Justia Contracts Opinion SummariesArticles Posted in Kentucky Supreme Court
Bingham Greenebaum Doll, LLP v. Lawrence
The Supreme Court remanded this matter to the circuit court with directions to reinstate a default judgment granted to Bingham Greenebaum Doll, LLP and J. Richard Kiefer (collectively, Bingham) against Meredith Lawrence on its counterclaim to enforce a promissory note made by Lawrence in partial payment of attorney’s fees owed by Lawrence to Bingham, holding that the trial court erred in setting aside the default judgment and that the Court of Appeals erred in affirming that order.Specifically, the Court held that because Bingham’s counterclaim was a compulsory counterclaim to Lawrence’s action against Bingham for professional negligence and because the complaint called into question the validity of the promissory note at issue, Bingham’s counterclaim was justiciable even though it was filed three an a half months prior to the promissory note’s due date. View "Bingham Greenebaum Doll, LLP v. Lawrence" on Justia Law
Louisville & Jefferson County Metropolitan Sewer District v. T&C Contracting, Inc.
The Supreme Court reversed the decision of the Court of Appeals applying provisions of the Kentucky Fairness in Construction Act (KFCA) to void an entire dispute resolution process contained in the parties’ sewer construction contract, reinstated the summary judgment entered in the trial court, and affirmed the Court of Appeals on all remaining issues.Plaintiff hired Defendant for its sewer project for approximately $2.3 million. The contract contained a provision detailing the process for dispute resolution (Article 13). When Defendant did not substantially complete the project by the scheduled deadline, Plaintiff brought this action. The Court of Appeals deemed the whole of Article 13 void and unenforceable. The Supreme Court held (1) the trial court correctly granted summary judgment in favor of Plaintiff on Defendant’s claim for extra work, and the court of appeals erred in applying certain portions of the KFCA to render null and void the entirety of Article 13; (2) the trial court correctly handled Plaintiff’s liquidated damages claim; and (3) the trial court did not err in denying Plaintiff’s motions for directed verdict and judgment notwithstanding the verdict on one of Plaintiff’s breach of contract claims. View "Louisville & Jefferson County Metropolitan Sewer District v. T&C Contracting, Inc." on Justia Law
Maze v. Board of Directors for the Commonwealth Postsecondary Education Prepaid Tuition Trust Fund
At issue was various statutory amendments to the Kentucky Affordable Prepaid Tuition Fund (KAPT) contracts previously purchased by Appellants.The Court of Appeals reversed the judgment of the trial court concluding that the 2014 statutory changes affecting the 2003 contracts for prepaid college tuition entered into by Maze and the Board did not alter Appellants’ contracts, concluding that Appellants had expressly agreed to be bound by amendments to the contracts imposed by future statutory and regulatory changes. The Supreme Court reversed, holding (1) the KAPT contracts entered into by Appellants, and the underlying enabling statutes, did not authorize the contractual changes imposed by the retroactive application of the statutory amendments at issue in this case; and (2) the retroactive imposition of those amendments upon Appellants unlawfully impaired their contracts in violation of U.S. Const. art. I, 10 and Ky. Const. 19. View "Maze v. Board of Directors for the Commonwealth Postsecondary Education Prepaid Tuition Trust Fund" on Justia Law
Northern Kentucky Area Development District v. Snyder
The Supreme Court affirmed the decision of the court of appeals affirming the trial court’s order denying Employer’s motion to compel enforcement of the arbitration agreement between the parties in this case, holding that the arbitration agreement between Employer and Employee was unenforceable as a matter of law.Employer conditioned Employee’s continued employment on her agreement to arbitrate any dispute that may arise between them. The Supreme Court held that the arbitration agreement was unenforceable as a matter of state statutory law because (1) Ky. Rev. Stat. 336.700(2) prohibits employers from conditioning employment on an existing employee’s or prospective employee’s agreement to “waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit to which the employee or person seeking employment would otherwise be entitled”; and (2) the Federal Arbitration Act does not mandate a contrary holding because it does not preempt section 336.700(2) in this case. View "Northern Kentucky Area Development District v. Snyder" on Justia Law
Grimes v. GHSW Enterprises, LLC
The Supreme Court affirmed the judgment of the court of appeals granting a Ky. R. Civ. P. 65.09 motion filed by Respondent to compel arbitration, holding that the arbitration agreement between the parties was enforceable.The circuit court in this case issued an order invalidating the arbitration clause contained in the parties’ employment contract. Thereafter, Respondent a motion seeking interlocutory relief to compel arbitration. The court of appeals determined that even where the contract expressly allows Respondent to seek provisional injunctive remedies in a court pending arbitration but did not specifically provide the same right to Movant, the lack of reciprocal access to the courts for injunctive relief did not invalidate the arbitration agreement. The Supreme Court affirmed, holding that the arbitration agreement did not lack mutuality, was supported by adequate consideration, and was not unconscionable. View "Grimes v. GHSW Enterprises, LLC" on Justia Law
Pollitt v. Public Service Commission of Kentucky
The Supreme Court affirmed the decision of the Court of Appeals dissolving the stay of execution, and thus all collection activity, upon a judgment issued by the circuit court holding that Appellants failed to show “extraordinary cause.”The underlying merits of the circuit court’s case concerned the Public Service Commission’s enforcement of a previously-obtained money judgment that was affirmed by the Court of Appeals. Because the trial court’s order did not specify the procedural grounds for its decision to stay the case pending the resolution of an ongoing administrative case, the Supreme Court analyzed this case as an appeal from an order imposing a temporary injunction. The Court then denied Appellants’ motion to vacate the Court of Appeals’ order and affirmed the lower appellate court, holding that the judgment was valid and enforceable and that the equities did not weigh in Plaintiff’s favor. View "Pollitt v. Public Service Commission of Kentucky" on Justia Law
Nami Resources Co., LLC v. Asher Land & Mineral, Ltd.
The Supreme Court vacated in part the judgment of the Court of Appeals upholding a jury verdict against Appellants in the amount of $1,308,403 in compensatory damages and $2,686,000 in punitive damages, holding that the award of punitive damages, for what was essentially a breach of contract, was improper.The jury verdict arose from an action brought by Appellees asserting that Appellant violated its contractual obligations by fraudulently underpaying royalties owed under leases governing Appellants’ extraction of natural gas from Appellees’ land. Appellees brought its claim for unpaid royalties under breach of contract and fraudulent misrepresentation theories. The Supreme Court held (1) the award of punitive damages was improper; (2) the award of compensatory damages as determined by the trial court and jury was proper; and (3) Appellants’ post-verdict motions were timely made, no errors committed during trial warranted a new trial, and the trial court did not err in denying Appellees’ motion to amend the complaint. View "Nami Resources Co., LLC v. Asher Land & Mineral, Ltd." on Justia Law
Baumann Paper Co., Inc. v. Holland
The Supreme Court reversed the grant of summary judgment in favor of Defendant on Plaintiff’s complaint, holding that Plaintiff presented a genuine issue of material fact as to his breach of contract claim.Plaintiff brought claims against Defendant, his former employer, for breach of contract, quantum meruit, unjust enrichment, conversion, and fraud. The trial court granted Defendant’s motion for summary judgment on the issue of conversion and denied the motion as to the remaining issues. Upon reconsideration, the trial court vacated its original opinion and order, holding that Defendant was entitled to summary judgment as a matter of law on all claims. The court of appeals reversed. The Supreme Court affirmed and remanded this case to the trial court for further factual determinations regarding the alleged breach of contract, holding that the parties formed a valid contract, and there were sufficient genuine issues of material fact for Plaintiff to withstand a motion for summary judgment. View "Baumann Paper Co., Inc. v. Holland" on Justia Law
Martin/Elias Properties, LLC v. Acuity, a Mutual Insurance Co.
The Court of Appeals correctly applied the principles of Cincinnati Insurance Co. v. Motorist Mutual Insurance Co., 306 S.W.3d 69 (Ky. 2010), to hold that a contractor’s faulty workmanship on the basement and foundation of an existing structure, which resulted in extensive damage to the entire building, was not an accident triggering coverage as an occurrence under the contractor’s commercial general liability (CGL) insurance policy.The policy provided that the insurer (Insurer) would pay for property damage if it resulted from an “occurrence.” The trial court ruled that Plaintiff could recover from Insurer under the policy for the damage to the structure above the basement level because the damage was an unexpected and unintended consequence of the contractor’s faulty work on the basement. The court of appeals reversed, ruling that none of the structural damage qualified as an accident triggering coverage as an occurrence under Insurer’s CGL policy. The Supreme Court affirmed, holding that the trial court failed to focus on the proper elements from Cincinnati. View "Martin/Elias Properties, LLC v. Acuity, a Mutual Insurance Co." on Justia Law
Big Sandy Co., L.P. v. EQT Gathering, LLC
The Supreme Court reversed the judgment of the court of appeals reversing the circuit court’s entry of a declaratory judgment in favor of Big Sandy Company, LP, interpreting a pipeline easement agreement (the Agreement) in Big Sandy’s favor.In 2003, Big Sandy entered into the Agreement with Kentucky West Virginia Gas Company, LLC (KWVA), the predecessor in interest of EQT Gathering, LLC and EQT Production Company (collectively, EQT). EQT filed suit against Big Sandy requesting declaratory relief regarding the interpretation and scope of the Agreement. The trial court concluded that Big Sandy’s interpretation prevailed. The court of appeals reversed, holding that Big Sandy’s interpretation would be absurd and render much of the Agreement meaningless. The Supreme court reversed, holding that the trial court properly interpreted the Agreement. View "Big Sandy Co., L.P. v. EQT Gathering, LLC" on Justia Law