Court Opinion

ID: 4671342
Source: CourtListenerOpinion
Date Created: 2021-03-25 15:06:39.749267+00
Date Added: 2024-06-11T08:02:32.678983
License: Public Domain

RENDERED: MARCH 25, 2021
                                                            TO BE PUBLISHED

             Supreme Court of Kentucky
                                  2019-SC-0399-D

KAREN C. BRITT                                                       APPELLANT

                     ON REVIEW FROM COURT OF APPEALS
                              NO. 2016-CA-1036
V.                 FRANKLIN CIRCUIT COURT NO. 12-CI-00123

UNIVERSITY OF LOUISVILLE                                             APPELLEES

AND

SHIRLEY C. WILLIHINGANZ

                OPINION OF THE COURT BY JUSTICE LAMBERT
                                       AFFIRMING

      Under KRS1 45A.260, an action on a contract with the Commonwealth

generally must be commenced within one year from the date of completion

specified in the contract. In this case, while we conclude that the Court of

Appeals erred in its determination that Karen Britt, former professor at the

University of Louisville, had a written contract with the University, we

nonetheless hold that Britt brought her action outside of the one-year period

following the date of completion of her last written contract. We therefore

affirm the Court of Appeals, albeit on different grounds, and reverse the

Franklin Circuit Court

      1   Kentucky Revised Statutes.
                           I. FACTUAL BACKGROUND

      In the fall of 2003, James Brennan, Dean of the College of Arts and

Sciences at the University of Louisville (“the University”) sent a letter to

Appellant, Dr. Karen Britt, then a visiting assistant professor of Art History,

stating his intent to recommend her for appointment to a full-time, tenure-

track position. The letter set out the terms and conditions of the position,

including the duration of the appointment and first year’s salary. With regard

to tenure, the recommendation provided the conditions under which Dr. Britt

would be eligible for tenure should she remain employed at the University. The

letter further stated other terms and conditions applicable to the appointment,

such as the policies governing personnel reviews and termination, were set out

in the University’s governance document, The Redbook, and other relevant

college-level policy statements. Acceptance of the recommendation was made

effective upon receipt of the return of the letter with the employee’s signature in

the designated space. Dr. Britt signed the letter on October 27, 2003, and

upon the Provost and Board of Trustees’ approval of the appointment, began

working as an Assistant Professor of Art History.

      The University renewed Dr. Britt’s appointment each year until the

academic year 2009-2010. Between 2006 and 2009, the University’s Executive

Vice President and Provost, Shirley Willihinganz, sent Dr. Britt a letter each

summer informing Dr. Britt that her appointment as Assistant Professor was

continued through the upcoming academic year. With the exception of the

relevant dates, each of the four appointment letters is substantially identical.
The letters provide that “[t]he terms and conditions of employment in the

University of Louisville herein specified include all rules and regulations

promulgated on the authority of the University of Louisville Board of Trustees

and the governance document known as The Redbook.” Regarding tenure,

each letter states “[t]he appointment…is subject to the tenure policy of the

University of Louisville. Under the policy of The Redbook, tenure in this

position would be awarded July 1, 2011 should it be mutually agreeable to

make renewals of this appointment beyond this date.” Each letter requested

Dr. Britt sign and return the letter, which she did each year.

      Dr. Britt applied for tenure in October 2009. Following the review

process, Dr. Britt’s application was rejected. The Dean of the College of Arts

and Sciences recommended that Dr. Britt’s tenure application be denied

because she failed to demonstrate proficiency in her research. Following a

leave of absence in the fall of 2010, Dr. Britt returned to teach for the spring

semester of 2011, after which her employment at the University ended.

      Dr. Britt filed suit against the University in January 2012. Dr. Britt

alleged, inter alia, that the University breached its employment contract with

her when it violated provisions of its policy manuals and failed to provide her

with adequate time to perform the research necessary for her to obtain tenure.

Dr. Britt requested specific performance of her contract and money damages.

      The University moved for summary judgment. As relevant here, the

University asserted that governmental immunity shielded it from liability

because Dr. Britt’s appointment letters did not constitute written contracts
sufficient to waive immunity under the Kentucky Model Procurement Code

(KMPC), KRS 45A.245. The University further argued that even if the letters

constituted contracts, those contracts did not incorporate the University’s

personnel policies as contractual promises. Finally, the University claimed

that Dr. Britt filed her suit outside of the one-year limitations period set by

KRS 45A.260.

      After multiple hearings, the Franklin Circuit Court denied the

University’s motion for summary judgment. The court first concluded that the

recommendation letter and subsequent appointment letters constituted

express written contracts sufficient to waive the University’s immunity. The

court then determined that the letters incorporated by reference The Redbook

and the specified University policies. Regarding the statute of limitations, the

court concluded that, even though the suit was filed more than one year after

the end date of the last written contract, the suit was still timely because Dr.

Britt continued to perform under contract while challenging the denial of her

tenure in 2011.

      The Court of Appeals reversed the circuit court’s denial of summary

judgment, holding that the University was shielded from liability due to

governmental immunity. The court offered two independent bases for its

decision. First, the court held that the language of the various appointment

letters failed to clearly demonstrate the parties’ intent that The Redbook or

personnel policies be incorporated into the agreement. Under this theory, the

court reasoned that The Redbook might constitute an implied contract, but
KRS 45A.245 only applies to written agreements. In the alternative, the court

concluded Dr. Britt’s breach of contract claim was legally insufficient because

any purported agreement that she had did not guarantee her tenure and, as a

result, failed to provide a basis upon which relief could be granted.

                                     II. ANALYSIS

A. Standard of Review

      An order denying a claim of governmental immunity is immediately

appealable despite the lack of a final judgment.2 “The issue of whether a

defendant is entitled to the defense of sovereign or governmental immunity is a

question of law.”3 Similarly, issues regarding the formation and construction of

a contract are questions of law.4 Accordingly, our review on appeal is de novo.5

B. KRS 45A

      The University of Louisville, as a state university of the Commonwealth,

is a state agency entitled to the protection of governmental immunity.6 As a

result, the University is insulated from suit unless governmental immunity has

been specifically waived.7 KRS 45A.245(1) provides:

          Any person, firm or corporation, having a lawfully authorized
          written contract with the Commonwealth at the time of or
          after June 21, 1974, may bring an action against the
          Commonwealth on the contract, including but not limited to

      2   See Breathitt County Bd. of Educ. v. Prater, 292 S.W.3d 883, 887 (Ky. 2009).
      3 University of Louisville v. Rothstein, 532 S.W.3d 644, 647 (Ky. 2017) (citations

omitted).
      4   Hazard Coal Corp. v. Knight, 325 S.W.3d 290, 298 (Ky. 2010).
      5   Parker v. Webster Co. Coal, LLC, 529 S.W.3d 759, 765 (Ky. 2017).
      6   Furtula v. University of Kentucky, 438 S.W.3d 303, 305 (Ky. 2014).
      7   See Commonwealth v. Whitworth, 74 S.W.3d 695, 700 (Ky. 2002).
           actions either for breach of contracts or for enforcement of
           contracts or for both. Any such action shall be brought in
           the Franklin Circuit Court and shall be tried by the court
           sitting without a jury. All defenses in law or equity, except
           the defense of governmental immunity, shall be preserved to
           the Commonwealth.

      In University of Louisville v. Rothstein, we determined that KRS 45A.245

waived immunity for all written contracts with the state, including written

employment contracts.8 As such, the determination of whether the University

is entitled to governmental immunity in this case depends on whether Dr. Britt

executed a “lawfully authorized written contract” with the University.9

      The essential elements of a valid contact are an offer and unequivocal

acceptance, a certain and complete recitation of the material terms, and

consideration.10 Under Kentucky law, the terms of the contract must be

sufficiently definite to enable the court to determine the measure of damages in

the event of breach.11 An employment agreement for a specified term must

demonstrate an obligation by the employee to render service for a definite and

      8   532 S.W.3d at 647.
      9  Per KRS 45A.030(8), a “contract” means: “all types of state agreements,
including grants and orders, for the acquisition, purchase, or disposal of supplies,
services, construction, or any other item…” The KPMC defines “writing” or “written” as
letters, words, or numbers, or their equivalent, set down by handwriting, typewriting,
printing, photo stating, photographing, magnetic impulse, mechanical or electronic
recording, or other form of data compilation.” KRS 45A.030(32).
      10 See, e.g., Hines v. Thomas Jefferson Fire Ins. Co., 267 S.W.2d 709 (Ky. 1953),
Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 384 (Ky. App. 2002).
      11   Kovacs v. Freeman, 957 S.W.2d 251, 254 (Ky. 1997).
fixed period and a reciprocal obligation on the employer’s part to retain the

employee’s services.12

      The University claims that it never executed a valid written contract with

Dr. Britt during her term of employment, arguing that no document in the

record sets out an intent to be bound to the terms that Dr. Britt seeks to

enforce. While we agree that the record does not support the contention that

Dr. Britt worked under a written contract every year that she worked at the

University, we hold that the parties did execute a series of valid, written

contracts for at least five of those years.13

i. The 2003 Recommendation Letter

      First, we consider the 2003 recommendation letter from Dean Brennan

to Dr. Britt. On one hand, the letter sets out in detail the terms of Dr. Britt’s

eventual appointment. It provides that the appointment will last for one year;

specifies a salary of $41,200; and details the procedures by which Dr. Britt will

receive her work assignment. On the other hand, the letter plainly states that

Dean Brennan intends to recommend Dr. Britt be appointed by the Provost and

the Board of Trustees. That is, Dean Brennan expressly makes the

appointment contingent on the Board’s acceptance of the recommendation.

The University seizes on this language, asserting that the letter is, at most, a

      12 See, e.g., Clark v. Cincinnati, N.O. & T.P. Ry. Co., 79 S.W.2d 704 (Ky. 1935);
Dysart v. Dawkins Log & Mill Co., 300 S.W. 906 (Ky. 1927).
      13 Based on our review of the record, Dr. Britt did not receive a writing
confirming her appointment for either the academic year 2005-2006 or academic year
2010-2011.
contractual promise for Dean Brennan to convey his recommendation to the

Board, not a promise to hire Dr. Britt.

         We acknowledge that the University is correct insofar as Dean Brennan’s

only affirmative representation in the letter is that he will recommend Dr.

Britt’s appointment on the included terms. However, the parties do not dispute

that Dr. Britt did in fact work as an Assistant Professor of Fine Arts in 2004-

2005. Nor do they dispute that Dr. Britt received a salary consistent with the

terms of the agreement. Thus, we must consider whether the University

ultimately ratified and adopted the recommendation letter as an employment

agreement with Dr. Britt.

         Under Kentucky law, a principal who was not a party to an agreement

may become bound by its terms if it later adopts and affirms the agreement

and the agent initially entered the agreement on behalf of the principal.14

Ratification of the unauthorized act of an agent may either be express or

implied.15 Express ratification occurs when the principal affirms the act by

written or spoken words, whereas a principal impliedly ratifies an action

through their conduct, such as the acceptance of the benefits of a contract.16

However, “[r]atification is not to be presumed[;] it must be proven and the

burden rests upon [the party] who alleges it.”17

         14   Fulton Cnty. Fisc. Ct v. Southern Bell Tel. & Tel. Co., 158 S.W.2d 437, 439 (Ky.
1942).
         15   See St. Joseph Healthcare, Inc. v. Thomas, 487 S.W.3d 864 (Ky. 2016).
         16   Id.
         17   Fulton County Fiscal Court, 158 S.W.2d at 439.
      Here, the record does not contain evidence of the University or an

authorized agent expressly affirming the proposed agreement. The only

indication of such approval is the evidence of the parties’ subsequent conduct.

Dr. Britt worked for the University in the role the recommendation provided

and received numerous letters “continuing her appointment.” Additionally,

neither party contests that the Board did in fact appoint Dr. Britt to the

recommended position. On balance, we determine that the University’s

subsequent conduct indicated an intent to ratify and adopt the

recommendation letter as a binding employment agreement for the academic

year 2004-2005.

ii. The Continuation Letters

      The 2006-2009 appointment letters each contain the requisites of

contract formation. Each letter begins with the same sentence: “This is to

inform you of the continuation of your employment as Assistant Professor of

Fine Arts…” followed by the start and end dates of the upcoming academic

year. On its face, the statement offers Dr. Britt employment as an Assistant

Professor in the Department of Fine Arts for a definite and specified term (i.e.,

the upcoming academic year). Each letter also concludes in the same manner:

“Please sign and return the original copy of this letter to the Center for Faculty

Personnel, Grawemeyer Hall, Room 201[,]” followed by the Provost’s signature

and a space for the employee’s signature. In this way, each letter specifies the

required manner of assent to the offer of appointment. Dr. Britt signed and
returned each letter, demonstrating that she accepted the offer of continued

employment.

      The University argues that no document provided to Dr. Britt was

sufficiently definite to permit enforcement. We disagree. Each letter specifies

that the University wishes Dr. Britt to continue her work as an Assistant

Professor of Art History for the upcoming year. In return, they agree to

compensate her. While the letter does not state Dr. Britt’s salary or specify the

exact tasks she was to perform, the absence of those terms does not render the

agreement unenforceable. Importantly, the letter provides that the University

intends to continue Dr. Britt’s employment. On its face, this indicates that—

absent an agreement to the contrary—the parties intended for Dr. Britt to

perform substantially similar tasks for the same compensation due under her

prior appointment. A reviewing court could determine if breach occurred, and

if so, the measure of damages, by reference to the parties’ prior performance.

      Moreover, both the language of the agreement and relevant personnel

documents indicate that annual tasks are determined at the college or

department level. Each letter states: “An annual statement of work assignment

and compensation will be provided to you by the dean (or designee) of your unit

and will set out your assignment for each school year.” Under The Redbook,

faculty are expected to divide their time between research, teaching, and

service; the specific allocation of time between those categories is determined

on a yearly basis. Essentially, each professor is bound to perform a certain

degree of research, service, or teaching each term, but the specific tasks to be
performed are set by a manager (i.e., the Dean or a designated faculty

member). Such an arrangement does not render performance indefinite.

Resultingly, we determine that Dr. Britt executed valid written contracts with

the University for the academic years 2006-2007 through 2009-2010.

C. Incorporation by Reference

      The existence of written contracts for the foregoing years does not end

our inquiry. KRS 45A.245(1) requires all breach of contract actions to be

brought “on the contract.” Dr. Britt alleges that University breached its

agreements by failing to comply with certain policies contained in The Redbook

and associated personnel policy statements. As such, any provision that Dr.

Britt claims is breached must be included or incorporated in a written

employment agreement to be actionable.18

      Kentucky recognizes the common law doctrine of incorporation by

reference. “For a contract validly to incorporate other terms, ‘it must be clear

that the parties to the agreement had knowledge of and assented to the

incorporated terms.’”38 In addition, there must be “clear language [ ]

express[ing] the incorporation of other terms and conditions.”19

      We consider each of the parties’ contracts in turn. The 2003

Recommendation Letter states:

      18  We emphasize that our inquiry is restricted to determining the existence of a
valid written agreement and defining its scope. Given the limited scope of our review,
we take no position on whether either party breached any portion of their contracts.
      19Dixon v. Daymar Colls. Grp, LLC, 483 S.W.3d 332, 344 (Ky. 2015) (quoting
11 WILLISTON ON CONTRACTS § 30.25 (4th ed. 2014)).
      “the conditions governing employment at the University of
      Louisville are contained in the University’s governance
      document, The Redbook. Specific terms applicable to your
      appointment in the College of Arts and Sciences are
      contained in the College’s constitution and By-Laws, in the
      College’s Personnel Policy and Procedures and in the
      Constitution and By-laws of the Department.”

The letter additionally provides that all personnel reviews and termination

proceedings are “subject to” the provisions of The Redbook.

      Each continuations letter provides:

      [t]he terms and conditions of employment in the University of
      Louisville herein specified include all rules and regulations
      promulgated on the authority of the University of Louisville
      Board of Trustees and the governance document known as
      The Redbook. The appointment as Assistant Professor of Fine
      Arts is subject to the tenure policy of the University of
      Louisville. Under the policy of The Redbook, tenure in this
      position would be awarded July 1, 2011 should it be
      mutually agreeable to make renewals of this appointment
      beyond this date.

      The Court of Appeals considered the foregoing language and concluded

that it was not specific enough to incorporate the terms of The Redbook.20 We

disagree. A plain reading of each letter indicates that the parties intend for the

provisions of The Redbook relevant to Dr. Britt’s position as Assistant Professor

to be a part of the employment agreement of the parties. To “govern” means

      20 The University argues, and the Court of Appeals agreed, that this Court’s
decision in Furtula v. University of Kentucky, 483 S.W.3d 303 (Ky. 2014), indicates
that The Redbook provides solely an implied contract to Dr. Britt. Furtula, however, is
distinguishable from this case. There, the employees did not allege that they had an
express, written employment agreement, so they attempted to prevail on implied
contract grounds. Here, Dr. Britt has a written agreement with the University that
incorporates certain provisions of The Redbook.
either “to control, direct, or strongly influence the actions and conduct of

(another),” or “to serve as a precedent or deciding principle for.”21 “Subject to,”

in turn, means “affected by or possibly affected by (something).”22 The

University, in its written agreements, has stated that The Redbook shall

control, decide, or affect its relationship with Dr. Britt. As a result, we find the

provisions of The Redbook and its associated personnel policies relevant to Dr.

Britt’s position, including but not limited to the University’s policies regarding

tenure, personnel review, and termination, to be validly incorporated into each

of the foregoing contracts.

D. Statute of Limitations

      The University argues that, regardless of the validity of any written

agreement between Dr. Britt and the University, Dr. Britt’s breach of contract

claim is time-barred under KRS 45A.260. We agree.

      Section 231 of the Kentucky Constitution permits the General Assembly

to “direct in what manner and in what courts suit may be brought against the

Commonwealth.”23 Pursuant to this authority, the General Assembly passed

KRS 45A.260(2), which provides that any claim arising under the KPMC, other

than a construction contract executed by the Transportation Cabinet under

      21   Merriam–Webster Dictionary (online ed.).
      22   Merriam–Webster Dictionary (online ed.).
      23   Ky. Const. § 231.
KRS chapters 175, 176, 177, and 180 “shall be commenced in Franklin Circuit

Court within one (1) year from the date of completion specified in the contract.”24

      The Court of Appeals has interpreted this provision narrowly. In

Kovachevich v. University of Louisville, a physician and professor at the medical

school refused to execute his employment contract for the year 1976-1977 but

continued working for the university through May of 1978.25 The following

June, the physician filed suit based on his 1977 employment contract. The

Court of Appeals ultimately held that the claim was not timely filed because the

contract he was suing under terminated on June 30, 1977, notwithstanding

the fact that the physician continued his employment with the University.

      The Court of Appeals adopted a similarly strict approach in Jasper

Contracting Co. v. Commonwealth.26 There, the parties executed a valid

modification of their original contract which extended the completion date by

97 days.27 More than one year after the contractor failed to perform by the

extended deadline, the Commonwealth stated that they would only pay for the

work completed. Id. The plaintiff filed suit, arguing that the suit was timely

because the work had not yet been completed. Ultimately, the Court rejected

this argument, holding that the accrual date for any claim arising under KRS

      24   KRS 45A.260(2) (emphasis added).
      25   597 S.W.2d 621 (Ky. App. 1980).
      26   890 S.W.2d 296 (Ky. App. 1994).
      27   Id.
45A.260(2) was the completion date as stated in the contract or in a valid

modification of the contract.28

      Here, the University urges this Court to extend the reasoning of Jasper

Contracting and Kovachevich to this case. We agree that such extension is

appropriate. When interpreting a statute, we “accord to words of a statute

their literal meaning unless to do so would lead to an absurd or wholly

unreasonable conclusion.”29 If the plain language of a statute is clear and

unambiguous, the plain language controls.30 In considering whether a given

statute waives governmental immunity, “we will find waiver only where stated

‘by the most express language or by such overwhelming implications from the

text as will leave no room for any other reasonable construction.’”31

      Application of these principles to the statute and contracts at hand

compels our decision that Dr. Britt failed to file suit within the appropriate

time. The General Assembly, acting pursuant to its constitutional authority,

created a right of action against state agencies for breach of written contracts.

Pursuant to the same authority, they defined the limitations period applicable

to such claims as being one year from the date of completion of the written

contract. In this case, the last written contract executed by the parties

contained a termination date of July 30, 2010. While the University’s

      28   Id.
      29   Cosby v. Commonwealth, 147 S.W.3d 56, 59 (Ky. 2004) (citations omitted).
      30   See Rothstein, 532 S.W.3d at 647.
      31 Withers v. University of Kentucky, 939 S.W.2d 340, 344 (Ky. 1997) (quoting

Murray v. Wilson Distilling Co., 213 U.S. 151, 171 (1909)).
procedures provided that Dr. Britt would be eligible for tenure in 2011, no

provision of the contract guaranteed her employment until that date. Nor did

any provision extend the date of her employment through 2011. Under her

written agreement, Dr. Britt could have been terminated prior to her tenure

review and, so long as the termination complied with the contract’s procedures

for termination, no breach would have arisen. That Dr. Britt continued to work

at the University through the spring semester of 2011 without a written

agreement does not affect the limitations period under the statute. Thus, we

find Dr. Britt’s breach of contract claim, brought in January 2012, to be

untimely filed.

                                 III. CONCLUSION

      Because we find that Dr. Britt’s claim was filed outside of the limitations

period of KRS 45A.260, we affirm the Court of Appeals’ reversal of the Franklin

Circuit Court’s denial of the University’s motion for summary judgment.32

      Minton, C.J.; Conley, Hughes, Keller, Lambert and VanMeter, J.J.;

sitting. Nickell, J. not sitting. Minton, C.J.; Conley, Hughes, Keller, Lambert

and VanMeter, J.J. all concur.

      32 The Court of Appeals decided that even if Dr. Britt had a written contract
with the University, sovereign immunity still applied because the contract did not
address her entitlement to tenure, the sole issue in her breach of contract action.
While we disagree with the Court of Appeals on this point, we reach the same
conclusion on separate grounds. Sovereign immunity is waived in a contract action
under KRS 45A.245(1) only if that action is brought within one year as provided by
KRS 45A.260.
COUNSEL FOR APPELLANT:

Alton D. Priddy
Thomas J. Schulz
Chelsea Dermody
PRIDDY, CUTLER, NAAKE & MEADE, PLLC

COUNSEL FOR APPELLEES:

Donna King Perry
Jeremy S. Rogers
Matthew Barszcz
DINSMORE & SHOHL LLP