Don Booth of the Breland Group v. Debbie Lawson of Coldwell bankers/mcmahan

RENDERED: JUNE 17, 2021
TO BE PUBLISHED

Supreme Court of Kentucky
2020-SC-0023-DG

DON BOOTH OF THE BRELAND GROUP APPELLANT

ON REVIEW FROM COURT OF APPEALS
V. NO. 2019-CA-0069
JEFFERSON CIRCUIT COURT NO. 18-CI-003196

K&D BUILDERS, INC.; DEBBIE LAWSON
OF COLDWELL BANKER/MCMAHAN;
AND NICOLE RIBEIRO APPELLEES

AND

2020-SC-0026-DG

K&D BUILDERS, INC. APPELLANT

ON REVIEW FROM COURT OF APPEALS
V. NO. 2019-CA-0069
JEFFERSON CIRCUIT COURT NO. 18-CI-003196

NICOLE RIBEIRO; DON BOOTH OF THE
BRELAND GROUP; AND DEBBIE LAWSON
OF COLDWELL BANKER/MCMAHAN APPELLEES

AND

2020-SC-0028-DG

DEBBIE LAWSON OF COLDWELL APPELLANT
BANKER/MCMAHAN

ON REVIEW FROM COURT OF APPEALS
V. NO. 2019-CA-0069
JEFFERSON CIRCUIT COURT NO. 18-CI-003196

NICOLE RIBEIRO; DON BOOTH OF THE APPELLEES
BRELAND GROUP; AND K&D BUILDERS,
INC.
 OPINION OF THE COURT BY JUSTICE KELLER

REVERSING

Because the Court of Appeals exceeded the statutory basis for vacating

an arbitration award, we reverse the Court of Appeals and affirm the Jefferson

Circuit Court’s denial of the motion to vacate the arbitrator’s award.

I. FACTS

On October 28, 2016, Nicole Ribeiro purchased a house on Vista Hills

Boulevard in Louisville. K&D Builders (K&D) constructed the home in the mid-

2000s as a speculative investment. Due to the housing market downturn in the

latter half of that decade, K&D converted the house to a rental property. K&D

rented the home to a series of tenants from 2007 to mid-2016. In 2016, K&D

decided to again put the home on the market and engaged Don Booth from the

Breland Group (Booth) to list and sell the property.1

In October 2016, Ribeiro and her agent, Debbie Lawson, toured the

house on two separate occasions. After her second visit, Ribeiro made a written

offer to purchase the property. K&D accepted her offer, and both signed a

standard Residential Sales Contract provided by the Greater Louisville

Association of Realtors (GLAR). The contract included mandatory mediation

and arbitration provisions for disputes or claims arising from the transaction.

1 We start by acknowledging that none of the parties to the arbitration elected to
provide a written or video record of the proceedings. We note it is difficult to undertake
an adequate review without such a record, and it is incumbent on the parties to
provide a record for a thorough review. The facts as discussed in the Opinion are
taken from the arbitrator’s summary of the testimony and evidence, augmented by
specific provisions from the sales contract and facts acknowledged by all parties in
their briefs.

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As part of the contract, Ribeiro acknowledged that she had not been provided

the required “Seller Disclosure of Property Condition” (hereafter seller’s

disclosure) at signing. The contract specified that Ribeiro had the option to void

the contract if the seller’s disclosure was not provided within seventy-two (72)

hours of signing. Ribeiro also had an option to void the contract within twenty-

four (24) hours from receipt of the seller’s disclosure based on the contents of

that disclosure.

The Residential Sales Contract also provided for Ribeiro’s reasonable

access to the property for purposes of conducting an independent inspection

and provided her the ability to request the seller repair, correct, or replace

items discovered by any inspection. If the seller refused, Ribeiro had the option

to void the contract within three (3) days of said refusal. Ribeiro exercised her

right to an inspection and had the property inspected by Jay Jackson, a

licensed home inspector.

Jackson reported to Ribeiro that he observed cracks in the home's

foundation; signs of moisture infiltration in the basement floor and walls;

erosion under some downspouts; and grading around the house that left soil

above some weep holes. While noting these issues, Jackson concluded that the

house was “fundamentally sound.” Before closing, Ribeiro requested, and K&D

made, a series of repairs to the house. Ribeiro did not object to the extent or

quality of the repairs before closing.

At closing, Ribeiro accepted a general warranty deed from K&D. Over the

next several months, Ribeiro began remodeling the interior of the house but,

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citing defects in the home's interior and the yard, Ribeiro moved out in March

2017. Ribeiro initiated an arbitration proceeding against K&D, as the seller of

the home, as well as both real estate agents, seeking to recover damages or to

rescind the purchase contract. Additionally, Ribeiro initiated an action in

circuit court against K&D as the builder of the home for building code

violations. Ribeiro alleged that K&D intentionally withheld or misrepresented

material information, thereby deceiving her into purchasing the property.

Ribeiro alleged that as K&D’s agent, Booth violated his statutory duty under

the provisions of Kentucky Revised Statute (KRS) 324.360 by failing to deliver a

disclosure statement to her before closing. As to Lawson, Ribeiro alleged

Lawson breached her fiduciary duty by failing to advise Ribeiro that she should

not purchase the property without reviewing the seller's disclosure.

The arbitrator held an extensive hearing spread over four days which

included fourteen witnesses, the submission of forty-eight exhibits, and the

arbitrator’s inspection of the house himself. While the arbitrator heard fourteen

witnesses, upon K&D's objection, he excluded the testimony of Herb Goff. Goff

was a geologist and engineer who examined the home in May 2017. K&D

objected to the relevancy of Goff's testimony to the issues before the arbitrator.

The arbitrator heard arguments from both sides and refused to permit Goff's

testimony, finding it irrelevant to Ribeiro's claims.

After considering the parties' briefs and the evidence presented, the

arbitrator prepared extensive findings of fact and conclusions of law in a

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decision released March 16, 2018. The arbitrator concluded that Ribeiro could

not, as a matter of law, prevail on her claims for breach of contract or

rescission. First, addressing Ribeiro’s claims for breach of contract and

rescission, the arbitrator, citing to Borden v. Litchford, 619 S.W.2d 715 (Ky.

App. 1981), found any discrepancies in the seller's disclosure merged into the

deed at closing and that Ribeiro had not proven the fraud exception to the

merger doctrine by clear and convincing evidence.2 Second, Ribeiro failed to

prove she had a statutory cause of action against K&D and Booth for failure to

provide the seller’s disclosure under KRS 324.360. The arbitrator stated that

even if Booth and K&D failed to deliver the seller’s disclosure, for Ribeiro to

prevail on the statutory claim would have required her to suffer damages “as a

result” of that violation. Here, Ribeiro was aware of every defect outlined in her

claims prior to closing, so any damages suffered were the result of her failure to

address the known issues prior to closing, not defendants’ failure to deliver the

seller’s disclosure. Lastly, the arbitrator agreed Lawson owed Ribeiro a

fiduciary duty, but stated Ribeiro had not introduced any evidence that Lawson

had breached that duty or that Lawson’s conduct had fallen below the degree

of care, competence, diligence or skill normally exhibited by real estate agents

under similar circumstances.3

2 We note Borden is a Court of Appeals decision, but it has been cited
approvingly by this Court though we have not explicitly addressed seller’s disclosures.
See AEP Industries, Inc. v. B.G. Properties, Inc., 533 S.W.3d 674 (Ky. 2017); Miller v.
Hutson, 281 S.W.3d 791 (Ky. 2009); Yeager v. McLellan, 177 S.W.3d 807 (Ky. 2005).
3 The arbitrator, in his factual summary, never definitively determined whether
Ribeiro received the disclosure prior to closing. He emphasized the contradictory
nature of the testimony. In addressing each of Ribeiro’s claims: breach of
5
 Ribeiro filed a petition in circuit court to vacate the arbitration decision

pursuant to the provisions of KRS 417.160. She argued the arbitration award

should be set aside because the arbitrator (1) exceeded his powers by applying

the merger doctrine to “nullify” the disclosure statute and (2) refused to hear

evidence material to the controversy when he excluded Goff’s testimony. K&D,

Booth, and Lawson filed separate answers in which they denied that there was

any basis for the court to set aside the arbitration decision. The Jefferson

Circuit Court acknowledged its limited role in reviewing arbitration awards. The

circuit court found that the arbitrator did not exceed his powers in the

application of the merger doctrine, and that the doctrine provided exceptions

which the arbitrator applied to the facts before finding Ribeiro could not

recover. With respect to Goff’s testimony, the circuit court found insufficient

evidence in the record to dispute the arbitrator’s decision that Goff’s testimony

was not relevant to the issues before him. The court then stated, “[g]iven the

high standard for the Court’s review of an arbitration award, as well as the

law’s preference for upholding arbitration as a manner of dispute resolution,

this Court is not persuaded to vacate the arbitration award[.]” Ribeiro appealed

the circuit court’s order.

The Court of Appeals reversed the circuit court. The Court of Appeals

held that the adoption of KRS 324.360 superseded the merger doctrine as

articulated in Borden. Therefore, the arbitrator exceeded his powers when he

contract/rescission for failure to receive disclosure; fraud; statutory damages; and
breach of fiduciary duty, he assumed the version of the facts that most strongly
supported Ribeiro’s argument.

6
relied on Borden to invalidate the statute. The Court of Appeals also held that

Ribeiro was entitled to present Goff's testimony and that the arbitrator's refusal

to allow it was an error. Based on these two issues, the Court of Appeals

vacated the circuit court's order upholding the arbitration award and

remanded for a new order directing a new arbitration be granted. K&D, Booth,

and Lawson initiated this appeal arguing the Court of Appeals failed to apply

the appropriate standard of review to arbitration, erred in holding that the

adoption of KRS 324.360 extinguished the merger doctrine, and erred in

holding the arbitrator’s exclusion of Goff's testimony was a refusal to hear

evidence.

II. 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).4 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),5 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.

4 See also KRS 417.160(1); Ison v. Robinson, 411 S.W.3d 766, 770-71 (Ky. App.
2013).
Smith was interpreting KRS 417.040 which dealt with grounds for vacating an
5

arbitration award. KRS 417.160 replaced KRS 417.040 when Kentucky adopted the
Uniform Arbitration Act in 1984.

7
App. 2006) (citation omitted).6 As in this case, when there is no transcript of

the proceedings below, the court is required to assume that the evidence

supported the arbitrator's decision. Id. (citing Dillard v. Dillard, 859 S.W.2d

134, 137 (Ky. App. 1993)).7

III. ANALYSIS

KRS 417.160(1) establishes five grounds upon which the reviewing court

may vacate an arbitration award. The two addressed in this appeal are whether

“the arbitrator exceeded [his] power,” KRS 417.160(1)(c), and whether the

arbitrator “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.” KRS 417.160(1)(d).

KRS 324.360 is contained within provisions regulating the licensing of

brokers and includes duties owed by brokers to their clients, whether they be

buyers or sellers. The statute directs the listing broker to provide upon request

a Seller's Disclosure of Property Condition to any prospective buyer and to

6See also Dawahare v. Spencer, 210 F.3d 666, 669 (6th Cir. 2000) (stating
courts should play only a limited role in reviewing the decision of arbitrators, and the
Federal Arbitration Act presumes that arbitration awards will be confirmed);
Nationwide Mut. Ins. Co. v. Home Ins. Co., 429 F.3d 640, 643 (6th Cir. 2005) (“When
courts are called on to review an arbitrator's decision, the review is very narrow; one of
the narrowest standards of judicial review in all of American jurisprudence.”).
7 See also Samaan v. General Dynamics Land Sys., Inc., 835 F.3d 593, 603-04
(6th Cir. 2016); River City Fraternal Ord. of Police Lodge 614, Inc. v. Louisville/Jefferson
Cty. Metro. Gov’t., 585 S.W.3d 258, 267 (Ky. App. 2019); Miller v. Commonwealth, Dept.
of Highways, 487 S.W.2d 931, 933 (Ky. 1972) (“In the absence of the evidence in the
record, we must presume that the judgment of the trial court was supported by the
evidence.”) (internal citations omitted).

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deliver the same within seventy-two hours of the listing agent's receipt of a

contract for the sale. KRS 324.360(4). “The merger doctrine holds that all prior

statements and agreements, both written and oral, are merged into the deed

and the parties are bound by that instrument.” Borden, 619 S.W.2d at 717.

Any warranties as to the property made by a seller or his agents or observable

defects are merged into the deed and may not be relied upon for recovery. Id.

We disagree with the Court of Appeals that the application of the merger

doctrine eviscerates the purpose of KRS 324.360. The statute’s purpose is to

regulate brokers and sellers. It provides a basis for the Kentucky Real Estate

Commission to sanction brokers and provides potential contractual remedies

prior to closing. Finally, the disclosures made pursuant to the statute can be

used as evidence of fraud or misrepresentation to support the invocation of an

exception to the merger doctrine for claims that arise after closing.

A. The arbitrator did not exceed his power in his application of the
merger doctrine to Ribeiro’s claim for breach of contract damages
or rescission against K&D.

An arbitrator exceeds his authority where the award is not within the

scope of the issues submitted for arbitration or the arbitrator acts in excess of

the contract's material terms. 3d Enters. Contracting Corp., 134 S.W.3d at 561;

see also Wagner v. Drees Co., 422 S.W.3d 281, 283 (Ky. App. 2013). When a

dispute goes to arbitration, only if the arbitrator's decision is alleged to have

been tainted by fraud or favoritism does the trial court have the ability to

intercede. Ernst & Young, LLP v. Clark, 323 S.W.3d 682, 692 (Ky. 2010).

9
 In 3D Enterprises Contracting, 3D Enterprises contracted with Lexington-

Fayette Urban County Government (LFUCG) to construct a pool complex with a

required completion within 240 days. 134 S.W.3d at 559. The contract

included a mandatory arbitration clause and a no-damages-for-delay clause.

Id. Due to delays by LFUCG approving the final plans and LFUCG’s post-

contract award change requests, 3D made an arbitration claim for damages,

including delay damages. Id. at 559-60. The arbitration panel’s award

invalidated the “no delay damages” clause due to LFUCG’s active interference

in the project and material misrepresentations. Id. The circuit court vacated

the award, finding the arbitrators exceeded their power by refusing to enforce

the “no-damages-for-delay clause.” Id. We held that the circuit court’s action

exceeded the scope of review under KRS 417.160(1)(c), holding that a court’s

review is limited to “whether the award was fairly and honestly made within the

scope of the issues presented for resolution.” Id. at 561 (citing Tackett v.

Campbell Corp., 781 S.W.2d 758 (Ky. App. 1989)). We stated:

The applicability of the no-damages-for-delay clause and the
change orders was squarely presented to the arbitrators. They
heard evidence on exceptions to the enforceability of the clause
and rendered a decision based on the evidence. We disagree with
the circuit court's view that the arbitrators exceeded their powers
by failing to enforce the no-damages-for-delay clause.

Id.

The questions of what Ribeiro knew about the property and whether she

suffered damages due to the inadequate disclosure were appropriately before

the arbitrator. The Residential Sales Contract specifically addressed arbitration

10
of issues arising from the physical condition of the property in question or

representations made by the “[s]eller or any broker or agent[.]”8 For purposes of

KRS 417.160(1)(c), an arbitrator exceeds his authority when he decides an

issue not appropriately submitted for arbitration, Wagner, 422 S.W.3d at 283,

not through a misapplication of the law. Conagra Poultry Co., 186 S.W.3d at

245.

It is uncontested that Ribeiro’s delayed receipt, or non-receipt, of the

seller’s disclosure and its effect on Ribeiro’s claim for damages or on her ability

to rescind the contract was properly before the arbitrator. His decision to apply

Borden and find that the merger doctrine extinguished the absolute right

Ribeiro had as part of the Residential Sales Contract to rescind the contract or

sue for breach of contract damages for any failure to receive the disclosure was

an application of law. Even if incorrect, a reviewing court’s disagreement with

the arbitrator’s application of law does not support vacating the award under

KRS 417.160, if the issue presented was within his proper scope and the award

was fairly and honestly made.

B. The arbitrator did not exceed his power when he fully and fairly
reviewed whether the fraud exception to merger provided Ribeiro
a claim against K&D and Booth.

We note the arbitrator acknowledged there are exceptions to the merger

doctrine and fairly analyzed whether Ribeiro’s claims met the fraud exception

consistent with Borden, Yeager, and Ross v. Powell, 206 S.W.3d 327 (Ky.

8 Paragraph 24 of the Residential Sales Contract dated October 13, 2016.

11
2006).9 Even if erroneous, the arbitrator’s application of the merger doctrine is

consistent with prior Kentucky precedent dealing with seller’s disclosures,

including the sole case which dealt with an absolute failure to provide a seller’s

disclosure prior to closing. See Davis v. Taylor, No. 2003-CA-001042, 2004 WL

1300032 (Ky. App. June 11, 2004).

The arbitrator undertook an extensive review of whether the seller’s

disclosure provided Ribeiro a basis for a fraudulent misrepresentation claim.

To prevail on a claim of fraudulent misrepresentation, Ribeiro would have had

to show that: (1) K&D made material misrepresentations in the disclosure; (2)

the representations were false; (3) K&D knew that the representations made

were false; (4) K&D made the representations with the intent of inducing

Ribeiro to act on them; (5) Ribeiro relied on these misrepresentations; and (6)

Ribeiro suffered damages as the result of this reliance. Yeager, 177 S.W.3d at

809-10 (citing United Parcel Serv. Co. v. Rickert, 996 S.W.2d 464, 468 (Ky.

9 Ribeiro points to two, out-of-jurisdiction cases providing that a seller’s
disclosures survive merger, but we find both cases distinguishable. In Ram’s Gate
Winery, LLC v. Joseph G. Roche, 185 Cal. Rptr. 3d 935 (Cal. Ct. App. 2015) the
appellate court reversed a summary judgment in favor of the seller. The purchase
agreement included a specific clause requiring seller’s delivery of a seismic survey
prior to closing. The seller failed to deliver the survey, but the buyer went through with
the closing. The court found that the seller’s failure to deliver a seismic survey created
triable issues of fact as to whether the intent of the parties was to merge the
requirement to deliver the survey into the deed and whether the collateral obligations
exception to merger applied.
In Coughlin v. Gustafson, 772 N.E.2d 864 (Ill. App. Ct. 2002), the appellate
court reversed summary judgment in favor of a defendant, holding the plaintiff’s claim
under Illinois’ Disclosure Act was not merged with the deed at closing. This case is
highly distinguishable. Unlike our statute, the Illinois Disclosure Act included a
specific remedy provision with a one-year statute of limitations. The court held based
on the statute’s explicit authorization of claims based on a violation of the Disclosure
Act commencing within one-year after possession, occupancy or recording made
merger inapplicable to such claims.

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1999)). After considering the extensive testimony and evidence presented, the

arbitrator found that Ribeiro could not prevail on her fraud claim. The

arbitrator found that even if K&D’s disclosure was not wholly accurate, Ribeiro

had not presented evidence that K&D, Booth, or Lawson concealed any

condition from Ribeiro or committed fraudulent conduct. Furthermore, the

arbitrator found, based on Ribeiro’s own testimony, inspection report, and the

testimony of Ribeiro’s experts, that she had discovered all the defects at issue

before closing. Therefore, the arbitrator found she could not show reliance on

any statements in the disclosure permitting a rescission or damages based on

fraud. The arbitrator’s evaluation of the evidence and conclusions of law and

determination that Ribeiro had not demonstrated a basis for fraud was

properly within the scope of the arbitrator’s authority, and Ribeiro makes no

allegation it was not fairly and honestly made. The arbitrator’s review of this

issue and his failure to award Ribeiro damages for fraud did not exceed his

authority.

C. The arbitrator did not exceed his power when he found Ribeiro’s
claim against K&D and Booth for statutory damages was
unsupported.

Contrary to the Court of Appeals’ analysis, the arbitrator did not nullify

the effect of KRS 324.360. The arbitrator undertook an examination of whether

Ribeiro had a statutory claim for damages based on K&D and Booth’s failure to

deliver the seller’s disclosure pursuant to the statute. KRS 446.070 provides a

cause of action to recover for damages sustained as a result of the violation of a

statute which does not include its own remedy provision. KRS 446.070 codifies

13
the common law concept of negligence per se and only applies if the offender

violates a statute and the plaintiff was in the class of persons whom the statute

was intended to protect. Davidson v. American Freightways, Inc., 25 S.W.3d 94,

99-100 (Ky. 2000).

Based on the evidence presented, the arbitrator found that even if Ribeiro

suffered damages and K&D and Booth failed to deliver the seller’s disclosure in

the timeframe prescribed by KRS 324.360, this failure was not the cause of

Ribeiro’s damages. The arbitrator found that through her own inspections

Ribeiro was aware, prior to closing, of all the defects claimed in the arbitration.

Furthermore, the Residential Sales Contract provided Ribeiro the option to void

the contract prior to closing if disclosure had not been timely made. She did

not choose to do so. Therefore, it was “Ribeiro’s own failure to address the

issues that she had discovered in the closing document, not a violation of KRS

324.360” that was the cause of her damages. The arbitrator’s evaluation of the

evidence and conclusions of law based on the evidence concerning statutory

damages was properly within the scope of the arbitrator’s authority, and there

is no allegation it was not fairly and honestly made. The arbitrator’s review of

this issue and his failure to award Ribeiro statutory damages did not exceed

his authority.

D. The arbitrator’s decision to exclude Goff’s testimony was not a
failure to hear evidence for purposes of KRS 417.160(1)(d).

KRS 417.160(1)(d) provides for vacating an award when the arbitrator

“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
14
substantially the rights of a party[.]" The relevant provision of KRS 417.090

states, "[t]he parties are entitled to be heard, to present evidence material to

the controversy and to cross-examine witnesses appearing at the hearing."

We note that in this case, the arbitrator did not refuse to hear the

evidence offered by Goff, but rather ruled the testimony would be irrelevant to

the questions upon which he was ruling. An arbitrator has the authority to

determine if the evidence is cumulative, immaterial, or irrelevant to the matters

before him, and Kentucky courts do not second guess an arbitrator's factual or

legal applications. Conagra Poultry Co., 186 S.W.3d at 245.10 “The arbitrator

shall determine the admissibility, relevance, and materiality of the evidence

offered and may exclude evidence deemed by the arbitrator to be cumulative or

irrelevant.” AM. ARB. ASS’N RULE 34 (R-34), EVIDENCE.

Ribeiro concedes Goff’s testimony was intended to address the

seriousness of the deficiencies in the home, not the presence of the

deficiencies. As a geologist and engineer, Goff had toured the home after

Ribeiro moved out. K&D objected to Goff’s testimony as irrelevant. The

10 See e.g. Boskovich Farms, Inc. v. Taco Bell Corp., No. 2010-CA-000754-MR,
2011 WL 2935373, (Ky. App. July 22, 2011) (holding arbitrator’s summary judgment
was not a refusal to hear evidence as provided by KRS 417.160(1)(d) where arbitrator
heard arguments on motion); Calbex Mineral Ltd. v. ACC Res. Co., L.P., 90 F. Supp. 3d
442 (W.D. Pa. 2015) (holding vacating an arbitration award is only proper when the
exclusion of relevant evidence actually deprived a party of a fair hearing); Landmark
Ventures, Inc. v. InSightec, Ltd., 63 F. Supp. 3d 343 (S.D.N.Y. 2014) (holding
arbitrators are not required to hear all the evidence proffered but must give each party
adequate opportunity to present its evidence and argument); In re Allegheny Health
Educ. & Rsch. Found., 265 B.R. 88 (Bankr. W.D. Pa. 2001) (vacating an arbitration
award is warranted when the exclusion of relevant evidence by arbitrator so affected
rights of a party that it may be said that he or she was deprived of fair hearing).

15
arbitrator heard argument from the parties and ruled that Goff’s testimony was

irrelevant. Without a record, we must assume the evidence supported the

arbitrator's decision. Conagra Poultry Co., 186 S.W.3d at 245. We note that

Goff's testimony as to the presence of defects in the home was largely

cumulative to the testimony of Mr. Jackson and Ribeiro herself, as well as

Ribeiro’s two experts: Mr. Hagerty and Mr. Mercke. According to Ribeiro, Goff's

testimony as to which of the home’s defects rose to a level of a building code

violation would have supported Mr. Mercke's testimony as to damages. Ribeiro

concedes that the existence of building code violations was not before the

arbitrator, but rather addressed in a separate court action Ribeiro was

pursuing against K&D as the builder. Based on the limited record before us, we

hold that the arbitrator’s exclusion of Goff’s testimony was a decision on the

relevance of the testimony as to the issues before him and not a refusal to hear

material evidence that substantially prejudiced Ribeiro’s claim.

E. Nothing in Ribeiro’s appeal questions the arbitrator’s finding that
she failed to present evidence of Lawson’s breach of fiduciary
duty.

Ribeiro’s appeal is predicated on her claims that the arbitrator exceeded

his powers by applying the merger doctrine to “nullify” KRS 324.360 and

refused to hear evidence material to the controversy in excluding Goff’s

testimony. Neither of these issues go to the question of the arbitrator’s finding

that Ribeiro failed to present adequate evidence of Lawson’s breach of fiduciary

duty. The arbitrator stated that nothing in the evidence presented by Ribeiro

showed that Lawson had in any way breached her duty to Ribeiro, or even if

16
such a breach occurred, that it resulted in damage to Ribeiro. The arbitrator’s

decision goes to the merits of Ribeiro’s breach of fiduciary duty claim which

was properly before the arbitrator and did not exceed his powers.

IV. CONCLUSION

For the aforementioned reasons, the opinion of the Court of Appeals is

reversed, and the order of the Jefferson Circuit Court is reinstated.

All sitting. All concur.

COUNSEL FOR APPELLANT/APPELLEE, DON BOOTH OF THE BRELAND
GROUP:

Vincent J. Eiden

Fredrick Owen Rodgers
Virginia Lue Lawson
McBrayer PLLC

COUNSEL FOR APPELLANT/APPELLEE, K&D BUILDERS, INC.:

Gerald Lee Stovall
The Stovall Firm, PLLC

COUNSEL FOR APPELLANT/APPELLEE, DEBBIE LAWSON OF COLDWELL
BANKER/MCMAHAN:

Mark Squires Fenzel
David Joseph Kellerman
Middleton Reutlinger

COUNSEL FOR APPELLEE, NICOLE RIBEIRO:

Kenneth Allen Bohnert
Maureen Phyllis Taylor
Conliffe Sandmann & Sullivan

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