Board of Education of Paris, Kentucky v. Jason Earlywine ( 2023 )

RENDERED: FEBRUARY 24, 2023; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-0788-MR
BOARD OF EDUCATION OF PARIS,
KENTUCKY APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
v. HONORABLE PHILLIP J. SHEPHERD, JUDGE
ACTION NO. 21-CI-00493
JASON EARLYWINE APPELLEE
OPINION
AFFIRMING IN PART,
REVERSING IN PART,
AND REMANDING
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BEFORE: COMBS, EASTON, AND MCNEILL, JUDGES.
EASTON, JUDGE: The Board of Education of Paris, Kentucky (“Board”) appeals
the trial court’s ruling that KRS1 45A.245 is a waiver of the Board’s governmental
immunity from a suit for damages for breach of an employment contract. The
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Kentucky Revised Statute.
Board additionally appeals the relocation of venue from the Bourbon Circuit Court
to the Franklin Circuit Court. By order entered by this Court on December 16,
2021, we are limited to those issues directly affected by the immunity
determination. We affirm in part, reverse in part, and remand to the Bourbon
Circuit Court for dismissal of this case.
FACTUAL AND PROCEDURAL HISTORY
The Board employed the Appellee Jason Earlywine (“Earlywine”) as
a teacher from August 2007 until June 2019. In 2011, a student accused Earlywine
of inappropriate contact. The Board through its agents suspended Earlywine with
pay from the time of the accusation until June 2012, when the Board altered the
suspension to be without pay. This suspension ended in February 2015.
In 2012, Earlywine was indicted for one count of first-degree sexual
abuse in violation of KRS 510.110. The criminal case went to trial in January
2015. The circuit court judge presiding over that trial directed a verdict for
Earlywine on January 27, 2015. The criminal case was subsequently dismissed
with prejudice. Earlywine thereafter moved for expungement of the criminal case,
which was granted in April 2015.2
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While expungement has certain legal effects, it does not change the fact that, when Earlywine
was suspended without pay, the Board was addressing a criminal charge for which probable
cause was found as evidenced by the return of an indictment.
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The Board reinstated Earlywine in February 2015. Earlywine then
requested back wages for unpaid suspension time, which was denied due to his
failure to have sought any hearing to contest the suspension without pay when it
occurred. Earlywine continued teaching in the Board’s school district until June
2019. In 2020, Earlywine filed this action for breach of contract and violation of
statutory wage and hour provisions3 in the Bourbon Circuit Court.
The Board filed a motion to dismiss asserting that it benefited from
governmental immunity. The Bourbon Circuit Court denied the motion by an
order dated June 10, 2021. In its order, the circuit court agreed the Board was
entitled to immunity from Earlywine’s claims, but the circuit court held the waiver
of that immunity was provided by KRS 45A.245. The circuit court transferred
venue to the Franklin Circuit Court, pursuant to the same statute.
STANDARD OF REVIEW
The issue of whether a defendant is entitled to the defense of
sovereign or governmental immunity is a question of law. Rowan Cnty. v. Sloas,
201 S.W.3d 469, 475 (Ky. 2006)). Questions of law are reviewed de novo.
Cumberland Valley Contractors, Inc. v. Bell Cnty. Coal Corp., 238 S.W.3d 644,
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Neither the prehearing statements nor the briefs address the wage and hour claim. As a result,
the claim is waived. Kentucky Rule of Appellate Procedure 22(C)(2) (formerly Kentucky Rule
of Civil Procedure 76.03(8)). Commonwealth v. Pollini, 437 S.W.3d 144, 148 (Ky. 2014). We
need not address the claim here noting Earlywine previously advised the circuit court the claim
was simply a claim to lost wages under the contract at issue. Plaintiff’s Response to Motion to
Dismiss at pg. 10.
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647 (Ky. 2007). “[A]n order denying a substantial claim of absolute immunity is
immediately appealable even in the absence of a final judgment.” Breathitt Cnty.
Bd. of Educ. v. Prater, 292 S.W.3d 883, 887 (Ky. 2009).
ANALYSIS
The Board argues the circuit court erred when denying its claim of
governmental immunity by applying KRS 45A.245 to local boards of education. It
contends that notwithstanding the language of KRS 45A.245, local boards of
education retain their immunity from suits for damages for breach of contract.
It is clear under Kentucky law that local boards of education are
agencies of state government exercising a state function in running schools and
hiring teachers and have governmental immunity. Kentucky’s highest court has
recognized this for over eighty years. Clevinger v. Bd. of Educ. of Pike Cnty., 789
S.W.2d 5, 10 (Ky. 1990), overruled on other grounds by Cook v. Popplewell, 394
S.W.3d 323 (Ky. 2011). The overruling of Clevinger applies only to liability for
violations of federal civil rights violations. Cook, 394 S.W.3d at 327 n.3.
Boards of education have governmental immunity generally from
liability on contracts. Ammerman v. Bd. of Educ. of Nicholas Cnty., 30 S.W.3d
793, 797 (Ky. 2000). This does not mean this immunity has not been waived by
the General Assembly, which has the authority to waive immunity and provide
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limitations on the remedy provided. Yanero v. Davis, 65 S.W.3d 510, 523-24 (Ky.
2001) (explaining the Board of Claims Act as a waiver of immunity).
The Board argues KRS 45A.245 does not waive its governmental
immunity.
KRS 45A.245(1) reads as follows:
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.
This statement is an unqualified waiver of immunity on all contracts
with the Commonwealth and its agencies, including employment contracts. Univ.
of Louisville v. Rothstein, 532 S.W.3d 644, 647 (Ky. 2017) (breach of contract
claim by university professor). Pursuant to Rothstein, the Board as a state agency
does not have governmental immunity for Earlywine’s breach of contract claims.
The analysis of the immunity for Earlywine’s contract claim cannot
end there because the immunity for liability on a contract between the Board and
Earlywine has been waived by a more specific and limiting statutory enactment by
the General Assembly. The law requires the Board to have a contract with
Earlywine. KRS 161.011. Such contracts are governed by the provisions of KRS
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Chapter 161. A contract between a board of education and a teacher is infused
with these statutory provisions such that it may be considered a legislative grant
more than a contract. Bd. of Educ. of Harrodsburg v. Powell, 792 S.W.2d 376, 379
(Ky. App. 1990). Still, it is a contract, although a statutory contract.
This record reveals Earlywine had a continuing service contract with
the Board. KRS 161.720(4). Under the contract, the Board had the authority to
suspend Earlywine without pay. KRS 161.790(10). When the Board chose this
course, the governing statute then applied the same review process applied to
termination. KRS 161.790(3)-(9). Earlywine could have sought review when he
was suspended. He did not do so.
In providing a specific process and remedy in KRS 161.790, the
General Assembly withheld subject matter jurisdiction from the circuit court to
hear Earlywine’s breach of contract claim seeking the wages not paid during his
suspension if the requirements of KRS 161.790 had not been satisfied. “The
General Assembly has constructed this legislative scheme in order to provide
teachers and school administrators with an effective and neutral means by which to
resolve disputes arising from teacher discipline.” Jefferson Cnty. Bd. of Educ. v.
Edwards, 434 S.W.3d 472, 476 (Ky. 2014). “However, a teacher’s election to not
answer a charge and thereby forego the institution of administrative proceedings
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does not entitle the teacher to instead challenge his disciplinary claims in circuit
court.” Id.The Court in Edwards echoed the sentiment expressed in Board of
Education of Fayette County v. Hurley-Richards, 396 S.W.3d 879, 882 (Ky. 2013),
which stated that
KRS 161.790 establishes the process for the adjudication
of public school teacher disciplinary matters. KRS
161.790(4)-(9) provides for the selection of an ad hoc
hearing Tribunal to conduct an administrative evidentiary
hearing. The Tribunal makes findings of fact, determines
whether grounds for termination have been proven, and
renders a final order accordingly. The decision of the
Tribunal is a final order, subject to judicial review by the
circuit court “in accordance with KRS Chapter 13B.”
“[E]xhaustion of administrative remedies is a jurisdictional prerequisite to seeking
judicial relief.” Commonwealth v. DLX, Inc., 42 S.W.3d 624, 625 (Ky. 2001). See
also Frisby v. Bd. of Educ. of Boyle Cnty., 707 S.W.2d 359, 361 (Ky. App. 1986).
As the Court in Edwards recognized, a teacher could have a breach of
contract claim outside the strictures of KRS 161.790. Edwards, 434 S.W.3d at
478. While this is not such a case, our courts have recognized the right to proceed
to seek damages in such cases. See Watkins v. Oldham, 731 S.W.2d 829 (Ky. App.
1987). In effect, Rothstein confirms there is no immunity for liability for contracts
entered into by the Board. Rothstein, 532 S.W.3d at 651. But Rothstein did not
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eliminate the applicable provisions in KRS Chapter 161 which overlay the specific
contract at issue.
It is undisputed in this case that Earlywine did not avail himself of the
administrative hearing afforded him in KRS 161.790. Had Earlywine requested an
administrative hearing on the unpaid suspension at the time it occurred or within
ten days, he would have had the option to appeal the tribunal’s decision to the
Bourbon Circuit Court, which could have granted relief relating to the unpaid
suspension. Having failed to do that, Earlywine is not now able to ignore the
procedures set out in KRS 161.790 and seek a remedy in the circuit court. The
failure of Earlywine to exhaust the specific, applicable administrative process
prevents any argument as to the impropriety of his suspension and thus removes
any basis for his breach of contract claim.
Regarding the question of venue, KRS 45A.245 is part of the Model
Procurement Code (“MPC”). The General Assembly decided to place its general
declaration of contract immunity waiver in that chapter. This does not mean all
contract cases are sent to the Franklin Circuit Court under that statute. The MPC
governs purchases, including those in the context of building projects. See KRS
45A.010. We do not “procure” teachers as envisioned by the MPC.
In Rothstein, the Court left open the question of whether other
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provisions of the MPC apply. Rothstein, 532 S.W.3d at 651. As this case
illustrates, the other provisions of the MPC cannot be held to apply to a teacher
contract dispute under KRS Chapter 161. This would be contrary to well-
established law. Cases between a teacher and a school board should be in the
county where the parties are. See Pendleton Cnty. Bd. of Educ. v. Simpson, 91
S.W.2d 557, 560 (Ky. 1936). To apply the MPC and transfer all teacher contracts
cases to Franklin Circuit Court would lead to an illogical result which could not
have been the intention of the General Assembly. The proper venue for this action
is in the Bourbon Circuit Court, as the county in which the Board of Education sits.
See KRS 161.790(9).
CONCLUSION
For the foregoing reasons, we affirm the determination the Board does
not have immunity for the breach of contract claim asserted by Earlywine. We
reverse the order transferring this case to the Franklin Circuit Court. We remand
this case for the Franklin Circuit Court to transfer this case back to the Bourbon
Circuit Court. The Bourbon Circuit Court shall then dismiss the case because
Earlywine’s failure to exhaust administrative remedies provided pursuant to his
contract with the Board deprives the circuit court of subject matter jurisdiction of
his claim.
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ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Jonathan C. Shaw Robert L. Roark
Grant R. Chenoweth Tyler Z. Korus
Paintsville, Kentucky Lexington, Kentucky
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