RENDERED: JULY 9, 2021; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals NO. 2020-CA-0037-MR
DUSTIN C. BEARD APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT v. HONORABLE THOMAS D. WINGATE, JUDGE ACTION NO. 19-CI-00498
CABINET FOR HEALTH AND FAMILY SERVICES APPELLEE
OPINION AFFIRMING IN PART, VACATING IN PART, AND REMANDING
** ** ** ** **
BEFORE: CALDWELL, JONES, AND TAYLOR, JUDGES.
JONES, JUDGE: Dustin C. Beard appeals an order of the Franklin Circuit Court
which granted the Cabinet for Health and Family Services’ (the Cabinet’s) motion
to dismiss his suit seeking enforcement of a contract. We affirm in part, vacate in
part, and remand for further proceedings. I. BACKGROUND
The parties disagree regarding virtually all of the underlying facts in
this case. Beard is an attorney working out of a private firm in Lexington.
According to Beard, he was contacted by Tabitha Schnell, an employee working
for the Cabinet. The Cabinet was allegedly involved in a guardian and conservator
action in Scott County in which an individual, L.C.K., was being exploited by her
children. 1 In Beard’s account, Schnell approached him and asked if he would
petition the court for appointment as L.C.K.’s guardian and conservator. She
allegedly requested Beard’s services because the Cabinet is ill-equipped to serve as
a guardian to a person with significant assets, particularly stocks and bonds.
According to Beard, he was informed, presumably by Schnell, to keep a record of
his hours worked on the case, and the Cabinet would compensate him for his time
at the conclusion of his representation. There is nothing in the record which
memorializes the alleged agreement between Beard and Schnell or any other
member of the Cabinet; although, Beard alleged the existence of a valid contract in
his complaint.
1 Although not specified in the record or the briefs, it appears the L.C.K. action was initiated under the provisions for conservatorship of a disabled person, pursuant to Kentucky Revised Statutes (KRS) 387.500, et seq. The underlying issues in the L.C.K. action are not part of the record.
-2- According to Beard, he worked on the L.C.K. case from September
12, 2017, to July 18, 2018. However, when he submitted a detailed invoice for his
services in the amount of $39,315.00 to the Cabinet, the Cabinet declined payment
on the invoice. After some negotiation with the Cabinet attorneys, Beard filed a
suit to enforce his contract in Scott Circuit Court. The matter was then transferred
to Franklin Circuit Court pursuant to the requirements of KRS 45A.245(1). Beard
attached emails to his pleadings documenting his communication with Cabinet
attorneys Johann Herklotz and Marion Hogan. Those emails show that Beard was
working on an unspecified case with Herklotz and Hogan, and they also document
a dispute relating to his fee. Beard also attached his detailed invoice, showing the
time he invested in the L.C.K. case. Finally, Beard attached an affidavit from
Cameron Culbertson, Assistant Scott County Attorney, in which Culbertson
attested as follows:
It was my understanding that Dustin C. Beard was representing the Cabinet for Health and Family Services in [the L.C.K. case], and that he filed the Guardianship case at the request of the Cabinet for Health and Family Services. . . . Dustin C. Beard filed pleadings and represented the Cabinet for Health and Family Services in all respects of the case from September 12, 2017 through July 18, 2018.
(Record (R.) at 119.)
The Cabinet moved to dismiss Beard’s suit on grounds that Beard did
not show he had a lawfully authorized written contract with the Cabinet, and
-3- sovereign immunity barred suit in such cases. Following receipt of the parties’
briefs on the issue, the Franklin Circuit Court agreed with the Cabinet and entered
its order granting the motion to dismiss. This appeal followed.
II. ANALYSIS
The trial court granted the Cabinet’s motion to dismiss under CR2
12.02. As an appellate court, we apply the following standard of review in such
cases:
A motion to dismiss for failure to state a claim upon which relief may be granted admits as true the material facts of the complaint. So a court should not grant such a motion unless it appears the pleading party would not be entitled to relief under any set of facts which could be proved. . . . Stated another way, the court must ask if the facts alleged in the complaint can be proved, would the plaintiff be entitled to relief? Since a motion to dismiss for failure to state a claim upon which relief may be granted is a pure question of law, a reviewing court owes no deference to a trial court’s determination; instead, an appellate court reviews the issue de novo.
Skeens v. University of Louisville, 565 S.W.3d 159, 160 (Ky. App. 2018) (quoting
Fox v. Grayson, 317 S.W.3d 1, 7 (Ky. 2010) (internal quotation marks and
citations omitted)).
Beard presents three arguments on appeal. First, he argues the circuit
court erroneously found the Cabinet did not hire him in the L.C.K. guardianship
2 Kentucky Rules of Civil Procedure.
-4- proceedings. Second, Beard argues the circuit court erroneously found the Cabinet
did not waive sovereign immunity regarding his attorney-client agreement with the
Cabinet. Third, and finally, Beard argues the circuit court erroneously found his
claim was barred by sovereign immunity when the Cabinet’s employees informed
him a writing would be performed at the conclusion of his representation. For its
part, the Cabinet asserts Beard has not produced a written contract between itself
and Beard and cites Commonwealth v. Whitworth, 74 S.W.3d 695 (Ky. 2002), for
the proposition that “[l]egally enforceable contracts with the state are to be in
writing.” Id. at 700. The circuit court relied upon this same point in its order
dismissing Beard’s action against the Cabinet.
We agree with the circuit court that, as a matter of sovereign
immunity, suits against the Commonwealth or its agencies to enforce a contract
require a written contract. Sovereign immunity is “an inherent attribute of the
state” which provides it with “[a]bsolute immunity from suit.” Comair, Inc. v.
Lexington-Fayette Urban County Airport Corp., 295 S.W.3d 91, 94 (Ky. 2009)
(citations omitted). “[P]ure sovereign immunity, for the state itself, has long been
the rule in Kentucky. . . . Sovereign immunity can only be waived by the General
Assembly.” Ruplinger v. Louisville/Jefferson County Metro Government, 607
S.W.3d 583, 585 (Ky. 2020) (citations and internal quotation marks omitted).
Governmental immunity, derived from sovereign immunity, likewise prevents suit
-5- against a government agency. Yanero v. Davis, 65 S.W.3d 510, 519 (Ky. 2001).
Like sovereign immunity, governmental immunity can only be waived by an
explicit act of the General Assembly. University of Louisville v. Rothstein, 532
Free access — add to your briefcase to read the full text and ask questions with AI
RENDERED: JULY 9, 2021; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals NO. 2020-CA-0037-MR
DUSTIN C. BEARD APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT v. HONORABLE THOMAS D. WINGATE, JUDGE ACTION NO. 19-CI-00498
CABINET FOR HEALTH AND FAMILY SERVICES APPELLEE
OPINION AFFIRMING IN PART, VACATING IN PART, AND REMANDING
** ** ** ** **
BEFORE: CALDWELL, JONES, AND TAYLOR, JUDGES.
JONES, JUDGE: Dustin C. Beard appeals an order of the Franklin Circuit Court
which granted the Cabinet for Health and Family Services’ (the Cabinet’s) motion
to dismiss his suit seeking enforcement of a contract. We affirm in part, vacate in
part, and remand for further proceedings. I. BACKGROUND
The parties disagree regarding virtually all of the underlying facts in
this case. Beard is an attorney working out of a private firm in Lexington.
According to Beard, he was contacted by Tabitha Schnell, an employee working
for the Cabinet. The Cabinet was allegedly involved in a guardian and conservator
action in Scott County in which an individual, L.C.K., was being exploited by her
children. 1 In Beard’s account, Schnell approached him and asked if he would
petition the court for appointment as L.C.K.’s guardian and conservator. She
allegedly requested Beard’s services because the Cabinet is ill-equipped to serve as
a guardian to a person with significant assets, particularly stocks and bonds.
According to Beard, he was informed, presumably by Schnell, to keep a record of
his hours worked on the case, and the Cabinet would compensate him for his time
at the conclusion of his representation. There is nothing in the record which
memorializes the alleged agreement between Beard and Schnell or any other
member of the Cabinet; although, Beard alleged the existence of a valid contract in
his complaint.
1 Although not specified in the record or the briefs, it appears the L.C.K. action was initiated under the provisions for conservatorship of a disabled person, pursuant to Kentucky Revised Statutes (KRS) 387.500, et seq. The underlying issues in the L.C.K. action are not part of the record.
-2- According to Beard, he worked on the L.C.K. case from September
12, 2017, to July 18, 2018. However, when he submitted a detailed invoice for his
services in the amount of $39,315.00 to the Cabinet, the Cabinet declined payment
on the invoice. After some negotiation with the Cabinet attorneys, Beard filed a
suit to enforce his contract in Scott Circuit Court. The matter was then transferred
to Franklin Circuit Court pursuant to the requirements of KRS 45A.245(1). Beard
attached emails to his pleadings documenting his communication with Cabinet
attorneys Johann Herklotz and Marion Hogan. Those emails show that Beard was
working on an unspecified case with Herklotz and Hogan, and they also document
a dispute relating to his fee. Beard also attached his detailed invoice, showing the
time he invested in the L.C.K. case. Finally, Beard attached an affidavit from
Cameron Culbertson, Assistant Scott County Attorney, in which Culbertson
attested as follows:
It was my understanding that Dustin C. Beard was representing the Cabinet for Health and Family Services in [the L.C.K. case], and that he filed the Guardianship case at the request of the Cabinet for Health and Family Services. . . . Dustin C. Beard filed pleadings and represented the Cabinet for Health and Family Services in all respects of the case from September 12, 2017 through July 18, 2018.
(Record (R.) at 119.)
The Cabinet moved to dismiss Beard’s suit on grounds that Beard did
not show he had a lawfully authorized written contract with the Cabinet, and
-3- sovereign immunity barred suit in such cases. Following receipt of the parties’
briefs on the issue, the Franklin Circuit Court agreed with the Cabinet and entered
its order granting the motion to dismiss. This appeal followed.
II. ANALYSIS
The trial court granted the Cabinet’s motion to dismiss under CR2
12.02. As an appellate court, we apply the following standard of review in such
cases:
A motion to dismiss for failure to state a claim upon which relief may be granted admits as true the material facts of the complaint. So a court should not grant such a motion unless it appears the pleading party would not be entitled to relief under any set of facts which could be proved. . . . Stated another way, the court must ask if the facts alleged in the complaint can be proved, would the plaintiff be entitled to relief? Since a motion to dismiss for failure to state a claim upon which relief may be granted is a pure question of law, a reviewing court owes no deference to a trial court’s determination; instead, an appellate court reviews the issue de novo.
Skeens v. University of Louisville, 565 S.W.3d 159, 160 (Ky. App. 2018) (quoting
Fox v. Grayson, 317 S.W.3d 1, 7 (Ky. 2010) (internal quotation marks and
citations omitted)).
Beard presents three arguments on appeal. First, he argues the circuit
court erroneously found the Cabinet did not hire him in the L.C.K. guardianship
2 Kentucky Rules of Civil Procedure.
-4- proceedings. Second, Beard argues the circuit court erroneously found the Cabinet
did not waive sovereign immunity regarding his attorney-client agreement with the
Cabinet. Third, and finally, Beard argues the circuit court erroneously found his
claim was barred by sovereign immunity when the Cabinet’s employees informed
him a writing would be performed at the conclusion of his representation. For its
part, the Cabinet asserts Beard has not produced a written contract between itself
and Beard and cites Commonwealth v. Whitworth, 74 S.W.3d 695 (Ky. 2002), for
the proposition that “[l]egally enforceable contracts with the state are to be in
writing.” Id. at 700. The circuit court relied upon this same point in its order
dismissing Beard’s action against the Cabinet.
We agree with the circuit court that, as a matter of sovereign
immunity, suits against the Commonwealth or its agencies to enforce a contract
require a written contract. Sovereign immunity is “an inherent attribute of the
state” which provides it with “[a]bsolute immunity from suit.” Comair, Inc. v.
Lexington-Fayette Urban County Airport Corp., 295 S.W.3d 91, 94 (Ky. 2009)
(citations omitted). “[P]ure sovereign immunity, for the state itself, has long been
the rule in Kentucky. . . . Sovereign immunity can only be waived by the General
Assembly.” Ruplinger v. Louisville/Jefferson County Metro Government, 607
S.W.3d 583, 585 (Ky. 2020) (citations and internal quotation marks omitted).
Governmental immunity, derived from sovereign immunity, likewise prevents suit
-5- against a government agency. Yanero v. Davis, 65 S.W.3d 510, 519 (Ky. 2001).
Like sovereign immunity, governmental immunity can only be waived by an
explicit act of the General Assembly. University of Louisville v. Rothstein, 532
S.W.3d 644, 647 (Ky. 2017). “It is undisputed that the Cabinet is a state agency
entitled to the protection of governmental immunity.” Cabinet for Health and
Family Services v. Todd County Standard, Inc., 488 S.W.3d 1, 9-10 (Ky. App.
2015) (citing Stratton v. Commonwealth, 182 S.W.3d 516 (Ky. 2006)).
Beard’s suit against the Cabinet is predicated upon enforcement of a
contract. The governmental immunity afforded to the Cabinet in contract matters
has been waived by the General Assembly in KRS 45A.245(1), which reads in
pertinent part as follows: “Any person, firm or corporation, having a lawfully
authorized written contract with the Commonwealth . . . 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.” A plain
reading of the statute indicates that the legislative waiver of sovereign immunity in
contractual matters only applies to written contracts. This was the basis for our
Supreme Court’s declaration in Commonwealth v. Whitworth, that “a lawsuit
cannot be brought against the Commonwealth to enforce oral contracts.”
Whitworth, 74 S.W.3d at 700. The circuit court correctly determined anyone
-6- bringing suit against the Commonwealth for enforcement of a contract must have a
written contract, and we affirm that part of the circuit court’s order.
However, the record presented to us, as well as to the circuit court, is
underdeveloped in this case. Beard strenuously argues several Cabinet employees
knew he was working on the L.C.K. matter for the Cabinet, and he asserts the
Cabinet now incorrectly denies he was working on its behalf. Based on the record
before us, it appears the circuit court did not have the advantage of being able to
consider the record in the underlying L.C.K. action in order to consider the scope
of Beard’s representation. Furthermore, Beard claims there are documents in the
Cabinet’s possession which, taken together, will show all the elements of a written
contract between himself and the Cabinet were present while he performed
services on the L.C.K. matter. Beard asserts the Cabinet blocked him from
conducting adequate discovery which would prove the existence of this written
contract.
Wide-ranging discovery is not appropriate against a party claiming
immunity. “Immunity from suit includes protection against the ‘cost of trial’ and
the ‘burdens of broad-reaching discovery’ that ‘are peculiarly disruptive of
effective government.’” Lexington-Fayette Urban County Government v. Smolcic,
142 S.W.3d 128, 135 (Ky. 2004) (quoting Harlow v. Fitzgerald, 457 U.S. 800,
817-18, 102 S. Ct. 2727, 2738, 73 L. Ed. 2d 396, 409-10 (1982)). The Kentucky
-7- Supreme Court has held that “broad-reaching discovery” was not appropriate
“prior to an immunity determination” by the trial court. Presbyterian Church
(U.S.A.) v. Edwards, 566 S.W.3d 175, 179 (Ky. 2018). Notably, however, the
Supreme Court also held “limited discovery [which] the trial court may deem
necessary” on the question of immunity was appropriate. Id. at 181.
Here, it appears the circuit court granted the Cabinet’s motion to
dismiss before Beard could conduct limited discovery relevant to the threshold
immunity issue. In doing so, the circuit court took the Cabinet’s representations at
face value and found no contract existed in this case. However, if Beard is correct,
and the Cabinet has documents in its possession which amount to a written contract
between Beard and the Cabinet in the underlying case, this could effectively waive
the Cabinet’s immunity under KRS 45A.245(1). Furthermore, the circuit court
should review the record in the underlying L.C.K. case in order to determine the
scope of Beard’s representation in that action.
III. CONCLUSION
For the foregoing reasons, we affirm that portion of the Franklin
Circuit Court’s order which found a written contract was necessary to enforce a
suit against the Cabinet in a contract matter. We vacate the order of dismissal and
remand to the circuit court with instructions (1) to review the record in the
underlying L.C.K. action, in order to ascertain the scope of Beard’s representation;
-8- and (2) to allow limited discovery sufficient to discover whether a written contract
exists between Beard and the Cabinet before determining immunity should apply
in this case. After this additional discovery, the circuit court shall determine
whether a valid written agreement existed between the parties or whether the
Cabinet’s motion should be granted on the basis that no written agreement existed
between the parties.
ALL CONCUR.
BRIEF AND ORAL ARGUMENT BRIEF AND ORAL ARGUMENT FOR APPELLANT: FOR APPELLEE:
D. Lyle McQuinn Carmen M. Ross Lexington, Kentucky Frankfort, Kentucky
-9-