Commonwealth v. Whitworth , 2002 Ky. LEXIS 97 ( 2002 )

WINTERSHEIMER, Justice.

This appeal is from an opinion of the Court of Appeals affirming in part, reversing in part and remanding an opinion and order of the Franklin Circuit Court which granted summary judgment to the Department of Parks on the breach of contract claims brought by some of its contract employees.

The Department of Parks argues that the persons involved were at all times at-will or temporary employees; that the employees are precluded from prosecuting this action because of the election of remedies doctrine; that the case must be dismissed because of sovereign immunity and that the Court of Appeals abused its discretion when it reversed the circuit court order. The employees respond that the Court of Appeals was correct when it reversed the summary judgment of the circuit court in favor of the Department of Parks on sovereign immunity because it was premature, and they contend that the other arguments of the Department of Parks are not at issue in this appeal.

This class action lawsuit was filed in circuit court against the Department of Parks by employees hired by oral contract as temporary maintenance and construction workers pursuant to KRS 56.491(5) and KRS 148.026. The employees were hired over a period of years and worked as electricians, plumbers and carpenters, etc. They allege that they were orally promised eleven months of work per year. A dispute arose when the Department began requiring the employees to sign a certification as to a condition of further state service. This document required the employees to acknowledge them status as “P-9” or temporary, nonmerit state employees who were only allowed nine months of work per year. The Department undertook this policy after being informed by the Kentucky Retirement System that temporary P-9 employees who worked in excess of nine months per year were eligible for coverage in the retirement system. The Department began suspending the employment of the employees when they refused to sign the certification or when they completed nine months of employment.

The legal action began in 1993 when the employees filed an appeal to the Kentucky Personnel Board, contending that they were full-time state employees, qualified for Kentucky Retirement benefits. The Board rejected that appeal for lack of subject matter jurisdiction. That dismissal was then appealed to the circuit court in 1994 and was filed along with the class action presently before this Court. The 1994 appeal was remanded to the Board for consideration of whether the class plaintiffs were, by virtue of their hiring under KRS 56.491(5) and KRS 148.026, infringing upon the principles of the merit system. On remand, the Board, following a six-day evidentiary hearing, once again denied the appeals. An appeal from that decision filed by the same employees and raising the same issues is currently pending in Franklin Circuit Court, presumably awaiting the outcome of this case.

Thereafter, the circuit court granted the class action certification. After the employees filed an amended class action complaint and filed a motion for partial summary judgment, the Department responded by filing a motion for summary judgment. The circuit judge entered a summary judgment in favor of the Department finding that a suit on oral contracts was barred by sovereign immunity. As to the employees’ claim that the oral contracts may have been ratified by the Department on the basis of internal written documents in their personnel files, the circuit court found that an oral contract with the Commonwealth is void and not capable of being ratified by any subsequent writing which may appear in a personnel file. The employees offered no evidence as to the actual existence of such documents.

The Court of Appeals held that although sovereign immunity barred suit on an oral contract, the oral contracts were not void and a genuine issue of material fact existed as to whether the oral contracts were ratified in some way by written documents. This Court accepted discretionary review.

I. Summary Judgment

The standard for summary judgment is abundantly clear in Kentucky. A movant must show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. CR 56.03. The record must be viewed in a light most favorable to the party opposing the motion for a summary judgment and all doubts must be resolved in favor of that party. Summary judgment should be used only when, as a matter of law, it appears it would be impossible for the respondent to produce evidence at trial warranting a judgment in favor of the respondent and against the movant. See Paintsville Hospital Co. v. Rose, Ky., 683 S.W.2d 255 (1985).

The proper function of summary judgment is to terminate litigation when it appears that it would be impossible for the respondent to produce evidence at trial warranting judgment in the respondents’ favor. It is proper where the movant shows that the adverse party cannot prevail under any circumstances. James Graham Brown Foundation, Inc. v. St. Paul Fire & Marine Ins. Co., Ky., 814 S.W.2d 273 (1991).

The mere fact that legal conclusions may be drawn from undisputed evidentiary facts in controyersy does not prevent summary judgment. Murphy v. Lumbermens Mutual Casualty Co., Ky.App., 580 S.W.2d 502 (1979). When any claim has no substance, or controlling facts are not in dispute, a summary judgment can be proper. Brown, supra.

In Steelvest, Inc. v. Scansteel Service Center, Inc., Ky., 807 S.W.2d 476 (1991), this Court reaffirmed the standards set out in Paintsville Hospital, supra, that summary judgments are to be cautiously applied and should not be used as a substitute for trial. Under the rule and cases noted, a movant must convince the circuit court that based on the evidence in the record there is no material fact at issue. The movant will not succeed unless the right to summary judgment is shown with such clarity that there is no room left for controversy.

Only when it appears impossible for the nonmoving party to produce evidence at trial warranting a judgment in its favor, should a motion for summary judgment be granted. A party opposing ' a properly documented summary judgment cannot defeat it without presenting at least some affirmative evidence demonstrating that there is a material issue .of fact. See Perry v. Motorists Mutual Ins. Co., Ky., 860 S.W.2d 762 (1993); West American Ins. Co. v. Dickerson, Ky., 865 S.W.2d 320 (1993); Hubble v. Johnson, Ky., 841 S.W.2d 169 (1992); Brown, supra; Steelvest, supra.

II. Circuit Court Decision

The circuit court correctly determined that even if the employees could establish that they had oral contracts with the state which allowed them to work longer than nine months, they were precluded by sovereign immunity from suing on an oral contract. KRS 45A.245(1) waives sovereign immunity for a lawfully authorized written contract. As recognized by Withers v. University of Kentucky, Ky., 939 S.W.2d 340 (1997), the state cannot be sued except upon a specific and explicit waiver of sovereign immunity. Thus, the circuit judge correctly determined that the public policy of the Commonwealth bars claims on oral contracts. The employees in this action were unable to show any specific and explicit waiver of sovereign immunity as required by Withers, supra. Such a waiver cannot be implied from KRS 148.026. That statute provides that the Commissioner of Parks may employ or contract with such persons, firms or corporations as he deems necessary or desirable to accomplish the duties and functions assigned by law to the Department of Parks. There is no express language waiving sovereign immunity for the contracts alleged in this matter.

Nor can a waiver be implied from KRS 56.491(5). It provides that a capital construction project not exceeding the statutorily designated amount may be performed by employees of the requesting agency or by individuals hired specifically for the project who shall be exempt from the requirements of KRS Chapter 18A, if the project is approved and authorized by the Cabinet. Chapter 18A is the comprehensive statute which deals with state personnel.

The Court of Appeals was in error when it reversed and remanded this case to the circuit court to allow employees to introduce internal documents as proof of the ratification of the oral contracts for temporary employment. Even if such documents exist, they cannot be construed as constituting a written employment contract because the Commissioner of Parks has no authority to hire employees in violation of the terms of KRS 148.026 and KRS 56.491(5). Although the General Assembly has authorized the Commissioner of Parks to hire temporary employees for construction projects, it did not authorize the Commissioner to convert them into merit system employees and he had no statutory authority to do so. None of the employees in this case participated in the competitive hiring procedures mandatory for merit system employees and their wages are not subject to the constraints of the state classification and compensation system governing merit employees. All compensation comes from the specific project budgets.

The employees were on notice that under KRS 148.026, project officers are not authorized to promise or guarantee work for any specific period except to complete a project. As noted in Clark County Constr. Co. v. State Highway Com’n, 248 Ky. 158, 58 S.W.2d 388 (1933), “... anyone who deals or contracts with public officials or with public bodies must at his own peril take notice of their authority since they can only act within the limits of express or necessarily implied powers conferred upon them by law.” Again, as stated in Calvert v. Allen County Fiscal Court, 252 Ky. 450, 67 S.W.2d 701 (1934), “It is equally well established that one dealing with public officials, boards, or commissions must take notice of their authority to act and the law charges him with the knowledge of any and all limitations upon such power.” See also All-American Movers, Inc. v. Commonwealth ex rel Hancock, Ky.App., 552 S.W.2d 679 (1977). Accord Louisville Civil Service Bd. v. Blair, Ky., 711 S.W.2d 181 (1986).

Suit cannot be instituted against the Commonwealth on a claim unless sovereign immunity has been specifically waived, as it has been on a lawfully authorized written contract. All-American Movers, supra. KRS 45A.245(1) provides that any person having a lawfully authorized written contract with the Commonwealth may bring an action against the Commonwealth on the contract ....

As noted by this Court in Foley Constr. Co. v. Ward, Ky., 375 S.W.2d 392 (1963), cases which have permitted the state to be sued on a contract ... without express legislative consent, are unsound. The U.S. Supreme Court has held that state employees are limited in their property rights to employment by the constraints of the state legislature which created those rights. See Bishop v. Wood, 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976).

We recognize that the concept of sovereign immunity does not provide that all oral contracts with the Commonwealth are void per se, but simply indicates that a lawsuit cannot be brought against the Commonwealth to enforce oral contracts. That conclusion does not open the door to a challenge to the decision of the circuit court under summary judgment principles.

The employees take issue with the word “void” as used by the circuit court. The word “void” has a number of definitions but one of them includes the statement that it is useless and ineffective or lacking in legal force or validity. See Webster’s New Riverside Dictionary 1293 (2nd Ed.1998)’ Lykins v. Oaks, 286 Ky. 332, 150 S.W.2d 231 (1941), citing a number of older cases and legal authorities, states that a void contract cannot be ratified. Black’s . Law Dictionary 1568 (7th Ed.1999) defines void as being of no legal effect; null, and further states that a contract is void ab initio if it seriously offends law or public policy, in contrast to a contract that is merely voidable at the election of one party to the contract. Here, we find that sovereign immunity prohibits absolutely the making of a claim against the state without an express waiver. Legally enforceable contracts with the state are to be in writing.

The fact that the circuit judge used the word “void” to describe his judicial reasoning is not reversible error. It may have been a poor choice of language, but it does express a reasonable basis for his rationale in support of the sovereign immunity analysis. Certainly, the concept of sovereign immunity prevents the enforcement of the oral contract in question. Thus, we- believe it was correct for the circuit court to determine in effect that the oral agreement sought to be used in this case was unenforceable from the beginning.

III. Summary Judgment Application

We recognize that simply because a case may be disposed of on a writing such as a contract does not always mean that it is appropriate for summary judgment particularly if the matters of parol evidence necessary to place the document in its context are genuinely in issue. See Conrad Chevrolet, Inc. v. Rood, Ky., 862 S.W.2d 312 (1993). This matter is disposed of on the basis of sovereign immunity thus any parol evidence that might be discovered is of no value. It should be remembered that the circuit court is not required to make findings of fact and conclusions of law that would be otherwise required by CR 52.01 when entering a summary judgment because the rule specifically provides that they are not necessary. See Allen v. Martin, Ky.App., 735 S.W.2d 332 (1987). Here, the circuit judge did give legal reasons for the decision.

As noted in Old Mason’s Home of Kentucky, Inc. v. Mitchell, Ky.App., 892 S.W.2d 304 (1995), summary judgment is proper when it is manifest that the opposing party cannot strengthen the case at trial and the moving party would be entitled ultimately to a directed verdict. See also Palmer v. Int’l Ass’n. of Machinists & Aerospace Workers, AFL-CIO, Ky., 882 S.W.2d 117 (1994). That is the situation here. We find it unnecessary to address any of the other arguments raised by the parties.

The decision of the Court of Appeals is reversed and the summary judgment in favor of the Department of Parks granted by the circuit court is reinstated.

LAMBERT, C.J., COOPER, GRAVES and JOHNSTONE, JJ., concur. KELLER, J., dissents by separate opinion in which STUMBO, J., joins.