Shm, 2601, LLC v. Denise Bentley

• Court: Court of Appeals of Kentucky
• Decided: March 30, 2023
• Docket: 2022 CA 000441
• Status: Unknown

Opinion

RENDERED: MARCH 31, 2023; 10:00 A.M. NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals

NO. 2022-CA-0441-MR

SHM, 2601, LLC AND DINA, LLC APPELLANTS

APPEAL FROM JEFFERSON CIRCUIT COURT v. HONORABLE CHARLES L. CUNNINGHAM, JR., JUDGE ACTION NO. 21-CI-004243

DENISE BENTLEY; DAVID JAMES; AND DONNA PURVIS APPELLEES

OPINION AFFIRMING

** ** ** ** **

BEFORE: CETRULO, DIXON, AND EASTON, JUDGES.

EASTON, JUDGE: SHM, 2601, LLC (“SHM”), and Dina, LLC, d/b/a Dino’s

Food Mart (“Dino’s”), (collectively “Appellants”) filed a complaint alleging

defamation and other claims against the Appellees Denise Bentley, David James,

and Donna Purvis (collectively “Appellees”). The Appellees are members or staff

of the Louisville Metro Council sued in their individual capacities. The alleged defamatory statements were made while the Appellees testified before the

Louisville Metro Government Code Enforcement Board (“Code Board”) about a

nuisance violation complaint. The circuit court dismissed the Appellants’

complaint, ruling the Appellees were witnesses in a quasi-judicial setting and thus

were entitled to absolute immunity from civil damages resulting from the

testimonies. Finding no error, we affirm.

FACTUAL AND PROCEDURAL HISTORY

SHM owns real estate located at 2601 West Broadway in Louisville.

The tenant of this property, Dino’s, owns and operates a gas station and grocery

store by the same name. SHM received a notice from the Code Board in March

2020, as well as a notice of public nuisance violation in April 2020. The initial

notice and later specific notice of public nuisance violation were issued to SHM

pursuant to LMCO1 § 156.057 alleging there was ongoing criminal activity on the

premises of Dino’s resulting in a public nuisance. Because Dino’s was the tenant

and not the owner, Dino’s did not receive a notice of public nuisance.2

SHM appealed these notices to the Code Board. The Code Board held

a hearing on SHM’s appeal on July 24, 2020. At this hearing, the Appellees were

1 Louisville Metro Government Code of Ordinance. 2 LMCO § 156.057(C)(3) requires notice of a public nuisance be sent to the owner of the property in question.

-2- sworn in as witnesses to provide testimony relating to activity on the premises

owned by SHM and leased by Dino’s. Among the Appellees’ statements under

oath were basically (1) Dino’s premises were unsanitary and unclean, (2) Dino’s

and SHM engaged in or allowed criminal activity, including the sale of drugs and

prostitution, (3) persons have been shot at the gas pumps at Dino’s, (4) Dino’s and

SHM caused the shooting of David McAttee, (5) Dino’s is equivalent to a

“vampire, sucking the life out of West Louisville,” and (6) Dino’s “serves anyone

with a social disfunction.”

The Code Board upheld the notices. The Appellants state they

appealed the Code Board’s decision to the Jefferson District Court. According to

the Appellants, the district court case is still pending. The record does not contain

any documentation of any such appeal or its status.

The Appellants filed this action in the circuit court, alleging they were

defamed by the statements made by the Appellees at the Code Board hearing.

While the Appellants suggest some statements were also aired because of media

coverage, the complaint does not allege anything additionally said by the

Appellees other than what was said in the public hearing.

The Appellees filed a CR3 12.02 motion to dismiss the Appellants’

complaint for failure to state a claim. The Appellees argued their testimonies at the

3 Kentucky Rules of Civil Procedure.

-3- Code Board hearing were privileged and entitled to absolute immunity. The

Appellees’ motion to dismiss was granted on December 29, 2021.

The Appellants filed a motion to alter, amend, or vacate, as well as a

motion for findings of fact and conclusions of law. The circuit court granted the

Appellants’ motion for findings of fact and conclusions of law and entered its

findings on April 1, 2022. The circuit court then denied the Appellants’ motion to

alter, amend, or vacate. This appeal followed.

STANDARD OF REVIEW

For purposes of a CR 12.02 motion, we must accept the Appellants’

factual allegations as true and draw all reasonable inferences in their favor. Hardin

v. Jefferson Cnty. Bd. Of Educ., 558 S.W.3d 1, 5 (Ky. App. 2018). Whether the

circuit court correctly dismissed an action under CR 12.02 is a question of law.

Morgan & Pottinger, Attorneys, P.S.C. v. Botts, 348 S.W.3d 599, 601 (Ky. 2011),

overruled on other grounds by Maggard v. Kinney, 576 S.W.3d 559 (Ky. 2019).

Therefore, we will review this matter de novo. Id.

ANALYSIS

The Appellants argue the circuit court erred in dismissing their

complaint as the Appellees’ statements before the Code Board were not privileged

and specifically not protected by absolute immunity. The absolute immunity at

issue is “a judicially created privilege founded upon the belief that the

-4- administration of justice requires witnesses in a legal proceeding be able to discuss

their views without fear of a defamation lawsuit.” Curd v. Kentucky State Bd. of

Licensure for Pro. Engineers & Land Surveyors, 433 S.W.3d 291, 298 (Ky. 2014)

(citations omitted). A witness, even if he or she knowingly gives false testimony,

is entitled to absolute immunity from civil damages. Stone v. Glass, 35 S.W.3d

827, 828 (Ky. App. 2000).

“A witness is absolutely privileged to publish false and defamatory

matter of another in communications preliminary to a proposed judicial proceeding

and as a part of a judicial proceeding in which he is testifying, if it has some

relation thereto.” Schmitt v. Mann, 163 S.W.2d 281, 284 (Ky. 1942). Judicial

statements are absolutely privileged when material, pertinent, and relevant to the

subject under inquiry. Id. at 283.

The Appellees testified at the Code Board hearing, which is a quasi-

judicial proceeding. Absolute immunity for witnesses also applies to quasi-judicial

proceedings such as administrative hearings. Begley v. Louisville Times Co., 115

S.W.2d 345, 348 (Ky. 1938). The Appellants have not challenged the quasi-

judicial nature of the Code Board hearing.

The Appellants argue the Appellees’ statements were not privileged as

the statements were not material, pertinent, or relevant to the subject of the Code

Board hearing. The determination as to whether a judicial statement is material,

-5- pertinent, or relevant to the subject of inquiry is to be applied liberally, especially

to witnesses. Smith v. Hodges, 199 S.W.3d 185, 194 (Ky. App. 2005).

The subject of the Code Board hearing regarded a possible public

nuisance on the premises of Dino’s. The Appellees testified as to the cleanliness of

Dino’s, as well as alleged criminal activity on Dino’s premises. The Appellees’

statements were clearly related to the Code Board’s inquiry as to whether the

operation of Dino’s constituted a public nuisance. The statements were material

and pertinent.

The Appellants argue the Appellees were not entitled to absolute

privilege as the Appellees’ statements were not “admissible.” The Appellants do

not explain why the statements were inadmissible. Some of the statements would

appear to be hearsay, but this misses the point. The application of rules of

evidence is not the question. This argument fails, because as mentioned in Schmitt,

supra, judicial statements are absolutely privileged if they have some relation to

the proceedings at hand.

The Appellants next argue the Appellees’ statements were outside the

scope of the Appellees’ official duties, and thus should not be privileged. The

Appellants engage in an extensive discussion of what is a ministerial versus

discretionary duty of an official as explained in Yanero v. Davis, 65 S.W.3d 510

(Ky. 2001). Yanero examined the issue of qualified official immunity of

-6- government officials and does not factor into the analysis of whether witness

testimony is privileged. Whether testimony is within the scope of a witness’

official duties is irrelevant in determining immunity for judicial statements. The

question raised is whether the Appellees were liable in an individual capacity, not

as city officials.

As part of this same inapposite argument, the Appellants insist the

Appellees’ statements were not privileged as they were made with malice. The

Appellants have either confused the absolute testimonial privilege, which applies

here, and a qualified testimonial privilege,4 or the assessment of malice is offered

as part of the contention the Appellees were acting in an official capacity and

exercising discretionary duties.

Not only are statements made in judicial proceedings protected

regardless of their truth, but the witness is also still protected from civil liability,

even if the witness is malicious. General Elec. Co. v. Sargent & Lundy, 916 F.2d

1119, 1126 (6th Cir. 1990). As previously stated, the Appellees’ statements at the

Code Board hearing were relevant to the subject of the inquiry; therefore, even if

Appellees’ statements were made maliciously, said statements would still be

absolutely privileged.

4 Judicial statements that are not pertinent and material to the matter at issue are only qualifiedly privileged, i.e., they are privileged only if made in good faith. Maggard, 576 S.W.3d at 567.

-7- The Appellants then argue that the circuit court erred in dismissing

their claims for invasion of privacy/false light, wrongful use of civil proceedings,

and civil conspiracy. The Appellants’ claim for invasion of privacy/false light fails

as both Appellants are business entities, not human beings. 13 KY. PRAC. Tort Law

§ 16:1. “[I]f the case at bar turned upon the violation of a right of privacy, then the

Company’s cause would fail, because such a right is designed primarily to protect

the feelings and sensibilities of human beings, rather than to safeguard property,

business or other pecuniary interests.” Maysville Transit Co. v. Ort, 177 S.W.2d

369, 370 (Ky. 1943).

The Appellants’ claim of wrongful use of civil proceedings also fails.

The elements of this particular cause of action are:

(1) the institution or continuation of original judicial proceedings, either civil or criminal, or of administrative or disciplinary proceedings, (2) by, or at the instance, of the plaintiff, (3) the termination of such proceedings in defendant’s favor, (4) malice in the institution of such proceeding, (5) want or lack of probable cause for the proceeding, and (6) the suffering of damage as a result of the proceeding.

D’Angelo v. Mussler, 290 S.W.3d 75, 79 (Ky. App. 2009).

Appellants argue that Appellees wrongfully continued the proceedings

by testifying and thereby adding time to the Code Board hearing. This assertion

stretches the meaning of “continue” beyond any reasonable understanding. The

-8- only roles the Appellees played in the hearing were as witnesses providing

testimony. They did not institute or continue the Code Board hearing.

Even if the Appellants could make a case of a continuation of the

proceedings by the Appellees, another reason would bar the wrongful civil

proceedings claim. Since the Appellants’ alleged appeal of the Code Board’s

decision is supposedly still pending before the Jefferson District Court, there has

been no termination of such proceedings in the Appellants’ favor, an element of

the claim. The Appellants’ claim of wrongful use of civil proceedings was

properly dismissed.

The Appellants’ next claim is that of civil conspiracy. Civil

conspiracy has been defined as “a corrupt or unlawful combination or agreement

between two or more persons to do by concert of action an unlawful act, or to do a

lawful act by unlawful means.” Smith v. Bd. of Educ. of Ludlow, 94 S.W.2d 321,

325 (Ky. 1936). “In order to prevail on a claim of civil conspiracy, the proponent

must show an unlawful/corrupt combination or agreement between the alleged

conspirators to do by some concerted action an unlawful act.” Peoples Bank of

Northern Kentucky, Inc. v. Crowe Chizek and Co. LLC, 277 S.W.3d 255, 261 (Ky.

App. 2008).

The Appellants allege there was concerted action on behalf of the

Appellees that constitutes civil conspiracy as the Appellees each gave false

-9- testimony back-to-back. Civil conspiracy is not a free-standing claim – instead, it

merely provides a theory from which a plaintiff may recover from multiple

defendants for an underlying tort. See Davenport’s Adm’x v. Crummies Creek

Coal Co., 184 S.W.2d 887, 888 (Ky. 1945). Since the circuit court properly

dismissed the other causes of action made by the Appellants, the claim of civil

conspiracy has no underlying tort to be based upon and cannot survive.

Finally, in their complaint and brief, the Appellants make several

vague statements that they are being targeted for discrimination because the store

is being operated by “persons of Middle Eastern descent.” The right to be free

from discrimination based on race or national origin is a statutory right, and the

Appellants cite to no statute which would give rise to a discrimination claim nor do

they otherwise plead such a claim based upon the other allegations they have

made. See Kentucky Comm’n on Human Rights v. Fraser, 625 S.W.2d 852, 854

(Ky. 1981).

CONCLUSION

The circuit court correctly determined the Appellees’ testimonies at

the Code Board hearing to be privileged and entitled to absolute immunity from

civil damages. The circuit court’s dismissal of the Appellants’ complaint is

AFFIRMED.

-10- ALL CONCUR.

BRIEF FOR APPELLANT: BRIEF FOR APPELLEE:

Nader George Shunnarah Michael J. O’Connell Louisville, Kentucky Andrew Miller Robbie Howard Louisville, Kentucky

-11-