Opinion
NO. 2016-CA-000707-MR
02-23-2018
LARRY HAMMOND, IN HIS OFFICIAL CAPACITY AS STATE MANAGER OF BREATHITT COUNTY SCHOOLS; THE BOARD OF EDUCATION OF BREATHITT COUNTY, KENTUCKY, A BODY CORPORATE AND POLITIC; KENTUCKY BOARD OF EDUCATION, A BODY CORPORATE AND POLITIC; AND TERRY HOLLIDAY, IN HIS OFFICIAL CAPACITY AS KENTUCKY EDUCATION COMMISSIONER APPELLANTS v. IRMA LITTLE APPELLEE
BRIEFS FOR APPELLANTS: Jonathan C. Shaw Paintsville, Kentucky BRIEF FOR APPELLEE: J. Follace Fields Lexington, Kentucky
NOT TO BE PUBLISHED APPEAL FROM BREATHITT CIRCUIT COURT
HONORABLE FRANK ALLEN FLETCHER, JUDGE
ACTION NO. 14-CI-00029 OPINION
REVERSING AND REMANDING
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BEFORE: JONES, MAZE AND THOMPSON, JUDGES. THOMPSON, JUDGE: Larry Hammond, in his official capacity as State Manager of the Breathitt County Schools; the Board of Education of Breathitt County, Kentucky, a body corporate and politic; Kentucky Board of Education, a body corporate and politic; and Terry Holliday, in his official capacity as Kentucky Education Commissioner, appeal from a summary judgment entered in favor of Irma Little. The trial court awarded Little lost wages and benefits for the 2013-2014 school year, including her out-of-pocket medical expenses and retirement contributions. We conclude the award of retroactive monetary relief is barred by immunity.
In 2012, Holliday, the former Commissioner of Education, notified the Breathitt County School District of his intention to conduct a management audit of the district. Based on that audit, the Breathitt County Board of Education was informed that Holliday would recommend to the Kentucky Board of Education that the Breathitt County School District be designated a state-managed district pursuant to Kentucky Revised Statutes (KRS) 158.785. The basis for the recommendation was that the school system had revealed a pattern of ineffective administration. After the Breathitt County Board of Education accepted the recommendation, the Kentucky Board of Education later designated the district as a state-managed district as of December 5, 2012.
Hammond was employed as the state manager of the Breathitt County School District and assumed the authority of the Board of Education. Pursuant to KRS 158.785(7) as state manager, Hammond had the authority to perform all "administrative, operational, financial, personnel, and instructional aspects of the management of the school district formerly exercised by the local school board and the superintendent[.]"
Acting as the state manager for the school district and pursuant to his statutory authority to act as superintendent of the Breathitt County School District, at the end of the 2012-2013 school year, Hammond notified Little, who had four years' continuous service with the Breathitt County School District, and thirteen other classified staff members that their contracts were non-renewed or subject to reduction in force for the 2013-2014 school year.
The letter notifying Little was purportedly issued in compliance with KRS 161.011, which provides in part as follows:
(1)(a) "Classified employee" means an employee of a local district who is not required to have certification for his position as provided in KRS 161.020; and
(b) "Seniority" means total continuous months of service in the local school district, including all approved paid and unpaid leave.
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(8) The superintendent shall have full authority to make a reduction in force due to reductions in funding,
enrollment, or changes in the district or school boundaries, or other compelling reasons as determined by the superintendent.
(a) When a reduction of force is necessary, the superintendent shall, within each job classification affected, reduce classified employees on the basis of seniority and qualifications with those employees who have less than four (4) years of continuous active service being reduced first.
(b) If it becomes necessary to reduce employees who have more than four (4) years of continuous active service, the superintendent shall make reductions based upon seniority and qualifications within each job classification affected.
(c) Employees with more than four (4) years of continuous active service shall have the right of recall positions if positions become available for which they are qualified. Recall shall be done according to seniority with restoration of primary benefits, including all accumulated sick leave and appropriate rank and step on the current salary schedule based on the total number of years of service in the district.
On January 13, 2014, Little filed this action alleging that at least one classified employee assigned within the classification of instructional assistance with less than four years' continuous service was not subject to the reduction in force and remained an instructional assistant for the 2013-2014 school year. She also alleged that she was not recalled to a position of program assistant reading tutor posted in June 2013 for which she was qualified, and the position was filled with an existing part-time employee. Little alleged the appellants' actions were arbitrary and capricious in violation of Section 2 of the Kentucky Constitution and that she was entitled to a declaratory judgment. She requested to be retroactively reinstated to her full contract of employment for the 2013-2014 school year with no loss of time, salary or benefits.
Discovery commenced. Prior to the non-renewal of her contract in 2013, Little had been employed by Breathitt County Board of Education in 2008 and each year was employed under a written contract that, pursuant to its terms, was subject to renewal in June of the following year. Little testified that Cynthia Pelfrey, an instructional assistant at another Breathitt County school, did not have four years' continuous service but was not subject to the reduction of force. She also testified that her statutory right to be recalled was violated when Diane Sword was hired after the reduction in force as a literacy tutor through a grant program called Save the Children and that she was not offered the position. She further testified that she was not aware if Sword had any specific training within the Save the Children grant program. When asked, Little acknowledged that on the reduction in force list, her name was toward the bottom indicating she was one of the more recent instructional assistants hired. The list showed that three other employees had more seniority than Little.
Hammond testified that prior to serving as state manager for Breathitt County School District, he had not dealt with a reduction in force. Hammond testified that only one instructional assistant subject to the reduction in force, James Rice, had been recalled during the 2013-2014 school year. Rice was recalled only for that year and to work with a specific autistic student who he had worked with the previous year. Hammond testified Rice was not the most senior instructional assistant but was rehired because of his experience with that student. He testified that because Pelfrey had twelve years of service with the district, it was believed she was not subject to the reduction in force but it was later discovered that she did not have four years' continuous service.
Stacy McKnight, personnel manager for the Breathitt County Schools, testified that ten to twelve instructional assistants were subject to the reduction in force. She confirmed Hammond's testimony that it was initially believed Pelfrey had more seniority than Little but it was later discovered she had a break in service so that it was not continuous service. McKnight testified Little was not offered the Save the Children position because she did not include part-time positions in the recall, which she testified was an "oversight." McKnight testified that although part-time, the position was for 160 days of the school year and carried full-time benefits. The job posting for the position stated it was full-time and would require the successful applicant to complete training.
Little was recalled for the 2014-2015 school year. Therefore, the issue of reinstatement became moot leaving her only possible remedy her lost time, salary and benefits.
The trial court ruled that Little had standing to pursue her action, venue was proper in the Breathitt Circuit Court and the individual defendants were necessary parties. It further ruled the defendants were not entitled to immunity for their failure to perform ministerial duties or from application of Section 2 of the Kentucky Constitution. Ultimately it concluded the Board misapplied KRS 161.011 by: 1) retaining an instructional assistant with less seniority than Little; 2) recalling an employee subject to the reduction in force without offering the position to Little; and 3) posting a position rather than recalling an employee subject to the reduction in force. The trial court ordered that Little be awarded lost wages, salary and benefits from the Board for the 2013-2014 school year.
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Kentucky Rules of Civil Procedure (CR) 56.03. "Summary judgments play an especially important role when dealing with immunities," where the immunity is "from suit, that is, from the burdens of defending the action, not merely just an immunity from liability." Rowan Cty. v. Sloas, 201 S.W.3d 469, 474 (Ky. 2006). If immunity precludes Little's claims, that issue is dispositive of this appeal and we need not address the remaining issues presented.
"[S]overeign immunity is a concept that arose from the common law of England and was embraced by our courts at an early stage in our nation's history." Yanero v. Davis, 65 S.W.3d 510, 517 (Ky. 2001). In Kentucky, the doctrine "precludes the maintaining of any suit against the state unless the state has given its consent or otherwise waived its immunity." Id.
"[A] state agency is entitled to [governmental] immunity . . . to the extent that it is performing a governmental, as opposed to a proprietary, function." Id. at 519. In Yanero, the Court pointed out that although sovereign immunity and governmental immunity are terms frequently used interchangeably, they are distinct concepts emphasizing that a state agency will be immune only when performing a governmental function. Id.
There is no question that the Kentucky State Board of Education, as a direct arm of the state, is entitled to immunity. Likewise, the Breathitt County Board of Education is entitled to immunity. As explained in Ammerman v. Bd. of Educ. of Nicholas County, 30 S.W.3d 793, 797 (Ky. 2000) (quoting Clevinger v. Bd. of Educ., 789 S.W.2d 5 (Ky. 1990)):
There has never been any question about the status of a local school board as an agency of state government, but, if
there were, such is now beyond the realm of argument because of our decision in Rose v. The Council for Better Education, Inc., Ky., 790 S.W.2d 186 (Rendered, as Modified, September 28, 1989). Rose recognizes public schools are a responsibility of the state, and local school boards exist simply as agencies of state government.... Thus, local school districts fall within the express language of the section of our Kentucky Constitution, § 231, which provides immunity to suits "brought against the Commonwealth."
When the state or its agency is entitled to immunity, that same immunity is applicable to those named in their official capacities. Yanero, 65 S.W.3d at 522. Hammond and Holliday, named only in their official capacities, are cloaked with the same immunity afforded the Kentucky State Board of Education and the Breathitt County Board of Education.
The breadth of immunity in Kentucky is broad and applies to tort actions and contract actions. Ammerman, 30 S.W.3d at 797. However, it is not applied without limitation. As stated in Commonwealth v. Kentucky Ret. Sys., 396 S.W.3d 833, 839 (Ky. 2013):
We do not have a government that is beyond scrutiny. If sovereign immunity can be used to prevent the state, through its agencies, from being required to act in accordance with the law, then lawlessness results. This review is qualitatively different from requiring the state to pay out the people's resources as damages for state injury to a plaintiff. This is the very act of governing, which the people have a right to scrutinize. Thus to say that the state is entirely immune is an overbroad statement.
To the extent Little's complaint seeks relief in the form of a declaratory judgment and prospective relief, immunity does not preclude her action. A "declaratory judgment action is not a claim for damages, but rather it is a request that the plaintiff's rights under the law be declared. There is no harm to state resources from a declaratory judgment." Id. at 838. Immunity does not preclude a trial court from ordering prospective injunctive relief and, therefore, the appellants could properly be directed to comply with KRS 161.011. Roberts v. Fayette Cty. Bd. of Educ., 173 S.W.3d 918, 923 (Ky.App. 2005).
However, in Kentucky Ret. Sys., 396 S.W.3d at 839, the Court cautioned "that in subsequent or contemporaneous actions to enforce declared rights, the immunity issue could be relevant if the revenue or property of the state would be affected." In addressing whether a specific form of relief implicates the immunity of the state or its agent, the ultimate inquiry is if such relief would require the state or its agent to withdraw monies from the "public purse." Beshear v. Haydon Bridge Co., 416 S.W.3d 280, 291 (Ky. 2013). If so, immunity precludes the action. Id.
Because Little has been reinstated to her position with the Breathitt County School District, the only relief available, and that awarded, was back-pay and retroactive benefits. As a monetary damage award against a Board of Education, the award will necessarily be paid directly from the public purse. Therefore, unless immunity has been expressly waived by the legislature, the monetary award in Little's favor must be reversed. Ammerman, 30 S.W.3d at 797.
The waiver of immunity must be accomplished through legislative enactment. "Once it has been determined that an entity is entitled to sovereign immunity, this Court has no right to merely refuse to apply it or abrogate the legal doctrine." Withers v. Univ. of Kentucky, 939 S.W.2d 340, 344 (Ky. 1997). Consequently, "[w]e will find waiver only where stated 'by the most express language or by such overwhelming implications from the text as [will] leave no room for any other reasonable construction."' Id. at 346 (quoting Edelman v. Jordan, 415 U.S. 651, 673, 94 S.Ct. 1347, 1361, 39 L.E.2d 662, 678 (1974)).
KRS 161.011 was enacted to provide classified school employees with certain protections when a district implements a reduction in force necessitated by financial factors. The statute provides that reductions in force and recall must be based on seniority. Therefore, and to that extent, classified school employees in Kentucky "receive a statutory contract or, in a broad sense, a legislative grant." See Bd. of Educ. of Harrodsburg v. Powell, 792 S.W.2d 376, 379 (Ky.App. 1990). However, it does not necessarily follow that the contract or grant is an express waiver of immunity or does so by overwhelming implication.
In Ammerman, our Supreme Court quickly disposed of any argument that sovereign immunity was waived based merely on the violation of a statute conferring contractual rights upon teachers. In that case, current or former teachers brought an action against the Nicholas County Board of Education and members of the Board in their official capacities seeking damages resulting from sexual harassment by a co-worker. The plaintiffs argued that sovereign immunity did not apply because they were required to enter into an employment contract and they had a contract right to be free from sexual harassment by virtue of a statutory mandate that prohibits abuse of and discrimination against teachers. Ammerman, 30 S.W.3d at 796. The plaintiffs argued sovereign immunity could not "leave them without a damages remedy." Id.
The Court devoted little time to discussing the issue. It found it necessary only to point out that school districts are entitled to immunity and the text of the statute relied upon did not waive immunity. Id. at 797. The Court held that all claims for monetary damages other than the civil rights claims were barred by the doctrine of sovereign immunity. Id.
A case more on point was decided by this Court. In Commonwealth v. Halcomb, 2002-CA-001308-MR, 2004 WL 1532171 (Ky.App. 2004) (unpublished), this Court considered whether two school administrators demoted to classroom teachers after the school district became a state-managed district and who were allegedly not given notice in compliance with KRS 161.765(2)(f) and KRS 161.790(8) were entitled to back-pay. The Court held that the applicable statutes "do not contemplate that a school district's failure to comply with the procedural notice requirements" entitled an administrator to back-pay. Id. at 7. The remedy available was remand of the matter for a hearing in compliance with KRS 161.765(2). Id.
We may cite this unpublished case pursuant to Kentucky Rules of Civil Procedure (CR) 76.28 (4)(c). --------
Our reasoning was based on the inclusion of back-pay as a remedy in other provisions within the same KRS Chapter that are not applicable to administrators. We noted that because the specific applicable statute did not provide for back-pay, failure to follow procedural requirements did not justify such an award. We stated: "If the statutory scheme applicable to administrators provided for payments of lost salary, . . . then the argument could be made that the Legislature had specifically waived the defense of sovereign immunity as to these particular damages." Id. at n.21.
Likewise, there is no language in KRS 161.011 which waives immunity to permit a classified school employee to recover back-pay and lost benefits if the provisions of KRS 161.011 are not complied with. Nor is there any overwhelming implication that immunity is waived. The failure to permit such damages does not, as Little suggests, render the statute meaningless. Prospective claims for relief through promptly filed actions to compel compliance with the statute prevent back-pay from accruing if the reduction in force and recall requirements are violated. While there may be some accumulation of lost pay and benefits, there is nevertheless a remedy.
For the reasons stated, the judgment of the Breathitt Circuit Court is reversed, and the case remanded for entry of a summary judgment in favor of the Kentucky State Board of Education, the Breathitt County Board of Education, and Hammond and Holliday in their official capacities.
ALL CONCUR. BRIEFS FOR APPELLANTS: Jonathan C. Shaw
Paintsville, Kentucky BRIEF FOR APPELLEE: J. Follace Fields
Lexington, Kentucky