Miller v. Ggnsc Atlanta, LLC

Decision Date16 July 2013
Docket NumberA13A0062.,Nos. A13A0061,s. A13A0061
Citation323 Ga.App. 114,746 S.E.2d 680
PartiesMILLER v. GGNSC ATLANTA, LLC. GGNSC Atlanta, LLC v. Miller.
CourtGeorgia Court of Appeals


Lance D. Lourie, Stephen Roberts Chance, Darren Summerville, Atlanta, for Miller.

Patricia Marilyn Peters, Christian John Lang, Atlanta, for GGNSC Atlanta, LLC.

BRANCH, Judge.

These cross appeals require us to determine the enforceability of a consumer arbitration agreement that was executed as part of a nursing home admissions process. Specifically, we must decide whether the unavailability of the selected arbitral forum (in this case, the National Arbitration Association or “NAF”) renders the agreement impossible to enforce and therefore void. For the reasons explained herein, we answer that question in the affirmative. We therefore vacate the order of the trial court in Case No. A13A0061 which, although it denied the motion of the defendant/appellee to dismiss, compel arbitration, and stay discovery, nevertheless found that the arbitration agreement was enforceable. We remand Case No. A13A0061 for proceedings consistent with this opinion. We dismiss as moot the appeal in Case No. A13A0062.

The facts relevant to this appeal are undisputed. In January, 2010, Michael Miller was admitted to Golden Living Center–Northside (“GLC–Northside”), 1 a nursing home and convalescent center located in Atlanta. At the time of his admission to GLC–Northside, Miller executed a number of forms contained in the Golden Living “admissions packet.” One of those forms was a “Resident and Facility Arbitration Agreement.” The Arbitration Agreement provides, in relevant part:

It is understood and agreed by Facility and Resident that any and all claims, disputes, and controversies (hereinafter collectively referred to as a “claim” or collectively as “claims”) arising out of, or in connection with, or relating in any way to the Admission Agreement or any service or health care provided by the Facility to the Resident shall be resolved exclusively by binding arbitration to be conducted at a place agreed upon by the Parties, or in the absence of such an agreement, at the Facility,2in accordance with the National Arbitration Forum Code of Procedure, which is hereby incorporated into this Agreement, and not by lawsuit or resort to court process. This agreement shall be governed by and interpreted under the Federal Arbitration Act, U.S.C. Sections 1–16.


In the event a court having jurisdiction finds any portion of this agreement unenforceable, that portion shall not be effectiveand the remainder of the agreement shall remain effective.

It is the intention of the parties to this Arbitration Agreement that it shall inure to the benefit of and bind the parties, their successors, and assigns, including without limitation ... all persons whose claim is derived through or on behalf of the Resident, including any ... child, guardian, executor, legal representative, administrator, or heir of the Resident. The parties further intend that this agreement is to survive the lives or existence of the parties hereto.

(Emphasis supplied.) 3

Rule 1(A) of the NAF Code of Procedure in effect at the time the respective arbitration agreements were executed 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 into 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 by any entity or individual providing administrative services by agreement with the National Arbitration Forum.

(Emphasis supplied.)

The NAF is headquartered in Minneapolis, Minnesota. 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 (Minn.Stat. § 325F.69), the Minnesota Uniform Deceptive Trade Practices Act (Minn.Stat. § 325D.44), and the Minnesota False Statements in Advertising Act (Minn.Stat. § 325F.67).4 The complaint sought civil penalties as well as an injunction barring the NAF from engaging in those practices of the organization that allegedly violated the relevant statutes. On July 17, 2009, the parties entered into a consent judgment under which the NAF agreed that it would not administer, process, or [i]n any manner participate in” any consumer arbitration 5 filed on or after July 24, 2009.6

In April 2011, Miller filed suit in the State Court of Fulton County against GLC–Northside and related entities.7 Relying on the Arbitration Agreement, Golden Living filed a motion to dismiss, to compel arbitration, and to stay discovery. Miller opposed the motion, arguing that the designation of the NAF as the arbitral forum was an integral term of the Arbitration Agreement, and that the unavailability of either the NAF or its Code of Procedure rendered the contract impossible to enforce and therefore void. He further argued that the Arbitration Agreement should not be enforced because it is substantively and procedurally unconscionable. Finally, Miller asserted that he was legally incompetent to execute the Arbitration Agreement, because at the time of his admission to GLC–Northside he had just undergone two major surgeries, was in significant pain, and was under the influence of narcotic pain killers.

The trial court found that the Agreement was not impossible to perform and that it was neither substantively nor procedurally unconscionable. The court nevertheless denied the motion to compel arbitration, finding that there exists a jury question as to whether Miller was legally competent to execute the Agreement. Miller then sought a certificate of immediate review, to allow him to appeal the trial court's rulings as to impossibility and unconscionability. The trial court granted that certificate, and this Court granted Miller's application for an interlocutory appeal. In Case No. A13A0061, Miller appeals the trial court's rulings that the Arbitration Agreement is not void because of either impossibility or unconscionability. GLC–Northside has filed a cross-appeal in Case No. A13A0062, in which it challenges the trial court's finding that a jury question exists as to Miller's competency to execute the Arbitration Agreement. We now turn to the merits of these appeals.

1. “The question of whether a valid and enforceable arbitration agreement exists ... represents a question of law.” (Citation and footnote omitted.) Yates v. CACV of Colorado, LLC, 303 Ga.App. 425, 693 S.E.2d 629 (2010). We therefore review de novo a trial court's order granting or denying a motion to compel arbitration. Dunaway v. UAP/GA AG. Chem., 301 Ga.App. 282, 284–285(1), 687 S.E.2d 211 (2009).

Case No. A13A0061

2. We first address the question of whether the Arbitration Agreement is void because of impossibility of performance—i.e., because neither the NAF, as the chosen arbitral forum, nor, consequently, its Code of Procedure is available to the parties. We begin our analysis by noting that a written agreement to arbitrate is by definition a contract. In deciding the validity of such an agreement, therefore, we apply the usual rules of Georgia law regarding the construction and enforcement of contracts. See Yates, supra at 430(1), 693 S.E.2d 629. The normal defenses to enforcement of a contract apply to arbitration agreements, including the defense of impossibility. See Triad Health Mgmt. of Ga., III v. Johnson, 298 Ga.App. 204, 209(3), 679 S.E.2d 785 (2009) (“generally applicable contract defenses ... may invalidate arbitration agreements to which the FAA applies”) (citation omitted); Kothari v. Tessfaye, 318 Ga.App. 289, 294–295(1)(a)(i), 733 S.E.2d 815 (2012) (recognizing that impossibility of performance is a contract defense); OCGA § 13–3–5 (impossible conditions in a contract are “void and are binding upon no one”). Here, Miller argues that because the Arbitration Agreement designates the NAF as the parties' exclusive arbitral forum, and because the NAF is legally barred from conducting consumer arbitrations, the agreement is impossible to perform. We agree.

Under Georgia law, the cardinal rule of contract construction is to ascertain the intent of the parties, as evidenced by the language of the contract. Garrett v. So. Health Corp. of Ellijay, 320 Ga.App. 176, 182(1), 739 S.E.2d 661 (2013). And [i]f the terms of a contract are plain and unambiguous, the contractual terms alone determine the parties' intent.” (Citation omitted.) Id. Accordingly, while we recognize the “liberal federal policy favoring arbitration agreements,” Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24(4)(c), 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), that policy does not allow us to rewrite the parties' agreement. Rather, the law obligates us to enforce the plain terms of the contract into which the parties entered. Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 53–54, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995) (when applying the Federal Arbitration Act, courts must still “ensure that private agreements to arbitrate are enforced according to their terms”) (citation and punctuation omitted).

Golden Living argues that the Arbitration Agreement is not impossible to enforce because the contract is governed by the Federal Arbitration Act (“FAA”), and section 5 of that statute 8 permits a court to appoint a substitute arbitrator. Although this issue has never been addressed by a Georgia appellate court, the United States Court of Appeals for the Eleventh Circuit has previously held that where the parties' chosen arbitral forum has failed or is otherwise unavailable, section 5 of the FAA may apply, in some circumstances, to allow the naming of a...

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