White v. Ashland Park Neighborhood Association, Inc., No. 2008-CA-001303-MR (Ky. App. 7/10/2009)
| Decision Date | 10 July 2009 |
| Docket Number | No. 2008-CA-001303-MR.,2008-CA-001303-MR. |
| Parties | Marlene WHITE and Rikki Jamalia, Appellants, v. ASHLAND PARK NEIGHBORHOOD ASSOCIATION, INC.; and Steve Hanson, Appellees. |
| Court | Kentucky Court of Appeals |
W. Henry Graddy, IV, Randal A. Strobo, Midway, Kentucky, Briefs for Appellants.
W. Henry Graddy, IV, Oral Argument for Appellants.
Tammy S. Meade, Justin M. Schaefer, Lexington, Kentucky, and David Helmers, Lexington, Kentucky, Joint Brief for Appellees.
Justin M. Schaefer, Oral Argument for Appellee, Steve Hanson.
David Helmers, Oral Argument for Appellee, Ashland Park Neighborhood Assocation, Inc.
Before: CLAYTON and TAYLOR, Judges; KNOPF,1 Senior Judge.
Not to be Published
This appeal stems from an order of the Fayette Circuit Court dismissing the claims of Appellants Marlene White and Rikki Jamalia against Ashland Park Neighborhood Association, Inc. (Ashland Park) and Steve Hanson pursuant to Kentucky Rules of Civil Procedure (CR) 12.02(f) for "failure to state a claim upon which relief can be granted." Appellants also challenge the circuit court's refusal to allow them to amend their complaint pursuant to CR 15.01. Upon review, we conclude that the circuit court erred by denying Appellants' motion to amend their complaint and their defamation claim against Ashland Park and Hanson. Therefore, we affirm in part, vacate in part, and remand for further proceedings consistent with this opinion.
The following facts are taken from the complaint filed by Appellants on February 25, 2008.2 Appellant Marlene White owns the property at 119 (a/k/a 121) South Ashland Avenue in Lexington, Kentucky.3 She purchased this property with the intent of opening and operating a bed-and-breakfast. To that end, she sought a conditional use permit from the Lexington-Fayette Urban County Government (LFUCG) Board of Adjustments that would allow her to use the property for that purpose. At the time of purchase, the neighborhood's R-3 "planned neighborhood residential" zoning designation apparently allowed property therein to be put to such use if other conditional use permit application requirements were met.
Despite this fact, White's efforts were opposed by Ashland Park, the neighborhood association in which the subject property is located. Hanson is a former board member of the neighborhood association who often spoke on its behalf before governmental bodies. Subsequent to White's purchase of the property and submission of her conditional use permit application, Ashland Park asked the LFUCG Council to rezone various properties in the Ashland Park area including the subject property — in a manner that would disallow the proposed use. Consequently, the Council placed a moratorium on decisions relating to conditional use permits in the area while it conducted hearings on the rezoning proposal.
On August 17, 2006, White appeared before the LFUCG Council and asked that her property be removed from any "downzoning" proposal that was under consideration. In support of her request, she tendered a favorable recommendation that she had received from LFUCG staff on January 20, 2006. White also claims that Ashland Park and Hanson openly represented to the Council that they had decided to support her desire to open a bed-and-breakfast on her property because her conditional use permit application had preceded the rezoning proposal. In spite of White's petition, however, the Council passed Resolution No. 479-2006 after midnight the next day. This Resolution called for the rezoning of multiple properties on South Ashland Avenue from R-3 to R-2, or "two-family residential."
The Council's rezoning proposal was subsequently submitted to the LFUCG Planning Commission for a public hearing. On November 9, 2006, the Commission voted 9-0 to recommend disapproval of the rezoning proposal as it would apply to a number of properties — including White's. Despite this fact, the LFUCG Council declined to follow the recommendations of the Commission and took action on January 25, 2007, to "downzone" White's property and others in the area from an R-3 to an R-2 designation. This decision effectively eliminated the possibility of White's using the property at 119 (a/k/a 121) South Ashland Avenue for a bed-and-breakfast.
Despite the Council's decision, on February 23, 2007, White appeared before the LFUCG Board of Adjustments and reiterated her request for a conditional use permit that would allow her to open and operate a bed-andbreakfast on her property as though it still had an R-3 designation. This effort was again opposed by Ashland Park and Hanson at the hearing. According to the complaint, Ashland Park and Hanson denied ever representing to White that they would support her application for a conditional use permit and made a number of "false, disparaging and humiliating representations." The Board of Adjustments ultimately denied White's application by a four-to-three vote.
On February 25, 2008, Appellants filed a verified complaint in the Fayette Circuit Court alleging that Ashland Park and Hanson had: (1) intentionally and wrongfully interfered with Appellants' ability to perform contracts that had been entered into with third parties while relying on the zoning and land use requirements that applied to their property at the time; (2) intentionally and wrongfully interfered with Appellants' prospective contractual relations and business; (3) wrongfully interfered with Appellants' business; (4) engaged in wrongful conspiracy with others, including the LFUCG Council and the LFUCG Board of Adjustments, to injure Appellants; (5) made false and defamatory statements against Appellants that were not privileged when made; and (6) engaged in malicious and grossly negligent conduct toward Appellants. Appellants also raised a general contention that Ashland Park and Hanson had made "statements and representations that were false and defamatory and were not privileged when made and were in writing and oral and known to be false when made and were made for the purpose of harm and injury" to them. Appellants sought consequential and punitive damages as a result of this alleged conduct.
On April 7, 2008, Ashland Park and Hanson filed a joint motion to dismiss Appellants' complaint pursuant to CR 12.02(f) for "failure to state a claim upon which relief can be granted." They specifically argued that Appellants' suit was an effort "to retaliate against the Defendants for exercising their First Amendment right to petition their local government." Accordingly, they claimed that they were "absolutely immune from suit based on the First Amendment to the United States Constitution and Section One of the Kentucky Constitution." Ashland Park and Hanson further contended that the alleged defamatory statements concerning Appellants were made at public hearings before the LFUCG Council and Board of Adjustment; therefore, those statements were "absolutely privileged" and created no liability for defamation.
A hearing on the joint motion to dismiss was held on May 9, 2008. During the hearing, Appellants orally moved the circuit court to allow them to amend their complaint and to cure any claimed deficiencies by filing a more definite statement of fact. Appellants did not have a prepared amended complaint on hand at the time of the motion. The trial judge initially appeared inclined to allow an amended complaint to be filed but then changed his mind and denied Appellants' request. The trial judge then granted the motion to dismiss because he believed that all of the allegations in Appellants' complaint were "centered around testimony before the various governmental agencies — the Board of Adjustments, the Planning and Zoning Committee, Urban County Council." He continued: "I believe all of those are protected speech under the cases cited," and concluded that Ashland Park and Hanson, therefore, were immune from suit. On May 12, 2008, the circuit court entered a written order granting the joint motion to dismiss and dismissing Appellants' claims with prejudice.
Appellants subsequently filed a CR 59 motion asking the circuit court to alter, amend, or vacate its order of dismissal. Along with that motion, Appellants filed a written motion for leave to file an amended verified complaint pursuant to CR 15.01 in order to "plead non-privileged statements and actions by the Defendants, to seek to cure the basis the Court relied upon to dismiss." The circuit court denied both motions. This appeal followed.
On appeal, Appellants raise two issues: (1) did the circuit court err by refusing to allow them to file an amended complaint pursuant to CR 15.01?; and (2) did the circuit court err by dismissing their action pursuant to CR 12.02(f) for "failure to state a claim upon which relief can be granted"? We address each contention in turn.
Appellants first claim that the circuit court erred by refusing to allow them to file an amended complaint pursuant to CR 15.01. The relevant language of that rule provides that "[a] party may amend his pleading once as a matter of course at any time before a responsive pleading is served[.]" This Court reviews a denial of a motion for leave to file an amended complaint for abuse of discretion. Graves v. Winer, 351 S.W.2d 193, 197 (Ky. 1961). "The test for abuse of discretion is whether the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000).
Here, Appellants orally asked the circuit court for leave to amend their complaint during the hearing on the joint motion to dismiss held on May 9, 2008. At this point, the better practice clearly would have been...
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