RENDERED: NOVEMBER 4, 2022; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2022-CA-0167-MR

JON MAND APPELLANT 

v. 

APPEAL FROM RUSSELL CIRCUIT COURT

HONORABLE VERNON MINIARD, JR., JUDGE

ACTION NO. 21-CI-00223

BARRY BACK AND 

CATHERINE BACK APPELLEES 

OPINION

REVERSING AND REMANDING

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BEFORE: ACREE, MCNEILL, AND L. THOMPSON, JUDGES.

THOMPSON, L., JUDGE: Jon Mand appeals from an order of the Russell Circuit 

Court which denied his motion to compel arbitration. Appellant argues that the 

contract at issue requires arbitration. We agree; therefore, we reverse and remand.

FACTS AND PROCEDURAL HISTORY

On August 23, 2021, Appellant entered into a contract to purchase a 

vacant lot from Barry and Catherine Back. The parties utilized a broker and 
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Appellant deposited a $5,000 earnest money deposit into an account with the 

brokerage. The contract gave Appellant the option to declare the contract null and 

void within thirty days of acceptance. Appellant ultimately utilized that provision.

Appellant then sought the return of the $5,000 deposit. Appellees 

refused to return the money. The parties went to mediation, but that was 

unsuccessful. Appellees then filed suit for breach of contract. Appellant moved to 

dismiss and compel arbitration. Appellant argued that the contract required 

arbitration. The trial court denied the motion to compel arbitration and this appeal 

followed.

ANALYSIS

We will first set forth the contract clauses at issue in this case. The 

second clause of the purchase contract states in relevant part:

Failure to deliver the earnest money deposit as described 

herein shall constitute a breach of this contract, in which 

case Seller may either grant an extension of time, declare 

the contract null and void, or pursue a claim for damages 

as a result of the breach. The deposit shall only be 

removed from the broker’s escrow account shown above 

upon closing, written agreement of all parties, court 

order, or as provided by law, in accordance with KRS[1]

324.111(6). If either party fails to perform his/her 

obligation hereunder, the other party may accept the 

deposit as liquidated damages, with both parties signing a 

1 Kentucky Revised Statutes.
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release, or subject to paragraph 16,[2] may pursue any 

available legal or equitable remedy. In the event that any 

legal action is necessary as a result of the Buyer’s or 

Seller’s refusal to release the earnest money deposit, in 

addition to any other remedies available under this 

Contract, the prevailing party shall be entitled to recover 

the earnest money deposit and any and all 

mediation/arbitration or Court costs and the reasonable 

attorney’s fees required to obtain the return of said 

deposit.

The fifteenth clause of the contract states in relevant part:

Any dispute or claim . . . of Seller, Buyer, Broker, Agents 

or any of them for a sum greater than the limits of small 

claims court jurisdiction[3]arising out of this Contract or 

breach thereof . . . shall first be submitted to mediation 

and arbitration[.]

If mediation does not result in an agreement signed by 

the Parties, all such claims or disputes shall be decided 

by binding arbitration . . . . Any proceeding to determine 

damages shall be conducted by an arbitrator pursuant to 

this paragraph 15 and not in court and shall be conducted 

in the Commonwealth of Kentucky. In the event a party 

fails to proceed with arbitration when so required, or 

unsuccessfully challenges the arbitrator’s award, the 

other party is entitled to recover its costs, including 

reasonable attorney fees, for having to compel arbitration 

or defend/enforce the award.

2 Paragraph 16 concerns amendments to the contract and is not relevant to this appeal. Appellant 

argues that this was a typographical error and it should say “paragraph 15,” which concerns 

arbitration. We need not address whether this was a typographical error as it has no bearing on 

our judgment.

3 No claim for over $2,500 can be brought in small claims court. KRS 24A.230.
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Appellees believe they are entitled to pursue any legal or equitable 

remedy pursuant to clause 2. Appellees claim this clause allows them to pursue 

their cause of action in the circuit court. Appellant, on the other hand, argues that 

clause 15 requires binding arbitration. The trial court agreed with Appellees.

On appeal, Appellant argues that the contract is clear that arbitration is 

required in this case. Appellees argue that because the contract is ambiguous, it 

must be construed in their favor and allow litigation in court.

Because arbitration is fundamentally a matter of contract

an arbitration agreement is treated as all other contracts 

and if the agreement is valid, it will be enforced[.] Once 

the party seeking to enforce an agreement meets its 

burden of establishing with prima facie evidence a valid 

arbitration agreement exists, the burden shifts to the party 

seeking to avoid the agreement to rebut the 

presumption. [A]ny doubts concerning the scope of 

arbitrable issues should be resolved in favor of 

arbitration, whether the problem at hand is the 

construction of the contract language itself or an 

allegation of waiver, delay, or a like defense to 

arbitrability.

LP Louisville East, LLC v. Patton, No. 2019-SC-0016-DG, 2020 WL 13559023, at 

*3 (Ky. Aug. 20, 2020), as modified on denial of reh’g (Apr. 29, 2021) (internal 

quotation marks and citations omitted).

The interpretation of a contract, including 

determining whether a contract is ambiguous, is a 

question of law to be determined de novo on appellate 

review.
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. . . A basic rule of contract interpretation requires

that preference be given to the interpretation which gives

a reasonable, lawful, and effective meaning to all the

terms over a reading which leaves a part unreasonable,

unlawful, or of no effect.

Moreover, in the absence of ambiguity, a written 

instrument will be enforced strictly according to its 

terms, and a court will interpret the contract’s terms by 

assigning language its ordinary meaning and without 

resort to extrinsic evidence. A contract is ambiguous if a 

reasonable person would find it susceptible to different or 

inconsistent interpretations.

When no ambiguity exists in the contract, we look 

only as far as the four corners of the document to 

determine the parties’ intentions. If the language is 

ambiguous, the court’s primary objective is to effectuate 

the intentions of the parties. The fact that one party may 

have intended different results, however, is insufficient to 

construe a contract at variance with its plain and 

unambiguous terms.

Maze v. Board of Directors for Commonwealth Postsecondary Education Prepaid

Tuition Tr. Fund, 559 S.W.3d 354, 363 (Ky. 2018) (internal quotation marks and 

citations omitted).

As it pertains to this contract and the arbitration clause, we conclude 

that the trial court erred in not compelling arbitration. Clause 2 states that disputes 

regarding the deposit shall be pursued via “any available legal or equitable 

remedy.” Clause 15 then states that any dispute or claim arising out of the contract 
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“shall” go to mediation and arbitration if the amount at issue exceeds the small 

claims jurisdictional amount.4

We do not believe the contract is ambiguous. Looking at the four 

corners of the contract, and reading clauses 2 and 15 together, it is clear that the 

only available legal avenue to determine who is entitled to the deposit is to submit 

the issue to arbitration. “By all rules of construction and interpretation with which 

we are familiar we are required to give the words of the agreement their ordinary 

meaning. ‘Shall’ does not mean ‘may’ but is mandatory.” Fayette Cnty. Ed. Ass’n

v. Hardy, 626 S.W.2d 217, 220 (Ky. App. 1980). Causes of action arising from the 

contract with damages exceeding $2,500 shall go to mediation and arbitration 

according to the clear terms of the contract. The damages being sought here are 

$5,000; therefore, arbitration is required. Ignoring the arbitration clause would be 

unreasonable. Our interpretation reconciles both clauses at issue and gives effect 

to all terms of the contract. Maze, supra.

CONCLUSION

Based on the foregoing, we reverse and remand. On remand, the trial 

court shall compel arbitration.

ALL CONCUR.

4 The damages in this case do exceed this jurisdictional amount.
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BRIEFS FOR APPELLANT:

Lee H. Donahue

Louisville, Kentucky

BRIEF FOR APPELLEES:

Donald L. Wilkerson III

Jeffrey H. Hoover

Jamestown, Kentucky