RENDERED: SEPTEMBER 30, 2022; 10:00 A.M.

TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2022-CA-0002-MR

COMMONWEALTH OF KENTUCKY, 

ENERGY AND ENVIRONMENT 

CABINET APPELLANT 

v. 

APPEAL FROM BRECKINRIDGE CIRCUIT COURT

HONORABLE KENNETH H. GOFF, II, JUDGE

ACTION NO. 19-CI-00237

ERIC SHRADER AND KENTUCKY 

CLAIMS COMMISSION APPELLEES 

OPINION

REVERSING

**   **  **

BEFORE: CLAYTON, CHIEF JUDGE; COMBS AND DIXON, JUDGES.

DIXON, JUDGE: The Commonwealth of Kentucky, Energy and Environment 

Cabinet (Cabinet) appeals from the order of the Breckinridge Circuit Court entered 

on December 1, 2021, reversing and remanding the final order of the Kentucky 
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Claims Commission (Commission)1issued on October 28, 2019, dismissing Eric 

Shrader’s claim against the Cabinet. Following review of the record, briefs, and 

law, we reverse.

FACTS AND PROCEDURAL BACKGROUND

In 2015, Eric Shrader contracted a timber harvest on his property. 

Pursuant to 402 KAR2 3:030, a “logger or operator engaged in timber harvesting 

operations shall comply with the provisions of the silviculture section of The 

Kentucky Agriculture Water Quality Plan, Best Management Practices [(BMPs)], 

required by KRS 224.71-110 and 224.71-120.” The Cabinet’s Kentucky Division 

of Forestry (KDF) inspects timber harvests for BMP3compliance.

The KDF inspected Shrader’s property eight times throughout the

timber harvest. The final inspection was conducted by Ranger David Hurt and

indicated the site was “in compliance” with BMPs. Shrader was not present during 

1

 In 2021, the Commission was replaced by the Office of Claims and Appeals and the Kentucky 

Board of Claims. See Kentucky Revised Statutes (KRS) 12.020, KRS 13B.020, and KRS 49.010 

et seq. 

2

 Kentucky Administrative Regulations.

3

 KRS 149.330(1) defines BMPs as: 

effective, practical, economical, structural, or nonstructural 

methods that prevent or reduce the movement of sediment, 

nutrients, pesticides, and other pollutants from the land to surface 

or groundwater, or that otherwise protect water quality from 

potential adverse effects of timber harvesting operations as 

developed by the Division of Forestry and approved by the 

Agriculture Water Quality Authority[.]
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the final inspection but disagreed with Ranger Hurt’s determination. 

Consequently, Shrader contacted Cabinet agents to complain that BMP violations 

went uncited. 

Shrader expressed concerns to the Kentucky Division of Water 

(DOW) that the logging might impact the groundwater quality due to storm water 

runoff. Over a month after the final inspection, at Shrader’s request, DOW 

Geologist Sean Vanderhoff investigated Shrader’s property but did not cite a water 

quality violation. About a month later, DOW Inspector Jordan Bailey examined

Shrader’s property, again at Shrader’s request, and did not cite any water quality 

violation. Both Vanderhoff and Bailey issued written findings and

recommendations, but neither ordered any type of remediation for the property. 

Vanderhoff “recommended that natural vegetation (i.e. native grasses) be planted 

to stabilize the soils and to provide a buffer around the sinkholes.” Bailey’s 

recommendation stated “if the property owner [(Shrader)] feels additional 

stabilization is needed, then it is advised that the use of other, less abrasive means 

of stabilization[,]” be utilized, such as methods without using heavy equipment 

which would disturb the previously employed measures. (Emphasis added.)

4

 

4 Bailey later testified in an affidavit that he had no grounds to cite violations because he did not 

have any evidence that the waters had been or were being impacted by pollution. Bailey also 

testified that he “considered a major re-disturbance of the site as being completely unnecessary 

and felt that the re-introduction of heavy equipment would do more harm than good.” 
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Nearly a year after the final inspection, Shrader petitioned the 

Commission for $35,024.56 in monetary damages – including $19,575, which 

represented 783 hours he worked to remediate the property valued at $25 per hour.

5

 

Shrader alleged the Cabinet, KDF, and DOW failed to enforce BMPs by not citing 

the loggers and holding them accountable, which required him to fix areas of his 

property that did not comply with BMPs. 

A two-day administrative hearing was held at which Shrader offered 

numerous exhibits but was the only witness to testify. Shrader was considered an 

expert witness due to his training and experience as a Master Conservationist, 

Master Logger, and Master Woodland Steward. 

Following the hearing, the hearing officer issued recommended 

findings of fact, conclusions of law, and an order. The hearing officer 

recommended that the Commission dismiss Shrader’s claim because the Cabinet 

did not breach its duty to investigate or fail to enforce regulations in a routine, 

ministerial manner. The hearing officer concluded that, in light of all the evidence 

presented, Shrader’s disagreement with the Cabinet’s findings, and the Cabinet’s 

decision not to issue citations Shrader felt it should have, did not make it legally 

liable to Shrader for damages. 

5

 Shrader settled with the loggers for $20,000 in a separate action – $19,000 was designated as 

Shrader’s recovery for breach of contract but only $1,000 for BMP violations. 
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The Commission entered a final order accepting and adopting the 

hearing officer’s recommended order. Shrader appealed to the Breckinridge 

Circuit Court, which entered an order reversing the Commission’s final order and 

remanding the case for further proceedings. This appeal followed. 

STANDARD OF REVIEW

It is well-settled that: 

The basic scope of judicial review of an 

administrative decision is limited to a determination of 

whether the agency’s action was arbitrary. Bobinchuck v. 

Levitch, [380 S.W.2d 233 (Ky. 1964)]. If an 

administrative agency’s findings of fact are supported by 

substantial evidence of probative value, they must be 

accepted as binding and it must then be determined 

whether or not the agency has applied the correct rule of 

law to the facts so found. Kentucky Unemployment Ins. 

Comm’n v. [Landmark Cmty. Newspapers of Kentucky, 

Inc., 91 S.W.3d 575 (Ky. 2002)]. The Court of Appeals 

is authorized to review issues of law involving an 

administrative agency decision on a de novo basis. 

Aubrey v. Office of the [Att’y Gen., 994 S.W.2d 516 (Ky. 

App. 1998)]. In particular, an interpretation of a statute 

is a question of law and a reviewing court is not bound 

by the agency’s interpretation of that statute. Halls 

Hardwood Floor Co. v. Stapleton, [16 S.W.3d 327 (Ky. 

App. 2000)].

Liquor Outlet, LLC v. Alcoholic Beverage Control Bd., 141 S.W.3d 378, 381 (Ky. 

App. 2004).
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ANALYSIS

On appeal, the Cabinet argues the circuit court erred by impermissibly 

shifting the burden of proof from Shrader to the Cabinet and improperly 

substituting its own judgment for the Commission’s when its findings were 

supported by the record and not clearly erroneous. We will address each of these 

arguments, in turn.

KRS 13B.090(7) provides: 

In all administrative hearings . . . the party proposing the 

agency take action . . . has the burden to show the 

propriety of the agency action or entitlement to the 

benefit sought. . . . The party with the burden of proof on 

any issue has the burden of going forward and the 

ultimate burden of persuasion as to that issue. The 

ultimate burden of persuasion in all administrative 

hearings is met by a preponderance of evidence in the 

record, except when a higher standard of proof is 

required by law. Failure to meet the burden of proof is 

grounds for a recommended order from the hearing 

officer.

Here, Shrader requested agency action; therefore, he bore the burden of proof

pursuant to statute. 

In Blankenship v. Lloyd Blankenship Coal Co., 463 S.W.2d 62 (Ky. 

1970), Kentucky’s then highest court6 held: 

It is not necessary for a party who does not have the 

burden of proof to produce ‘substantial evidence’ in 

6

 The Supreme Court of Kentucky was not established until 1976; the Court of Appeals of 

Kentucky was the Commonwealth’s highest court prior to that time. 
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order for a decision in his favor to stand. If the evidence 

against him is strong enough to require an unfavorable 

decision against him unless rebutted, he need only inject 

enough doubt that it cannot be held unreasonable for the 

fact-finding body to remain unconvinced by his 

adversary’s evidence. Cf. Hunter v. Turner Elkhorn 

Mining Co., [455 S.W.2d 571, 572 (Ky. 1970)]; Porter v. 

Goad, [404 S.W.2d 795 (Ky. 1966)]; D. H. Overmyer 

Company [v. Hirsch Bros. & Co., Inc., 459 S.W.2d 598 

(Ky. 1970)]. Stated another way, if the whole evidence is 

such that the fact-finder cannot be compelled as a matter 

of law to find one way or the other, and in fact is unable 

to find one way or the other, the party with the burden of 

proof loses.

Id. at 64. 

Herein, clearly the Cabinet did not bear the burden of proof and, thus, 

was not required to produce substantial evidence in support of its position. The 

circuit court found the Commission’s final order “was not supported by substantial 

evidence,” stating: 

There was documentary proof submitted during the 

hearing that evidenced violation of BMPs, but no citation 

to the appropriate agencies for remedy. The Cabinet 

moved for a directed verdict at the hearing, which was 

not granted, and then provided no testimony or refutation 

of Shrader’s expert testimony regarding the BMP 

violations.

As the Cabinet suggests, this finding effectively and erroneously shifted the burden 

of proof to the Cabinet. Obviously, it was unnecessary for the Cabinet to present 

any evidence. We understand the appearance of illogicality for the Commission to 

deny a motion for directed verdict only to subsequently find in the Cabinet’s favor 
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without any additional evidence. However, a denial of a directed verdict does not 

equate with sufficiency of evidence in that the burden required is different in each

case. For a directed verdict the court (or Commission) merely determines whether 

it would be unreasonable to make a finding in a petitioner’s favor – a low bar

indeed. However, in order to prevail on the merits, a petitioner must offer a 

preponderance of evidence. The Cabinet asserts the circuit court improperly 

concluded that a decision in Shrader’s favor was required by the evidence and 

substituted its judgment for the Commission’s in the reversal of its final order. We 

agree. 

It is well-established that, “[i]n a case in which the [Commission] 

finds against a claimant having the burden of persuasion, as in this instance, the 

issue on appeal to the court is whether the evidence for the claimant was so strong 

that the [Commission] could not reasonably have found against him.” 

Commonwealth, Dep’t of Highways v. Hoskins, 495 S.W.2d 177, 178 (Ky. 1973). 

After careful review, and for the reasons discussed herein, we cannot say that 

Shrader’s evidence was so strong that it was unreasonable for the Commission to 

find against him. 

Since this is a negligence claim, the onus was on Shrader to prove:

(1) the Cabinet owed him a duty of care, (2) the Cabinet breached the standard by 

which its duty is measured, (3) consequent injury, and (4) damages. See Pathways, 
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Inc. v. Hammons, 113 S.W.3d 85, 88 (Ky. 2003). The hearing officer and the 

Commission found there was no breach of duty, which is a question of fact, rather 

than one of law. Id. at 89. Thus, the decision was entitled to a deferential review. 

In its examination of whether the Cabinet breached its duty owed to 

Shrader, the hearing officer cited Grogan v. Commonwealth, 577 S.W.2d 4 (Ky. 

1979), which held “a government ought to be free to enact laws for the public 

protection without thereby exposing its supporting taxpayers . . . to liability for 

failures of omission in its attempt to enforce them. It is better to have such laws, 

even haphazardly enforced, than not to have them at all.” Id. at 6. Like the 

plaintiffs in Grogan, Shrader claims the Cabinet “did not enforce a law or laws 

designed for the safety of the public and that . . . taxpayers must therefore bear a 

loss occasioned by someone else’s failure to comply with the law.”7 Id. at 5. 

Although the Grogan court found “no basis for tort liability” in that case, there are 

cases in which governmental agencies are liable for breaches of duty. Id. at 6. 

The hearing officer contrasted the case herein to another case in which 

a breach was found: Collins v. Commonwealth of Kentucky Natural Resources and 

Environmental Protection Cabinet, 10 S.W.3d 122 (Ky. 1999). In Collins, the 

Board found the Cabinet negligent where “Cabinet employees had a duty to inspect 

7

 We note again that Shrader has already held the loggers responsible for the breach of their 

contract and BMP violations. 
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[a] mine site properly to ensure that the culvert was free-flowing and that this duty 

had been breached . . . . 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.” Id. at 124. Here, 

the hearing officer found that the Cabinet investigated Shrader’s property eight 

times during the timber harvest as well as multiple times afterward in response to 

Shrader’s complaints and “thoroughly considered and investigated” his 

disagreements with their findings; however, ultimately neither agents of the KDF 

nor DOW found it appropriate to cite any violations after their investigations. 

Unlike Collins, here the Cabinet plainly discharged its duty to investigate. In view 

of the whole record, we cannot say the Cabinet was negligent in its decision to not

issue citations nor legally liable to Shrader for its decision.

8

 The circuit court 

8

 Shrader refers us to the following documents, in addition to those previously discussed: 

• Letter dated August 19, 2015, by DOW Project Manager Chloe Brantley identifying four 

“incidental” log jams which “should” be removed;

• Letter dated August 4, 2016, by University of Kentucky Geologist James C. Currens 

responding to Shrader and identifying photographed features as natural sinkholes;

• Statement signed after 2017 by Cecil E. Burch – identified as a journeyman, master 

plumber, and excavator – that he observed BMP violations after loggers left the property;

• Letter dated October 28, 2016, by Louisville Metropolitan Sewer District, Certified 

Erosion Control Specialist Matthew Blankenship, opining “[m]ost any layperson of 

average intelligence that could read the timber sale contract language and [BMPs] could 

clearly identify those areas that failed to meet the timber sale contract requirements, after 

the logging”; 

• Letter dated September 6, 2015 – presumably meant to be 2016 – by Geologist Ted 

Jessup opining BMP #s 2, 3, and 4 had not been met on Shrader’s property;
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improperly usurped the Commission’s fact-finding role in determining otherwise 

and reversing its final order. See 500 Assocs., Inc. v. Nat. Res. & Env’t Prot.

Cabinet, 204 S.W.3d 121, 131-32 (Ky. App. 2006). 

CONCLUSION

Therefore, and for the foregoing reasons, the order entered by the 

Breckinridge Circuit Court is REVERSED thereby reinstating the Commission’s 

final order.

ALL CONCUR.

• Letter dated September 9, 2016, by DOW Supervisor Charles Roth clarifying that the 

DOW’s prior recommendation “does not preclude the use of other means to stabilize the 

area if these prove to be more efficient or desirable by the landowner”;

• Report dated May 25, 2017, by Kentucky Department for Natural Resources, 

Environmental Scientist Nicholas R. Lawhon, regarding his December 12, 2016, 

inspection of Shrader’s property which discussed nine potential karst features; 

• Letter dated May 25, 2017, by KDF Director James Wright informing Shrader that the 

“Cabinet has thoroughly considered and investigated your allegations and evaluated your 

request. Based upon this investigation, we have determined that it is not appropriate to 

revise the Final Report”;

• Forest Management Plan dated June 10, 2017, by Consulting Forester Thomas L. Pohl;

• American Tree Farm System Tree Farm Inspection Record with field inspection 

conducted November 30, 2017, approved by the State on December 21, 2017, noting 

Shrader meets or exceeds practices prescribed by the KDF’s BMPs; 

• Photographs; and 

• Multiple emails and letters by Shrader to various recipients regarding his opinions. 

This documentation does not comprise such convincing evidence that it was unreasonable for the 

Commission to deny Shrader’s requested relief. 
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BRIEFS FOR APPELLANT:

Lance C. Huffman

Frankfort, Kentucky 

BRIEF FOR APPELLEE ERIC 

SHRADER:

Parker M. Wornall

Gregory A. Healey

Louisville, Kentucky