Extremity Healthcare, Inc. v. Access to Care Am., LLC

• Citation: 339 Ga.App. 246,793 S.E.2d 529
• Decision Date: 28 October 2016
• Docket Number: A16A1990
• Parties: EXTREMITY HEALTHCARE, INC. et al. v. ACCESS TO CARE AMERICA, LLC et al.
• Court: United States Court of Appeals (Georgia)

339 Ga.App. 246

793 S.E.2d 529

EXTREMITY HEALTHCARE, INC. et al.

v.ACCESS TO CARE AMERICA, LLC et al.

A16A1990

Court of Appeals of Georgia.

October 28, 2016

Nathan Alexander Wood, Robert James Waddell Jr., Atlanta, for Appellant.

Lanier John Edwards, Erin Aube Lerner, Jacob Joseph Slowik, Yussuf Abdel–aleem, for Appellee.

Barnes, Presiding Judge.

This case centers on a dispute between several businesses over the enforceability of an arbitration clause in a buyout agreement relating to a failed joint venture. Plaintiffs Extremity Healthcare, Inc. ("EHI"), Village Podiatry Group, LLC ("Village Podiatry"), and EHI Vascular Solutions–Marietta, LLC f/k/a Extremity ASC, LLC ("Vascular Solutions") appeal the trial court's order compelling arbitration of their claims against Defendants Access to Care America, LLC ("ATCA") and Sweet Dreams Nurse Anesthesia, Inc. ("Sweet Dreams") and dismissing the case. The plaintiffs contend that the trial court erred in compelling arbitration because the buyout agreement containing the arbitration clause was invalid and unenforceable due to lack of mutual assent and a mutual mistake. The plaintiffs also argue that the defendants waived enforcement of the arbitration clause based on their participation in this litigation. For the reasons discussed below, we conclude that the trial court properly ordered the case to arbitration and therefore affirm.

Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. Therefore, the question of arbitrability, i.e., whether an agreement creates a duty for the parties to arbitrate the particular grievance, is undeniably an issue for judicial determination.

(Punctuation and footnote omitted.) Perry Golf Course Dev., LLC v. Columbia Residential, LLC , 337 Ga.App. 525, 528 (1), 786 S.E.2d 565 (2016). See Granite Rock Co. v. Intl. Brotherhood of Teamsters , 561 U.S. 287, 296 (II), 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010) ; Triad Health Mgmt. of Ga., III, LLC v. Johnson , 298 Ga.App. 204, 206 (2), 679 S.E.2d 785 (2009) ; Panhandle Fire Protection v. Batson Cook Co. , 288 Ga.App. 194, 197–198 (1) (b), 653 S.E.2d 802 (2007).¹ On appeal from a trial court's order compelling arbitration, the standard of review is whether the court "was correct as a matter of law." Simmons Family Properties, LLLP v. Shelton , 307 Ga.App. 361, 362 (1), 705 S.E.2d 258 (2010). And "[t]he construction of an arbitration agreement, like any other contract, presents a question of law, which is subject to de novo review." Id. Mindful of these principles, we turn to the record here.

The Joint Venture. The record reflects that Village Podiatry is a wholly owned subsidiary of EHI. In 2012, Village Podiatry, a practice group of podiatrists, and Sweet Dreams, a practice group of nurse anaesthetists, entered into a joint venture to establish a podiatric ambulatory surgery center. To that end, Sweet Dreams formed another legal entity, ATCA, and on October 1, 2012, ATCA secured a five-year lease with the landlord of an office building in Marietta, Georgia, where the parties intended to construct their surgery center. The parties also formed Vascular Solutions, a limited liability company in which Village Podiatry and ATCA would be members, through which the parties would operate their joint venture at the office building.

The Buyout Agreement. The parties' joint venture did not operate smoothly, and they ultimately decided to end their business relationship. In 2015, after lengthy negotiations, the parties executed a document entitled "Release and Settlement/Buyout Agreement" (the "Buyout Agreement" or "Agreement") under which EHI, Village Podiatry, and Vascular Solutions (collectively, the "EHI Parties") agreed to buy out the joint venture interests of Sweet Dreams and ATCA (collectively, the "SDNA Parties"), and the parties agreed to release one another from all claims related to the joint venture.

More specifically, under the Buyout Agreement, in return for a cash payment totaling over $800,000 from the EHI Parties paid out over a 5–year term, the SDNA Parties agreed to take several steps to withdraw from the joint venture, including having ATCA relinquish its membership interest in the parties' joint venture company, Vascular Solutions. ATCA also executed a "Lease Assignment" attached as an exhibit to the Buyout Agreement, which would assign ATCA's rights and obligations under the office building lease to Vascular Solutions once approved by the landlord.

In addition to the substantive provisions addressing the SDNA Parties' withdrawal from the joint venture in return for the cash payment, the Buyout Agreement contained an "entire agreement" clause and an arbitration clause. The "entire agreement" clause provided:

This Agreement and any Exhibits and Schedules hereto contain the entire agreement of the Parties with respect to the subject matter hereof and supersede all prior written and oral agreements, negotiations, commitments, writings, and understandings between the Parties with respect to the subject matter contained herein. It is agreed that there are no collateral agreements or representations, written or oral, related to the [ambulatory surgery center joint venture] which are not contained in this Agreement.

The arbitration clause provided in part:

Any controversy or claim arising out or relating to this Agreement, or the breach thereof, will be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

Lastly, the Buyout Agreement included a provision specifying when it would become binding on the parties. The provision stated that the Agreement would "become effective following execution of the Agreement by all of the Parties" in counterparts and/or by facsimile, by PDF exchange via email, or by electronic signature.

The EHI Parties signed the Buyout Agreement and subsequently delivered the signed Agreement to the SDNA Parties by email in PDF format on June 15, 2015. In the email, counsel for the EHI Parties stated, "We consider the documents to be held in escrow until they are fully executed by all parties." Two days later, on June 17, 2015, the SDNA Parties returned the fully executed Buyout Agreement to the EHI Parties by email in PDF format.

The Proposed Lease Amendment. Before execution of the Buyout Agreement, a dispute had arisen between the landlord and ATCA over the payment of certain costs and other issues related to the office building lease. The landlord sought to settle the dispute with ATCA, and the landlord ultimately proposed an amendment to the office building lease that, among other things, would have extended the term of the lease from 5 years to 10 years (the "Proposed Lease Amendment").

Following execution of the Buyout Agreement, the EHI Parties asked the landlord to approve and sign the Lease Assignment attached as an exhibit to the Buyout Agreement to effectuate the assignment of the office building lease from ATCA to Vascular Solutions. However, the landlord indicated that its approval of the Lease Assignment was contingent on ATCA first executing the Proposed Lease Amendment.

The EHI Parties requested that ATCA sign the Proposed Lease Amendment as requested by the landlord, but ATCA ultimately declined to do so because it did not want to risk bearing any potential legal obligation for an extended lease term. Because ATCA declined to sign the Proposed Lease Amendment, the landlord refused to approve the Lease Assignment. In the absence of a valid and enforceable Lease Assignment, the landlord was unwilling to provide access to the office building to any party other than ATCA, including the EHI Parties.

Procedural History. Because ATCA refused to sign the Proposed Lease Amendment and the landlord refused to sign the Lease Assignment, the EHI Parties refused to make any cash payments to the SDNA Parties under the terms of the Buyout Agreement. In response, the SDNA Parties filed a claim for arbitration with the American Arbitration Association under its Commercial Arbitration Rules, alleging that the EHI Parties had breached their payment obligations under the Buyout Agreement.

After the SDNA Parties filed their arbitration claim, the EHI Parties initiated the present action against them for declaratory relief in the Superior Court of Fulton County, seeking a declaration that the Buyout Agreement, including the payment terms and the arbitration clause, was invalid and unenforceable because the parties had not mutually assented to all of the essential contractual terms. The EHI Parties sought a temporary restraining order and permanent stay of the arbitration on the same basis.

The trial court temporarily stayed the arbitration with the consent of the parties and entered a case management order. The SDNA Parties thereafter filed an answer that included the affirmative defense that the EHI Parties' claims were barred by the arbitration clause in the Buyout Agreement. The SDNA Parties also asserted several counterclaims that went to the merits of the parties' underlying dispute over the joint venture, including counterclaims for unjust enrichment and promissory estoppel, in the event that the trial court "determine[d] that the fully executed ... Buyout Agreement [was] not enforceable."

The parties proceeded with discovery. The SDNA Parties subsequently filed a motion for summary judgment,² arguing that the parties had mutually assented to all essential terms of the Buyout Agreement by signing it; that the Agreement was unambiguous and constituted a complete and final expression of the parties' intent to settle all matters relating to their joint venture; and that parol evidence was inadmissible to change the unambiguous terms of the Agreement. Based on these arguments, the SDNA Parties asserted that the Buyout Agreement was valid and...