Court Opinion

ID: 9396064
Source: CourtListenerOpinion
Date Created: 2023-05-19 14:06:20.910137+00
Date Added: 2024-06-11T17:19:13.888853
License: Public Domain

RENDERED: MAY 12, 2023; 10:00 A.M.
                        NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2022-CA-0380-MR

PAT DOYLE AND SHEILA DOYLE                                         APPELLANTS

                 APPEAL FROM OLDHAM CIRCUIT COURT
v.                HONORABLE JERRY CROSBY, II, JUDGE
                        ACTION NO. 19-CI-00390

BLAKE-MOORE CONSTRUCTION,
INC.                                                                  APPELLEE

                                   OPINION
                                  AFFIRMING

                                  ** ** ** ** **

BEFORE: CETRULO, JONES, AND MCNEILL, JUDGES.

MCNEILL, JUDGE: Pat and Sheila Doyle (the “Doyles”) appeal from a judgment

of the Oldham Circuit Court following a bench trial. Finding no error, we affirm.

            In 2018, the Doyles contacted Blake-Moore Construction, Inc.

(“BMC”) about building an unattached garage on their property. BMC agreed to

the project on a cost-plus management fee arrangement and produced a written
estimate for the project with itemized costs for permits, Builder’s Risk insurance,

Workers’ Compensation insurance, materials, and labor for subcontractors totaling

$72,530.08, including a 12% project management fee of $7,771.08. The Doyles

rejected the estimate, believing it to be high, and agreed BMC would perform some

of the construction with Mr. Doyle performing the rest. The details of this oral

agreement were not reduced to writing.1

              The project proceeded, although the parties disagreed on the nature of

their arrangement. The Doyles believed the project would be billed on a cost-plus

12% management fee basis as in the original estimate while BMC understood that

they were operating as a subcontractor with Mr. Doyle as the general contractor.

In this scenario, BMC would send invoices to the Doyles as they would when

acting as a subcontractor, including a fee for their services.

              On October 17, 2018, the Doyles paid a deposit of $8,500 and work

on the garage began. At some point, the Doyles entered a second contract with

BMC to construct a new deck on their house for $14,000. This agreement was

never committed to writing and there was no discussion of a cost-plus fee

arrangement. The Doyles made two more payments of $20,471.87 and

1
  While Mr. Doyle testified that he signed the original estimate and marked which items he
intended to perform, BMC denied the existence of a signed agreement and no such document
was entered into evidence.

                                             -2-
$21,033.90,2 respectively, over the course of the projects for a total of $50,005.77,

including $14,915.35 for the deck.

              By mid-January both projects were substantially3 completed. The

Doyles asked BMC for invoices and receipts from their contractors to verify the

total cost of the project, believing it to be a cost-plus arrangement. BMC provided

some invoices to the Doyles but not to their satisfaction and the parties’

relationship deteriorated, resulting in the Doyles removing BMC from the job.

Following termination, BMC completed a final accounting. Its total costs for both

projects were $44,580.28, which included $969.53 for fuel, Builder’s Risk

insurance, Workers’ Compensation insurance, and $5,580.00 for BMC labor.

              The Doyles dispute this accounting, primarily taking issue with

BMC’s charge for its own labor. By its own admission, BMC never discussed this

cost with the Doyles. Further, the 124 hours BMC charged for labor were an

estimate and there are no timesheets detailing these hours. According to the

Doyles’ calculation, they overpaid on the project by $7,011.42.

2
  The December 12, 2018 invoice was for $28,971.87 and the December 31, 2018 invoice was
for $21,033.90.

3
 Work yet to be completed on the garage included: installing the garage doors, insulation,
gutters, soffit, and downspouts, and brick work on the garage exterior; work remaining on the
deck included installing the deck railing and steps.

                                              -3-
                The Doyles filed a complaint in Oldham Circuit Court alleging breach

of contract; fraud/misrepresentation; violations of the Kentucky Consumer

Protection Act (“KCPA”), KRS4 367.170; unjust enrichment; bad faith; and

punitive damages.5 Following a bench trial, the trial court dismissed all claims.

This appeal followed.

                Our standard of review of a trial court’s findings of fact after a bench

trial is whether they are clearly erroneous. CR6 52.01. Factual findings are not

clearly erroneous if they are “supported by substantial evidence.” Gosney v.

Glenn, 163 S.W.3d 894, 898 (Ky. App. 2005) (citations omitted). “Substantial

evidence is evidence, when taken alone or in light of all the evidence, has

sufficient probative value to induce conviction in the mind of a reasonable person.”

Id. (citations omitted). The trial court’s conclusions of law are reviewed de novo.

Id.

                The Doyles argue the trial court erred in dismissing their claims,

specifically that its findings were clearly erroneous, and that it misapplied the law

to the facts. Fundamentally, the Doyles’ allegations of error all center around the

4
    Kentucky Revised Statutes.
5
 The Doyles filed an amended complaint on June 29, 2020, adding additional claims. The
original complaint stated claims for breach of contract and unjust enrichment while the amended
complaint added claims for fraud/misrepresentation, violations of the Kentucky Consumer
protection Act, bad faith, and punitive damages.
6
    Kentucky Rules of Civil Procedure.

                                              -4-
trial court’s construction of the parties’ agreement. The Doyles claim damages of

$7,411.32 based upon their belief the parties were operating under a cost-plus 12%

agreement. However, the trial court determined any such agreement ended when

the Doyles rejected BMC’s original estimate. This finding was supported by

substantial evidence.

               First, it is unclear the parties ever entered a cost-plus agreement.

Terry Moore, BMC’s owner,7 testified the parties never reached a cost-plus

agreement because the Doyles rejected their estimate. Had the Doyles accepted the

estimate, BMC would have created a written contract using actual bids from

suppliers and subcontractors. What is clear is that the original estimate contained a

12% management fee and that the Doyles rejected this estimate.

               Moore testified that once the Doyles rejected the estimate and asked

BMC to perform only parts of the project, it considered itself a subcontractor of the

Doyles. In this arrangement, it would submit invoices to the Doyles, like any other

subcontractor, including a fee for its services. No evidence of any updated price

agreement between the parties was ever introduced.

               In fact, the best evidence of the agreement existing between the

parties once the Doyles rejected the original estimate is the two invoices, tendered

to and paid by the Doyles, totaling $50.005.77, which represent the total cost the

7
    BMC is co-owned by Terry Moore and Bob Blakemore.

                                            -5-
Doyles paid for the garage and deck, including the alleged overpayment of

$7,411.32. These invoices contain itemized costs for the work BMC performed (or

subcontracted) and specifically include a 15% management fee. The Doyles paid

both invoices without objection, suggesting these numbers reflected the parties’

intentions, or at least were not disagreeable to the Doyles. Regardless, the Doyles

cannot now complain of prices which were clearly set forth in the invoices and

about which they did not object at the time. In sum, the trial court’s finding that

the parties did not have a cost-plus 12% agreement once the Doyles rejected

BMC’s original estimate was not clearly erroneous.

               Based upon this finding, the trial court held the Doyles could not

prove their claims for conversion, unjust enrichment, violation of the KCPA,

fraud/misrepresentation, bad faith, or punitive damages. The Doyles’ claims were

all premised on their understanding the parties were operating under a cost-plus

12% agreement. We agree with the trial court’s conclusion but will address each

claim briefly in turn.

               Turning first to the Doyles’ claim for conversion,8 the trial court

construed this claim as referring to their alleged overpayment of $7,411.32.

Conversion is “the wrongful exercise of dominion and control over property of

8
  We would note that neither the original nor the amended complaint state a claim for
conversion, however, because the trial court assumed and specifically considered the claim in its
judgment, we will address it on the merits.

                                               -6-
another[.]” State Auto. Mut. Ins. Co. v. Chrysler Credit Corp., 792 S.W.2d 626,

627 (Ky. App. 1990). The elements of the tort of conversion are: (1) the plaintiff

had legal title to the converted property; (2) the plaintiff had possession of the

property or the right to possess it at the time of the conversion; (3) the defendant

exercised dominion over the property in a manner which denied the plaintiff’s

rights to use and enjoy the property and which was to the defendant’s own use and

beneficial enjoyment; (4) the defendant intended to interfere with the plaintiff’s

possession; (5) the plaintiff made some demand for the property’s return which the

defendant refused; (6) the defendant’s act was the legal cause of the plaintiff’s loss

of the property; and (7) the plaintiff suffered damage by the loss of the property.

Jones v. Marquis Terminal, Inc., 454 S.W.3d 849, 853 (Ky. App. 2014) (quoting

Ky. Ass’n of Counties All Lines Fund Trust v. McClendon, 157 S.W.3d 626, 632

n.12 (Ky. 2005)).

             The Doyles’ conversion claim fails because they cannot prove

entitlement to the $7,411.32 they allege they overpaid. This alleged overpayment

stems from the Doyles’ belief the parties had a cost-plus 12% agreement.

However, as the trial court found, any such agreement ended when the Doyles

rejected the original estimate. As held above, this finding was supported by

substantial evidence. Therefore, the Doyles cannot prove the elements of

conversion and the trial court did not err in dismissing this claim.

                                          -7-
              To recover on a claim of unjust enrichment a plaintiff is required to

“prove three elements: (1) benefit conferred upon defendant at plaintiff’s expense;

(2) a resulting appreciation of benefit by defendant; and (3) inequitable retention of

[that] benefit without payment for its value.” Furlong Dev. Co. v. Georgetown-

Scott Cnty. Planning & Zoning Comm’n, 504 S.W.3d 34, 39-40 (Ky. 2016)

(internal quotation marks and citation omitted). We agree with the trial court that

the Doyles’ claim for unjust enrichment fails because they cannot prove an

inequitable overpayment to BMC. The Doyles’ alleged overpayment hinges on a

cost-plus 12% agreement, which the trial court determined did not exist.

Therefore, we find no error.

              Next, the KCPA prohibits “unfair, false, misleading, or deceptive acts

or practices in the conduct of any trade or business[.]” The trial court held the

Doyles’ payment of invoices clearly depicting BMC’s charges, including a 15%

management fee, was persuasive evidence against claims of unfair, false,

misleading, or deceptive billing practices. This finding was supported by

substantial evidence. Absent any evidence of unfair, false, misleading, or

deceptive acts, the Doyles’ claim for violations of the KCPA fails.9 The trial court

did not err in dismissing this claim.

9
 We question whether the KCPA applies to the facts of this case. See Joiner v. Tran & P
Properties, LLC, 526 S.W.3d 94, 99 (Ky. App. 2017) (citation omitted) (“[T]he KCPA does not

                                            -8-
               Fraud by misrepresentation requires proof that “(1) the defendant

made a material representation to the plaintiff; (2) the representation was false; (3)

the defendant knew the representation to be false or made it with reckless disregard

for its truth or falsity; (4) the defendant intended to induce the plaintiff to act upon

the misrepresentation; (5) the plaintiff reasonably relied upon the

misrepresentation; and (6) the misrepresentation caused injury to the plaintiff.”

Giddings & Lewis, Inc. v. Industrial Risk Insurers, 348 S.W.3d 729, 747 (Ky.

2011) (citations omitted). The trial court found no evidence of false or misleading

statements by BMC designed to induce the Doyles into hiring BMC to construct

the garage or deck. This finding was supported by substantial evidence.

               The Doyles’ fraud allegations all concern BMC’s purported

overcharging for its services, which, again, stems from the Doyles’ belief the

parties had a cost-plus 12% agreement. The trial court found no such agreement to

exist. Therefore, the trial court properly dismissed this claim.

               The trial court dismissed the Doyles’ bad faith claim, finding that

common law bad faith claims arise only under insurance contracts. While we

disagree with the trial court’s reasoning, we agree with its result. “Within every

contract, there is an implied covenant of good faith and fair dealing, and contracts

apply to single real estate transactions.”). However, because we affirm the trial court’s dismissal
of this claim on other grounds, we decline to pursue the issue.

                                                -9-
impose on the parties thereto a duty to do everything necessary to carry them out.”

Farmers Bank and Tr. Co. of Georgetown, Kentucky v. Willmott Hardwoods, Inc.,

171 S.W.3d 4, 11 (Ky. 2005) (citation omitted). “An implied covenant of good

faith and fair dealing does not prevent a party from exercising its contractual

rights.” Id. (citation omitted). “In order to show a violation of the implied

covenant of good faith and fair dealing . . . the party asserting the violation must

‘provide evidence sufficient to support a conclusion that the party alleged to have

acted in bad faith has engaged in some conduct that denied the benefit of the

bargain originally intended by the parties.’” PBI Bank, Inc. v. Signature Point

Condominiums LLC, 535 S.W.3d 700, 718 (Ky. App. 2016) (quoting 23 Williston

on Contracts § 63:22 (4th ed. 2004)). As with its other claims, the Doyles’ bad

faith claim primarily concerns its alleged overpayment for BMC’s services, which

is, again, based off a cost-plus 12% agreement. The Doyles’ appellate brief

claims:

             the bad faith and unfair dealing of BMC is obvious and
             actionable. Again, it would not present invoices to show
             actual costs, it never gave a final accounting, it
             overcharged Doyle, it unilaterally changed the
             management fee from 12 to 15%, it falsely billed 124
             hours of labor, it created magical accounting, and it
             would not complete the job according to schedule.

             Without a cost-plus 12% agreement, these allegations are not evidence

of bad faith. Without a cost-plus 12% agreement, there is no evidence BMC

                                         -10-
engaged in any conduct which denied the benefit of the bargain originally intended

by the parties. Again, as noted above, the best evidence of the parties’ intentions

after the Doyles rejected the original estimate is the invoices paid by the Doyles

without objection, invoices which included the alleged overpayment the Doyles

now seek to recover. The only claim not dependent on a cost-plus 12% agreement,

that BMC failed to complete the job according to schedule, also fails because, as

the trial court found, BMC stopped working at the Doyles’ request. This finding

was supported by substantial evidence. Therefore, the trial court did not err in

dismissing this claim.

             Concerning punitive damages, KRS 411.184(2) provides: “A plaintiff

shall recover punitive damages only upon proving, by clear and convincing

evidence, that the defendant from whom such damages are sought acted toward the

plaintiff with oppression, fraud or malice.” The trial court found insufficient

evidence of oppression, fraud, or malice to award punitive damages. The Doyles’

“arguments” in opposition are merely conclusory. As such, we find no error.

See Hadley v. Citizen Deposit Bank, 186 S.W.3d 754, 759 (Ky. App. 2005) (“It is

not our function as an appellate court to research and construct a party’s legal

arguments, and we decline to do so here.”).

             The Doyles additionally argue the trial court erred in failing to make

further findings, or to amend its findings. Following entry of the trial court’s order

                                         -11-
dismissing their claims, the Doyles moved pursuant to CR 52.02 for the court to

amend its findings or make additional findings in their favor. In their appellate

brief, they list numerous facts they allege the trial court failed to find. Once again,

the Doyles simply disagree with the trial court’s interpretation of the evidence.

However, “judging the credibility of witnesses and weighing evidence are tasks

within the exclusive province of the trial court.” Vinson v. Sorrell, 136 S.W.3d

465, 470 (Ky. 2004) (quoting Moore v. Asente, 110 S.W.3d 336, 354 (Ky. 2003)).

Without addressing them individually, these alleged missed findings are all

dependent upon a cost-plus 12% agreement. As the trial court found, this

agreement ended when the Doyles rejected the original estimate. We find no error.

               Lastly, the Doyles argue the trial court erred in failing to grant their

CR 50.02 motion for judgment notwithstanding the verdict and motion for a new

trial, CR 59.05 motion to alter, amend, or vacate, and CR 60.02 motion for relief

from the final judgment. The Doyles’ arguments, again, are based upon their

different interpretation of the parties’ agreement and are conclusory. We therefore

decline to address them and find no error.

               Based upon the foregoing, the judgment of the Oldham Circuit Court

is affirmed.

               ALL CONCUR.

                                           -12-
BRIEFS FOR APPELLANTS:     BRIEF FOR APPELLEE:

Gregg Y. Neal              Chelsey S. Brammell
Shelbyville, Kentucky      New Castle, Kentucky

                         -13-