Kestler v. Transit Authority of Northern Kentucky

• Decision Date: 06 October 1988
• Docket Number: 87-SC-853-DG,Nos. 87-SC-841-D,s. 87-SC-841-D
• Parties: Roy W. KESTLER & Susan Kestler, Movants, v. TRANSIT AUTHORITY OF NORTHERN KENTUCKY, Respondent, and CONSOLIDATED FREIGHTWAYS, INC., Movant, v. TRANSIT AUTHORITY OF NORTHERN KENTUCKY, Respondent.
• Court: United States State Supreme Court — District of Kentucky

Page 38

758 S.W.2d 38

Roy W. KESTLER & Susan Kestler, Movants, v. TRANSIT AUTHORITY OF NORTHERN KENTUCKY, Respondent, and CONSOLIDATED FREIGHTWAYS, INC., Movant, v. TRANSIT AUTHORITY OF NORTHERN KENTUCKY, Respondent.

Nos. 87-SC-841-DG, 87-SC-853-DG.

Supreme Court of Kentucky.

Oct. 6, 1988.

Michael P. Collins, Florence, Kevin G. Henry, Walter A. Ward and Elizabeth C. Lehrfeld, Clark, Ward & Hopgood, Lexington, for movants.

Robert D. Monfort, Ziegler & Schneider, P.S.C., Covington, for respondent.

STEPHENS, Chief Justice.

On January 17, 1985, Roy W. Kestler was driving a truck owned by his employer, Consolidated Freightways, when he collided with a bus owned by the Transit Authority of Northern Kentucky (TANK), resulting in serious personal injuries. Kestler and his wife filed suit against TANK, the driver of the bus, and the Transit Authority's board of directors. TANK moved for summary judgment on the grounds of sovereign immunity. The Campbell Circuit Court granted the motion, dismissing both TANK and its board of directors. On appeal, the summary judgment was affirmed by the Court of Appeals. We granted discretionary review to both Kestler, and his intervening employer, Consolidated Freightways.

The sole issue to be decided is whether TANK may claim the protections of sovereign immunity. We hold that it may not.

The sovereign immunity doctrine has enjoyed a long and well-established history in Kentucky. The common law sovereign immunity, originally established to protect the Crown from suit, has been deeply planted in the law of the Commonwealth through Section 231 of the Kentucky Constitution. Section 231 provides:

Sec. 231. Suits against the commonwealth.--The General Assembly may, by law, direct in what manner and in what courts suits may be brought against the Commonwealth.

Thus it is clear that the drafters of the Constitution sought to enable the General Assembly, through statute, to eliminate the common law doctrine whenever it deemed necessary. Sovereign immunity would then exist as protection, only until the legislature sought to take it away.

The General Assembly has the discretion, however, to determine whether the protection should be eliminated entirely, or simply limited to allow claims of a particular kind or for a particular specified amount. The Mass Transit Authorities Enabling Statute, KRS 96A.010 et seq. is one such statute. Within this comprehensive statutory scheme, Section 180 provides for the mandatory purchase of liability insurance by the Transit Authority.

96A.180. Insurance of authority's properties.--An authority shall provide for insurance of its properties, and for workers' compensation, and for public liability or any other risk or hazard arising from its activities, and may provide for the insuring of its officers or employes against any such risk or hazard, and the expense of obtaining such insurance, and of paying the premiums therefor from time to time, shall be borne by the authority and be chargeable as an operating expense of the authority. The board of an authority may provide for self insurance and may establish for that purpose such reserves as it deems prudent. (Emphasis added.)

We have held that immunity can be partially waived by the express terms of a statute allowing maintenance of an insurance fund. Dunlap v. University of Kentucky Student Health Services Clinic, Ky., 716 S.W.2d 219 (1986). In Dunlap, the University Student Health Services Clinic was sued by a student-patient for malpractice. The Clinic claimed the protection of sovereign immunity pursuant to Section 231 of the Kentucky Constitution. This Court denied the claim of protection and held that the statutory scheme set up in KRS 164.939-944, entitled "University of Kentucky Medical Center Malpractice Insurance," constituted a clear, partial waiver of governmental immunity for the hospital to the extent of the statutorily provided insurance fund. Id. at 222.

There is no significant difference between Dunlap and the case at bar. Here, we have a comprehensive statutory scheme setting forth the proper establishment and maintenance procedures for mass transit authorities. Within this scheme is a provision mandating either the purchase of liability insurance from a private carrier or the establishment of a fund for self insurance. Either way, the statute clearly contemplates a limited waiver of governmental immunity to the extent of the insurance coverage.

Respondent argues that since no funds were specifically set aside for the payment of claims against the Transit Authority, there was no actual intent to statutorily waive its governmental immunity. We do not agree. It is sufficient that the statute sets forth a mandatory provision of liability insurance against potential claims. The statute under consideration in Dunlap merely allowed for the option of insuring, not a requirement that insurance be provided. KRS 164.941. Granting no choice to the transit authorities sends an unambiguous message from the legislature that TANK, and all other transit authorities in the state will need insurance.

Respondent further contends that KRS 44.072 forbids the interpretation that insurance coverage waives immunity. KRS 44.072 provides:

44.072. Legislative intent as to sovereign immunity in negligence claims.--It is the intention of the general assembly to provide the means to enable a person negligently injured by the Commonwealth, any of its cabinets, departments, bureaus or agencies, or any of its officers, agents or employes while acting within the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus or agencies to be able to assert their just claims as herein provided. The Commonwealth thereby waives the sovereign immunity defense only in the limited situations as herein set forth. It is further the intention of the general assembly to otherwise expressly preserve the sovereign immunity of the Commonwealth, any of its cabinets, departments, bureaus or agencies or any of its officers, agents or employes while acting in the scope of their employment by the Commonwealth or any of its cabinets, departments, bureaus or agencies in all other situations except where sovereign immunity is specifically and expressly waived as set forth by statute. The board of claims shall have exclusive jurisdiction to hear claims for damages, except as otherwise specifically set forth by statute, against the Commonwealth, its cabinets, departments, bureaus, agencies or any of its officers, agents or employes while acting within the scope of their employment by the Commonwealth, its cabinets, departments, bureaus or agencies.

Therefore, the sovereign immunity of the Commonwealth is preserved unless specifically and expressly waived by statute. It is not necessary to examine the merits of respondent's claim, because KRS 44.072 was enacted July 15, 1986, one and one-half years after the accident which prompted the claim against TANK. Therefore, as we do not hold the statute to be retroactive, it has no application to the case at bar.

We therefore hold, that the provision of the Mass Transit Authorities Enabling Statute which requires liability insurance, KRS 96A.180, operates a limited waiver, to the extent of the insurance coverage, of the governmental immunity granted to TANK. The decisions of the Court of Appeals are reversed and remanded to the Campbell Circuit Court for proceedings consistent with this opinion.

WINTERSHEIMER, J., concurs.

LEIBSON, J., concurs in a separate concurring opinion in which LAMBERT, J., joins.

VANCE, J., dissents in a separate dissenting opinion and is joined by GANT and STEPHENSON, JJ.

LEIBSON, Justice, concurring.

I concur in the Majority Opinion so far as it goes, but it does not go far enough.

This is a plain, old, garden-variety motor vehicle collision, occurring on the streets of this Commonwealth between a truck and a bus. It so happens that the bus company operating this particular bus, rather than being privately owned, is a municipal corporation organized pursuant to KRS Chapter 96A, which permits local...