Swetnam Design Construction, Inc. v. Saurer

382 S.W.3d 73, 2012 WL 4838991, 2012 Ky. App. LEXIS 207
CourtCourt of Appeals of Kentucky
DecidedOctober 12, 2012
DocketNo. 2010-CA-002267-MR
StatusPublished

This text of 382 S.W.3d 73 (Swetnam Design Construction, Inc. v. Saurer) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Swetnam Design Construction, Inc. v. Saurer, 382 S.W.3d 73, 2012 WL 4838991, 2012 Ky. App. LEXIS 207 (Ky. Ct. App. 2012).

Opinion

OPINION

CAPERTON, Judge:

Swetnam Design Construction, Inc. (hereinafter “Swetnam”) appeals from the trial court’s order and judgment of November 23, 2010, whereby the court confirmed the modification to arbitrator’s award dated August 6, 2010. On appeal, Swetnam argues that there was no ground for modification of the original arbitration award and, thus, the trial court’s confirmation of the modification of arbitrator’s award was in error. After a thorough review of the parties’ arguments, the record, and the applicable law, we agree with Swetnam that there was not a ground for modification of the original arbitrator’s award and, thus, the arbitrator exceeded his powers in so modifying the award. Accordingly, we reverse the trial court’s confirmation of the modification of the award and remand this matter to the trial court with instructions to vacate the order modifying.

Swetnam was hired by Saurer to renovate residential rental property located in Louisville, Kentucky. Soon after Swetnam began work, Saurer began adding to the scope of the original agreement, resulting in additional costs and time to complete the work. As Swetnam neared completion of the project, Saurer began complaining about the cost and time it was taking for the work to be performed. Saurer ceased paying Swetnam. Swetnam filed a mechanic’s and materialman’s lien and subsequently filed suit in Jefferson Circuit Court against Saurer for breach of contract and to foreclose on the lien. The parties agreed to arbitrate their dispute.

An arbitration hearing was held on July 2, 2010, at which both parties presented witnesses and documentary evidence. After considering the evidence presented, the arbitrator entered an award, dated July 16, 2010, in favor of Swetnam in the amount of $27,078.401 as follows:

[[Image here]]
Thereafter, on August 6, 2010, the arbitrator entered a modification of arbitrator’s award:
The Arbitrator has received Respondent’s [Saurer] Motion to Reconsider the Award entered on July 16, 2010, and Claimant’s [Swetnam] Objection to Respondent’s Motion. Upon review of the Award, the Arbitrator concludes that the Award was improperly determined. This modification [75]*75is made to correct the Arbitrator’s error, and is not based on new consideration of the evidence and testimony. The Award is modified as follows:
[[Image here]]

On November 23, 2010, the circuit court entered an order confirming the modification to arbitrator’s award, dated August 6, 2010. It is from this order that Swetnam appeals.

On appeal, Swetnam argues that there was no ground for modification of the original arbitration award and, thus, the trial court’s confirmation of the modification of arbitrator’s award was in error. Saurer argues that there are no grounds 'to vacate the arbitrator’s modified award. With these arguments in mind, we turn to our applicable jurisprudence.

As a general rule, “an arbitrator’s award is not reviewable by a court.” Taylor v. Fitz Coal Co., Inc., 618 S.W.2d 432, 432 (Ky.1981) (internal citations omitted). This is attributable to the fact that “settlement of disputes by arbitration is favored in the law of this Commonwealth.” Lombardo v. Investment Management and Research, Inc., 885 S.W.2d 320, 322 (Ky.App.1994) (internal citations omitted). “Generally, much judicial latitude and deference are accorded to an arbitration decision. It will not be disturbed by the courts merely because it was unjust, inadequate, excessive or contrary to law.” Id. (internal quotations and citation omitted). “Without a transcript of the arbitration proceedings, the court was required to assume that the evidence supported the arbitrator’s decision.” Conagra Poultry Co. v. Grissom Transp., Inc., 186 S.W.3d 243, 245 (Ky.App.2006), citing Dillard v. Dillard, 859 S.W.2d 134, 137 (Ky.App.1993).

Moreover, the sufficiency of the evidence supporting an arbitration award is specifically nonreviewable. Taylor, 618 S.W.2d at 432 (internal citations omitted). “This is so because when a court examines the evidence and imposes its view of the case it substitutes the decision of another tribunal for the arbitration upon which the parties have agreed and, in effect, sets aside their contract.” Id. at 433 (internal citation omitted).

With this said, the Kentucky Uniform Arbitration Act (hereinafter “KUAA”), and specifically Kentucky Revised Statutes (KRS) 417.160, provides that a court may vacate an arbitration award pursuant to five specific grounds:

(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;
[76]*76(c) The arbitrators exceeded their powers;
(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.

KRS 417.160(l)(a)-(e).

With respect to all arbitration agreements entered into after the effective date of the KUAA (July 13, 1984), a court may only set aside an arbitration award pursuant to those grounds set forth in KRS 417.160. 3D Enterprises Contracting Corp. v. Lexington-Fayette Urban County Government, 134 S.W.3d 558, 562-63 (Ky.2004).

An arbitrator is similarly bound by statute in modifying an award. KRS 417.130 states:

On application of a party to the arbitrators or, if an application to the court is pending under KRS 417.150

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Taylor v. FITZ COAL CO. INC.
618 S.W.2d 432 (Kentucky Supreme Court, 1981)
DeMello v. Souza
36 Cal. App. 3d 79 (California Court of Appeal, 1973)
Severtson v. Williams Construction Co.
173 Cal. App. 3d 86 (California Court of Appeal, 1985)
Conagra Poultry Co. v. Grissom Transportation, Inc.
186 S.W.3d 243 (Court of Appeals of Kentucky, 2006)
Dillard v. Dillar
859 S.W.2d 134 (Court of Appeals of Kentucky, 1993)
Lombardo v. Investment Management & Research Inc.
885 S.W.2d 320 (Court of Appeals of Kentucky, 1994)
North Boulevard Plaza v. North Boulevard Associates
526 S.E.2d 203 (Court of Appeals of North Carolina, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
382 S.W.3d 73, 2012 WL 4838991, 2012 Ky. App. LEXIS 207, Counsel Stack Legal Research, https://law.counselstack.com/opinion/swetnam-design-construction-inc-v-saurer-kyctapp-2012.