Collins v. Com. of Ky. Nat. Resources

• Decision Date: 21 October 1999
• Docket Number: No. 97-SC-0849-DG.,97-SC-0849-DG.
• Citation: 10 S.W.3d 122
• Parties: Sonja Kay COLLINS, Individually and as Administratrix of the Estate of Eric Matthew Maggard, Appellant, v. COMMONWEALTH OF KENTUCKY NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET, and Commonwealth of Kentucky, Board of Claims, Appellees.
• Court: United States State Supreme Court — District of Kentucky

10 S.W.3d 122

Sonja Kay COLLINS, Individually and as Administratrix of the Estate of Eric Matthew Maggard, Appellant, v. COMMONWEALTH OF KENTUCKY NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET, and Commonwealth of Kentucky, Board of Claims, Appellees.

No. 97-SC-0849-DG.

Supreme Court of Kentucky.

October 21, 1999.

Rehearing Denied February 24, 2000.

Stephen A. Sanders, Deborah A. Schmedemann, Appalachian Research & Defense, Fund of Kentucky, Inc., Prestonsburg, Tony Oppegard, Appalachian Research & Defense, Fund of Kentucky, Inc., Lexington, for Appellant.

Ronald W. Crawford, Fred A. Bee, Natural Resources and Environmental, Protection Cabinet, Office of Legal Services, Frankfort, Grey Vincent, Chairman, Commonwealth of Kentucky, Board of Claims, Frankfort, for Appellees.

LAMBERT, Chief Justice.

This Court granted discretionary review (CR 76.20) to consider whether damages may be recovered under the Board of Claims Act for injuries arising from the Natural Resources and Environmental Protection Cabinet's negligent inspection of a strip mine site. To answer this question, we must first review a key provision of the 1986 amendments to the Board of Claims Act, KRS 44.073(2), which provides recovery for injury caused by the negligent performance of ministerial acts. We must then determine whether inspection of a strip mine site by Cabinet employees constitutes a ministerial act, the negligent performance of which may support recovery under the Act, or whether it is a discretionary act, which provides no basis for recovery. If the award of damages is proper, we must then determine whether the statute was correctly applied.

The case arose as a consequence of a tragic accident. On April 8, 1987, 13-year-old Eric Matthew Maggard went biking in an area near his home with his brother and a friend. There was runoff from melting snow, and two to three inches of water flowed over parts of the road where the boys were riding. The water was high in a nearby creek, which ran underneath an access road to a strip mine and was covered by a 48-inch corrugated metal drainage culvert. The culvert was flooded as it was grossly undersized, contained several upright railroad ties inside it for reinforcement, and was clogged with debris. Eric slid off the road and into the creek on the upstream side of the flooded drainage culvert, where he drowned.

The culvert was part of the Terry R. Mullins strip mine site, for which the Cabinet had issued an operating permit. Although Cabinet employees had inspected the mine site repeatedly to ensure the location conformed to mandatory regulatory requirements, the culvert had never been physically inspected to insure that it was not obstructed or to assess its ability to handle peak runoff as required by regulation.

Sonja Kay Collins, Eric's mother, brought two claims against the Cabinet. In her capacity as administratrix of her son's estate, Mrs. Collins' filed a claim for his lost earnings. Individually, she filed a claim for loss of affection and companionship. Both claims alleged the Cabinet caused Eric's death by its negligent issuance of the strip mine permit, negligent inspections of the mine site, negligent issuance of a revised permit, and negligent failure to require the mine operator to remove the culvert after completion of the mining and reclamation operations.

The Board of Claims found a violation of the regulations for the mining operators to restrict the flow of water through the culvert by placing railroad ties inside it. See 405 KAR 1:120, Section 4(2). The Board also found the 48-inch culvert much too small to handle the peak runoff from a 10-year, 24-hour precipitation event as required by regulation. See 405 KAR 1:120 Section (3)(2). Determining that Cabinet employees had a duty to inspect the mine site properly to ensure that the culvert was free-flowing and that this duty had been breached, the Board found the Cabinet negligent under the Act. In its ruling, the Board stated that even "minimal regulations" charged the Cabinet with the duty of performing a more thorough inspection than merely having inspectors drive over the culvert.

The Board found Eric's negligence contributed to the accident and apportioned 80 percent of the fault of the accident to Eric and 20 percent to the Cabinet. Damages were awarded to both Eric's estate and Mrs. Collins. Eric's lost earnings were assessed at $958,454. This amount was reduced to $100,000, the maximum amount of recovery allowed by statute for a single claim. See KRS 44.070(5). This amount was then reduced to $20,000 to reflect the apportionment of fault. The Board assessed Mrs. Collins' total loss at $25,000, which was reduced to $5,000 to reflect the apportionment of fault.

The Perry Circuit Court affirmed the Board's holding with respect to liability. However, the circuit court concluded the Board erred in its calculation of damages to Eric's estate. The circuit court corrected the perceived error by applying the 80 percent reduction for comparative fault to the total lost earnings figure of $958,454 rather than to the $100,000 statutory maximum. Through these calculations, the circuit court arrived at a figure of $180,000, which was then reduced to the $100,000 maximum recovery limit.

The Court of Appeals reversed the circuit court and remanded the case with directions that it be dismissed. In its decision, the court held the Cabinet could not be held legally liable as a matter of law. The court reasoned that the Cabinet's regulatory functions involve the exercise of reason, discretion, and judgment, as each mining permit application is different and may enter into "gray areas" requiring interpretation of statutes and regulations. Thus, the court concluded, the acts at issue here were not purely ministerial as required for recovery under the Act. The court supported its position with Commonwealth, Dept. of Banking and Securities v. Brown, Ky., 605 S.W.2d 497 (1980), which held the Commonwealth cannot be liable under the Act for its employee's dereliction in the performance of duties that run to the public as a whole. For the following reasons, we now reverse.

Sovereign immunity is a doctrine of law created by section 231 of the Constitution of Kentucky. Withers v. University of Kentucky, Ky., 939 S.W.2d 340, 342 (1997); Brown, 605 S.W.2d at 498. Section 231 "grants the General Assembly the exclusive authority to decide when and under what conditions the Commonwealth will allow itself to be subjected to suit." Brown at 500. This Court recently reiterated this fundamental principle in Commonwealth, Transportation Cabinet v. Roof Ky, 913 S.W.2d 322, 325 (1996), stating, "It is the province of the General Assembly to waive immunity, if at all, and only to the extent it sees fit."

The Board of Claims Act offers a limited waiver of sovereign immunity with regard to negligence claims filed with the Board. KRS 44.072. The first Board of Claims Act was enacted in 1946 and applied to personal injury or property damage arising from the negligent construction, reconstruction, maintenance or policing of highways by the Department of Highways. Brown at 498 (citing former KRS 176.290, renumbered as KRS 44.070 by Statute Reviser (1950)). In 1950, the Act was extended to provide compensation for injury caused by the negligence of the Commonwealth, any of its departments of agencies, or any of its agents or employees while acting within the scope of their employment. Id. (citing KRS 44.070). Recovery under the Act is limited to situations in which the alleged negligence was such that the claimant would be entitled to recover a judgment in an action at law if the Commonwealth were amenable to such an action. KRS 44.120.

The statutory language governing this action comes from KRS 44.073(2), one of the key provisions of the 1986 amendments to the Act. Two significant cases were decided shortly before the enactment of the 1986 amendments and are important to an understanding of the amendments. The first, Commonwealth, Department of Banking and Securities v. Brown, Ky., 605 S.W.2d 497 (1980), involved claims alleging the negligent regulation of two building and loan associations by the Department of Banking and Securities. The Court agreed that the Department had acted negligently, yet ruled for the Department, relying on KRS 44.120. The Court interpreted KRS 44.120 to incorporate the common law limitations on municipal tort liability, and concluded that "the Commonwealth has no common law liability for the malfeasance of its agents in the performance of obligations running to the public as a whole." Id. at 500.

The second case, Gas Service Co. v. City of London, Ky., 687 S.W.2d 144 (1985), involved a claim that the city of London had negligently installed and repaired a sewer line, contributing to a natural gas explosion. The Court reinstated the rule of, sovereign immunity only for "the exercise of legislative or judicial or quasi-legislative or quasi-judicial functions." Id. at 149-150 (quoting Haney v. City of Lexington, Ky., 386 S.W.2d 738, 742 (1964)). The Court ruled against the city and remanded the case. In a concurring opinion, Justice Wintersheimer noted the distinction between discretionary and ministerial acts with regard to sovereign immunity:

In general it must be recognized that there are certain discretionary activities related to the formulation of public activity and public policy.

A public entity is not liable for the exercise of discretion when, in the face of competing demands, it determines how or whether to utilize or apply existing resources. Nothing in such a statute should exonerate the public entity for negligence arising out of acts or omissions of its employees in carrying out their ministerial function.

Id. at 151-152 (citations omitted).

The 1986 amendments clarified the law with regard to what types of conduct may form the basis for recovery under the Act. The first key provision of the ...