Presbyterian Child Welfare v. Nelson County Bd.

• Decision Date: 22 June 2001
• Docket Number: Civil Action No. 3:00CV-328-H.
• Citation: 185 F.Supp.2d 716
• Court: U.S. District Court — Western District of Kentucky
• Parties: PRESBYTERIAN CHILD WELFARE AGENCY OF BUCKHORN, KENTUCKY, INC., Plaintiff, v. NELSON COUNTY BOARD OF ADJUSTMENT, et al., Defendants.

185 F.Supp.2d 716

PRESBYTERIAN CHILD WELFARE AGENCY OF BUCKHORN, KENTUCKY, INC., Plaintiff, v. NELSON COUNTY BOARD OF ADJUSTMENT, et al., Defendants.

Civil Action No. 3:00CV-328-H.

United States District Court, W.D. Kentucky, at Louisville.

June 22, 2001.

COPYRIGHT MATERIAL OMITTED

Paul Baker Whitty, Michael F. Tigue, Elizabeth S. Gray, Greenebaum Doll & McDonald, Louisville, KY, for plaintiff.

Michael E. Coen, Fulton, Hubbard & Hubbard, Bardstown, KY, Dave Whalin, Landrum & Shouse, Louisville, KY, for defendants.

MEMORANDUM OPINION

HEYBURN, District Judge.

The parties have filed cross motions for summary judgment and partial summary judgment. In Count I of the complaint, Plaintiff, Presbyterian Child Welfare Agency ("PCWA"), seeks a declaration that it is an "instrumentality of state government," immune from the decisions of local planning boards under Kentucky Revised Statute ("KRS") 100.361. In Count II, PCWA claims that the Nelson County Board of Zoning Appeals ("BOZA") violated the Fair Housing Amendments Act of 1988 ("FHAA"), 42 U.S.C. § 3604(f)(1)(b) & 3(b) by denying PCWA's conditional use permit application to operate a group home for abused, neglected and disabled teenage boys. PCWA moves for summary judgment on Count I. The Nelson County Board of Adjustments moved to dismiss both counts on the grounds of res judicata and the Rooker-Feldman doctrine. For the reasons stated here, the Court will dismiss Count I of the complaint.

I.

PCWA owns thirty acres on Boston Road in an unincorporated section of Nelson County, Kentucky. In May of 1997 it applied for a conditional use permit to operate a group home for teenage boys on the property. The BOZA held a hearing on the application in June, 1997. A representative from PCWA explained the nature of the group home program and a number of neighbors aired concerns. The BOZA denied the permit based on concerns of the neighbors, concerns for the safety of the residents (both those in the area and those in the group home), flooding, and because "the number of kids proposed does not blend in with the character of the area."

PCWA appealed the permit denial to Nelson Circuit Court arguing that the BOZA hearing denied procedural due process and that the BOZA decision was arbitrary. Plaintiff also attempted to include a claim that the BOZA violated the FHAA. In February, 1998, the state court found that the BOZA hearing did not deny PCWA procedural due process and was supported by substantial evidence. Presbyterian Child Welfare Agency, Inc. v. Nelson County Board of Adjustment, No. 97-CI-00331 (Nelson Cir. Ct. Entered Feb. 17, 1998) (the "1998 Suit"). The Court refused to allow PCWA to amend its petition to include the FHAA claim. Id. Permission to amend the complaint was denied because PCWA did not raise this issue before the BOZA and because the PCWA had not described the children as disabled. Id. PCWA did not appeal this ruling.

Instead, three months later, on June 11, 1998 PCWA made a second appearance before the BOZA this time raising its FHAA claim. At this hearing it again explained the group home program and described the children as having "emotional handicaps and educational disabilities." Sam Wheatley, Director of Pupil Personnel, Bardstown City Schools, testified that the current residents qualified for special education services, that the group home program is designed for children of this nature, and that PCWA runs an excellent program. The BOZA denied the petition without any discussion or formal findings.¹ Almost two years later, PCWA filed the present federal action.

II.

The judicial proceedings of any state court have the same full faith and credit in every court within the United States as in the courts of that state. 28 U.S.C. § 1738; Kremer v. Chemical Constr. Corp., 456 U.S. 461, 466, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982). This principle applies with full force to a state court's review of a state administrative agency. See Kremer, 456 U.S. at 466-67, 102 S.Ct. 1883. This Court may hear PCWA's claims only if Kentucky's law of res judicata would not bar a Kentucky court from hearing them.

In Kentucky, res judicata is an affirmative defense which operates to bar repetitious suits involving the same cause of action. Yeoman v. Commonwealth, 983 S.W.2d 459, 464 (Ky.1998). Res judicata encompasses both claim preclusion and issue preclusion. "Claim preclusion" bars any further litigation on the same cause of action where: (1) there was an identity of parties; (2) an identity of the causes of action that were brought or could have been brought; and, (3) the action resolved on the merits. Id. at 465. Issue preclusion bars parties from re-litigating issues actually litigated and decided in an earlier lawsuit. Id.

Res judicata bars a second suit only in so far as it involves the same cause of action as a former suit:

"[W]here the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered. In all cases, therefore, where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined. Only upon such matters is the judgment conclusive in another action."

Louisville v. Louisville Professional Firefighters Ass'n, 813 S.W.2d 804, 807 (Ky., 1991) (quoting Cream Top Creamery v. Dean Milk Co., 383 F.2d 358, 362 (6th Cir.1967)) (emphasis added).

If the subject matter of the second lawsuit is not identical with the first, claim preclusion does not apply. Yeoman, 983 S.W.2d at 465. If an issue advanced in the second lawsuit was not actually litigated, decided, and necessary for the result in the first decision, the issue is not precluded. Id.

A.

PCWA claims that its contractual relationship with the state of Kentucky makes it an "instrumentality of state government" within the meaning of KRS 100.361(2) and, therefore, not subject to regulation by local planning units such as the Nelson County BOZA. KRS 100.361(2) provides:

"Nothing in this chapter shall impair the sovereignty of the Commonwealth of Kentucky over its political subdivisions. Any proposal affecting land use by any department, commission, board, authority, or instrumentality of state government shall not require approval of the local planning unit. However, adequate information concerning the proposals shall be furnished to the planning commission by the ... instrumentality of state government. If the state proposes to acquire, construct, alter, or lease any land or structure to be used as a penal institution ... and the proposed use is inconsistent with or contrary to local planning regulations ... the secretary of the Justice Cabinet, or his designee, shall notify, in accordance with KRS 424.180, the planning commission, the local governing body, who has jurisdiction over the area involved ... and he shall hold a public hearing ..." (emphasis added).

Kentucky courts characterize KRS 100.361(2) as a "legislative grant of immunity" from the decisions of local planning commissions. Louisville Bd. of Zoning Adjustment v. Gailor, 920 S.W.2d 887, 888 (Ky.Ct.App.1996). A private entity performing a governmental function through a contractual relationship with local government may gain such immunity. Id. at 889 (allowing a private corporation to claim immunity for the operation of a county jail). This Court need not determine whether PCWA could have prevailed in Nelson County Circuit Court had it asserted KRS 100.361(2). The Court need only determine whether the issue is so integral to PCWA's application for a conditional use permit as to fall within the preclusive effects of the 1998 decision. Yeoman, 983 S.W.2d at 465 ("if the two suits concern the same controversy, then the previous suit is deemed to have adjudicated every matter which was or could have been brought in support of the cause of action.").

The controversy in the 1998 state action was whether the 1997 BOZA hearing was a denial of due process or so lacked evidentiary support as to be arbitrary. As an immunity KRS 100.361(2) is an affirmative defense to denial of a permit by a local planning board. As such, KRS 100.361(2) is directly related to the 1998 action challenging BOZA's authority to deny PCWA's permit. Had this defense been successfully raised, the court would have found the BOZA did not have the authority to deny PCWA a permit and reversed the decision to deny the permit. See Gailor, 920 S.W.2d at 888. The KRS 100.361(2) immunity claim and the 1998 action are thus rooted in the same controversy. The immunity claim is therefore precluded in this federal court under Yeoman and 28 U.S.C. § 1738.²

B.

Plaintiff's FHAA claim alleges that BOZA failed to reasonably accommodate the disability of PCWA residents and discriminated against them because of their disabilities. The Nelson County Circuit Court expressly refused to consider it because the cause of action did not ripen until after the BOZA rendered its decision and because the record as to the children's disability was not fully developed at the 1997 BOZA hearing. The state court's on-the-record review of the administrative record concerned only the process and content of the 1997 BOZA hearing. Plaintiff's FHAA claim concerns not the process and content of the BOZA hearings, but rather that their result—denying PCWA a permit—violated the FHAA. The substantive issues in the FHAA claim—whether the BOZA had discriminated against or failed to reasonably accommodate PCWA due to its residents' disabilities—are entirely removed from the issues litigated in the 1998 Suit. The FHAA claim is therefore different from and not related...