SunTrust Bank. The clause permits an individual depositor to reject the agreement’s mandatory arbitration clause by giving written notice by a certain deadline. SunTrust claimed it drafted the arbitration clause in such a way that only an individual depositor may exercise this right to reject arbitration on his or her own behalf, thereby permitting that individual to file only an individual lawsuit against the bank. But SunTrust asserted that even if, as it has been determined here, the filing of a lawsuit prior to the expiration of the rejection of arbitration deadline operated to give notice of the individual plaintiff’s rejection of arbitration, the complaint could not be brought as a class action because the filing of a class action could not serve to reject the arbitration clause on behalf of class members who have not individually given notice. Jeff Bickerstaff, Jr., who was a SunTrust Bank depositor, filed a complaint against SunTrust on behalf of himself and all others similarly situated alleging the bank’s overdraft fee constitutes the charging of usurious interest. At the time Bickerstaff opened his account (thereby agreeing to the terms of SunTrust’s deposit agreement), that agreement included a mandatory arbitration provision. In response to the ruling of a federal court in an unrelated action finding the arbitration clause in SunTrust’s deposit agreement was unconscionable at Georgia law, and after Bickerstaff’s complaint had been filed, SunTrust amended the arbitration clause to permit a window of time in which a depositor could reject arbitration by sending SunTrust written notification that complied with certain requirements. SunTrust had not notified Bickerstaff or its other customers of this change in the arbitration clause of the deposit agreement at the time Bickerstaff filed his complaint, but the complaint, as well as the first amendment to the complaint, was filed prior to the amendment’s deadline for giving SunTrust written notice of an election to reject arbitration. It was only after Bickerstaff’s complaint was filed that SunTrust notified Bickerstaff and its other existing depositors, by language printed in monthly account statements distributed on August 24, 2010, that an updated version of the deposit agreement had been adopted, that a copy of the new agreement could be obtained at any branch office or on-line, and that all future transactions would be governed by the updated agreement. SunTrust appealed the order denying its motion to compel Bickerstaff to arbitrate his claim, and the Court of Appeals affirmed the trial court, finding that the information contained in the complaint filed by Bickerstaff’s attorney substantially satisfied the notice required to reject arbitration. Bickerstaff appealed the order denying his motion for class certification, and in the same opinion the Court of Appeals affirmed that decision, holding in essence, that the contractual language in this case requiring individual notification of the decision to reject arbitration did not permit Bickerstaff to reject the deposit agreement’s arbitration clause on behalf of other putative class members by virtue of the filing of his class action complaint. The Georgia Supreme Court reversed that decision, holding that the terms of the arbitration rejection provision of SunTrust’s deposit agreement did not prevent Bickerstaff’s class action complaint from tolling the contractual limitation for rejecting that provision on behalf of all putative class members until such time as the class may be certified and each member makes the election to opt out or remain in the class. Accordingly, the numerosity requirement of OCGA 9-11-23 (a) (1) for pursuing a class complaint was not defeated on this ground. View "Bickerstaff v. SunTrust Bank" on Justia Law