Atlanta Concorde Fire Soccer Ass'n, Inc. v. Graham

355 Ga.App. 228

843 S.E.2d 889

ATLANTA CONCORDE FIRE SOCCER ASSOCIATION, INC. et al.

v.GRAHAM et al.

A20A0155

Court of Appeals of Georgia.

May 28, 2020

Drew Eckl & Farnham, Brian Wade Johnson, Appellant.

Albury Law Group, Korey M. Albury, Atlanta, Appellee.

Coomer, Judge.

Atlanta Concorde Fire Soccer 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"). The 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. The 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 nonprofit 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 Parent/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, in law or in equity for indemnity or otherwise, liabilities, claims, demands, 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, Harris and Quamina met with G. G.’s parents at a coffee shop and told them, within earshot of others, that G. G. had 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 Harris and Quamina.

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 , 323 Ga. App. 114, 117 (1), 746 S.E.2d 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 v. Johnson , 298 Ga. App. 204, 206 (2), 679 S.E.2d 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 , 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 nonexecuting parties owned the company that executed the arbitration agreement. Id. Additionally, the arbitration agreement at issue was written on the letterhead of the other nonexecuting 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 nonexecuting parties. Id. at 1402, 1407, 117 Cal. Rptr. 3d 310.

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 (III) (D), 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 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 (III) (D), 237 Cal.Rptr.3d 256 (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 (III) (B), 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...