Battletown Materials LLC v. Haydon Materials Battletown, LLC

Opinion

RENDERED: AUGUST 21, 2026; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2025-CA-1105-MR

BATTLETOWN MATERIALS LLC APPELLANT

APPEAL FROM MEADE CIRCUIT COURT v. HONORABLE KENNETH H. GOFF, II, JUDGE ACTION NO. 23-CI-00152

HAYDON MATERIALS BATTLETOWN, LLC APPELLEE

OPINION

REVERSING AND REMANDING

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BEFORE: THOMPSON, CHIEF JUDGE; MCNEILL AND MOYNAHAN, JUDGES.

THOMPSON, CHIEF JUDGE: Battletown Materials LLC (“Battletown”) appeals from an order granting summary judgment in favor of Haydon Materials Battletown, LLC (“Haydon”). The summary judgment found that there was an implied contractual term in a Supply Agreement which entitled Haydon to a payment of $676,577.46. Battletown argues that Haydon was entitled to no such payment or, in the alternative, summary judgment was premature. We agree with

Battletown that summary judgment was premature at this juncture; therefore, we reverse and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY Haydon and Kosmos Cement Company, a Kentucky general partnership (“KCC”), entered into a Supply Agreement on June 28, 2013. The Supply Agreement sets forth the terms under which Haydon agreed to sell, and KCC agreed to purchase, certain quantities of limestone aggregate material mined and produced by Haydon at a quarry owned by KCC and leased to Haydon. The term of the Supply Agreement and the quarry lease agreement were to expire on June 28, 2023.

Part of the Supply Agreement concerned a tier-based pricing system.

There was to be an annual adjustment to the price based on the “US PPI[1] for Finished Goods Less Food and Energy” as published by the Bureau of Labor Statistics. The annual PPI price adjustments were reciprocal and subject to two limitations: (1) if the PPI increase or decrease is between 2% and 4% in any year, the adjustment shall not exceed 2% (up or down) in that year; (2) if the PPI increase or decrease exceeds 4% in any year, the adjustment shall not exceed half that amount (up or down) in that year. In the event that the PPI increased or decreased by more than the limits set by the contract guardrails, any additional

1 Producer Price Index.

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increase or decrease would be “maintained on a cumulative basis” and “made up.” Specifically, adjustments that exceeded the reciprocal limitations were to be made up in the earliest available year when the adjustment was less than the 2% maximum. For example, if the price of limestone aggregate material increased by 5% based on the PPI, KCC would pay to Haydon 2.5% of that increase and the leftover 2.5% increase amount would be paid at a later date. If there was any leftover amount the following year, that would be added to the previous 2.5% leftover amount. These amounts would continue to accumulate until paid off.

On March 6, 2020, Kosmos Cement Company, LLC, a Delaware limited liability company (“Kosmos”), acquired certain assets of KCC, including the quarry. As part of the acquisition, KCC assigned the Supply Agreement to Kosmos. Prior to expiration of the Supply Agreement, Haydon and Kosmos discussed a potential extension and renewal, but no agreement was reached. Instead, Haydon and Kosmos chose to dissolve their business relationship by entering into an Asset Purchase and Separation Agreement (hereafter the “APSA”) dated January 31, 2023. The APSA set forth the terms under which the parties agreed to effectuate a termination of the Supply Agreement, the lease, and for transition of Haydon’s mining operations at the quarry to Kosmos. As part of the transition of mining operations, the APSA further provided for Kosmos to purchase from Haydon certain equipment, permits, inventory, and personal

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property. Certain contracts were also transferred and assigned to Kosmos under the APSA, and Kosmos assumed certain liabilities of Haydon. The APSA terms anticipated that the termination of the Supply Agreement would officially happen on March 31, 2023 (hereinafter the “Closing”).

Around one week before the Closing, Haydon alleged that it was owed an additional $676,577.462 under the Supply Agreement. This amount was the total amount of PPI price adjustment carryover owed to Haydon for the years 2022 and 2023. Neither the Supply Agreement nor the APSA indicated what was to become of any leftover PPI price adjustment amounts once the Supply Agreement expired or was terminated.

On March 30, 2023, one day before the Closing, Kosmos assigned its rights under the APSA to Battletown. In other words, after the Closing, Battletown was to take over the quarry and its operations. Not wanting to delay the Closing in order to litigate the PPI price adjustment issue, Haydon and Battletown entered into a Reservation of Rights Agreement (hereinafter the “ROR”). This allowed the Closing to go forward, but also allowed Haydon to reserve its rights to seek a declaration of rights regarding the PPI price adjustment issue and seek the additional amount it believed it was owed.

2 This amount changed a few times during the pendency of this lawsuit, but we will utilize the amount settled on by the trial court.

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On May 31, 2023, Haydon filed a complaint against Battletown seeking $676,577.46 in PPI price adjustment payments. Battletown answered and asserted various defenses.3 On November 15, 2023, Haydon moved for summary judgment. This motion argued, among other things, that there was an implied term in the Supply Agreement and APSA that allowed it to recover any outstanding PPI adjustment amounts when the Supply Agreement expired or was terminated. Battletown responded and argued that the court should only look at the language of the contracts and not consider evidence outside the four corners of the agreements. Battletown also requested time to conduct discovery if the court was inclined to consider extrinsic evidence.

On July 11, 2024, the trial court denied the motion for summary judgment. Haydon then filed a Kentucky Rules of Civil Procedure (CR) 56.04 motion for specificity requesting that the court indicate what material facts were still in dispute. Instead of entering an order describing what facts were still in dispute, the trial court entered an order vacating its previous order and granting summary judgment in favor of Haydon. The court held that there was an implied term in the contracts that allowed Haydon to recover the PPI price adjustment money owed to it once the Supply Agreement was terminated. Battletown then moved to vacate that order since it had not been able to address the reconsideration

3 Neither party has asked for a jury trial.

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issue. The trial court agreed and set aside the new order granting summary judgment. On January 17, 2025, Battletown filed a brief addressing all issues. On that same day, Battletown served upon Haydon a set of interrogatories, a request for production of documents, and a request for admissions in relation to the implied contractual term dispute.

On August 7, 2025, the court entered an order granting summary judgment in favor of Haydon. It once again held that there was an implied term in the Supply Agreement which allowed Haydon to collect the PPI price adjustment money owed to it once the Supply Agreement was terminated. The court also held that discovery was unnecessary because the issue before it was one of contract interpretation.4 This appeal followed.

STANDARD OF REVIEW

The standard of review on appeal when a trial court grants a motion for summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law. The trial court must view the evidence in the light most favorable to the nonmoving party, and summary judgment should be granted only if it appears impossible that the nonmoving party will be able to produce evidence at trial warranting a judgment in his favor. The moving party bears the initial burden of showing that no genuine issue of material fact exists, and then the burden shifts to the party opposing summary judgment to present at least

4 Haydon did not respond to the discovery requests before the order granting summary judgment was entered.

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some affirmative evidence showing that there is a genuine issue of material fact for trial. The trial court must examine the evidence, not to decide any issue of fact, but to discover if a real issue exists. The word “impossible,” as set forth in the standard for summary judgment, is meant to be used in a practical sense, not in an absolute sense. Because summary judgment involves only legal questions and the existence of any disputed material issues of fact, an appellate court need not defer to the trial court’s decision and will review the issue [de novo].

Blackstone Mining Co. v. Travelers Ins. Co., 351 S.W.3d 193, 198 (Ky. 2010), as modified on denial of reh’g (Nov. 23, 2011) (internal quotation marks and citations omitted).

ANALYSIS

Battletown argues that the trial court erred in granting summary judgment because it impermissibly added terms to the Supply Agreement and APSA. In the alternative, Battletown argues that it should have been allowed to conduct discovery because the issue of an implied contractual term is a factual issue and summary judgment would be premature. We agree with Battletown that there are genuine issues of material fact that still need to be examined and summary judgment was inappropriate.

The trial court held that there was an implied term in the Supply Agreement which allowed Haydon to collect the leftover PPI price adjustment amount once the Supply Agreement was terminated.

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The primary object in construing a contract . . . is to effectuate the intentions of the parties. Any contract or agreement must be construed as a whole, giving effect to all parts and every word in it if possible.

Where a contract is ambiguous or silent on a vital matter, a court may consider parol and extrinsic evidence involving the circumstances surrounding execution of the contract, the subject matter of the contract, the objects to be accomplished, and the conduct of the parties. Absent an ambiguity in the contract, the parties’ intentions must be discerned from the four corners of the instrument without resort to extrinsic evidence. A contract is ambiguous if a reasonable person would find it susceptible to different or inconsistent interpretations.

The fact that one party may have intended different results, however, is insufficient to construe a contract at variance with its plain and unambiguous terms.

Generally, the interpretation of a contract, including determining whether a contract is ambiguous, is a question of law for the courts and is subject to de novo review. However, once a court determines that a contract is ambiguous, areas of dispute concerning the extrinsic evidence are factual issues and construction of the contract become subject to resolution by the fact-finder.

Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 384-85 (Ky. App. 2002) (internal quotation marks and citations omitted).

It is generally recognized that if a contract is silent on a certain point, the law will imply an obligation to carry out the purpose for which the contract was made. Terms are implied in a contract to give the contract the effect the parties would have agreed on if they would have considered the possibility of subsequent events.

Old Republic Ins. Co. v. Ashley, 722 S.W.2d 55, 58 (Ky. App. 1986) (citations omitted).

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The Supply Agreement and the APSA are both silent as to whether Haydon can collect the money it believes it is owed. Haydon believes that creating a mechanism for collecting this money at the termination of the Supply Agreement was not contemplated by the parties when they entered the agreement, but it should be a part of the agreement as the money is indisputably owed. Battletown argues that the lack of a collection mechanism in the contracts means the right to collect any leftover funds at the termination of the Supply Agreement was waived. Pursuant to Cantrell Supply and Old Republic, an implied contractual term concerns the contracting parties’ intent, and once a court begins to examine intent and parol evidence, genuine issues of material fact come into play.

Here, the contracting parties’ intent is at issue; therefore, there are genuine issues of material fact that need to be addressed and summary judgment was inappropriate. This is especially so in this case since Battletown was not a party to the Supply Agreement or the APSA. Battletown cannot speak to the intentions of Haydon, KCC, or Kosmos. Because the contracts at issue were silent as to the collection of allegedly due PPI price adjustment amounts, the court must look to extrinsic evidence and the intent of the parties. This requires fact finding and summary judgment was erroneously granted at this time.

In addition, Battletown should be allowed to conduct discovery into this factual issue. Haydon argues that Battletown was untimely in seeking

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discovery because discovery was not propounded in the early stages of the lawsuit. We disagree. Haydon did not mention the implied contractual term issue in its complaint. The first time this issue was raised was in Haydon’s motion for summary judgment in November of 2023. Battletown’s response to that motion requested time to conduct discovery. Then, confusing procedural issues occurred with the motion for summary judgment being denied, then being granted, then being vacated, and then being granted again. Battletown then served discovery upon Haydon in January of 2025, before the final order granting summary judgment was entered. “Generally, a court should not grant summary judgment without affording the opposing party the opportunity to engage in sufficient discovery.” White v. Norton Healthcare, Inc., 435 S.W.3d 68, 75 (Ky. App. 2014). We believe under the circumstances of this case, Battletown’s request for time to conduct discovery was reasonable.

CONCLUSION

Based on the foregoing, we reverse and remand. Summary judgment was erroneously granted in this case because there are genuine issues of material fact that need to be addressed regarding the intent of the contracting parties regarding the leftover PPI price adjustment amounts and whether Haydon can collect them upon termination of the Supply Agreement.

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ALL CONCUR.

BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:

Daniel E. Hitchcock Benjamin L. Carter C. Williamson Mathews Lexington, Kentucky Lexington, Kentucky Darren L. Embry

Litchfield, Kentucky