Coin-Op Solutions, LLC v. Metro Carrollton Corp.
| Decision Date | 23 June 2021 |
| Docket Number | A21A0010, A21A0011 |
| Citation | 360 Ga.App. 44,860 S.E.2d 599 |
| Court | Georgia Court of Appeals |
| Parties | COIN-OP SOLUTIONS, LLC v. METRO CARROLLTON CORPORATION, et al.; and vice versa |
Jonathan Edward Hawkins, Atlanta, for Appellant in A21A0010.
Steven Marc Kushner, Joseph Edward Hart, Atlanta, for Appellee in A21A0010.
Steven Marc Kushner, Joseph Edward Hart, Atlanta, for Appellee in A21A0011.
Jonathan Edward Hawkins, Atlanta, for Appellant in A21A0011.
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."
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.
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 Coin-Op, 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...
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