Court Opinion

ID: 9394116
Source: CourtListenerOpinion
Date Created: 2023-05-12 14:05:00.946617+00
Date Added: 2024-06-11T17:18:58.355022
License: Public Domain

RENDERED: MAY 5, 2023; 10:00 A.M.
                  NOT TO BE PUBLISHED

           Commonwealth of Kentucky
                  Court of Appeals

                     NO. 2022-CA-0221-MR

CITY OF CORBIN, KENTUCKY;
CITY UTILITIES COMMISSION OF
CORBIN, KENTUCKY; AND MPI KY,
LLC                                               APPELLANTS

            APPEAL FROM LAUREL CIRCUIT COURT
v.          HONORABLE GREGORY A. LAY, JUDGE
                  ACTION NO. 20-CI-00662

CITY OF LONDON, KENTUCKY                            APPELLEE

AND

                     NO. 2022-CA-0334-MR

CITY OF LONDON, KENTUCKY                    CROSS-APPELLANT

         CROSS-APPEAL FROM LAUREL CIRCUIT COURT
v.          HONORABLE GREGORY A. LAY, JUDGE
                   ACTION NO. 20-CI-00662

CITY OF CORBIN, KENTUCKY;
CITY UTILITIES COMMISSION OF
CORBIN, KENTUCKY; AND MPI KY,
LLC                                                          CROSS-APPELLEES

                                      OPINION
                                 AFFIRMING IN PART,
                                 VACATING IN PART,
                                  AND REMANDING

                                    ** ** ** ** **

BEFORE: THOMPSON, CHIEF JUDGE; COMBS AND JONES, JUDGES.

COMBS, JUDGE: The City of Corbin, Kentucky, (Corbin); the City Utilities

Commission of Corbin, Kentucky, (the Utilities Commission); and MPI KY, LLC

(MPI), a private company, appeal from the summary judgment of the Laurel

Circuit Court entered in favor of the City of London, Kentucky, (London). London

cross-appeals. After carefully reviewing the record in light of the arguments of

counsel, we conclude that the existence of a genuine issue of material fact

precludes entry of summary judgment in London’s favor and that London’s cross-

appeal is without merit. Consequently, we affirm in part and vacate in part, and we

remand for additional proceedings.

                Pursuant to the provisions of KRS1 81A.420, London proposed to

annex two unincorporated areas in Laurel County. Tract 1 encompasses a portion

of Interstate Highway 75 and its right-of-way for approximately nine miles. It

1
    Kentucky Revised Statutes.

                                         -2-
borders London’s southern city limits. Tract 2, located at the intersection of

Interstate Highway 75 and West Cumberland Gap Parkway, is adjacent to Tract 1

and is owned by G & M Oil Company. G & M Oil Company requested the

annexation. Together, the tracts total 639 acres.

             On August 12, 2020, Ordinance 2020-10 received its first reading.

The ordinance defined the boundaries of the unincorporated territory proposed to

be annexed and stated the intention of London to annex it. The ordinance directed

that written notice of London’s intention to annex the properties be mailed to the

property owners of Tract 1 and Tract 2 as required by the provisions of KRS

81A.425.

             On September 10, 2020, Corbin’s counsel sent correspondence by

email to London’s City Attorney advising that Corbin owned utility infrastructure

within Tract 1. Counsel noted that London had failed to provide notice of the

proposed annexation to Corbin’s mayor no later than fourteen (14) days prior to the

meeting at which the ordinance would receive its second reading as required by the

provisions of KRS 81A.427(3). Corbin lodged an informal objection to the

annexation of Tract 1 and requested that London’s city council postpone its

meeting. However, London did not postpone the meeting, and on the evening of

September 10, 2020, the ordinance received its second reading. Corbin’s mayor

appeared at the meeting to oppose the proposed annexation. The ordinance passed

                                         -3-
unanimously. Thereafter, London provided public notice of the ordinance in

September, October, and December 2020.

             On September 11, 2020, the day after London’s city council meeting,

Corbin filed a petition for declaration of rights in Laurel Circuit Court. Corbin

alleged that two controversies existed. First, Corbin challenged the legality of the

ordinance proposing the annexation of Tract 1 and Tract 2 “on the basis that

neither territory is suitable for annexation pursuant to the terms of KRS 81A.410.”

In part, it alleged that the annexation of Tract 1 constitutes prohibited “corridor

annexation” and fails to serve a municipal purpose. It alleged that without

annexation of Tract 1, Tract 2 is not contiguous or adjacent to London as required

for its annexation. Second, it challenged London’s failure to notify its mayor of

the proposed annexation of Tract 1, “which houses utility infrastructure for water

and sewer services, which is owned by Corbin, pursuant to KRS 81A.427.” Citing

the remedy provisions of KRS 81A.427(7), Corbin requested the court to declare

the ordinance void.

             On September 30, 2020, Corbin amended its petition to include MPI

as a party-plaintiff and to add allegations concerning an additional controversy

between the opposing parties. MPI owns property adjacent to Tract 1, and it also

objected to London’s decision to annex the area.

                                          -4-
             London answered and denied many of the substantive allegations of

the petition. However, it acknowledged that it did not provide written notice of the

proposed annexation to Corbin’s mayor. It alleged that it was not required to do so

under the circumstances and noted that Corbin’s mayor unquestionably received

actual notice of the ordinance as she appeared at the city council meeting.

             London also challenged the jurisdiction of the court. It argued that the

court was not empowered by the provisions of KRS 81A.427(7) to declare its

ordinance void because Corbin had not formally objected to the proposed

annexation by timely forwarding a certified copy of a municipal order as required

by the provisions of KRS 81A.427(5). It also contended that no actual controversy

existed between the party opponents; that Corbin and MPI had no rights or

interests with respect to London’s “intent to annex ordinance”; that both Corbin

and MPI lacked standing; and that neither could show that either had been

aggrieved, harmed, or damaged by the ordinance.

             On November 6, 2020, the Utilities Commission filed a motion to

intervene in the action and tendered an intervening complaint for declaration of

rights. Although Corbin owns the utility infrastructure, the Utilities Commission

claimed that it acts as a trustee operating and managing the utility services. It

alleged that its interests were not adequately represented by Corbin. London

challenged the motion to intervene. It noted that all rights of utilities providing

                                          -5-
utility services in any area annexed by a city prior to the annexation are expressly

preserved by the provisions of KRS 81A.490; therefore, no interests of the Utilities

Commission were at stake.

             The trial court granted the motion to intervene, and the Utilities

Commission’s tendered complaint was filed in the record. London filed its answer,

and a period of intense discovery began. On January 6, 2021, London’s city

council adopted an ordinance finally annexing the disputed areas.

             On March 8, 2021, Corbin, the Utilities Commission, and MPI filed a

motion for summary judgment. London fled a cross-motion for summary

judgment. Oral arguments were conducted before the trial court on July 22, 2021.

By its order entered on February 9, 2022, the court granted London’s motion for

summary judgment. Without addressing the substantive contentions, the circuit

court concluded that Corbin, the Utilities Commission, and MPI each lacked

standing to maintain the action. Corbin, the Utilities Commission, and MPI filed

this appeal; London filed a cross-appeal.

             On appeal, Corbin contends that the trial court erred by concluding

that it lacked standing as a matter of law. We agree.

             Constitutional standing is prerequisite to establishing the existence of

a justiciable cause. Lincoln Trail Grain Growers Association, Inc. v. Meade Cnty.

Fiscal Court, 632 S.W.3d 766 (Ky. App. 2021). The “justiciable cause”

                                         -6-
requirement in Kentucky Constitution, Section 112(5) is the basis of the trial

court’s jurisdiction. “To invoke the court’s jurisdiction, the plaintiff must allege an

injury caused by the defendant of a sort the court is able to redress.” Lawson v.

Office of the Attorney General, 415 S.W.3d 59, 67 (Ky. 2013).

             So-called “statutory standing” is conferred where “a statute creating a

private right of action authorizes a particular plaintiff to avail herself of that right

of action.” Id. (citing Small v. Federal National Mortgage Association, 286 Va.

119, 747 S.E.2d 817 (2013) (quoting CGM, LLC v. BellSouth Telecomm., Inc., 664

F.3d 46, 52 (4th Cir. 2011))).

             The first issue we address is whether the trial court erred by

concluding that Corbin is not authorized by statute to pursue its litigation against

London.

             The provisions of KRS 81A.427(3) require a city proposing to annex

an unincorporated area under the provisions of KRS 81A.420 to send notice of the

proposed annexation “to the mayor of each city government owning utility

infrastructure within the area proposed to be annexed.” The timing and content of

the notice are expressly prescribed by statute. KRS 81A.427(3)(a), (b), (c).

             A city owning utility infrastructure as described which receives such a

notice “shall have the right to object and prevent the annexation by sending a

certified copy of a municipal order enacted pursuant to KRS 83A.060.” KRS

                                           -7-
81A.427(5) (emphasis added). The contents of the municipal order and the

methods by which it can be delivered are carefully prescribed. Id. The certified

copy of the municipal order “shall be received by the city acting [to annex

property] at any time before or at the meeting where the ordinance is scheduled to

receive its second reading.” Id.

             The provisions of KRS 81A.427(6) direct that a city shall not annex

any area that includes utility infrastructure owned by a city objecting under

subsection (5) of the statute unless the cities in interest agree through an interlocal

agreement. If a city proposing to annex does not receive a municipal order from an

affected city prior to or at the meeting, the annexing city may proceed to enact its

ordinance. Id. In that event, “the city owning utility infrastructure shall forfeit its

right to object and shall be deemed to have consented to the annexation.” Id.

             Where a city annexes property without following the express statutory

requirements, the provisions of KRS 81A.427(7) provide a remedy: the affected

city may commence an action in circuit court to void the final annexation

ordinance. Relief is afforded where the circuit court “determines that the annexing

city failed to substantially comply with the requirements of this section and the

failure resulted in material prejudice to the substantial rights of the affected city.”

Id.

                                           -8-
             Corbin contends that the trial court erred by concluding that it did not

establish statutory standing because it failed to prove that it owns the utility

infrastructure within the area annexed by London. We agree.

             The Kentucky Rules of Civil Procedure (CR) provide that summary

judgment will be granted where the pleadings, depositions, answers to

interrogatories, stipulations, admissions and/or affidavits show that there is no

genuine issue as to any material fact and that the moving party is entitled to

judgment as a matter of law. CR 56.03. Because summary judgment involves

only questions of law and not the resolution of disputed facts, we may not defer to

the trial court’s decision. Goldsmith v. Allied Building Components, Inc., 833

S.W.2d 378 (Ky. 1992). Instead, we must review the decision de novo.

Cumberland Valley Contrs., Inc. v. Bell County Coal Corp., 238 S.W.3d 644 (Ky.

2007).

             Corbin asserts that its evidence confirms that it owns the utility

infrastructure. In the alternative, it argues that the conflicting evidence of record

creates a genuine dispute as to whether it owns utility infrastructure in the area

annexed by London and that this factual dispute precludes summary judgment.

             As the trial court observed, Corbin’s claim of ownership is based, in

part, upon: financial documents; minutes from city council meetings; and

affidavits and emails authored by city officials, the Utility Commission

                                          -9-
representatives, and others. London disputes Corbin’s claim of ownership and

argues that the evidence indicates that the utility infrastructure is owned by the

Utility Commission instead. It relies, in part, on language included in: an

easement; contracts; resolutions of the Utility Commission; and an audit filed with

the Kentucky Department of Local Government.

             Faced with conflicting evidence concerning ownership of the utility

infrastructure, the trial court questioned whether Corbin and the Utility

Commission are considered separate and distinct bodies. Examining relevant

statutes, the court concluded that the Utility Commission and Corbin are indeed

separate legal entities and “considering the totality of the circumstances, it

therefore follows, that the utility infrastructure . . . is owned by the [Utility

Commission].” Having determined that the Utility Commission, and not Corbin,

owned the utility infrastructure, the court reasoned that the notice requirements of

KRS 81A.427 were never triggered. Therefore, no statutory remedy was available,

and Corbin could not establish statutory standing sufficient to maintain the action.

We do not agree with the court’s reasoning.

             The Utility Commission is a special purpose governmental entity.

KRS 65A.010. It has independent authority to generate public funds and may

expend public funds, grants, awards, and appropriations from the city. Id. KRS

96.530 provides that it is “a public body politic and corporate, with perpetual

                                           -10-
succession” and that it may “contract and be contracted with, sue and be sued, in

and by its corporate name, and have and use a corporate seal.” However, these

qualities have little bearing on the issue of whether the Utility Commission owns

the disputed utility infrastructure.

             The determination of a party’s standing requires consideration of the

facts of each individual case. Rose v. Council for Better Education, Inc., 790

S.W.2d 186, 202 (Ky. 1989). Here, the issue of ownership -- critical to

establishing Corbin’s standing to pursue this litigation -- remains in controversy.

At this point, neither London nor Corbin has offered sufficient evidence to prove

conclusively whether Corbin or the Utilities Commission owns the disputed

infrastructure. This genuine issue of material fact is appropriately addressed to a

fact finder for resolution; it simply cannot be determined as a matter of law at this

time.

             Nevertheless, London argues that it is entitled to judgment as a matter

of law. Assuming that Corbin owns the disputed utility infrastructure and that the

notice requirement of KRS 81A.427(3) was triggered, London contends that

Corbin waived its statutory right to prevent the annexation by failing to provide

London with a timely, certified copy of a municipal order as a means of objecting

to the proposed annexation pursuant to the provisions of KRS 81A.427(5). Thus,

London argues that the court could provide no redress.

                                         -11-
             However, Corbin was not obligated by language of the statute to

provide a municipal order to preserve its right to object to the annexation where

London did not first provide notice of the proposed annexation to Corbin’s mayor

as required by the provisions of KRS 81A.427(3). Consequently, Corbin did not

waive its statutory right to try to prevent the annexation. London failed to establish

that there are no genuine issues of material fact in dispute or that it is entitled to

judgment as a matter of law. Thus, summary judgment was erroneously granted.

We vacate on this issue and remand for additional proceedings.

             Next, we consider whether the trial court erred by concluding that

MPI lacked statutory standing. It is uncontroverted that MPI owns property

directly adjoining Tract 1. Again, Tract 1 encompasses a portion of Interstate

Highway 75 and its right-of-way for approximately nine miles.

             Where a city annexes or proposes to annex territory in which no

person is resident, an individual has standing to pursue a claim if he owns property

directly adjoining a parcel of land that contains either in whole or in part any

territory proposed to be annexed or annexed by the city. KRS 81A.482. For

purposes of the statute, “parcel” is defined as “a tract of real property that is

assessed as a single unit for purposes of determining ad valorem tax liability.” Id.

Because Tract 1 is a right-of-way, the parties agree that it is not subject to

assessment for taxation.

                                          -12-
             While the trial court acknowledged that the legislative intent behind

the statute was to broaden the basis for standing to challenge annexation

proceedings, it concluded that the language of the statute is clear. It held that MPI

does not own property directly adjoining a “a tract of real property that is assessed

as a single unit for purposes of determining ad valorem tax liability.”

             Where provisions of a statute are plain and unambiguous, the

language is to be given effect as written. Kincaid v. Johnson, True & Guarnieri,

LLP, 538 S.W.3d 901 (Ky. App. 2017). It is true that the statute was enacted to

provide standing to contest annexation to adjoining property owners. However, in

light of its specific definition of “parcel,” MPI is excluded from its application.

MPI’s ownership of property adjoining the right-of-way is not sufficient to

establish its statutory standing. Consequently, the trial court did not err by

granting summary judgment against MPI.

             Next, we consider whether the trial court erred by concluding that the

Utilities Commission lacked constitutional standing. To invoke the trial court’s

jurisdiction, a litigant “must have the requisite constitutional standing to do so,

defined by three requirements: (1) injury, (2) causation, and (3) redressability.”

Commonwealth Cabinet for Health and Family Services, Department for Medicaid

Services v. Sexton by and through Appalachian Regional Healthcare, Inc., 566

S.W.3d 185, 196 (Ky. 2018).

                                         -13-
             The trial court concluded that the Utilities Commission could not

pursue its grievances against London’s annexation because the provisions of KRS

81A.490 expressly preserve “all right of the utilities providing utility services in

any area annexed by a city prior to the annexation.” Where its rights are expressly

preserved despite annexation, the court determined that the Utility Commission

cannot show that it suffered a concrete or particularized injury. We agree.

             The Utilities Commission cannot assert a direct injury caused by

London’s allegedly improper annexation of the territory described in its ordinance.

Regardless of whether the annexation was proper, its interests are unaffected, and

there is no redress to be had. Consequently, the trial court did not err by granting

summary judgment against the Utilities Commission.

             Finally, we address London’s argument on cross-appeal. London

contends that the appeal must be dismissed because Corbin, the Utilities

Commission, and MPI failed to comply with the procedural requirements of KRS

100.347 governing zoning litigation. It explains that London’s challenged

ordinance was adopted pursuant to a procedure outlined in the provisions of KRS

100.209. Pursuant to this provision, when a city which has adopted zoning

regulations proposes to annex unincorporated territory, it may amend its

comprehensive plan and official zoning map to incorporate zoning regulations for

the property proposed for annexation prior to adoption of the ordinance of

                                         -14-
annexation. KRS 100.209. Where a city elects to follow this procedure, the

planning commission holds a public hearing (after the adoption of the ordinance

stating the city’s intention to annex and prior to final action upon the ordinance of

annexation) for the purpose of adopting a comprehensive plan amendment and

making its recommendations as to the zoning regulations which will become

effective for the property upon its annexation. Id. The city council takes final

action upon the planning commission's recommendations prior to adoption of the

ordinance of annexation.

             London explains that the zone classification for the disputed tracts

was assigned by its city council just before the annexation was approved at its

December 30, 2020, meeting. It argues that the hybrid nature of the proceeding

means that the annexation and zone classification are so intertwined as to be

inseparable, and, as a consequence, Corbin, the Utilities Commission, and MPI are

bound by the requirements of KRS 100.347 concerning appeals from a final action

of its city council relating to a map amendment.

             The provisions of KRS 100.347(3) require that an aggrieved party

must appeal from the city council’s final action within thirty (30) days after the

final action of the legislative body. The statute provides that the legislative body

and owners of the subject property “who initiated the proceeding shall be made

parties” to the appeal to circuit court. KRS 100.347(3), (4). It provides that all

                                         -15-
final actions which have not been appealed within thirty (30) days shall not be

subject to judicial review. KRS 100.347(3). London argues that the failure of the

appellants to name its city council and the owners of the disputed property in a

timely appeal to the circuit court deprives the court of jurisdiction. We disagree.

             Through this litigation, Corbin sought to challenge London’s

annexation of two unincorporated areas in Laurel County. It did not challenge the

zoning of the tracts or any map amendment. KRS 81A.427(7) provides a specific

remedy to a specific class of entities -- cities owning utility infrastructure within an

area proposed to be annexed. The statute creates a specific, private right of action

in these cities and a specific remedy. Because the basis of the trial court’s

jurisdiction is found in the provisions of KRS 81A.427, Corbin is not required to

pursue its challenge to the annexation pursuant to the requirements of KRS

100.347 governing zoning litigation. The trial court did not err by refusing to grant

summary judgment to London on this basis.

             Based upon the foregoing, the judgment of the Laurel Circuit Court is

affirmed in part, vacated in part, and remanded for further proceedings consistent

with this Opinion.

                                         -16-
          ALL CONCUR.

BRIEFS FOR                BRIEFS FOR APPELLEE/CROSS-
APPELLANTS/CROSS-         APPELLANT CITY OF LONDON
APPELLEES:                KENTUCKY:

Patrick R. Hughes         Larry G. Bryson
Christopher B. Markus     London, Kentucky
Joseph M. Kramer
Covington, Kentucky       David A. Pike
                          F. Keith Brown
                          Shepherdsville, Kentucky

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