333 Ga. App. 152
Ga. Ct. App.2015Background
- Peek's home was largely destroyed by fire; she signed a July 2013 contract with AAA for demolition and rebuilding that included an initialed arbitration clause.
- The clause required binding arbitration “in accordance with the Construction Arbitration Association (of Atlanta)” under its Commercial rules in Atlanta, Fulton County, Georgia, before a single arbitrator.
- Peek sued AAA in March 2014 asserting fraud, negligent misrepresentation, statutory consumer claims, negligence, and related relief. AAA moved to stay and compel arbitration.
- Peek argued the arbitration clause was unenforceable because the named arbitral forum did not exist. AAA replied it intended to name Construction Arbitration Associates, Ltd., and submitted an affidavit asserting a unilateral drafting mistake.
- The superior court denied the motion to compel; AAA obtained interlocutory appellate review. The Court of Appeals reversed and remanded, directing appointment of a substitute arbitrator under OCGA § 9-9-7(b).
Issues
| Issue | Plaintiff's Argument (Peek) | Defendant's Argument (AAA) | Held |
|---|---|---|---|
| Whether a corporate misnomer in the arbitration clause can be corrected so arbitration before the intended forum can proceed | The named forum does not exist, so the clause is void and unenforceable | The clause merely misnames Construction Arbitration Associates, Ltd.; the court may correct the misnomer or reform the contract | Court: No reformation/correction — evidence shows only a unilateral drafting mistake and the misnamed forum was not a party or known to Peek, so cannot reform the contract |
| Whether the arbitration clause is unenforceable because the designated arbitral forum is unavailable/nonexistent | Unavailability of named forum makes arbitration impossible; clause is integral and thus void | Forum unavailability is an ancillary logistical issue; under OCGA § 9-9-7(b) court may appoint a substitute arbitrator | Court: Designation of the (nonexistent) forum was ancillary, not integral; arbitration agreement is enforceable and the trial court must appoint a substitute arbitrator under OCGA § 9-9-7(b) |
| Whether Miller v. GGNSC Atlanta controls to void clause when forum is unavailable | Cites Miller to argue forum selection was integral, so clause unenforceable | Distinguishes Miller: that case involved an existing forum that withdrew and incorporated exclusive rules; here forum never existed and clause lacks exclusivity | Court: Miller’s integral-vs-ancillary test applies, but facts distinguish Miller; here nonexistence and non-exclusive language make forum selection ancillary |
| Scope of relief on remand | N/A | Appointment of substitute arbitrator but honoring agreed logistical terms (single arbitrator; Atlanta, Fulton County) | Court: Reverse and remand; trial court must appoint substitute arbitrator and respect clause provisions requiring arbitration in Atlanta, Fulton County by a single arbitrator |
Key Cases Cited
- Miller v. GGNSC Atlanta, 323 Ga. App. 114 (Ga. Ct. App. 2013) (adopts integral-term vs. ancillary-logistical-concern test for forum unavailability)
- Pinson v. Hartsfield Intl. Commerce Center, 191 Ga. App. 459 (Ga. Ct. App. 1989) (corporate misnomer in instrument is not material if identity can be shown)
- Darling Intl. v. Carter, 294 Ga. 455 (Ga. 2014) (misdescription in chain-of-title context does not invalidate transfer)
- Deutsche Bank Nat. Trust Co. v. JP Morgan Chase Bank, N.A., 307 Ga. App. 307 (Ga. Ct. App. 2010) (minor name differences do not make identity unclear)
- Johnson v. Unified Residential Dev. Co., 285 Ga. App. 852 (Ga. Ct. App. 2007) (corporate misnomer in contract does not render agreement unenforceable where identity is proved)
- Brookfield Country Club v. St. James-Brookfield, LLC, 287 Ga. 408 (Ga. 2010) (Georgia arbitration code tracks federal law; courts may look to federal cases for guidance)
- Brown v. ITT Consumer Financial Corp., 211 F.3d 1217 (11th Cir. 2000) (forum-selection that is not integral allows court to appoint substitute arbitrator under FAA)
- Inetianbor v. CashCall, Inc., 768 F.3d 1346 (11th Cir. 2014) (assessing how important forum selection was to parties when deciding integrality)
- In re Salomon Inc. Shareholders Derivative Litigation, 68 F.3d 554 (2d Cir. 1995) (discusses when forum selection is as important as the arbitration agreement itself)