Nucor Corp. v. General Electric Co.

812 S.W.2d 136, 1991 WL 74040
CourtKentucky Supreme Court
DecidedMay 13, 1991
Docket89-SC-802-DG, 90-SC-208-DG, 90-SC-209-DG
StatusPublished
Cited by111 cases

This text of 812 S.W.2d 136 (Nucor Corp. v. General Electric Co.) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nucor Corp. v. General Electric Co., 812 S.W.2d 136, 1991 WL 74040 (Ky. 1991).

Opinions

LEIBSON, Justice.

This is a complex case with an even more complex history. On July 13,1977, a warehouse roof at General Electric Company’s Appliance Park in Louisville, Ky., partially collapsed causing substantial damage to the warehouse and numerous appliances stored in the warehouse. In August, less than a month later, another partial roof collapse occurred to the same warehouse resulting in further damage. Both failures occurred because the joist girders, or trusses, manufactured by Nucor Corporation and intended to support the roof, failed to do so. Through an error in the manufacturing process, the trusses were fabricated to only one half the design strength required by the specifications.

General Electric had employed Garst-Re-ceveur Construction Company as principal contractor to construct the warehouse. Garst-Receveur entered into a purchase order contract with Harman & Conway, Inc., the manufacturer’s representative for Nu-cor in the Louisville area, which required Harman & Conway to furnish “all steel joint and joist girders” for the roof support system. Harman & Conway then entered a standard purchase order with Nucor.

General Electric filed suit in February 1979, naming Nucor, Garst-Receveur, and Harman & Conway as defendants. The Complaint alleged theories of liability in negligence, breach of warranty and strict liability in tort for a defective product. All these alternative theories were based on a single premise: General Electric had contracted for the construction of the warehouse with Garst-Receveur who used defective joist girders manufactured by Nu-cor and supplied by Harman & Conway.

At the close of the proof, Nucor moved to dismiss General Electric’s breach of warranty claim as barred by the Uniform Commercial Code statute of limitations, KRS 355.2-725, which requires suit “commenced within four (4) years after the cause of action has accrued.” KRS 355.2-725(2) further specifies the “cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach.” This meant limitations had run on General Electric’s breach of warranty claim at the time of substantial completion of the structure, which was more than five years before suit was filed. Nucor had failed to perform according to the written contract specifications for the joist [139]*139girders and this contract and its breach were part of the evidence.

The joist girders admittedly failed to meet specifications and were defective; who was responsible for the loss and the amount of damages were in dispute until conclusion of the trial in January of 1987. At the close of the evidence the trial court: (1) dismissed the breach of warranty claims because the statute of limitations had run before suit was filed, but then permitted General Electric to amend to a breach of contract based on the same evidence; and then (2) directed a verdict for General Electric against Nucor, Garst-Receveur and Harman & Conway on the products liability theory and also (3) entered a directed verdict against Garst-Receveur for breach of contract. Later, the final judgment provided that Garst-Receveur and Harman & Conway were each entitled to indemnity against Nucor for the products liability recovery, but, as we will discuss, it is not clear whether it provided for indemnity for the separate judgment awarded for breach of contract.

The trial court decided there was a factual issue as to whether and to what extent General Electric was at fault and should share responsibility for the damages occasioned by the second roof collapse. This issue was submitted to the jury to decide based on findings of “actual knowledge as to the extent of the dangerous condition of the truss that failed on August 8, 1977” and whether General Electric “acted unreasonably in failing to remedy such dangerous condition.” The jury was instructed to apply the comparative fault principle, to “consider both the nature of the conduct of the parties and the extent of the causal relationship, if any, between the conduct and the damages claimed.” Under these Instructions the jury found the defendants 80% at fault and General Electric 20% at fault.

Under instructions covering compensatory damages which are no longer disputed, the jury awarded General Electric damages for “cost of repair for the warehouse structure,” and “difference between the fair market value of the appliances and other personal property” within the structure, “immediately before and immediately after the two subject roof failures,” of $505,438 for the first roof collapse and $285,775.86 for the second roof collapse, a total of $791,213.86. This was the amount of the final judgment for General Electric and its insurers under the breach of contract theory. The final judgment for General Electric and its insurers on the products liability claim was reduced by the 20% share of fault for the second roof collapse apportioned to General Electric by the jury, so that the final judgment on the products liability theory was $734,058.69, or $57,-155.17 less than the award for breach of contract. Under Paragraph Three of the Final Judgment the plaintiffs cannot recover for both tort and contract since both relate to the same subject matter. Presumably if the breach of contract award were to be set aside on appeal and the products liability award sustained, plaintiffs then recover the lesser amount assigned to the products liability recovery.

The principal issue at this level concerns a jury award of $1,526,084.73 in prejudgment interest, an issue presented to the jury in the second stage of a bifurcated procedure. To understand this issue we must review some history. As previously stated, General Electric’s cause of action accrued in July and August of 1977. General Electric filed suit in February 1979 and requested a trial date in August 1981. The first available trial date was April of 1983. On April 1, 1983, by Third Amended Complaint, General Electric added prejudgment interest to its claim for damages. Trial was then rescheduled and before the new trial date, in November 1983, the trial court dismissed the products liability claim holding that this theory was barred by KRS 413.135, a statute then providing that “no action” could be brought after the expiration of five years following substantial completion of any improvement to real property against persons engaged in its “design, planning, supervision, inspection or construction” for damages or injury caused by any deficiency. Trial of this case was postponed during the appeal of the summary judgment granted on this is[140]*140sue. This appeal was consolidated with another case involving the same issue, and the consolidated appeal was finally disposed of by an opinion of this Court reported as Tabler v. Wallace, Ky., 704 S.W.2d 179 (1986), holding KRS 413.135, the “no action” statute, unconstitutional in violation of the Ky. Const. § 59(5), which prohibits the General Assembly from enacting special legislation for the protection of a single individual or group to the exclusion of others similarly situated.

This case was then remanded to the trial court and trial was rescheduled once again for January 1987.

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Bluebook (online)
812 S.W.2d 136, 1991 WL 74040, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nucor-corp-v-general-electric-co-ky-1991.