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D. W. Wilburn, Inc. v. The Painting Co.

Court of Appeals of Kentucky

April 12, 2019

D. W. WILBURN, INC.; AND CONTINENTAL CASUALTY COMPANY APPELLANTS
v.
THE PAINTING COMPANY; OK INTERIORS CORPORATION; AND COMMONWEALTH OF KENTUCKY APPELLEESANDTHE PAINTING COMPANYCROSS-APPELLANT
v.
D.W. WILBURN, INC.;CONTINENTAL CASUALTY COMPANY;AND OK INTERIORS CORPORATIONCROSS-APPELLEES

          CROSS-APPEAL FROM FAYETTE CIRCUIT COURT HONORABLE PAMELA R. GOODWINE, JUDGE ACTION NO. 14-CI-01322

          BRIEFS FOR APPELLANTS/ CROSS APPELLEES: Michael R. Eaves Morgan H. Eaves Richmond, Kentucky

          BRIEF FOR APPELLEE/CROSS APPELLANT THE PAINTING COMPANY: Jon A. Woodall Brendan R. Yates Lexington, Kentucky, BRIEF FOR APPELLEE OK INTERIORS CORPORATION: Thomas M. Todd Lexington, Kentucky BRIEF FOR APPELLEE COMMONWEALTH OF KENTUCKY: Stephen E. Smith Aaron J. Silletto Prospect, Kentucky

          BEFORE: CLAYTON, CHIEF JUDGE; LAMBERT AND MAZE, JUDGES.

          OPINION AFFIRMING

          LAMBERT, JUDGE

         D. W. Wilburn, Inc. (DWW), and Continental Casualty Company (CCC) appeal from the Fayette Circuit Court's order awarding attorney fees, costs, and prejudgment interest to The Painting Company (TPC) and OK Interiors Corporation (OKI) for their claims on contract balances due; and from the order dismissing the appellants' claims against the Commonwealth of Kentucky. (Appeal No. 2017-CA-000968-MR). TPC cross-appeals from the portion of the order denying prejudgment interest on its claims for extra work. (Cross-Appeal No. 2017-CA-001131-MR). We affirm.

         The contractual relationships among the parties originated in 2009, when the Commonwealth of Kentucky awarded contracts for construction of the Eastern Kentucky State Hospital in Lexington, Kentucky. DWW became the managing contractor and construction manager for the project; its duties included coordinating subcontractors and suppliers and supervising the construction site. CCC was surety for the project. TPC and OKI were two of the subcontractors, with TPC under contract to do painting work for $902, 650.00, and OKI to do exterior insulation, interior framing, and drywall work for $7, 894, 590.00. The project reached substantial completion in May 2013.

         Suit was filed by TPC against DWW on April 9, 2014. DWW, joined by its surety CCC, filed as third-party plaintiffs for indemnity from the Commonwealth and from OKI (both of which DWW insisted had caused the extra work on TPC's behalf). OKI cross-claimed DWW and its surety (CCC) for payments due under its contract. The Commonwealth's motion for summary judgment was granted on August 30, 2016. The Fayette Circuit Court held a five-day bench trial in October and November 2016, and entered its opinion and order on April 19, 2017. All parties except the Commonwealth filed separate motions to alter, amend, or vacate the order. TPC and OKI, as prevailing parties, also sought attorney fees and costs. On June 1, 2017, the Fayette Circuit Court entered its final order in favor of TPC and OKI, but it denied prejudgment interest to TPC.

         DWW first argues that the circuit court erred by dismissing the Commonwealth as a party. DWW maintains that the project was not able to be completed properly since the delays and additional costs were incurred by the negligence of the Commonwealth's architect. Therefore, DWW contends, the Commonwealth was a necessary party to the litigation.

          We begin by stating the standard of review as it relates to summary judgments, namely:

The standard of review on appeal when a trial court grants a motion for summary judgment is "whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law." Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996); Kentucky Rules of Civil Procedure (CR) 56.03. "The trial court must view the evidence in the light most favorable to the nonmoving party, and summary judgment should be granted only if it appears impossible that the nonmoving party will be able to produce evidence at trial warranting a judgment in his favor." Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001), citing Steelvest v. Scansteel Service Center, Inc., 807 S.W.2d 476, 480-82 (Ky. 1991).
"The moving party bears the initial burden of showing that no genuine issue of material fact exists, and then the burden shifts to the party opposing summary judgment to present 'at least some affirmative evidence showing that there is a genuine issue of material fact for trial.'" Lewis, 56 S.W.3d at 436, citing Steelvest, 807 S.W.2d at 482. The trial court "must examine the evidence, not to decide any issue of fact, but to discover if a real issue exists." Steelvest, 807 S.W.2d at 480. The Kentucky Supreme Court has held that the word "impossible," as set forth in the standard for summary judgment, is meant to be "used in a practical sense, not in an absolute sense." Lewis, 56 S.W.3d at 436. "Because summary judgment involves only legal questions and the existence of any disputed material issues of fact, an appellate court need not defer to the trial court's decision and will review the issue de novo." Lewis at 436.

West v. KKI, LLC, 300 S.W.3d 184, 188 (Ky. App. 2008).

         As the Commonwealth correctly points out, it is immune, with only express statutory exceptions, from liability. Ky. Const. §231; see Withers v. University of Kentucky, 939 S.W.2d 340, 344 (Ky. 1997). We are aware of the Kentucky Supreme Court's recent ruling that "the General Assembly has specifically chosen to waive the defense of governmental immunity in all cases based upon written contracts with the Commonwealth." University of Louisville v. Rothstein, 532 S.W.3d 644, 651 (Ky. 2017). However, DWW's third-party claim against the Commonwealth was not based on breach of contract. Rather it was a claim for indemnity from the Commonwealth, for which there was no provision in the contract, nor has there been a statutory waiver of sovereign immunity. See Louisville Arena Auth., Inc. v. RAM Eng'g & Const., Inc., 415 S.W.3d 671, 681 (Ky. App. 2013) ("claims for monetary ...


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