X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Doyle, Presiding Judge. Coin-Op Solutions, LLC, the holder of a master license to operate coin operated amusement machines (“COAMs”), filed a petition in superior court to vacate an arbitration award entered by a Georgia Lottery Commission (“GLC”) hearing officer/arbitrator pursuant to OCGA § 50-27-102 (d). The petition sought to vacate the arbitrator’s determination that Coin-Op could not recover money allegedly owed according to contracts it had with Metro Carrollton Corporation, Glenwood C. Store, Inc.; Lovvorn Road Grocery, Inc.; Sony Enterprises (USA), Inc.; and Sony Investments, Inc. (collectively “Retail Locations”), which owned or operated certain retail locations where Coin-Op’s machines were placed. The Retail Locations answered Coin-Op’s petition to vacate, filed a counterclaim to confirm the arbitrator’s determination, and moved for summary judgment against Coin-Op’s petition and in favor of their counterclaim. The superior court granted summary judgment in favor of the Retail Locations on Coin-Op’s petition to vacate the award, and the court denied summary judgment as to the Retail Locations’ counterclaim; the court also sua sponte granted summary judgment in favor of Coin-Op on the Retail Locations’ counterclaim seeking to confirm the award. In Case No. A21A0010, Coin-Op appeals from the rulings denying its petition to vacate the arbitration award, arguing that the superior court erred by (1) ruling that it lacked authority to vacate the award in this proceeding, and (2) failing to rule that the arbitrator’s award was against the weight of the evidence. In Case No. A21A0011, the Retail Locations cross-appeal from the superior court’s denial of their motion for summary judgment on their counterclaim, arguing that the court erred by concluding that it could not confirm the arbitration award in this proceeding. For the reasons that follow, we affirm in part in Case No. A21A0010 and vacate the judgment and remand in Case No. A21A0011. The relevant record is undisputed, and to the extent that issues of law are presented, we review them de novo.[1] Coin-Op holds a master license for operating COAMs, and it entered into contracts with the Retail Locations to place COAMs in their locations for play by the public. Under the contracts, the Retail Locations and Coin-Op would evenly split the net collections after winnings were paid out. Winnings were paid by Retail Location employees from money in the machines, and Coin-Op employees periodically visited the COAM locations to collect its share of the net proceeds.[2] According to Coin-Op, the cash remaining in the machines typically was not sufficient to pay its 50 percent share, so it would seek reimbursement from the retail store itself; at times, the store did not pay the Coin-Op collector, who would instead create a receipt showing Coin-Op’s uncollected share. Eventually, a collection dispute arose between Coin-Op and the Retail Locations, and Coin-Op filed demands for arbitration pursuant to OCGA § 50-27-102 (d), seeking payment of various amounts allegedly owed by the Retail Locations under the contracts. The disputes were sent to arbitration and later consolidated; after reviewing the record from the consolidated cases (including deposition transcripts, affidavits, and documentary evidence), an arbitrator entered a final award in November 2018, denying Coin-Op any recovery on the ground that recovery was barred by the parties’ conduct under OCGA § 13-4-4.[3] Within ten days of that award, on November 12, 2018, Coin-Op filed a timely motion for review by the Chief Executive Officer (“CEO”) of the GLC. The CEO took no action on the motion, and under GLC rules, the motion for review was deemed denied as of December 12, 2018.[4] On January 16, 2019, Coin-Op then filed a petition in the Superior Court of Gwinnett County to vacate the arbitration award on the ground that the arbitrator manifestly disregarded the law.[5] The Retail Locations filed an answer denying Coin-Op’s theory of recovery and asserting a counterclaim seeking to confirm the arbitration award; the same day, they moved for summary judgment against Coin-Op’s petition and in favor of their counterclaim to confirm the award. Subsequently, the court entered a consent order transferring the proceeding to the Superior Court of Fulton County.[6] Upon reviewing the record, that court entered an order granting summary judgment to the Retail Locations on Coin-Op’s petition to vacate the arbitration award, denying summary judgment to the Retail Locations on their counterclaim, and sua sponte granting summary judgment to Coin-Op on the Retail Locations’ counterclaim seeking to confirm the arbitration award. In a footnote, the court also found that, to the extent that it had independent authority to reach the validity of the arbitration, there was no evidence authorizing the court to vacate the award on the ground that, as argued by Coin-Op, the arbitrator manifestly disregarded the law under OCGA § 9-9-13 (b) (5). Essentially, the superior court declined to vacate or confirm the award, pointing out in another footnote that it made “no conclusions as [to] the effect of the GLC’s actions or decisions.” The superior court based its ruling on the statutory scheme governing contractual disputes between COAM master licensees and retail location owner/operators. Under OCGA § 50-27-102 (d), any such disputes must be referred to a hearing officer/arbitrator who hears disputes according to rules made by the GLC consistent with the Georgia Arbitration Code.[7] If a master licensee or retail location disagrees with the arbitrator’s decision, [t]he decision of the hearing officer[/arbitrator] may be appealed to the chief executive officer or his or her designee. The chief executive officer shall not reverse a finding of fact of the hearing officer if any evidence supports the hearing officer’s conclusion. The chief executive officer shall not reverse a conclusion of law of the hearing officer unless it was clearly erroneous, arbitrary, and capricious or exceeded the hearing officer’s jurisdiction. The decision of the chief executive officer may be appealed to the Superior Court of Fulton County, which court shall not reverse the chief executive officer’s findings of fact unless it is against the weight of the evidence as set forth in Code Section 5521, and the chief executive officer’s legal conclusions shall not be set aside unless there is an error of law.[8] In light of this statutory process, the superior court ruled that Coin-Op’s petition to vacate the arbitration award was not the proper vehicle to challenge the award and that it lacked authority to vacate or confirm the arbitrator’s final award. Coin-Op filed a notice of appeal to this Court challenging the superior court’s failure to vacate the arbitrator award, which appeal was docketed as Case No. A21A0010, and the Retail Locations filed a notice of appeal challenging the superior court’s failure to confirm the award, which appeal was docketed as Case No. A21A0011. Case No. A21A0010 1. Coin-Op contends that the superior court erred by finding that it lacked authority to vacate the arbitrator’s award under OCGA § 50-27-102 (d). We disagree. As noted above, the GLC regulates COAMs according to the statutory framework established in OCGA § 50-27-70 et seq.[9] Under that framework, “[t]he [GLC] shall have jurisdiction of all disputes between and among any licensees . . . relating in any way to any agreement involving coin operated amusement machines, distribution of funds, . . . [or] other claims against a subsequent master license holder or location owner. . . .”[10] This exclusive dispute resolution and appeal process is governed by OCGA § 50-27-102 (d).[11] Here, Coin-Op properly initiated this dispute resolution process by seeking relief with a hearing officer/arbitrator pursuant to OCGA § 50-27-102 (d). However, when it received an adverse decision, which was then affirmed by operation of law by the failure of the CEO to act on Coin-Op’s appeal of the arbitrator’s award,[12] Coin-Op filed a petition to vacate the arbitration award, despite the clear statutory process established for appealing the award. Instead of seeking to vacate the award, Coin-Op’s proper remedy was to file an appeal under OCGA § 50-27-102 (d) (5). “[I]t is clear from the record that the dispute between CoinOp, a master licensee, and [the Retail Locations] is governed exclusively by the GLC through implementing statutes and the GLC’s rules and regulations[,] which establish how decisions are contested and appealed.”[13] This is not a distinction without a difference. As noted by the superior court, arbitration confirmation proceedings and the GLC appeal process pertain to different records (the arbitration proceeding versus the full administrative record), and they apply different standards of review. For example, OCGA § 50-27-102 (d) (5) authorizes a superior court to reverse a factual finding if it is against the weight of the evidence under OCGA § 5-5-21 and to reverse a legal conclusion “[if] there is an error of law.” By contrast, OCGA § 9-9-13 (b) (5) authorizes a superior court to vacate an arbitration award if the arbitrator manifestly disregarded the law. In the arbitration context, the concept of manifest disregard has never been the equivalent of . . . a misapplication of the law to the facts. It is a much narrower standard, requiring a showing in the record, other than the result obtained, that the arbitrators knew the law and expressly disregarded it. Arbitrators must deliberately ignore applicable law to fall within the manifest disregard prohibition in OCGA § 9913 (b) (5).[14] Thus, with respect to Coin-Op’s challenge to the GLC’s denial of Coin-Op’s motion for review of the arbitrator’s award, its remedy was the procedure established in OCGA § 50-27-102 (d) (5) — appealing to the Superior Court of Fulton County.[15] Accordingly, the superior court correctly concluded that the arbitration award was not properly before it for purposes of Coin-Op’s challenge to its outcome, and we affirm the judgment denying Coin-Op’s petition to vacate the arbitration award.[16] Case No. A21A0011 2. In this appeal, the Retail Locations challenge the superior court’s denial of their counterclaim to confirm the award. They argue that OCGA § 50-27-102 does not prevent the superior court from otherwise confirming the award because superior courts have statutory authority to confirm arbitration awards and reduce them to an enforceable judgment, and as a practical matter, they must be afforded some avenue for obtaining finality with respect to the result of the arbitration. We agree. OCGA § 50-27-102 does not address confirmation of arbitration awards; rather, it provides the procedure for an aggrieved party to challenge an adverse result obtained in a GLC proceeding. That Code section also clarifies that the GLC rules must be consistent with the Georgia Arbitration Code, and both parties in this case agree that a superior court has authority to confirm arbitration awards made pursuant to a GLC proceeding.[17] Under OCGA § 9-9-12, “[t]he court shall confirm an award upon application of a party made within one year after its delivery to [the party], unless the award is vacated or modified by the court as provided in this part.” In light of the fact that the superior court expressly found no basis for vacating the award, and in light of our ruling in Division 1, the award of the arbitrator remains undisturbed. Under the resulting procedural posture, the Retail Locations have prevailed in their defense at arbitration and properly sought confirmation of the arbitration result.[18] Accordingly, we vacate the superior court’s summary judgment rulings denying the Retail Locations’ petition to confirm the award and remand for confirmation consistent with this opinion and the law of the case established by this case’s procedural history. Judgment affirmed in part in Case No. A21A0010; judgment vacated in part and case remanded in Case No. A21A0011. Reese and Brown, JJ., concur.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

General Counsel Conference East 2021

September 22, 2021 - September 23, 2021
New York, NY

GCC East addresses General Counsel trends in regulatory, data protection, tech management, legal operations, and leadership.


Register

New Jersey Legal Awards 2021

September 23, 2021
Virtual, NJ

New Jersey Law Journal honors lawyers leaving a mark on the legal community in New Jersey with their dedication to the profession.


Register

Women Influence & Power in Law Awards 2021

October 07, 2021
Washington, DC

Women Influence & Power in Law Awards honors women lawyers who have made a remarkable difference in the legal profession.


Register

Senior Litigation Support Analyst

Philadelphia, Pennsylvania, United States

The Office of Counsel of Temple University Health System is seeking a full time Senior Litigation Support Analyst to assist with managing it...


Apply Now ›

Corporate Transactional Associate

Hackensack, New Jersey, United States

COLE SCHOTZ P.C. CORPORATE/TRANSACTIONAL ASSOCIATE- DELAWARE, FLORIDA, MARYLAND, NEW JERSEY, NEW YORK OR TEXAS OFFICES:   Promi...


Apply Now ›

Litigation Attorney - Atlanta, Georgia

Atlanta, Georgia, United States

Sole practitioner seeks attorney for complex litigation. Hours are flexible and can be part-time. Must be able to work remote...


Apply Now ›

JAVERBAUM WURGAFT HICKS

09/20/2021
NJLJ Web

JAVERBAUM WURGAFT HICKS mourn the passing of our Co-Founding Partner, collegue, and friend.


View Announcement ›

BARTON GILMAN LLP

09/14/2021
CLT Web

Barton Gilman Expands Into Connecticut


View Announcement ›

BARTON GILMAN LLP

09/14/2021
TLI Web

Barton Gilman LLP is excited to announce that its expansion into Philadelphia


View Announcement ›