KING CRETE DRILLING INC v. WHITLEY COUNTY FISCAL COURT (2026)

The issue before us is whether the Whitley Fiscal Court and Whitley County, Kentucky (the County) should be immune from King-Crete Drilling, Inc.’s suit because of the County's sovereign immunity regarding their written contract. King-Crete alleges it is due more money as the written contract required unit pricing and was additionally modified orally or through course of dealing, or it should receive additional payment in quantum meruit for unjust enrichment.

The Court of Appeals determined that the County was wholly immune pursuant to sovereign immunity. We agree with the Court of Appeals that sovereign immunity has not been waived for the County by the legislature's enactment of Kentucky Revised Statutes (KRS) 45A.245, the Kentucky Model Procurement Code (KMPC). However, a narrow, longstanding exception to total immunity for counties does allow recovery under the terms of any express written contract, as stated in Illinois Central. Gulf Railroad Co. v. Graves County Fiscal Court, 676 S.W.2d 470 (Ky. App. 1984) (Illinois Central). As the parties dispute what the original written contract requires, we reverse and remand for the trial court to interpret its express terms and proceed to determine whether the County's payment fulfilled these terms.

Sovereign immunity bars suit against the County on any other basis than the express written contract. Therefore, we affirm the dismissal of King-Crete's claims based on oral modifications of the contract and equitable grounds.

I. FACTUAL AND LEGAL BACKGROUND

Serious flooding occurred in Whitley County during the summer of 2021, causing significant damage to its infrastructure. Floodwaters damaged public roads, necessitating repairs.

The County received a Federal Emergency Management Agency (FEMA) grant for repair work. On July 28, 2021, the County invited bids for these projects through a newspaper advertisement which stated: “These projects will be bid using unit pricing for materials.” In stating how the bids were to be submitted, the advertisement reiterated the need for “including unit pricing[.]”¹

King-Crete alleged in its complaint that Jimmy Bates, the Director of Infrastructure and County Project Development for the County, provided bidders the required specifications from FEMA and told bidders that they were to supply bids based on the already specified quantities of materials. King-Crete alleged that upon reviewing the FEMA specifications for the projects it noticed that the amount of materials and/or labor within the FEMA specifications, in particular those relating to asphalt and aggregate base, were insufficient to adequately repair and restore the roadbeds at issue to industry standards. King-Crete alleged that it communicated this fact to Bates on numerous occasions and Bates instructed and directed King-Crete to bid unit pricing pursuant to the FEMA specifications and not go beyond them, assuring them that “the county would pay for the number of units that were ultimately required regardless of the actual FEMA specifications[.]”

On August 16, 2021, King-Crete submitted road repair bids to the County. Nowhere in the wording of the bid was there any indication that King-Crete's bid was a “unit pricing” bid in which the totals were based on estimates of the quantities to be used.

On August 17, 2021, the fiscal court voted to accept the low bids. As a low bidder, King-Crete was awarded two repair projects. In a letter dated August 18, 2021, and signed by Pat White, Jr., Whitley County Judge Executive, King-Crete was informed:

Please be advised that the Whitley County Fiscal Court during its regularly held court meeting on August 17, 2021 awarded King-Crete, Inc. the bids as listed below:

Lower Laurel Fork E - $41,890.59

Dal Road B. - $172,844.82

King-Crete states that it relied on Bates's assurances that it would be paid for its work “based upon the unit prices bid by [King-Crete] to complete the job to the county's standards and to industry standards” and relied on his instruction during the actual repair projects to exceed the FEMA specifications for the paved road width. King-Crete also alleged that Bates was present on the job sites and was aware that King-Crete was using the extra material as was needed to properly make the repairs.

King-Crete completed the projects in approximately three months. On November 19, 2021, King-Crete submitted its invoices to the County. The invoices billed unit prices for the materials. While the cost of each unit remained the same, based on the additional units that were used in the construction projects, the requested payment was increased. The County paid only the total from the original bids.

On August 9, 2022, King-Crete filed a complaint against Bates in his individual capacity, alleging he violated his duty of reasonable care by making false representations and assertions of material fact (or was reckless as to the truth or falsity of his representations) that it relied upon to its detriment. King-Crete also alleged that the County had a history of using unit pricing and had always paid the amount for the number of units needed, whether it was higher or lower than the amount listed in the bid. King-Crete alleged that Bates was engaging in a ministerial duty and was not entitled to governmental immunity.

On November 18, 2022, King-Crete filed a motion requesting that the trial court allow it to file an amended complaint. In its amended complaint, King-Crete incorporated the contents of its previous complaint and named the County as a defendant. King-Crete alleged that the County and Bates breached the contract and were jointly and severally liable, and alternatively, the County was unjustly enriched by its labor.

On January 20, 2023, the County filed a motion to dismiss pursuant to Kentucky Rules of Civil Procedure (CR) 12.02, primarily on the basis that the County was immune pursuant to sovereign immunity. The County argued that the KMPC, which waived sovereign immunity for the Commonwealth of Kentucky as to written contracts, did not apply to counties and would have required filing in the Franklin Circuit Court. The County also stated it was entitled to sovereign immunity for an unjust enrichment claim. The County further argued that an oral contract violated the KMPC, which required “a writing;” an oral contract was not valid for a sale of goods; and Bates could not bind the County because it did not ratify his actions.

That same day, Bates also filed a motion to dismiss, stating that he was not a party to the written contract between King-Crete and the County, and the County had sovereign immunity or, at most, was obligated to fulfill the written contract.

On March 10, 2023, the trial court denied the motions to dismiss.² The County and Bates each appealed. Their two appeals, 2023-CA-0384-MR, which was the appeal by the County, and 2023-CA-0386-MR, which was the appeal by Bates, were resolved in one opinion by the Court of Appeals.

The Court of Appeals concluded as to the County that there was no statutory waiver of sovereign immunity for written contracts for counties, as there was for the Commonwealth pursuant to the KMPC as set out in KRS 45A.245, and the County was dismissed because of immunity.

The Court of Appeals concluded that Bates could not be individually liable, but vacated the trial court's decision denying him immunity on the basis that further discovery was required to determine if his duties were ministerial (in which case qualified official immunity would not be available to him) or discretionary (in which case it would need to be determined if he acted in bad faith).

King-Crete sought discretionary review only as to 2023-CA-0384-MR, the case upon which we are deciding this appeal. As neither King-Crete nor Bates sought discretionary review in 2023-CA-0386-MR, the Court of Appeals’ decision as to Bates is final. In 2023-CA-0384-MR, Bates was an appellee; he is also an appellee before our Court. Although King-Crete's briefs before this Court raise arguments regarding both the County and Bates, this cannot broaden the scope of the discretionary review granted. Therefore, we disregard all briefing regarding 2023-CA-0386-MR by all the parties as this matter is not before us and is final.

II. ANALYSIS

“[S]overeign immunity, for the state itself, has long been the rule in Kentucky.” Comair, Inc. v. Lexington-Fayette Urban Cnty. Airport Corp., 295 S.W.3d 91, 94 (Ky. 2009). Sovereign immunity “is an inherent attribute of a sovereign state that precludes the maintaining of any suit against the state unless the state has given its consent or otherwise waived its immunity[.]” Yanero v. Davis, 65 S.W.3d 510, 517-18 (Ky. 2001).

“Under the common law, a state, by reason of its prerogatives as a sovereign and on the ground of public policy, cannot be sued without its consent, and this immunity from the processes of the courts is absolute and unqualified.” Ky. State Park Comm'n v. Wilder, 256 Ky. 313, 76 S.W.2d 4, 5 (1934). See also Foley v. Constr. Co. v. Ward, 375 S.W.2d 392, 393-94 (Ky. 1963). In the absence of a waiver, sovereign immunity extends to prevent suit against the sovereign to enforce a contract or to receive damages for a tort. See Ammerman v. Bd. of Educ. of Nicholas Cnty., 30 S.W.3d 793, 797 (Ky. 2000); Univ. of Louisville v. Martin, 574 S.W.2d 676, 677 (Ky. App. 1978).

Sovereign immunity generally extends to county governments as basic subdivisions of the Commonwealth, some of which preexisted the formation of the Commonwealth. Ruplinger v. Louisville/Jefferson Cnty. Metro Gov't, 607 S.W.3d 583, 585 (Ky. 2020); Bryant v. Louisville Metro Hous. Auth., 568 S.W.3d 839, 845 (Ky. 2019); Comair, Inc., 295 S.W.3d at 94; Lexington-Fayette Urb. Cnty. Gov't v. Smolcic, 142 S.W.3d 128, 132 (Ky. 2004). Fiscal Courts of counties similarly share in their sovereign immunity. Edmonson Cnty. v. French, 394 S.W.3d 410, 414 (Ky. App. 2013); Doe v. Magoffin Cnty. Fiscal Ct., 174 Fed. Appx. 962, 971 (6th Cir. 2006).

The question of whether a defendant is entitled to the defense of sovereign immunity is a matter which we review de novo as it is a question of law. Univ. of Louisville v. Rothstein, 532 S.W.3d 644, 647 (Ky. 2017).

When interpreting statutes to determine whether they waive sovereign immunity, “we must first look to the plain language of a statute and, if the language is clear, our inquiry ends.” Id. at 648. “[I]f a statute is clear and unambiguous and expresses the legislature's intent, the statute must be applied as written.” Hall v. Hosp. Res., Inc., 276 S.W.3d 775, 784 (Ky. 2008).

We presume that the legislature is aware of the judicial construction of prior enactments of a statute and can alter the statute in further iterations to clarify its intentions if needed, and the failure to do so implies that our prior interpretation was correct. Indep. Bank v. Welch, 636 S.W.3d 528, 535–36 (Ky. 2021).

King-Crete argues that there are two possible grounds upon which a written contract might be enforceable against a county:

(1) By interpreting the waiver of sovereign immunity as set out in the KMPC in KRS 45A.245 as applying to counties.

(2) From the precedent of Illinois Central which ruled there is an exception to counties’ sovereign immunity for the enforcement of express contracts.

The KMPC Does Not Waive the Sovereign Immunity of Counties.

King-Crete argues that the KMPC provides a waiver of sovereign immunity for counties which permits the enforcement of its written contract with the County because the KMPC generally waives sovereign immunity on written contracts.

The waiver of the Commonwealth's sovereign immunity in the KMPC, KRS 45A.245, states:

(1) Any person, firm or corporation, having a lawfully authorized written contract with the Commonwealth[3] at the time of or after June 21, 1974, may bring an action against the Commonwealth on the contract, including but not limited to actions either for breach of contracts or for enforcement of contracts or for both. Any such action shall be brought in the Franklin Circuit Court and shall be tried by the court sitting without a jury. All defenses in law or equity, except the defense of governmental immunity, shall be preserved to the Commonwealth.

(2) If damages awarded on any contract claim under this section exceed the original amount of the contract, such excess shall be limited to an amount which is equal to the amount of the original contract.

This statute does not mention counties as being subject to this waiver of sovereign immunity. This, alone, would be a valid reason for concluding that the sovereign immunity of counties was not waived in the KMPC, as there is no “express language” or “overwhelming implications from the text” that waiver was intended, which would “leave no room of any other reasonable construction.” Withers v. Univ. of Ky., 939 S.W.2d 340, 346 (Ky. 1997). The conspicuous absence of any language pertaining to counties implies that they were simply not included in this waiver of sovereign immunity. Commonwealth v. Harris, 59 S.W.3d 896, 900 (Ky. 2001).

This ruling is also consistent with our longstanding interpretation that a similar provision in the Board of Claims Act (BOCA), which waives sovereign immunity as to the Commonwealth, does not thereby also waive sovereign immunity as to counties.⁴ See Smolcic, 142 S.W.3d at 133-34; Harris, 59 S.W.3d at 900-01; Bd. of Claims of Ky. v. Banks, 31 S.W.3d 436, 438-39 (Ky. App. 2000).⁵ The General Assembly has not abrogated the sovereign immunity of counties in either of these acts. However, that is not the end of our inquiry.

Pursuant to the Common Law, Sovereign Immunity is Waived for Counties as to Express Written Contracts.

King-Crete argues that Illinois Central, a 1984 opinion of the Court of Appeals, is precedent that permits King-Crete to enforce its written contract with the County. Illinois Central. involved a county which entered into a written contract with a railroad agreeing to pay the cost for installation of an automatic flashing light signal and bell at a grade crossing leading to an industrial park maintained by the county, estimated as costing $14,990.00, and when presented with the bill for $15,366.56 decided to disclaim any responsibility for paying anything. 676 S.W.2d at 471. When the railroad sued to enforce the contract, the county raised sovereign immunity as a complete defense to suit, and the trial court dismissed the case. Id.

The Court of Appeals in Illinois Central reversed based upon existing precedent which interpreted our common law as permitting suit against counties to enforce express written contracts. Illinois Central has been controlling law for more than forty years.

We observe that sovereign immunity is a creation of the common law and has its roots there and not in the Kentucky Constitution. Yanero, 65 S.W.3d at 523-24. Where it is well established in the common law that sovereign immunity does not extend to bar suit against counties on express written contracts, the fact that the General Assembly has not itself waived sovereign immunity for counties under the KMPC is not dispositive as to whether counties wholly retain sovereign immunity as to written contracts. The General Assembly's silence as to counties in the KMPC (and in its predecessor statutes) could also express agreement with the existing common law waiving counties’ immunity for express written contracts.

Therefore, the trial court properly denied dismissal to the County in so far as King-Crete made a claim against the County for violating their express written contract, a matter for which sovereign immunity is waived. Whether the contract was fulfilled or not depends upon whether it required unit pricing or fixed pricing, a matter which has yet to be determined.

Sovereign Immunity Bars All Other Relief.

Oral contracts with counties are unenforceable because sovereign immunity prevents their enforcement. Commonwealth v. Whitworth, 74 S.W.3d 695, 700 (Ky. 2002); All-Am. Movers, Inc. v. Kentucky ex rel. Hancock, 552 S.W.2d 679, 681 (Ky. App. 1977). Therefore, oral modifications of written contracts are likewise unenforceable.

Implied contracts with counties are similarly unenforceable based on sovereign immunity. See Furtula v. Univ. of Ky., 438 S.W.3d 303, 310 (Ky. 2014).

Recovery is also barred on equitable grounds as sovereign immunity has not been waived for such recovery. In Lipson v. Univ. of Louisville, 556 S.W.3d 18, 28 (Ky. App. 2018), the Court explained that there was no waiver of sovereign immunity for unjust enrichment claims.

The County has sovereign immunity, which requires dismissal of King-Crete's additional claims for relief against it.

III. CONCLUSION

We reverse the Court of Appeals to the extent that it determined that the Whitley Circuit Court erred in failing to dismiss King-Crete's suit to enforce an express written contract against the Whitley County Fiscal Court and Whitley County, Kentucky, based on their defense of sovereign immunity. We affirm the Court of Appeals to the extent it determined that sovereign immunity is not waived for oral contracts or to provide equitable relief against counties. We remand to the circuit court for further proceedings.

At this early stage, there is no resolution about what the written contract requires or what documents form this contract. See Univ. of Ky v. Regard, 670 S.W.3d 903, 912, 916-20 (Ky. 2023) (discussing how other documents could be incorporated into a contract and how this amalgamated written contract was sufficient to waive governmental immunity under the KMPC); Lonnie Hayes & Sons Staves, Inc. v. Bourbon Cooperage Co., 777 S.W.2d 940, 942 (Ky. App. 1989) (“Separate writings may form the memorandum of contract required by the Statute of Frauds”). The written contract will control whether unit pricing or fixed pricing was required by the contract. This is the dispositive issue in resolving whether the County has fulfilled its obligations under the terms of the contract. While solicitations for bids are typically not part of a contract, see Ohio River Conversions, Inc. v. City of Owensboro, 663 S.W.2d 759, 761 (Ky. App. 1984), this may be the rare case that is an exception to that general rule. Accordingly, this breach of contract claim may proceed to an adjudication on its merits.

In my view, our precedent in George M. Eady Co. v. Jefferson Cnty., 551 S.W.2d 571 (Ky. 1977), forecloses King-Crete's claims for recovery under the contract. Contrary to the majority, I would distinguish, rather than apply, Illinois Central Gulf Railroad Co. v. Graves County Fiscal Court, 676 S.W.2d 470 (Ky. App. 1984), and the decisions of our predecessor Court upon which it relies.⁶ Therefore, I respectfully concur in part, dissent in part, and would affirm the decision of the Court of Appeals in its entirety.

This Court has recognized that “cases which have permitted the state to be sued on a contract ․ without express legislative consent, are unsound.” Commonwealth v. Whitworth, 74 S.W.3d 695, 700 (Ky. 2002) (citing Foley Constr. Co. v. Ward, 375 S.W.2d 392 (Ky. 1963)). The sovereign immunity of the Commonwealth for breach of contract has been applied equally to counties. George M. Eady, 551 S.W.2d at 572. “In sum, sovereign immunity bars the retroactive monetary relief ordered by the trial court regardless of whether it is labeled a retroactive injunction, equitable restitution, or some other type of remedy.” Beshear v. Haydon Bridge Co., 416 S.W.3d 280, 295 (Ky. 2013).

Limited to its proper context, I am convinced Illinois Central remains good law notwithstanding the foregoing authorities. Trace Creek Constr., 2008 WL 1991647, at *4. In the appropriate circumstance, the sovereign's post-performance repudiation of a valid and undisputed debt for labor, goods, or services exceeds a mere breach of contract and may constitute an arbitrary or unlawful taking without due process of law. See Ky. State Park Comm'n v. Wilder, 260 Ky. 190, 84 S.W.2d 38, 40 (1935); see also, e.g., Smith v. State, 289 N.C. 303, 222 S.E.2d 412, 420 (1976) (collecting cases).

In my estimation, however, the Illinois Central decision is limited to the situation where a county disclaims a lawful and undisputed debt. Trace Creek Constr., 2008 WL 1991647, at *4. By contrast, in the present appeal, the parties vigorously dispute both the terms and the amount properly owed under the contract. Therefore, the reasoning of Illinois Central is inapplicable, and the holding of George M. Eady should control the outcome here.

For the foregoing reasons, I would affirm the decision of the Court of Appeals in its entirety. Therefore, I respectfully concur in part and dissent in part.

FOOTNOTES

1.   See Types of Contracts—Fixed-Unit Price Contract, 1 Brunner & O'Connor on Construction Law § 2:25 (explaining that fixed-unit pricing allows for payment for completed work items which can only be estimated as to quantity at the time of bidding, meaning that “[t]he contractor is entitled to payment at the fixed unit price for the aggregate units of work performed”).

2.   The trial court also allowed King-Crete to file a second amended complaint which clarified that it was seeking quantum meruit for its unjust enrichment claim.

3.   For purposes of KRS 45A.245, “Commonwealth” is defined in KRS 45A.240(1) as “mean[ing] the Commonwealth of Kentucky and any of its departments or agencies.” Departments or agencies are not defined.

4.   Compare KRS 45A.240 (defining “Commonwealth” in the KMPC) with KRS 49.060 (waiving sovereign immunity under the BOCA for “the Commonwealth, any of its cabinets, departments, bureaus, or agencies, or any of its officers, agents, or employees while acting within the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus, or agencies to be able to assert their just claims as herein provided”).

5.   These cases were interpreting KRS 44.070 (the general BOCA statute), which was renumbered to KRS 49.040 in 2017.

6.   In this regard, I am persuaded the unpublished decision of the Court of Appeals in Trace Creek Const., Inc. v. Harlan Cnty. Fiscal Ct., No. 2007-CA-000328-MR, 2008 WL 1991647 (Ky. App. May 9, 2008), is sound.

OPINION OF THE COURT BY JUSTICE THOMPSON

Lambert, C.J.; Bisig, Conley, Keller, Nickell, and Thompson, JJ., sitting. Lambert, C.J.; Conley, and Keller, JJ., concur. Nickell, J., concurs in part and dissents in part by separate opinion which Bisig, J., joins. Goodwine, J., not sitting.