Rodger Sparks v. Michael Rose

RENDERED: DECEMBER 15, 2023; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2023-CA-0062-MR
RODGER SPARKS APPELLANT
APPEAL FROM JACKSON CIRCUIT COURT
v. HONORABLE OSCAR G. HOUSE, JUDGE
ACTION NO. 19-CI-00140
MICHAEL ROSE APPELLEE
OPINION
REVERSING AND REMANDING
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BEFORE: THOMPSON, CHIEF JUDGE; ECKERLE AND TAYLOR, JUDGES.
THOMPSON, CHIEF JUDGE: Rodger Sparks (“Appellant”) appeals from a trial
order and judgment of the Jackson Circuit Court in favor of Michael Rose
(“Appellee”) in Appellant’s claim alleging breach of contract. Appellant argues
that the circuit court erred in finding that the parties did not enter into a contract,
when the parties acknowledged the existence of a contract. He also argues that the
court’s delay in ruling on the matter for 575 days improperly prejudiced the
proceedings against him, and that the court made a hasty ruling in retaliation on the
day after he filed a motion for a ruling. He seeks an opinion reversing the
judgment, remanding the matter for new proceedings, and appointing a new trial
judge. After careful review, we conclude that the parties’ mutual agreement as to
the existence of a contract, coupled with underlying facts including the exchange
of payment for the installation of custom-made kitchen cabinets, demonstrates the
existence of an implied contract. Accordingly, we reverse the judgment on appeal
and remand the matter to the Jackson Circuit Court.
FACTS AND PROCEDURAL HISTORY
According to Appellant, he is a cabinet maker in Jackson County,
Kentucky, who has operated a successful business for more than 30 years. He
alleged that in February 2019, Appellee asked him to build and install cabinets in
Appellee’s new home that was under construction. Appellant alleged that the
parties discussed the project, agreed on specifications, drew up plans for the
installation, and mutually agreed via text messages on an estimated cost of
$27,300.00.
According to Appellant, Appellee made payments of $10,000.00 and
$3,000.00 in April 2019, and July 2019, respectively. Appellant alleged that
Appellee then made changes to the plans which increased the cost by $11,700.00,
and undertook some demolition on his own that reduced the project cost by
$4,800.00. According to Appellant, this left a balance owing of $21,200.00.
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Appellant alleged that after the work was completed, he requested
payment of the balance. It was then that, according to Appellant, Appellee
complained about the workmanship of the cabinetry. Appellant alleged that he
agreed to fix anything to Appellee’s satisfaction, but Appellee refused and also
refused to pay the balance.
Thereafter, Appellant filed the instant action against Appellee in
Jackson Circuit Court alleging breach of contract. Appellee answered with a
general denial and filed a counterclaim alleging breach of contract, promissory
estoppel, and negligence. The matter proceeded to a bench trial on June 14, 2021,
where oral and documentary evidence was submitted, and the parties’ arguments
were heard. After the conclusion of the trial, the matter languished without action
for approximately 17 months. Appellant asserts that he was reluctant to file a
motion for a judgment for fear of angering Judge Oscar Gayle House.
On January 5, 2023, the circuit court entered a notice to dismiss for
lack of prosecution. In response, on January 9, 2023, Appellant filed a motion for
a judgment. The following day, the circuit court rendered the judgment now
before us. The court found in relevant part that Appellant had not proved the
existence of a contract between the parties, and therefore denied Appellant’s claim
for damages arising from Appellee’s alleged breach of contract. The court then
addressed Appellee’s counterclaims. Having found no contract to exist, the court
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denied Count 1 of the counterclaim alleging breach of contract. Count 2 of the
counterclaim set forth a claim of promissory estoppel. The court ruled in favor of
Appellee on this claim, upon finding that Appellant breached his promise to build
and install custom cabinetry in a workmanlike manner. Lastly, the court sustained
Count 3 of Appellee’s counterclaim alleging negligence. It found that there were
several workmanship errors in the construction and installation of the cabinets that
were due to the negligent workmanship of Appellant. The court determined that as
a proximate result of Appellant’s negligent workmanship, Appellee suffered injury
due to having to repair or replace the cabinets. The court awarded nothing to
Appellant on his claim of breach of contract, $10,600 to Appellee based on Counts
2 and 3 of Appellee’s counterclaim, and $3,000 in attorney fees to Appellee. This
appeal followed.1
ARGUMENTS AND ANALYSIS
Appellant’s primary argument on appeal is his contention that the
Jackson Circuit Court erred in finding that the parties did not enter into a contract
for the construction and installation of cabinets. Appellant argues that the parties
are in agreement that a contract exists; that the parties asserted the existence of a
1
Appellant failed to comply with Kentucky Rules of Appellate Procedure (“RAP”) 32(A)(3) and
(4), requiring ample supportive references to the record in the Statement of the Case and
Argument sections of the brief. Per RAP 10(B), we will consider his written argument as if it
were compliant with the rules.
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contract in the complaint and counterclaim; that Appellee acknowledged the
existence of a contract in his answers to interrogatories; and, that text messages
were entered into evidence which show the terms of the contract and the parties’
acceptance. Appellee has not filed an Appellee’s Brief nor a cross-appeal.
The circuit court correctly determined that the record does not contain
an express, written contract setting out the terms of the parties’ agreement.
However,
[a] contract may be inferred wholly or partly from such
conduct as justifies the promisee in understanding that
the promisor intended to make a promise. To constitute
such a contract there must, of course, be a mutual assent
by the parties – a meeting of minds – and also an
intentional manifestation of such assent. Such
manifestation may consist wholly or partly of acts, other
than written or spoken words.
Furtula v. University of Kentucky, 438 S.W.3d 303, 308 (Ky. 2014), as modified
(Jun. 23, 2014) (italics in original) (citation omitted). Further,
[w]ords are not the only medium of expression. Conduct
may often convey as clearly as words a promise or an
assent to a proposed promise, and where no particular
requirement of form is made by the law a condition of the
validity or enforceability of a contract, there is no
distinction in the effect of a promise whether it is
expressed (1) in writing, (2) orally, (3) in acts, or (4)
partly in one of these ways and partly in others.
Kellum v. Browning’s Adm’r, 231 Ky. 308, 314-15, 21 S.W.2d 459, 463 (1929)
(internal quotation marks and citation omitted).
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Though Appellant has not cited to the record in compliance with RAP
32(A)(3) and (4), our review of the record shows that: 1) Appellant’s complaint
asserts that the parties entered into a contract whereby Appellant would build and
install cabinetry for a certain payment; 2) Appellee’s answer states that the parties
entered into the contract; 3) Appellee’s answers to interrogatories state that the
parties entered into the contract; and, 4) text messages show the parties negotiating
the terms of the agreement, the price at $27,300.00, and Appellee stating “we are
in business on everything,” indicating his assent to the estimate.
Further, the parties agree, and the record so demonstrates, that the
parties made certain changes to the terms of the installation as the project
progressed, that Appellant installed the cabinetry, and that Appellee made a
payment – though the quality of the installation and the amount of payment are in
dispute. In addition, the circuit court found that Appellant, “promised to build and
install custom cabinetry in . . . [Appellee’s] newly constructed home in a
workmanlike manner,” and that Appellee “has paid a substantial amount of the
agreed upon price.”
Thus, the parties agree that they entered into a contract; the pleadings
and record evince their agreement; both parties performed under the agreement;
and, the circuit court found that Appellant promised to build and install the
cabinetry in a workmanlike manner and at an agreed upon price. Per Furtula and
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Kellum, supra, we conclude that the parties’ words and conduct, coupled with their
respective promises and performance based on those promises, demonstrate the
existence of a contract. The circuit court erred in failing to so find.
Having determined that a contract existed between the parties, we turn
to the circuit court’s disposition of Appellee’s counterclaim. Appellant has not
directly argued that the circuit court erred in sustaining Appellee’s counterclaims
of promissory estoppel and negligence, though it is implicit in his argument that
the parties entered into a contract. As a general rule, we will not address issues
unless they are preserved for appellate review and raised on appeal by the parties.
Mitchell v. Hadl, 816 S.W.2d 183, 185 (Ky. 1991). There are limited exceptions to
this rule, however, where the facts require the appellate court to address issues not
raised by the parties.
Ordinarily, this Court confines itself rather closely
to deciding only those issues which the parties present.
We take the view that counsel and the courts below have
sufficiently identified the issues; that we need not
redefine the question in the last stage of the litigation.
However, we are constrained by no rule of court or
constitutional provision to observe this procedure, and on
rare occasions, the facts mandate a departure from the
normal practice. When the facts reveal a fundamental
basis for decision not presented by the parties, it is our
duty to address the issue to avoid a misleading
application of the law.
Id. (emphasis added). Thus, having concluded that the circuit court erred in failing
to find the existence of a contract, we are duty-bound to address the whole of the
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circuit court’s judgment in order “to avoid a misleading application of the law.”
Id.In Kentucky, the measure of damages in a construction contract is
thoroughly discussed in Deskins v. Estep, 314 S.W.3d 300, 305 (Ky. App. 2010).
The seminal opinion cited by Deskins was written by Justice Palmore in State
Property and Buildings Commission v. H.W. Miller Construction Company, 385
S.W.2d 211 (Ky. 1964). Therein, Kentucky’s highest court states that “the real
measure of damages for defective performance of a construction contract is the
cost of remedying the defect, so long as it is reasonable.” Id. at 214 (citations
omitted). The Court went on to explain:
In simple terms, the measure of damages is the
amount that is reasonably necessary in order to make the
building conform to the requirements of the contract, but
in no event to exceed the difference, if any, between its
market value as it should have been constructed and its
market value as it was actually constructed.
....
[T]he damages should not exceed the sum that is
reasonably required in order to put the owner in the same
position in which he would have been had the contract
been performed.
Id.In the matter before us, the Jackson Circuit Court failed to address or
apply the proper measure of damages. On remand, the circuit court is directed to
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address the correct measure of damages per Deskins and H.W. Miller Construction
Company, as well as Appellee’s mitigation of damages, if any, which is discussed
in Deskins, 314 S.W.3d at 305.
Further, since a bench trial was conducted below, the circuit court was
required to make specific findings of fact and conclusions of law as required by
Kentucky Rules of Civil Procedure (“CR”) 52.01, from which the clearly
erroneous standard of review emanates. Factual findings are clearly erroneous if
unsupported by substantial evidence. Moore v. Asente, 110 S.W.3d 336, 354 (Ky.
2003). Substantial evidence is “some evidence of substance and relevant
consequence, having the fitness to induce conviction in the minds of reasonable
men.” Whittaker v. Rowland, 998 S.W.2d 479, 481-82 (Ky. 1999) (citation
omitted).
In the matter before us, the circuit court made only limited findings
which are not based on the evidence of record. This was likely because the court
waited more than seventeen months after the trial to draft them. We conclude that
the circuit court’s limited findings were not supported by substantial evidence per
Moore, supra.
In addition, we review the circuit court’s conclusions of law de novo.
Hoskins v. Beatty, 343 S.W.3d 639, 641 (Ky. App. 2011). The circuit court’s
judgment sustaining Appellee’s claim of promissory estoppel and negligence is not
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consistent with applicable law nor supported by the record, as the record clearly
reveals that the parties entered into a contract.
Appellant goes on to argue that the 575-day delay between the bench
trial and the judgment prejudiced the proceedings against him. In light of the
foregoing, this argument is moot.
Lastly, Appellant requests that we appoint a new trial judge to
consider the matter on remand. “A motion for recusal should be made
immediately upon discovery of the facts upon which the disqualification rests.
Otherwise, it will be waived.” Adkins v. Wrightway Readymix, LLC, 499 S.W.3d
286, 291 (Ky. App. 2016) (internal quotation marks and citations omitted).
Appellant does not direct our attention to any recusal motion made before the
circuit court, leaving us nothing to review on this issue.
CONCLUSION
For the foregoing reasons, we reverse the judgment of the Jackson
Circuit Court and remand the matter for a new trial based on our determination that
the parties entered into a contract. On remand, the circuit court shall 1) determine
if one or both parties breached the contract; 2) make specific findings per CR
52.01; and, 3) address the amount of damages, if any, including Appellee’s
mitigation of damages, based on Deskins and H.W. Miller Construction Company,
supra.
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ECKERLE, JUDGE, CONCURS.
TAYLOR, JUDGE, CONCURS AND FILES SEPARATE OPINION.
TAYLOR, JUDGE, CONCURRING: I concur totally with the thorough analysis
and disposition of this case by the Chief Judge. I write separately to emphasize
that upon remand for a new trial, the trial court must address the doctrine of
substantial performance. Under this long-standing doctrine, a builder, upon
substantial performance of a construction contract, is entitled to recovery of the
contract price notwithstanding that the work may have been defective and not
completed to the satisfaction of the homeowner. Meador v. Robinson, 263 S.W.2d
118 (Ky. 1953). As in this case, Meador looked to an oral construction contract.
Upon substantial performance by the builder, the remedy of the homeowner is a
claim for damages for the defective workmanship, which is the basis for the
counterclaim below. Id. See also Shreve v. Biggerstaff, 777 S.W.2d 616, 618 (Ky.
App. 1989).
Under the facts of this case, the substantial performance doctrine
would preclude a windfall for the homeowner, which appears to be the result of the
judgment rendered by the circuit court now before this Court. If on remand, the
evidence establishes that the oral construction contract was substantially performed
by the appellant, then the doctrine is applicable.
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BRIEF FOR APPELLANT: NO BRIEF FOR APPELLEE.
Marsha Taylor
McKee, Kentucky
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