RENDERED: APRIL 29, 2021 TO BE PUBLISHED
Supreme Court of Kentucky 2019-SC-0282-DG
PERRY PUCKETT APPELLANT
ON REVIEW FROM COURT OF APPEALS V. NO. 2017-CA-1060 FRANKLIN CIRCUIT COURT NO. 10-CI-01144
CABINET FOR HEALTH AND FAMILY APPELLEES SERVICES AND KENTUCKY PERSONNEL BOARD
OPINION OF THE COURT BY JUSTICE KELLER
AFFIRMING
Perry Puckett was terminated from his employment with the
Commonwealth of Kentucky Cabinet for Health and Family Services (CHFS) in
2009 for excessive and inappropriate personal email usage. After protracted
litigation through multiple levels of appeals, the Franklin Circuit Court
reversed his termination. CHFS appealed to the Court of Appeals which
reversed the circuit court. This Court granted discretionary review, and after a
careful review of the record and pertinent authority, we affirm the Court of
Appeals.
I. BACKGROUND
In 2009, Puckett was employed by CHFS as a Disability Adjudicator III –
Trainer. He had been employed by CHFS for over a decade when he was terminated in 2009 for excessive and inappropriate email usage including
sending emails that contained graphic sexual comments and photos,
unprofessional language, and derogatory comments about coworkers and
supervisors. Significantly, Puckett’s termination letter was signed by Jay Klein,
a Division Director in the Division of Employee Management at CHFS,
purportedly on behalf of J.P. Hamm, CHFS’s Human Resources Director. Klein
signed Hamm’s name, followed by a diagonal slash and his own initials (JK).
Hamm had been appropriately delegated appointing authority by the Secretary
of CHFS, but Klein had not.1 Because the question before us does not involve
the merits of Puckett’s termination, we will not discuss the underlying facts in
great detail. Instead, we will focus our discussion on the long procedural
history of this case.
After receiving the termination letter, Puckett timely appealed his
termination to the Kentucky Personnel Board (the Board). A hearing was held
before a hearing officer at which several CHFS employees testified, including
Klein. During CHFS’s opening statement, counsel for CHFS stated that Klein
made the final determination to terminate Puckett. Sean Estep, Human
Resources Administrator for CHFS, testified at the hearing and twice referred to
Klein as the appointing authority charged with making termination decisions.
Klein himself testified that he was the appointing authority for disciplinary
actions and that part of his job was to review final disciplinary actions and
1 In this Opinion, we assume without deciding that Klein did not possess the
requisite authority to terminate Puckett.
2 “sign off” on said actions. No witness was asked, and no witness testified as to,
who actually signed Hamm’s name on Puckett’s termination letter. However,
during his testimony, Klein acknowledged signing Hamm’s name, followed by
his own initials, on another document relating to a different employee, and this
document was admitted into evidence, by stipulation, at the hearing.
After an evidentiary hearing, the hearing officer issued a recommended
order finding that Puckett’s punishment was disproportionately harsh and
recommending that the termination be reduced to a 30-day suspension. CHFS
filed exceptions to the hearing officer’s recommended order, and Puckett did
not. The Board rejected the hearing officer’s recommended order and instead
imposed Puckett’s termination. Puckett then timely petitioned the Franklin
Circuit Court for review of his termination.
While the case was pending in Franklin Circuit Court, Puckett’s attorney
learned, through discovery in a separate, unrelated case, that Klein had
actually signed Hamm’s name to Puckett’s termination letter. Also while
Puckett’s case was pending, it became clear that Klein did not have the
requisite appointing authority to terminate CHFS employees. Based on this
new knowledge, Puckett moved to amend his complaint in circuit court to
include a claim that Puckett’s termination was null and void because the
person who signed the termination document lacked appointing authority to
terminate him. He further moved for a stay of the proceedings in circuit court
so that the matter could be remanded to the Board for consideration of whether
his termination was void. The circuit court granted both of these motions.
3 CHFS then filed both a petition for a writ of prohibition and an
interlocutory appeal in the Court of Appeals. The writ petition asked the Court
of Appeals to prohibit the circuit court from enforcing its order remanding the
case back to the Board. The Court of Appeals denied the writ petition holding
that the circuit court acted within its jurisdiction in remanding the case back
to the Board. Ky. Cabinet for Health & Family Servs. v. Puckett, No. 2012-CA-
002195-OA (Ky. App. June 10, 2013). In the interlocutory appeal, the Court of
Appeals held that Puckett’s “amended complaint properly asserts a claim for
declaratory relief which is not barred by the doctrine of sovereign immunity.”
Cabinet for Health & Family Servs. v. Puckett, No. 2012-CA-002165-MR, 2014
WL 689094, at *1 (Ky. App. Feb. 21, 2014).
Following the Court of Appeals’ rulings, the Board took up the case on
remand from the circuit court. A hearing officer held another evidentiary
hearing and issued a recommended order. The hearing officer concluded that
the Board had no authority to decide whether Puckett’s termination was void
due to Klein’s lack of appointing authority because there was no evidence of
fraud or misconduct on the part of CHFS and the issue had not been raised or
preserved before the Board previously. Puckett filed exceptions to the hearing
officer’s recommended order; however, the Board adopted the hearing officer’s
recommended order in its entirety.
Puckett then moved the circuit court to re-activate the case and for leave
to file another amended complaint to include review of the Board’s most recent
order. An agreed order was entered lifting the stay and allowing the amended
4 complaint to be filed. After briefing and argument, the circuit court entered an
opinion and order reversing the Board’s original order terminating Puckett,
finding that the Board lacked substantial evidence to terminate Puckett and
that its decision was arbitrary. Interestingly, the circuit court never addressed
the issue on which it remanded the case to the Board, whether Puckett’s
termination was void due to Klein’s lack of appointing authority. CHFS
appealed to the Court of Appeals.2
The Court of Appeals reversed the circuit court holding, in short, that the
circuit court substituted its own judgment for that of the Board and that
substantial evidence supported Puckett’s termination. Relevant to this appeal,
the Court of Appeals declined to address Puckett’s argument that his
termination was void because Puckett did not properly preserve that argument
for appeal and CHFS did not commit fraud or misconduct.
Puckett filed a motion for discretionary review with this Court which we
granted to determine, essentially, whether the circuit court’s remand to the
Board was proper.
II. STANDARD OF REVIEW
This case primarily involves the interpretation of Kentucky Revised
Statute (KRS) 13B.150. “Because the construction and application of statutes
is a question of law, it is subject to de novo review on appeal.” Osborne v.
Commonwealth, 185 S.W.3d 645, 648 (Ky. 2006).
2 Puckett cross-appealed on issues unrelated to that before us today.
5 III. ANALYSIS
1. Preservation
Because Puckett was a classified employee with status, he could only be
dismissed with cause. KRS 18A.095(1). KRS 18A.095(7)(c) allowed Puckett to
appeal his dismissal to the Board within sixty (60) days of the dismissal. He did
so. An administrative hearing on his dismissal was then “conducted in
accordance with KRS Chapter 13B.” KRS 18A.095(17). As previously explained,
the hearing officer found Puckett’s termination to be unduly harsh and
recommended only a 30-day suspension. Puckett did not file exceptions to
anything in the hearing officer’s recommended order, but CHFS did. After the
Board entered an order in favor of CHFS, Puckett petitioned the Franklin
Circuit Court for review of his termination in accordance with KRS 13B.140
which subjects all final orders of an agency to judicial review.
“It is well settled that failure to raise an issue before an administrative
body precludes the assertion of that issue in an action for judicial review.”
Urella v. Kentucky Bd. of Med. Licensure, 939 S.W.2d 869, 873 (Ky. 1997)
(citing Jackson v. State Auto. Mut. Ins. Co., 837 S.W.2d 496, 498 (Ky. 1992);
Personnel Bd. v. Heck, 725 S.W.2d 13, 17 (Ky. App. 1987)). “Under Chapter
13B, the filing of exceptions provides the means for preserving and identifying
issues for review by the agency head. In turn, filing exceptions is necessary to
preserve issues for further judicial review.” Rapier v. Philpot, 130 S.W.3d 560,
563 (Ky. 2004). By failing to file an exception regarding the appointing
authority of Klein, Puckett failed to preserve this issue for judicial review. We
6 have previously made clear that failure to follow this preservation rule
“precludes judicial review of any part of the recommended order not excepted
to and adopted in the final order.” Id. at 563–64. We have further explained
that “when a party fails to file exceptions, the issues the party can raise on
judicial review under KRS 13B.140 are limited to those findings and
conclusions contained in the agency head's final order that differ from those
contained in the hearing officer's recommended order.” Id. at 564. In this case,
the Board’s final order did not differ from the hearing officer’s recommended
order in regard to the authority of Klein to terminate Puckett, as this was never
raised as an issue to either the hearing officer or the Board. Accordingly,
Puckett could not raise the issue on judicial review under KRS 13B.140.
Once before the circuit court, that court’s review of the agency’s order is
“confined to the record, unless there is fraud or misconduct involving a party
engaged in administration of [Chapter 13B].” KRS 13B.150(1). The circuit court
may affirm the final order or it may reverse the final order, in whole or in part, and remand the case for further proceedings if it finds the agency's final order is:
(a) In violation of constitutional or statutory provisions; (b) In excess of the statutory authority of the agency; (c) Without support of substantial evidence on the whole record; (d) Arbitrary, capricious, or characterized by abuse of discretion; (e) Based on an ex parte communication which substantially prejudiced the rights of any party and likely affected the outcome of the hearing; (f) Prejudiced by a failure of the person conducting a proceeding to be disqualified pursuant to KRS 13B.040(2); or (g) Deficient as otherwise provided by law.
7 KRS 13B.150(2). As explained above, the circuit court remanded the case to
the Board to address Puckett’s claim regarding Klein’s authority to terminate
him.
Puckett argues the circuit court’s remand was proper under KRS
13B.150(1)(a), (d), and (g). We, however, disagree. When considered in light of
the evidence before it, the Board’s order itself was not “[i]n violation of
constitutional or statutory provisions;” “[a]bitrary, capricious, or characterized
by abuse of discretion;” or “[d]eficient as otherwise provided by law.” The Board
did not have any evidence before it regarding Klein’s authority, or lack thereof,
to terminate Puckett. It had no ability, and no reason, to look outside of that
evidence to consider an issue that was never argued before it. The order itself
was not in violation of constitutional or statutory provisions. Further, it was
not arbitrary, capricious, or an abuse of discretion for the Board to terminate
Puckett despite Klein’s lack of authority because it was not presented with
evidence of that lack of authority. Finally, the order itself was not deficient as
otherwise provided by law. Therefore, the Board’s termination of Puckett,
despite Klein’s lack of authority to terminate him, fails to meet any of the
criteria for remand as set out in KRS 13B.150(2). Accordingly, the circuit court
erred in remanding Puckett’s case to the Board under KRS 13B.150(2).
2. Doctrine of Primary Jurisdiction
Puckett also argues that under the doctrine of primary jurisdiction, the
circuit court’s remand to the Board was proper so that the Board could make
an initial determination regarding Klein’s authority to terminate Puckett. We
8 disagree. We have previously explained that “[t]he precise function of the
doctrine of primary jurisdiction is to guide a trial court in deciding whether the
court should refrain from exercising its jurisdiction until after an
administrative agency has determined some question or some aspect of some
question arising in the proceeding before the court.” Preston v. Meigs, 464
S.W.2d 271, 274 (Ky. 1971). In Preston, we quoted United States Supreme
Court Justice Marshall, who explained, “When there is a basis for judicial
action, independent of agency proceedings, courts may route the threshold
decision as to certain issues to the agency charged with primary responsibility
for governmental supervision or control of the particular industry or activity
involved.” Id. (quoting Port of Boston Marine Terminal Ass'n v.
Rederiaktiebolaget Transatlantic, 400 U.S. 62, 68 (1970)).
In this case, the judicial action was not independent of the agency
proceedings. Instead, the judicial action was a review of those proceedings.
Puckett argues that the determination of whether Klein had the authority to
terminate his employment was best left to the Board before the trial court
proceeded. The doctrine of primary jurisdiction, however, does not supplant
our rules of preservation. It merely “recognizes that the court has subject-
matter jurisdiction but as a matter of judicial policy should not exercise it in
instances where proper judicial administration requires that action be deferred
by the court until the agency has acted and the court may then review its
action.” Id. at 274–75. In this case, the Board had already acted on the issue of
Puckett’s termination. Although the Board did not decide the specific issue of
9 Klein’s authority to terminate Puckett, this issue was never presented to it. As
such, in this case the doctrine of primary jurisdiction is not relevant to a
determination of whether the circuit court’s remand of the matter back to the
3. Law of the Case Doctrine
Puckett also argues that the law of the case doctrine prevents a current
review of the propriety of the circuit court’s remand. Specifically, he argues
that the Court of Appeals’ decisions in CHFS’s prior writ petition and
interlocutory appeal from the circuit court’s remand order are the law of the
case as it relates to whether the circuit court remanded the case to the Board
in error.
Under the law of the case doctrine, “if an appellate court has passed on a
legal question and remanded the cause to the court below for further
proceedings, the legal questions thus determined by the appellate court will not
be differently determined on a subsequent appeal in the same case.” Inman v.
Inman, 648 S.W.2d 847, 849 (Ky. 1982) (quoting 5 Am. Jur. 2d Appeal and
Error § 744). The doctrine, however, is inapplicable in this case, because the
Court of Appeals’ holdings to which Puckett refers were not on the specific legal
issue before us today.
The issue before the Court of Appeals in CHFS’s interlocutory appeal was
whether sovereign immunity shielded it from Puckett’s amended complaint.
Puckett, 2014 WL 689094, at *1. The Court of Appeals merely held that the
“amended complaint properly asserts a claim for declaratory relief which is not
10 barred by the doctrine of sovereign immunity.” Id. It did not pass on the
propriety of the circuit court’s remand to the Board. In fact, the Court of
Appeals specifically stated that “other matters, including the circuit court's
order remanding this case to the Board, are not before this Court at this time.”
Id. at *4. Accordingly, the Court of Appeals’ opinion in CHFS’s interlocutory
appeal did not create the law of the case on the issue currently before this
Court.
In CHFS’s petition for a writ of prohibition filed in the Court of Appeals,
CHFS argued that the trial court exceeded its jurisdiction when it remanded
Puckett’s case back to the Board. Puckett, No. 2012-CA-002195-OA. Thus, the
Court of Appeals’ holding in that case was limited to whether the trial court
acted within its jurisdiction when it remanded the matter to the Board. Any
statements regarding the propriety of the remand were not properly before the
Court of Appeals at that time. Therefore, the Court of Appeals’ opinion in
CHFS’s writ case did not create the law of the case on the current issue.
4. Void Versus Voidable Action
Finally, Puckett argues that his termination was void ab initio, and
therefore, preservation of it is not required. A void action is one that is “a
nullity from the outset.” Carter v. Smith, 366 S.W.3d 414, 424 (Ky. 2012) (citing
BLACK'S LAW DICTIONARY (9th ed. 2009)). A voidable action, on the other hand,
“is an action that is valid until it is annulled.” Id. (citing BLACK'S LAW DICTIONARY
(9th ed. 2009)). If an action is void, “[a] court may, in a proper proceeding,
vacate it at any time. The lapse of time is no bar to such relief.” Hill v. Walker,
11 180 S.W.2d 93, 95 (Ky. 1944). Accordingly, if Puckett’s termination is void, it
can be declared so at any time, regardless of preservation. It would follow that
any other adverse employment actions taken by Klein would also be void
regardless of how long ago those actions were taken and whether the issue had
ever been addressed before. This simply cannot be so.
Regarding judgments, we have previously held that “[t]he generally
accepted rule is that where the court has jurisdiction of parties and subject
matter, the judgment, if erroneous, is voidable, not void.” Dix v. Dix, 222
S.W.2d 839, 842 (Ky. 1949). On the other hand, “a personal judgment without
such jurisdiction is void.” Hill, 180 S.W.2d at 95 (citations omitted). Although
certainly not binding on this Court, the Industrial Commission Division of the
Fourth District Appellate Court of Illinois explained clearly and concisely how
this concept of jurisdiction applies to administrative agencies. It said,
[t]o the extent an agency acts outside its statutory authority, it acts without jurisdiction. The term “jurisdiction,” while not strictly applicable to an administrative agency, may be employed to designate the authority of the agency to act. In administrative law, the term “jurisdiction” has three aspects: (1) personal jurisdiction, (2) subject-matter jurisdiction, and (3) the agency's scope of statutory authority. Business & Professional People for the Public Interest v. Illinois Commerce Comm'n, 136 Ill.2d 192, 243, 144 Ill.Dec. 334, 555 N.E.2d 693, 716 (1989). A judgment or order is void where it is entered by a court or agency which lacks personal jurisdiction, subject-matter jurisdiction, or the inherent power to enter the particular judgment or order, or where the order is procured by fraud. Evans v. Corporate Services, 207 Ill.App.3d 297, 302, 152 Ill.Dec. 191, 565 N.E.2d 724, 727 (1990).
Siddens v. Industrial Com'n, 711 N.E.2d 18, 21 (Ill. App. Ct. 1999).
12 In this case, someone within CHFS had the authority to terminate
Puckett. It was within the “jurisdiction” of CHFS to do so. The fact that an
individual who was not properly delegated the appointing authority to
terminate Puckett signed his termination letter does not make his termination
void. It merely makes his termination voidable. We can find nothing in our
precedent that would make CHFS’s actions in this case void.
Puckett relies on Commonwealth, Tourism Cabinet v. Stosberg for the
proposition that an agency’s failure to comply with statutory requirements in
imposing employee discipline makes that disciplinary action void. 948 S.W.2d
425 (Ky. App. 1997). However, the facts of that case, and the way in which the
Tourism Cabinet took its disciplinary action in that case, stand in stark
contrast to the actions taken by CHFS in this case. In Stosberg, the Tourism
Cabinet involuntarily transferred a classified employee with status but deemed
the transfer a promotion.3 Id. at 427. In doing so, the Tourism Cabinet
essentially ignored the statutory scheme regarding employment penalizations
and failed to follow it all together. The Court of Appeals held that the Tourism
Cabinet had “refus[ed] to implement the protections prescribed in KRS
18A.095” and had “no authority” to do so. Id. (emphasis added). Because the
Tourism Cabinet failed to comply with “the mandatory provision of KRS
3 An involuntary transfer is a “penalization” as defined in KRS 18A.005(24) that
triggers the rights of employees listed in KRS 18A.095.
13 18A.095(2) that such penalization be only ‘for cause[,]’” the Court of Appeals
held that Stosberg’s transfer was void ab initio.4 Id. at 428.
In the case before us, CHFS attempted to comply with KRS 18A.095 in
terminating Puckett. It provided him with an intent to dismiss letter as
required by KRS 18A.095(2), and Puckett and his attorney were permitted to
appear personally and be heard in response to this intent to dismiss as
required by KRS 18A.095(5). Puckett was then notified in writing of his
dismissal pursuant to KRS 18A.095(7) and permitted to appeal his dismissal to
the Board. The fact that Klein, who did not have the proper appointing
authority to terminate Puckett, signed Puckett’s termination letter does not
make his termination void. CHFS committed a mere procedural error in the
manner in which it effected Puckett’s termination. This error does not implicate
the same “lack of authority” displayed by the actions of the Tourism Cabinet in
Stosberg.
Accordingly, Puckett’s termination is merely voidable, as opposed to void.
As such, review of Klein’s authority to terminate Puckett is not reviewable “at
any time” in the way that a void action would be. The issue needed to be
preserved by presentation to the hearing officer or the Board, but it was not.
Accordingly, it was improper for the circuit court to remand Puckett’s case to
the Board on an issue that was not preserved.
4 The provision that prohibits penalization of classified employees with status
“except for cause” is now found in KRS 18A.095(1).
14 IV. CONCLUSION
For the foregoing reasons, we affirm the Court of Appeals and reinstate
the Board’s order terminating Puckett from his employment with CHFS.
All sitting. All concur.
COUNSEL FOR APPELLANT:
David Lindsay Leightty Alison Meredith Messex Priddy, Cutler, Naake & Meade, PLLC
COUNSEL FOR APPELLEE, CABINET FOR HEALTH & FAMILY SERVICES:
Wesley Warden Duke Ashley Genevieve Kennedy Catherine Elaine York Office of Legal Counsel
COUNSEL FOR APPELLEE, KENTUCKY PERSONNEL BOARD:
Stafford Easterling Mark Albert Sipek
COUNSEL FOR AMICUS, KENTUCKY PERSONNEL CABINET:
Catherine Marie Stevens