COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 67736 : C.A. KASTEN & ASSOCIATES, LTD. : : : JOURNAL ENTRY Plaintiff-Appellant : : and -vs- : : OPINION C. RICHARD LYNHAM : : : Defendant-Appellee : : : DATE OF ANNOUNCEMENT OF DECISION: AUGUST 10, 1995 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. CV-263275 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiff-Appellant: For Defendant-Appellee: ALAN BELKIN, ESQ. DAVID N. BROWN, ESQ. SHAPIRO, TUROFF & BELKIN ROCHELLE E. BOLAND, ESQ. 1200 Standard Building BROWN AND AMODIA 1370 Ontario Street 109 West Liberty Street Cleveland, Ohio 44113 P.O. Box 1117 Medina, Ohio 44258 - 2 - KARPINSKI, J.: Plaintiff-appellant, C.A. Kasten & Associates, Ltd. (hereinafter referred to as "Kasten") appeals from the trial court's decision upholding an arbitration award in favor of defendant-appellee, C. Richard Lynham (hereinafter referred to as "Lynham"). Kasten is a firm that assists buyers in mergers and acquisitions. This firm specializes in finding businesses for purchase by prospective buyers. Lynham contacted Kasten and decided to retain his services to purchase a business. Kasten proposed they enter into the standard consulting contract used by Kasten. Lynham did not agree and substantially revised the contract. After these revisions, Lynham and Kasten's agent Brown executed the contract. Two important revisions were made to this contract. First, the standard contract listed no specific duties on the part of Kasten and the revised contract listed six specific duties to be performed under the contract. Second, the standard contract did not include any criteria for prospective businesses, but the revised contract listed several criteria. One of these criteria required that a potential business have, at a minimum, two million dollars in sales. Under the contract, appellant was to "use its best efforts to locate and help Lynham acquire a business that meets Lynham's criteria as outlined in Exhibit I and which is otherwise - 3 - acceptable for acquisition by Lynham." In addition to an hourly rate, Kasten was to be paid a contingent fee if Lynham acquired a business located by Kasten. In performance of this contract, Kasten presented to Lynham numerous companies that had the potential to be acquired. One of the companies that was presented to Lynham was Remelt Sources. Lynham reviewed the books of Remelt Sources and met the owner and President of Remelt, Jack Drage. In reviewing the company's financial status, Lynham noticed a past due account receivable from a business known as Kove Castings. Jack Drage gave Lynham the name of a contact person at Kove Castings and it became apparent that Kove Castings was a potential acquisition candidate. Lynham began discussions to acquire Kove Castings. Kasten knew nothing of these discussions, which proved unfruitful because, at that point, Lynham did not acquire Kove Castings. Later, in a chance meeting at the Cleveland Orchestra concert at Severance Hall, Drage and Lynham again brought up the possibility of acquiring Kove Castings. Drage informed Lynham that he felt Kove Castings was still available. After this meeting Lynham resumed discussions with Kove Castings which resulted in Lynham purchasing the company. After the deal with Kove Castings was completed, Lynham terminated the contract with Kasten, to which Kasten demanded compensation pursuant to the contract, that is, the hourly and the contingent fee. The hourly fee was paid, but Lynham refused to pay the contingent fee. According to the contract, any - 4 - disputes arising from the contract are to be resolved through arbitration. Thereby, Kasten initiated arbitration proceedings. After a hearing the arbitrator issued a decision denying Kasten's request for a contingent fee. Kasten appealed to Cuyahoga County Common Pleas Court, asking for a reversal of the arbitration decision. That court affirmed the arbitration decision. Kasten has now timely appealed to this court raising only one assignment of error: THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT IN FAVOR OF DEFENDANT-APPELLANT C. RICHARD LYNHAM ("LYNHAM"). THE RECORD BEFORE THE TRIAL COURT SHOWED THAT THE ARBITRATOR DISREGARDED THE CLEAR AND UNAMBIGUOUS LANGUAGE OF THE CONTRACT BETWEEN LYNHAM AND PLAINTIFF-APPELLANT C.A. KASTEN & ASSOCIATES LTD. KASTEN PROPERLY STATED A CLAIM FOR VACATION OF THE ARBITRATOR'S AWARD PURSUANT TO OHIO REVISED CODE SECTION 2711.10. Ohio law has consistently encouraged arbitration. The Ohio Supreme Court in Goodyear v. Local Union No. 200 (1975), 42 Ohio St.2d 516 at 520, noted that arbitration would be undermined if a reviewing court could easily reverse an arbitration award. Arbitration of the modification clause, as of other contract clauses, can be effective only to the extent that the arbitrator's decision is conclusive on the parties, where the arbitration is properly and fairly conducted. Were the arbitrator's decision to be subject to reversal because a reviewing court disagreed with findings of fact or with an interpretation of the contract, arbitration would become only an added proceeding and expense prior to final judicial determination. This would defeat the bargain made by the parties and would defeat as well the strong public policy favoring private settlement of grievance disputes arising from collective bargaining agreements. These policy reasons favoring arbitration decisions were reiterated by the court in Findlay City School Dist. Bd. of Edn. - 5 - v. Findlay Edn. Assn. (1990), 49 Ohio St.3d 129. The court stated as follows: *** As this court has noted on previous occasion, " '[i]t is the policy of the law to favor and encourage arbitration and every reasonable intendment will be indulged to give effect to such proceedings and to favor the regularity and integrity of the arbitrator's acts. ' ***" (Citation omitted.) Mahoning Cty. Bd. of Mental Retardation v. Mahoning Cty. TMR Edn. Assn. (1986), 22 Ohio St.3d 80, 84 22 OBR 95, 98, 488 N.E.2d 872, 875. Arbitration provides the parties with an alternate method of dispute resolution. "It provides the parties with a relatively speedy and inexpensive method of conflict resolution and has the additional advantage of unburdening crowded court dockets." Id. at 83, 22 OBR at 98, 488 N.E.2d at 875. Accordingly, this court has placed certain restrictions on a reviewing court's authority to vacate an arbitrator's award pursuant to R.C.2711.10(D), because the integrity and purposes of the arbitration system of dispute resolution would be seriously undermined in the absence of such restrictions. Additionally, following a strong line of authority, this court recently held that arbitration awards are presumed valid and an appellate court may not substitute its interpretation of a contract provision for that of an arbitrator selected by the parties. Marra Constructors v. Cleveland Metro. (1993), 82 Ohio App.3d 557. Emphasizing the degree to which this validity is to be presumed, the court asserted that the parties to an arbitration contract "agree to accept the result regardless of its legal or factual accuracy." Id. at 562. The circumstances under which a reviewing court may vacate an arbitrator's decision are limited by R.C. 2711.10: 2711.10 Court may vacate award. In any of the following cases, the court of common pleas shall make an order vacating the award upon the application of any party to the arbitration if: - 6 - (A) The award was procured by corruption, fraud, or undue means. (B) There was evidence partiality or corruption on the part of the arbitrators, or any of them. (C) The arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced. (D) The arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. If an award is vacated and the time within which the agreement required the award to be made has not expired, the court may direct a rehearing by the arbitrators. In the case sub judice, appellant makes no claim that the arbitration decision should be vacated pursuant to the first three divisions of R.C. 2711.10. Our analysis is thereby limited to whether the arbitration award should be vacated pursuant to R.C. 2711.10(D), which allows awards to be vacated if the arbitrators exceeded their power. The Ohio Supreme Court has held that arbitrators do not exceed their power so long as the award draws its essence from the agreement. Goodyear, supra. The Supreme Court clarified the analysis of this process as follows: An arbitrator's award draws its essence from a collective bargaining agreement when there is a rational nexus between the agreement and the award, and where the award is not arbitrary, capricious or unlawful. Mahoning County Bd., supra, at 84. In this case, there was a rational nexus between the contract and the award. The record reveals a major reason to deny Kasten the contingent fee under the contract. One - 7 - criterion of the contract was that the business have over two million dollars in sales. It is uncontroverted that Kove castings did not satisfy this criterion, because it had sales only between $1.3 million and $1.6 million. This major requirement of the contract not having been met, it is unnecessary to consider the other disputed provisions. Absent any evidence that the arbitrator exceeded his authority, we must affirm the arbitrator's decision. - 8 - It is ordered that appellee recover of appellant his costs herein taxed. The court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court directing the common pleas court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. DYKE, P.J., and NAHRA, J., CONCUR. DIANE KARPINSKI JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time it will become the judgment and .