Don Booth of the Breland Group v. Debbie Lawson of Coldwell bankers/mcmahan ( 2021 )


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  •                                           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.
    2
    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,
    3
    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
    4
    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).
    8
    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.
    12
    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
    17