Kentucky Court Report - SCOKY & COAKY

GOVERNMENT - Ethics: Turbyfill v. Executive Branch Ethics Commission (COA 11/20/2009)

Turbyfill v. Executive Branch Ethics Commission
2008-CA-001394 11/20/09 2009 WL 3878046

Opinion by Judge Wine; Judges Nickell and Thompson concurred.

The Court affirmed an order of the circuit court denying appellant’s petition for judicial review and declining to order dismissal of administrative proceedings opened by the Kentucky Executive Branch Ethics Commission (EBEC) for the purpose of sanctioning appellant. Although, appellant had been previously pardoned by the Governor, the EBEC filed “Allegations of Violations” in which it sought to fine appellant and publicly reprimand him for violating KRS 11A.020. The Court held that the allegation that appellant violated KRS 11A.020 was not criminal in nature and was collateral to the criminal proceedings for which he was pardoned. Therefore, the EBEC proceedings were not subject to the pardon.

The Court further held that the statutory scheme was not so punitive in purpose or effect so as to transform it into a criminal penalty. The Court rejected appellant’s argument that the pardon could not preclude civil actions by private individuals but could preclude civil actions by a state agency seeking to enforce violations of state law. First, because the EBEC proceeding was a collateral civil action, the pardon could not preclude its action. Second, the language of the pardon itself did not purport to include EBEC administrative actions.

CONTRACTS - Public employment: Waters v. City of Pioneer Village (COA 11/20/2009)

Waters v. City of Pioneer Village
2008-CA-000837 11/20/09 2009 WL 3877596
Opinion by Judge Clayton; Judges Moore and VanMeter concurred.

The Court affirmed an order of the circuit court granting a judgment to the appellee city on its claim against appellant for breach of an employment contract.

The Court first held that KRS 70.290, which allows a law enforcement agency to require a newly appointed officer to enter into an employment contract for no longer than three years from the date of graduation from the Criminal Justice Training Academy, did not prohibit the city from seeking repayment of the amounts owed under the contract. The statute did not provide the sole means of reimbursement to the City for expended training costs. While the statute placed a duty on an agency to pay the agency that paid for the training, it did not place a duty on the first agency to obtain the payment from the second.

The Court then held that because the City was entitled to be reimbursed under the employment contract, rather than under the statute, the amount recovered was properly calculated pursuant to the contract.

PROPERTY - KRS 67.0802 exchanges w/federal gov't: Southside Real Estate Developers, Inc. v. Pike County Fiscal Court (COA 9/4/2009)

Southside Real Estate Developers, Inc. v. Pike County Fiscal Court
2008-CA-001534 9/4/09 2009 WL 2835138 Released for pub.

Opinion by Judge VanMeter; Judges Lambert and Moore concurred. The Court affirmed an order of the circuit court finding that a county fiscal court’s failure to comply with the requirements of KRS 67.0802 in its decision to exchange property conveyed to it from the federal government, after completion of a flood control project prevented appellant from maintaining an action to compel conveyance of the property from the fiscal court.

The Court first held that the trial court properly concluded that the decision to exchange the property did not comply with statute, which required either a transfer to another governmental agency or a public sale by auction or sealed bid. The Court then held that the requirements of the statute were not preempted by federal law so that the only requirement for transfer of the property would be the approval of the federal government. The Energy and Water Development Appropriation Act, under

which the flood control project was initiated, did not manifest Congressional intent to preempt state requirements on the transfer of real estate owned by counties; no express preemption existed; and compliance with both federal and state requirements concerning the transfer of real property was not physically impossible.

GOVERNMENT CONTRACTS - Firefighters, collective bargaining agreement: Metro Louisville/Jefferson County Government v. Abma (COA 9/4/2009)

Metro Louisville/Jefferson County Government v. Abma
2007-CA-001417 9/4/09 2009 WL 2837355 Rehearing pending

Opinion by Judge Nickell; Judges Acree and Senior Judge Knopf concurred.

The Court affirmed in part and vacated in part and remanded orders of the circuit court related to breach of contract claims by two groups of firefighters against the City of Louisville.

The Court held that the trial court properly granted summary judgment to the firefighters after finding that the City breached its contract with the union. The Court first held that the firefighters could maintain a contract action separate from their wage and hour complaint. Although the wage and hour law filled any gaps in the Collective Bargaining Agreement (CBA), the City’s obligation to pay overtime was stated in the CBA negotiated between the City and the union. The Court then held that the trial court correctly found that the City had breached the CBA based on the CBA language, the intent of the parties under the CBA and well-settled caselaw. The Court next held that the judgment was not interlocutory. While the judgment reserved some issues for the taking of proof or later determination, it did specify the formula the City was to use in calculating the additional overtime pay. Further, by certifying the judgment as final on some but not all of the pending issues, the trial court enabled the City to perfect an appeal and to proceed in calculating damages. The Court also held that the firefighters could recover damages under both the contract and wage and law causes of action but that they could not recover twice for the same damage. The Court next held that the applicable statue of limitations was 15 years, as provided in KRS 413.090(2) for actions on written contract, not five years under KRS 413.12(2) for statutory violations, as the underlying cause of action was for breach of contract. The Court next held that although sovereign immunity could be asserted for the first time on appeal, the defense could not be asserted by the newly merged government to avoid a contractual obligation resulting from an agreement entered into by one of its predecessors.

GOVERNMENT IMMUNITY - Lexington Airport Authority coverered by gov't immunity for Comair crash negligence: Comair, Inc.; and Comair Services, Inc. v. Lexington-Fayette urban County Airport Corporation et. Al (SC 10/1/2009)

Comair, Inc.; and Comair Services, Inc. v. Lexington-Fayette urban County Airport Corporation et. Al
2007-SC-000602-TG October 1, 2009
Opinion by Justice Noble. All sitting; all concur.

The estates of persons killed in a commercial airplane crash sued Comair, the flight operator. Comair then filed a third-party complaint against the Lexington-Fayette Urban County Government Airport Board, the LFUCG Airport Corporation and members of the board in their official capacities alleging negligence in operation of the airport where the accident occurred. The circuit court granted the third-party defendants motion to dismiss, holding they were entitled to immunity. Comair appealed and the Supreme Court transferred the case to its docket from the Court of Appeals.

The Court affirmed, holding that the airport board and airport corporation were both agencies of the LFUCG, exercising a function integral to state government by providing essential transportation infrastructure—and thus immune from suit. In reaching this decision, the Court moved away from the two-pronged test for sovereign immunity set forth in Berns (1: direction and control by central state government; 2: supported by funds from the state treasury).

The Court concluded the Berns test was overly simple and limiting and that it did not lend itself to analyzing municipal entities. Instead, the Court held a preferable approach is a case-by-case analysis of a) the origins of the organization seeking immunity (i.e. state, county, municipal) to determine the level of immunity enjoyed by the “parent” entity; and b) whether the organization exercised a function integral to state government. The Court rejected Comair’s argument that the airport board was engaged in a purely proprietary function—distinguishing providing transportation services from providing transportation infrastructure (terminals, runways, etc.). The Court concluded that the latter was a “quintessentially governmental function.”

GOVERNMENT IMMUNITY - Gov't vs. proprietar function re housing provided to mainentance person working for school board: Breathitt County Board of Education v. Dot Prater (SC 8/27/2009)

Breathitt County Board of Education v. Dot Prater
2008-SC-000041-DG August 27, 2009
Opinion by Justice Abramson; all sitting.

As part of her compensation for providing security and maintenance services at an elementary school, the school board allowed an employee to live in a house located on school grounds. Prater was visiting the employee at the house when she suffered a permanent injury. Prater sued the school board, alleging negligence in the maintenance of the house. The board moved for dismissal, claiming it was absolutely immune from damage claims brought in court. The trial court denied the motion on the grounds that the board’s maintenance of the house served a proprietary function rather than a governmental function.

The Supreme Court noted that denials of motions to dismiss are typically not final and thus not subject to appellate review. However, since immunity is meant to shield its possessor not just from liability, but from the costs and burdens of litigation as well, a denial of immunity is subject to interlocutory appeal. The Court also concluded that the board’s furnishing of a residence was a governmental function because it furthered the board’s educational mission and was thus within the scope of governmental immunity.

Justice Venters dissented, taking the position that “maintaining the personal, private house for the use of a school maintenance worker and her social guests has nothing to do with the school district’s educational mission.”

ADMINISTRATIVE LAW - Gov't disability retirement and workers compensation benefits: Mitchell Metzinger v. Kentucky Retirement Systems, et al. (SC 8/27/2009)

Mitchell Metzinger v. Kentucky Retirement Systems, et al.
2007-SC-000363-DG August 27, 2009
Opinion by Justice Scott. All sitting; all concur.

Metzinger, an electrician employed by the city of Louisville, was injured on the job. He applied for disability retirement and workers’ compensation benefits and filed a civil suit against the tortfeasor--Louisville Gas & Electric. As part of a global settlement, LG&E and the city agreed to purchase an annuity for Metzinger. Later, when Kentucky Retirement Systems calculated Metzinger’s monthly disability retirement award, it reduced the award by the amount on the monthly annuity payment. Metzinger objected, but the award was upheld by the Board, the circuit court and the Court of Appeals. On appeal, Kentucky Retirement Systems argued that KRS 61.607 permits it to take into account monthly workers’ compensation benefits therefore, any payments that were voluntarily exchanged for a right to payment to monthly workers’ compensation benefits should also be taken into account.

The Supreme Court reversed, holding that Kentucky Retirement Systems’ interpretation of the statute was contrary to its plain language. The Court noted that if the General Assembly has intended to broaden the scope of the agency’s consideration of workers’ compensation benefits under KRS 61.607, it could have done so.

SOVEREIGN IMMUNITY / JURAL RIGHTS: Caneyville Volunteer Fire Department, et al v. Green’s Motorcycle Salvage, Inc., et al (SC 6/25/2009)

Caneyville Volunteer Fire Department, et al v. Green’s Motorcycle Salvage, Inc., et al
2007-SC-000517-DG June 25, 2009
Opinion by Justice Scott; all sitting.

The Greens sued the Caneyville Volunteer Fire Department (CVFD) and it chief in tort, alleging negligence in failing to timely extinguish a fire, causing damage to their property. They also argued that KRS 75.070 and 95.830(2), which purport to provide firefighters and fire departments with immunity from civil liability are unconstitutional. The Circuit Court dismissed the complaint. The Court of Appeals reversed, holding the statutes unconstitutional for violating the jural rights doctrine. The Court of Appeals ruled that by enacting the statutes, the legislature impermissibly extended sovereign immunity. The majority opinion analyzed the roots of the jural rights doctrine and the historic relationship between civil governance and firefighting. Applying the test from Autry, the Court concluded that the CVFD was an agent of the Commonwealth, engaged in the Commonwealth’s work and thus entitled to sovereign immunity. The majority also concluded that the fire chief was afforded qualified official immunity from liability under Autry, since his acts were discretionary in nature, not ministerial.

Justice Venters concurred, contending reevaluation of the jural rights doctrine and sovereign immunity was unnecessary since the original complaint failed to state a claim for which relief could be granted since the fire department owed no duty to the Greens to save their property. Justice Abramson concurred in result only, writing that the city of Caneyville was not a proper party to the case since the fire department was a county-authorized taxing district immune from suit under KRS 75.070. Chief Justice Minton (joined by Justice Schroder and Justice Cunningham) concurred in result only, arguing that the jural rights doctrine is a legal fiction without basis in Kentucky law or history. This minority agreed that the fire chief enjoyed immunity for actions performed within the scope of his employment, regardless of whether the action were mistrial or discretionary—rejecting these distinctions as a “judicial amendment” to the immunity statute. Justice Noble concurred in result only.

ADMINISTRATIVE LAW - Government retirement, changing options after check issued: Bob Lawson v. Kentucky Retirement Systems, et al. (SC 5/21/2009)

Bob Lawson v. Kentucky Retirement Systems, et al.
2007-SC-000540-DG May 21, 2009
Opinion by Justice Noble. All sitting.

Lawson retired from employment with the state after 26 years. He selected a retirement benefit payment option and signed a form acknowledging that under KRS 61.590(3) he could not change his payment option after the first payment “had been issued.” Prior to receiving his first check, Lawson realized he had misunderstood the terms of the payment option and contacted KERS to obtain paperwork to make a change. KERS advised Lawson that since the initial check had been printed by the State Treasurer’s office, no change would be permitted. Lawson began the appeals process, and KERS prevailed before the hearing officer and Board, as well as at the circuit court and Court of Appeals levels.

The Supreme Court affirmed the Court of Appeals’ ruling that KRS 65.590 was neither void for vagueness nor required defining regulation under KRS 13A.100. However, the Court reversed the Court of Appeals’ findings that KERS had correctly applied 61.590(3) and had not misled Lawson. The Court held that payment is “issued” when the check is delivered to the payee—as such, Lawson should have been allowed to change his payment option. Justice Abramson (joined by the Chief Justice) concurred in result only, contending that inasmuch as state workers’ retirement rights have been deemed an “inviolable contract,” contract law requires that the ambiguity contained in 61.590(3) be construed against the drafter (i.e. the Commonwealth). The minority disagreed with the majority’s conclusion that Lawson had either been misled by KERS or that KERS was negligent in their handling of Lawson’s retirement process.

DISABILITY RETIREMENT (GOV'T) - "Residual functioning capacity"; "treating physician rule" rejected: Kentucky Retirement Systems v. Sandra Bowens (SC 4/23/2009)

Kentucky Retirement Systems v. Sandra Bowens
2007-SC-000509-DG April 23, 2009
Opinion by Justice Scott. All sitting; all concur.

Kentucky Retirement Systems denied employee’s application for disability retirement and she sought judicial review in Franklin Circuit Court— which affirmed the Board’s decision. The Court of Appeals affirmed in part and vacated in part.

The Supreme Court affirmed the portion of the Court of Appeal’s decision that held that KRS 61.600 implicitly requires that the cumulative effect of the claimant’s ailments be considered when determining the claimant’s “residual functioning capacity.” In this case, the Hearing Officer had fragmented claimant’s several ailments and determined that no single condition permanently prevented claimant from being able to work. The Supreme Court held that failure to apply the “cumulative effect rule” rendered the Board’s decision arbitrary. However, the Supreme Court reversed the Court of Appeals’ adoption of the federal “treating physician rule” which states that the opinions of treating physicians should be given greater weight than opinions of non-examining physicians as long as the treating physician’s opinions were supported by substantial evidence. The Court held such a rule was not within the state’s statutory scheme and infringed upon the well-settled principle that the trier of fact may give evidence the weight it deems appropriate. The case was remanded back to the Board for further review of evidence under the “cumulative effect” standard.