JAMES D. MCNEVIN, and KIM MCNEVIN v. DEAN PEARMAN, d/b/a PEARMAN BROTHERS & SONS, and RICHARD PEARMAN
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RENDERED: April 30, 1999; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1997-CA-002285-MR
JAMES D. MCNEVIN, and
KIM MCNEVIN
v.
APPELLANTS
APPEAL FROM HARDIN CIRCUIT COURT
HONORABLE HUGH ROARK, JUDGE
ACTION NO. 95-CI-001467
DEAN PEARMAN, d/b/a PEARMAN
BROTHERS & SONS, and
RICHARD PEARMAN
APPELLEES
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
EMBERTON, KNOPF AND KNOX, JUDGES.
KNOX, JUDGE: Appellants, James and Kim McNevin (the McNevins),
appeal an order of the Hardin Circuit Court dismissing their
complaint with prejudice upon appellees’ (collectively “Pearman”)
motion for summary judgment.
Having reviewed the record and
applicable law, we reverse and remand.
In May 1994, the McNevins entered into a contract with
Dean Pearman for the construction of a new home.
The contract
called for a completion cost of $216,375.00, inclusive of
materials and labor completion cost.
Sometime shortly after
executing the contract, Pearman commenced construction on the
project.
Several months later, the parties began disputing with
regard to the McNevins’ dissatisfaction with the quality of
Pearman’s workmanship, and Pearman’s irritation with the
McNevins’ failure to finance the construction costs as such costs
were incurred.
In September or October 1994, Pearman ceased
performing under the contract.
The record does not adequately
reflect whether the termination of performance was the result of
a unilateral or bilateral breach of contract.
In January 1995, Pearman filed a mechanic’s lien upon
the McNevins’ property, stating a claim in the amount of
$34,200.00 for labor and materials expended prior to his having
ceased performance under the contract.
In turn, the McNevins
filed a complaint against Pearman alleging, inter alia, breach of
contract.
Pearman counterclaimed, similarly seeking damages for
breach of contract.
On April 11, 1997, Pearman moved the trial court for
summary judgment.
Suffice it to say that several hearings on the
summary judgment motion were scheduled, then rescheduled, until
Pearman renewed his motion on August 27, 1997.
The trial court
entered its order dismissing the McNevins’ complaint with
prejudice on September 4, 1997.
“The standard of review on appeal of a
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.” Furthermore, the trial court
must view the evidence in a light most
favorable to the party opposing the summary
judgment motion, and summary judgment should
be granted only if it “appears impossible for
the nonmoving party to produce evidence at
trial warranting a judgment in his favor.”
-2-
Leslie v. Cincinnati Sub-Zero Prod., Inc., Ky. App. 961 S.W.2d
799, 804 (1998) (citations omitted).
In reviewing the propriety
of a judgment as a matter of law there is no requirement that the
appellate court defer to the trial court since the factual
findings are not at issue.
Goldsmith v. Allied Bldg. Components,
Inc., Ky., 833 S.W.2d 378 (1992).
We believe the record is
entirely too denuded of sufficient facts in order to ascertain
whether any genuine issues even exist.
Principally, we believe
the issue of damages alone has been inadequately addressed by the
parties, hence, rendering the matter unripe for summary judgment.
Both below and on appeal, the McNevins argue the
contract was a “lock and key” arrangement whereby Pearman would
be paid the entire contract amount upon completion of
construction.
On the other hand, Pearman contends he was to
receive progress payments at particular stages of construction.
The contract itself is silent concerning any payment provision.
It is our opinion the nature of the contract payment terms gives
rise to an issue of material fact since it would assist in
identifying the breaching party.
Once the party in breach is
known, the issue of damages can be undertaken.
Pearman, citing Graves v. Winer, Ky., 351 S.W.2d 193
(1961), asserts the proper measure of damages is “the difference
between the contract price and the actual value of land.”
Application of Graves is misplaced.
Graves addresses the measure
of damages with respect to a breach of contract for the sale of
land.
Under the sale scenario “‘the quantum of damages is the
difference between the contract price and the actual value of the
-3-
land on the date of the breach, provided the actual value is less
than the contract price.’” Id. at 195. (Citations omitted).
Obviously, Graves is unsuitable to the matter sub judice.
Similarly, the McNevins’ position is that the measure
of damages is the difference between the value of the home as
constructed and the value it would have retained had it been
constructed according to the contract.
While Totten v. Stewart,
Ky., 286 S.W.2d 539 (1955), does state this general principle,
more is involved.
The effect of a building contract is to make
the contract price the measure of the value
of the work as done according to the terms.
That is the true measure of recovery by the
contractor less the damage sustained by a
failure to perform the contract, as by not
completing it or doing defective work. The
usual and often approved measure of the
owner’s damages where there has been a
failure of substantial performance of the
contract, as distinguished from defects that
are remedial at a reasonable cost without
doing the work over, is the difference
between the value of the building as
constructed and its value had it been
constructed according to the contract. This
same measure [has been] expressed . . . as
being the difference between the value of the
house the owner got and the house he should
have had.
Id. at 541-42. (Citations omitted).
In other words, under the doctrine of substantial
performance,
a builder, upon substantial performance, is
entitled to recovery of the contract price
notwithstanding the work may have been
defective or incomplete.
The remedy of the
owner is the recovery of damages on account
of incomplete or defective work.
-4-
Meador v. Robinson, Ky., 263 S.W.2d 118 (1953) (citation
omitted).
See also Shreve v. Biggerstaff, Ky. App., 777 S.W.2d
616, 618 (1989).
Conversely, the owner’s damages where there
has been a failure of substantial performance of the contract, as
distinguished from defects that are remedial at a reasonable cost
without doing the work over, is the difference between the value
of the building as constructed and its value had it been
constructed according to the contract terms.
Totten, 286 S.W.2d
at 541-42.
Our review of the record indicates there is
insufficient information to ascertain the status of the contract
at the time of breach or the actual circumstances giving rise
thereto.
These many unanswered facts render this action
inappropriate for summary judgment.
Accordingly, for the reasons above-stated, the judgment
of the Hardin Circuit Court is reversed and remanded.
ALL CONCUR.
BRIEF FOR APPELLANTS:
BRIEF FOR APPELLEES:
Nick L. Pearl
Radcliff, Kentucky
Douglas E. Miller
Radcliff, Kentucky
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