Date: 03-24-1998

Case Style: Thermal Equipment Sales, Inc. v. A & A Mechanical, Inc.

Case Number: 1994-CI-000557

Judge: William L. Graham

Court: Circuit Court, Franklin County, Kentucky

Plaintiff's Attorney: Gregory P. Parsons and Anne E. Gorham of Stites & Harbison, Lexington, Kentucky

Defendant's Attorney: Robert L. Ackerson and H. Edwin Bornstein, Ackerson, Mosley & Yann, Louisville, Kentucky

Description: Breach of contract - In 1992 the University of Kentucky (UK) undertook the renovation of some of the laboratory buildings on its Lexington campus. It awarded a contract for work on the laboratories' ventilation systems to A & A Mechanical, Inc. (A & A ), the appellant. A & A in turn subcontracted with the appellee, Thermal Equipment Sales, Inc. (TES), which was to supply A & A with duct work and other materials. In April 1994, TES sued A & A for the alleged breach of their agreement, and by order entered March 24, 1998,[fn1] the Franklin Circuit Court awarded TES damages and attorney fees. Insisting that the trial court misconstrued, factually and legally, its agreement with TES, A & A appeals. We affirm.

In January 1993, during the bidding phase of UK's renovation project, TES sent a price list to A & A that included, among other prices, a quote of fifty-three thousand seventy-four dollars ($53,074.00) plus tax, for approximately nineteen thousand pounds (19,000 lbs.) of PVC coated duct and fittings and five hundred pounds (500 lbs.) of PVC coated "radioisotope stack and fittings." Soon thereafter, in February 1993, UK awarded the ventilation contract to A & A, and A & A in turn sent a purchase order to TES that provided in part as follows:

Provide per plans, specs, addenda 1 and 2 and alternates 1 and 2 all round PVC coated ductwork and fittings including the radioisotope stack and fittings as found in but not exclusively in spec section 15810 for a total lump sum price of 53,074. [plus] Tax 3,184. [total] 56,238.

A sales representative of TES and A & A's project manager then met to discuss ordering and shipping details. They agreed that A & A would order specific sections of duct work as its needs became known, but would attempt to allow sufficient lead time for manufacturing. During the course of their discussion, the two (2) men realized that each had based his estimate of the quantity of duct work that would be required on plans prepared by UK's engineers and that the estimates were in close agreement. Both were aware, moreover, that this was a rehabilitation project and so was certain to require some deviation from the plans in order to accommodate pipes, wiring, and other fixtures the plans did not represent.

A & A ordered duct work in May, July, and October 1993. TES passed the orders along to its manufacturer, who shipped the goods directly to A & A and billed TES. TES apparently then billed A & A. Following completion of the second order and shipment, A & A had been billed and had payed slightly less than forty thousand dollars ($40,000.00). In the course of sending A & A's third order to the manufacturer, TES realized that the order would exhaust and slightly exceed the fifty-six thousand dollar ($56,000.00) total price provided for in the purchase agreement. Concerned, TES contacted A & A to find out how near completion the project was. A & A then, in November and December 1993, prepared a fourth order listing its remaining requirements. That order, TES calculated, would add nearly nineteen thousand dollars ($19,000.00) to the estimated total cost of the duct work. TES thereupon informed A & A that it would not fill the fourth order without additional payment. In response, A & A insisted that its fourth order was contemplated by the original contract and demanded that TES supply the remaining goods. The ensuing stalemate culminated in A & A's obtaining duct work to complete the project from a third party and TES's filing suit.

Outcome: Judgment for plaintiff after bench trial for an unknown sum.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: Affirmed by the Court of Appeals of Kentucky on July 23, 1999.