BRIEFS FOR APPELLANTS: Lawrence E. Barbiere Jay D. Patton Mason, Ohio BRIEF FOR APPELLEE: Robert E. Blau Cold Springs, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM BOONE CIRCUIT COURT
HONORABLE ANTHONY W. FROHLICH, JUDGE
ACTION NO. 10-CI-01953
REVERSING AND REMANDING
BEFORE: CAPERTON, STUMBO AND THOMPSON, JUDGES. STUMBO, JUDGE: Kenton County and Kenton County Airport Board ("KCAB") appeal from an interlocutory Order of the Boone Circuit Court overruling their CR 12 Motion for a Judgment on the Pleadings in the personal injury action of Janet Winter. Kenton County and KCAB argue that they are entitled to a Judgment on the Pleadings based on sovereign immunity and that the circuit court erred in failing to so find. We conclude that 1) Kenton County is shielded from tort litigation by sovereign immunity, and 2) additional proof is required to determine if KCAB is protected by sovereign immunity. Accordingly, we reverse the Order on appeal and remand the matter for further proceedings.
On August 4, 2010, Winter filed the instant action against Kenton County and KCAB in Boone Circuit Court seeking damages resulting from injuries suffered when she slipped and fell at the Cincinnati/Northern Kentucky International Airport. The Complaint alleged that Kenton County is a political body authorized by the Kentucky Constitution and Kentucky Revised Statutes and that KCAB is a board properly created and authorized to oversee the airport.
On December 22, 2010, Kenton County and KCAB filed a motion for Judgment on the Pleadings pursuant to CR 12.03. As a basis for the motion, and citing Comair, Inc. v. Lexington-Fayette Urban County Airport Corp., 295 S.W.3d 91 (Ky. 2009), they argued that both Kenton County and KCAB are shielded from tort litigation by sovereign immunity and were therefore entitled to a Judgment on the Pleadings. Kenton County argued that counties are direct subdivisions of the Commonwealth and by virtue of that fact enjoy the Commonwealth's immunity. Similarly, KCAB maintained that because it was established pursuant to the Kentucky Revised Statutes and vested with the authority to control transportation infrastructure, it exercised an integral function of state government and therefore was also shielded by sovereign immunity.
In response, Winter conceded that Comair held that the Lexington-Fayette County Airport Board was immune from liability under the facts alleged in that case. However, she argued that Comair specifically and the statutory and case law generally hold that immunity is a fact-specific determination, and that one may not summarily hold that all counties and all airport boards are immune from all actions in all circumstances. Based on her reading of Comair, she claimed that Kenton County came into existence after the Commonwealth as a whole, and therefore it was not vested with the immunity enjoyed by counties which pre-existed the Commonwealth. Accordingly, Winter argued that additional discovery was required to properly determine whether Kenton County and KCAB were protected by sovereign immunity and that the entry of a Judgment on the Pleadings in favor of Kenton County and KCAB was premature.
The circuit court characterized the Motion for a Judgment on the Pleadings as a Motion to Dismiss.
Kenton County and KCAB now argue that the circuit court erred in overruling their CR 12.03 Motion for a Judgment on the Pleadings. They first argue that this Court has jurisdiction to adjudicate the instant appeal even though the Order denying immunity was not made final and appealable. In support of this contention, they direct our attention to Breathitt County Bd. of Educ. v. Prater, 292 S.W.3d 883 (Ky. 2009), which they claim stands for the proposition that an order denying immunity is immediately appealable even in the absence of a final judgment. They argue that immunity for litigation includes protection against the cost of trial and the burdens of broad-reaching discovery which are particularly disruptive of effective government.
Winter concedes that Kenton County and KCAB may prosecute an interlocutory appeal.
The corpus of their argument, though, is that Kenton County and KCAB are entitled to immunity as a matter of law. Kenton County directs our attention to Comair, supra, in support of their contention that sovereign immunity is recognized as an inherent attribute of the Commonwealth that is enjoyed by all counties based on their status as subdivisions of the Commonwealth. This is true, they maintain, irrespective of whether the creation of a particular county pre-dated the establishment of the Commonwealth. Kenton County notes that Comair cited Inco, Ltd. v. Lexington-Fayette Urban County Airport Bd., 705 S.W.2d 933, 934 (Ky. App. 1985), which recognized that "the Lexington-Fayette Urban County Governmental Unit is a county and thus entitled to the protection afforded the state." They also point to Comair's citation to Schwindel v. Meade County, 113 S.W.3d 159 (Ky. 2003), as support for the proposition that "[a] county government is cloaked with sovereign immunity." Comair at 94. In sum, Kenton County argues that it is entitled to sovereign immunity as a matter of law and that the circuit court erred in denying the County's motion for a Judgment on the Pleadings pursuant to CR 12.03. Similarly, KCAB contends that in carrying out an essential state governmental function, it ,too, is a division of the state and is also shielded by sovereign immunity.
We will first address Kenton County's contention that it is entitled to sovereign immunity and that the Boone Circuit Court erred in failing to so find. Though often thought to be constitutional in its genesis, sovereign immunity in Kentucky is a creation of the common law which recognizes that the sovereign state is immune from litigation. Comair at 94, citing Kentucky State Park Com'n v. Wilder, 260 Ky. 190, 84 S.W.2d 38, 39 (Ky. 1935). "Absolute immunity from suit is a high attribute and prerogative of sovereignty . . . . This immunity has come down to us as a part of the fundamental common law and is only indirectly contained in the Constitution." Wilder at 39. Immunity is "an inherent attribute of the state." Yanero v. Davis, 65 S.W.3d 510, 523 (Ky. 2001).
Winter contends that the circuit court denied the Appellants' motion on the basis that further discovery needed to be conducted in order to address the immunity issue. The Order on appeal, however, does not state that further discovery is required. Rather, it summarily overruled the motion without explanation.
"Counties, which predate the existence of the state and are considered direct political subdivisions of it, enjoy the same immunity as the state itself." Comair at 94. Directing our attention to this language, Winter maintains that only counties which predate the existence of the state are entitled to sovereign immunity. We do not read Comair as so stating. Rather, the high court's plain language merely notes that the political or geographic entities referred to as counties pre-dated the establishment of the Commonwealth, are now subdivisions of it, and are therefore entitled to immunity. The court did not hold that only counties that came into existence prior to the establishment of the Commonwealth are entitled to immunity. This conclusion is buttressed by other case law holding that all counties enjoy sovereign immunity, not merely those which predate the Commonwealth. "A county government is cloaked with sovereign immunity." Schwindel at 163. Counties enjoy immunity because they function as administrative, legislative and judicial subdivisions of the Commonwealth. Comair at 95. Based on the holding of Comair, which affirms the long-held proposition that counties are entitled to the protection of sovereign immunity, we conclude that the Boone Circuit Court erred in overruling Kenton County's motion for a Judgment on the Pleadings.
The remaining issue is whether KCAB is entitled to the same immunity that shields the Commonwealth and its counties. In addressing whether the Lexington-Fayette Urban County Airport Board was immune, the Kentucky Supreme Court in Comair noted that the "reach of sovereign immunity becomes more complicated when dealing with governmental and quasi-governmental entities and departments below the level of the Commonwealth itself." Id. at 94. The court went on to examine the long and somewhat contradictory line of case law which established various tests for determining whether entities created by counties were themselves divisions of the Commonwealth and therefore entitled to sovereign immunity, or whether they were more akin to "municipal corporations" which were creations of county government but did not exercise state governmental functions and were not entitled to immunity. Id. at 94-95. With respect to airport boards specifically, the Comair court found only one prior opinion which directly examined the issue of sovereign immunity, and one which tangentially addressed it. Comair also addressed Kentucky Center for the Arts v. Berns, 801 S.W.2d 327 (Ky. 1990), which sought to establish a broad test for whether entities below the county level were entitled to immunity. The Comair court characterized this attempt as unsuccessful, noting that "[i]n analyzing the situation, however, the Court did not appear to have a single coherent rule." Comair at 96.
Bernard v. Russell County Air Board, 718 S.W.2d 123 (Ky. 1986).
After considering the foregoing line of cases, the Comair court went on to characterize as controlling the question of whether the governmental entity was carrying out a function primarily reserved to the Commonwealth, or was acting in a municipal capacity (local or restricted to one locality) and not carrying out a state governmental function. If the local entity was exercising a state governmental function, it was found to be a division or subdivision of the Commonwealth and was therefore entitled to immunity. Id. Conversely, if the entity was exercising a municipal or local function rather than that of the state government, it was not entitled to immunity. Id. In so ruling, the court stated as follows:
Airport boards may be created by "[a]ny urban-county government, city, or county, or city and county acting jointly, or any combination[.]" KRS 183.132(1). As noted by the Court of Appeals in Inco, Ltd., it is not clear whether the City of Lexington or Fayette County initially created the Airport Board, but upon the merger of the city and the county to create the Lexington-Fayette Urban County Government, "every function [the city] sponsored became a county agency[.]" 705 S.W.2d at 934. The record in this case is no clearer as to the originComair at 100-102.
of the Board, but the principle in Inco, Ltd. is sound. At the merger of the city and the county, the newly formed Urban County Government became the (possibly adoptive) "parent" entity of the Airport Board.
This is further supported by the fact that the Urban County Government retains significant control over the board. The members of the Airport Board are appointed by the mayor. KRS 183.132(4)(e). The mayor, or his representative, also sits on the Board. Id. The accounting books of the Board "shall at all times be subject to examination by the legislative body ... by whom the board was created." KRS 183.132(15). The Board is required to submit an annual "detailed report of all acts and doings of the board to the legislative body or bodies by whom the board was created." Id. The most control, however, stems from KRS 183.133(6), which states:
The board or any other governmental unit may from time to time make, adopt and enforce such rules, regulations and ordinances as it may find necessary, desirable or appropriate for carrying into effect the purposes of this chapter, including those relating to the operation and control of the airport, airport facilities or air navigation facilities owned or operated by such board or such other governmental unit.The term "governmental unit" includes "urban-county government," KRS 183.012(2), meaning that under KRS 183.133(6), the Urban County Government can exercise regulatory control over the Board and the airport if it sees fit to do so.
The Airport Board also carries out a function integral to state government in that it exists solely to provide and maintain part of the Commonwealth's air transportation infrastructure (i.e., the airport). The statutory purpose of airport boards is "to establish, maintain, operate, and expand necessary, desirable or appropriate airport and air navigation facilities," and they "shall have the duty and
such powers as may be necessary, or desirable to promote and develop aviation, including air transportation, airports and air navigation facilities." KRS 183.133(1). As argued by the Board and Corporation, this function is, in many ways, analogous to the provision of county roads and state highways. Though the analogy is imperfect, since the Airport Board does not own or maintain the airways themselves (an impossibility, actually), it is sufficient because the board, by providing the airport, provides the primary means for accessing those airways, which in turn are essential for commercial and private transportation of people, cargo, and mail. See also KRS 183.200 ("Recognizing that the rapid development of a statewide system of airports is of prime importance in the industrial development of the state, the General Assembly reaffirms its previous declarations that the acquisition, establishment, construction, enlargement, improvement, maintenance, equipping and operation of airports is a public purpose, and further declares assistance in the financing of local airport projects to be within the proper province of state government."); KRS 183.123 ("The acquisition of any lands for the purpose of establishing airports or other air navigation facilities; ... the acquisition, establishment, construction, enlargement, improvement, maintenance, equipping, and operation of airports and other air navigation facilities, whether by the state separately or jointly with any governmental unit thereof or air board ... are hereby declared to be public and governmental functions exercised for a public purpose, and matters of public necessity ...." (emphasis added)).
It is also important that the Board is "a legislative body for the purposes of KRS 183.630 to 183.740 [the statutes relating to the issuance of bonds]." KRS 183.132(3). The power to legislate is one of the core functions of government. Though this legislative capacity is only one small aspect of the Board, it is nevertheless telling about the overall nature of the entity. It is also worth noting that even the cases most restrictive of immunity admit that legislative and quasi-legislative functions are entitled to immunity. E.g., Haney, 386 S.W.2d at 742.
Comair argues that the Airport Board is "engaged in a proprietary venture, i.e., transportation." This, however, imputes too much function and activity to the Board, which does not actually provide transportation services, for example, by operating an airplane to transport people. Instead, it provides the runways, terminals, and other infrastructure that private airline companies like Comair use (admittedly for a fee) to provide those transportation services. Comair's reasoning is akin to saying that the Transportation Cabinet is engaged in the business of transportation because it facilitates private and commercial transportation (e.g., by trucking companies) by building roads and highways (and even charges a fee for their use at times with toll booths). But the Cabinet (like the Board) is actually in the "business" of providing transportation infrastructure, which is a quintessential state concern and function, one that is very different from the business of transportation itself.
The fact that the Board has substantial revenue from fees charged while operating the airport also does not make the activity proprietary. Partly this is because fees, authorized by KRS 183.33, are but one of many ways an airport board can generate revenue. An airport board can also receive money from its local government, including counties and urban-county governments, which may impose taxes and appropriate money from their general funds to support the creation, expansion, and operation of airports. See KRS 183.134. Most importantly, however, an airport board can issue revenue bonds, KRS 183.136, which, as noted above, is a legislative function.
Also, the Board is far more limited than a private entity when setting the fees it charges for some of its services (use of the landing area, etc.), since the fees can only be "reasonable" and are subject to judicial review, much like an administrative agency's decisions. KRS 183.133(2). The Board is not a for-profit entity. Its revenues are to be used solely to make improvements and to maintain the airport itself through employees and contracts with construction and service providers.
Comair also argues that the Airport Board over the years has held itself out to be a wholly private entity independent of the Lexington-Fayette Urban County Government. This argument cuts both ways, since in many documents—including the annual financial report, the bond issue documents, and the lease of the airport real estate from the Airport Corporation (which holds title) to the Board and the Urban County Government— the Board refers to itself as an agency of the Urban County Government. Ultimately, however, such statements by the entity are not controlling. As noted in Autry, "An analysis of what an agency actually does is required to determine its immunity status." 219 S.W.3d at 717.
An examination of the "parent" and the function of the Airport Board thus reveals that the Court of Appeals was correct in Inco, Ltd. in holding that the Board was a county agency entitled to the protection of sovereign immunity. The Urban County Government is the parent of the Board and continues to exercise some control over the entity. But perhaps more importantly, the Board's sole function is to provide vital transportation infrastructure for the people of the Commonwealth, which is an integral function of state government. The Airport Board is therefore entitled to immunity.
In reaching the conclusion that the Lexington-Fayette Urban County Airport Board's sole function was to provide vital transportation infrastructure to the people of the Commonwealth, which is an integral function of state government, the court first looked to the provisions of the Kentucky Revised Statutes which governed the establishment and function of that board. The court then examined the record to determine if the board was in fact carrying out those functions in accordance with the governing statutes. It then answered that question in the affirmative, and a finding of immunity resulted.
In the matter at bar, the record is insufficient to support this analysis on an interlocutory appeal. While the same statutes which governed the creation and operation of the Lexington-Fayette Urban County Airport Board also govern those of the KCAB, we cannot determine from the record whether - in the language of Comair - Kenton County is the "parent" entity, it continues to exercise some control over KCAB, and whether the sole function of KCAB is to provide vital transportation infrastructure to the to the people of the Commonwealth. While the answers to these questions may appear obvious, we are nevertheless without the authority or desire to go beyond the record and speculate on this issue.
On remand, the Boone Circuit Court will develop the record and determine therefrom whether Kenton County is the parent entity of KCAB, whether it continues to exercise some control over KCAB, and whether the sole purpose of KCAB is to provide vital transportation infrastructure to the people of the Commonwealth. If these questions are answered in the affirmative, KCAB is entitled to sovereign immunity under Comair.
For the foregoing reasons, Kenton County is shielded from tort litigation by sovereign immunity, thus entitling it to a Judgment on the Pleadings, and the Boone Circuit Court erred in failing to so rule. We reverse and remand the Order on appeal for a determination of whether the KCAB is entitled to immunity under Comair.
ALL CONCUR. BRIEFS FOR APPELLANTS: Lawrence E. Barbiere
Jay D. Patton
BRIEF FOR APPELLEE: Robert E. Blau
Cold Springs, Kentucky