Court Opinion

ID: 8482944
Source: CourtListenerOpinion
Date Created: 2022-11-10 16:05:05.446195+00
Date Added: 2024-06-11T16:49:42.969255
License: Public Domain

RENDERED: NOVEMBER 4, 2022; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                           Court of Appeals

                              NO. 2021-CA-0618-MR

CHARLES “SKEE” BAUER                                                  APPELLANT

                  APPEAL FROM OLDHAM CIRCUIT COURT
v.                 HONORABLE JERRY CROSBY, II, JUDGE
                         ACTION NO. 17-CI-00771

ROGER BAUER, BOTH
INDIVIDUALLY AND ON BEHALF
OF THE CHARLES F. BAUER
REALTY PARTNERSHIP, LLLP                                                APPELLEE

                                    OPINION
                                   AFFIRMING

                                   ** ** ** ** **

BEFORE: CETRULO, LAMBERT, AND MCNEILL, JUDGES.

LAMBERT, JUDGE: Charles “Skee” Bauer appeals the Oldham Circuit Court

orders concerning the arbitration award pertaining to Roger Bauer’s claims against

Skee over the family trust. We affirm.

             Skee and Roger are half-brothers, both sons of Charles F. Bauer, Sr.

The family trust was created in 2007, while Charles was still living, and the three
men comprised equal one/third ownership. Prior to December 2012, the principal

property owned by the partnership consisted of several establishments in Louisville

on Brownsboro Road (namely, at 3608 to 3624). In that month, what had been

Doll’s Market (a grocery store of many decades in that location) sold for over $2.5

million. The monies realized were placed in the trust, and the partnership retained

ownership of the adjoining properties. Skee brokered the deal and managed all the

business relating to the trust.

             Charles Sr. passed away in February 2013. It was not until the

following year that Roger began asking Skee to see the financial statements for the

partnership. When none was forthcoming in spite of repeated requests, Roger

(individually and on behalf of the trust) filed suit against Skee in 2017 in Oldham

Circuit Court. In February 2019, Skee moved to compel arbitration pursuant to the

partnership agreement. An order staying the action was entered, and a three-day

arbitration hearing was held. The arbitration award was entered on August 13,

2020. A further hearing was held on October 30, 2020, on Skee’s petition to

vacate or modify the award. The matter then moved to circuit court for review.

The circuit court affirmed the arbitrator’s decision on January 22, 2021. Skee filed

a post-judgment motion pursuant to Kentucky Rules of Civil Procedure (CR)

59.05. The motion was denied on April 21, 2021, after which Skee filed his notice

of appeal.

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             The crux of this appeal turns on whether the parties effectively agreed

that the circuit court could review the arbitrator’s award for errors of law. Skee

insists that he and Roger agreed to this, with circuit court approval, and that

subsequent orders entered by the circuit court denied Skee of this agreed-upon

right. We find no such error and affirm.

             Skee specifically points to this language in the arbitrator’s findings of

fact and conclusions of law: “the parties have requested that findings be made so

that they may challenge any legal conclusions they believe to be incorrect in the

Oldham County Circuit Court.” The emphasis here should be on whether such a

review took place and is permitted by law.

             Kentucky Revised Statutes (KRS) 417.160 and 417.170 provide the

framework for arbitration review. KRS 417.160 (“Vacating an award”)

enumerates the following bases which allow an award to be vacated, namely:

             (1) Upon application of a party, the court shall vacate an
             award where:

                    (a) The award was procured by corruption,
                    fraud or other undue means;

                    (b) There was evident partiality by an
                    arbitrator appointed as a neutral or
                    corruption in any of the arbitrators or
                    misconduct prejudicing the rights of any
                    party;

                    (c) The arbitrators exceeded their powers;

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                  (d) The arbitrators refused to postpone the
                  hearing upon sufficient cause being
                  shown therefor or refused to hear evidence
                  material to the controversy or otherwise so
                  conducted the hearing, contrary to the
                  provisions of KRS 417.090, as to prejudice
                  substantially the rights of a party; or

                  (e) There was no arbitration agreement and
                  the issue was not adversely determined in
                  proceedings under KRS 417.060 and the
                  party did not participate in the arbitration
                  hearing without raising the objection; but the
                  fact that the relief was such that it could not
                  or would not be granted by a court is not
                  ground for vacating or refusing to confirm
                  the award.

            And KRS 417.170 (“Modification or correction of award”) provides

the following guidance:

            (1) Upon application made within ninety (90) days after
            delivery of a copy of the award to the applicant, the court
            shall modify or correct the award where:

                  (a) There was an evident miscalculation of
                  figures or an evident mistake in the
                  description of any person, thing or property
                  referred to in the award;

                  (b) The arbitrators have awarded upon a
                  matter not submitted to them and the
                  award may be corrected without affecting
                  the merits of the decision upon the issues
                  submitted; or

                  (c) The award is imperfect in a matter of
                  form, not affecting the merits of the
                  controversy.

                                        -4-
             The Kentucky Supreme Court recently visited this issue in the case of

Don Booth of Breland Group v. K&D Builders, Inc., 626 S.W.3d 601 (Ky. 2021),

where it reiterated that KRS 417.160 delineates the limited bases for vacating an

arbitrator’s award. The Court reiterated the following standard of review:

             Generally, courts may not review an arbitrator’s award.
             Taylor v. Fitz Coal Co. Inc., 618 S.W.2d 432, 432 (Ky.
             1981). Kentucky’s Uniform Arbitration Act, KRS
             Chapter 417, strictly circumscribes when a court review
             of an arbitration decision is appropriate. 3D Enters.
             Contracting Corp. v. Lexington-Fayette Urb. Cty. Gov’t,
             134 S.W.3d 558, 562 (Ky. 2004). An arbitration award
             may not be set aside for mere errors of law or fact, Smith
             v. Hillerich & Bradsby Co., 253 S.W.2d 629, 630 (Ky.
             1952), and “an arbitrator’s resolution of factual disputes
             and his application of the law are not subject to review by
             the courts.” Conagra Poultry Co. v. Grissom Transp.,
             Inc., 186 S.W.3d 243, 245 (Ky. App. 2006) (citation
             omitted).

626 S.W.3d at 606-07 (footnotes omitted).

             It matters not what the parties agreed to do: They cannot rewrite the

laws passed by the General Assembly and interpreted by the courts. Conagra

Poultry Co., 186 S.W.3d at 245 (citing to 3D Enterprises, supra).

             Furthermore, the parties did receive meaningful review from the

circuit court on two occasions after the arbitrator’s decision.

             Skee received the full benefit of the arbitration process and circuit

court review. His dissatisfaction lays with the arbitrator’s findings of fact, which

he concedes are not reviewable, rather than the conclusions of law. It was Skee

                                          -5-
who sought to enforce the arbitration clause in the partnership agreement (and

rightly so) after Roger brought suit in the circuit court. Skee does nothing to

convince us that the arbitration process here was statutorily unsound. Nor are his

allegations of arbitrator partiality persuasive. The three-day hearing was

comprehensive, and neither party was hindered in the presentation of evidence or

testimony. The fact that Skee was disappointed with the outcome does not provide

the legal grounds necessary to vacate the arbitration award or the circuit court’s

orders affirming same. See Meers v. Semonin Realtors, 525 S.W.3d 545 (Ky. App.

2017).

             Accordingly, the orders of the Oldham Circuit Court are affirmed.

             ALL CONCUR.

BRIEFS FOR APPELLANT:                      BRIEF FOR APPELLEE:

J. Gregory Joyner                          Kenneth A. Bohnert
Louisville, Kentucky                       Maureen P. Taylor
                                           Louisville, Kentucky

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