Louisville & Jefferson County Metropolitan Sewer District v. T&C Contracting, Inc.

The Supreme Court reversed the decision of the Court of Appeals applying provisions of the Kentucky Fairness in Construction Act (KFCA) to void an entire dispute resolution process contained in the parties’ sewer construction contract, reinstated the summary judgment entered in the trial court, and affirmed the Court of Appeals on all remaining issues.

Plaintiff hired Defendant for its sewer project for approximately $2.3 million. The contract contained a provision detailing the process for dispute resolution (Article 13). When Defendant did not substantially complete the project by the scheduled deadline, Plaintiff brought this action. The Court of Appeals deemed the whole of Article 13 void and unenforceable. The Supreme Court held (1) the trial court correctly granted summary judgment in favor of Plaintiff on Defendant’s claim for extra work, and the court of appeals erred in applying certain portions of the KFCA to render null and void the entirety of Article 13; (2) the trial court correctly handled Plaintiff’s liquidated damages claim; and (3) the trial court did not err in denying Plaintiff’s motions for directed verdict and judgment notwithstanding the verdict on one of Plaintiff’s breach of contract claims.