Court Opinion

ID: 9582056
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:22:01.15836+00
Date Added: 2024-06-11T13:37:25.095634
License: Public Domain

Deen, Presiding Judge,
dissenting.
I must dissent from the third division of the majority opinion which holds that arbitration must proceed between Skone and McNeal because of a prior decision in Paine, Webber &c. v. McNeal, 143 Ga. App. 579, 582 (239 SE2d 401) (1977) under the law of the case rule. The prior decision did not so hold. The basic question there was whether in case of disagreement between Paine, Webber and McNeal, Paine, Webber had a right to insist the matter be arbitrated, or whether McNeal could sue Paine, Webber in the courts. The right of Paine, Webber to insist that the dispute be submitted to arbitration is based on a contract between Paine, Webber and McNeal in which those two parties agreed to arbitrate any disputes. This court held in the second division of that opinion that the Federal Arbitration Act is applicable in actions pending in Georgia courts, and that accordingly McNeal’s action against Paine, Webber would not be barred from arbitration on the ground that this would be against the policy of Georgia law. This, and this only, was the narrow ground of the decision in that case.
The fourth division of the opinion deals with the appellants’ *840“right for any reason” argument, and holds: “While it is true that resolution of any of these issues [offered as sufficient reasons for denying the motion to compel arbitration] may have justified denial of appellant’s motion, they were not resolved and the record provides this court with no basis for doing so. The trial judge based his order wholly on an incorrect theory of law. Since the order is reversed, the case will be remanded for consideration of those and any other issues properly raised.”
The other fork of the decision in Paine, Webber on its first appearance and the ruling here denominated “law of the case” refers to an entirely separate portion of the order of the trial court on that appearance of the case, a statement of which commences the fifth division of that opinion: “The portion of the order stating that Skone would be excluded from arbitration even if Paine, Webber were entitled to it has been enumerated as error.” As to this enumeration the Court of Appeals held: “We are persuaded that the ends of justice are more nearly met by holding that Skone must be allowed to participatein the arbitration, should the trial court, on remand,grant the motion as to Paine, Webber. In other words, if on reconsideration of the question (which this court did not decide) the trial court held that the case should be stayed in the courts and submitted to arbitration instead, then and in that event Skone also would be allowed to participate in the arbitration even though he was not a party to the contract between McNeal and Paine, Webber. In that contract, McNeal and Paine, Webber, and they alone, agreed that any disagreement between them be submitted to arbitration before allowing a suit in the courts.
In the first place, law of the case cannot apply because the trial court did not consider the issue as to whether arbitration should be granted for other reasons than the one considered on the first appearance of the case, a condition precedent to allowing Skone to participate. Secondly, the grant of summary judgment to Paine, Webber effectively removed that defendant from the case. Therefore the statement of this court (that Skone could participate in arbitration if the court in the last analysis should decide to stay proceedings and issue an order invoking arbitration between Paine, Webber and McNeal) did not require arbitration between Skone and McNeal. It required only that, if the court should ultimately require arbitration between Paine, Webber and McNeal, then Skone could participate in it. That contingency, also, never occurred. Therefore no law of the case exists for this court to invoke.
Lastly, in brief summary, this was an action brought by McNeal, a customer of the brokerage firm Paine, Webber against that firm and its broker, the co-defendant Skone. He first brought an action in *841Federal Court under a federal statute against the brokerage firm only, relying on establishing liability because of the fraud of its employee Skone. The trial resulted in a judgment in favor of Paine, Webber. McNeal v. Paine, Webber, Jackson & Curtis, Inc., 598 F2d 888. This action was then brought in the State Court of Fulton County against Paine, Webber and Skone jointly, based on the same course of events but not on the same statutory right of action. The majority opinion here correctly holds that the present common law action against Paine, Webber could have been joined with the statutory claim in the federal suit, and that accordingly summary judgment must be granted in favor of Paine, Webber under the federal doctrine of pendant jurisdiction.
None of this affects Skone, the allegedly defaulting employee. Skone could not have been and was not joined in the action in federal courts under the federal statute. The present action, now that Paine, Webber is out of the case, is against Skone as an individual for fraudulently and negligently doing the plaintiff out of a large sum of money. The brokerage firm, Paine, Webber, (who did sign an arbitration contract) is not now involved in this action — it lies solely between Skone as an individual broker and McNeal as an individual investor.
Skone never signed any agreement to arbitrate disputes. Paine, Webber, who did sign such an agreement, is out of the case. Skone is now being sued individually for his alleged individual wrongdoing. The case on its first appearance did not hold that Skone was bound by the arbitration agreement. What it held was that //Paine, Webber was forced to arbitrate, then Skone might participate. This eventuality never occurred.
Last of all, the decision written by Judge Shulman was both proper and an exercise in judicial economy, as it would have been unfortunate to require a corporation sued only on the theory of respondeat superior to arbitrate while prohibiting its employee who was the only alleged active tortfeasor from being a party to the arbitration. When the reason for the rule ceases, however, the rule also ceases. The present case is between the investor and his individual broker only, is based on common law negligence, and is not in any way affected by the contract between the investor and the corporation for the settlement of their financial differences.
In citing Code § 81A-160 (h) the majority opinion ignores that portion which says: “Provided, however, that any ruling by the Supreme Court or the Court of Appeals in a case shall be binding in all subsequent proceedings in that case in the lower court and in the Supreme Court or the Court of Appeals as the case may be.” Since the majority opinion presently holds that McNeal’s action cannot *842proceed against Paine, Webber, there is no way in which Skone can “participate” in an arbitration action between Paine, Webber and McNeal. Nothing to the contrary is held in the cited case of Redmond v. Blau, 153 Ga. App. 395 (265 SE2d 329) (1980). It was there held that this court had no authority to reinvestigate whether certain agreements were securities after a judgment concluding that they were such. There is a vast difference between changing one’s views on a point of law and misapplying a point of law to a situation not comtemplated by it.
I respectfully dissent from the third division of the opinion and from the judgment in case no. 62868. I am authorized to state that Judge Pope concurs in this dissent.