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IN THE COURT OF APPEALS OF IOWA No. 2-275 / 11-1493 Filed June 27, 2012

ROBERT F. KAZIMOUR CO., KORLIN K. KAZIMOUR, KIMBERLY K. KAZIMOUR, JANIS L. KAZIMOUR, RFK TRANSPORTATION, INC., JANCO TRANSPORTATION, INC., PAN AMERICAN WORLD HIGHWAYS, LTD., ROBERT F. AND JANIS L. KAZIMOUR CHARITABLE LEAD TRUST, and RFK SYSTEMS, INC., Plaintiffs-Appellants, vs. WEST SIDE UNLIMITED CORPORATION, WEST SIDE TRANSPORT, INC., WEST SIDE BROKERAGE, INC., and DONALD VOGT, Defendants-Appellees. ________________________________________________________________ Appeal from the Iowa District Court for Linn County, Fae Hoover-Grinde, Judge. The plaintiffs appeal the district court's confirmation of an arbitration award. AFFIRMED.

Donald G. Thompson and Vernon P. Squires of Bradley & Riley, P.C., Cedar Rapids, for appellants. Kevin J. Visser and Robert S. Hatala of Simmons, Perrine, Moyer, Bergman, P.L.C., Cedar Rapids, for appellees.

Heard by Vaitheswaran, P.J., and Doyle and Danilson, JJ.

2 DOYLE, J. This is an appeal from the confirmation of an arbitration award. The

plaintiffs, Robert Kazimour, his wife (Janis), their two daughters (Korlin and Kimberly), and the Kazimours' various businesses, claim the damages awarded by the arbitrators in their suit against Donald Vogt and his companies, West Side Unlimited Corporation, West Side Transport, Inc., and West Side Brokerage, Inc., were inadequate. We disagree and affirm the judgment of the district court. I. Background Facts and Prior Proceedings. The largely undisputed facts giving rise to this appeal were set forth in the majority decision of the panel of arbitrators as follows: The case centers on the failed merger of two Iowa-based over-the-road dry-haul trucking and logistics companies, Robert F. Kazimour Company and West Side Unlimited Corporation. . . . . . . Beginning in January 2006 and continuing through June 2007, David F. McIrvin as president and CEO of West Side Unlimited negotiated a series of agreements between West Side and Robert F. Kazimour, then-president of Robert F. Kazimour Co., for the creation of two new entities known as RFK Transportation, L.L.C., and RFK Transportation Logistics, L.L.C. The transaction required a "series" of agreements because various Kazimour family members and entities owned pieces of the Robert F. Kazimour trucking and logistics businesses. The objective for the agreements was for the Kazimour family to contribute their existing trucking and logistics businesses in exchange for 50% ownership of the two new LLCs and for West Side Unlimited to contribute cash in amounts equal to the agreed upon values of the trucking and logistics businesses contributed by the Kazimour family [$50,000 for the trucking business and $100,000 for the logistics business]. After 42 months, West Side Unlimited Corporation was obligated to buy out the Kazimours' interests using a formula based on weighted earnings before interest and taxes (EBIT). West Side Transport, Inc., a wholly-owned division of West Side Unlimited, would manage the day-to-day affairs of the two LLCs during the 42month period. The devil, of course, always lurks in the details. . . . Despite a great deal of testimony and review of financial documents, the pertinent facts surrounding the collapse of the joint

3 enterprises in July 2008 are less than clear. Plainly it was not the orderly "winding up" that one might contemplate under either the parties' agreements or the Code of Iowa. . . . At least four events crucial to these proceedings appear uncontroverted: (1) RFK Transportation LLC, which had operated at a loss every month since its inception, ceased to exist in late-spring 2008; (2) the trailers (and, to the extent that any remained, the tractors) contributed to the joint enterprise by Robert F. Kazimour entities remained in the service of West Side and were returned, if at all, only after delays measuring in length from fourteen days to eight months; (3) no payments were made on the Kazimour entity leases after July 1, 2008; and (4) the RFK Transportation Logistics LLC operation that had been headquartered at the Kazimour facility and had shown operating profits throughout the year of its existence was moved, "lock, stock and barrel," at the direction of Don Vogt [owner of West Side Unlimited entities], to West Side and continued thereafter as part of West Side's brokerage enterprise. . . . The dispute between the parties is primarily over the financial fall-out from this disorderly winding up of the new limited liability companies. (Footnote omitted.) The Kazimours filed suit in federal court against Vogt and the West Side entities involved in the failed merger. West Side moved to compel arbitration based on the following identical provisions in the operating agreements for the limited liability companies: Any dispute between the Members that cannot be resolved by the Board of Directors shall be resolved by binding arbitration. . . . The arbitration shall be conducted pursuant to the rules of the American Arbitration Association or pursuant to such other rules and procedures that are mutually agreeable to the Members. . . . The Kazimours filed a consent to the motion, which stated: "Without conceding that the arbitration provisions do, in fact or law, compel arbitration of all disputes between all of the parties, Plaintiffs have agreed to arbitrate all such disputes. Plaintiffs and Defendants have negotiated and executed an Arbitration Submission Agreement." Based on the parties' agreement, the federal district

4 court dismissed the Kazimours' complaint and entered an order directing the parties "to binding arbitration over all of their claims." An arbitration hearing commenced in November 2009. After listening to more than a week of testimony and reviewing hundreds of pages of documents, two out of the three arbitrators decided to award the Kazimours damages totaling $378,330 for West Side's conduct in the demise of the trucking companies' merger. The dissenting arbitrator would have awarded the Kazimours

$4,291,690 in damages. The Kazimours filed an application to vacate the award under Iowa Code section 679A.12(1)(c) and (f) (2009), while West Side sought its confirmation under section 679A.11. The district court denied the Kazimours' application,

finding the arbitrators did not exceed their powers in making the award. The court found the damages awarded by the arbitrators were supported by substantial evidence and entered an order confirming the award. The Kazimours appeal. II. Scope and Standards of Review. This case is on appeal from Iowa Code section 679A.17(1)(c), which provides an appeal may be taken from an order granting confirmation of an arbitration award. Section 679A.17(2) directs us to review the appeal "in the manner and to the same extent as from orders or judgments in a civil action." Our review is accordingly for the correction of errors at law. Ales v. Anderson, Gabelmann, Lower & Whitlow, P.C., 728 N.W.2d 832, 839 (Iowa 2007).

5 III. Scope of Arbitration. The threshold question in reviewing an arbitration award is to determine whether the issue in dispute is one the parties had agreed to settle by arbitration. LCI, Inc. v. Chipman, 572 N.W.2d 158, 160 (Iowa 1997); see also Iowa Code

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