Coin-Op Solutions, LLC v. Metro Carrollton Corp.

• Court: United States Court of Appeals (Georgia)
• Citation: 360 Ga.App. 44,860 S.E.2d 599
• Decision Date: 23 June 2021
• Docket Number: A21A0010, A21A0011
• Parties: COIN-OP SOLUTIONS, LLC v. METRO CARROLLTON CORPORATION, et al.; and vice versa

360 Ga.App. 44
860 S.E.2d 599

COIN-OP SOLUTIONS, LLC
v.
METRO CARROLLTON CORPORATION, et al.; and vice versa

A21A0010, A21A0011

Court of Appeals of Georgia.

June 23, 2021

860 S.E.2d 600

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.

Doyle, Presiding Judge.

360 Ga.App. 44

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

860 S.E.2d 601

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

360 Ga.App. 45

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

860 S.E.2d 602

County to vacate the arbitration award

360 Ga.App. 46

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

360 Ga.App. 47

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 5-5-21, 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...