Case Name: MORGAN & POTTINGER, ATTORNEYS, P.S.C., Appellants, v. Noel Mark BOTTS, Appellee; GMAC Mortgage Corporation, Appellant, v. Noel Mark Botts, Appellee
Court: Supreme Court of Kentucky
Jurisdiction: Kentucky
Decision Date: 2011-04-21
Citations: 348 S.W.3d 599
Docket Number: Nos. 2009-SC-000515-TG, 2009-SC-000751-TG, 2009-SC-000818-TG
Parties: MORGAN & POTTINGER, ATTORNEYS, P.S.C., Appellants, v. Noel Mark BOTTS, Appellee. GMAC Mortgage Corporation, Appellant, v. Noel Mark Botts, Appellee.
Judges: MINTON, C.J.; ABRAMSON and VENTERS, JJ., concur. NOBLE, J., dissents by separate opinion. SCOTT, J., also dissents by separate opinion in which SCHRODER, J., joins.
Reporter: South Western Reporter Third Series
Volume: 348
Pages: 599–613

Head Matter:
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 & Potting-er, 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:
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 eviden-tiary hearing and ultimately determined that the Kentucky Bar Association (hereinafter "KBA") failed to prove, by a pre ponderance 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.
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 & Pot-tinger 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 eviden-tiary 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 com plaint 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 malicious prosecution or other similar tort actions based on the filing of a disciplinary complaint. See generally 52 A.L.R.2d 1217 (2011). Indeed, a very early Kentucky case seems to acknowledge the right of an attorney to pursue a malicious prosecution action against the attorney who instigated disbarment proceedings against him. See Lancaster v. McKay, 103 Ky. 616, 45 S.W. 887 (1898) (in action predating the Rules of Professional Conduct and the establishment of the Bar Association as having jurisdiction over disciplinary proceedings, judgment ultimately reversed for insufficiency of proof that disbarment suit lacked probable cause). However, in the latter part of the twentieth century, a growing trend emerged to bar any type of civil action predicated upon the filing of an attorney discipline or ethics complaint.
At least twenty-eight states have evinced a policy decision to bar such civil suits through enactment of a court rule or statute. These provisions, whether granting absolute or qualified immunity to communications made to the disciplinary authority, also prohibit any type of lawsuit based on the privileged communication or complaint. Tennessee Supreme Court Rule 9, § 27 is representative of this type of court rule: "Communications to the board, district committee members or Disciplinary Counsel relating to lawyer misconduct or disability and testimony given in the proceedings shall be absolutely privileged, and no civil lawsuit predicated thereon may be instituted against any complainant or witnesses." (Emphasis added.) Each of these rules uses similarly expansive language barring any "lawsuit," "civil suit," or "civil liability" without restricting the prohibition to suits for defamation, libel or slander. Cf. WV R Lwyr Disc Rule 2.5 (West Virginia designates that all information provided to the disciplinary authority "shall be privileged in any action for defamation."). Though few cases exist interpreting the typically broad language of these rules, at least four courts have specifically concluded that the privilege would bar even claims relating to the act of filing the complaint, such as malicious prosecution or abuse of process. See Wallace v. Jarvis, 119 N.C.App. 582, 459 S.E.2d 44 (1995); Jarvis v. Drake, 250 Kan. 645, 830 P.2d 23 (1992) (interpreting rule which affords judicial immunity to participants in the attorney discipline process); In re Smith, 989 P.2d 165 (Colo.1999) (interpreting former rule); Kamaka v. Goodsill Anderson Quinn & Stifel, 117 Hawai'i 92, 176 P.3d 91 (2008). But see Goldstein v. Serio, 496 So.2d 412 (La.Ct.App.1986) (holding that rule affording privilege to contents of bar complaint does not extend to the act of filing the complaint).
While the majority of states protect complainants through enactment of a statute or rule, some have achieved the same result through application of the judicial statements privilege and, thus, are more persuasive in consideration of the present matter. In Stone v. Rosen, Florida recognized that an absolute privilege protects statements made to the Bar Association in a complaint which operates to prohibit the attorney's claim of malicious prosecution against the complainant. 348 So.2d 387 (Fla.Dist.Ct.App.1977). The holding in Stone was later reaffirmed by the Florida Supreme Court, notwithstanding subsequent passage of procedural rules which removed confidentiality of the grievance process. Tobkin v. Jarboe, 710 So.2d 975 (Fla.1998). The Court of Appeals of Arizona reached a similar result in Drummond v. Stahl, wherein the plaintiff-attorney filed suit against opposing counsel alleging tortious interference with a contractual relationship through the filing of a bar complaint. 127 Ariz. 122, 618 P.2d 616 (Ariz.Ct.App.1980). The court determined that the judicial statements privilege affords complainants an absolute privilege for statements made in attorney discipline proceedings, and that the privilege operated to bar the plaintiffs claim of tortious interference. Id. at 619-20. See also Ashton-Blair, 928 P.2d at 1246-47 (applying absolute privilege under judicial statements doctrine to bar attorney's claim for defamation against complainant).
Though there is some authority to the contrary, see, e.g., Goldstein, 496 So.2d 412, we conclude that the judicial statements privilege encompasses the act of filing the complaint, in addition to the statements contained therein. Sound public policy compels this conclusion. "The doctrine of privileged communications rests upon public policy 'which looks to the free and unfettered administration of justice, though, as an incidental result, it may, in some instances, afford an immunity to the evil-disposed and malignant slanderer.' " Schmitt, 163 S.W.2d at 284 (quoting Bartlett v. Christhilf, 69 Md. 219, 14 A. 518, 520 (1888)). This rationale applies no less to attorney discipline proceedings. In order to maintain a self-regulating profession, the investigation of unethical conduct must be vigorous and complainants must be free from threat of any civil liability. Any lesser grant of immunity would have a chilling effect on the reporting of attorney misconduct. See Jarvis, 830 P.2d 23 at 26 (internal quotations omitted) (["Ajppre-hension of personal liability for presenting a question of professional responsibility to the disciplinary administrator might tend to subvert the system established for ensuring that persons holding licenses to practice law are fit to be entrusted with professional and judicial matters.").
The purpose of this policy would be eviscerated if the protection extends only to the statements contained in the complaint itself, but not to the act of filing the grievance. While Justice Noble is correct in her dissent that sometimes the attorney and the complainant may be equally sophisticated and on "equal-footing," this is often not the case. When the complainant is not an attorney, there is an inequitable balance of power which creates a very real opportunity for attorney intimidation. At torneys can threaten and pursue retaliatory litigation at very little expense and through their own means. "Conversely, the cost of litigation coupled with the risk of liability in defending against such an action- could be enough to discourage an individual from bringing a meritorious complaint." Tobkin, 710 So.2d at 977. Laypersons, in deciding whether to file a bar complaint, cannot be expected to understand the subtle legal difference between an allegation of defamation versus a claim of abuse of process. And it is insufficient that an "honest" complainant would eventually be exonerated of any abuse of process claim. It is the threat and potential for retaliatory litigation — of any kind— that serves as a disincentive to filing a bar complaint.
We must encourage persons with complaints against attorneys to submit such information to the KBA for proper investigation and examination. This includes persons who might lack knowledge of the law and, therefore, have some doubt as to the propriety of the attorney's conduct or the validity of the complaint. "If ethics investigations are to be conducted effectively, it is imperative that complainants be free from the threat of themselves being sued." Farber v. Dale, 182 W.Va. 784, 392 S.E.2d 224, 227 (1990). This includes the act of filing the bar complaint itself. The threat of any retaliatory suit — whether it is for defamation, slander, or abuse of process — would have a chilling effect on the filing of bar complaints.
We do not believe our holding today unduly burdens attorneys or otherwise abrogates a right. Rather, certain causes of action do not exist in privileged situations. Here, "one who elects to enjoy the status and benefits as a member of the legal profession must give up certain rights or causes of action.... " Stone, 348 So.2d at 389. If a bar complaint is determined to be based on probable cause and results in disciplinary action, then clearly the attorney has no cause of action against the complaining party. If the complaint is deemed lacking in probable cause, or even entirely without merit, any harm to the attorney is minimal and would amount to little more than mere inconvenience. In Kentucky, the bar complaint, the investigation by the Inquiry Commission, and the disciplinary proceedings are entirely confidential. SCR 3.150(1). In fact, there is no publication whatsoever unless, and until, a public reprimand or other public discipline is imposed. Id. As such, the potential harm suffered by an attorney at the hands of the malicious complainant — if indeed the complaint lacks merit — is minimal and certainly does not outweigh the competing interests. Further, because of the protection afforded by the confidentiality of KBA proceedings, the attorney is not in the same position as a party to an ordinary suit that might damage reputation or character, where pleadings are public.
Accordingly, we hold today that any communication or statement made to the KBA during the course of a disciplinary hearing or investigation, including the contents of the bar complaint initiating such proceedings, are absolutely privileged. This privilege extends to any claim relating to the act of filing the bar complaint, such as abuse of process, wrongful use of civil proceedings, or malicious prosecution.
Notwithstanding our holding herein, we must remand this matter to the Mercer Circuit Court for a determination if further fact-finding is necessary. Botts' complaint, including the amended complaint, is unclear as to the factual basis of his claims, particularly those claims for fraud, defamation and slander. As stated above, any claim based on the content of the KBA complaint, or on the act of filing such complaint, must be dismissed. However, in his complaint, Botts references statements allegedly made outside of, and prior to, the filing of the complaint. The pertinent part is ambiguous at best. He does not identify the content of the statements, at whom they were directed, in what forum they were made, or specifically when they were made. He has presented no proof to support his claims, other than the bar complaint. Indeed, on at least two occasions during hearings before the trial court, Botts was asked whether he had proof, other than the KBA complaint, and he replied that he did not. For these reasons, we have serious doubt that Botts' bare allegation of "accusations" satisfies the requirements of notice pleading so as to defeat a motion to dismiss. Nonetheless, out of an abundance of caution, we remand this matter to the trial court for further fact-finding, if necessary, and for final determination as to the viability of Botts' claim in light of our holding herein.
For the foregoing reasons, this case is remanded for further proceedings consistent with this opinion.
MINTON, C.J.; ABRAMSON and VENTERS, JJ., concur. NOBLE, J., dissents by separate opinion. SCOTT, J., also dissents by separate opinion in which SCHRODER, J., joins.
. Contrary to the assertion contained in Justice Noble's dissent, Botts was never temporarily suspended from the practice of law as a result of this matter.
. DE Lawyers R Disc Proc Rule 10 (Delaware); GA Bar Rule 4-221(g) (Georgia); RSCH Rule 2.8 (Hawaii); ID Bar Comm Rule 520(a) (Idaho); ILCS S.Ct.R. 775 (Illinois); Ind. ADR 23 § 20 (Indiana); IA R 35.23(1) (Iowa); M. Bar. R. 7.3(a)(1) (Maine); MA SJC 4.01 § 9(1) (Massachusetts); MI Rules MCR 9.125 (Michigan); 52 Minn.Stat. Ann. RLPR 21 (Minnesota); Miss.Code. Ann. § 73-3-345 (Mississippi); MO R Bar 5.315 (Missouri); MT R 17 (Montana); Nev. Sup.Ct. Rules 106 (Nevada); NH SCR 37(7) (New Hampshire); NM R Disc 17-304 (New Mexico); NCGSA § 84-28.2 (North Carolina); NDR Lawyer Discipline 6.5 (North Dakota); 204 Pa.Code § 85.9 (Pennsylvania); RI RSCT, Art III Rule 7 (Rhode Island); SCACR 413 (South Carolina); SDCL§ 16-19-30 (South Dakota); TX Gov't § 81.072 (Texas); VA Code Ann § 54.1-39.08 (Virginia); WI SCR 21.19 (Wisconsin); Wy. Disp.Code § 10 (Wyoming).