CONSOLIDATED INFRASTRUCTURE MANAGEMENT AUTHORITY, INC. V. THOMAS EVERETTE ALLEN
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RENDERED : NOVEMBER 26, 2008
TO BE PUBLISHED
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2006-SC-000188-DG
2006-SC-000712-DG
CONSOLIDATED INFRASTRUCTURE
MANAGEMENT AUTHORITY, INC .
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APPELLANT/ CROSS-APPELLEE
ON REVIEW FROM COURT OF APPEALS
CASE NOS . 2004-CA-001508-MR ; 2004-CA-001563-MR;
AND 2005-CA-000440-MR
LOGAN CIRCUIT COURT NO. 03-CI-00072
V.
THOMAS EVERETTE ALLEN
APPELLEE/CROSS-APPELLANT
OPINION OF THE COURT BY JUSTICE CUNNINGHAM
AFFIRMING
Consolidated Infrastructure Management Authority, Inc . ("CIMA")
appeals from a judgment of the Logan Circuit Court in favor of its former
employee, Thomas Everette Allen . Allen brought the action pursuant to
Kentucky's Whistleblower Act, KRS 61 .101 et. seq . , and was awarded back pay,
as well as attorney's fees and costs . The Court of Appeals affirmed the trial
court's judgment in its entirety. For the reasons set forth herein, we likewise
affirm.
In 2000, Allen was hired as a Safety Director for the City of Russellville.
The following year, Russellville joined with the City of Auburn to form CIMA,
which would administer the water and sewer services for both cities . Upon
CIMA's creation, Allen became the Safety Director. The position required
Allen's supervision of safety standards at CIMA's Russellville and Auburn
facilities .
Shortly following his transfer, Allen performed a walk-through of the
Auburn facility and found numerous safety violations . He presented his list to
CIMA's Executive Director, Charles McCollum, and the Assistant Executive
Director, Wayne Thomas. The list included instances of broken equipment,
lack of safety railings, and torn-down exterior fencing. Despite Allen's
characterization of the violations as serious, he was told there was no money to
fix the violations.
In August of 2001, Allen sent a letter to McCollum, Thomas, the
Chairman of CIMA's Board of Directors, and CIMA's Financial Director. The
document, entitled "Notification of a Formal OSHA Inspection by Safety
Director," reported the safety violations and his efforts to fix the problems .
Allen further stated, "On September 10, 2001 1 will make another inspection of
the facilities and when I get the violations written then there will be a dead line
when they will need to be done . At this point if the violations and safety
equipment that is needed is not in place I will request a survey from Frankfort
OSHA . . . .
Allen appeared before CIMA's Board of Directors in September and
October of 2001 . At both meetings, he reported on safety violations and again
expressed his intention to contact Kentucky OSHA if the problems were not
addressed . At the October meeting, the Board voted to repair the exterior
fencing, which was completed in November 2001 .
In February 2002, Allen was informed that CIMA was reducing its
workforce due to financial constraints and that he would be among those laid
off. A week later, Allen sent a letter to the Kentucky Labor Cabinet
enumerating the safety violations at CIMA's facilities and enclosing
photographs. He requested an unannounced inspection of the water treatment
plant and the wastewater plant. A surprise inspection was conducted, which
resulted in several violation notices and penalties.
Approximately one year later, Allen brought suit against CIMA for
violation of Kentucky's Whistleblower Act, wrongful termination, and
intentional infliction of emotional distress . At trial, Allen withdrew the
intentional infliction of emotional distress claim. The trial court dismissed the
wrongful termination claim. With respect to Allen's whistleblower claim, the
trial court refused to instruct the jury on punitive damages or injunctive relief,
determining that such claim was barred by the applicable statute of
limitations.
The jury found in Allen's favor, awarding him $40,000 in compensatory
damages . The trial court granted Allen's motion for attorney's fees and
expenses . In its final order and judgment, the trial court reduced the $4QOOO
award by the amount which Allen had received in unemployment benefits .
Shortly after the trial concluded, CIMA announced its dissolution . Allen moved
the trial court to require CIMA'to post a supersedeas bond ; the motion was
denied. Thereafter, CIMA appealed the judgment . Allen filed a cross-appeal of
the reduction of the jury's award and the denial of the motion for a
supersedeas bond .
The Court of Appeals affirmed the judgment, rejecting CIMA's primary
contention that Allen's whistleblower claim was barred by the statute of
limitations . It likewise rejected CIMA's claim that Allen's actions did not
constitute "whistleblowing" within the meaning of the Act. The Court of
Appeals also affirmed the trial court's refusal to require LIMA to post a
supersedeas bond. This appeal followed.
LIMA first argues that it was entitled to a directed verdict because Allen's
whistleblower claim was barred by the statute of limitations found within the
Whistleblower Act. KRS 61 .103(2) provides :
Notwithstanding the administrative remedies granted by KRS
Chapters 16, 18A, 78, 90, 95, 156, and other chapters of the
Kentucky Revised Statutes, employees alleging a violation of KRS
61 .102(l) or (2) may bring a civil action for appropriate injunctive
relief or punitive damages, or both, within ninety (90) days after
the occurrence of the alleged violation.
The trial court rejected CIMA's motion, concluding that the limitation applied
only to claims for punitive damages and injunctive relief, not to claims for
compensatory damages. We agree.
To determine whether KRS 61 .103(2) applies to all claims brought under
the Whistleblower Act, we look first to the plain language of the statute,
affording words their ordinary meaning. "We are not at liberty to add or
subtract from the legislative enactment or discover meanings not reasonably
ascertainable from the language used." Commonwealth v. Harrelson, 14
S.W.3d 541, 546 (Ky. 2000) . Statutes must be liberally construed so that the
intent of the legislature is carried out. KRS 446.080(l) .
The plain language of KRS 61 .103(2) indicates that the 90-day limitation
applies to civil actions "for appropriate injunctive relief or punitive damages, or
both . . . ." This is not to say that whistleblowers are limited solely to
injunctive relief or punitive damages in seeking redress : KRS . 61 .990(4)
specifically permits a court to order "reinstatement of the employee, the
payment of back wages, full reinstatement of fringe benefits and seniority
rights, exemplary or punitive damages, or any combination thereof' in actions
filed under KRS 61 .102 and 61 .103. Yet, there is nothing in the language of
KRS 61 .103(2) that would require its application to actions for relief other than
injunctive or punitive, such as a compensatory claim for back pay. When the
express language of a statute is clear and unambiguous, this Court is without
authority to construe the statute otherwise . See Commonwealth v . Remolds ,
136 S .W.3d 442 (Ky. 2004) .
This interpretation does not lead to an absurd result simply because it
limits actions brought under the statute according to the nature of the relief
sought. When more than three months passes after an employee is dismissed,
it becomes increasingly difficult for the state employer to comply with an
injunctive order. Because they are paid with taxpayer dollars, it is common
that punitive damage awards are either unavailable or heavily restricted when
sought against a public entity. See generally Green v. Jersey City Bd . of Educ. ,
828 A.2d 883, 443 n.4 (N .J. 2003). In light of the significant policy concerns
surrounding such awards, the General Assembly's decision to limit the right to
collect punitive damages from public entities is rational and harmonizes with
the overall intent of the Whistleblower Act.
The 90-day limitation found at KRS 61 .103(2), by its express language,
applies only to claims for injunctive relief and/or punitive damages. Claims for
compensatory damages and other relief, as made available through KRS
61 .990(4), are not subject to this limitation. The trial court correctly
determined that Allen's action for compensatory damages was not time-barred
by KRS 61 .103(2) .
LIMA next contends that Allen failed to establish that he engaged in
activity protected by the Whistleblower Act, and that a directed verdict should
have been granted . LIMA relies primarily on the fact that Allen did not contact
Kentucky OSHA until after he was notified of his lay-off. Further, LIMA argues
that Allen only requested a survey from Kentucky OSHA, which leads only to
education and training rather than enforcement; therefore, his threat cannot
be considered a protected disclosure. The trial court denied the motion.
On appeal, a reviewing court must determine whether the trial court
erred in failing to grant a directed verdict. "All evidence which favors the
prevailing party must be taken as true and the reviewing court is not at liberty
to determine credibility or the weight which should be given to the evidence,
these being functions reserved to the trier of fact." Lewis v . Bledsoe Surface
Min . Co. , 798 S.W.2d 459, 461 (Ky. 1990) . The trial court's ruling will be
overturned only where the jury's verdict is so flagrantly against the weight of
the evidence as to indicate passion or prejudice . Denzik v. Denzik, 197 S .W.3d
108, 110 (Ky. 2006) .
A state employee engages in whistleblowing when he or she "in good faith
reports, discloses, divulges, or otherwise brings to the attention of [government
officials] any facts or information relative to an actual or suspected violation of
any law, statute, executive order, administrative regulation, mandate, rule, or
ordinance[ .]" KRS 61 .102(1) . Disclosure is defined at KRS 61 .103(1) 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 in KRS
61 .102." (Emphasis added) . When read together, these statutes indicate that
disclosure not only occurs when a report is actually made, but also when the
threat of a report is made. Allen's letter to CIMA's Board included his intention
to contact "Kentucky OSHA" and to report the safety violations if they were not
corrected immediately. It is fairly and reasonably characterized as a threat to
report safety violations at CIMA's facilities . This letter, tendered prior to Allen's
dismissal, constitutes a disclosure within the meaning of KRS 61 .102 and
61 .103.
CIMA contends that Allen did not engage in whistleblowing because he
threatened to contact Kentucky OSHA's educational office, which does not have
an enforcement function . This assertion is not supported by the record . The
evidence establishes that Allen was in continual contact with Joseph Giles of
Kentucky OSHA's Education and Training Division. Allen had previously
requested educational surveys and courtesy inspections from Mr. Giles, which
were conducted at CIMA's Russellville facility.
However, in his letter to CIMA's Board, Allen threatened to report the
safety violations to Tom Edwards of Kentucky OSHA's Compliance Department .
In fact, Allen specifically stated he did not intend to contact Mr. Edwards for
another educational survey: "I was going to report [CIMA] to Mr . Tom Edwards
and have him have the enforcers come down ."
KRS 61 .102 protects employees that report, or threaten to report, facts or
information relative to an actual or suspected violation. By his letter to CIMA's
Board, Allen expressed his intent to contact Kentucky's Occupational Safety
and Health Program regarding safety violations at the Auburn plant if the
problems were not corrected . This action falls within the protected disclosures
of Kentucky's Whistleblower Act. The trial court did not err in denying CIMA's
motion for a directed verdict.
In his cross-appeal, Allen argues that the trial court erred in not
requiring CIMA to post a supersedeas bond after it dissolved . CR 81A exempts
governmental entities from the requirement to post a supersedeas bond
pending appeal: "Whenever a bond is or may be required by these rules in
order to . . . . stay proceedings under or the enforcement of a judgment, such
requirement shall not apply to the United States, the Commonwealth or any of
its municipal corporations or political subdivisions, or any of their agencies or
officers acting for or on their behalf."
The fact that CIMA dissolved did not change application of this rule .
Upon dissolution, CIMA was absorbed by the cities of Russellville and Auburn .
The judgment continues to be enforceable against those entities : "Thus, if a
municipal corporation goes out of existence by being annexed to, or merged in,
another corporation, and if no legislative provision is made respecting the
property and liabilities of the corporation which ceases to exist, the corporation
to which it is annexed, or in which it is merged, is entitled to all its property
and is answerable for all its liabilities ." 56 Am. Jur. 2d., Municipal
Corporations, Etc . ยง 80 (2008) . The trial court correctly refused to order CIMA
to post a supersedeas bond following its dissolution.
The judgment of the Logan Circuit Court is affirmed in its entirety .
Abramson, Noble, Schroder, Scott, and Venters, JJ ., concur. Minton,
C.J ., not sitting
COUNSEL FOR APPELLANT/ CROSS-APPELLEE :
Gregory N . Stivers
Scott Donald Laufenberg
Kerrick, Stivers, Coyle 8s Van Zant, PLC
1025 State Street
P. 0. Box 9547
Bowling Green, KY 42102-9547
COUNSEL FOR APPELLEE/ CROSS-APPELLANT:
Michael C . Bratcher
Pamela Carolyn Bratcher
Bratcher 8v Bratcher, LLP
943 College Street
P. 0 . Box 130
Bowling Green, KY 42102-0130
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