RUSSELL W. BEHANAN; DR. PETER FLYNN; and the BOARD OF EDUCATION OF FAYETTE COUNTY, KENTUCKY v. MELINDA LEWIS COBB
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RENDERED:
FEBRUARY 2, 2007; 2:00 P.M.
ORDERED NOT PUBLISHED BY KENTUCKY SUPREME COURT:
OCTOBER 24, 2007
(2007-SC-0160-D & 2007-SC-0170-D)
Commonwealth of Kentucky
Court of Appeals
NO. 2005-CA-002170-MR
RUSSELL W. BEHANAN; DR. PETER
FLYNN; and the BOARD OF EDUCATION
OF FAYETTE COUNTY, KENTUCKY
v.
APPELLANTS
APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE GARY D. PAYNE, JUDGE
CIVIL ACTION NO. 99-CI-01504
MELINDA LEWIS COBB
APPELLEE
OPINION
AFFIRMING IN PART AND REVERSING IN PART
** ** ** ** ** ** ** **
BEFORE: ACREE AND TAYLOR, JUDGES; ROSENBLUM,1 SENIOR JUDGE.
ROSENBLUM, SENIOR JUDGE:
Russell Behanan, Peter Flynn, and the
Board of Education of Fayette County (Board) bring this appeal
from a jury verdict of the Fayette Circuit Court awarding
compensatory and punitive damages totaling $3.5 million in favor
1
Senior Judge Paul W. Rosenblum, sitting as Special Judge by assignment of
the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution
and KRS 21.580.
of Melinda Cobb.
Finding error, we affirm in part and reverse
in part.
BACKGROUND
The Fayette County Public Schools (FCPS) hired Melinda
Cobb to serve as the principal for Leestown Middle School
(Leestown) for the 1997-98 school year.
renewed for the 1998-99 school year.
Cobb's contract was
Cobb had previously worked
for various public schools in the Commonwealth, but this was her
first job within the FCPS.
During that time, Russell Behanan
was the Director of Middle Schools for the FCPS and was Cobb’s
immediate supervisor.
Peter Flynn was the Superintendent of the
FCPS and was Behanan’s immediate supervisor.
Cobb experienced a
considerable amount of conflict with several members of the
school's staff during her first year as principal at the school.
She continued to have problems with certain members of her staff
and with a small group of parents during her second year as
principal.
Following Cobb’s second year as principal, Behanan
recommended to Flynn that she not be employed for the 1999-2000
school year.
On May 14, 1999, Flynn delivered to Cobb an
extensive seventeen-page “termination packet,” which detailed a
variety of factual charges against Cobb and notified her that,
absent an answer to the charges, her employment would be
terminated.
The termination packet alleged that Cobb had
violated KRS 161.790(1) by insubordination, conduct unbecoming a
teacher, inefficiency, and incompetence.
2
The termination packet
also described in detail the factual allegations underlying the
charges, namely: (1) complaints about Cobb's interaction with
parents, her staff, and the Site Based Decision Making (SBDM)
Council at the school; (2) her failure to properly perform the
“Day 4”2 count of students; (3) her improper conduct related to
her employee evaluation; and, (4) her carrying and possession of
a gun on school property in violation of the Board's express
policy.
Cobb elected to answer the charges leveled against her.
Pursuant to KRS 161.790(4), a three-member tribunal was convened
to hear evidence of the charges and Cobb's response to the
charges.
The administrative hearing was held in August 1999 and
lasted for twelve days.
The tribunal issued its written findings of fact,
conclusions of law, and final order in September 1999.
It found
that Cobb had regularly carried a loaded gun on school property
and that she had failed to report accurately the number of
students attending Leestown in the “Day 4” count.
The tribunal
also found that Cobb had made inappropriate comments to parents
and staff and that she had had numerous problems and conflicts
with parents, staff, and SBDM members, but that all the parties
were at fault for those problems and conflicts.
Finally, the
tribunal found the Board had committed “major procedural errors”
in evaluating Cobb's performance.
As a result of these findings, the tribunal concluded
that the Board had met its burden of showing a violation of KRS
2
“Day 4” is the official attendance count that determines the amount of
funding and staffing for the school for the coming year.
3
161.790 only as to two of the charges, to wit, that Cobb was
guilty of “inefficiency and incompetency” for failing to
properly perform the “Day 4” count and “insubordination and
conduct unbecoming a teacher” for bringing a gun onto school
property.
The tribunal then determined that the “appropriate
sanction and punishment” for the two violations was a reprimand
for the erroneous “Day 4” count and a suspension without pay
until the end of the 2000-2001 school year, a total of two
years, for the violation of the weapons policy.
The tribunal
also specifically concluded that Cobb's inappropriate comments
were not sufficient to warrant sanctions.
The Board appealed the tribunal's decision to the
Fayette Circuit Court, and Cobb cross-appealed.
The court
reviewed the lengthy administrative record compiled before the
tribunal and issued an opinion upholding the tribunal's ruling.
It found substantial evidence to support the tribunal's ruling
and held that there was no prejudicial error in the procedures
used by the hearing officer who presided at the hearing.
court affirmed the tribunal order and findings.
The
Upon appeal,
both this court and the Kentucky Supreme Court affirmed the
tribunal’s decision.3
Prior to her termination, Cobb and the SBDM became the
subject of an investigation by the Office of Education
Accountability (OEA).
Responding to the inquiries of the OEA,
Cobb provided information alleging wrongdoing by other employees
3
See Fankhauser v. Cobb, 163 S.W.3d 389 (Ky. 2005).
4
of the FCPS.
Cobb also sought an advisory opinion from the
office of general counsel for the commissioner of the Kentucky
Department of Education (KDE).
Cobb’s initial complaint was
filed (April 1999) before the administrative hearing was
conducted (August-September 1999).
She filed various amended
complaints alleging several causes of action.
Ultimately, the
trial court allowed two causes of action to be presented to a
jury, to wit, a statutory claim under Kentucky’s Whistleblower
Act against the Board, and a tort claim of wrongful use of
administrative proceedings against Flynn and Behanan.
On June 13, 2005, a five day jury trial began on
Cobb’s claims.
The jury returned a verdict against all
Appellants, granting $500,000.00 in punitive damages against the
Board under the Whistleblower Act; $500,000.00 each in punitive
damages against Flynn and Behanan for wrongful use of
administrative proceedings; and, $2,000,000.00 compensatory
damages jointly against Flynn and Behanan for wrongful use of
administrative proceedings for a total award of $3.5 million.
The Fayette Circuit Court entered a judgment on the verdict and
subsequently awarded Cobb attorney’s fees and costs totaling
more than $500,000.00.
This appeal followed.
I. WHISTLEBLOWER ACT CLAIM
Kentucky's Whistleblower Act4 protects state employees
from reprisal for reporting actual or suspected agency
violations of the law.
4
In order to demonstrate a violation of
Kentucky Revised Statutes (KRS) 61.102.
5
the Act, an employee must establish the following four elements:
(1) the employer is an officer of the state; (2) the employee is
employed by the state; (3) the employee made or attempted to
make a good faith report or disclosure of a suspected violation
of state or local law to an appropriate body or authority; and,
(4) the employer took action or threatened to take action to
discourage the employee from making such a disclosure or to
punish the employee for making such a disclosure.
Woodward v.
Commonwealth, 984 S.W.2d 477, 480-81 (Ky. 1998).
The employee
must show by a preponderance of evidence that "the disclosure
was a contributing factor5 in the personnel action."
61.103(3).
KRS
The burden of proof is then on the state employer
"to prove by clear and convincing evidence that the disclosure
was not a material fact in the personnel action."
5
Id.
“Contributing factor” means any factor which, alone or in connection with
other factors, tends to affect in any way the outcome of a decision. See KRS
61.103(1)(b).
6
A. Jury Instructions
The Board avers that the court’s jury instruction was
erroneous regarding the elements of a whistleblower claim.
We
disagree.
The Board argues that the jury instruction6 did not
allow the Board an opportunity to have the jury determine
whether, even if the disclosure was a “contributing factor,” it
was, nonetheless, not a “material factor” in the personnel
decision to fire Cobb.
The Board cites Com., Dept. of
Agriculture v. Vinson, 30 S.W.3d 162, 169 (Ky. 2000) for the
proposition that “the employer now has an affirmative burden of
proving by clear and convincing evidence that the report was not
a material fact in the personnel action.”
The Board argues that
the instruction given by the court incorrectly stated the law
and allowed the jury to impose liability based on proof of a
prima facie case without consideration of the burden shift.
6
The pertinent instruction states:
You will find for Melinda Cobb and against Fayette
County Board of Education under this Instruction if
you are satisfied by a preponderance of the evidence
the following:
(a)
That Melinda Cobb reported information
regarding actual or suspected violation(s) of
law, mandates, or rules to the Office of
Education Accountability and/or the Kentucky
Department of Educational Legal Services;
AND
(b)
That employees of the Fayette County Board of
Education caused Melinda Cobb to be subjected
to reprisal or directly or indirectly used
official authority or influence against her as
a result of her reports to the Office of
Education Accountability and/or Kentucky
Department of Educational Legal Services.
7
We agree that the burden shifted to the Board to prove
by clear and convincing evidence that the disclosures made by
Cobb were not a material factor in the decision to terminate her
employment.
However, we do not agree that the instructions to
the jury need to be tailored to consider every possible scenario
under the Act.
The instructions need only provide the “bare
bones” of the pertinent questions for the jury, and those can be
further fleshed out by counsel during closing arguments.
Cooper, 510 S.W.2d 530, 535 (Ky. 1974).
Cox v.
In essence, the Board
argues that the jury should have been instructed to weigh each
party's burden in turn.
The Board does not cite any relevant
authority for its argument and it is contrary to Kentucky law.
See Meyers v. Chapman Printing Company, Inc., 840 S.W.2d 814,
824 (Ky. 1992)(“In Kentucky jury instructions do not include
evidentiary presumptions.”).
See also, Brooks v. Lexington-
Fayette Urban County Housing Authority, 132 S.W.3d 790 (Ky.
2004).
Instructions should not explain evidentiary matters,
evidentiary presumptions or contain unnecessary detail.
840 S.W.2d at 824.
Meyers,
After reviewing the instruction, we find
nothing erroneous or so confusing that the jury could not reach
a reasonable verdict based on the evidence.
Additionally, the Board argues that the trial court
erred when it failed to instruct the jury to determine whether
Behanan or Flynn “knew or had constructive knowledge” of Cobb’s
disclosure at the time the adverse personnel action was taken.
We disagree.
8
KRS 61.103(1)(b) states that:
It shall be presumed there existed a
“contributing factor” if the official taking
the action knew or had constructive
knowledge of the disclosure and acted within
a limited period of time so that a
reasonable person would conclude the
disclosure was a factor in the personnel
action.
The Board argues that the question of actual or
constructive knowledge was not submitted to the jury.
simply not the case.
This is
Although not explicitly stated as actual
or constructive knowledge, the jury instruction necessarily
required the jurors to consider it.
Indeed, the instruction was
tailored so that the jury could not find for Cobb unless she
showed she was subjected to reprisal from official authorities
as a result of her reports.
Therefore, the jury must have
inherently found that Behanan and Flynn were aware of the report
and were satisfied that the reprisal against Cobb was connected.
Thus, the instruction was adequate and the Board’s argument is
without merit.
The Board also contends that the trial court erred
when it failed to instruct the jury that Cobb’s disclosures must
have been made “in good faith” as required by KRS 61.102(1).
Again, we disagree.
Under KRS 61.102(1), an employer is prohibited from
taking adverse action against an employee “who in good faith
reports . . . an actual or suspected violation of any
law . . . .” (emphasis ours).
Contrary to the Board’s
9
assertion, the jury instruction inherently incorporated the
statute’s required “good faith” standard.
In order to find in
Cobb’s favor and against the Board, the instruction required the
jury to find that she “reported information regarding actual or
suspected violation(s) of law . . . .”
Thus, “good faith” was
inherent in the instruction given to the jury.
There was no
error.
B. Issue Preclusion
The Board argues that the trial court erred when it
did not give “issue preclusive effect to the independent
administrative tribunal’s decision in the collateral, underlying
proceeding.”
Issue preclusion (collateral estoppel) is not
applicable to this case and thus the Board’s argument is without
merit.
The Board argues that the administrative tribunal’s
findings (i.e., the hearing regarding whether to terminate
Cobb’s employment) concluded that Cobb’s workplace conduct
warranted adverse personnel action and thus should be given
issue preclusive effect to the case at hand.
Essentially, the
Board contends that the tribunal’s findings should have been
given preclusive effect on the legal issue of whether adverse
personnel action would have still been taken against Cobb based
on the non-retaliatory reasons for her firing offered into
evidence.
The Board avers that the administrative tribunal
adduced sufficient facts warranting adverse personnel action
10
against Cobb and thus should not have been subject to further
litigation by the court below.
We disagree.
Issue preclusion bars the parties from relitigating
any issue actually litigated and finally decided in an earlier
action.
See Yeoman v. Commonwealth, Health Policy Bd., 983
S.W.2d 459, 465 (Ky. 1998).
In Yeoman, the Kentucky Supreme
Court enunciated a four element test to determine whether issue
preclusion will bar subsequent litigation.
For purposes of this
opinion, we need only examine the third element, to wit, “even
if an issue was actually litigated in a prior action, issue
preclusion will not bar subsequent litigation unless the issue
was actually decided in that action.”
Id. (citing Restatement
(Second) of Judgments § 27 (1982)).
Here, the administrative tribunal hearing was
conducted with regard to whether adverse personnel action should
be taken against Cobb.
The issue of whether Cobb’s termination
was being sought based on alleged retaliation by school
officials was not “actually decided” by the tribunal.
Moreover,
the administrative hearing, conducted in accordance with KRS
161.790 and KRS Chapter 13B, was solely concerned with issues
associated with employment termination, not civil causes of
action such as Cobb’s whistleblower claim and the wrongful use
of administrative proceedings claim.
Because the issues decided
by the administrative tribunal are starkly different from the
issues decided by the jury in the trial below, we are of the
11
opinion that issue preclusion is wholly inapplicable to this
case.
C. Protected Disclosure
The Board argues that the trial court’s Whistleblower
Act instruction erroneously indicated certain alleged acts by
Cobb constituted a protected disclosure.
Again, we disagree.
The Whistleblower Act protects an employee from
retaliation by an employer provided the employee makes a
disclosure regarding actual or suspected violations of law to an
“appropriate body or authority.”
See KRS 61.102(1).
A
“disclosure” is defined as “a person acting on his own behalf,
or on behalf of another, who reported or is about to report,
either verbally or in writing, any matter set forth” under the
Whistleblower Act.
See KRS 61.103(1)(a).
Thus, in order for a
disclosure to be protected by the Whistleblower Act, it must be
made in accordance with the statutory definition.
The Board argues that the trial court erroneously
instructed the jury that the “Kentucky Department of Education
Legal Services” was an agency to whom Cobb could have made a
protected “disclosure” under the statute.
Additionally, the
Board contends that Cobb’s alleged disclosure was actually a
request for advisory guidance from the Kentucky Department of
Education (KDE) and not an allegation of any violation of law.
Consequently, the Board argues, Cobb’s actions did not amount to
a protected disclosure as a whistleblower.
12
In order for Cobb to have prevailed at trial, the jury
was instructed that she had to have “reported information”
(i.e., made a disclosure) “regarding actual or suspected
violation(s) of law, mandates, or rules to the Office of
Education Accountability and/or the Kentucky Department of
Educational Legal Services.”
Under this instruction, the trial
court considered the OEA and the KDE appropriate bodies or
authorities to whom Cobb could make a protected disclosure.
We
agree.
Whistleblower Acts, such as Kentucky’s, are remedial
in nature.
See Davis v. Ector County, Texas, 40 F.3d 777, 785
(5th Cir. 1994)(construing the Texas whistleblower statute).
Statutes that are remedial in nature are entitled to a liberal
construction in favor of the remedy provided by law, or in favor
of those entitled to the benefits of the statute.
Kentucky Ins.
Guar. Ass’n v. Jeffers ex rel. Jeffers, 13 S.W.3d 606, 611 (Ky.
2000)(quoting 73 Am.Jur.2d Statutes, § 278 (1974)).
Moreover,
Kentucky’s Whistleblower Act has been subject to constitutional
challenge.
See Vinson, 30 S.W.3d 162 (Ky. 2000).
The Vinson
court opined that subsection (1) of the Act was not written in
such broad sweeping terms as to make it constitutionally vague
and that a person of ordinary intelligence can understand the
intended meaning of the language.
Id. at 164.
Applying these principals to the present case, we have
no trouble finding that the jury instruction was appropriate and
that Cobb’s disclosures were adequate and entitled to
13
Whether the information Cobb reported7
whistleblower protection.
to the OEA and the KDE constituted a disclosure was a question
for the jury.
Obviously, the jury found that it was in fact a
disclosure and entitled Cobb to the protections afforded to a
whistleblower.
We decline to second guess the jury’s factual
determinations.
The Board makes much of the fact that the jury
instruction asked jurors to determine whether Cobb’s disclosure
was to the OEA and/or the “Kentucky Department of Educational
Legal Services.”
The Board argues that no such agency named
“Kentucky Department of Educational Legal Services” exists and
thus, no disclosure was made.
such trivial semantics.
We need not detain ourselves with
Cobb made disclosures to counsel for
the Kentucky Department of Education’s Office of Legal and
Legislative Services.
We find that the jury instruction was
tailored with enough specificity such that any reasonably
intelligent juror would have no trouble understanding that the
“Kentucky Department of Educational Legal Services” is one and
the same as the “Kentucky Department of Education’s Office of
Legal and Legislative Services.”
The Board’s argument is
without merit.
7
Cobb provided the OEA with information regarding alleged actual and
attempted violations of law by personnel of Leestown Middle School.
Additionally, on March 12, 1999, Cobb sent an e-mail to Kevin Noland, legal
counsel with the Office of Legal and Legislative Services, alleging
violations of school policy by her supervisor.
14
Finally, the Board contends that even if Cobb did make
a disclosure, she did not make it to “an appropriate body or
authority” as required by the statute.
Again, we disagree.
The instruction required that the jury, in order to
find in Cobb’s favor, determine whether a disclosure had been
made to “the Office of Education Accountability and/or the
Kentucky Department of Educational Legal Services.”
The OEA,
pursuant to KRS 7.410(2)(c)(1) and (4), has the authority to
investigate allegations of wrongdoing by school officials and
personnel.
Thus, it is elementary that the OEA is an
“appropriate body or authority” for Cobb to make disclosures to
because the wrongdoing will be uncovered, as intended by the
Whistleblower Act.
Similarly, Cobb’s e-mail to legal counsel
with the KDE’s Office of Legal and Legislative Services is also
an appropriate body or authority to whom disclosures can be made
under the Act.
The KDE’s own legal counsel, as officers of the
court, are not free to ignore allegations of wrongdoing by
school officials.
Moreover, KDE’s legal counsel also report to
the Chief State School Officer.
Pursuant to KRS 156.210, the
Chief is required to report allegations of wrongdoing to the
Kentucky Board of Education and the Commonwealth’s Attorney.
Both of those entities are obviously able to undertake
investigative roles and determine whether allegations can be
substantiated.
Thus, Cobb’s statements to both the OEA and the
KDE sufficed as appropriate bodies or authorities to make
disclosures to under the Whistleblower Act.
15
II. WRONGFUL USE OF ADMINISTRATIVE PROCEEDING CLAIM
Cobb’s second civil action is a wrongful use of
administrative proceeding claim against both Flynn and Behanan.
We note at the outset that this tort is traditionally disfavored
in the Commonwealth.
(Ky.App. 2003).
See Feinberg v. Townsend, 107 S.W.3d 910
There is a long-standing precedent that one
claiming wrongful use of civil8 proceedings must strictly comply
with the elements of the tort.
Id.; Prewitt v. Sexton, 777
S.W.2d 891 (Ky. 1989); Broaddus v. Campbell, 911 S.W.2d 281
(Ky.App. 1995).
Kentucky’s Supreme Court has outlined the
elements necessary to prove a claim for wrongful use of civil
proceedings:
(1)
(2)
(3)
(4)
(5)
(6)
the institution or continuation of
original judicial proceedings . . . or
of administrative or disciplinary
proceedings,
by, or at the instance, of the original
plaintiff/complainant,
the termination of such proceedings in
the original defendant’s favor,
malice in the institution of such
proceeding,
want or lack of probable cause for the
proceeding, and
the suffering of damage as a result of
the proceeding.
Farmers Deposit Bank v. Ripato, 760 S.W.2d 396, 399 (Ky.
1988)(emphasis ours)(citing Raine v. Drasin, 621 S.W.2d 895 (Ky.
1981)).
See also, Restatement (Second) of Torts § 660.
Flynn
and Behanan argue, persuasively, that Cobb failed to meet
8
A claim for “wrongful use of civil proceedings” would include a claim for
“wrongful use of administrative proceedings.” See Farmers Deposit Bank v.
Ripato, 760 S.W.2d 396 (Ky. 1988); Raine v. Drasin, 621 S.W.2d 895 (Ky.
1981).
16
several elements of the tort and thus were entitled to a
directed verdict.
We agree and reverse the judgment against
both Flynn and Behanan.
A. Underlying Proceeding Did Not Terminate in Cobb’s Favor
The third element of Cobb’s wrongful use of
administrative proceedings claim requires that the underlying
proceedings terminate in her favor.
Flynn and Behanan argue
that because the proceedings did not, they were entitled to a
directed verdict.
We agree.
The underlying proceeding in this case is the
tribunal’s administrative hearing conducted to determine whether
Cobb’s employment should be terminated.
The tribunal’s decision
was appealed by the Board to both the Kentucky Court of Appeals
and the Kentucky Supreme Court.
The Kentucky Supreme Court
ultimately affirmed the tribunal’s decision, finding that Cobb
was guilty of carrying a loaded gun onto school premises and
failed to accurately perform the “Day 4” count.
163 S.W.3d at 391.
See Fankhauser,
In other words, the underlying proceeding
did not terminate in Cobb’s favor because the tribunal’s
decision, upheld on appeal, resulted in adverse personnel action
being taken against her, to wit, a reprimand and suspension.
Moreover, Cobb was well aware that the tribunal’s decision did
not terminate in her favor as is evidenced by her filing of a
counter-claim in Fayette Circuit Court seeking reversal of those
adverse actions.
17
In Feinberg, supra, we cited with approval the
comments to Restatement (Second) of Torts § 674, indicating that
civil proceedings may be terminated in favor of the person
against whom they are brought if there is a favorable
adjudication of the claim by a competent tribunal.
Id. at 912.
Here, the underlying administrative tribunal’s decision was
obviously not terminated in Cobb’s favor because she was
punished for her actions.
Cobb argues, conversely, that even
though she did lose on some of the issues below, she did prevail
against all other claims leveled against her, keeping her job.
Cobb contends that her tort can be premised on a parsing out of
claims that she successfully defended against below.
We do not
agree as the authority on this issue is squarely against Cobb’s
contention.
In Provident Sav. Life Assur. Soc. v. Johnson, 115 Ky.
84, 72 S.W. 754 (1903), a former employee of a company
criticized and maligned his former employer by publishing a
three paragraph story in the local newspaper.
Id.
The former
employee was indicted for criminal libel, charging that all
three paragraphs of the story were false, however he was only
charged as to the comments made in one of the paragraphs.
Id.
The employee was acquitted and thereafter sued his former
employer for malicious prosecution.
Id.
In its defense, the
employer sought to show that even if the one paragraph was
actually true, the other two paragraphs were false, and
therefore gave probable cause for the indictment for libel.
18
Id.
The trial court did not allow this proof, and instead required
the employer to show that there was probable cause as to the
specific paragraph on which the employee was tried.
Id.
Finding error, the Provident court held that the question of
probable cause on a claim of malicious prosecution9 is to be
considered “on the whole case” and not on individual paragraphs
of the indictment.
Id.
Similarly, the administrative proceeding was initiated
in much the same manner.
Cobb was found to have engaged in
wrongful conduct, both personally and professionally.
Flynn and
Behanan sought her dismissal based on this misconduct.
Even
though Cobb successfully defended against several of the
charges, Flynn and Behanan were justified in seeking to
terminate her employment.
Viewing “the whole case” against Cobb
and in light of the fact that the underlying proceeding did not
terminate in her favor, the trial court erred in allowing the
wrongful use of administrative proceeding claim to go forward
against Flynn and Behanan.
Accordingly, the trial court erred
in denying their motion for a directed verdict and we reverse.
Although we reverse on this issue, we consider several
other arguments raised by the appellants.
B. Cobb Failed to Show Lack of Probable Cause
Another requisite element of an action for wrongful
use of administrative proceedings, as set out above, is a
9
The tort of wrongful use of civil proceedings is derived from the common law
tort of malicious prosecution. See Raine v. Drasin, 621 S.W.2d 895 (Ky.
1981).
19
showing of lack of probable cause to support the underlying
proceeding.
Flynn and Behanan argue that Cobb failed to
demonstrate that probable cause was lacking for institution of
the administrative proceeding against her and thus, the trial
court erred in allowing the action against them to go forward.
We agree.
For purposes of a claim for wrongful use of
administrative proceedings, probable cause “exists where the
person who initiates civil proceedings ‘reasonably believes in
the existence of the facts upon which the claim is based, and
. . . that under those facts the claim may be valid under the
applicable law.’”
(Ky. 1989).
See Prewitt v. Sexton, 777 S.W.2d 891, 894
The Supreme Court stated that “probable cause to
initiate a civil action does not require ‘the same degree of
certainty as to the relevant facts that is required of a private
prosecutor of criminal proceedings.’”
Id. (quoting Restatement
(Second) of Torts § 675 cmt. d, p. 459 “Points of Difference
Between Criminal and Civil Proceedings”).
“Probable cause” is a
suspicion founded upon circumstances sufficiently strong as to
warrant a reasonable person in the belief that the charge is
true.
Id. at 896 (citing Kassan v. Bledsoe, 252 Cal.App.2d 810,
60 Cal.Rptr. 799, 803 (1967)).
In this case, Flynn and Behanan were in receipt of
facts and evidence of sufficient strength to believe that Cobb
had engaged in misconduct.
The burden of proving an absence of
probable cause to support the underlying proceeding was Cobb’s
20
to bear.
See Prewitt, 777 S.W.2d at 895.
Cobb presented no
evidence at trial tending to show that Flynn and Behanan were
unreasonable in their opinion of her.
Like the employee in
Provident, supra, while Flynn and Behanan may have lacked
probable cause for all of the allegations or charges against
Cobb, at least some of their claims were supported by probable
cause because Cobb was found guilty of two offenses and
punished.
Thus, probable cause existed for Flynn and Behanan to
seek termination of Cobb’s employment.
Consequently, because
Cobb failed to demonstrate an essential element of her claim, a
directed verdict should have been granted and we reverse.
C. Advice of Counsel Defense
Flynn and Behanan argue that the trial court erred
when it refused to give the jury an instruction on the defense
of advice of counsel.
At trial Flynn testified that he sought
legal counsel prior to sending the termination letter to Cobb.
On appeal Flynn and Behanan contend that because ample evidence
was presented showing that the Board’s general counsel played an
active role in the investigation of Cobb and the drafting of the
termination letter, they were entitled to the jury instruction.
We agree.
The defense of “advice of counsel” to an action
requires that the party asserting the defense have sought legal
advice in good faith and that the advice have been given after a
full disclosure of the facts within the party’s knowledge and
information.
See Restatement (Second) of Torts § 666.
21
Here,
after Flynn and Behanan sought to use the defense, Cobb
requested to call Virginia Gregg, counsel for the Board, as a
witness to determine whether her advice was sought in good faith
and whether she was given full disclosure of the facts.
The
judge denied the request10 to examine the attorney based upon
Cobb’s failure to meet her evidentiary burden pursuant to CR
26.02(3).11
The judge also denied Flynn and Behanan’s request
for the “advice of counsel” defense jury instruction.
After a
careful review of the evidence presented on this matter, we
conclude that the trial court erred in denying the proposed jury
instruction.
Certainly each party to civil litigation is entitled
to have an instruction upon his theory of the case submitted to
the jury for its acceptance or rejection if there is any
evidence to sustain it.
(Ky. 2000).
See Coulter v. Thomas, 33 S.W.3d 522
Here, Flynn and Behanan offered uncontradicted
testimony that extensive legal advice was sought prior to
sending Cobb the termination letter.
Thus, there was ample
evidence to sustain Flynn and Behanan’s request for a jury
instruction on the defense of advice of counsel.
It would then
be for the jury to determine whether the legal advice was sought
in good faith and with full disclosure of the facts.
The trial
10
Cobb did not cross appeal from the trial court’s denial of her motion to
examine the attorney and thus waived the argument on appeal.
11
CR 26.02(3) allows a party to obtain discovery of documents and tangible
things prepared in anticipation of trial by the opposing party (including his
attorney) provided that the party seeking discovery show a substantial need
for the materials and is unable without undue hardship to obtain the
substantial equivalent of the materials by other means.
22
court’s failure to submit the instruction was an abuse of
discretion and we reverse.
D. Probable Cause Not For Jury Determination
Flynn and Behanan contend that the trial court erred
when it left exclusively for jury determination the existence of
probable cause.12
We agree.
In Prewitt, supra, the Supreme Court of Kentucky
delineated which elements of a claim of wrongful use of civil
proceedings are for the trial court to determine and which are
for the jury’s determination.
The Court held that in an action
for wrongful use of civil proceedings, the trial court
determines whether the defendant has probable cause for his
action.
See Prewitt, 777 S.W.2d at 895.
Here, the trial court
left the probable cause determination to the jury.
Clearly, the
existence of probable cause is a question of law for the court
and the trial court erred when it failed to make that
determination.
We reverse.
E. Issue Preclusion
Flynn and Behanan also assert the same argument as the
Board regarding issue preclusion13.
They argue that the trial
court erred by not giving the administrative tribunal’s decision
issue preclusive effect and must be reversed.
We disagree and
decline to grant relief for the reasons we discussed regarding
the Board’s identical argument above.
12
We discuss the issue of probable cause as an element of a wrongful use of
civil proceedings claim in section II(B).
13
We discuss issue preclusion in section I(B).
23
III. EXPERT TESTIMONY
At trial, Cobb called as a witness a licensed clinical
social worker.
The social worker was permitted to testify, over
objection, regarding her diagnosis of Cobb and its purported
cause.
Appellants argue that the trial court erred in allowing
the social worker to testify as an expert witness regarding
Cobb’s psychological condition.
We agree.
We need not belabor this issue as the law of Kentucky
is well-settled regarding this matter.
In Kentucky, a social
worker is not qualified to give opinion testimony regarding the
diagnosis of a mental or emotional disorder.
See Prater v.
Cabinet for Human Resources, 954 S.W.2d 954, 958 (Ky. 1997)
(opinions of social workers not expert testimony because they
are insufficiently qualified); Hellstrom v. Commonwealth, 825
S.W.2d 612, 614 (Ky. 1992)(same); Drumm v. Commonwealth, 783
S.W.2d 380, 385 (Ky. 1990)(same); R.C. v. Commonwealth, 101
S.W.3d 897, 900-901 (Ky.App. 2002)(same).
See also KRE14 702 and
KRS 319.010 (“practice of psychology” includes “diagnosis”) cf.
KRS 335.020(2)(“practice of social work” does not include
“diagnosis”).
Only a medical expert can testify as to diagnosis
and causation of injuries, be they mental or physical.
See
Stringer v. Commonwealth, 956 S.W.2d 883 (Ky. 1997).
Here, Cobb’s witness, as a social worker, did not
possess the appropriate medical background and training required
to testify as an expert regarding Cobb’s psychological
14
Kentucky Rules of Evidence.
24
condition.
The admission of this evidence was an abuse of
discretion by the trial court.
Although we reverse on other
grounds above, we would also reverse the jury’s verdict against
Flynn and Behanan based solely on the trial court’s admission of
this evidence.
IV. PUNITIVE DAMAGES
The Appellants argue that the punitive damages awarded
by the jury violated their rights under the Eighth and
Fourteenth Amendments.
Based on our reversal of the judgments
against Flynn and Behanan, we need not address this issue as it
pertains to each of them.
As against the Board, we disagree
that the award amounts to a violation of constitutional due
process rights.
Contrary to Cobb’s assertion, we believe that the
appellants have properly preserved for review by this court the
issue of whether the judgment itself is grossly excessive and
violates federal constitutional due process rights.
The
appellants’ motion to alter, amend or vacate is the proper
method to preserve this issue.
Thus, Cobb’s contention is
without merit.
The jury’s award of $500,000.00 in punitive damages
against the Board does not appear excessive.
Cobb sued the
Board directly under the Whistleblower Act as a corporation.
A
corporation which violates the Whistleblower Act is subject to a
criminal penalty of a maximum $10,000.00.
and KRS 534.050(1)(b).
See, KRS 61.990(3)
We are not persuaded by the appellants’
25
argument that they did not have notice prior to the complained
of conduct that the elements contained in the jury instructions
might subject them to damages.
The criminal provisions served
as adequate notice to the Board of the severity of the penalty
available for retaliatory misconduct against an employee.
Moreover, the Whistleblower Act specifically acknowledges that a
wronged employee may seek not only compensatory damages but also
punitive damages.
See, KRS 61.103(2).
Additionally, the
Kentucky Supreme Court, in interpreting the statute, has upheld
the imposition of punitive damages.
(Ky. 2000).
See, Vinson, 30 S.W.3d 162
While the punitive damage award against the Board
by the jury was fifty times the available criminal penalty, such
awards have been upheld in other cases.
See e.g., Vinson,
supra, (upholding an award of $1 million in punitive damages
against the Kentucky Department of Agriculture).
The United
States Supreme Court has stated that the “[e]lementary notions
of fairness enshrined in our constitutional jurisprudence
dictate that a person receive fair notice not only of the
conduct that will subject him to punishment, but also of the
severity of the penalty that a State may impose.”
America, Inc. v. Gore, 517 U.S. 559, 575 (1996).
BMW of North
Here, the
Board not only received fair notice of the prohibited conduct,
but also of the severity of the punishment.
Under these facts,
we cannot say that the jury’s punitive damage award against the
Board was grossly excessive or without adequate notice.
Accordingly, we affirm.
26
V. ATTORNEY FEES AND COSTS
Following the trial, the court granted Cobb’s motion
for attorney fees, costs and witness fees, pursuant to KRS
61.990(4), in excess of $500,000.00.
The appellants argue that
the amount of fees awarded15 are so excessive and unreasonable as
to constitute an abuse of discretion.
We agree.
Cobb argues that the appellants’ failure to identify
the law firm of Golden & Walters, PLLC,16 in their notice of
appeal is fatal to any argument regarding the award of fees.
The Kentucky Supreme Court has concluded that the only instance
where an attorney must be named as a party to an appeal is where
there is “an award of fees to an attorney by judgment in his or
her favor[.]”
331 (Ky. 1993).
Knott v. Crown Colony Farm, Inc., 865 S.W.2d 326,
Here, neither Cobb’s motion for attorney fees
nor the judgment thereon identifies Cobb’s attorneys.
Thus,
Cobb’s attorneys were not necessary parties to this appeal.
Cobb’s argument is without merit.
The award of attorney fees and costs was excessive and
therefore unreasonable.
Cobb filed two verified complaints in
this matter and multiple amendments thereto.
In those pleadings
Cobb asserted several claims against the Board.
In the end,
only one claim against the Board proceeded to trial and the rest
were disposed of through summary judgment in the Board’s favor.
The award of attorney fees and costs by the trial court below is
15
Attorney fees and costs were only awarded against the Board.
16
Attorneys for Cobb.
27
not specific as to how the fees were derived.
For instance, we
are unable to determine what amount of the awarded attorney fees
and costs were associated with the Board’s successful defenses
on summary judgment, which were incurred as a result of the
wrongful use of administrative proceeding claim against Flynn
and Behanan, and which were derived from Cobb’s successful claim
under the Whistleblower Act.
In considering an award of
attorney fees, the trial court must provide a concise but clear
explanation of its reasons for the award.
See Wooldridge v.
Marlene Industries Corp., 898 F.2d 1169, 1176 (6th Cir. 1990).
Here, the trial court failed to make such an explanation for
awarding attorney fees and we reverse.
In Hensley v. Eckerhart, 461 U.S. 424 (1983), the
United States Supreme Court set out precise guidance for
determining what fee is reasonable, indicating that a trial
court should first determine the number of hours reasonably
expended on the litigation and a reasonable hourly rate.
A
party seeking fees should submit evidentiary support not only
for the time expended, but also the hourly rates claimed.
at 433.
The trial court should also exclude from any fee
request “hours that were not ‘reasonably expended.’”
434.
Id.
Id. at
On remand, the trial court should exclude costs of
secretaries, law clerks, and other overhead expenses.
See Ky.
Bar Ass’n v. Graves, 556 S.W.2d 890, 892 (Ky. 1977).
Further,
the trial court should exclude fees incurred by Cobb in the
collateral administrative proceeding and in the judicial review
28
thereof for which no fee-shifting is authorized.17
161.790 and KRS 13B.140.
See KRS
Moreover, the costs claimed by Cobb
for the testimony of the social worker should be excluded as
well.
See Brookshire v. Lavigne, 713 S.W.2d 481 (Ky.App.
1986)(fees paid by a party to expert witnesses are not
recoverable as part of the cost of the action, unless
specifically authorized by statute).
No statutory authority was
identified by the trial court authorizing the reimbursement of
expert witness fees.
Accordingly, we reverse and remand for a
hearing to determine an appropriate award of attorney fees and
costs.
CONCLUSION
Because we reverse on other grounds, we need not
consider Flynn and Behanan’s remaining argument that the trial
court erred by not entering a directed verdict in their favor
due to the absence of any evidence that they initiated the
administrative proceeding.
For the foregoing reasons, we affirm the judgment
against the Board and reverse the judgment against Flynn and
Behanan and remand to the Fayette Circuit Court for proceedings
consistent with this opinion.
ALL CONCUR.
17
“Except for fee-shifting statutes which provide that a trial court may
assess an attorney's fee for one party against the other, such as provided
for in Civil Rights Act litigation by KRS 344.450 and in divorce litigation
by KRS 403.220, the obligation to pay one's own attorney falls upon the
person employing the attorney rather than upon the opposing litigant.”
Louisville Label, Inc. v. Hildesheim, 843 S.W.2d 321, 326 (Ky. 1992).
29
BRIEF FOR APPELLANTS:
BRIEF FOR APPELLEE:
Robert L. Chenoweth
S. Shea Luna
Frankfort, Kentucky
J. Dale Golden
Eddie Wilson
Lexington, Kentucky
ORAL ARGUMENT FOR APPELLANTS:
ORAL ARGUMENT FOR APPELLEE:
Robert L. Chenoweth
Frankfort, Kentucky
J. Dale Golden
Lexington, Kentucky
30
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