DONNA LEE MABERRY REDMON v. JOSEPH STEWART REDMON
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RENDERED: JUNE 27, 2003; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2002-CA-001799-MR
DONNA LEE MABERRY REDMON
v.
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE REED RHORER, JUDGE
ACTION NO. 99-CI-00099
JOSEPH STEWART REDMON
APPELLEE
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
BUCKINGHAM, GUIDUGLI AND SCHRODER, JUDGES.
GUIDUGLI, JUDGE.
Donna Lee Maberry Redmon (“Mrs. Redmon”)
appeals from a final order of the Franklin Circuit Court on the
motion of Joseph Stewart Redmon (“Mr. Redmon”) to modify his
child support obligation.
Mrs. Redmon maintains that the
circuit court erred in vacating an arbitrator’s award finding
that no modification was warranted.
herein, we reverse and remand.
For the reasons stated
The Redmons were married on September 28, 1985.
The
married produced two children, a daughter, Jordan Lee Redmon,
and a son, Joseph Stewart Redmon, Jr.
On January 29, 1999, Mr.
Redmon filed a petition for dissolution of marriage in Franklin
Circuit Court.
On July 15, 1999, the Redmons entered into a
settlement agreement addressing, among other things, custody and
child support.
The agreement provided in relevant part that
Mrs. Redmon would serve as primary custodian to the children,
with Mr. Redmon having liberal visitation.
It further provided
that Mr. Redmon would pay $5,000 per month in child support to
Mrs. Redmon until Jordan reached the age of 18 or graduated from
high school, at which time the obligation would reduce to $3,000
per month until Joseph Jr. reached the age of 18 or graduated
from high school.
The parties agreed that any request for
modification of the child support obligation would be submitted
to binding arbitration with no right of appeal.
On September 28, 2001, Mr. Redmon filed a motion to
reduce his child support obligation.
As a basis for the motion,
he alleged a material change in circumstances, i.e., a reduction
in income.
On January 21, 2002, a hearing on the motion was
heard before an arbitrator whom the parties had designated in
the July 15, 1999, agreement.
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Mr. Redmon tendered proof at the hearing that his 1999
adjusted gross income was $523,886.
His 2000 income was shown
to be $352,288, and his CPA calculated that his 2001 income
would be $275,000.
The CPA stated that much of the diminution
in income resulted from the termination of payments he had been
receiving from the sale of stock.
Upon considering the proof, the arbitrator rendered an
award finding that since Mr. Redmon had agreed to the $5,000
monthly child support payment, and was aware at the time of the
settlement that his income would decrease, he was not entitled
to a reduction in his child support obligation.
Mr. Redmon, through counsel, then filed a motion with
the Franklin Circuit Court to vacate, modify or correct the
arbitrator’s award.
He argued therein that the award was so
grossly excessive as to be considered a result of fraud.
on the motion was heard.
Proof
On May 31, 2002, the circuit court
rendered an order finding that the award was excessive and
required diminution.
The court found that the agreement did not
limit the change in circumstances language to changes not
contemplated at the time of the agreement.
It further found
that the arbitrator’s award did not account for the possibility
that Mr. Redmon agreed to the $5,000 amount because he knew he
could seek a reduction as his income decreased.
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The court was persuaded by Mr. Redmon’s CPA, who used
the Redmon’s income and the child support guidelines to
extrapolate that Mr. Redmon should pay $2,402.06 per month in
child support.
Its order reflected that amount, and this appeal
followed.
Mrs. Redmon now argues that the circuit court
committed reversible error in tampering with the arbitrator’s
award.
She notes that the settlement agreement provides that
any issue of child support modification would be submitted to
arbitration and would not be subject to appeal.
She claims that
the court improperly concluded that the award was a result of
fraud, and that it is bound by statutory law and case law to
accept the award even if it disagrees with it.
She also argues
that the trial court erred in substituting its award for that of
the arbitrator.
She seeks an order reversing the circuit court
and remanding the matter with instructions to confirm the
arbitrator’s award.
Mr. Redmon counters that the circuit court
had the procedural right to review the arbitrator’s decision,
and that it properly reviewed the award and fixed his support
obligation in accordance with Kentucky law.
KRS 417.050 provides that a written agreement to
submit a controversy to arbitration is valid, enforceable and
irrevocable, except for grounds existing at law for the
revocation of any contract.
An arbitration decision will not be
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held invalid merely because it is unjust, inadequate, excessive
or contrary to the law.
Carrs Fork Corp. v. Kodak Mining Co.,
Ky., 809 S.W.2d 699, 702 (1991).
if it is wrongly decided.
It shall not be set aside even
Id.
In order to reverse an arbitrator’s decision, the
award must be procured by corruption, fraud or other undue
means, KRS 417.160, and the corruption or fraud must be so
strong and manifest that “it must be impossible to state it to a
man of common sense without producing an exclamation at the
inequity of it.”
Carr, supra, quoting Second Society of
Universalists v. Royal Insurance Co.,
221 Mass. 518, 109 N.E.
384 (1915).
While we are reluctant to tamper the trial court’s
rulings as they are presumptively correct, City of Louisville v.
Allen, Ky., 385 S.W.2d 179 (1964), we cannot conclude that the
arbitrator’s award in the matter at bar was so outrageous as to
properly be characterized as fraud.
for two reasons.
We reach this conclusion
First is the general proposition regarding the
validity of arbitration awards espoused in Carrs, to wit, that
such an award shall not be held invalid even if it is unjust,
excessive, or wrongly decided.
Even if the award at issue is
excessive or unjust, it nevertheless must be affirmed by the
circuit court.
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Second, the totality of the circumstances compel a
conclusion that the award was something short of fraudulent.
The arbitrator did not create the $5,000 sum; rather, it was an
amount fixed by the Redmons in the settlement agreement.
Mr.
Redmon agreed to pay this amount while represented by counsel
and with the knowledge that his income would be reduced in
subsequent years.
It is also an amount which Mr. Redmon said he
could afford, and represented about 17% of his 2000 adjusted
gross income.
And lastly, the obligation will reduce to $3000
per month no later than next year when Jordan reaches the age of
18.
Given all of the facts surrounding the arbitrator’s
decision, we cannot conclude that the award would, in the
language of Carrs, cause a common man to produce an exclamation
at its inequity.
We hold as moot Mrs. Redmon’s second argument
addressing the trial court’s alleged error in substituting its
award for that of the arbitrator.
For the foregoing reasons, we reverse the May 31,
2002, order of the Franklin Circuit Court and remand the matter
for an order denying Mr. Redmon’s motion to vacate, modify or
correct the arbitrator’s award.
ALL CONCUR.
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BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Mark A. Bubenzer
Frankfort, KY
Paul C. Gaines, III
Frankfort, KY
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