This month we start with a decision from the Fifth District Court of Appeals of Ohio where the issue was whether a general contractor violated the Ohio Consumer Sales Practices Act when it built a home for a customer. Our second case, from the Court of Appeals of Kentucky, looks at whether a county engineer faced liability in a motorist’s death. The motorist’s estate alleged that the engineer failed to provide adequate protection at a dangerous curve in a county road where the man lost his life.

Deficient Contract Specifications and Workmanship – General Contractor Liable Under Consumer Sales Practices Act

The Ohio Consumer Sales Practices Act (CSPA) prohibits unfair, deceptive, and unconscionable acts in connection with consumer transactions. In a unanimous decision, the Fifth District Court of Appeals affirmed the trial court’s application of the protections in the CSPA to hold a general contractor liable for failing to meet the homeowners’ reasonable expectations after major repairs were required to a threeyear- old modular home.

In Winegar v. Creekside Crossing Homes, et al., 2008-Ohio-5835, two homeowners entered into a contract with Creekside Crossing Homes Sales (Creekside) for the purchase and construction of a modular home. Creekside subsequently hired New Tech as a subcontractor for the installation of the basement and foundation.

Problems arose throughout the construction process, and the homeowners expressed concern about Creekside’s workmanship. About 10 months after construction began, the homeowners moved into their new home.

It was not long though before the new home began to show defects. The homeowners not only learned that their house lacked adequate footers, but the basement leaked, the drywall was cracking, the floors and walls were sinking, the porch had a bowing roof, and the foundation of the garage experienced movement/ cracking.

Based upon the myriad of problems, the homeowners filed a complaint against Creekside alleging breach of contract and violations of the CSPA. Creekside then filed a third-party complaint against the basement subcontractor seeking indemnification for any and all damages incurred.

At the trial court level, the jury returned a verdict in favor of the homeowner on the claims of negligence and violations of the CSPA. The jury also denied Creekside’s indemnification claim from the subcontractor.

Appealing this judgment, Creekside alleged four assignments of error – three of which dealt with technical legal issues unrelated to the construction project. The fourth assignment of error, however, sought to set aside the jury verdicts on the claims of negligence and violations of the CSPA.

Citing to the relevant provisions of the CSPA, the appellate court explained that Ohio law, specifically Ohio Revised Code section 1345.03, “prohibits unconscionable acts or practices in connection with consumer transactions.” The court then noted that, rather than having to prove that Creekside “intended to commit an unfair or deceptive act,” the CSPA only required the homeowners to establish that such an unfair or deceptive act “was committed.”

The appellate court concluded that the jury did not err in finding that Creekside misled the homeowners by failing to have detailed job specifications and being unable to meet the homeowners’ general expectations that the home would have footers and otherwise be constructed properly.

Additionally, the appellate court recognized that the jury properly found Creekside negligent for failing to investigate whether there was a foundation under the home, especially in light of the fact that all of the experts in the case testified that they had never seen a home constructed without footers.

Governmental Immunity Protects Kentucky Engineer in Motorist’s Death

Kentucky’s governmental immunity law generally provides immunity where a government employee is negligent in performing discretionary acts or functions. In Bolin v. Wilson, 2008 Ky. App. LEXIS 346, a deceased man’s estate sued a county engineer for failing to provide adequate protection at a dangerous curve in a county road where the man lost his life. The court was asked to determine whether the county engineer was being sued in an individual capacity or his official capacity as county engineer and determine whether he was immune under Kentucky law.

In Bolin, a man traveling on a county roadway was killed after he skidded off the road. The accident was located at a turn at the bottom of a hill just before a bridge. The man’s truck slid off the road, overturned, and left him trapped inside the truck in the creek. The estate of the deceased man sued the county engineer for failing to install a guardrail, speed limit signs, and/or warning signs that would alert drivers to the upcoming curve.

The initial problem in Bolin involved the strategy of filing the initial complaint and the answer to the complaint. The argument revolved around whether Bolin was suing the county engineer in his individual capacity or his official capacity. Bolin, wishing to avoid governmental immunity, claimed he was suing the county engineer in his individual capacity. The county engineer, wishing to use the benefit of governmental immunity, claimed that Bolin was suing the county engineer in his official capacity.

The court determined that the complaint did not reference the county but only mentioned the county engineer by name. In addition, because the county engineer filed an answer to the complaint instead of preparing a motion to determine whether he was being sued individually or in his capacity as a county engineer, the court determined that he was not “misled or prejudiced” and Bolin’s claim was in fact against the county engineer in his individual capacity.

In Kentucky, a government employee that is sued in their individual capacity can only invoke “qualified official immunity” where the government employee is negligent in performing discretionary acts or functions, i.e., “those involving the exercise of discretion and judgment, or personal deliberation, decision, and judgment;” in good faith; and within the scope of the employee’s authority.

A government employee would be held liable if the negligent performance was a ministerial act, i.e., “one that requires only obedience to the orders of others, or when the officer’s duty is absolute, certain, and imperative, involving merely execution of a specific act arising from fixed and designated facts.”

The court determined that the installation of guardrails was a discretionary act, not a ministerial act. The county engineer had evaluated this particular site in the past. Based on his experience and the technical characteristics of the site, the county engineer determined that such a measure was not necessary.

There had not been a guardrail at this site for 37-years; and, to the best of the county engineer’s knowledge, no one had ever slid into the creek during that time. However, the county engineer did reduce the speed limit on the road and installed signs indicating the reduced speed limit.

Discretion in the performance of an act takes place where there are two or more lawful options to choose from and the choice of the option is left to one’s will or judgment. The county engineer had a choice of installing guardrail or reducing the speed limit. He made a “good faith judgment call” that consisted of a discretionary act. Therefore, the county engineer was immune from liability.