Pottinger v. Botts

• Decision Date: 21 April 2011
• Docket Number: 2009–SC–000751–TG,Nos. 2009–SC–000515–TG,2009–SC–000818–TG.,s. 2009–SC–000515–TG
• Citation: 348 S.W.3d 599
• Court: United States State Supreme Court — District of Kentucky
• Parties: MORGAN & POTTINGER, ATTORNEYS, P.S.C., Appellants,v.Noel Mark BOTTS, Appellee.GMAC Mortgage Corporation, Appellant,v.Noel Mark Botts, Appellee.

348 S.W.3d 599

MORGAN & POTTINGER, ATTORNEYS, P.S.C., Appellants,

v.Noel Mark BOTTS, Appellee.GMAC Mortgage Corporation, Appellant,

v.Noel Mark Botts, Appellee.

Nos. 2009–SC–000515–TG

2009–SC–000751–TG

2009–SC–000818–TG.

Supreme Court of Kentucky.

April 21, 2011.As Modified on Denial of Rehearing

Oct. 27, 2011.

Calvin Ray Fulkerson, John Christian Lewis, Erin Celeste Sammons, Fulkerson, Kinkel & Marrs, PLLC, Lexington, KY, Counsel for Appellants, Morgan & Pottinger, Attorneys, P.S.C.Richard P. Corthell, David P. Fornshell, Dinsmore & Shohl LLP, Cincinnati, OH, Jeremy Stuart Rogers, Dinsmore & Shohl LLP, Louisville, KY, Counsel for Appellant, GMAC Mortgage Corporation.Noel Mark Botts, Harrodsburg, KY, Counsel for Appellee.Linda Ann Gosnell, Chief Bar Counsel, Steven T. Pulliam, Deputy Bar Counsel, Kentucky Bar Association, Frankfort, KY, Counsel for Amicus Curiae, Kentucky Bar Association.Opinion of the Court by Justice CUNNINGHAM.

In these combined cases, we are asked to determine if the absolute privilege afforded statements made in the course of a judicial proceeding applies to statements contained in an attorney disciplinary complaint.

GMAC Mortgage Corporation (hereinafter “GMAC”), through its attorney, Morgan & Pottinger, Attorneys, P.S.C. (hereinafter “Morgan & Pottinger”), filed a disciplinary complaint against Appellee, Noel Mark Botts (hereinafter “Botts”). Botts had represented GMAC's successor-in-interest in a foreclosure action. Neither the details of Botts' representation nor the unethical conduct alleged are relevant to the issues before us today. Suffice it to say, the Office of Bar Counsel referred the matter to the Inquiry Commission, which found sufficient probable cause to file charges against Botts. The Trial Commissioner conducted an evidentiary hearing and ultimately determined that the Kentucky Bar Association (hereinafter “KBA”) failed to prove, by a preponderance of the evidence, that Botts committed any of the acts or omissions charged. The Board of Governors accepted the Trial Commissioner's determination. In a confidential Opinion and Order, this Court declined further review and dismissed the charges against Botts.¹

Subsequently, Botts filed suit against GMAC and Morgan & Pottinger in the Mercer Circuit Court, requesting relief from the pecuniary and professional harm he has allegedly suffered as a result of the disciplinary complaint. He alleged wrongful use of civil proceedings, defamation and slander, abuse of process, fraud, and outrageous conduct. Appellants filed numerous motions to dismiss based on claims of immunity, all of which were denied.

The present matter represents the consolidation of three separate appeals, each from an order denying a motion to dismiss. Because both GMAC and Morgan & Pottinger raised claims of absolute immunity as the basis for their motions, the order is appealable, though interlocutory. Breathitt County Bd. of Educ. v. Prater, 292 S.W.3d 883, 887 (Ky.2009) (stating “an order denying a substantial claim of absolute immunity is immediately appealable even in the absence of a final judgment.”). Further, because the claim raises an issue of statewide importance, this Court granted Morgan & Pottinger's motion to transfer.

Appellants argued that they were immune from suit pursuant to the judicial statements privilege and SCR 3.160(4). The trial court rejected the former argument, reasoning that the privilege does not protect Appellants' statements made to the KBA. Without further elaboration, the trial court concluded that these statements were “adjudged without merit.” The trial court likewise rejected Appellants' assertion that SCR 3.160(4) immunizes attorneys who file complaints with the KBA from civil liability. The court determined that the rule granted only a qualified immunity and applies only after a judicial determination that the complaint was made in good faith. Though not argued by any of the parties, the trial court further opined that an absolute grant of immunity pursuant to SCR 3.160(4) would be unconstitutional, in violation of the separation of powers and equal protection clauses of the United States and Kentucky Constitutions.

Whether a court should dismiss an action pursuant to CR 12.02 is a question of law. James v. Wilson, 95 S.W.3d 875, 884 (Ky.App.2002). Consequently, the trial court's denial of Appellants' motions to dismiss pursuant to CR 12.02 will be reviewed de novo. Morgan v. Bird, 289 S.W.3d 222, 226 (Ky.App.2009). Furthermore, the question of whether a privilege applies is a matter of law for the court to decide. Rogers v. Luttrell, 144 S.W.3d 841, 844 (Ky.App.2004).

Because it is determinative of the matter, we first address Appellants' claims that they are entitled to absolute immunity from liability based on the judicial statements privilege. “The prevailing rule and the one recognized in this jurisdiction is that statements in pleadings filed in judicial proceedings are absolutely privileged when material, pertinent, and relevant to the subject under inquiry, though it is claimed that they are false and alleged with malice.” Schmitt v. Mann, 291 Ky. 80, 163 S.W.2d 281, 283 (1942). See also Smith v. Hodges, 199 S.W.3d 185, 189 (Ky.App.2005) (“The absolute immunity afforded to defamatory statements made in the course of a judicial proceeding has a long history in this Commonwealth....”); Morgan v. Booth, 76 Ky. 480 (1877).

A communication must fulfill two requirements in order to fall within the ambit of the judicial statements privilege. First, the communication must have been made “preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as part of a judicial proceeding.” General Elec. Co. v. Sargent & Lundy, 916 F.2d 1119, 1127 (6th Cir.1990) (citing Restatement (Second) of Torts § 587 (1977)). Second, the communication must be material, pertinent, and relevant to the judicial proceeding. Smith, 199 S.W.3d at 193 (citing Lisanby v. Illinois Cent. R. Co., 209 Ky. 325, 272 S.W. 753, 754 (1925)).

Attorney discipline proceedings which commence with the filing of a bar complaint, as occurred in this case, are judicial proceedings. This Court is granted original jurisdiction in the discipline of attorneys and regulation of the profession. Ky. Const. § 116. The KBA has been vested with the authority of this Court to administer that responsibility. SCR 3.025. See also KBA v. Shewmaker, 842 S.W.2d 520, 521 (Ky.1992).

“Judicial proceedings include all proceedings in which an officer or tribunal exercises judicial functions.” Restatement (Second) of Torts § 587 (1977). The disciplinary process has been likened to a criminal trial. KBA v. Harris, 269 S.W.3d 414, 417–18 (Ky.2008). The Office of Bar Counsel is empowered to assess complaints, investigate and prosecute disciplinary cases, and impose alternative discipline when appropriate. SCR 3.160(3)(A). The Inquiry Commission has authority to subpoena witnesses and take testimony. SCR 3.180(3). The Trial Commissioner enters findings of fact and conclusions of law. SCR 3.360(1). Clearly, the KBA exercises a judicial function in the handling of disciplinary matters and, therefore, disciplinary hearings are judicial proceedings. See 77 A.L.R.2d 493 (collecting authorities). See also Baggott v. Hughes, 34 Ohio Misc. 63, 72, 296 N.E.2d 696, 701 (1973) (“Investigations and proceedings on complaints as to an attorney's professional conduct is a judicial function in Ohio.”). Accord McCurdy v. Hughes, 63 N.D. 435, 248 N.W. 512 (1933); Ashton–Blair v. Merrill, 187 Ariz. 315, 928 P.2d 1244 (Ariz.Ct.App.1996); Doe v. Rosenberry, 255 F.2d 118 (2nd Cir.1958).

Thus, any statement made preliminary to, in the institution of, or during the course of an attorney disciplinary proceeding will be privileged so long as it is material, pertinent, and relevant to such proceeding. This would include statements contained in the ethics complaint. The complaint triggers the investigative and disciplinary functions of the KBA and, therefore, is always material, pertinent, and relevant to attorney discipline proceedings. See Katz v. Rosen, 48 Cal.App.3d 1032, 1036, 121 Cal.Rptr. 853 (Cal.Ct.App.1975) (“Informal complaints received by a bar association which is empowered by law to initiate disciplinary procedures are as privileged as statements made during the course of formal disciplinary proceedings.”).

Contrary to the trial court's determination, this conclusion is not swayed by the fact that the charges against Botts were ultimately dismissed. See Jarvis v. Drake, 250 Kan. 645, 830 P.2d 23 (1992) (doctrine of absolute immunity barred attorney's suit against former client's spouse who filed grievance against attorney that was later dismissed). Little explanation is needed to emphasize that a lack of evidentiary support is not the equivalent of a finding of falsehood. Regardless, even if patently false or entered with malice, Kentucky's judicial statements privilege is absolute and would still apply. Accord Sinnett v. Albert, 188 Neb. 176, 195 N.W.2d 506 (1972) (judicial statements privilege protects contents of attorney ethics complaint so as to bar subsequent suit against complainant for libel); Kerpelman v. Bricker, 23 Md.App. 628, 329 A.2d 423 (Md.Ct.Spec.App.1974) (absolute privilege pursuant to judicial statements doctrine attaches to statements contained in attorney disciplinary complaint).

A larger question is posed, however, because Botts' complaint also alleges wrongful use of civil proceedings, abuse of process, fraud, and outrageous conduct. Stated otherwise, his claims are based not only on Appellants' statements contained in the KBA complaint, but also on the act of filing the complaint. Whether the judicial statements privilege encompasses the act of filing the complaint is also a matter of first impression in Kentucky.

It seems that, until roughly the mid-twentieth century, courts assumed the right of an attorney to sue for...