We granted defendant-appellant jOjA Partners, LLC’s (“jOjA”) application for discretionary appeal to consider whether the Cobb County Superior Court erred in denying jOjA’s motion to compel arbitrátion and motiоn for immediate stay in the underlying action. Therein, plaintiff-appellee Abrams Properties, Inc. seeks a declaratory judgment, damages, and OCGA § 13-6-11 attorney fees against jOjA, averring breach of contract, breach of fiduciary duties, and conversion. On appeal, jOjA contends that the superior court erred in finding: the Asset Management Agreement (“Agreement”) in issue showed that the parties intended arbitration to serve as an optional rather than exclusive remedy for disputes arising under the Agreement; the termination of the
On December 22, 2000, jOjA and Abrams entered into thе Agreement by which jOjA was engaged as an independent contractor to provide certain services relating to the administration, management, supervision, leasing, and disposition of Abrams’ real estatе assets. Evidence of a dispute between the parties arose on August 12, 2002, when by letter to Abrams, subject: Notice of Failure to Perform Under Asset Management Agreement, jOjA notified Abrams that it was in breach of the Agreement for failure to pay the full commission owing upon its sale of a Florida shopping center on Abrams’ behalf. The letter gave Abrams ten days to cure. On August 16, 2002, Abrams sent jOjA its “Notice of Failure to Perform Duties and Obligаtions Under the Contract” by letter, contending that jOjA had breached seven of its duties under the Agreement. On August 22, 2002, Abrams further wrote jOjA in response to its August 12, 2002 letter, denying any breach of the Agreement and demanding withdrawal of “improрer notice and demand for payment.” The following day, jOjA notified Abrams of its termination of the Agreement and election to pursue arbitration in the event the parties cannot “amicably resolve this dispute within thirty (30) days, i.e. on or before September 22, 2002.” On September 20, 2002, Abrams terminated the Agreement and filed the instant action in the trial court. Five days later, jOjA filed its motion to compel arbitration and motion for stay. On October 16, 2002, jOjA timely answered denying the material allegations of Abrams’ complaint and counterclaimed seeking damages, punitive damages, and OCGA § 13-6-11 attorney fees, averring breach of the Agreement from its perspective as well as tortious interference with business/contractual relations. Held:
1. The superior court erred in concluding that the permissive use of the word “may” rather than the obligatory word “shall” in Article 12 оf the Agreement made arbitration an optional remedy under the Agreement.
Pertinently, in the event of default by asset manager jOjA or by owner Abrams, Sections 12.2 and 12.4 of Article 12 of the Agreement provide that the “[injurеd party] may pursue any one or more of the following remedies, separately or concurrently or in any combination, without further notice or demand whatsoever.” Id.
Section 12.2.1 [and Section 12.4.1 The injured party] may terminate this Agreement by giving notice of such termination, in which event this Agreement shall be terminated at the time designated by [the injured party] in its notice of termination to [the defaulting party].
Section 12.2.2 [and Section 12.4.2] With or without terminating this Agreement, [the injured party] may pursue arbitration against [the defaulting party] in accordance with Section 15.16 to recover from [defaulting party] all damages suffered, incurred or sustained by [injured party] as a result of, by reason of or in connection with such default.
(Emphasis supplied.) Sections 12.2.1 and 12.4.1, and Sections 12.2.2 аnd 12.4.2, Article 12, Agreement, respectively.
Section 15.16 of the Agreement, in turn, provides
Arbitration. Owner [Abrams] and [Asset Manager] jOjA agree to diligently and in good faith attempt to resolve any dispute hereunder. In the event the parties cannot amicably resolve а dispute within thirty (30) days, the parties agree to submit the dispute to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association.
We, of course, recognize that the Georgia Arbitration Code “is in derogation of common law and must be strictly construed and not extended beyond its plain terms.”
Pinnacle Constr. Co. v. Osborne,
So construing the use of the word “may” versus the word “shall” in the instant circumstances, the superior court correctly concluded that “may” meant that the parties intended that they should have a choice as to remedies for disputes arising under the Agreement. See Black’s Law Dictionаry (6th ed.), p. 979 (“In construction of statutes and presumably also in construction of federal rules word ‘may’ as opposed to ‘shall’ is indicative of discretion or choice between two or more alternаtives, but context in which word appears must be controlling factor. [Cit.]”). However, the superior court erred insofar as the choice provided the parties under the Agreement was not one allowing thеm to litigate or arbitrate; rather, the choice provided was one which allowed them to terminate for default upon notice or to arbitrate after making a good faith, 30-day effort to amicably resolve any disputes arising under the Agreement between themselves pursuant to Section 15.16 thereof. Arbitration as mandatory under the Agreement in the absence of electing the termination option, the supеrior court erred in staying arbitration and in refusing to compel Abrams to submit to an arbitration of the claims of the parties.
2. Neither did termination of the Agreement render its arbitration provisions unenforceable. Sections 12.2.2 and 12.4.2 of the Agreement plainly provide that in the event of default by either party, the injured party may pursue arbitration “with or without terminating the Agreement.” Division 1, supra. Moreover the foregoing seсtions of the Agreement provide that the available remedies — termination or arbitration — may be pursued “separately or concurrently or in any combination.” Sections 12.2.2 and 12.4.2, Article 12, Agreement. This language is plain, unambiguous, and capable of only one reasonable interpretation. As such, it must be given its literal effect, the finding of the superior court to the contrary notwithstanding.
Eastside Gardens of Snellville v. Sims,
3. Further, jOjA challenges the finding of thе superior court barring arbitration for the failure of the parties to initial the arbitration provisions of the Agreement under OCGA § 9-9-2 (c) (9). While the superior court correctly indicates that OCGA § 9-9-2 (c) (9) 1 makes the Arbitration Cоde inapplicable to arbitration provisions not initialed by parties to contracts as to terms and conditions of employment, the Agreement, by its own terms, is not an employment contract. Pertinently, Section 2.2 of the Agreement, denominated “Status of the Asset Manager,” provides that “in the performance of all its duties and obligations under [the] Agreement, IjOjA] is, and shall at all times during the Term be, an independent cоntractor, and not an employee of [Abrams].”
“Where the contract of employment clearly denominates the other party as an independent contractor, that relationship is presumеd to be true unless the evidence shows that the employer assumed such control.” (Citations and punctuation omitted.)
Teachers’ Retirement System &c. v. Forehand,
4. jOjA last claims that the superior court erred in finding waiver of any right to compel arbitration for failure to diligently and in good faith attempt to resolve the dispute of the parties under Section 15.16 of the Agreement prior to serving its arbitration demand. “ An agreement to arbitrate is waived by any action of a party whiсh is inconsistent with the right of arbitration.’ [Cit.]”
St. Paul Fire &c. Ins. Co. v. Barge,
However, in those cases where a waiver was held to have occurred, the party seeking to rely upon an arbitration clause did not promptly invoke or seek to enforce the clause. See, e.g., Tillman [Group v. Keith,201 Ga. App. 680 , 681 (2) (411 SE2d 794 ) (1991)] (appellant litigated claim to judgment without ever moving to compel arbitration or to stay proceedings pending arbitration); Nat. Parents’ Resource &c. v. Peachtree Hotel Co.,201 Ga. App. 637 , 638 (2) (411 SE2d 884 ) (1991) (appellant defended оn the merits and litigated case without moving to compel or to stay proceedings).
Weyant v. MacIntyre,
The record shows that by its letter to Abrams of August 12, 2002, jOjA gave Abrams notice of breach under the Agreement. On August 23, 2002, jOjA notified Abrams of its termination of the Agreement and election to pursue arbitration under the Agreement. And, on September 25, 2002, jOjA filed its motion to compel arbitration and motion for immediate stay, this despite the fact that Abrams had filed its lawsuit and given notice of its termination of the Agreement five days earlier. Manifestly, these actions are not inconsistent with the right of arbitration. Accordingly, the superior court erred in finding waiver of arbitration for failure in jOjA to attempt to resolve the dispute prior to initiating arbitration.
Judgment reversed.
Notes
The Georgia Arbitration Code shall not apply to “[a]ny contract relating to terms and conditions of employment unless the clause agreeing to arbitrate is initialed by all signatories at the time of the execution of the agreement.” OCGA § 9-9-2 (c) (9).