Lang Enters. Co. v. Alcue Props. & Interiors

• Docket Number: A23A0087
• Decision Date: 09 June 2023
• Parties: LANG ENTERPRISES LTD. CO. d/b/a LANG RESTORATION & CONSTRUCTION v. ALCUE PROPERTIES & INTERIORS, INC. d/b/a PRIMROSE SCHOOL OF LAWRENCEVILLE NORTH.
• Court: Georgia Court of Appeals

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LANG ENTERPRISES LTD. CO. d/b/a LANG RESTORATION & CONSTRUCTION v. ALCUE PROPERTIES & INTERIORS, INC. d/b/a PRIMROSE SCHOOL OF LAWRENCEVILLE NORTH.

No. A23A0087

Court of Appeals of Georgia, Second Division

June 9, 2023

MILLER, P. J., MERCIER and HODGES, JJ.

HODGES, JUDGE

In this construction row, Alcue Properties &Interiors, Inc. d/b/a Primrose School of Lawrenceville North ("Primrose") filed a demand for arbitration against Lang Enterprises Ltd Co. d/b/a Land Restoration &Construction ("Lang") for damages resulting from Lang's mitigation work following a property loss at Primrose. Instead, the arbitrator awarded Lang $142,700 for the mitigation work it performed. Lang filed a petition to confirm the arbitration award, while Primrose moved to vacate the award. The Superior Court of Gwinnett County ultimately vacated the award, and Lang appeals, contending that the trial court erred in vacating the arbitrator's award based upon a manifest disregard of the law and in adopting a proposed order presented by Primrose's counsel. For the following reasons, we reverse.

The facts in this case are sparse. The limited record demonstrates that Primrose and Lang executed an agreement for Lang to perform work at Primrose's facility following a loss. At some point during construction, and for reasons not evident from the record, the parties' relationship soured and Primrose filed a demand for arbitration in accordance with the parties' agreement. Lang also filed a counter-demand for arbitration, seeking more than $100,000 for its work. Following a hearing, the arbitrator concluded that Primrose "[b]reached the Contract when it refused to allow [Lang] access to the property to complete the work." As a result, the arbitrator awarded Lang $142,700.

Lang filed a petition to confirm the arbitration award, while Primrose countered with a motion to vacate the award. In an order drafted by Primrose's counsel, the trial court found that the arbitrator manifestly disregarded the law because, "[w]hile there is no transcript of the hearing before the arbitrator, the pleadings submitted to the arbitrator demonstrate that [the arbitrator] was made aware that there is [no] right to repair in a commercial construction context" and because the award exceeded the amount Primrose would have owed Lang. The trial court concluded that "[t]he arbitration record, as well as [the arbitrator's] credentials, demonstrate that he was fully aware of the law and disregarded same" and granted Primrose's motion to vacate the award. Lang's appeal follows.

1. First, Lang contends that the trial court erred in vacating the arbitration award because there was no showing of a manifest abuse of discretion by the arbitrator. We agree.

Under Georgia law, "trial courts are severely limited in vacating an arbitration award so as not to frustrate the legislative purpose of avoiding litigation by resort to arbitration." (Citation and punctuation omitted.) Adventure Motorsports Reinsurance, Ltd. v. Interstate Natl. Dealers Svcs., 313 Ga. 19, 25 (1) (867 S.E.2d 155) (2021). As a result, "judicial review of an arbitration award is strictly limited to five statutory grounds set forth in OCGA § 9-9-13 (b)." ABCO Builders v. Progressive Plumbing, 282 Ga. 308, 309 (647 S.E.2d 574) (2007). Relevant to this case, an arbitration award "shall be vacated on the application of a party who either participated in the arbitration or was served with a demand for arbitration if the court finds that the rights of that party were prejudiced by . . . [t]he arbitrator's manifest disregard of the law." OCGA § 9-9-13 (b) (5). "To manifestly disregard the law, one must be conscious of the law and deliberately ignore it." (Citation and punctuation omitted.) ABCO Builders, 282 Ga. at 309. To that end, such "disregard must be both evident and intentional[,]" and

clear evidence of the arbitrator's intent to purposefully disregard the law is required. That is, there must be concrete evidence of this intent either in the findings of the arbitrator . . . or in the transcript of the arbitration hearing[.]

Id. "[T]his showing is an extremely difficult one to make, especially in light of the fact that an arbitrator is not required to make findings of fact or state his or her rationale in reaching decisions." Id.

In this case, just as in ABCO Builders, "the record contains neither findings of the [arbitrator] nor a transcript of the arbitration hearing, and there is nothing else in the record which would indicate the intent of the [arbitrator] in reaching the conclusion that [he] did."^[1] ...