THIRD DIVISION
DOYLE, P. J.,
REESE and BROWN, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
https://www.gaappeals.us/rules
August 19, 2022
In the Court of Appeals of Georgia
A21A0055. WEST et al. v. BOWSER et al.
BROWN, Judge.
In West v. Bowser, 360 Ga. App. 103 (860 SE2d 904) (2021), we reversed the
trial court’s order compelling arbitration in a wrongful death action filed by Jobe
West, individually and as executor of the estate of Ronald West, and Kelly
Blottenberger as the surviving children of Ronald (collectively “the plaintiffs”)
against Provident Group-Creekside Properties, LLC, d/b/a Provident Village at
Creekside, Provident Resources Group, Inc., and Provident Resources Management,
LLC (collectively “the Provident defendants”). Pertinently, we held in Division 1 (a)
that the provisions of the Georgia Code pertaining to guardians of adult wards, see
OCGA § 29-4-1 et seq. (“the Guardianship Code”), did not give Jobe, as Ronald’s
guardian, the authority to enter into a pre-dispute arbitration agreement (“the Arbitration Agreement”) on Ronald’s behalf. Id. at 106-107 (1) (a). We based that
holding on our precedent in CL SNF, LLC v. Fountain, 355 Ga. App. 176 (843 SE2d
605) (2020) (“Fountain I”). West, 360 Ga. App. at 106-107 (1) (a), (b).
Three months later, our Supreme Court reversed Fountain I, holding that the
Guardianship Code grants a guardian authority to enter into a binding pre-dispute
arbitration agreement where the exercise of such power is reasonably necessary to
provide adequately for the ward’s support, care, health, and welfare. CL SNF, LLC
v. Fountain, 312 Ga. 416 (863 SE2d 116) (2021) (“Fountain II”). Thereafter, our
Supreme Court granted certiorari in this case, vacated our decision, and remanded to
this Court for reconsideration in light of Fountain II. Provident Group-Creekside
Properties v. West, Case No. S21C1253 (Nov. 2, 2021). We now affirm.
1. In light of Fountain II, we vacate Division 1 of our earlier opinion. In its
place, we hold that OCGA § 29-4-23 (a) (4) of the Guardianship Code gave Jobe the
authority to enter into the Arbitration Agreement on Ronald’s behalf. See Fountain
II, 312 Ga. at 420-421.
2. In Division 2 of our opinion, we declined to address the plaintiffs’ remaining
arguments related to the enforceability of the Arbitration Agreement. West, 360 Ga.
App. at 109 (2). Given our holding in Division 1, we now find it necessary to address
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those arguments. The plaintiffs contend that the agreement is unsupported by
consideration, that Jobe was fraudulently induced into signing the agreement, and that
the agreement is void under Georgia law and as against public policy. We find these
contentions unavailing.
Whether a valid and enforceable arbitration agreement exists is a question of
law. Miller v. GGNSC Atlanta, 323 Ga. App. 114, 117 (1) (746 SE2d 680) (2013).
“On appeal from the grant or denial of a motion to compel arbitration, the standard
of review is whether the trial court was correct as a matter of law. The construction
of an arbitration agreement, like any other contract, presents a question of law, which
is subject to de novo review.” (Citations and punctuation omitted.) Aaron v. United
Health Svcs. of Ga., 349 Ga. App. 563, 563-564 (826 SE2d 442) (2019). “And the
validity of an arbitration agreement is generally governed by state law principles of
contract formation.” (Citation and punctuation omitted.) United Health Svcs. of Ga.
v. Alexander, 342 Ga. App. 1, 2 (2) (802 SE2d 314) (2017). See also Lynn v. Lowndes
County Health Svcs., 354 Ga. App. 242, 245 (2), n.3 (840 SE2d 623) (2020) (“This
principle still applies in cases . . . where the arbitration agreement states that the
agreement is to be governed by the Federal Arbitration Act.”). “As the party seeking
arbitration, [defendants] bear[ ] the burden of proving the existence of a valid and
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enforceable agreement to arbitrate.” (Citation and punctuation omitted.) Triad Health
Mgmt. of Ga., III v. Johnson, 298 Ga. App. 204, 206 (2) (679 SE2d 785) (2009).
(a) The plaintiffs argue that the Arbitration Agreement is a separate and distinct
contract from the Residential Agreement and thus requires separate and distinct
consideration. The Provident defendants argue that the true consideration in the
contract is the mutual promises to arbitrate any disputes. We agree with the Provident
defendants.
Under Georgia law, mutual promises and obligations are sufficient
consideration to support a contract. See Atlanta Six Flags Partnership v. Hughes, 191
Ga. App. 404, 407 (1) (381 SE2d 605) (1989). See also Rushing v. Gold Kist, 256 Ga.
App. 115, 119 (3) (567 SE2d 384) (2002). Here, the Arbitration Agreement
demonstrated mutuality of obligation, as it required both parties to submit any and all
disputes to binding arbitration. Accordingly, there was sufficient consideration to
support the Arbitration Agreement. See Attenborough v. Dillard’s Dept. Store, No.
1:06-CV-0291-TWT, 2006 WL 1663299, at *2 (II) (N.D. Ga. June 9, 2006) (holding
that arbitration agreement was supported by consideration “as it required both the
Plaintiff and the Defendant to submit all discrimination and retaliation disputes
related to the Plaintiff’s employment to ‘final and binding arbitration’”). See also
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Caley v. Gulfstream Aerospace Corp., 428 F3d 1359, 1376 (II) (E) (3) (11th Cir.
2005).
(b) The plaintiffs next contend that Jobe was fraudulently induced to sign the
Arbitration Agreement. We disagree.
“In general, a party alleging fraudulent inducement to enter a contract has two
options: (1) affirm the contract and sue for damages from the fraud or breach; or (2)
promptly rescind the contract and sue in tort for fraud.” Ekeledo v. Amporful, 281 Ga.
817, 819 (1) (642 SE2d 20) (2007).
Having elected to seek rescission and pursue a claim for fraud, [the
plaintiffs are] required to prove that [the Provident defendants] through
misrepresentation, act, or artifice intentionally induced [Jobe] to sign the
[Arbitration] Agreement and that [Jobe] justifiably relied on the
misrepresentation, act, or artifice, being reasonably diligent in the use
of the facilities at [his] command.
(Citation and punctuation omitted.) Legacy Academy v. Mamilove, 297 Ga. 15, 17 (1)
(771 SE2d 868) (2015). In this vein, the plaintiffs contend that Jobe was fraudulently
induced to sign the Arbitration Agreement because he was “made to believe by the
representatives of Provident Village that he was required to sign all of the documents
placed before him, which apparently included the Arbitration Agreement.” However,
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[o]ne cannot claim to be defrauded about a matter equally open to the
observation of all parties where no special relationship or trust or
confidence exists. Further, in the absence of special circumstances one
must exercise ordinary diligence in making an independent verification
of contractual terms and representations, failure to do which will bar an
action based on fraud. One not prevented from reading the contract, and
having the capacity and opportunity to do so, cannot after signing it
claim he was fraudulently induced to sign by promises which contradict
the express terms of the contract.
(Citation and punctuation omitted.) Megel v. Donaldson, 288 Ga. App. 510, 514 (2)
(654 SE2d 656) (2007). Accord Results Oriented v. Crawford, 245 Ga. App. 432, 439
(1) (b) (538 SE2d 73) (2000). As the plaintiffs themselves point out, the Arbitration
Agreement expressly provided, in bold, all-caps, that “IF THIS AGREEMENT IS
NOT SIGNED, THE RESIDENT WILL STILL BE ALLOWED TO RECEIVE
SERVICES AT THE FACILITY.” (Emphasis in original.) The plaintiffs assert that
Jobe was not given the opportunity to read the documents, but nothing in the record
shows that Jobe was prevented from reading the Arbitration Agreement. See Legacy
Academy, 297 Ga. at 18 (1) (allegations that defendants gave the franchise agreement
to the plaintiffs on the same day it was signed and told them that they had to sign the
documents that day or another franchisee would be allowed to take their desired
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location were legally insufficient to support a finding that the plaintiffs were
prevented from reading the agreement through fraud or misleading artifice). He
simply chose not to do so before signing the agreement. Absent any evidence of fraud
that prevented Jobe from reading the Arbitration Agreement, plaintiffs’ claim that
Jobe was fraudulently induced to sign by statements which contradict the express
terms of the Arbitration Agreement fails. See id. (because the pre-contractual
representations by the defendants upon which the plaintiffs allege they relied
expressly contradict the agreement, their reliance on such representations was
unreasonable as a matter of law).
(c) Plaintiffs assert that the Arbitration Agreement is void under Georgia law,
specifically, the “Remedies for Residents of Personal Care Homes Act,” OCGA § 31-8-130 et seq., and the “Bill of Rights for Residents of Long-Term Facilities,” OCGA
§ 31-8-100 et seq. Pursuant to OCGA § 31-8-133, the plaintiffs point out, “[personal
care home r]esidents’ rights shall include all rights enumerated in the rules and
regulations of the Department of Community Health, including, but not limited to,
procedural protections relating to admission, transfer, or discharge of residents.”
Subsection (a) of OCGA § 31-8-136 further provides: “Any resident or the
representative or legal surrogate of the resident, if any, may bring an action in a court
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of competent jurisdiction to recover actual and punitive damages against a personal
care home or its governing body, administrator, or employee for any violation of the
rights of a resident granted under this article.” See also OCGA § 31-8-136 (c) (“The
right of a resident to bring an action pursuant to this Code section is in addition to any
and all other rights, remedies, or causes of action the resident may have by statute or
at common law.”). The plaintiffs then point to Section 111-8-63-.16 of the Rules and
Regulations of the Georgia Department of Community Health, which provides in
relevant part that an “assisted living community must not use a written admission
agreement or any other written agreement signed by the resident or the resident’s
legal representative which waives or attempts to waive any of the resident’s rights
these rules protect.” Ga. Comp. R. & Regs., r. 111-8-63-.16 (1). Based on these
provisions, the plaintiffs assert that the Arbitration Agreement takes away Jobe’s right
as a resident to bring an action in court and have a jury trial, in violation of the
Remedies for Residents of Personal Care Homes Act and the Rules and Regulations
of the Department of Community Health as well as the United States and Georgia
Constitutions.
It is well established that “[p]arties to a binding arbitration agreement can
waive constitutional rights, including the right to trial by jury to obtain a quick and
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simple resolution of the dispute.” Wise v. Tidal Construction Co., 261 Ga. App. 670,
674 (2) (583 SE2d 466) (2003). See also Greene v. Hundley, 266 Ga. 592, 595 (2)
(468 SE2d 350) (1996); Burnham v. Cooney, 265 Ga. App. 246, 247 (1) (593 SE2d
701) (2004). Moreover, the Arbitration Agreement provides that “the parties
expressly stipulate that the Federal Arbitration Act, 9 U.S.C. §§ 1-16, shall
exclusively govern the enforcement of this Agreement.” See Triad, 298 Ga. App. at
206 (“[i]f the intent of the parties indicates that arbitration would be governed by the
FAA, this Court will enforce the intentions of the parties”) (citation and punctuation
omitted). See also Harrison v. Eberhardt, 287 Ga. App. 561, 563 (2) (a) (651 SE2d
826) (2007). And, “the FAA preempts any state law that conflicts with its provisions
or undermines the enforcement of private arbitration agreements.” Langfitt v.
Jackson, 284 Ga. App. 628, 634-635 (3) (644 SE2d 460) (2007). “The FAA simply
requires courts to enforce privately negotiated agreements to arbitrate, like other
contracts, in accordance with their terms. Thus, the FAA will pre[ ]empt state laws
which require a judicial forum for the resolution of claims which the contracting
parties agreed to resolve by arbitration.” (Citation and punctuation omitted.) BDO
USA, LLP v. Coe, 329 Ga. App. 79, 83 (1) (763 SE2d 742) (2014). To the extent that
the Remedies for Residents of Personal Care Homes Act, the Bill of Rights for
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Residents of Long-Term Facilities, or any corresponding regulations prohibit
arbitration of the plaintiffs’ claims, they are preempted by the FAA. See Marmet
Health Care Ctr. v. Brown, 565 U. S. 530, 533 (I) (132 SCt 1201, 182 LE2d 42)
(2012) (state’s prohibition against pre-dispute agreements to arbitrate personal-injury
or wrongful-death claims against nursing homes preempted by the FAA); Weaver v.
Doe, 371 P3d 1170, 1174, 1177 (Okla. Civ. App. 2016) (provision of Oklahoma’s
Nursing Home Care Act providing that any waiver of the right to commence an action
against the nursing home owner or licensee for any intentional or negligent act or
omission shall be null and void and without legal effect preempted by the FAA);
Fosler v. Midwest Care Ctr. II, 398 Ill. App. 3d 563, 565 (928 NE2d 1) (2009) (FAA
preempts the provisions of Illinois’s Nursing Home Care Act that purport to nullify
a nursing home resident’s waiver of the right to commence an action in court and to
a jury trial).
(d) Finally, the plaintiffs contend that the Arbitration Agreement is
unenforceable because it is void as against public policy. OCGA § 13-8-2 (a)
provides: “[a] contract that is against the policy of the law cannot be enforced.” The
statute then lists several types of contracts that are void as against public policy, none
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of which are relevant here,1 but the list is expressly non-exhaustive. OCGA § 13-8-2
(a). Thus,
[w]e are not restricted by this list in voiding contracts that are against
public policy; however, the power of the courts to declare a contract
void for being in contravention of a sound public policy is a very
delicate and undefined power, and, like the power to declare a statute
unconstitutional, should be exercised only in cases free from doubt. The
authority of the lawmaking power to interfere with the private right of
contract has its limits, and the courts should be extremely cautious in
exercising the power to supervise private contracts which the lawmaking
power has not declared unlawful.
(Citation and punctuation omitted.) Edwards v. Grapefields, 267 Ga. App. 399, 403
(1) (599 SE2d 489) (2004). See also Innovative Images v. Summerville, 309 Ga. 675,
681 (3) (a) (848 SE2d 75) (2020) (“courts must exercise extreme caution in declaring
a contract void as against public policy and may do so only where the case is free
from doubt and an injury to the public clearly appears”) (citation and punctuation
1
These include contracts tending to corrupt legislation or the judiciary; contracts in general restraint of trade, as distinguished from contracts which restrict certain competitive activities (restrictive covenants); contracts to evade or oppose the revenue laws of another country; wagering contracts; and contracts of maintenance or champerty. OCGA § 13-8-2 (a) (1) - (5).
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omitted). We conclude that the alleged violation of public policy in this case is not
“free from doubt.”
Contrary to the plaintiffs’ assertions, “binding arbitration agreements generally
are not in contravention of the public policy of this State.” Innovative Images, 309
Ga. at 682 (3) (a). Indeed, “[b]y enacting the [Georgia Arbitration Code], the Georgia
General Assembly has established a clear public policy in favor of arbitration.” Helms
v. Franklin Builders, 305 Ga. App. 863, 865 (700 SE2d 609) (2010). Nonetheless, the
plaintiffs assert that there also is a strong public policy in this State for the protection
of the elderly against abuse. See OCGA § 16-5-100 et seq. (“Protection of Elder
Persons”); OCGA § 30-5-1 et seq. (“Disabled Adults and Elder Persons Protection
Act”); OCGA § 30-8-80 et seq. (“Long-term Care Facility Resident Abuse Reporting
Act”). Relying on Lichon v. Morse, 327 Mich. App. 375 (933 NW2d 506) (2019), in
which the Michigan Court of Appeals found an employment contract’s arbitration
clause unenforceable in a case involving sexual assault in the workplace, id. at 394-395 (II), the plaintiffs urge us to adopt a similar stance with regard to the
enforceability of an arbitration clause in the context of elder abuse in a licensed care
facility. The plaintiffs’ reliance on Lichon is misplaced for several reasons. First, the
court in Lichon did not determine whether the arbitration agreement is contrary to
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public policy. 327 Mich. App. at 390 (II), 397 (II) (“[T]his Court is asked to decide
whether the sexual assault and battery of an employee at the hands of a superior is
conduct related to employment. We conclude that it is not.”). Indeed, some of the
quotations employed by the plaintiffs in their brief are merely a recitation of the
plaintiff’s arguments in that case. Id. at 383 (I) (A). Additionally, the Supreme Court
of Michigan vacated the Court of Appeals’ decision in Lichon. Lichon v. Morse, 507
Mich. 424, 446 (IV) (968 NW2d 461) (2021). The plaintiffs have pointed to no
Georgia cases finding any category of arbitration agreements void as against public
policy. We decline to do so for the first time here.2 Moreover, such a public policy
would run afoul of the FAA. See Brown, 565 U. S. at 533 (I) (West Virginia’s public
policy prohibition against pre-dispute agreements to arbitrate personal-injury or
wrongful-death claims against nursing homes preempted by the FAA). Accordingly,
we now affirm the trial court’s order compelling arbitration.
Judgment affirmed. Doyle, P. J., and Reese, J., concur.
2
In arguing that the Arbitration Agreement is void as against public policy, the plaintiffs assert, in passing, that the agreement is “unconscionable.” However, the doctrines of unconscionable contracts and contracts that are void as against public policy are “somewhat distinct,” and the analyses should not be conflated. Innovative Images, 309 Ga. at 680 (3), 684 (3) (b).
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