Kentucky Court Report - SCOKY & COAKY

No time limitations for appealing open records denial to attorney general: WYRICK V. DEPARTMENT OF REVENUE, FINANCE, AND ADMINISTRATION CABINET (COA 5/30/2008)

WYRICK V. DEPARTMENT OF REVENUE, FINANCE, AND ADMINISTRATION CABINET
GOVERNMENT:  Open Records Request
2007-CA-000089
PUBLISHED: REVERSING IN PART, VACATING IN PART, AND REMANDING
PANEL: KELLER PRESIDING; THOMPSON, GRAVES CONCUR
FRANKLIN COUNTY
DATE RENDERED: 5/30/2008

In this open records request case, the Department of Revenue sought review of the Attorney General's decision, requiring disclosure of certain records requested by taxpayer's attorney, Mitzi D. Wyrick, who appealed the circuit court order which barred her from inspecting the documents.

COA held there was no time limitation to appeal open records denial to the attorney general and declined the DOR’s request there be a 30-day time limitation for seeking review before the Attorney General and hold that pursuant to the plain language of the statute, Wyrick’s appeal to the Attorney General would have been timely whenever she chose to file it.

With regard to the records requested, the DOR cannot on the one hand argue, successfully, that the material sought in the tax appeal case is irrelevant to that litigation to defeat the discovery request, and then on the other hand argue in the Open Records proceeding that it is pertaining to that litigation and therefore subject to the limitation. The DOR is not “permitted to feed one can of worms” to the Board of Tax Appeals and another to the circuit court in the Open Records action.  COA then rejected the DOR’s argument that just because a record requested in discovery is deemed irrelevant, does not mean that it is not related to that litigation. The public agency bears the burden of establishing that a requested record is exempt from release. When ruling on party litigation defense to Open Records Act request, trial court was required to first determine whether a listed exemption applied.  However, the party litigation limitation was inapplicable because underlying litigation  in this was case was a tax appeal and was administrative, not civil.

Digested by Michael Stevens

 

Angioplasty project withstands constitutional scrutiny: THE ST. LUKE HOSPITALS, INC. V. COM. (COA 5/9/2008)

THE ST. LUKE HOSPITALS, INC. V. COM.
ADMINISTRATIVE LAW:  Angioplasty pilot project withstands constitutional scrutiny
2007-CA-001092
PUBLISHED: AFFIRMING
PANEL: DIXON PRESIDING; COMBS, KNOPF CONCUR
KNOX COUNTY
DATE RENDERED: 5/9/2008

CA affirms dismissal of declaratory judgment action challenging the constitutionality of KRS establishing an angioplasty pilot project.

Pursuant to state law, the Cabinet for Health and Family Services issued the State Health Plan establishing a pilot project to study the risks and benefits of allowing angioplasty at hospitals without immediate access to an open-heart surgery facility. The scope was limited to one eastern Kentucky hospital and one western one located thirty minutes from an on-site open-heart surgery center. St. Luke, a northern Kentucky facility, (joined by other facilities) filed this action challenging the constitutionality of the project.

CA holds that both the two-hospital limitation and the thirty-minute requirement are reasonable in light of the inherent risks of the project, including increased patient mortality. The Cabinet held a lengthy review process and the regulation survives rational basis scrutiny.

Digested by John E. Hamlet

Exceptions to administrative ruling must be timely filed and substantial compliance offers no relief in licensing of child placement facility: COM. V.COPPER CARE, INC.

COM. V. COPPER CARE, INC.
ADMINISTRATIVE APPEAL:  Sustantial compliance not apply and exceptions not timely
2007-CA-000676 521
PUBLISHED: REVERSING
PANEL: THOMPSON PRESIDING; CAPTERTON, LAMBERT CONCUR
MADISON COUNTY
DATE RENDERED: 5/25/2008

The Cabinet for Health and Family Services (the Cabinet) appeals circuit court order denying its motion for summary judgment against Copper Care, Inc. (Copper Care). The issue raised is whether the circuit court properly held that the Stapletons’ exceptions to the hearing officer’s findings of fact, conclusions of law, and recommended order were timely filed.  COA reversed.

The Cabinet issued a “Notice of Revocation and Preliminary Order to Close” seeking to revoke Copper Care’s license based on its alleged failure to meet the standards in the administrative regulations promulgated pursuant to KRS 199.640 for a child-placement agency. Following an administrative hearing Copper Care filed exceptions 18 days later, and not 15 days.  The Cabinet accepted the hearing officer’s recommended order, and Copper Care filed a complaint in the Madison Circuit Court seeking review of the Cabinet’s order. In addition to its answer, the Cabinet filed a motion for summary judgment arguing that, as a matter of law, the exceptions were untimely filed

To reconcile judicial decisions with the recently amended CR 73.02(2), the Court held that dismissal of an appeal is not an appropriate remedy “so long as the judgment appealed from can be ascertained within reasonable certainty from a complete review of the record on appeal and no substantial harm or prejudice has resulted to the opponent.”

The issue in this case does not concern CR 73.02. The time for filing exceptions in an administrative proceeding is governed by statute and is a step in the administrative review process.  The language contained in KRS 13B.110(4) is unequivocal and requires that exceptions be filed within fifteen days from the date the recommended order is mailed. Absent legislative authority to the contrary, the substantial compliance doctrine is not applicable.

The trial court erroneously concluded that the substantial compliance doctrine saved Copper Care from the consequences of the untimely filing of its exceptions. Although not a jurisdictional defect, the filing of exceptions is, in this case, fatal.

Since Copper Care’s exceptions were untimely filed, there was no issue properly preserved for review. As a consequence, the circuit court erred when it denied
the Cabinet’s motion for summary judgment. The summary judgment entered in favor of Copper Care is reversed and the case remanded for the entry of an order granting the Cabinet summary judgment.

By Michael Stevens

Sheriff entitled to county's sovereign immunity which is waived per KRS 70.040 for actions or omissions of his deputies: JONES V. CROSS (SC 4/24/08)

JONES V. CROSS
TORTS:  Sheriff entitled to county's sovereign immunity which is waived per KRS 70.040 for actions or omissions of his deputies
2005-SC-000854-DG
PUBLISHED: AFFIRMING
OPINION BY SCHRODER; ABRAMSON CONCURRING BY SEPARATE OPINION
DATE: 4/24/2008
BARREN COUNTY

The split between the majority opinion and the concurring opinion is more interesting than either the facts or the holding of the opinion itself. The opinion itself is limited to two questions. The first is whether a County Sheriff is entitled to the county’s sovereign immunity? The majority opinion holds yes. The concurring opinion says, “No.”

The second is the rather narrow question of whether KRS 70.040 waives a County Sheriff’s sovereign immunity. Again, the majority holds that it does and the concurring opinion says, “No.”

 

KRS 70.040 provides in pertinent part:

The sheriff shall be liable for the acts or omissions of his deputies; except that, the office of sheriff, and not the individual holder thereof, shall be liable under this section.

The majority finds that the “literal or plain reading of the statute clearly imposes liability” on the sheriff, which leads the Court to conclude “that the legislative waiver of immunity is very clear, and that the plain language of KRS 70.040 leaves no room for any other reasonable construction than a waiver of the sheriff’s official immunity (the office of sheriff) for the tortious acts or omissions of his deputies.”

In her concurring opinion, Justice Abramson argues that the majority’s holding is contrary to Grayson County Board of Education v. Casey, 157 S.W.3d 201 (Ky.2005). As you may recall, Casey holds that a statute “authorizing boards of education to insure against the negligence of school bus drivers” does not constitute a waiver of the school board’s sovereign immunity despite language “expressly requiring that insurance policies issued pursuant to the statute ‘shall bind the company to pay any final judgment rendered against the insured.’”

Being biased against immunity, I certainly favor the majority opinion. But I should note that the stark differences between the holdings in Jones and Casey could lie in the fact that Jones concerns a waiver of a County’s sovereign immunity whereas Casey concerns a waiver of the Commonwealth’s sovereign immunity. That is, Casey implicates payments out of the State Treasury, and, hence, Section 230 of the Kentucky Constitution, and Jones does not. In other words, Jones could stand for the proposition that waiver of County sovereign immunity is subject to a lesser test than waiver of the State’s sovereign immunity. 

 

By Hays Lawson at www.PedlyLaw.com

SOVEREIGN IMMUNITY: School board employees afforded same immunity, if any, to which agency entitled; discretionary vs. ministerial acts are not bright line and measured against Yanero: PENNINGTON V. GREENUP COUNTY BOARD OF EDUCATION

PENNINGTON V. GREENUP COUNTY BOARD OF EDUCATION
SOVEREIGN IMMUNITY: School board employees afforded same immunity, if any, to which agency entitled; discretionary vs. ministerial acts are not bright line and measured against Yanero
RENDERED: APRIL 11, 28, 2008; 2:00 P
PUBLISHED: AFFIRMING
GREENUP COUNTY
DATE RENDERED: 4/18/2008

Parent of child who was mentally retarded brought action against school and his teacher when child fell and broke his ankle at school outing. The circuit court granted summary judgment to both defendants, holding that the Board of Education is protected from suit by governmental immunity and that Ms. Kelley (teacher) is protected by qualified immunity.

The issue presented on this appeal was whether or not the circuit court erred when it found that Tracey Kelley's actions in supervising Andrew were discretionary rather than ministerial in nature, resulting in the legal conclusion that Ms. Kelley is entitled to the protection of qualified official immunity. COA affirmed.

The child broke his ankle when he reached over and attempted to kiss another student.

The extent to which local school boards and their employees are protected from suit by governmental immunity is an area of law which has received considerable attention in Kentucky's appellate courts in recent years. Yanero v. Davis, 65 S.W.3d 510 (Ky. 2001), the most frequently cited recent Kentucky case relating to governmental immunity, involved a high school student who was injured when he was struck by a baseball thrown by another student on school grounds. In Lamb v. Holmes, 162 S.W.3d 902 (Ky. 2005), our Supreme Court, relying on qualified official immunity, dismissed a 42 U.S.C. § 1983 “strip search” action against school employees.

It is now familiar law in Kentucky that when an employee of a local board of education is sued in her representative capacity, her “actions are afforded the same immunity, if any, to which the agency, itself, would be entitled[.]” Yanero at 522.

The courts cannot make a “bright line” rule of demarcation between discretionary and ministerial acts. The act or acts complained of in each case must be measured against the standards quoted above from Yanero. Consistent application of those standards can prove difficult, as seen in Williams at 150 (teachers' duty to supervise students a ministerial function); Sloas at 479-481 (deputy jailer's supervision of inmates while cutting trees and brush a discretionary function) and Lamb at 909 (search of students by school personnel a discretionary function).

After examining these precedents and others, the COA was unable to conclude that the circuit court erred as a matter of law by granting summary judgment in favor of Ms. Kelley.

For purposes of “discretionary versus ministerial” analysis, it was the COA's opinion that the teacher's decisions required as much personal deliberation and judgment as that exercised by the employees in Sloas and Lamb, and we are unable to rationally distinguish the relevant factual bases of those recent cases from that of the present case.

Digested by Michael Stevens

Negligent misrepresentation claim in purchase of "service credit" against KERS not recognized at time of BOC claim: BOARD OF TRUSTEES OF KENTUCKY RETIREMENT SYSTEMS V. COMMONWEALTH OF KENTUCKY (COA 4/4/08)

BOARD OF TRUSTEES OF KENTUCKY RETIREMENT SYSTEMS V. COMMONWEALTH OF KENTUCKY
BOARD OF CLAIMS:  Negligent misrepresentation claim, sovereign immunity, and exhaustion of administrative remedies for purchasing retirement through KERS
Commonwealth of Kentucky
PUBLISHED: REVERSING
PANEL: MOORE PRESIDING; ACREE CONCURS; COMBS DISSENTS FILING SEPARATE OPINION
COUNTY: FRANKLIN
Date: 4/4/2008

This appeal centers around Vicki Knable's complaint filed with the Board of Claims in April 2005 against KERS regarding the purchase of “service credit” or “service.”

The purpose of purchasing service is to fund KERS for employer and employee retirement contributions that would have been paid over an employee's term of employment, so that the employee will be credited with years of service for determining eligibility for retirement. KRS 61.525(2)(b) allows a person who rejects membership to subsequently elect to become a member of KERS and was amended in 2004 to provide that purchases of service credit can only be made by members who are vested or have at least sixty months of service at the time of the purchase if they are under the age of sixty five. Knable fits into the latter category.

Knable believed that only past service fitting into this category had to be purchased by July 12 and thought the deadline did not apply to her so that she did not purchase any past service prior to the deadline.

After July 2004, when Knable attempted to purchase past service, KERS refused her request because she was not vested as she had not been a member of KERS for sixty months. This appeal followed (as well as a Board of Claims action).

Knable contends KERS' failure to honor the language in the May 2004 newsletter forced her to wait until she was a member for sixty months before allowing her to purchase any past service. Knable calculated that this would cause her to spend an extra $90,000.00 in order to purchase the past service that she wanted to buy, thereby, causing her damage. KERS moved to dismiss the BOC action pursuant to KRS 44.070 claiming the BOC only has jurisdiction over claims in which a person has suffered either personal injury or property damage as the result of negligence on the part of the Commonwealth.

COA ruled that KERS did not have to exhaust its administrative remedies before the BOC prior to filing its declaratory judgment action in that it is not necessary to have previously exhausted administrative remedies if the only issue being raised is subject matter jurisdiction, which is a legal question not dependent upon disputed facts.

The doctrine of exhaustion of administrative remedies defined as the “'proper judicial administration mandates judicial deference until after exhaustion of all viable remedies before the agency vested with primary jurisdiction over the matter.'”

There are two exceptions to the general and often relied upon rule that to appeal an agency's decision, one must previously exhaust all administrative remedies: 1) where a regulation is void on its face; or 2) where continuation of the administrative process would be an exercise in futility. The latter exception applies “when a complaint 'raises an issue of jurisdiction as a mere legal question, not dependent upon disputed facts, so that an administrative denial of the relief sought would be clearly arbitrary.'”

As a general rule, state agencies, carrying out integral state functions, have sovereign immunity. Waiver of this immunity is a matter of legislative grace.

COA held further that any construction of other statutes to result in a waiver of immunity which differs from the language of the Board of Claims Act is untenable. In various places throughout the Board of Claims Act, waiver of immunity is alluded to and in every instance an express waiver is required.

Accordingly, sovereign immunity must be expressly waived by the General Assembly. Its waiver cannot be assumed by the courts or even the BOC.

When enacted, the BOC was given exclusive jurisdiction over all claims for the negligent performance of ministerial acts by the Commonwealth or its agencies. The rub in the case at hand is obviously whether this jurisdiction includes negligent misrepresentation. BOC does not have jurisdiction over Knable's claim which is one of negligent misrepresentation and which was not adopted by the Kentucky Supreme Court until 2004 in Presnell Construction Managers, Inc. v. EH Construction, LLC, 134 S.W.3d 575 (Ky. 2004). Because negligent misrepresentation, which has elements separate from negligence, was not recognized as a tort at the time KRS 44.072 was enacted, and the General Assembly's not having expressly waived sovereign immunity to this tort after its adoption by the Kentucky Supreme Court, the BOC did not have jurisdiction over Knable's claim.

Accordingly, the BOC's order to the contrary is void, and the KERS' action for declaratory action was properly taken having raised jurisdiction as a legal question. COA reversed the circuit court, and remanded this case for entry of judgment consistent with this opinion.

Digested by Michael Stevens

 

Physician's satellite offices primarily for diagnostic testing not included in KRS 216B.010 certificate of need: GILBERT, M.D. V. COM. CAB. FOR HEALTH AND FAMILY SVCS. (COA 2/22/2008)

GILBERT, M.D.  V. COM. CAB. FOR HEALTH AND FAMILY SVCS.
MEDICAL FACILITY LICENSURE: APPLICABILITY OF EXEMPTION TO CERTIFICATE OF NEED REQUIREMENT
2007-CA-000042
PUBLISHED: AFFIRMING
PANEL: ACREE PRESIDING; KELLER, MOORE CONCUR
COUNTY: FRANKLIN
DATE RENDERED: 2/22/2008

John Gilbert, a well-known neurologist based in Lexington, his medical company and his satellite offices (collectively "Gilbert") appeal the TC's Order affirming the decision of the Cabinet for Health & Family Services finding Dr. Gilbert in violation of KRS 216B.010, et seq., by operating health facilities with MRI services in London, Hazard and Florence without first obtaining a certificate of need ("CON"). Gilbert's main contention on appeal was that his facilities are exempt from licensure per KRS 216B.020(2)(a), which exempts "private offices and clinics of physicians, dentists and other practioners of the healing arts." The Cabinet deemed this statute inapplicable since Gilbert did not actively practice at the 3 satellite offices and thus could not be considered a physician's "private office." Gilbert conversely argued that the statute includes no element of personal active participation at the offices, only ownership.

    

The COA began its analysis by ruling that since both party's interpretation of the subject statute was reasonable, the statute was ambiguous not on its face but as applied, and therefore constituted a latent ambiguity. The COA then turned to the legislative intent, and first noted its agreement with Gilbert that the Legislature did not intend to prohibit or discourage any physician from establishing satellite offices in medically underserved communities such as Hazard and London in this instance by permitting the exemption only if the physician owner personally and actively participated in the practice at each office. To remove any doubt, the COA affirmatively held that no such personal, active participation is required. On the other hand, the COA felt that the real focus of the Cabinet's inquiry should have instead been on the kind of activity that usually takes place at the office for which an exemption is sought. To this end, Gilbert had the burden of demonstrating to the Cabinet that the exemption was, in fact, available and applicable to each of the 3 offices.

         

The COA's review of the official record found that each of the 3 offices were primarily used as diagnostic facilities for patients referred by other physicians and were not used primarily to obtain scans for diagnosis of Gilbert's own patients as he claimed. The evidence showed that no licensed physician was even actively present at the two eastern Kentucky offices while the physician who did work at the Florence office only read the films from the MRI scans performed at that office on patients referred by other physicians. Thus, the COA concluded that all three offices had all the hallmarks of a diagnostic testing facility. As such, the exemption under KRS 216B.020(2)(a) did not apply and a CON was needed for all three facilities on an individual basis, which Gilbert had failed to obtain. The TC's Order sustaining the ultimate decision of the Cabinet was affirmed by the COA.

By Chad Kessinger, Schiller Osbourn Barnes & Maloney

PSC order establishing economic development riders not authorized per statute: COM. V. THE PUBLIC SERVICE COMMISSION OF KY (COA 2/1/2008)

COM. V. THE PUBLIC SERVICE COMMISSION OF KY
ADMINISTRATIVE LAW:  Jurisdiction, utility regulation
2006-CA-001652
PUBLISHED: REVERSING AND REMANDING
PANEL: NICKELL, PJ;  COMBS, WINE CONCUR
COUNTY: FRANKLIN
DATE: 02/01/2008

This appeal started with the state filing an action to vacate or set aside orders by the Public Service Commission (PSC) that authorized establishment of economic development riders to electric utility's general tariff.  The Franklin Circuit Court affirmed. State appealed, and the COA reversed and remanded the circuit court holding the orders were unlawful under statute setting forth permissible considerations for free or reduced-rate services; and the state authorizing a public utility to employ suitable and reasonable customer classifications in the conduct of its business did not confer alternative basis of jurisdiction to issue orders in question.

Michael Stevens

Open records request and privileged documents: COMMONWEALTH OF KY V. SCORSONE (COA 1/18/2008)

COMMONWEALTH OF KY V. SCORSONE
GOVERNMENT:  Open records request
EVIDENCE:  Attorney client privilege
2006-CA-001704
PUBLISHED: AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
PANEL: LAMBERT PRESIDING; TAYLOR CONCURS; WINE CONCURS IN PART, DISSENTS IN PART, AND FILES SEP. OPINION
COUNTY: FRANKLIN
DATE RENDERED: 01/18/2008

In this open-records case, representatives from various agencies in Governor Fletcher's Administration appeal the decision of the Franklin Circuit Court regarding disclosure of attorney billing statements prepared by non-government lawyers retained by the Fletcher Administration in connection with the Attorney General's recent investigation of the Administration's hiring practices. For the reasons set forth herein, we affirm the decision of the circuit court. In this case, Senator Ernesto Scorsone of Lexington issued open-records requests to various agencies within the Fletcher Administration seeking all attorney billing statements from non-government lawyers retained by the Administration in connection with the Attorney General's recent investigation of the Fletcher Administration's hiring practices. Senator Scorsone's request sought “the date of each service performed, a description of the service, the identity of the attorney performing such service, the hourly rate charged for that attorney, the time spent by that attorney on that service, any reimbursable expenses, total amounts incurred and total amounts due for their services.”

The Fletcher Administration partially complied with Senator Scorsone's request by tendering its attorney billing statements relating to the investigation, but redacting from them the descriptions of the particular services rendered on the grounds that they are protected by attorney-client privilege. Dissatisfied with the Administration's redactions, Senator Scorsone appealed to the Attorney General. The Attorney General rendered an open records decision ruling that the Fletcher Administration's blanket redaction of descriptions of particular services rendered from the billing statements was improper. The Attorney General ruled that redaction is only proper where a particular description of a service rendered would disclose privileged matters.

In turn, the Fletcher Administration unsuccessfully appealed to Franklin circuit court, which generally agreed with the Attorney General's opinion. The circuit court, however, additionally ruled that, when the Administration was in doubt whether a particular description contained protected material, the description in question should be submitted to the circuit court for an in camera review.

Finally, the circuit court also awarded attorney fees to Senator Scorsone on the ground that the Fletcher Administration's redactions had been “willful.”

The primary issue presented here is to what extent, if any, must descriptions of particular legal services rendered to the Fletcher Administration by non-government counsel be disclosed as open records

The attorney-client privilege does not apply to all communications between an attorney and a client. Indeed, to fall under the attorney-client privilege, a communications must be confidential, relate to the rendition of legal services, and not fall under certain exceptions. See KRE 503. In the case at bar, the burden of proof of demonstrating that a requested public record falls within the attorney-client privilege falls upon the Administration. See KRS 61.882(3). And, like the Attorney General and the circuit court before us, we cannot imagine that each and every description of services rendered contained in billing statements prepared by non-government lawyers during the Attorney General's investigation falls under the attorney-client privilege

Thus, the COA found the Attorney General and the circuit court are both correct in rejecting the Administration's blanket redaction of all descriptive portions of the disclosed billing records without particularized demonstration that each description is privileged. We further find that the circuit court's decision to allow the Administration to tender those portions of the billing records it believes to be privileged for in camera review to be in accordance with the Open Records Act and an excellent device for balancing the Administration's interest in the confidentiality of privileged materials and the public interest in the disclosure of nonconfidential government records. Therefore, we affirm the circuit court's decision regarding disclosure. Although the COA did affirm the circuit court's disclosure ruling, it reversed its award of attorney's fees to appellee.

Because the attorney-client privilege was favored by the circuit court to be a valid exception to at least a portion of the billings records, and because the circuit court's in camera review solution appears to be novel and therefore not readily available to appellants at the time of appellee's record request, the circuit court erred in finding that appellant willfully withheld records in violation of KRS 61.870 to 61.884. Accordingly, we hold each party should bear its own costs of litigation in this matter.

Michael Stevens

Excessive force claim against police and qualified immunity: HAUGH V. CITY OF LOUISVILLE (COA 12/7/2007)

HAUGH V. CITY OF LOUISVILLE
TORTS:  Use of force by police officer; qualified immunity
2006-CA-002565
PUBLISHED: affirming
PANEL: LAMBERT PRESIDING; TAYLOR, KNOPF CONCUR
COUNTY:JEFFERSON
DATE RENDERED: 12/07/2007

CA affirms TC entry of SJ for appellants in this wrongful-death due to excessive police force case.

City police officers went to decedent's residence to arrest him on felony and misdemeanor bench warrants. He refused to comply with officers and armed himself within his home with a butcher knife. Eventually, the SWAT team captain decided not to wait the decedent out, and ordered the swat team in. Decedent mightily resisted several means of force including tear gas, bean-bag rounds and police fire. Decedent stabbed a police dog. He was eventually subdued, but died several days later from his injuries. Later it was learned that the decedent suffered from paranoid schizophrenia.

The estate sued alleging excessive or unnecessary force. CA affirms that the officers' decision to storm decedent's residence and to use nonlethal force to quickly subdue him is entitled to qualified immunity. The decision was objectively reasonable. Also, mental illness does not exempt a person from the use of reasonable force by the police. Finally, uncontroverted evidence indicates that decedent himself was solely responsible for his demise.

John Hamlet
Sitlinger, McGlincy, Theiler & Karem