Gray v. Central Bank & Trust Co.

HOGGE, Judge.

In 1974 the Lexington-Fayette Urban County Airport Board advertised for bids for the construction of a new airport terminal building. Seven Lexington banks, including Central Bank and Trust Company, were to participate in financing the project. On August 23, 1974, the bids were opened, and Gray Construction Company, Inc. was the lowest bidder. White & Congleton Construction Company was the second lowest bidder. The initial bids were valid for a fifteen day period.

On September 6,1974, one day before the bids expired, the air board met but was unable at that meeting to reach a decision as to whom the contract would be awarded. Both Gray and White & Congleton were asked if they would extend their bids for an additional ten days. White & Congleton agreed to extend their bid. However, Gray refused to extend his bid. Nevertheless, both bidders were asked to submit a list of materials, equipment, and subcontractors. Gray’s list of materials and equipment was found to contain major substitutions.

Garvice D. Kincaid was a member of the air board and, subsequent to the September 6 meeting, he initiated an investigation of Gray Construction. On September 16,1974, members of the air board met with representatives of the banks that were to provide financing for the project. At that meeting, Kincaid disclosed the results of his investigation and expressed reservations about the qualifications of Gray Construction Company. On September 17, the air board met and voted unanimously to select White & Congleton as the contractor.

Following the decision of the air board, Gray Construction threatened to take legal action against the air board if the contract was awarded to White & Congleton. As a result, First Security National Bank and Trust Company withdrew its financial support. Faced with this dilemma, White & Congleton offered to withdraw its bid and allow the air board to solicit new bids. This offer was accepted by the air board, and new bids were solicited. Upon rebidding, White & Congleton’s bid was the lowest and they were awarded the contract.

Appellant, thereafter, filed this action alleging that Garvice Kincaid had defamed him and interfered with prospective business relationships. The trial court granted a summary judgment in favor of the defendant on the ground that members of the air board enjoy an absolute privilege from liability for statements made by them in the scope of their duties.

There has been considerable dispute concerning whether the alleged defamation and interference with prospective contractual relationships were separate causes of action and which, if either, survived the death of Garvice D. Kincaid.

Prosser, in his treatise, Law of Torts, 4th Edition, Chapter 25, Section 130, at page 926 states:

Defamation, interference with contract, injurious falsehood, and the broader tort of interference with prospective economic relations, áre all different phases of the same general wrong of depriving the plaintiff of beneficial relations with others . . . the greatest protection is given to personal reputation, and existing contracts, the least to competitive interest in future advantage

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At page 924, Prosser further states:

In general, it may be said that injurious falsehood which is a tort that never has been greatly favored by the law, is subject to all of the privileges recognized both in cases of personal defamation and in those of other types of interference with economic advantage. The question of absolute privilege to disparage in judicial, legislative, and executive proceedings has seldom arisen, except in connection with pleadings, motions, and the like in the course of. litigation, where it has been recognized. [Emphasis added.]

On page 953 in ff. 97, Prosser further states:

Although there are almost no cases, it appears that the absolute privileges in defamation will be available as a defense here, (cases of interference with prospective economic relations.) [Emphasis added.]

We are, therefore, of the opinion that any privilege conferred by statute applies equally to actions founded upon defamation and to actions founded upon the tort of interference with prospective economic relations.

KRS 84.050(5) extends absolute immunity to members of city legislative bodies. In Jacobs v. Underwood, Ky., 484 S.W.2d 855 (1972), the Court of Appeals discussed the immunity conferred by KRS 84.050(5) and stated at page 857: “We believe the general assembly has effectively granted to members of city legislative bodies an absolute privilege under which they cannot be liable for statements made during a debate before a formal meeting of the assembly.” [Emphasis ours.]

Legislative status has been delegated to city/county air boards by KRS 183.132, which provides as follows:

(1) Any city or county acting jointly, or in any combination of two or more cities and/or counties may establish a nonpartisan airboard composed of six members.

(2)The board shall be a body politic and corporate with the usual corporate attributes, and in its corporate name may sue and be sued, contract and be contracted with, and do all things reasonable or necessary to effectively carry out the duties prescribed by statute. The board shall constitute a legislative body for the purposes of KRS 183.630 to 183.740. [Emphasis ours.]

While KRS 183.630 to 183.740 specifically relate to the issuance of revenue bonds, the air board was created by an act of legislature, delegating to it numerous legislative powers, functions, and duties. For example, KRS 183.133 grants to the air board the power to adopt such ordinances as it may find necessary to effectuate the duties imposed by statute. Violations of such ordinances shall be prosecuted in police court or county court. This is clearly a legislative function.

Thus, it is the opinion of this court that the air board is a legislative body and, as such, its members are granted absolute immunity for statements made while acting within the scope of the duties imposed upon them by statute.

It is also the opinion of this court that Kincaid, although simultaneously protecting the interests of Central Bank, was acting within the scope of his duties as a member of the air board, in as much as he was seeking to insure that the contract was awarded to the lowest and best bidder, and thereby enjoyed an absolute privilege from the liability for his remarks. This privilege extends to protect both the estate of Kincaid and Central Bank from liability for either cause of action. Spears v. Burchett, Ky., 289 S.W.2d 731 (1956); Cheasapeake & O. R. Company v. Williams’ Adm’x., 300 Ky. 850, 190 S.W.2d 549 (1937).

Although the preceding ground is adequate to support the judgment, the following grounds may also have been sufficient to support the judgment. It has often been held that the judgment of the trial court must be affirmed if there exists any valid ground which supports it. Haddad v. Louisville Gas & Electric Company, Ky., 449 S.W.2d 916 (1969). First, as to the defendant Garvice D. Kincaid, it cannot be disputed that his death terminated the cause of action against him and his estate for slander. KRS 411.140 provides that actions for slander and libel do not survive the death of the tortfeasor.

Second, the appellants have utterly failed to prove that they would have been awarded the contract in the absence of ap-pellee’s interference. The record clearly discloses that the appellant did not have before the air board a valid bid. Gray’s fifteen day bid expired on September 7, 1974, and the appellant refused to extend the bid beyond that date. Even so, the appellant’s bid did not comply with the requirements of the bidding documents, in that he had substituted a number of construction materials without obtaining the approval of the air board’s architect. Gray also failed to comply with the air board’s request that he submit a list of the subcontractors he proposed to employ.

Appellees have filed what has, perhaps erroneously, been designated as a cross-appeal alleging that the trial court improperly allowed into the record evidence relating to statements made during a meeting of the air board. Since the appellees do not attack any portion of the judgment, this is not properly the basis for a cross-appeal. The issue- may, nevertheless, be raised in the appellees’ argument in support of the judgment even in the absence of a cross-appeal. See Clark v. Wells-Elkhorn Coal Company, 215 Ky. 128, 284 S.W. 91 (1926). The cross-appeal is accordingly dismissed.

Judgment affirmed.

All concur.