RENDERED: JANUARY 7, 2022; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2020-CA-1112-MR
GREENUP COUNTY BOARD OF EDUCATION; AND STEVE HALL, IN HIS OFFICIAL AND INDIVIDUAL CAPACITIES APPELLANTS
APPEAL FROM GREENUP CIRCUIT COURT v. HONORABLE REBECCA K. PHILLIPS, SPECIAL JUDGE ACTION NO. 13-CI-00462
LUTHER GRIZZLE APPELLEE
OPINION REVERSING AND REMANDING
** ** ** ** **
BEFORE: CETRULO, LAMBERT, AND TAYLOR, JUDGES.
CETRULO, JUDGE: Luther Grizzle initiated a civil suit in Greenup Circuit Court
against the Greenup County Board of Education (Board), as well as its
superintendent, Steve Hall (in both his official and individual capacities). The
Board and Hall then moved to summarily dismiss Grizzle’s suit on immunity grounds, but their motions were denied. This interlocutory appeal followed. We
reverse to the extent that the circuit court concluded the appellants were not
entitled to immunity, insofar as Grizzle’s suit asked for monetary damages. We
further believe the circuit court’s application of Kentucky Revised Statute (KRS)
Chapter 45A with respect to the immunity questions caused it to incorrectly
conclude that this matter should be transferred to Franklin Circuit Court. We
remand for further proceedings in Greenup Circuit Court.
I. THE COMPLAINT
Understanding our disposition of this appeal requires, at the onset,
understanding the nature of the civil suit Grizzle asserted against the Board and
Hall. That is accordingly our starting point, and we will begin with the only
complaint Grizzle filed in this matter. In relevant part, his July 24, 2013 complaint
in Greenup Circuit Court alleged:
1. Luther Grizzle is a resident of Greenup County, Kentucky.
2. The Greenup County School Board is an independent political body located in Greenup County, Kentucky.
3. Steve A. Hall is a resident of Greenup County, Kentucky.
4. The Greenup Circuit Court has jurisdiction over this matter.
-2- 5. On or about the ___ day of ________, 20__, the Plaintiff and the Defendants entered into a contract, as evidenced by the attached Exhibit A.[1]
6. In violation of said contract, the Defendants, Greenup County School Board and Steve Hall, both individually and personally, failed to renew said contract with Luther Grizzle without cause.
7. Under the terms of the contract, the Defendants could only fail to renew Mr. Grizzle’s contract due to “incompetence, neglect of duty, insubordination, inefficiency, misconduct, immorality, or other reasonable grounds which are specifically contained in the contract.”
8. Mr. Grizzle has never been notified by any entity or individual of what he may have done in violation of the contract.
9. Mr. Grizzle was offered the attached Exhibit B contract.
10. The Defendants all know that Mr. Grizzle is not qualified for the position he was offered, which was that of essentially an aid to special needs children at McKell in the Greenup County School System.
11. The failure to renew his contract is wrongful, without basis, and an intentional act.
12. The Plaintiff has and will continue to suffer damages as a result of the wrongful action of the Defendants, including but not limited to loss of pay, loss of benefits, loss of accumulation of retirement, and other damages to be proven during discovery and at trial.
1 Grizzle never indicated in his complaint when he entered into his contract with the appellants, nor does his complaint of record include either an “Exhibit A” or “Exhibit B.” He did, however, include his complete, written contract as an exhibit to his December 23, 2014 response to the appellants’ summary judgment motions.
-3- 13. The actions of the Defendants are wanton and intentional in nature and, as such, Mr. Grizzle demands punitive damages from all Defendants for their conduct.
WHEREFORE, the Plaintiff, Luther Grizzle, prays that this [c]ourt order that he be reinstated to his contract terms, with back pay and back benefits; for punitive damages in an amount to be determined by the [c]ourt or a jury; for his costs herein expended, including a reasonable fee for his attorney; and for any and all other relief to which he may appear entitled.
Grizzle’s complaint is somewhat open to interpretation; without
specifying any legal theory, it mentions a contract, but also uses phrases commonly
associated with tort law, such as “wanton,” “intentional act,” and “punitive
damages.” But, Grizzle clarifies that his sole cause of action – in his view – was
breach of contract. He states on page ten of his appellate brief – as he did in his
various other filings below – that he “never pursued a tort claim against the
Appellants. [His] Complaint alleges the partied [sic] entered into a contract, the
terms of which were later breached by the Appellants.”
II. STATUTORY RIGHTS
That aside, it is important to note a few salient points about Grizzle’s
“contract” before taking Grizzle’s characterization of his claims at face value. It
was an employment agreement, specifying Grizzle’s employment with the Board
was as a “classified” employee of the Greenup County School District. All
counsel agree that Grizzle had more than four years of continuous active service
-4- with the district and, as he represents, this was but one of a succession of year-to-
year contracts Grizzle had entered with the Board. As noted, Grizzle alleged the
appellants breached the contract through their “failure to renew” it without
notifying him “of what he may have done in violation of the contract.” However,
the Board points out that Grizzle was given notice and paid out for the remainder
of his contract. No one disputes that there was no hearing requested nor any held
before the within case was filed in the circuit court in Greenup County.
The Board’s policy regarding “Discipline, Suspension and Dismissal
of Classified Employees” (Policy 03.27), referenced “KRS 161.011.” And that
statute, in turn, gave rise to Grizzle’s “contract.” The phrase “classified employee”
is a statutory term of art. Pursuant to KRS 161.011(1)(a), it “means an employee
of a local district who is not required to have certification for his position as
provided in KRS 161.020[.]” Likewise, a “classified employee” has statutory
rights. Relevant to this matter, KRS 161.011 provides:
(5) Local districts shall enter into written contracts with classified employees. Contracts with classified employees shall be renewed annually except contracts with the following employees:
....
(b) An employee who has completed four (4) years of continuous active service, upon written notice which is provided or mailed to the employee by the superintendent, no later than May 15,
-5- that the contract is not being renewed due to one (1) or more of the reasons described in subsection (7) of this section. Upon written request within ten (10) days of the receipt of the notice of nonrenewal, the employee shall be provided with a specific and complete written statement of the grounds upon which the nonrenewal is based. The employee shall have ten (10) days to respond in writing to the grounds for nonrenewal.
(7) Nothing in this section shall prevent a superintendent from terminating a classified employee for incompetency, neglect of duty, insubordination, inefficiency, misconduct, immorality, or other reasonable grounds which are specifically contained in board policy.
(9) Local school boards shall develop and provide to all classified employees written policies which shall include but not be limited to:
(a) Terms and conditions of employment;
(b) Identification and documentation of fringe benefits, employee rights, and procedures for the reduction or laying off of employees; and
(c) Discipline guidelines and procedures that satisfy due process requirements.
-6- Pursuant to KRS 161.011(5)(b) and (7), Grizzle was a classified
employee; thus his employment could only be terminated (or his contract could
only be non-renewed) based upon specific grounds listed in the statute, which were
then set forth in his employment contract. Pursuant to KRS 161.011(9)(c),
Grizzle’s employment rights were governed by the Board’s “written policies”
including its “[d]iscipline guidelines and procedures that satisfy due process
requirements.” In the context of KRS Chapter 161, written contracts with
classified employees, as well as certified teachers,2 are required by statute; the
substance of those contracts is governed by statute; and the contract itself is
considered a “legislative grant.” See Bd. of Educ. of Harrodsburg v. Powell, 792
S.W.2d 376, 379 (Ky. App. 1990).
Continuing in that vein, the Kentucky Supreme Court has explained
that a suit alleging the breach of a contractual provision relating to employee
termination or rehiring, but which is based upon grounds inside the governance of
KRS Chapter 161, “does not present a common law breach of contract claim,” but
rather a statutory wrongful termination claim. See Jefferson County Bd. of Educ. v.
Edwards, 434 S.W.3d 472, 478 (Ky. 2014). In other words, despite any verbiage
to the contrary, such a claim is not contractual, it is statutory. Id. As an aside,
2 See KRS 161.730.
-7- Edwards addressed this issue in the context of a certified employee’s (i.e.,
teacher’s) purported claim for breach of contract against the school board that
terminated his employment – a claim governed by KRS 161.790. Id.
Nevertheless, the same general rule holds true for classified employees: their
claims of either wrongful termination or wrongful non-renewal of contract stem
from and are governed by KRS 161.011. See, e.g., Alvey v. Davis, 583 S.W.3d 20
(Ky. App. 2019) (illustrating the nature of these statutory claims; how they are
properly presented; and the extent to which a circuit court is authorized to consider
them).
Similarly, this Court in Hammond v. Little discussed the provisions of
KRS 161.011 in a similar setting and noted that classified school employees in
Kentucky receive a statutory contract, or in a broader sense, a legislative grant.
Hammond v. Little, No. 2016-CA-000707-MR, 2018 WL 1357485 (Ky. App. Feb.
23, 2018)3 (citing Bd. of Educ. of Harrodsburg, 792 S.W.2d at 379). As in that
case, the only remedy available if there was any violation of KRS Chapter 161 in
this instance would be limited to a remand for a hearing in compliance with KRS
161.765(2). Both parties agreed that the contract itself for the year that Grizzle
was employed was paid out in full.
3 We find Hammond to be persuasive authority in this case and proper to cite as it fulfills the criteria of Kentucky Rule of Civil Procedure (CR) 76.28(4).
-8- The essential thrust of Grizzle’s claim, as set forth in his complaint,
was that the Board and its superintendent, Hall, failed to comply with their
statutory obligations under KRS Chapter 161 regarding his rights to notice and due
process relative to the non-renewal of his contract – grounds squarely within the
governance of KRS Chapter 161. Accordingly, Grizzle’s claim was based upon
statute, not contract; and it therefore sounded not in contract or tort, but in equity.
See, e.g., Roberts v. Fayette Cty. Bd. of Educ., 173 S.W.3d 918, 923 (Ky. App.
2005) (explaining that a claim for relief “directing the Board to comply with the
statute, sounds in equity rather than in tort.”).
Specifically, as illustrated in Alvey, 583 S.W.3d 20, and as set forth in
KRS 161.011 itself, the only remedy permitted under KRS 161.011 for wrongful
termination is in the nature of prospective injunctive relief: if there is compliance
with KRS 161.011(5); if the aggrieved employee subsequently invokes the Board’s
due process procedures for contesting the termination or non-renewal; and if the
aggrieved employee ultimately succeeds in his or her case, the termination is
deemed invalid and the employee is effectively reinstated. In this record, the Court
cannot even determine whether there was compliance with the statute, or any
exercise of administrative processes, or any due process violation.
Apart from that, monetary damages for a purported violation of KRS
161.011 are not contemplated by the statute nor permitted:
-9- [T]here 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[.]
Hammond v. Little, 2018 WL 1357485, at *5.
III. IMMUNITY
Having defined the nature of Grizzle’s claim, we now return to what
occurred during the proceedings below and, particularly, how the circuit court
resolved the appellants’ asserted defenses of immunity. In their respective answers,
the Board and Hall (in his official capacity) asserted governmental immunity; and
Hall (in his individual capacity) asserted qualified immunity. Later, both moved
for summary judgment on those bases.
Regarding the former defense, school districts (and their
representatives sued in their official capacities) are considered arms of the
Commonwealth and are thus entitled to “governmental immunity.”4 That is, absent
4 See Ammerman v. Bd. of Educ. of Nicholas Cty., 30 S.W.3d 793, 797 (Ky. 2000) (explaining local boards of education qualify as arms of state government entitled to immunity); see also Autry v. W. Ky. Univ., 219 S.W.3d 713, 718 (Ky. 2007) (explaining “State agency officials or employees, when sued in their official capacity, have the same immunity as their employer.”).
-10- a waiver from the General Assembly,5 they cannot be sued for monetary damages
based upon acts they have taken “which constitute governmental functions, i.e.,
public acts integral in some way to state government.” See Breathitt Cty. Bd. of
Educ. v. Prater, 292 S.W.3d 883, 887 (Ky. 2009). Regarding the latter defense,
employees of school districts sued in their individual capacities are entitled to
“qualified immunity.” They cannot be sued for monetary damages based upon acts
they have taken that (1) involved the exercise of discretion and judgment; (2) were
taken in good faith; and (3) were within the scope of the employee’s authority. See
Yanero v. Davis, 65 S.W.3d 510, 522 (Ky. 2001).
As discussed, the circuit court denied the summary judgment motions
even though the court specifically found no evidence of bad faith on the part of the
superintendent. As to why, its August 12, 2020 order to that effect seized upon the
“breach of contract” and tort-like language of Grizzle’s complaint. With respect to
the asserted defense of governmental immunity, the circuit court reasoned: (1) the
Board qualifies as an arm of the Commonwealth; (2) pursuant to KRS 45A.245,
the Commonwealth has effectively waived governmental immunity for its various
arms insofar as liability for written contracts is concerned;6 and therefore (3) the
5 Only the General Assembly may limit or waive governmental immunity. See Withers v. Univ. of Kentucky, 939 S.W.2d 340, 344 (Ky. 1997).
6 The Kentucky Supreme Court has explained that KRS 45A.245 does indeed signal that the General Assembly has waived governmental immunity insofar as written contracts with its
-11- Board and Hall (in his official capacity) were precluded from asserting
governmental immunity because, in its view, Grizzle’s claim involved a dispute
over a written contract with an arm of the Commonwealth.
In short, the trial judge felt it was bound by the Kentucky Supreme
Court decision in University of Louisville v. Rothstein, 532 S.W.3d 644, which
concluded that the Commonwealth and its various arms had waived immunity from
liability for written contracts with its interpretation of KRS 45A.245. Further,
because it believed KRS 45A.245 was dispositive of this matter, the circuit court
also held that, pursuant to KRS 45A.245(1), it was consequently required to
“transfer” this matter to Franklin Circuit Court pending the outcome of any
interlocutory appeal. We certainly understand the circuit court’s conclusion, but
we also note there is no published case law which extends the application of KRS
45A.245 to local and county boards of education. Even more telling, there are
various arms are concerned. “We now hold that KRS 45A.245 is an unqualified waiver of immunity in all cases based on a written contract with the Commonwealth, including but not limited to employment contracts.” Univ. of Louisville v. Rothstein, 532 S.W.3d 644, 647 (Ky. 2017).
In relevant part, the statute provides:
(1) Any person, firm or corporation, having a lawfully authorized written contract with the Commonwealth at the time of or after June 21, 1974, 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. Any such action shall be brought in the Franklin Circuit Court and shall be tried by the court sitting without a jury. All defenses in law or equity, except the defense of governmental immunity, shall be preserved to the Commonwealth.
-12- multiple cases involving claims virtually identical to this where the employee is
essentially seeking relief from what is perceived as a violation of KRS 161.011 or
similar provisions contained within that chapter.
While we are similarly bound to follow the Kentucky Supreme
Court’s decisions, we are not convinced that the Court or the legislature intended
for KRS 45A.245 to be so applied and require all suits across the Commonwealth
for statutory violation claims under KRS Chapter 161 to be moved from their local
and county courts to Franklin County. We are not at liberty to disregard Rothstein,
any more than the circuit court. However, we do not agree that Rothstein applies
because we do not find KRS 45A.245 to be dispositive.
In Edwards, 434 S.W.3d at 476-78, our Kentucky Supreme Court held
that a teacher’s failure to exhaust administrative remedies deprived the circuit court
of jurisdiction over a statutory wrongful termination claim. In Ammerman, 30
S.W.3d at 793-800, which preceded Rothstein, the Supreme Court affirmed a
Nicholas Circuit Court ruling without any mention or suggestion that KRS Chapter
45A applied or required transfer to Franklin County. The Court held that
immunity applied to school districts in the absence of a statutory waiver of
immunity. The Court did not find that immunity was waived based merely on the
alleged violation of a statute conferring contractual rights. Ammerman was not
mentioned by the Court in Rothstein.
-13- In Benningfield v. Fields, 584 S.W.3d 731 (Ky. 2019), the Kentucky
Supreme Court addressed a claim by an employee against the Taylor County Fiscal
Court as the employer as well as individual members of that Court, for a civil
rights violation. While finding that KRS 342.197 does implicitly waive immunity
for government employers accused of violating that statute, the Court did not order
that the case had to be transferred or refiled in Franklin Circuit Court under the
provisions of the Model Procurement Code, as the Greenup Circuit Court held in
this instance. Rather, the Supreme Court in Benningfield simply reversed a
summary judgment in favor of the employer and remanded the matter to Taylor
Circuit Court to determine whether there was any violation of KRS 342.197 by the
Taylor Fiscal Court. Benningfield followed Rothstein but makes no reference to
KRS Chapter 45A.
Finally, in Hammond, 2018 WL 1357485, no waiver of immunity was
found in the language of the statutes relied upon as a part of the cause of action
advanced. Again, the dispute involved statutory terms which the plaintiffs asserted
were contractually binding.
The circuit court herein felt bound by Rothstein and concluded this
was a suit over a written contract and that immunity was waived by application of
KRS 45A.245. Even were we to agree, the damages recoverable by this appellee
would be limited considerably to the amount of the contract, which we were told
-14- was fully paid out.7 However, we do not find that Rothstein requires a finding of a
waiver of immunity under KRS Chapter 45A for a local school superintendent and
board charged by a different statute with certain obligations and who has been
alleged to have failed to comply with those. Instead, we perceive this as
indistinguishable from Edwards, Hammond, and Ammerman.
In so doing, we recognize that the Kentucky Supreme Court may need
to address this issue further and provide guidance in the context of local school
board employment cases. We are unaware of any authority since Rothstein,
in 2017, which requires that KRS Chapter 161 claims against local school boards
be heard in Franklin Circuit Court. Indeed, there is long standing authority that
local boards are not subject to suit in any county other than the one where they sit.
Pendleton County Bd. of Educ. v. Simpson, 91 S.W.2d 557, 559-60 (Ky. 1936)
(“All of the acts performed by county boards of education are made and done
locally within the county. Its jurisdiction is confined to its county. It is an
incorporated subdivision of the free school system of the state, but circumscribed
in exercising its proper functions to its particular county. Any other rule
permitting the bringing of such actions within any other venue of the state that [sic]
7 KRS 45A.245(2) limits damages on an contract claim to the amount of the original contract, stating, “[i]f damages awarded on any contract claim under this section exceed the original amount of the contract, such excess shall be limited to an amount which is equal to the amount of the original contract.”
-15- in that county would result in great harassment of the board and the custodian of its
records, as well as incurring large expenditures in defending such foreign brought
actions of the nature herein involved.”).
Consistent with the aforementioned authorities, we disagree with the
circuit court’s application of KRS 45A.245 and thus reverse to the extent that the
circuit court found it applicable and in so doing denied the appellants’ immunity
arguments. Likewise, we reverse the circuit court to the extent it decided that a
transfer to Franklin Circuit Court was warranted in this matter. Rather, we believe
its decision was, as noted, a symptom of its improper application of KRS 45A.245
to the underlying equity and immunity dispute.
IV. LIMITED JURISDICTION
The appellants also ask this Court to review other issues affecting the
circuit court’s subject matter jurisdiction and the merits of Grizzle’s underlying
civil suit as to prospective injunctive relief. This we cannot do although the record
does leave us with many questions. In Baker v. Fields, 543 S.W.3d 575, 578 (Ky.
2018), the Kentucky Supreme Court explained our limited role in deciding
immunity issues on interlocutory appeal.
A court can only address the issues presented in the interlocutory appeal itself, nothing more. Otherwise, interlocutory appeals would be used as vehicles for bypassing the structured appellate process. Specifically, this means, and we hold, that an appellate court reviewing an interlocutory appeal of a trial court’s
-16- determination of a defendant’s immunity from suit is limited to the specific issue of whether immunity was properly denied, nothing more.
See also Commonwealth v. Samaritan All., LLC, 439 S.W.3d 757, 760 (Ky. App.
2014) (“Although a party can immediately appeal from the denial of a motion to
dismiss based upon absolute immunity, most other substantive defenses must wait
for adjudication by a final order.”).
V. CONCLUSION
Consistent with what is set forth above, we REVERSE AND
REMAND to the Greenup Circuit Court, for further proceedings consistent with
this Opinion.
LAMBERT, JUDGE, CONCURS.
TAYLOR, JUDGE, CONCURS IN RESULT ONLY.
BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE:
Suzanne Cassidy Robert T. Renfroe Covington, Kentucky R. Stephen McGinnis Greenup, Kentucky
ORAL ARGUMENT FOR ORAL ARGUMENT FOR APPELLANTS: APPELLEE:
Suzanne Cassidy Robert T. Renfroe Covington, Kentucky Greenup, Kentucky
-17-