THI RD DI VI SI ON
M C FA DDEN, C. J.

, D OYLE, P. J.

, and HODGES, J.

N O T IC E : M otions for r e c ons i de r a tion m us t be ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n da y s of the da te of de c is ion to be de e m ed tim e ly file d.

https ://w w w

. ga a ppe a ls .us /r ule s

D E A D LIN E S A R E N O LO N G E R TO LLE D IN T

H I S
C O U R T. A LL FILIN G S M U ST B E S U B M I TTE D WITH IN
TH E TIM E S S E T B Y

O U R C O U R T R U LE S

.

June 25, 2020



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A2 0 A0 03 6

. ADVENTURE M OTORSPORTS REINSURANCE,

LTD. et al

. v

. INTERSTATE NATIO N A L DEALER
SERVICES INC. DO-0 0 2

A 20A 0 037. I N T E R S T A T E NAT I O N A L D E A L E R S E R V I C E S I N C

.

v

. ADVENTURE M OTORSPORTS REINSURANCE LTD.

et al

. DO-0 0 3

D O Y LE , Pres i d i n g J u d g e.

Th es e cas es ari s e fro m a s u p eri o r co u rt ord er co n fi rm i n g an arb i t rat i o n award

i n fav o r o f So u t h er n M o u n t ai n Ad v en t u res , LLC, (“ th e Deal er”) an d A d v en t u re

M o t o rs p o rt s Rei n su ran ce, Lt d

. , (“ t h e Rei n s u rer,” co ll ect i v el y “ t h e Cl ai m an t s ”) i n a

cla im the y br ought a g ai ns t In t ers t at e Nat i o n al Deal er Serv i ces , In c. (“ INDS”). In Cas e

No

. A2 0 A 0 0 36

, t h e Cl a i m a n t s c o n ten d t h at t h e s u p eri o r co urt erred by fai l i n g to

en fo rce a p o s t -ju d g m en t i n teres t an d co s t p ro vi s i o n

. In Cas e No . A2 0 A0 0 37 , INDS

co n ten d s t h at t h e su p eri o r co u rt erred b y co n fi rm i n g t h e award b ecau s e t h e arb i t rat o ru n l awfu l l y d ep art ed fro m t h e t erm s o f t h e part i es ’ wri tt en ag reem en t s

. Fo r t he reas on s

t h at fo l lo w, we di s m i s s th e ap p eal as m o o t in Cas e No

. A2 0 A 0 0 36

, an d we rev ers e

i n Cas e No . A2 0 A0 0 37

.

Th e rel ev an t fact u al b ack g ro u n d i s n o t i n di sp u t e. T h e r eco rd s ho ws t h at

So u t hern M o u n tai n Ad v en tu res i s a m o to rs p o rt s v eh i cl e d e a l ers h i p co nt ro l l ed by

Ry an Hard wi ck

, a fo rm er p ers o n al wat ercraft racer o f s o m e s u c c e s s i n t he 1 9 9 0 s

.

INDS i s an ad m i n i s t rat o r o f v eh i cl e s erv i ce co n t ract s an d rei ns u ran ce p ro g ram s

.

INDS pro v i d ed th es e s erv i ces th ro u g h v eh i cl e deal ers wh o p art i ci p at ed i n t h e p ro fi t

o f s erv i ce an d ro ad s i de as s i s tan ce co n t ract s t h ey s o ld t o d eal er cu s t o m ers

.

In 2 0 0 6

, INDS an d t he Deal er en t ered i n t o an a g r e e m e n t (“ Pro d u cer

A g r e em en t”) wh ereb y t h e Deal er s o ld INDS’ s v eh i cl e serv i ce co nt ract s t o t h e

Deal er’ s cu s t o m ers i n ex ch an g e fo r a fro n t -en d co m m i s si on d et erm i n ed b y t h e

Deal er’ s o w n ret ai l p ri ci n g l es s t h e co m m erci al pri ce (“ Rat e Card ”) t he Deal er p ai d

t o IND S

. 1 Th e Rat e Card l i st ed t h e p ri ce pai d b y d eal ers t o INDS, acco rd i n g t o t h e

y ear, m ak e, an d m o d el o f th e v eh i cl es ; an d th e Deal er was free t o d et erm i n e i t s o wn

1 Th i s i s al s o referred t o as t h e “ Deal er Pri ce Net Sch ed u le.”

2ret ai l m ark up ab o v e t h e Rat e Card p ri ces

. 2 INDS t hen u s ed t h e pay m en t s t o co v er t h e

co s t s of m ark et i n g , ad m i ni s t rat i o n , a n d p erfo rm an ce o f t h e s erv i ce co n t ract s ,

i n cl u d i n g : res erv e fu nd s t o p ay s erv i ce an d ro ad s i d e as s i s t an ce cl ai m s , ad m in i s t rat i v e

fees

, ag en t co m

m i s si o ns , an d em

p l o y ee i n cen t i ves

. In ad d i t i on t o t h e co m m i s s i o n , i f

res erv es rem ai n ed aft er th e ex p i rat i o n o f t h e co n tract s , t h e Deal er s h ared i n a p art i al

d i s t ri b u t i o n o f t hat p ro fi t

.

In 2 0 0 8

, t h e part i es m o ved fro m t h e p ro fi t -s h ari n g m o d el t o a rei ns u ran ce p l an

.

Un d er t h e rei n su ran ce arran g em en t

, t h e Deal er wo u ld co n t i n u e t o s el l s erv i ce

co n t r act s t o i t s cu s t o m ers an d p ay INDS t h e am o u nt o n th e Rat e Card fo r each

co n tract s o ld ; l i k ewi s e, INDS wo u ld co nt i n u e to ad m i n i st er t h e co n t ract s

. Bu t i n s t ead

o f th e res erv es b ei n g p ai d t o INDS, t h e res erv es were h el d b y t h e Rei ns u rer, a n ewl y

creat ed en t i t y co n t ro l l ed b y Hard wi ck

. Th e Rei n s u rer wo u l d h o ld t h e res erv es , p ay i n g

cl ai m s as n eed ed

, an d at t h e en d o f t h e s e r v i c e c o n t ract s , t h e Rei n s u rer wo u l d b e

en t i t l ed t o k eep t h e res erv es

. Du ri n g t he t erm o f t h e s erv ice co n t ract s , t he Rei n s u rer

wo u l d rei m

b u rs e INDS fo r v eh i cl e s erv i ce cl ai m s

.

2 In o n e o f t h e co n t ract s , INDS reco m m en d s t h a t t h e Cl ai m an t s s et t h e ret ai l

p ri ce at 1 8 5% o f t h e co s t p ai d b y t h e Cl ai m an t s

.

3In 2 0 1 4

, t he rel at i on s h i p s o ured

, an d t he D eal er t erm i n at ed i t s Pro d u cer

Ag reem en t wi t h I N D S

. 3 Pu rs u an t t o an arb i t rat io n cl au s e i n t h e ag reem en t s , t h e

Cl ai m an t s i n i ti at ed t h e un d erl y i n g arb i t rat i o n p ro ce e d i n g t o reco v er ch arg es t h ey

al l eg ed w ere i m

p ro p erl y co ll ect ed b y INDS o v er t he co urs e o f t h e p art i es ’ d eal i n g s

.

Es s en t i al l y , th e Cl ai m an t s arg u ed t h at INDS co l l ect ed fees t h at were n o t au t h o ri zed

b y th e Pro d u cer Ag re e m en t an d co n ceal ed t h ei r us e fo r p u rp o s es o u ts i d e t h e s co p e

o f t he ag reem en t

. Fo l l o w ing a n e vide nt i ary h eari n g , t h e arb i t rat o r ag reed an d award ed

t h e Cl ai m an t s $4 6 2 ,7 81 in ex ces s fees p ai d by th e Cl ai m an t s t o INDS. INDS i n i t i at ed

t h e p res en t act i o n i n t he s u p eri o r co u rt b y fi l in g a m o t i on to vacat e t h e award

, an d t h e

Cl ai m an t s fi l ed a cro ss -m o t io n t o co n fi rm t h e award

. Fo l lo wi n g a h eari n g , t h e

s u p eri o r co u rt co n fi rm ed t h e a w a r d a n d d en i ed th e Cl ai m an t s ’ m o t i o n fo r fees an d

p o s t -ju d g m en t i n t eres t . Th es e ap p eal s fo l l o wed

.

Ca s e No . A2 0

A0 0 3 6

In t h i s ap p eal

, t h e Cl ai m an t s co n t en d t hat t h e su p eri o r co u rt erred by fai l i n g to

en fo rce t he fo ll o wi ng p ro v is i o n o f t h e arb it rat o r’ s award :

3 Th e Pro d u cer Ag reem en t al l o wed th e Deal er t o t erm i nat e at an y t i m e wi t h 3 0
d ay s n o t i ce.

4If t h i s A ward i s n o t p ai d i n fu ll b y [INDS] t o Cl ai m an t s wi th i n 30 d ay s

o f t h e d at e o f t h e A w ard

, Res p o nd en t w i l l be ch arg ed i nt eres t at an

an n u al rat e p res cri b ed un d er OCGA § 7-4 -1 2 o n t h e o u t s t an d i ng Award

b al an ce fro m t h e d at e o f t h e Award u n ti l t h e Award i s p ai d i n fu l l

, p l u s

reas o n ab l e co s t s of co l l ect i o n , i ncl u d i n g at to rn ey s ’ fees

, i n cu rred b y

Cl ai m an t s

.

In l i gh t o f o u r ru l i n g b el ow i n Cas e No

. A2 0A0 0 3 7, h o l d i ng t h at t h e tri al co u rt erred

b y co n fi rm i n g t h e arb i trat or’ s award

, t h i s arg u m en t i s m o o t

, an d th e ap p eal i s

d i s m i s s ed

.

Ca s e No . A2 0 A0 0 3 7

INDS co n t en d s t h at t he su p eri o r co u rt erred b y co n fi rm i n g t h e award b ecau s e

t h e arb i t rat o r i g no red t h e co n t ract u al l an g u ag e ag reed t o b y t h e p art i es . W e ag ree.

INDS ch al l en g e s t h e award u n d er OCGA § 9 -9 -1 3 (b ) (3 ) an d (5 ), wh i ch

p ro v id e t h at a s u p eri o r co u rt has au t h o ri t y to v acat e an arb i t rat i o n award “ i f t h e co u rt

fi nd s t h at t h e ri g h t s o f [a] p art y were p reju d i ced b y : . . . (3 ) An o vers t ep p i n g b y t h e

arb i t rat o rs o f t h ei r au th o ri t y o r s u ch i m perfect ex ecu ti o n o f i t t hat a fi nal an d d efi n i t e

award u p o n t he s u b

ject m at ter s u b m i t t ed w as n o t m ad e

. . . o r

. . . (5 ) Th e arb i t rat o r’ s

m an i fes t d i s reg ard o f t h e l aw.”

In t h e arb i t rat i o n co n t ex t

, t h e co n c e p t o f m an i fes t d i s reg ard h as

n ev er b een t h e eq u i v al en t o f i ns u ffi ci en cy o f t h e ev i d en ce o r a

5m i s ap p l icat i o n o f t he l aw t o t he fact s. It i s a m u ch n arro wer s t an d ard

,
req u iri n g a s h o wi n g i n t h e reco rd

, o t h er t h an th e res u lt o b t ai ned

, t hat th e

arb i t rat ors k n ew t h e l aw an d ex p res s l y d is reg ard ed i t

. Arb i t rat o rs m u s t

d el i b erat el y

i g n ore ap p l i cab l e l aw t o fal l wi t h i n t h e m an ifes t d i sreg ard

p ro h i b it i o n i n OCGA § 9 -9 -1 3 (b ) (5 ). 4

Fu rt h er,

[d ] u ri n g arb i t rat i o n p ro ceed i n g s , t h e g en eral ru l es o f co n tract

co n s t ru ct io n ap p l y

. An arb i t rat i o n award sh o uld be c onsisten t wi t h t erm s

o f t h e u n d erl y i n g ag reem en t an d refl ect t h e “ es s en ce” o f t h at co n t ract ;

i t m u s t n o t d em o n st rat e an “ i m p erfect ex ecu t i o n ” o f t h e arb i t rat or’ s

a u t h o ri t y

. Al t h o u g h an arb i t rat or h as s om e l at i t u d e i n fas h i on i n g

rem ed i es , h e i s n o t free t o i gn o re t h e ex p res s t erm s of a v a l i d an d

en fo rceab l e co n t ract

. 5

Here, th e arb i t rat o r’ s award fo u n d t h at INDS d raft ed th e i n s u ran ce ag reem en t s

wi t h o u t ex p l i ci t au t h o ri zat i o n t o reco v er cert ai n fees

. Sp eci fi cal ly

, t he arb i t rat o r’ s

award co n cl ud es t h at INDS was o n l y au t h ori zed to co l l ect m o ney t o p ay “ warran t y

4 (Ci t at i on ,p u n ct u at i o n , an d em p h as i s o m it t ed .) A i r ta b

, In c. v. L i m b a ch Co

. , LLC, 2 9 5 Ga. Ap p. 7 2 0 , 7 2 2 (2 ) (a) (6 73 SE2 d 6 9 ) (2 0 0 9 ).

5 (Ci tat i o n s o m i t t ed

. ) S

wea t t v. In t l

. Dev. Co r

p

. , 2 4 2 Ga. Ap p

. 7 5 3

, 7 5 5 (1 ) (5 3 1
SE2 d 1 9 2 ) (2 0 00 ). See al s o Ki n g v. Ki ng , 3 5 4 Ga. Ap p

. 1 9

, 2 5 (2 ) (b ) (8 4 0 SE2 d 1 0 8 ) (2 0 2 0) (s am e).

6cl ai m s ” an d “ f e e s a s s o ci at ed wi t h co n tract s wri t t en .” 6 Bas ed o n t h is

, t h e arb i t rat o r

co n cl u d ed t h a t I N D S was on l y au t h o ri zed t o co ll ect fu n ds fro m t h e Cl ai m an t s to

co v er th e co s t o f warran t y cl ai m s an d ad j u s tm en t ex p e n s e s , a th ird -p art y co n s u m er

p ro t ect i o n p o l i cy , an d prem iu m t ax es

. By co n t ras t

, wi t h res p ect t o ch arg es fo r

ad m i n is t rat i v e fee s, a ge nt c om m issions, non- c la im r e serv es fo r an em p l oy ee i n cen t i v e

p ro g ram , an d ro ad s i d e as s i s t an ce b en efi t s , t h e arb i t rat o r co n cl u d ed t hat t h es e ch arg es

were n o t au t h o ri zed b y

t he co n t ract s b et ween t h e Cl ai m an t s an d INDS.

INDS arg ues t h at t h i s , in es s en ce, i g n o res t h e fact t h at t h e p art ies ag reed t o t h e

p ri ces s et o u t i n t h e Rat e Car d

, w h i c h refl ect ed t h e o nl y am o u n t ev er p ai d t o INDS

b y t h e Cl ai m an t s. INDS po i n t s o u t t h at i t i s u n d is p u ted t h at th e co nt ract s req u i red t h e

Cl ai m an t s to “ [u ] t il ize t h e p ri ci ng s tru ct u res

. . . i s su ed b y [INDS] fro m t i m e t o t i m e,”

t h at t h e Rat e Card refl ect ed t h o s e p ri ces , an d i t w as t h e on l y am o u n t ev er ch arg ed by

INDS. Fo r ex am

p le, t h e 20 0 6 Pro d u cer Ag reem en t s et th e Cl ai m an t ’ s co m m i s s i o n as

t h e am o u n t “ eq u al t o t h e am o u n t of t h e ret ai l p ri ce o f Co n t ract l es s Co n t ract Co s t as

s et fo rt h i n t h e” Rat e Card

. T h e Cl ai m an t s were free t o s et t h ei r ret ai l p ri ci n g at t h ei r

6 Th e arb i t rat o r al s o n o t ed t h at a “ ced i n g fee” p ro v i s i o n w as l eft b l an k

, wh i ch
INDS arg u es refl ect s t h e fact t h at i t d i d no t ch arg e a ced in g fee, b u t w h i ch p ro v i s i o n
t h e arb i t rat o r fo u n d t o b e co n t rary t o i n d u s t ry p ract i ce b e c a u s e s u ch fees are

“ g en eral l y p ai d t o co v er co s t s an d ex p e n s e s a n t ici p at ed t o b e i n cu rred b y t h e ad m i n is t rat o r o f a rei n su ran ce p ro g ram

. ”

7o wn d is cre t i o n a n d k e e p th e n et am o u nt aft er p ay i n g INDS t h e Rat e Card p ri ce. In

s u m , t h ere is n o ev i d en ce o r d i s p u t e th at INDS ev er ch arg ed t h e Cl ai m an t s an y t h i n g

o t h er t h an t h e p ri ce refl ect ed i n t h e Rat e Card

, wh i ch was t h e p ri ce ag reed t o b y t h e

p art i es

.

W h en ad d res si n g t h e Rat e Card , t he arb it rat o r ex p lai n ed :

[INDS] ’ s rep e a t e d r e l i a n ce

. . . o n th e Rat e Card

. . . as d raft ed b y [INDS] an d u t i l i zed o n l y b et ween t h e p art i e s i n p ri ci n g t h e co st o f

warran t y co v erag e

. . . s o l d b y Cl ai m an t s t o i t s r e t a i l c us t o m ers , as

i d en ti fy i n g t h e au th o ri ty fo r [INDS] t o u n i l at eral ly reco v er o r p ay i t s el f

ch arg es an d fees is d i s i n g en u o u s an d wi t h o u t a fact ual b as i s

. [INDS’ s ]

as s ert i on i s no t s up p o rt ed b y t es t i m o n y o r ev i d en ce o t h er t h an [INDS’ s ]

m ak i n g t h e as s ert i o n rep eat ed ly

, wh i ch as s ert i on was co n v i n c i n g l y

ch al len ged b y

Cl ai m an t s

.

Nev ert h el es s , i t rem ai n s t ru e i n Geo rg i a t h at p art ies are free t o co n t ract as t h ey

s ee fi t

, an d t ho se co n t ract s are b i n di n g an d en fo rceab l e p ro v i d ed t h ey are co n s i s t en t

wi t h l a w a n d p u b l i c p ol i cy

. 7 Nei t h er th e Cl ai m an t s n or t he arb i t rat o r i d en t i fi ed an y

am ou n t p ai d to INDS o u t s i d e o f t h e p ri ces refl ect ed in t h e co n t ract s an d o n t h e Rat e

7 See RS N Pr o p e r t i e s v. En g i n eer i ng Co n s u l t i n g Svcs

. , 30 1 Ga. Ap p

. 5 2

, 5 3 (6 8 6 SE2 d 8 5 3 ) (2 0 0 9 ) (“ Un l es s p ro h i b i t ed by st at u t e o r p u bl i c po l icy

, t h e p art i es to

a co n t ract are free t o co n t ract o n an y t erm s an d ab o u t an y s ub ject m at t er i n wh i ch t h ey h av e an i n t eres t .”) (p u nct u at io n o m i tt ed ).

8Card

, s o t h i s i s no t a cas e i n v o l v i n g u nrev i ewab l e f a c t u a l erro rs

. 8 Th at INDS u s ed

t h o s e pay m en t s t o ru n i t s b u s i n es s , p ay it s co s t s , an d ret ai n a p ro fi t is n o t a g ro u n d fo r

el i m i n at i n g t h e Cl ai m an t s’ co n t ract u al l iab i l i ty t o p ay INDS t h e p ri ces l i s ted o n t h e

Rat e Card

. Th e arb it rat o r’ s ex pl i ci t reject i o n o f t h e R a t e Card as t h e co n tract ed -fo r

p ri ci ng i g n o res t h e ex p res s co n t ract u al l an g u ag e req u i ri ng t h e Cl ai m an t s t o “ u t i l i ze

t h e p ri ci n g s t ru ct u res ” pro vi d ed b y INDS a nd tr a nsm it co m p l et ed s erv i ce ap p l i cat i on s

“ t o get h er wi t h ap p ro p ri at e m o n i es d u e I N D S fro m ” t h e Cl ai m an t s ’ s al es

.

Acco rd ingly

, by e x plic itly r e j e c ting the c ontr a ct u al l an g u ag e, th e arb i t rat or m an i fes t l y

d i s reg ard ed t h e l aw, an d t h e s u p eri o r co u rt erred b y co n fi rm i n g t h e award

. 9

Ap p ea l d i s mi s sed a s m o ot i n Ca s e No

. A2 0 A0 03 6 ; j u d g m en t rever

s ed i n Ca s e

No . A2 0 A0 0 3 7 . McFa d

d en
, C. J., a n d

Ho d g es , J., co ncu r

.

8 See, e.g ., M

cGi l l Ho mes
, In c. v. W

ea ver , 2 7 8 Ga. Ap p . 6 2 2 , 6 23 (6 2 9 SE2 d

5 3 5 ) (2 0 0 6 ) (“ [I] t i s ev i d en t t h at [t h e part y ’ s ] cl ai m s o f ‘ m an i fes t d i s reg ard o f t h e l aw’

are n o t h i n g m o re t h an u nrev i ewab l e fact u al i ss u es

. ”) (p u n ct uat i o n o m i t ted ).

9 See S wea t t , 2 4 2 Ga. Ap p . at 7 5 7 (2 ).

9