SCSJ Enterprises, Inc. v. Hansen & Hansen Enterprises, Inc.

734 S.E.2d 214, 319 Ga. App. 210, 2012 Fulton County D. Rep. 3656, 2012 Ga. App. LEXIS 934
CourtCourt of Appeals of Georgia
DecidedNovember 13, 2012
DocketA12A1185
StatusPublished
Cited by33 cases

This text of 734 S.E.2d 214 (SCSJ Enterprises, Inc. v. Hansen & Hansen Enterprises, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SCSJ Enterprises, Inc. v. Hansen & Hansen Enterprises, Inc., 734 S.E.2d 214, 319 Ga. App. 210, 2012 Fulton County D. Rep. 3656, 2012 Ga. App. LEXIS 934 (Ga. Ct. App. 2012).

Opinion

Ellington, Chief Judge.

The Fulton County Superior Court entered judgment confirming an arbitration award, which required SCSJ Enterprises, Inc., and Shandton Williams (collectively, SCSJ) to pay approximately $800,000 to Hansen & Hansen Enterprises, Inc., and Juden Enterprises, Inc. (collectively, Hansen). SCSJ appeals this ruling, arguing that the trial court erred in returning the case to arbitration; the trial court erred in confirming the arbitration award; and the judgment was inconsistent with the arbitration award. For the reasons that follow, we affirm.

This is the third appearance of this case before this Court. The dispute arose after SCSJ Enterprises purchased two UPS Store franchises from Hansen. In connection with the purchase, SCSJ executed two $250,000 promissory notes, one in favor of Hansen and one in favor of Juden Enterprises.1 Williams signed a personal guaranty for each note.

SCSJ filed a claim against Hansen, asserting that Hansen had fraudulently misrepresented the value of the two stores. Hansen filed counterclaims for nonpayment of the two promissory notes. In accordance with the sales agreement, the claims were submitted to arbitration. The arbitrator found in favor of Hansen, who filed an application for confirmation of the arbitration award. SCSJ, however, filed a motion to vacate the award, which the trial court granted.

Hansen appealed, and in Hansen & Hansen Enterprises v. SCSJ Enterprises, 299 Ga. App. 469 (682 SE2d 652) (2009), we affirmed the judgment in part, reversed in part, and remanded the case with direction. Succinctly stated, this Court ruled that the arbitrator knew and applied the applicable Georgia law with respect to the fraud claim, and thus the trial court erred in concluding the arbitrator manifestly disregarded the law. Id. at 472. We also concluded that the [211]*211arbitrator did not overstep its authority in awarding attorney fees, and the trial court erred in concluding otherwise. Id. at 472-473 (2) (a). Finally, we agreed with the trial court that no final arbitration award had been made because the arbitrator failed to consider Hansen’s counterclaim on the promissory notes. Although the promissory notes did not contain an arbitration clause, the notes expressly incorporated the sales agreement, which required arbitration of “any and all disputes.” Id. at 473-474 (2) (b). This Court remanded the case to the trial court with direction to “vacate the arbitrator’s award consistent with this opinion and order a rehearing before the same arbitrator on Hansen’s counterclaim only.” (Citations omitted.) Id. at 474.

On remand, the trial court entered an order confirming the arbitrator’s award with respect to SCSJ’s claims, but vacating that portion of the award dismissing Hansen’s counterclaim. SCSJ appealed, and we reversed. See SCSJ Enterprises v. Hansen & Hansen Enterprises, 306 Ga. App. 188 (702 SE2d 12) (2010). The sole issue on appeal was whether the trial court properly vacated a portion of the arbitrator’s award. We found that the trial court erred because an arbitration award may only be vacated in its entirety. Id. at 189. We nonetheless noted that vacatur of the entire award did not render the prior proceeding a nullity because, under OCGA § 9-9-13 (e), rehearing before the arbitrator could be limited to the specific issue necessitating the vacatur. Id. at 190. Therefore, we remanded the case and directed the trial court to vacate the arbitrator’s entire award and to direct the arbitrator to consider Hansen’s counterclaims. Id.

Following our ruling, SCSJ filed a motion to dismiss the arbitration proceedings. According to SCSJ, the fact that the arbitration award had been vacated meant that no final award had been made, which permitted SCSJ to terminate arbitration in accordance with the original sales contract. The trial court denied the motion.

The trial court then vacated the prior arbitration award in its entirety and remanded the case to the arbitrator directing him to consider Hansen’s counterclaim for nonpayment of the promissory notes. The arbitrator issued a new award in which it found in favor of Hansen on the counterclaims on the promissory notes.2 Specifically, the arbitrator entered an award in favor of Juden Enterprises for $394,931.59 and in favor of Hansen and Hansen Enterprises in the [212]*212amount of $394,931.59.3 The arbitrator also found that Williams was liable under his personal guaranties in the amount of $789,863.18. Finally, the arbitrator required SCSJ and Williams to reimburse Hansen $12,261.35 for the fees and expenses of arbitration.

The trial court confirmed the arbitration award and entered judgment against SCSJ and Williams “jointly and severally, in the amount of $789,863.18.” The court also required payment of arbitration fees, attorney fees, and interest, for a total judgment of $814,142.54. SCSJ appeals this ruling.

1. In its first enumeration of error, SCSJ contends that it was entitled to terminate arbitration proceedings under the sales contract and, thus, the trial court erred in remanding the case to the arbitrator. The arbitration clause in the contract provided, in pertinent part, that the arbitration shall promptly proceed to hearing and determination provided, however, that “if a final decision has not been rendered within thirty (30) days after the conclusion of the [arbitration] hearing, then any party may terminate the arbitration and proceed to litigation.” Although the arbitrator issued a final decision, SCSJ contends that this Court’s subsequent ruling, which vacated the decision, meant no final award had been rendered, permitting SCSJ to terminate arbitration proceedings.

Arbitration in Georgia is a matter of contract. See Helms v. Franklin Builders, 305 Ga. App. 863, 864 (700 SE2d 609) (2010) (construction of arbitration agreement is question of law subject to de novo review). As such, “[t]he construction of an arbitration clause in a contract is subject to the ordinary rules of contract construction.” (Citation omitted.) South Point Retail Partners v. North American Properties Atlanta, 304 Ga. App. 419, 421 (1) (696 SE2d 136) (2010). One such rule requires that we interpret a contract in accordance with its plain language. See id. at 422 (1). Another “well-established rule of contract interpretation [is] that the construction which will uphold a contract in whole and in every part is to be preferred. It is likewise well established that a court should avoid an interpretation of a contract which renders portions of the language of the contract meaningless.” (Citation and punctuation omitted.) Etowah Environmental Group v. Advanced Disposal Svcs., 297 Ga. App. 126, 131-132 (2) (676 SE2d 456) (2009).

The contract at issue provided that a party could avoid arbitration and proceed to litigation if no final decision was rendered. Here, it is undisputed that the arbitrator rendered a final decision. SCSJ [213]*213essentially contends that the vacatur of that decision rendered it a nullity. But the mere fact that an award is vacated is not synonymous with the award never having been made. See, e.g., SCSJ Enterprises, 306 Ga. App. at 190 (“vacatur of the entire arbitration award will not render the prior proceedings a nullity”).

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734 S.E.2d 214, 319 Ga. App. 210, 2012 Fulton County D. Rep. 3656, 2012 Ga. App. LEXIS 934, Counsel Stack Legal Research, https://law.counselstack.com/opinion/scsj-enterprises-inc-v-hansen-hansen-enterprises-inc-gactapp-2012.