CLASSIC TRUSS WOOD COMPONENTS, INC. v. LANDIS LAKES PATIO HOMES, LLC;
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RENDERED: MARCH 23, 2007; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2005-CA-002604-MR
CLASSIC TRUSS WOOD COMPONENTS, INC.
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE MARTIN F. MCDONALD, JUDGE
ACTION NO. 02-CI-009798
LANDIS LAKES PATIO HOMES, LLC;
and STEPHEN T. COX BUILDER, INC.
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: VANMETER AND WINE, JUDGES; KNOPF,1 SENIOR JUDGE.
VANMETER, JUDGE: Classic Truss Wood Components, Inc. appeals from an order of
the Jefferson Circuit Court finding, as a matter of law, that Classic is liable to appellees
Landis Lakes Patio Homes, LLC, and Stephen T. Cox Builder, Inc., for damages arising
out of the breach of a contract. For the reasons stated hereafter, we affirm.
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Senior Judge William L. Knopf sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes
(KRS) 21.580.
The parties entered into a contract in April 2002 whereby Classic agreed to
provide the rough framing and the installation of a roof truss package for a residential
duplex. The final contract price was $69,061. The contract did not include any
references to the expected date of completion. Classic began work on the project on or
about May 20, 2002.
A dispute subsequently arose between the parties regarding the project.
After receiving payment of $58,426 from appellees, Classic obtained a mechanic’s lien
for the remainder of the contract price and then filed the underlying complaint seeking
the remaining amount which it claimed was due and payable. Appellees filed an answer
and counterclaim, asserting that Classic had failed to replace the “defective roof truss,”
and seeking compensation for damages including those resulting from Classic’s alleged
breach of contract.
Although Classic stated in the mechanic’s lien that it had supplied labor and
materials through July 31, it claimed during the May 2005 bench trial that its job was
substantially completed on June 14, and that a punch list was completed on June 19.
Classic asserted that all of its tasks were performed in a workmanlike manner.
Appellees, by contrast, asserted that Classic did not substantially complete
its work until late June or early July 2002, and that several major items listed on the
punch list were completed by independent subcontractors after Classic failed to do so.
Appellees also claimed that because Classic’s contractual obligations were not completed
in a workmanlike manner, there were multiple defects in the garage and interior floors,
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the walls, and the ceilings and rafters. Appellees introduced photographs and the
testimony of the independent subcontractors to support their claims.
The trial court granted appellees’ motion to amend the pleadings to
conform to the evidence and dismissed Classic’s complaint. Appellees were awarded the
$15,229.05 difference between the unpaid portion of the contract price and the amount
paid to the subcontractors to “correct the defects and complete the job.” This appeal
followed.
First, Classic contends that the court erred or abused its discretion by
permitting appellees to amend their pleadings and adduce evidence at trial concerning
issues not raised in their counterclaim. We disagree.
CR2 15.02 provides:
When issues not raised by the pleadings are tried by
express or implied consent of the parties, they shall be treated
in all respects as if they had been raised in the pleadings.
Such amendment of the pleading as may be necessary to
cause them to conform to the evidence and to raise these
issues may be made upon motion of any party at any time,
even after judgment; but failure so to amend does not affect
the result of the trial of these issues. If evidence is objected to
at the trial on the ground that it is not within the issues made
by the pleadings, the court may allow the pleadings to be
amended and shall do so freely when the presentation of the
merits of the action will be subserved thereby and the
objecting party fails to satisfy the court that admission of
such evidence would prejudice him in maintaining his action
or defense upon the merits. The court may grant a
continuance to enable the objecting party to meet such
evidence.
(Emphasis added.)
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Kentucky Rules of Civil Procedure.
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Here, Classic asserts that although appellees’ counterclaim alleged that the
roof truss was defective and unusable, the “alleged framing construction problems and
broken concrete drive way” were not raised in appellees’ pleadings and therefore should
not have been addressed during the trial. However, this claim must be viewed in light of
the responses appellees provided to Classic’s interrogatories some two years before the
trial. When asked in Interrogatory No. 4 to provide the facts supporting their claim of a
defective and unusable roof truss, appellees stated:
The roof truss system was not properly supportive, it swayed
back and forth, nor was it properly alined [sic] with the walls.
As a result, the installation of the house package was poor.
The walls were out of square, Classic Truss cracked cement
floor requiring its removal and repouring of same, and
defective studs.
As to Unit [A,] truss sagged one inch between great room and
entrance way, hallway one inch out of plumb, bow in soffit,
nailers over front door (both Unit A and Unit B), closet door
in master bedroom to bath, take header out of one side of
fireplace, add stud near pocket door in wall.
As to Unit B door to garage and laundry room insufficient
room for trim, no drywall nailer, right side stairway 45 degree
drywall nailer missing, bad stud on stairway wall, pocket door
improperly installed, stud missing in garage wall, plate and
stud missing in closet, most corners one-half inch to one inch
out of plumb, front entrance wall should be 2 X 6, tray ceiling
in master bedroom needed repair, floor in kitchen not flush,
extend wall in kitchen, take out wall in fireplace, closet door
in master bed and bath, door in garage needed to be moved
three inches, and add header lining closet next to pocket door.
In response to Interrogatory No. 5, appellees alleged that Classic had failed to replace the
defective roof trusses, and that Classic’s “defective work and the need to correct same”
had resulted in a 60-day delay in the delivery of possession to the buyers.
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Classic complains that the court erred by admitting evidence of any defects
relating to any part of the construction other than the roof truss, as such defects were
neither “raised by the pleadings” nor “tried by express or implied consent.” CR 15.02.
However, we must agree with the trial court that Classic was not surprised or prejudiced
by the evidence or the amended pleadings, as the issues and claims therein were “set forth
in sufficient notice in [appellees’] counterclaim and response to Interrogatories and all
issues were properly before the court” some two years prior to the trial. Given the record,
we cannot say that the court abused its discretion by permitting appellees to amend their
pleadings, or that it erred by allowing evidence relating to the amended pleadings.
Next, Classic contends that the trial court erred by admitting photographs
and various documents as evidence of appellees’ damages. We disagree.
Classic asserts that because the photographs showed alleged building
defects other than those that were part of the roof truss, they were inadmissible as
irrelevant. However, given our conclusion that the other alleged building defects were
properly before the court for its consideration, photographs of such defects clearly were
relevant and admissible.
Moreover, we are not persuaded by Classic’s assertion that the court erred
by allowing appellees, pursuant to the business records exception to the hearsay rule, to
introduce evidence of invoices provided to appellees by various subcontractors. KRE3
803(6) provides as follows:
Records of regularly conducted activity. A memorandum,
report, record, or data compilation, in any form, of acts,
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Kentucky Rules of Evidence.
5
events, conditions, opinions, or diagnoses, made at or near the
time by, or from information transmitted by, a person with
knowledge, if kept in the course of a regularly conducted
business activity, and if it was the regular practice of that
business activity to make the memorandum, report, record, or
data compilation, all as shown by the testimony of the
custodian or other qualified witness, unless the source of
information or the method or circumstances of preparation
indicate lack of trustworthiness. The term “business” as used
in this paragraph includes business, institution, association,
profession, occupation, and calling of every kind, whether or
not conducted for profit.
Here, appellees’ superintendent testified regarding the steps various
subcontractors took to repair and complete Classic’s allegedly defective work. Classic
objected to the introduction of the subcontractors’ invoices into evidence, as those
invoices were created by third parties rather than by appellees. However, we agree with
the trial court that the invoice records were admissible, pursuant to the business records
exception to the hearsay rule, to show the expenses appellees incurred in correcting the
errors and defects that allegedly resulted from Classic’s failure to properly complete the
terms of the parties’ contract. Clearly, the invoices collected by appellees from the
subcontractors constituted a “record, or data compilation” of “acts, events, conditions,
opinions, or diagnoses” that were “made at or near the time” of the work, as part of a
“course of a regularly conducted business activity,” by “or from information transmitted
by” subcontractors with knowledge of the work performed for appellees. KRE 803(6).
Further, after appellees received such invoices from the subcontractors, those invoices
evidently were kept as part of their regular business activity in working with the
subcontractors and clients. Cf. Robert G. Lawson, The Kentucky Evidence Law
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Handbook §§ 8.65(4) and 8.65(5) (4th ed. 2003). Although Classic certainly was entitled
to dispute whether some of the claimed expenses were accurate or related to the work it
had contracted to perform, such disputes went to the weight of the evidence rather than to
the admissibility of the invoices. Under these circumstances, the trial court did not err by
admitting the invoice records into evidence.
Next, we are not persuaded by Classic’s assertion that because it
substantially completed its work, the court erred by failing to award it the remainder of
the payment due under the contract. In Weil v. B.E. Buffaloe & Co., 251 Ky. 673, 65
S.W.2d 704, 706 (1933), Kentucky’s highest court described the applicable rule as being
that “substantial performance of a building contract will support a recovery of the entire
contract price, where it was undertaken to be performed in good faith; damages for
incompleteness or damages being allowed and deducted.” (Emphasis added.) See also
Regalbuto v. Grant, 473 S.W.2d 833, 839 (Ky. 1971). Given the evidence and the
court’s findings regarding damages for noncompletion and repairs, the court did not err
by failing to award Classic the remainder of the contract price.
Next, Classic contends that the trial court erred by admitting parol evidence
of the parties’ alleged discussions regarding the work’s anticipated date of completion.
We disagree.
Parol evidence may not be used to vary or contradict the terms of a written
contract which embodies the parties’ entire agreement. See, e.g., Stallard v. Adams, 312
Ky. 532, 228 S.W.2d 430, 431 (1950); Caudill v. Acton, 175 S.W.3d 617, 620 (Ky.App.
2004). However, parol evidence may be used to supplement a writing which is not an
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integrated or complete contract. See Kovacs v. Freeman, 957 S.W.2d 251, 256 (Ky.
1997). Moreover, if a contract is “ambiguous or silent on a vital matter, a court may
consider parol and extrinsic evidence involving the circumstances surrounding” the
contract’s execution, subject matter, and intended results, as well as regarding the parties’
conduct. Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 385 (Ky.App.
2002). As stated in KFC Corp. v. Darsam Corp., 543 F.Supp. 222, 224 (D.C.Ky. 1982),
there are three primary exceptions to the parol evidence rule: “that the evidence will show
the contract subject to condition precedent which did not occur; that the evidence
provides an additional portion of a contract which existed alongside the writing; or that
the evidence provides a term on which the contract is silent.”
Here, the record shows that on April 25, 2002, the parties executed a
contract which was drafted on Classic’s letterhead and listed eight separate construction
tasks. Also on Classic’s letterhead were a change order dated May 29, and a change
order/punch list dated June 26, 2002. Nowhere in any of these documents was there
either a reference to an anticipated date of completion, or any statement that the
document contained the parties’ entire agreement. As the parties’ written agreement was
entirely silent as to the expected time of completion, the trial court properly admitted
parol evidence on that subject.
Finally, Classic asserts that the trial court’s judgment was not supported by
substantial facts or law. We disagree. Having reviewed the record as well as the
arguments rejected above, we conclude that the trial court’s judgment for appellees was
supported by substantial evidence.
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The judgment of the Jefferson Circuit Court is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEES:
C. Mike Moulton
Elizabethtown, Kentucky
Harry Lee Meyer
Louisville, Kentucky
James C. Nicholson
Louisville, Kentucky
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