MARY J. AUBREY, DEVEN D. BROWN, BETTY J. BURGESS, SHIRLEY D. CLARK, DEBBIE S. CURTSINGER, WILMA P. HIPPE, JANA L. HUDNALL, BEVERLY A. PENNINGTON, PAMELA J. POE, MELINDA D. ROGERS, and TERRI L. SORRELL V. OFFICE OF THE ATTORNEY GENERAL A.B. CHANDLER III, APPOINTING AUTHORITY; COMMONWEALTH OF KENTUCKY PERSONNEL BOARD
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RENDERED: October 23, 1998; 10:00 a.m.
ORDERED PUBLISHED: June 11, 1999; 2:00 p.m.
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1997-CA-002648-MR
MARY J. AUBREY, DEVEN D. BROWN,
BETTY J. BURGESS, SHIRLEY D.
CLARK, DEBBIE S. CURTSINGER,
WILMA P. HIPPE, JANA L. HUDNALL,
BEVERLY A. PENNINGTON, PAMELA J.
POE, MELINDA D. ROGERS, and
TERRI L. SORRELL
v.
APPELLANTS
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE WILLIAM L. GRAHAM, JUDGE
ACTION NO. 96-CI-001518
OFFICE OF THE ATTORNEY GENERAL
A.B. CHANDLER III, APPOINTING AUTHORITY;
COMMONWEALTH OF KENTUCKY PERSONNEL BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
HUDDLESTON, KNOPF, AND MILLER, JUDGES.
KNOPF, JUDGE: This is an appeal from an order of the Franklin
Circuit Court reversing a ruling of the Kentucky Personnel Board
and reinstating the decision of the hearing officer.
Finding no
error, we affirm.
The underlying facts of this action are not in dispute.
Each of the individual appellants is a classified employee with
status in the Office of the Attorney General (OAG).
They are all
classified as Legal Secretary, Senior, Grade 10, except Devon
Brown, who is a Legal Secretary, Grade 9.
On December 16, 1990,
the Legal Secretary class was reevaluated and upgraded by the
Commissioner of Personnel through a class grade change within the
entire structure of state government.
The OAG did not authorize
pay increases to the Legal Secretary class as a result of this
class grade change.
In August 1995, the OAG requested a five (5) percent
increase adjustment for Jane C. Hosley, a Legal Secretary,
Senior.
(Hosley is not a party to this action).
The basis of
this request, which was approved by the Commissioner, was 101 Ky.
Admin.
Regs. [KAR] 2:036 § 3(8).
Subsequently, the appellants
learned of Ms. Hosley’s increase through an open records request
made in November 1995.
Each of the appellants appealed to the
Personnel Board, claiming that she suffered a continuing
“penalization” for not receiving a similar increase.
The
appellants contend that the application of the pay increase to
one (1) individual in the legal secretary class violated 101 KAR
2:036 § 3(7).
The claims were consolidated into one action, and an
evidentiary hearing was held before a hearing officer with the
Kentucky Personnel Board.
The hearing officer found that the
increase was proper, and recommended that the appeals be
dismissed.
The Personnel Board reversed, deleting several of the
hearing officer’s conclusions of law and substituting its own.
The Board found that the request for a pay increase for Hosley
was a “circumvention” of the requirement that all increases be
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uniform within the agency.
The Board concluded that § 3(7)
prevailed over § 3(8).
The OAG filed an appeal to the Franklin Circuit Court,
pursuant to KRS 18A.100 and KRS 13B.140.
The circuit court
reversed the Board and reinstated the findings made by the
hearing officer.
After discussing the appropriate standard of
review, the lower court found the Board’s finding was unsupported
by the evidence.
The circuit court concluded that § 3(7) did not
modify or repeal § 3(8), and that the OAG followed the correct
procedures under § 3(8) to give Hosley a pay adjustment.
In
response to the appellants’ motion to reconsider, the circuit
court stated, “Here, it is possible to conclude that § 3(7) is
intended generally to require all persons within a class to
receive the same salary adjustment upon receiving a pay grade
increase, while construing § 3(8) to allow the appointing
authority some discretion to grant specific pay increases to
individual employees without regard for the entire class.”
This
appeal followed.
The sole issue before this Court is which interpretation of
the relevant regulations is correct.
Although there are some
factual questions, this matter is primarily an issue of law.
two (2) regulations at issue, 101 KAR 2:036 § 3(7) and 101 KAR
The
2:036 § 3(8), provide as follows:
Section 3(7): Pay grade changes. An employee
who is advanced to a higher pay grade through
a class reevaluation and grade adjustment
under Section 7 of this administrative
regulation may receive a salary increase as
outlined below except that after the salary
increase the employee’s salary shall not be
below the minimum of the new pay grade:
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(a) Five (5) percent uniformly
applied within the agency;
(b) Ten (10) percent uniformly
applied within the agency;
(c) A dollar amount determined by
the Commissioner of Personnel
uniformly applied in the class
within the same agency.
Section 3(8): Other salary adjustments.
(a) An appointing authority, with
the approval of the commissioner,
may grant a salary adjustment to an
employee who was eligible for but
did not receive at least a five (5)
percent salary advancement due to
reallocation to a higher grade,
implementation of a special
entrance rate, class grade changes,
effective on or after January 3,
1986 or completion of a promotional
probationary period. In no case
may the salary adjustment be more
than five (5) percent nor be made
retroactive to the original
effective date but shall be made
effective on the first of the month
following approval of the
commissioner.
As correctly stated by the trial court, both the
circuit court's review and our review of this issue is limited.
Where the legislature has designated an administrative agency to
carry out a legislative policy by the exercise of discretionary
judgment in a specialized field, the courts do not have the
authority to review the agency decisions de novo.
American
Beauty Homes Corp. v. Louisville and Jefferson County Planning
and Zoning Commission, 379 S.W.2d 450, 458 (1964).
Judicial
review of the administrative action is confined to a
determination of whether the action taken was arbitrary.
City of
Louisville v. McDonald, Ky., 470 S.W.2d 173, 178 (1971).
So long
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as the agency's decision is supported by substantial evidence of
probative value, it is not arbitrary and must be accepted as
binding by the appellate court.
Starks v. Kentucky Health
Facilities, Ky. App., 684 S.W.2d 5 (1984).
Substantial evidence
is defined as evidence of substance and relevant consequence,
having the fitness to induce conviction in the minds of
reasonable persons.
O'Nan v. Ecklar Moore Express, Inc., Ky.,
339 S.W.2d 466 (1960).
In its role as a finder of fact, an
administrative agency is afforded great latitude in its
evaluation of the evidence heard and the credibility of
witnesses, including its findings and conclusions of fact.
Kentucky State Racing Commission v. Fuller, Ky., 481 S.W.2d 298,
309 (1972).
However, this Court is authorized to review issues
of law on a de novo basis.
Mill Street Church of Christ v.
Hogan, Ky. App., 785 S.W.2d 263, 266 (1990).
The appellants argue that the Personnel Board correctly
interpreted § 3(7) as controlling over § 3(8).
They assert that
§ 3(7) requires that all salary increases within a classification
be uniformly applied.
Since a conflict exists between the
provisions of § 3(7) and § 3(8), the appellees contend that §
3(7), being promulgated later in time, should control.
Consequently, they argue that the decision of the circuit court
was incorrect and should be set aside.
Upon a review of the entire record and the briefs and
arguments of the parties, this Court finds the reasoning of the
circuit court compelling, and this Court adopts the following
portions of the circuit court’s order of August 15, 1997:
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Whether the Respondents were penalized
depends upon whether they had any “rights” in
the salary increase given to Hosley. See KRS
18A.095(9) and 18A.005(17). Thus, we first
determine the interrelationship of Section
3(7) and Section 3(8)(a), based on the
evidence presented at hearing.
Petitioner claims that the Board’s1
finding that the OAG “circumvented” Section
3(7) is unsupported by any evidence in the
record. We agree. The Board fails to cite
any testimony, document, conversation or
other evidence which gives a factual basis
for his conclusion. A review of the entire
record likewise reveals no plausible basis
for such a conclusion. The closest argument
to this effect was made by the Respondents,
in citing Commissioner Clark’s testimony on
cross-examination. He agreed that if Section
3(8) were used independently of Section 3(7)
to allow individual increases, it “could”
result in a circumvention of Section 3(7)’s
intent that all increases be uniform.
However, there is no factual basis in the
record for the allegation that the OAG
intended to do so in this case.
Former Commissioner Clark testified that
Section 3(7) had been amended to require
that, in granting pay increases due to a
change in pay grade or class, all employees
would receive the raise and in the same
amounts. This altered the former version
which did not require all increases to be
uniform. However, Clark also testified that,
in his opinion, Section 3(8) was a separate
and distinct entity from Section (3)(7), and
that requiring the Commissioner’s approval of
an individual increase under Section 3(8) was
an adequate safeguard to circumventing the
requirements of Section 3(7). Thus, there is
no proof in the record that the OAG had such
an intent when granting Hosley an increase
but not other Legal Secretaries.
1
By order entered September 22, 1997, the trial court
amended its order to modify all references to “Secretary” to
reflect references to the “Board.” This quote is taken from the
order as amended.
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In any event, the central question in
this case is whether Section 3(7) somehow
controls, conditions or overrides the
provisions of Section 3(8), which clearly
states that the agency may grant an increase
to a single employee. We conclude, as a
matter of law, that it does not. The two
sections were enacted separately, and are
contained in separate paragraphs of the
regulation. Section 3(7) deals specifically
with pay increases in conjunction with, and
at the time of, pay grade changes or
reevaluations. It is true that the Legal
Secretary class was reevaluated and changed
in 1990. However, the record is clear that
no salary increase or adjustment was
instituted at the time of this change.
Section 3(8), on the other hand, gives an
appointing authority the discretion to award
a salary increase to “an employee,” (emphasis
added), rather than to an entire grade or
class.
Validly promulgated and executed
regulations have the full force and effect of
law. Britton v. Wooten, Ky., 817 S.W.2d 443,
447 (1991). Thus, “in the construction and
interpretation of administrative regulations,
the same rules apply that would be applicable
to statutory construction and
interpretation.” Revenue Cabinet v. Gaba,
Ky.App., 885 S.W.2d 706, 707 (1994) (citing
Revenue Cabinet v. Joy Technologies, Ky.
App., 838 S.W.2d 406 (1992)). It is a
fundamental rule that “all statutes should be
interpreted to give them meaning, with each
section construed to be in accord with the
statute as a whole.” Transportation Cabinet
v. Tartar, Ky.App., 802 S.W.2d 944 (1990).
Statutes should not be construed such that
their provisions are without meaning, whether
in part or in whole. George v. Scent, Ky.,
346 S.W.2d 784 (1961). To rule that the
provisions of Section 3(7) override the
specific authorization to increase an
individual employee’s salary would render
Section 3(8) a nullity.
The Respondents claim that, because
Section 3(7) was amended to stress uniform
increases after the enactment of Section
3(8), the more recent provisions should take
precedence. See Williams v. Commonwealth,
Ky.App., 829 S.W.2d 942 (1992). However,
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this is only the case where the provisions
actually conflict. Id. “The courts have
long held that where two statutes seemingly
conflict, courts must harmonize them and give
them such construction as will give effect to
each if possible.” Board of Trustees v.
Henderson County Fiscal Ct., Ky.App., 549
S.W.2d 828 (1976) (citing General Motors
Acceptance Corporation v. Shuey, 243 Ky. 74,
47 S.W.2d 968 (1932); Tubbs v. Commonwealth,
248 Ky., 24, 58 S.W.2d 236 (1933)).
Moreover, the fact that the provisions of
Section 3(8) were not specifically repealed
or removed when Section 3(7) was amended
tends to indicate an intent not to disturb
their effect.
We feel that the better interpretation
of the statutes would be to give full effect
to the provisions of Section 3(8). While the
regulations indicated a strong policy in
favor of uniform salary increases, the
specific language of Section 3(8) clearly
demonstrates an intent to allow an agency to
grant individual increases in pay, upon
certain specific criteria being met. The
agency must also have the Commissioner’s
approval before the pay increase is granted.2
We find that there are adequate safeguards in
place such that the intent of Section 3(7)
cannot be circumvented by denying a classwide increase and then granting several
individual increases under Section 3(8) to
exclude one or two unfavorable employees.
This discretionary authority was left
undisturbed by the agency, and there is no
specific law or regulation to the contrary.
Accordingly, the judgment of the Franklin Circuit Court
is affirmed.
2
In the trial court’s order of September 22, 1997, denying
the appellants’ motion to reconsider, the court noted “several
persuasive factors in Ms. Hosley’s case which place it within the
discretion under §3(8).” The trial court was particularly
convinced by: the long intervening time between the class
reevaluation and the pay increase; and the “great lengths” the
OAG went to note Hosley’s outstanding record, dedicated service
and exceptional skills. “Because the individual service record
was a major factor in requesting the increase, we remain
convinced that such an increase was within the discretion
outlined in § 3(8).”
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ALL CONCUR.
BRIEF AND ORAL ARGUMENT FOR
APPELLANTS:
BRIEF AND ORAL ARGUMENT FOR
APPELLEES:
Donald Duff
Frankfort, Kentucky
Barbara Maggio Pauley
Special Assistant Attorney
General
Office of Legal Services
Frankfort, Kentucky
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