H&R MECHANICAL CONTRACTORS, INC. v. CODELL CONSTRUCTION COMPANY AND TAYLOR & WHITNEY ARCHITECTS, INC.
Annotate this Case
Download PDF
RENDERED:
DECEMBER 22, 2005; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2002-CA-000862-MR
H&R MECHANICAL CONTRACTORS, INC.
APPELLANT
APPEAL FROM KNOX CIRCUIT COURT
HONORABLE RODERICK MESSER, JUDGE
ACTION NO. 02-CI-00024
v.
CODELL CONSTRUCTION COMPANY AND
TAYLOR & WHITNEY ARCHITECTS, INC.
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
TAYLOR AND McANULTY, JUDGES; POTTER, SENIOR JUDGE. 1
TAYLOR, JUDGE:
H&R Mechanical Contractors, Inc. (H&R) brings
this appeal from an April 17, 2002, Order of the Knox Circuit
Court dismissing its complaint against Codell Construction
Company (Codell) and Taylor & Whitney Architects, Inc. (Taylor &
Whitney).
1
We affirm.
Senior Judge John W. Potter sitting as Special Judge by assignment of the
Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and
Kentucky Revised Statutes 21.580.
H&R is a plumbing contractor who is located in
Georgetown, Kentucky.
Codell is a construction management
company doing business in Winchester, Kentucky.
Whitney are architects from Lexington, Kentucky.
Taylor
&
In 1999, the
Knox County Hospital, located in Barbourville, entered into
separate cotracts with H&R, Codell, and Taylor & Whitney for the
construction of a new hospital.
On January 17, 2002, H&R filed a complaint against,
inter alios, Codell and Taylor & Whitney for the negligent
performance of their duties in the construction of the new
hospital, which allegedly caused damage to H&R.
Taylor &
Whitney filed an answer on February 20, 2002, and Codell filed a
motion to dismiss for failure to state a claim upon which relief
could be granted on March 4, 2002.
Thereafter, Taylor & Whitney
also filed a motion to dismiss or a motion for judgment on the
pleadings.
On April 17, 2002, the circuit court entered an
order dismissing the complaint against Codell and Taylor &
Whitney.
Therein, the court concluded:
The Plaintiff, Codell, and Taylor &
Whitney each entered into contracts with
Knox County Hospital to perform certain
duties towards the construction of a new
hospital. Each of the parties signed a
separate contract with Knox County Hospital.
It is undisputed that the Plaintiff did not
contract with Codell and that the Plaintiff
did not contract with Taylor & Whitney.
There is then no contractual relationship
between the Plaintiff and Codell or Taylor &
-2-
Whitney.
result of
caused by
Plaintiff
The Plaintiff contends that as a
delays in the construction project
Codell and Taylor & Whitney, the
suffered substantial damages.
Kentucky has adopted the economic loss
doctrine which prevents the recovery of tort
damages because of a relationship that was
created by contract. Real Estate Market,
Inc. v. Franz, 885 S.W.2d 921 (Ky. 1994).
The duty of Codell was to Knox County
Hospital by virtue of its contract with Knox
County Hospital. The duty of Taylor &
Whitney was to Knox County Hospital by
virtue of its contract with Knox County
Hospital. Niether Codell or Taylor &
Whitney has a duty to the Plaintiff and the
Plaintiff is not a third party beneficiary
to the contracts of Codell or Taylor &
Whitney with the hospital. The duties of
Codell and Taylor & Whitney were created by
contract and cannot be converted to tort
claims based on negligence. Guarantee
Electric Co. v. Big River Electric Corp.,
669 F. Supp. 1371 (W.D.Ky. 1987).
The Plaintiff points out that it is
very early in this litigation and that
dismissal is an extreme remedy.
Nevertheless, the basis of the Plaintiff’s
claim is clear. The Plaintiff’s claim is
that delays by Codell and Taylor & Whitney
caused the Plaintiff damages. The
Plaintiff’s claim is based on contractual
duties, yet there is no contract between the
Plaintiff and either Codell or Taylor &
Whitney. Based on the authorities cited
above, such claims are not well taken.
This appeal follows.
H&R contends the circuit court committed error by
dismissing its complaint against Codell and Taylor & Whitney.
Specifically, H&R contends the complaint states a cause of
-3-
action based upon the tort of negligent misrepresentation as set
forth in Restatement (Second) of Torts § 552 (1997) and recently
adopted by the Kentucky Supreme Court in Presnell Construction
Managers, Inc. v. EH Construction, LLC, 134 S.W.3d 575 (Ky.
2004). 2
Conversely, Codell and Taylor & Whitney argue that the
complaint does not state a claim for negligent misrepresentation
and the circuit court properly dismissed the complaint.
A motion to dismiss for failure to state a claim
should only be granted when it appears the pleading party would
not be entitled to relief upon any set of facts that could be
proved in support of the claim.
S.W.2d 479 (Ky. 1960).
Ewell v. Central City, 340
When construing a complaint, it is well-
established that the substance of the complaint should control.
First National Bank of Mayfield v. Gardner, 376 S.W.2d 311 (Ky.
1964).
In relevant part, H&R’s complaint stated as follows:
13. That through actions or inaction of the
Defendants significant delays occurred
during the building of the new hospital
facility.
14. That the Defendants owed a duty to H&R
when performing their respective functions
during the completion of the new hospital to
perform them in a skillful, careful and
diligent manner.
2
We observe that this appeal was held in abeyance pending final resolution of
Presnell Construction Managers, Inc. v. EH Construction, LLC, 134 S.W.3d 575
(Ky. 2004).
-4-
15. That from the time the Agreement was
executed the Defendants failed to properly
perform their duties, resulting in delays in
the construction project, all of which were
the approximate cause of damages suffered by
H&R.
16. That the delays negligently caused
through actions or inaction of the
Defendants resulted in $358,090.00 in
project delay costs to H&R, as of November
5, 2001.
17. That H&R is entitled to and now demands
a judgment in the amount of $242,647.90
against Knox County Hospital in payment for
completed work.
18. That H&R is entitled to and now demands
a judgment, jointly and severally, against
the Defendants for damages proximately
resulting from the negligent performance of
their duties during the construction of the
new Knox County Hospital facility.
The elements of the tort of negligent misrepresentation are as
follow:
(1) One who, in the course of his business,
profession or employment, or in any other
transaction in which he has a pecuniary
interest, supplies false information for the
guidance of others in their business
transactions, is subject to liability for
pecuniary loss caused to them by their
justifiable reliance upon the information,
if he fails to exercise reasonable care or
competence in obtaining or communicating the
information.
(2) Except as stated in Subsection
liability stated in Subsection (1)
limited to loss suffered
(a) by the person or one of a
group of persons for whose benefit
guidance he intends to supply the
-5-
(3), the
is
limited
and
information or knows that the recipient
intends to supply it; and
(b) through reliance upon it in a
transaction that he intends the information
to influence or knows that the recipient so
intends or in a substantially similar
transaction.
Restatement (Second) of Torts § 552 (1997).
Juxtaposing H&R’s complaint and the elements of the
tort of negligent misrepresentation, it is evident that the
complaint does not set forth a claim for negligent
misrepresentation.
To set forth a claim for negligent
misrepresentation, it is imperative to allege, in some form,
that false information was supplied or relied upon by a party.
The complaint broadly speaks in terms of duties and inactions on
the part of the “defendants.”
In fact, the complaint looks to
alleged negligent performance of duties, not negligent
misrepresentation.
The circuit court viewed the complaint as
merely setting forth a breach of contractual duties for which no
contract existed.
Upon the whole, we do not believe the
complaint can reasonably be construed as setting forth a claim
for negligent misrepresentation.
Accordingly, we conclude the
circuit court properly dismissed H&R’s complaint for failure to
state a claim upon which relief could be granted.
For the foregoing reasons, the Order of the Knox
Circuit Court is affirmed.
McANULTY, JUDGE, CONCURS.
-6-
POTTER, SENIOR JUDGE, DISSENTS AND FILES SEPARATE
OPINION.
POTTER, SENIOR JUDGE, DISSENTING.
I respectfully
dissent.
For this judge, part of the difficulty in resolving
this appeal stems from the failure of the Court in Presnell,
supra, to specify in detail the facts upon which the alleged
misrepresentation and negligent supervision claims were based.
The Court merely outlined the operative facts as follows:
[The Contractor], claiming exclusively
economic losses from [the Construction
Manager’s] failure to perform properly its
contractual duty to coordinate the Project,
filed a suit against [The Construction
Manager]in which it brought claims premised
upon [its] alleged negligent
misrepresentation and negligent supervision
of the Project.
Id. at 576, emphasis added.
When considering the Presnell case, the Court of
Appeals described the facts upon which the claims were based as
follows:
Work on the project proceeded with great
difficulty. There were numerous disputes
relating to the timing and quality of the
work and to the payment of outstanding
invoices. EH Construction, LLC v. Delor
Design Group, Inc., Appeal No. 1998-CA001476-MR (Ky.App. March 31, 2000).
Given these descriptions of the facts which existed in Presnell,
it is difficult to imagine how that case differs from the
-7-
present case in any material way.
The absence of concrete facts
supporting the alleged negligent misrepresentation and negligent
supervision claims in Presnell makes it difficult to readily
envision factual examples of the type of conduct in the typical
construction contract which would easily fall within the purview
of the Restatement Section 552.
Be that as it may, it is not
this court’s task to provide such scenarios; neither is our
function to determine whether H&R has actually sustained a loss
covered by the Restatement or whether it can presently
articulate such a claim.
Because the court below dismissed the complaint based
upon the pleadings, the issue is whether H&R’s pleadings were
sufficient to survive the motion to dismiss for failure to state
a claim.
As made clear by the opinion of the former Court of
Appeals in Spencer v. Woods, 282 S.W.2d 851, 852 (Ky. 1955):
A complaint should not be dismissed for
failure to state a claim unless it appears
to a certainty that the claimant is entitled
to no relief under any state of the facts
which could be proved in support of the
claim.
Civil Rule 8.01 requires that a complaint contain only a “short
and plain statement of the claim showing that the pleader is
entitled to relief” and a demand for judgment.
The purpose of
that rule was further clarified by the Court in Universal C.I.T
-8-
Credit Corp v. Bell High Coal Corp., 454 S.W.2d 706, 708 (Ky.
1970):
‘The true objective of a pleading stating a
claim is to give the opposing party fair
notice of the claimant’s right, the adverse
party’s wrong, and the type of relief to
which the claimant deems himself entitled.’
Clay, Kentucky Practice, CR 8.01, Comment 3.
The complaint filed by H&R includes the following
allegations:
8. That Codell was retained by Hospital to
serve in the capacity of Construction
Manager.
9. That Taylor and Whitney was retained by
Hospital to serve in the capacity of
Architects.
* * *
13. That through actions or inactions of the
Defendants significant delays occurred
during the building of the new hospital
facility.
14. That the Defendants owed a duty to H&R
when performing their respective functions
during the completion of the new hospital to
perform them in a skillful, careful and
diligent manner.
15. That from the time that Agreement was
executed the Defendants failed to properly
perform their duties....
As previously noted, this description of H&R’s claims appears to
be virtually identical to the facts described as supporting the
claims in Presnell.
Furthermore, I find no basis for concluding that the
trial court was misled by the pleading.
-9-
I cannot concur in the
majority’s statement that the trial court viewed the complaint
as merely setting forth a breach of contract claim.
When the
Circuit Court dismissed the complaint, it did so in part because
“Kentucky has adopted the economic loss doctrine which prevents
the recovery of tort damages because of a relationship that was
created by contract.... [The Defendants’ duties] were created by
contract and cannot be converted to tort claims based on
negligence.”
[Emphasis added.]
These statements make clear
that the circuit court viewed the complaint as asserting a
negligence claim in addition to the one based on contract.
It
also appears clear to this judge that the Circuit Court would
have ruled differently had Presnell been the law at the time the
complaint was dismissed.
Surely, one of the Defendants’ duties under the
contract was to supply correct information.
Therefore if they
negligently supplied incorrect information, they violated not
only their contractual duties, but the tort duties imposed by
Restatement Section 552, which is now the law of Kentucky.
Because I am convinced that the pleadings potentially
state a claim under the rationale of Presnell, I would reverse.
-10-
BRIEF AND ORAL ARGUMENT FOR
APPELLANT:
Peter E. Brown
Lexington, Kentucky
BRIEF AND ORAL ARGUMENT FOR
APPELLEE CODELL CONSTRUCTION
COMPANY:
W. Craig Robertson, III
WYATT, TARRANT & COMBS, LLP
Lexington, Kentucky
BRIEF AND ORAL ARGUMENT FOR
APPELLEE TAYLOR & WHITNEY
ARCHITECTS, INC.:
Thomas H. Glover
WEBB, HOSKINS, GLOVER &
THOMPSON, PSC
Lexington, Kentucky
-11-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
