ROMAC, INC. v. COMMONWEALTH OF KENTUCKY, FINANCE AND ADMINISTRATION CABINET; AND CREDIT GENERAL INSURANCE COMPANY, INC.
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RENDERED: August 20, 1999; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-001357-MR
ROMAC, INC.
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE ROGER L. CRITTENDEN, JUDGE
ACTION NO. 1997-CI-000289
v.
COMMONWEALTH OF KENTUCKY,
FINANCE AND ADMINISTRATION CABINET;
AND CREDIT GENERAL INSURANCE COMPANY, INC.
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BUCKINGHAM, HUDDLESTON, AND KNOPF, JUDGES.
KNOPF, JUDGE:
This is an appeal from a circuit court order and
judgment enforcing a settlement agreement.
Finding that the
trial court acted within its discretion in denying interest from
the date of settlement, we affirm.
A brief discussion of the underlying facts of this
action is necessary to a consideration of the merits of the
appeal.
In March 1996, American Resources, Inc. (ARI), entered
into a contract with the Commonwealth of Kentucky to perform
construction and renovation work at the Central State Hospital in
Jefferson County, Kentucky.
The appellee, Credit General
Insurance Company, Inc. (Credit General), provided the
performance bond for ARI.
ARI later defaulted on its performance
obligations under the contract.
On August 15, 1996, Credit
General entered into a subcontract with the appellant, Romac,
Inc., in which Romac agreed to furnish certain labor and
materials for asbestos abatement work on the project.
Subsequently, a dispute arose between the parties
concerning payments owed to Romac.
On December 18, 1996, Romac
filed a mechanics and materialmen’s lien in the amount of
$155,091.57 against Credit General’s contract proceeds then held
by the Commonwealth.
Credit General protested the lien by letter
dated January 21, 1997.
On February 20, 1997, Romac filed an
action in Franklin Circuit Court against the Commonwealth and
Credit General seeking to enforce its lien.
In early April 1997, Romac and Credit General, through
counsel, began to discuss settlement.
Following the exchange of
correspondence, Credit General agreed to settle the dispute for
$162,942.38.
The proposed agreed order accompanying the
settlement stipulated that this amount would be paid by a direct
payment from Credit General to Romac in the amount of $13,667.28,
and by the Commonwealth’s dispersal to Romac of $149,275.10 from
Credit General’s contract proceeds.
Shortly after this agreement
was made, Romac argued that it was entitled to additional
interest from Credit General due to delay in receiving payment.
In response, Credit General asserted that the agreement required
Romac to tender the agreed order to the trial court to effectuate
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the settlement, and therefore any delay was caused by Romac’s
failure to have the agreed order entered in court.
Credit General then moved the trial court to find as a
matter of law that the case had been settled.
existence of a settlement agreement.
Romac denied the
In the alternative, Romac
contended that the settlement agreement was entered into on April
8, 1997, and that Credit General’s failure to tender payment
within a reasonable time from that date constituted a breach of
the agreement.
Thus, Romac asserted that it was entitled to
interest on the settlement from April 8, 1997, until the date of
judgment.
Following briefing by the parties and consideration of
the evidence, the trial court sustained Credit General’s motion
to enforce the settlement agreement.
The court found that Romac
and Credit General entered into a valid settlement agreement on
May 15, 1997.
The trial court further found that the agreement
contemplated that Romac would have the proposed agreed order
entered by the court so that the funds held by the Commonwealth
could be dispersed.
Because Romac failed to file the agreed
order, the trial court concluded that it was not entitled to
interest from the date of settlement.
Romac now appeals.1
On appeal, Romac admits that it had a valid settlement
agreement with Credit General.
Instead, Romac argues that the
trial court erred in finding that the date of the settlement
1
The Finance and Administration Cabinet released
$149,275.10 from Credit General’s contract proceeds to Romac
pursuant to the judgment enforcing the settlement agreement.
Although the Cabinet remains a nominal party to this appeal,
Romac does not seek any relief against it.
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agreement was May 15, 1997.
Romac further asserts that the trial
court erred in denying it interest on the settlement from April
8, 1997.
We disagree with Romac on both points.
As to the date of the settlement, the trial court found
as follows:
On April 8, 1997, counsel for Plaintiff
[Romac] delivered a handwritten note to the
Defendant’s [Credit General] counsel
outlining the terms of a proposed settlement
to the dispute. Counsel for Plaintiff
followed this handwritten note with a
proposed agreed order to Counsel for the
Defendant which apparently was transmitted on
May 7, 1997. Counsel for the Defendant
filled in the blanks of the Order reflecting
the amount to be paid to the Plaintiff and
returned the copy to Counsel for the
Plaintiff.
Counsel for the Plaintiff did not agree
with the numbers provided by the Defendant
and on May 15, 1997, submitted another
“Proposed Agreed Order Settled” to Counsel
for the Defendant with the amounts required
to settle the matter.
On May 16, 1997,
Counsel for the Defendant communicated the
Defendant’s agreement to settle the action
upon the terms demanded by the Plaintiff. At
this point in time, it appears that Counsel
for the Defendant expected that Counsel for
the Plaintiff would transmit an agreed order
to Defendant’s Counsel in Frankfort to be
entered by the Court pursuant to its May 9,
1997, letter to Counsel for Plaintiff.
For whatever reason this did not happen
and on May 28, 1997, Counsel for the
Plaintiff sent another letter to Counsel for
the Defendant demanding an additional amount
for interest because of delays. On May 29,
1997, Counsel for the Defendant communicated
to the Plaintiff that it was the Defendant’s
position that the matter had been settled and
would not enter into additional payments.
The trial court’s factual findings are binding upon
this Court unless they are clearly erroneous.
CR 52.01.
Based
upon these findings, we agree with the trial court that Romac and
Credit General did not reach a meeting of the minds until May 15,
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1997.
Since there was an offer and acceptance of the April 8
settlement proposal, either party might have sought enforcement
of that agreement.
However, both parties demonstrated by their
conduct that they intended for the later settlement agreement to
supersede the earlier one.
Having rejected Credit General’s
first response to the settlement agreement, and accepting the
second response, Romac will not be allowed to obtain enforcement
of the first agreement.
Romac also asserts that the trial court erred in
denying interest on the settlement from the date of the
settlement agreement.
We agree with Romac that since the
settlement agreement fixed no time for performance, the law will
imply a reasonable time.
Withers v. Commonwealth, Department of
Transportation, Ky. App., 656 S.W.2d 747, 749 (1983).
However,
the trial court specifically found that the settlement agreement
contemplated the entry of an agreed order to pay the settlement.
Although this point was vigorously disputed, we find substantial
evidence of record to support the trial court’s finding in this
regard.
It is less clear whether the parties understood who
would be responsible for tendering the agreed order and judgment.
In any case, the settlement agreement was not payable until the
entry of an order directing the Commonwealth to release the
contract proceeds to Romac.
Under these circumstances, the trial
court acted within its discretion in denying prejudgment interest
to Romac.
See, Nucor Corporation v. General Electric Co., Ky.,
812 S.W.2d 136, 144 (1991).
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Accordingly, the judgment of the Franklin Circuit Court
is affirmed.
BUCKINGHAM, JUDGE, CONCURS.
HUDDLESTON, JUDGE, CONCURS WITH RESULT.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE
CREDIT GENERAL INSURANCE
COMPANY, INC.:
G. Bruce Stigger
Parker & O’Connell, PLLC
Louisville, Kentucky
James Dean Liebman
Frankfort, Kentucky
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