In Rescigno v. Realmark SCB, LLC, the Court of Appeals of Georgia addressed a dispute arising from the arbitration provision of a residential construction contract between Tracy Rescigno (“Rescigno”) and Realmark SCB, LLC (“Realmark”). See 932 S.E.2d 402 (Ga. Ct. App. 2026). The contract was initially executed on July 12, 2021, with Douglas Davis (“Mr. Davis”) cosigning with Rescigno, as a second property owner on June 28, 2022. After Mr. Davis passed away on February 1, 2023, disputes arose regarding costs incurred under the contract, leading to arbitration.

On January 31, 2024, Davis’s estate settled with Realmark, agreeing to pay $10,000 in exchange for a release of all claims against the estate related to the contract. However, the settlement explicitly excluded any claims against Rescigno, who was not a party to the agreement. Realmark then filed a demand for arbitration against Rescigno on October 16, 2024, seeking recovery of the outstanding balance of $279,564.25 under the contract.

Rescigno argued the settlement with Davis’s estate should release her from liability, citing the principle that releasing one joint obligor releases all. However, Realmark countered that the release did not apply to Rescigno, as the settlement’s language and the lack of full satisfaction of the claim indicated otherwise. The arbitrator agreed with Realmark, awarding them $79,597.04 in damages against Rescigno and denying her motion to dismiss.

Realmark then filed a petition in the trial court to confirm the arbitration award. Rescigno filed a response in opposition to the petition, in which she requested, among other things, that the award be vacated pursuant to OCGA § 9-9-13(b)(5), because the arbitrator manifestly disregarded the law by failing to dismiss Realmark’s claims against her on the basis of its settlement agreement with Mr. Davis’s estate. The trial court confirmed the arbitration award, finding no manifest disregard of the law, as the release of one joint obligor does not automatically release others if the parties’ intentions indicate otherwise.

The Court of Appeals affirmed the trial court’s decision, emphasizing the high threshold required to vacate an arbitration award on the grounds of manifest disregard of the law. The Court noted that an arbitrator’s legal mistake does not equate to manifest disregard unless there is clear evidence of intentional disregard of the law. In this case, the arbitrator’s decision was based on more recent case law, which indicated that the release of one joint obligor does not automatically release others unless explicitly intended by the parties.

This case highlights the deference courts give to arbitration awards, reinforcing the need for contractors to carefully consider arbitration clauses in their contracts. The decision also serves as a reminder of some of the pitfalls of arbitration, as arbitration awards are difficult to overturn and often final. In Georgia, courts require substantial evidence of an arbitrator’s intentional disregard of the law in order to overturn an arbitration award. Contractors should be aware that even if an arbitrator makes a legal error, it is unlikely to result in the vacating of an award unless there is clear evidence of deliberate disregard.