Atlanta Concorde Fire Soccer Association, Inc. v. Margaret Graham, on Behalf of G. G., a Child ( 2020 )

SECOND DIVISION
MILLER, P. J.,
MERCIER and COOMER, 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.
http://www.gaappeals.us/rules
May 28, 2020
In the Court of Appeals of Georgia
A20A0155. ATLANTA CONCORDE FIRE SOCCER
ASSOCIATION, INC. et al. v. GRAHAM.
COOMER, Judge.
Atlanta Concorde Fire Association, Inc. (“Concorde Fire”), Gregg Blasingame,
James Harris, and Garvin Quamina (collectively, the “Appellants”) appeal a trial court
order denying their motion to compel arbitration of a defamation claim filed by G. G.,
a minor child, through her mother, Margaret Graham (collectively, the “Appellees”).
Appellants contend that the trial court erred in determining that the Appellees’ claims
were not subject to arbitration, arguing that the Appellants are parties to the
agreement at issue and, alternatively, that they can enforce the arbitration provision
of the agreement as third party beneficiaries, as agents, or under the doctrine of
equitable estoppel. Appellants further contend that the trial court erred in refusing to
compel arbitration because an arbitrator is required to determine the “gateway” issue
of whether a dispute is subject to arbitration. For the following reasons, we affirm.
Concorde Fire is a non-profit entity that operates a youth soccer program.
Concorde Fire participates in the U.S. Soccer Development Academy (the
“Academy”). Blasingame, Harris, and Quamina are employees of Concorde Fire. In
2017, G. G. played youth soccer for Concorde Fire. In July 2017, G. G. executed an
agreement with the Academy and the United States Soccer Federation, Inc. to
participate in certain Academy programs (the “Agreement”). The Agreement contains
a “Waiver and Release of Claims” (the “Release”) and a clause for “Arbitration as the
Exclusive Remedy” (the “Arbitration Clause”).
The Release states:
4. Waiver and Release of Claims:
A. The undersigned Participant and Participant/Guardian, for themselves
and on behalf of Participant, and the Participant’s heirs, next of kin,
personal representatives, successors and/or assigns, do hereby release and
forever discharge the Academy, the United States Soccer Federation, Inc.,
and each of their affiliated clubs, teams and companies, and any of their
members, directors, officers, employees, volunteers, sponsors,
independent contractors or agents (collectively, the “Releasees”), of and
from any and all manner of action or actions, cause or causes of action,
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in law or in equity for indemnity or otherwise, liabilities, claims,
damages, losses, costs, or expenses, of any nature whatsoever, known or
unknown, in any way relating to or arising from Participant’s enrollment
in or participation with the Academy. Without limiting the generality of
the foregoing this waiver and release includes, but is not limited to,
claims relating to personal injury, illness or death; damage to, or loss or
theft of, property (including personal items, cars and money); the receipt
of medical care or treatment for any physical or mental condition; use of
facilities, services, premises and equipment; exposure to inclement
weather; and involvement in accidents.
The Arbitration Clause states:
7. Arbitration as the Exclusive Remedy:
A. The parties agree that all disputes relating to or arising out of this
Agreement and/or the Participant’s participation in the Academy
shall be presented to the American Arbitration Association (“AAA”)
in accordance with the rules of the AAA before a retired state or
federal court judge for arbitration pursuant to the commercial rules
of that association as the sole and exclusive remedy for resolving
such disputes. . . .
The Agreement contains a California choice of law provision.
The Appellees allege that on February 9, 2018, Quamina and Harris met with
G. G.’s parents at a coffee shop and told them, within earshot of others, that G. G. had
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used her cell phone to send and receive nude pictures while on the team bus. The
Appellees further allege that G. G. was dismissed from the team, that Harris informed
the Academy that she had been dismissed, and that G. G. has been unable to join
another top tier youth soccer club due to the statements made by Quamina and Harris.
The Appellees filed a lawsuit against the appellants alleging breach of contract,
defamation, and unjust enrichment. The Appellants filed a “Motion to Dismiss, For
Summary Judgment, or in the Alternative to Compel Arbitration.” The trial court
found that the claims for breach of contract and unjust enrichment were barred by the
Release. However, the trial court found that the defamation claim was not barred by
the Release and the Appellants could not enforce the Arbitration Clause. The
Appellants obtained a certificate of immediate review and filed an application for
interlocutory appeal, which we granted. This appeal followed.
This Court reviews de novo a trial court’s order granting or denying a motion
to compel arbitration. Miller v. GGNSC Atlanta, LLC, 323 Ga. App. 114, 117 (1) (746
SE2d 680) (2013). “Whether there is a valid agreement to arbitrate is generally
governed by state law principles of contract formation, and is appropriate for
determination by the court.” Triad Health Mgmt. of Ga., III, LLC v. Johnson, 298 Ga.
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App. 204, 206 (2) (679 SE2d 785) (2009). The party seeking arbitration bears the
burden of proving the existence of a valid and enforceable agreement to arbitrate. Id.
1. The Appellants contend that the trial court erred in refusing to compel
arbitration on the basis that they are not parties to the Agreement. We disagree.
The parties agreed below that the matter is governed by California law. The
Appellants argue that under California law, they are parties to the Agreement and can
enforce the arbitration clause. In support of this argument, the Appellants cite to
Laswell v. AG Seal Beach, LLC, 189 Cal. App. 4th 1399, 1407 (117 Cal. Rptr. 3d
310) (2010). In Laswell, the Court of Appeal for the Second District of California
held that two companies were parties to an arbitration agreement which they did not
execute because they were related to the executing party. Id. However, in Laswell,
one of the non-executing parties owned the company that executed the arbitration
agreement. Id. Additionally, the arbitration agreement at issue was written on the
letterhead of the other non-executing party which also served as the management
company of the executing party. Id. Finally, all three parties were named in the
complaint, and the executing party shared defense counsel with the non-executing
parties. Id. at 1402, 1407.
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Here, however, the circumstances are distinguishable from those in Laswell.
G. G. did not file the lawsuit against the Academy. Furthermore, although the
Appellants cite to several paragraphs of the complaint where the Appellees have
alleged that Concorde Fire is a part of the Academy, these allegations appear to
indicate only that Concorde Fire is one of several soccer clubs in the country that are
participant organizations, not that they are legally-related entities. Thus, the trial court
did not err in refusing to enforce the Arbitration Clause on the ground that the
Appellants were not parties to the Arbitration Clause.
2. Next, the Appellants argue that the trial court erred in refusing to compel
arbitration because they are third party beneficiaries who can enforce the Arbitration
Clause. Again, we disagree.
“A third party beneficiary may enforce a contract expressly made for his
benefit. And although the contract may not have been made to benefit him alone, he
may enforce those promises directly made for him.” Fuentes v. TMCSF, Inc., 26 Cal.
App. 5th 541, 551 (237 Cal. Rptr. 3d 256) (2018) (citation and punctuation omitted).
But “a third party beneficiary can only enforce those promises made directly for his
benefit.” Id. (citation and punctuation omitted). “A third party should not be permitted
to enforce covenants made not for his benefit, but rather for others” and “[a]s to any
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provision made not for his benefit but for the benefit of the contracting parties or for
other third parties, he becomes an intermeddler.” Id. at 551-552 (citation and
punctuation omitted).
“The general rule is that only a party to an arbitration agreement may enforce
it.” Ronay Family Ltd. Partnership v. Tweed, 216 Cal. App. 4th 830, 837 (157 Cal.
Rptr. 3d 680) (2013). “[A] third party beneficiary of an arbitration agreement may
enforce it,” but to invoke the third party beneficiary exception, the third party
beneficiary must show that the arbitration clause was made expressly for their
benefit. Id. at 838. Here, unlike the Release, which specifically states that the
Appellees waived certain claims against “the Academy, the United States Soccer
Federation, Inc., and each of their affiliated clubs, teams and companies, and any of
their members, directors, officers, employees, volunteers, sponsors, independent
contractors or agents[,]” the Arbitration Clause does not expressly state that it is for
the benefit of its affiliated clubs or the directors or employees of their affiliated clubs.
Accordingly, the Appellants have not shown that the trial court erred in finding that
they were not third party beneficiaries who can enforce the Arbitration Clause.
3. The Appellants next argue that the trial court erred because they can enforce
the Arbitration Clause under the doctrine of equitable estoppel. We do not agree.
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Under California law, a nonsignatory of an arbitration agreement may enforce
such an agreement against a signatory through the theory of equitable estoppel only
under the following two conditions:
(1) when a signatory must rely on the terms of the written agreement
in asserting its claims against the nonsignatory or the claims are
intimately founded in and intertwined with the underlying contract,
and (2) when the signatory alleges substantially interdependent and
concerted misconduct by the nonsignatory and another signatory and
the allegations of interdependent misconduct are founded in or
intimately connected with the obligations of the underlying
agreement.
Murphy v. DirecTV, Inc., 724 F3d 1218, 1229 (II) (B) (1) (9th Cir. 2013) (citation
omitted).
Here, the defamation claim is based upon statements made by Quamina and
Harris concerning the nude pictures allegedly sent by G. G., and it is not founded in
or intertwined with the Agreement. Similarly, the Appellees did not allege
“substantially interdependent and concerted misconduct” by Concorde Fire and the
Academy. Thus, the trial court did not err by finding that the doctrine of equitable
estoppel did not require the Arbitration Clause to be enforced between the parties in
this case.
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4. The Appellants next argue that the trial court erred because Concorde Fire
can enforce the Arbitration Clause as an agent of the Academy. We do not agree.
Under California law, “[a] nonsignatory to an agreement to arbitrate may be
required to arbitrate, and may invoke arbitration against a party, if a preexisting
confidential relationship, such as an agency relationship between the nonsignatory
and one of the parties to the arbitration agreement, makes it equitable to impose the
duty to arbitrate upon the nonsignatory.” Westra v. Marcus & Millichap Real Estate
Investment Brokerage Co., 129 Cal. App. 4th 759, 765 (28 Cal. Rptr. 3d 752) (2005).
Here, the Appellants have argued that Concorde Fire was an “affiliated club”
of the Academy. However, the Appellants have failed to show how Concorde Fire
acted as an agent for the Academy, or that it had any of the traditional authority to
bind the Academy that an agent has. See Secci v. United Independant Taxi Drivers,
Inc., 8 Cal. App. 5th 846, 855 (214 Cal. Rptr. 3d 379) (2017) (“In the absence of the
essential characteristic of the right of control, there is no true agency. The fact that
parties had a preexisting relationship is not sufficient to make one party the agent for
the other. An agency is proved by evidence that the person for whom the work was
performed had the right to control the activities of the alleged agent.” (citation and
punctuation omitted)). Accordingly, the Appellants have not shown that the trial court
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erred by finding that the Arbitration Clause did not apply to the them as agents of the
Academy.
5. Finally, Appellants contend that the trial court erred by failing to allow an
arbitrator to determine whether the case should have gone to arbitration. We disagree.
The United States Supreme Court has held that the parties to an arbitration
contract “may agree to have an arbitrator decide not only the merits of a particular
dispute, but also gateway questions of arbitrability[.]” Henry Schein, Inc. v. Archer
and White Sales, Inc., ___ U.S. ___ , ___ (II) (139 SCt 524, 529, 202 LE2d 480)
(2019) (citation and punctuation omitted). However, “[c]ourts should not assume that
the parties agreed to arbitrate arbitrability unless there is clear and unmistakable
evidence that they did so.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,
944 (II) (115 SCt 1920, 131 LE2d 985) (1995) (punctuation omitted). Here, as
discussed in Division 1, the Appellants are not parties to the Agreement. There is no
evidence in the record that the Appellants otherwise agreed with the Appellees to
arbitrate this case. Thus, there can be no “clear and unmistakable evidence” that the
Appellants and the Appellees agreed with each other to arbitrate arbitrability under
the Agreement. Accordingly, the trial court did not err by not submitting this matter
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to an arbitrator to determine arbitrability.
Judgment affirmed. Miller, P. J., and Mercier, J., concur.
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