Gary Alessi v. Cornerstone Associates, Inc.
334 Ga. App. 490
Ga. Ct. App.2015Background
- Gary and Melissa Alessi entered a home purchase agreement with Cornerstone containing a mandatory binding arbitration clause for disputes arising from the transaction.
- The Alessis filed a demand for arbitration asserting multiple claims (breach of contract, breach of oral agreement, negligent construction, breach of warranty, unjust enrichment, and attorney fees).
- Cornerstone served a written settlement offer for $3,000 “pursuant to OCGA § 9-11-68” during the arbitration; the Alessis rejected it.
- The arbitrator awarded $0 to both parties and stated the award resolved all claims submitted to arbitration.
- Cornerstone sought confirmation of the arbitration award in superior court and moved for attorney fees and costs under Georgia’s offer-of-judgment statute, OCGA § 9-11-68, claiming $67,268.41 in fees incurred after its rejected offer.
- The trial court awarded those fees and entered judgment for Cornerstone; the Alessis appealed, arguing OCGA § 9-11-68 does not apply to claims decided in binding arbitration.
Issues
| Issue | Plaintiff's Argument (Alessi) | Defendant's Argument (Cornerstone) | Held |
|---|---|---|---|
| Whether OCGA § 9-11-68 applies to settlement offers made during binding arbitration | OCGA § 9-11-68 does not apply to arbitration because the statute refers to service of a summons and complaint and timing tied to trial — procedures unique to court litigation | The statute is part of the Civil Practice Act; confirmation of an arbitration award is a court proceeding subject to the Civil Practice Act, so the offer-of-judgment statute should apply | Reversed: OCGA § 9-11-68 does not apply to settlement offers made during binding arbitration; statute construed to apply to traditional civil litigation, not arbitration |
Key Cases Cited
- Johnson v. Allied Recycling, 323 Ga. App. 427 (principle: de novo review for legal questions)
- RadioShack Corp. v. Cascade Crossing II, 282 Ga. 841 (statutory construction: ascertain legislative intent and give plain meaning)
- Deal v. Coleman, 294 Ga. 170 (apply plain-language rules and presume legislature meant what it said)
- McDonald v. City of W. Branch, 466 U.S. 284 (arbitral factfinding differs from judicial factfinding; evidentiary and procedural differences)
- Greene v. Hundley, 266 Ga. 592 (arbitration allows waiver of rights available in judicial forum; limited judicial review)
- Joyner v. Raymond James Financial Svcs., 268 Ga. App. 835 (statutes awarding fees are in derogation of common law and must be strictly construed)
- Peachtree-Cain Co. v. McBee, 254 Ga. 91 (statutes construed in harmony with existing law and other statutes)
- LecStar Telecom v. Grenfell, 273 Ga. App. 712 (Georgia Arbitration Code contains procedural rules unique to arbitration)