Sunbridge Retirement Care Associates LLC v. Smith

757 S.E.2d 157, 326 Ga. App. 550, 2014 Fulton County D. Rep. 967, 2014 WL 1227725, 2014 Ga. App. LEXIS 232
CourtCourt of Appeals of Georgia
DecidedMarch 26, 2014
DocketA13A2129
StatusPublished
Cited by5 cases

This text of 757 S.E.2d 157 (Sunbridge Retirement Care Associates LLC v. Smith) 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
Sunbridge Retirement Care Associates LLC v. Smith, 757 S.E.2d 157, 326 Ga. App. 550, 2014 Fulton County D. Rep. 967, 2014 WL 1227725, 2014 Ga. App. LEXIS 232 (Ga. Ct. App. 2014).

Opinion

BARNES, Presiding Judge.

We granted Sunbridge’s1 application for interlocutory review of the trial court’s denial of its motion to stay proceedings pending arbitration and to compel arbitration.2 On appeal, Sunbridge contends that the trial court erred in denying its motion to stay proceedings and to compel arbitration because, among other things, the Federal Arbitration Act (“FAA”) mandates arbitration and the agreement at issue is not void for impossibility because of the unavailability of the National Arbitration Forum (“NAF”) as the designated arbitral forum. Upon our review and for the reasons that follow, we affirm.

The relevant undisputed facts establish that on May 27, 2009, Emma Wingo gave her daughter, Vickie Smith, a general power of attorney. On November 24, 2009, Smith enrolled Wingo at Carters-ville Heights Care and Rehabilitation Center, a Sunbridge facility. As part of the admission process, Smith signed documents as her mother’s legal representative, including an arbitration agreement that provided in pertinent part:

Any and all claims or controversies arising out of or in any way relating to this Agreement, the Admission Agreement or any of the Resident’s stays at this Facility . . . whether or not relating to medical malpractice . . . whether existing now or arising in the future, whether for statutory, compensatory or punitive damages and whether sounding in breach of contract, tort or breach of statutory duties, regard[551]*551less of the basis for the duty or of the legal theories upon which the claim is asserted, shall be submitted to binding arbitration.3

(Emphasis in original.) The agreement further provided:

The arbitrator shall apply the NAF’s Code of Procedure (in effect as of May 1, 2006) unless otherwise stated in this Agreement. The parties’ selection of the NAF Code of Procedure to govern the arbitration proceedings is not tantamount to the selection of NAF as the administrator of the arbitration.... The Parties hereby opt out of NAF rules (45 regarding indigents and 43 regarding appeals and judicial review).

(Emphasis supplied.) Rule 1 (A) of the 2006 NAF Code of Procedure provides, in relevant part:

Parties who contract for or agree to arbitration provided by the [NAF] or this Code of Procedure agree that this Code governs their arbitration proceedings, unless the Parties agree to other procedures. This Code shall be deemed incorporated by reference in every Arbitration Agreement! ] which refers to the National Arbitration Forum ... or this Code of Procedure, unless the Parties agree otherwise. This Code shall be administered only by the National Arbitration Forum or Forum.

Sections (E) and (F) of Rule 48 of the Code further provide, in pertinent part, that “[i]f Parties are denied the opportunity to arbitrate a dispute, controversy, or Claim before the Forum, the Parties may seek legal and other remedies in accord with applicable law,” and that “[i]n the event of a cancellation of this Code, any Party may seek legal and other remedies regarding any matter upon which an Award or Order has not been entered.”

In July 2009, the Minnesota Attorney General filed a complaint against the NAF and related entities alleging violations of the Minnesota Prevention of Consumer Fraud Act and, thereafter, the parties entered into a consent judgment under which the NAF agreed that it would not administer, process, or participate in any consumer arbitration filed on or after July 24, 2009. See Miller v. GGNSC [552]*552Atlanta, 323 Ga.App. 114, 116 (746 SE2d 680) (2013) (explainingthe details surrounding the NAF consent order).

Wingo died after spending approximately 11 months at the nursing home. OnNovember 21,2011, Smith and two siblings, Donna Green and Kenneth Anthony Brown, sued Sunbridge and several of its employees individually and as co-executors of their mother’s estate, for medical malpractice, ordinary negligence, and wrongful death. Sunbridge moved to stay the litigation and compel arbitration of the dispute pursuant to the arbitration agreement. Smith responded, and argued that the arbitration agreement was void pursuant to the doctrine of impossibility because of the NAF consent order and also because the agreement was unconscionable. Following a hearing on the motion, the trial court denied Sunbridge’s motion without explanation, but certified its order for immediate review. After this Court’s grant of Sunbridge’s application for interlocutory review, this appeal ensued.

In reviewing the trial court’s order, we look to see whether the trial court was correct as a matter of law in denying the motion to compel arbitration. Thus, the construction of an arbitration agreement, like any other contract, presents a question of law, which is subject to de novo review.

(Citations omitted.) Cash In Advance of Florida, Inc. v. Jolley, 272 Ga. App. 282 (612 SE2d 101) (2005).

1. This Court has previously addressed the issue of whether the FAA mandates arbitration in the event the arbitral forum designation in an agreement is unavailable. In Miller, 323 Ga.App. at 120 (2), this Court followed the “integral term vs. ancillary logistical concern” test for determining whether an arbitration agreement becomes unenforceable where the arbitral forum designated therein is unavailable for any reason. Under this test,

where the language of the agreement reflects that the choice of arbitral forum is an integral part of the agreement to arbitrate, then the agreement will be considered void if the forum is unavailable. [W]hen a court asks whether a choice of forum is integral, it asks whether the whole arbitration agreement becomes unenforceable if the chosen arbitrator cannot or will not act. If, on the other hand, the agreement shows that the selection of a particular forum was merely an ancillary logistical concern, section 5 [of the FAA] will apply and a substitute arbitrator may be named.

[553]*553(Citations and punctuation omitted.) Miller, 323 Ga. App. at 119 (2). See Brown v. ITT Consumer Financial Corp., 211 F3d 1217, 1222 (II) (A) (3) (11th Cir. 2000).

Sunbridge maintains that, despite the designation of the NAF as the arbitral forum in the Agreement, use of the NAF was not integral to the contract and that Section 5 of the FAA provides a mechanism for proceeding with arbitration when the chosen forum is no longer available.4

In Miller, 323 Ga. App. at 119 (2), this Court concluded that if “the agreement shows that the selection of a particular forum was merely an ‘ancillary logistical concern,’ section 5 of the FAA will apply and a substitute arbitrator may be named.” Conversely, if the selection of a particular forum was integral to the agreement, Section 5 does not apply, and the entire agreement is deemed impossible to enforce. Id. In determining whether the selection of a particular forum was ancillary or integral, we are guided by Miller, where we noted that

an arbitration agreement’s express designation of a single arbitration provider weighs in favor of a finding that the designated provider is integral to the agreement to arbitrate.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Flagg v. First Premier Bank
644 F. App'x 893 (Eleventh Circuit, 2016)
Beverly Enterprises, Inc. v. Cyr
84 F. Supp. 3d 1350 (S.D. Georgia, 2015)
Baillie v. Assenzio CA1/3
California Court of Appeal, 2014
Assenzio v. Baillie CA1/3
California Court of Appeal, 2014

Cite This Page — Counsel Stack

Bluebook (online)
757 S.E.2d 157, 326 Ga. App. 550, 2014 Fulton County D. Rep. 967, 2014 WL 1227725, 2014 Ga. App. LEXIS 232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sunbridge-retirement-care-associates-llc-v-smith-gactapp-2014.