City of Louisville v. Stock Yards Bank & Trust Co., 91-SC-952-TG

Citation843 S.W.2d 327
Decision Date17 December 1992
Docket NumberNo. 91-SC-952-TG,91-SC-952-TG
CourtUnited States State Supreme Court (Kentucky)
PartiesCITY of LOUISVILLE, Appellant, v. STOCK YARDS BANK & TRUST CO., et al., Appellees.

Samuel D. Hinkle IV, Lester I. Adams, Jr., Culver V. Halliday, Greenbaum Treitz Brown & Marshall, P.S.C., Christina Heavrin, Director of Law, Winston E. King, Asst. Director of Law, City of Louisville, Louisville, for appellant.

Lively M. Wilson, Philip W. Collier, Brooks D. Kubik, Scot A. Duvall, Stites & Harbison, John T. Ballantine, James N.G. Cauthen, Ogden, Newell & Welch, Ann B. Oldfather, Oldfather & Morris, Frank E. Haddad, Jr., Harris J. Berman, Louisville, for appellees.

LAMBERT, Justice.

Appellant, City of Louisville, brought this action for damages and injunctive relief against appellees, trustees of the Policemen's Retirement Fund of the City of Louisville, and various other parties including a bank, a brokerage firm, investment advisors and stock brokers with whom the Fund had entered into contracts and engaged in investment activities. In substance, appellant alleged the existence of a scheme whereby improper fees and commissions were paid from the assets of the Policemen's Retirement Fund. Appellees moved to dismiss the complaint on grounds that appellant lacked standing to bring the action and the trial court sustained the motion. After filing its Notice of Appeal, appellant moved this Court for transfer and its motion was sustained.

At the outset, it should be observed that this action was dismissed on grounds that appellant lacked standing to bring it. It is axiomatic that in such circumstances, every well-pleaded allegation of the complaint must be taken as true and construed in the light most favorable to the party against whom the motion is made. Gall v. Scroggy, Ky.App., 725 S.W.2d 867 (1987). As such, it was neither the province of the trial court nor of this Court to consider whether appellant may be able to prove its allegations or ultimately prevail. See generally, W. Bertelsman and K. Philipps, Kentucky Practice, 4th ed., Rule 12.02 (1984). On review, this Court will confine itself to a determination of whether the matters alleged in the complaint establish appellant's standing to bring the action or whether it is without a "substantial interest" in the subject matter of the controversy. Winn v. First Bank of Irvington, Ky.App., 581 S.W.2d 21, 23 (1978).

In the complaint, appellant alleged that appellees breached their fiduciary duty to the Fund by engaging in investment practices which resulted in excessive trading of securities, payment of excessive fees and commissions, and made incorrect statements to the Fund's Board of Trustees. As a result of those practices, appellant alleged, it was required, pursuant to an ordinance of the City of Louisville, to pay sums into the Fund which otherwise would not have been required. For this, appellant sought damages and injunctive relief. Appellees responded with the contention that the "exclusive authority relating to investment of the assets" language contained in KRS 95.290(2) forbade any such action. They viewed the statute as preventing any review, even for fraudulent conduct, of their investment practices.

The Policemen's Retirement Fund was created, pursuant to a statutory grant of authority to cities of the first class, KRS 95.020, by the legislative body of the City of Louisville. Among other things, Section 36.118 of the Ordinance requires appellant to guarantee payment of pension benefits in the event of a shortfall of investment income and member contributions. Appellant has alleged that on numerous occasions, it has been required to pay increased sums by virtue of the alleged mismanagement. Moreover, appellant contends that mismanagement is continuing and threatens to increase future sums it will be required to pay.

Prevailing Kentucky authority establishes the standard for standing to sue as "a judicially recognizable interest in the subject matter." The interest may not be "remote and speculative," but must be a present and...

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    • United States
    • United States State Supreme Court — District of Kentucky
    • November 19, 1998
    ...facts of each case. Rose v. Council for Better Education, Inc., Ky., 790 S.W.2d 186 (1989)(emphasis added); City of Louisville v. Stock Yards Bank & Trust, Ky., 843 S.W.2d 327 (1992). Simply because a plaintiff may be a citizen and a taxpayer is not in and of itself sufficient basis to asse......
  • Overstreet v. Mayberry
    • United States
    • United States State Supreme Court — District of Kentucky
    • July 9, 2020
    ...quotations marks omitted).34 140 S. Ct. 1615.35 552 U.S. at 254–56, 128 S.Ct. 1020.36 Plaintiffs cite to City of Louisville v. Stock Yards Bank & Trust Co., 843 S.W.2d 327 (Ky. 1992), as consistent with this proposition. But that case dealt with the ability of the City of Louisville, not be......
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    • November 19, 1998
    ...of each case. Rose v. Council for Better Education, Inc., Ky., 790 S.W.2d 186 (1989) (emphasis added); City of Louisville v. Stock Yards Bank & Trust, Ky., 843 S.W.2d 327 (1992). Simply because a plaintiff may be a citizen and a taxpayer is not in and of itself sufficient basis to assert st......
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    • United States State Supreme Court — District of Kentucky
    • September 22, 2016
    ...doctrine. And we must take these allegations at face value in undertaking this standing analysis. See City of Louisville v. Stock Yards Bank & Tr. Co. , 843 S.W.2d 327, 328 (Ky.1992) (“[I]t is neither the province of the trial court nor of this Court to consider whether Appellant may be abl......
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