Carter v. Smith, No. 2003-CA-001054-MR.

• Decision Date: 14 September 2005
• Docket Number: No. 2003-CA-001054-MR.
• Citation: 170 S.W.3d 402
• Parties: Arnold W. CARTER, Appellant, v. Jamie D. SMITH and Bourbon County Board of Education, Appellees.
• Court: United States State Supreme Court — District of Kentucky

170 S.W.3d 402

Arnold W. CARTER, Appellant, v. Jamie D. SMITH and Bourbon County Board of Education, Appellees.

No. 2003-CA-001054-MR.

Court of Appeals of Kentucky.

October 8, 2004.

Discretionary Review Denied by Supreme Court September 14, 2005.

COPYRIGHT MATERIAL OMITTED

Joe F. Childers, Lexington, KY, for appellant.

Neil Duncliffe, Georgetown, KY, for appellee, Jamie D. Smith.

Sam P. Burchett, Lexington, KY, for appellee, Bourbon County Board of Education.

Before GUIDUGLI and KNOPF, Judges; EMBERTON, Senior Judge.¹

OPINION

GUIDUGLI, Judge.

Arnold W. Carter has appealed from the portion of the Bourbon Circuit Court's May 13, 2003, Opinion and Order denying his motion to intervene as a matter of right pursuant to CR 24.01. Carter had moved to intervene, both as a matter of right and permissibly, in a lawsuit filed by Jamie D. Smith against the Bourbon County Board of Education alleging violations of the Open Meetings Act. Because we have determined that the denial of the motion to intervene as a matter of right was immediately final and appealable and that the circuit court should have granted the motion, we reverse and remand.

On December 3, 2002, Smith, a resident of Paris, Kentucky, filed a two-count complaint in Bourbon Circuit Court against the Bourbon County Board of Education alleging six violations of the Open Meetings Act² in 2001 and 2002. In late January, Smith moved the circuit court to file an amended complaint. Following a hearing, the circuit court granted Smith's motion and her amended complaint was filed on February 4, 2003. In her amended complaint, Smith included a third count, alleging that the Board went into a closed session at a December 19, 2002, meeting for a stated purpose of discussing pending litigation and personnel without giving notice of the specific provision of KRS 61.810 authorizing the closed session. Immediately following the closed session, the Board accepted the resignation of Superintendent Arnold W. Carter effective December 31, 2002, and hired him as a consultant through December 31, 2003, at a cost of approximately $133,000, as well as $3,000 in moving expenses. The Board and Carter entered into an agreement regarding his retention as a consultant on December 23, 2002. Smith requested that the circuit court declare the action at the December 19, 2002, meeting null and void and that any funds Carter was paid be turned over to Bourbon County Schools.

In a related motion, Smith moved for a temporary injunction to enjoin the Board from making any additional payments to Carter under the contract. Following a hearing in March, the circuit court entered a temporary injunction against the Board and enjoined it from making any further payments pursuant to the December 23, 2002, contract. The Board was ordered to pay all money due into an escrow account pending a final decision as to the validity of the contract. The circuit court allowed the parties sixty days from March 4, 2003, to take additional proof, after which it would decide whether to issue a permanent injunction or a judgment in favor of the Board.

At an April 9, 2002, hearing, Carter made motions to intervene as a defendant and to obtain a restraining order to prevent the hiring of a new superintendent. These motions were eventually filed with the clerk twenty days later. Carter first filed a motion to intervene as a matter of right pursuant to CR 24.01, and later amended his motion to include a request for permissive intervention pursuant to CR 24.02. In his original motion, Carter stated that he had signed an employment contract with the Board on June 5, 2001, providing that he would serve as Superintendent from July 1, 2001, through June 30, 2005. He resigned this position on December 30, 2002, conditioned on a new consulting contract he signed with the Board. Because the circuit court issued a temporary injunction in March, Carter was no longer being paid for his consulting services under his contract. Therefore, he requested permission to intervene as a matter of right pursuant to CR 24.01(1)(b), because he was so situated that the disposition of the action may have as a practical matter impaired or impeded his ability to protect his interests, which neither Smith nor the Board could be expected to do. In another motion, Carter requested a restraining order to prevent the Board from hiring a new Superintendent in case the circuit court decided that his consulting contract with the Board was void. The circuit court passed the motion to intervene to allow the parties to brief the issue, and denied his motion for a restraining order because Carter was not a party in the action.

In his memorandum in support of the motion to intervene, Carter asserted that he had a contractual right in the December 23, 2002, consulting contract as well as in his Superintendent contract, should the consulting contract be declared void. He also argued that his interests would not be adequately protected by the existing parties; Smith wanted to enjoin the Board from paying him, and the Board had a financial interest in not paying any money to him and had refused to ratify the December contract in a later open meeting. The Board filed a response in opposition to Carter's motion and amended motion to intervene, arguing that Carter's resignation was not conditioned on the consulting contract, that it was his duty to correctly post the agenda and ensure conformity with the Open Meetings requirements, and that the motion to intervene was untimely. The Board indicated that Carter and his attorney had attended the original January hearing, but did not attempt to intervene until April. Because he was aware of the lawsuit and could have intervened prior to the March 4, 2003, hearing, but chose not to do so, his motion was not timely filed.

On May 13, 2003, the circuit court entered an Opinion and Order denying Carter's motion to intervene pursuant to CR 24.01 and his amended motion to intervene pursuant to CR 24.02, the pertinent parts of which read as follows:

This case involves allegations by Plaintiff that the Bourbon County Board of Education ("Board") violated the open meetings statute of the Commonwealth of Kentucky on several occasions. Plaintiff sought a temporary injunction concerning the resignation of Mr. Carter as superintendent and the awarding of a consultant contract to him at that same meeting. A hearing was conducted by this Court on March 4, 2003, and a temporary injunction was entered by this Court at that time.

Mr. Carter now seeks to intervene into this action pursuant to CR 24.01, which states as follows:

Upon timely application anyone shall be permitted to intervene in an action (a) when a statute confers an unconditional right to intervene, or (b) when the applicant claims an interest relating to the property or transaction which is the subject of the action and is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless that interest is adequately represented by existing parties.

Obviously, the right to intervene where a statute conveys an unconditional right to intervene is not applicable in this case since this is an action pursuant to Kentucky's Open Meetings Act, KRS 61.805 through 61.850, and nothing in that statute grants anyone any unconditional right to intervene. Section (b) of CR 24.01 provides for intervention as a right: when the applicant claims an interest relating to the property or transaction, which is the subject of this action, and is so situated that practically its disposition should be determined in the suit. This would appear to be the section under which Mr. Carter seeks to intervene as a matter of right. However, there is no action that this Court can take which would impair his ability to protect his interests. The Court has ordered the funds to which he claims an entitlement to be placed in escrow until such time as the Court rules on this motion. If the Court finds that the action[s] of the Board were valid, those funds would still be available to pay him for his services. If the Court were to declare the actions of the Board improper, then this contract would be void ab initio as a violation of public policy and he would not be entitled to those funds. There is a whole separate issue as to whether he would be entitled to any funds on a quantum meruit basis, and that would be an independent action between Mr. Carter and the Board. Intervention as a matter of right does not involve cases where one person's rights are contingent on a resolution of another person's rights. As the Court said in Gayner v. Packaging Serv. Corp. of Kentucky, Ky.App., 636 S.W.2d 658, 660 (1982): "CR 24.01(b), like its federal counterpart, Fed.R.Civ.P. 24, does not permit a contingent interest such as the Gayner claim to be placed in issue by intervention." Therefore, Mr. Carter does not have a right to intervene in this matter.

. . . . However, even if the Court were to determine that intervention as a matter of right or by permission of the Court were appropriate in this case, the Court would not grant the motion for its failure to be timely. The issues involved in this case were initiated in December of 2002 and, as the Court pointed out before, has been subject to several motions and hearings since then. Mr. Carter has been aware of those issues, and counsel for both Plaintiff and the Board have asserted that he was present at some of the hearings on this matter. However, he chose not to intervene until there was a newspaper article indicating that the Board was considering hiring a new school superintendent. As soon as this article appeared in the paper, Mr. Carter, with his attorney, filed a motion to intervene and an accompanying motion for a temporary injunction to prevent said hiring. This is the real purpose of this matter. This Court finds that it is inappropriate and untimely to sit back and...