Charles "Skee" Bauer v. Roger Bauer, Both Individually and on Behalf of the Charles F. Bauer Realty Partnership, Lllp ( 2022 )

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NOT TO BE PUBLISHED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
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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.
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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
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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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