Court Opinion

ID: 4682309
Source: CourtListenerOpinion
Date Created: 2021-04-29 15:07:30.48479+00
Date Added: 2024-06-11T08:04:07.444137
License: Public Domain

RENDERED: APRIL 29, 2021
                                                          TO BE PUBLISHED

               Supreme Court of Kentucky
                               2019-SC-0282-DG

PERRY PUCKETT                                                        APPELLANT

                   ON REVIEW FROM COURT OF APPEALS
V.                          NO. 2017-CA-1060
                 FRANKLIN CIRCUIT COURT NO. 10-CI-01144

CABINET FOR HEALTH AND FAMILY                                        APPELLEES
SERVICES AND KENTUCKY PERSONNEL
BOARD

               OPINION OF THE COURT BY JUSTICE KELLER

                                  AFFIRMING

      Perry Puckett was terminated from his employment with the

Commonwealth of Kentucky Cabinet for Health and Family Services (CHFS) in

2009 for excessive and inappropriate personal email usage. After protracted

litigation through multiple levels of appeals, the Franklin Circuit Court

reversed his termination. CHFS appealed to the Court of Appeals which

reversed the circuit court. This Court granted discretionary review, and after a

careful review of the record and pertinent authority, we affirm the Court of

Appeals.

                                 I. BACKGROUND

      In 2009, Puckett was employed by CHFS as a Disability Adjudicator III –

Trainer. He had been employed by CHFS for over a decade when he was
terminated in 2009 for excessive and inappropriate email usage including

sending emails that contained graphic sexual comments and photos,

unprofessional language, and derogatory comments about coworkers and

supervisors. Significantly, Puckett’s termination letter was signed by Jay Klein,

a Division Director in the Division of Employee Management at CHFS,

purportedly on behalf of J.P. Hamm, CHFS’s Human Resources Director. Klein

signed Hamm’s name, followed by a diagonal slash and his own initials (JK).

Hamm had been appropriately delegated appointing authority by the Secretary

of CHFS, but Klein had not.1 Because the question before us does not involve

the merits of Puckett’s termination, we will not discuss the underlying facts in

great detail. Instead, we will focus our discussion on the long procedural

history of this case.

      After receiving the termination letter, Puckett timely appealed his

termination to the Kentucky Personnel Board (the Board). A hearing was held

before a hearing officer at which several CHFS employees testified, including

Klein. During CHFS’s opening statement, counsel for CHFS stated that Klein

made the final determination to terminate Puckett. Sean Estep, Human

Resources Administrator for CHFS, testified at the hearing and twice referred to

Klein as the appointing authority charged with making termination decisions.

Klein himself testified that he was the appointing authority for disciplinary

actions and that part of his job was to review final disciplinary actions and

       1 In this Opinion, we assume without deciding that Klein did not possess the

requisite authority to terminate Puckett.

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“sign off” on said actions. No witness was asked, and no witness testified as to,

who actually signed Hamm’s name on Puckett’s termination letter. However,

during his testimony, Klein acknowledged signing Hamm’s name, followed by

his own initials, on another document relating to a different employee, and this

document was admitted into evidence, by stipulation, at the hearing.

      After an evidentiary hearing, the hearing officer issued a recommended

order finding that Puckett’s punishment was disproportionately harsh and

recommending that the termination be reduced to a 30-day suspension. CHFS

filed exceptions to the hearing officer’s recommended order, and Puckett did

not. The Board rejected the hearing officer’s recommended order and instead

imposed Puckett’s termination. Puckett then timely petitioned the Franklin

Circuit Court for review of his termination.

      While the case was pending in Franklin Circuit Court, Puckett’s attorney

learned, through discovery in a separate, unrelated case, that Klein had

actually signed Hamm’s name to Puckett’s termination letter. Also while

Puckett’s case was pending, it became clear that Klein did not have the

requisite appointing authority to terminate CHFS employees. Based on this

new knowledge, Puckett moved to amend his complaint in circuit court to

include a claim that Puckett’s termination was null and void because the

person who signed the termination document lacked appointing authority to

terminate him. He further moved for a stay of the proceedings in circuit court

so that the matter could be remanded to the Board for consideration of whether

his termination was void. The circuit court granted both of these motions.

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      CHFS then filed both a petition for a writ of prohibition and an

interlocutory appeal in the Court of Appeals. The writ petition asked the Court

of Appeals to prohibit the circuit court from enforcing its order remanding the

case back to the Board. The Court of Appeals denied the writ petition holding

that the circuit court acted within its jurisdiction in remanding the case back

to the Board. Ky. Cabinet for Health & Family Servs. v. Puckett, No. 2012-CA-

002195-OA (Ky. App. June 10, 2013). In the interlocutory appeal, the Court of

Appeals held that Puckett’s “amended complaint properly asserts a claim for

declaratory relief which is not barred by the doctrine of sovereign immunity.”

Cabinet for Health & Family Servs. v. Puckett, No. 2012-CA-002165-MR, 2014

WL 689094, at *1 (Ky. App. Feb. 21, 2014).

      Following the Court of Appeals’ rulings, the Board took up the case on

remand from the circuit court. A hearing officer held another evidentiary

hearing and issued a recommended order. The hearing officer concluded that

the Board had no authority to decide whether Puckett’s termination was void

due to Klein’s lack of appointing authority because there was no evidence of

fraud or misconduct on the part of CHFS and the issue had not been raised or

preserved before the Board previously. Puckett filed exceptions to the hearing

officer’s recommended order; however, the Board adopted the hearing officer’s

recommended order in its entirety.

      Puckett then moved the circuit court to re-activate the case and for leave

to file another amended complaint to include review of the Board’s most recent

order. An agreed order was entered lifting the stay and allowing the amended

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complaint to be filed. After briefing and argument, the circuit court entered an

opinion and order reversing the Board’s original order terminating Puckett,

finding that the Board lacked substantial evidence to terminate Puckett and

that its decision was arbitrary. Interestingly, the circuit court never addressed

the issue on which it remanded the case to the Board, whether Puckett’s

termination was void due to Klein’s lack of appointing authority. CHFS

appealed to the Court of Appeals.2

      The Court of Appeals reversed the circuit court holding, in short, that the

circuit court substituted its own judgment for that of the Board and that

substantial evidence supported Puckett’s termination. Relevant to this appeal,

the Court of Appeals declined to address Puckett’s argument that his

termination was void because Puckett did not properly preserve that argument

for appeal and CHFS did not commit fraud or misconduct.

      Puckett filed a motion for discretionary review with this Court which we

granted to determine, essentially, whether the circuit court’s remand to the

Board was proper.

                              II.   STANDARD OF REVIEW

      This case primarily involves the interpretation of Kentucky Revised

Statute (KRS) 13B.150. “Because the construction and application of statutes

is a question of law, it is subject to de novo review on appeal.” Osborne v.

Commonwealth, 185 S.W.3d 645, 648 (Ky. 2006).

      2   Puckett cross-appealed on issues unrelated to that before us today.

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                                  III.   ANALYSIS

   1. Preservation

      Because Puckett was a classified employee with status, he could only be

dismissed with cause. KRS 18A.095(1). KRS 18A.095(7)(c) allowed Puckett to

appeal his dismissal to the Board within sixty (60) days of the dismissal. He did

so. An administrative hearing on his dismissal was then “conducted in

accordance with KRS Chapter 13B.” KRS 18A.095(17). As previously explained,

the hearing officer found Puckett’s termination to be unduly harsh and

recommended only a 30-day suspension. Puckett did not file exceptions to

anything in the hearing officer’s recommended order, but CHFS did. After the

Board entered an order in favor of CHFS, Puckett petitioned the Franklin

Circuit Court for review of his termination in accordance with KRS 13B.140

which subjects all final orders of an agency to judicial review.

      “It is well settled that failure to raise an issue before an administrative

body precludes the assertion of that issue in an action for judicial review.”

Urella v. Kentucky Bd. of Med. Licensure, 939 S.W.2d 869, 873 (Ky. 1997)

(citing Jackson v. State Auto. Mut. Ins. Co., 837 S.W.2d 496, 498 (Ky. 1992);

Personnel Bd. v. Heck, 725 S.W.2d 13, 17 (Ky. App. 1987)). “Under Chapter

13B, the filing of exceptions provides the means for preserving and identifying

issues for review by the agency head. In turn, filing exceptions is necessary to

preserve issues for further judicial review.” Rapier v. Philpot, 130 S.W.3d 560,

563 (Ky. 2004). By failing to file an exception regarding the appointing

authority of Klein, Puckett failed to preserve this issue for judicial review. We

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have previously made clear that failure to follow this preservation rule

“precludes judicial review of any part of the recommended order not excepted

to and adopted in the final order.” Id. at 563–64. We have further explained

that “when a party fails to file exceptions, the issues the party can raise on

judicial review under KRS 13B.140 are limited to those findings and

conclusions contained in the agency head's final order that differ from those

contained in the hearing officer's recommended order.” Id. at 564. In this case,

the Board’s final order did not differ from the hearing officer’s recommended

order in regard to the authority of Klein to terminate Puckett, as this was never

raised as an issue to either the hearing officer or the Board. Accordingly,

Puckett could not raise the issue on judicial review under KRS 13B.140.

      Once before the circuit court, that court’s review of the agency’s order is

“confined to the record, unless there is fraud or misconduct involving a party

engaged in administration of [Chapter 13B].” KRS 13B.150(1). The circuit court

      may affirm the final order or it may reverse the final order, in
      whole or in part, and remand the case for further proceedings if it
      finds the agency's final order is:

      (a) In violation of constitutional or statutory provisions;
      (b) In excess of the statutory authority of the agency;
      (c) Without support of substantial evidence on the whole record;
      (d) Arbitrary, capricious, or characterized by abuse of discretion;
      (e) Based on an ex parte communication which substantially
      prejudiced the rights of any party and likely affected the outcome
      of the hearing;
      (f) Prejudiced by a failure of the person conducting a proceeding to
      be disqualified pursuant to KRS 13B.040(2); or
      (g) Deficient as otherwise provided by law.

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KRS 13B.150(2). As explained above, the circuit court remanded the case to

the Board to address Puckett’s claim regarding Klein’s authority to terminate

him.

       Puckett argues the circuit court’s remand was proper under KRS

13B.150(1)(a), (d), and (g). We, however, disagree. When considered in light of

the evidence before it, the Board’s order itself was not “[i]n violation of

constitutional or statutory provisions;” “[a]bitrary, capricious, or characterized

by abuse of discretion;” or “[d]eficient as otherwise provided by law.” The Board

did not have any evidence before it regarding Klein’s authority, or lack thereof,

to terminate Puckett. It had no ability, and no reason, to look outside of that

evidence to consider an issue that was never argued before it. The order itself

was not in violation of constitutional or statutory provisions. Further, it was

not arbitrary, capricious, or an abuse of discretion for the Board to terminate

Puckett despite Klein’s lack of authority because it was not presented with

evidence of that lack of authority. Finally, the order itself was not deficient as

otherwise provided by law. Therefore, the Board’s termination of Puckett,

despite Klein’s lack of authority to terminate him, fails to meet any of the

criteria for remand as set out in KRS 13B.150(2). Accordingly, the circuit court

erred in remanding Puckett’s case to the Board under KRS 13B.150(2).

   2. Doctrine of Primary Jurisdiction

       Puckett also argues that under the doctrine of primary jurisdiction, the

circuit court’s remand to the Board was proper so that the Board could make

an initial determination regarding Klein’s authority to terminate Puckett. We

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disagree. We have previously explained that “[t]he precise function of the

doctrine of primary jurisdiction is to guide a trial court in deciding whether the

court should refrain from exercising its jurisdiction until after an

administrative agency has determined some question or some aspect of some

question arising in the proceeding before the court.” Preston v. Meigs, 464

S.W.2d 271, 274 (Ky. 1971). In Preston, we quoted United States Supreme

Court Justice Marshall, who explained, “When there is a basis for judicial

action, independent of agency proceedings, courts may route the threshold

decision as to certain issues to the agency charged with primary responsibility

for governmental supervision or control of the particular industry or activity

involved.” Id. (quoting Port of Boston Marine Terminal Ass'n v.

Rederiaktiebolaget Transatlantic, 400 U.S. 62, 68 (1970)).

      In this case, the judicial action was not independent of the agency

proceedings. Instead, the judicial action was a review of those proceedings.

Puckett argues that the determination of whether Klein had the authority to

terminate his employment was best left to the Board before the trial court

proceeded. The doctrine of primary jurisdiction, however, does not supplant

our rules of preservation. It merely “recognizes that the court has subject-

matter jurisdiction but as a matter of judicial policy should not exercise it in

instances where proper judicial administration requires that action be deferred

by the court until the agency has acted and the court may then review its

action.” Id. at 274–75. In this case, the Board had already acted on the issue of

Puckett’s termination. Although the Board did not decide the specific issue of

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Klein’s authority to terminate Puckett, this issue was never presented to it. As

such, in this case the doctrine of primary jurisdiction is not relevant to a

determination of whether the circuit court’s remand of the matter back to the

Board was proper.

   3. Law of the Case Doctrine

      Puckett also argues that the law of the case doctrine prevents a current

review of the propriety of the circuit court’s remand. Specifically, he argues

that the Court of Appeals’ decisions in CHFS’s prior writ petition and

interlocutory appeal from the circuit court’s remand order are the law of the

case as it relates to whether the circuit court remanded the case to the Board

in error.

      Under the law of the case doctrine, “if an appellate court has passed on a

legal question and remanded the cause to the court below for further

proceedings, the legal questions thus determined by the appellate court will not

be differently determined on a subsequent appeal in the same case.” Inman v.

Inman, 648 S.W.2d 847, 849 (Ky. 1982) (quoting 5 Am. Jur. 2d Appeal and

Error § 744). The doctrine, however, is inapplicable in this case, because the

Court of Appeals’ holdings to which Puckett refers were not on the specific legal

issue before us today.

      The issue before the Court of Appeals in CHFS’s interlocutory appeal was

whether sovereign immunity shielded it from Puckett’s amended complaint.

Puckett, 2014 WL 689094, at *1. The Court of Appeals merely held that the

“amended complaint properly asserts a claim for declaratory relief which is not

                                        10
barred by the doctrine of sovereign immunity.” Id. It did not pass on the

propriety of the circuit court’s remand to the Board. In fact, the Court of

Appeals specifically stated that “other matters, including the circuit court's

order remanding this case to the Board, are not before this Court at this time.”

Id. at *4. Accordingly, the Court of Appeals’ opinion in CHFS’s interlocutory

appeal did not create the law of the case on the issue currently before this

Court.

      In CHFS’s petition for a writ of prohibition filed in the Court of Appeals,

CHFS argued that the trial court exceeded its jurisdiction when it remanded

Puckett’s case back to the Board. Puckett, No. 2012-CA-002195-OA. Thus, the

Court of Appeals’ holding in that case was limited to whether the trial court

acted within its jurisdiction when it remanded the matter to the Board. Any

statements regarding the propriety of the remand were not properly before the

Court of Appeals at that time. Therefore, the Court of Appeals’ opinion in

CHFS’s writ case did not create the law of the case on the current issue.

   4. Void Versus Voidable Action

      Finally, Puckett argues that his termination was void ab initio, and

therefore, preservation of it is not required. A void action is one that is “a

nullity from the outset.” Carter v. Smith, 366 S.W.3d 414, 424 (Ky. 2012) (citing

BLACK'S LAW DICTIONARY (9th ed. 2009)). A voidable action, on the other hand,

“is an action that is valid until it is annulled.” Id. (citing BLACK'S LAW DICTIONARY

(9th ed. 2009)). If an action is void, “[a] court may, in a proper proceeding,

vacate it at any time. The lapse of time is no bar to such relief.” Hill v. Walker,

                                         11
180 S.W.2d 93, 95 (Ky. 1944). Accordingly, if Puckett’s termination is void, it

can be declared so at any time, regardless of preservation. It would follow that

any other adverse employment actions taken by Klein would also be void

regardless of how long ago those actions were taken and whether the issue had

ever been addressed before. This simply cannot be so.

      Regarding judgments, we have previously held that “[t]he generally

accepted rule is that where the court has jurisdiction of parties and subject

matter, the judgment, if erroneous, is voidable, not void.” Dix v. Dix, 222

S.W.2d 839, 842 (Ky. 1949). On the other hand, “a personal judgment without

such jurisdiction is void.” Hill, 180 S.W.2d at 95 (citations omitted). Although

certainly not binding on this Court, the Industrial Commission Division of the

Fourth District Appellate Court of Illinois explained clearly and concisely how

this concept of jurisdiction applies to administrative agencies. It said,

      [t]o the extent an agency acts outside its statutory authority, it acts
      without jurisdiction. The term “jurisdiction,” while not strictly
      applicable to an administrative agency, may be employed to
      designate the authority of the agency to act. In administrative law,
      the term “jurisdiction” has three aspects: (1) personal jurisdiction,
      (2) subject-matter jurisdiction, and (3) the agency's scope of
      statutory authority. Business & Professional People for the Public
      Interest v. Illinois Commerce Comm'n, 136 Ill.2d 192, 243, 144
      Ill.Dec. 334, 555 N.E.2d 693, 716 (1989). A judgment or order is
      void where it is entered by a court or agency which lacks personal
      jurisdiction, subject-matter jurisdiction, or the inherent power to
      enter the particular judgment or order, or where the order is
      procured by fraud. Evans v. Corporate Services, 207 Ill.App.3d 297,
      302, 152 Ill.Dec. 191, 565 N.E.2d 724, 727 (1990).

Siddens v. Industrial Com'n, 711 N.E.2d 18, 21 (Ill. App. Ct. 1999).

                                        12
      In this case, someone within CHFS had the authority to terminate

Puckett. It was within the “jurisdiction” of CHFS to do so. The fact that an

individual who was not properly delegated the appointing authority to

terminate Puckett signed his termination letter does not make his termination

void. It merely makes his termination voidable. We can find nothing in our

precedent that would make CHFS’s actions in this case void.

      Puckett relies on Commonwealth, Tourism Cabinet v. Stosberg for the

proposition that an agency’s failure to comply with statutory requirements in

imposing employee discipline makes that disciplinary action void. 948 S.W.2d

425 (Ky. App. 1997). However, the facts of that case, and the way in which the

Tourism Cabinet took its disciplinary action in that case, stand in stark

contrast to the actions taken by CHFS in this case. In Stosberg, the Tourism

Cabinet involuntarily transferred a classified employee with status but deemed

the transfer a promotion.3 Id. at 427. In doing so, the Tourism Cabinet

essentially ignored the statutory scheme regarding employment penalizations

and failed to follow it all together. The Court of Appeals held that the Tourism

Cabinet had “refus[ed] to implement the protections prescribed in KRS

18A.095” and had “no authority” to do so. Id. (emphasis added). Because the

Tourism Cabinet failed to comply with “the mandatory provision of KRS

       3 An involuntary transfer is a “penalization” as defined in KRS 18A.005(24) that

triggers the rights of employees listed in KRS 18A.095.

                                          13
18A.095(2) that such penalization be only ‘for cause[,]’” the Court of Appeals

held that Stosberg’s transfer was void ab initio.4 Id. at 428.

      In the case before us, CHFS attempted to comply with KRS 18A.095 in

terminating Puckett. It provided him with an intent to dismiss letter as

required by KRS 18A.095(2), and Puckett and his attorney were permitted to

appear personally and be heard in response to this intent to dismiss as

required by KRS 18A.095(5). Puckett was then notified in writing of his

dismissal pursuant to KRS 18A.095(7) and permitted to appeal his dismissal to

the Board. The fact that Klein, who did not have the proper appointing

authority to terminate Puckett, signed Puckett’s termination letter does not

make his termination void. CHFS committed a mere procedural error in the

manner in which it effected Puckett’s termination. This error does not implicate

the same “lack of authority” displayed by the actions of the Tourism Cabinet in

Stosberg.

      Accordingly, Puckett’s termination is merely voidable, as opposed to void.

As such, review of Klein’s authority to terminate Puckett is not reviewable “at

any time” in the way that a void action would be. The issue needed to be

preserved by presentation to the hearing officer or the Board, but it was not.

Accordingly, it was improper for the circuit court to remand Puckett’s case to

the Board on an issue that was not preserved.

      4 The provision that prohibits penalization of classified employees with status

“except for cause” is now found in KRS 18A.095(1).

                                          14
                                 IV. CONCLUSION

      For the foregoing reasons, we affirm the Court of Appeals and reinstate

the Board’s order terminating Puckett from his employment with CHFS.

      All sitting. All concur.

COUNSEL FOR APPELLANT:

David Lindsay Leightty
Alison Meredith Messex
Priddy, Cutler, Naake & Meade, PLLC

COUNSEL FOR APPELLEE, CABINET FOR HEALTH & FAMILY SERVICES:

Wesley Warden Duke
Ashley Genevieve Kennedy
Catherine Elaine York
Office of Legal Counsel

COUNSEL FOR APPELLEE, KENTUCKY PERSONNEL BOARD:

Stafford Easterling
Mark Albert Sipek

COUNSEL FOR AMICUS, KENTUCKY PERSONNEL CABINET:

Catherine Marie Stevens

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