Construction Law News Blog

Showing 4 posts by Denise H. McClelland.

Kentucky Adopts Economic Loss Doctrine but Specific Application to the Construction Industry Remains Unsettled

On June 16, 2011, Kentucky’s highest court officially adopted the economic loss doctrine, joining a majority of states that have done so.  To be sure, this doctrine is not pertinent only to the construction industry and is frequently thought to have the greatest impact on manufacturing.  The doctrine holds that when a product causes only damage to the product itself, with no personal injury or physical harm to other property, the owner of the product cannot bring tort claims but is limited to the recovery allowed under its contract with another party.  Negligence claims and strict liability claims are prohibited in this circumstance.  See Giddings & Lewis, Inc. v. Industrial Risk Insurers, __ S.W. 3d ___, 2011 WL 2436154 (Ky. 2011). 

In Giddings, an insurer of a diffuser cell system attempted to recover amounts paid to the owner of the product from the manufacturer of the system based on breach of contract, negligent strict liability, negligent misrepresentation and fraud by omission.  The court rejected the tort-based claims and damages, including economic loss for lost profits, costs for repair and replacement of the defective commercial product. Recovery was allowed only under the terms of the parties’ contract, which could include express or implied warranties negating certain types of damages.

Click here to read full publication. 

Kentucky Adopts Economic Loss Doctrine – Contractors’ Contract Remedies For Disputes In Construction Projects of Renewed Importance

On June 16, 2011, Kentucky’s highest court adopted the economic loss doctrine.  This doctrine holds that when a product causes only property damage, with no personal injury or physical harm, the owner of the product cannot bring tort claims and is limited to the recovery allowed under the contract between the parties.  Negligence claims and strict liability claims are prohibited.  See Giddings & Lewis, Inc. v. Industrial Risk Insurers, __ S.W. 3d ___, 2011 WL 2436154 (Ky. 2011).  In the Giddings’ case, an insurer of a diffuser cell system attempted to recover amounts paid to the owner of the product from the manufacturer of the system based on breach of contract, negligent strict liability, negligent misrepresentation and fraud by omission.  The court rejected the tort based claims and damages, including economic loss for lost profits, costs for repair and replacement of the defective commercial product. Recovery was allowed only under the terms of the parties’ contract, which could include express or implied warranties negating certain damages. Read More ›

Commencing Construction Projects in Kentucky Without Obtaining Stormwater Permits can be a Costly Proposition for Property Owners, Developers and Contractors

The 2009 stimulus package is expected to provide funds for a several large public and semi-public construction projects in Kentucky. For developers and contractors involved in those or other construction projects in the Commonwealth this year, however, the most significant “stimulus” they feel may be the “pain” in their pocketbooks if they commence their projects without first obtaining the necessary stormwater permits, or if they ignore their permit obligations during the construction of the project. Read More ›

Three Bills of Interest to Kentucky Contractors

As the Kentucky legislative session draws to a close, it appears that three new Kentucky laws will offer certain new protections for the Kentucky construction industry. Previously, contractors had no real means of monitoring a subcontractor’s worker’s compensation coverage. One new law now requires that the Kentucky Dept. of Workers’ claims notify all policy holders, including a general contractor, when a subcontractor’s workers compensation policy expires, or is terminated or cancelled. Read More ›

Ask the Blogger

Do you have a topic that you would like discussed in a future blog article? Please let us know. If you have a confidential question regarding a blog article, please feel free to contact the article's author directly, or let us know if you would like for someone to contact you directly.

Attorney Spotlight

C. Michael Shull, III focuses his practice on construction law and litigation. Michael's client representations range from casinos and ENR Top 400 contractors to design firms and subcontractors.

Top