Court Opinion

ID: 9758719
Source: CourtListenerOpinion
Date Created: 2023-08-28 23:41:13.208267+00
Date Added: 2024-06-11T07:28:54.268658
License: Public Domain

JOHNSTONE, Justice,
dissenting.
I respectfully dissent from the majority’s holding that the -Floyd County Development Authority is not shielded from liability by sovereign immunity and that Chairman Spurlock is not shielded from liability by official immunity.
This case revolves around the vital function of state encouraged economic development in this Commonwealth. Our legislature has deemed it appropriate and necessary to pursue these economic opportunities through a wide variety of programs, many of which are authorized by KRS Chapter 154. To emphasize the importance of this mission, the legislature has stated:
The mission of the Commonwealth’s economic development system shall be to achieve the best quality of fife for all Kentuckians through long term strategic planning and implementation that fosters sustainable growth in jobs and incomes and enables communities, businesses, governments, and individuals to compete in the global market place.
KRS 154.01-020.
The legislature authorized the creation of “local development authorities” as one of the vehicles for achieving this goal. KRS 154.50-136. The Floyd County Development Authority was, pursuant to state statute, created by action of the Floyd County Fiscal Court. The nonprofit entity’s purpose is to promote economic progress in the county by acquiring and developing land for industrial and commercial uses. Its board is appointed by the county judge-executive and is comprised of six residents of Floyd County who are community leaders serving without compensation.
The Authority receives its funding through loans and grants of state money. These funding arrangements are made by the Cabinet for Economic Development and are distributed pursuant to grant agreements with specific terms regarding their expenditure. KRS 154.20-010, et. seq.; 154.50-030.
In determining whether the Authority is entitled to the protection of sovereign immunity, the majority correctly applied the two-pronged test recently announced in Kentucky Center for the Arts v. Berns, Ky., 801 S.W.2d 327 (1991). However, I respectfully disagree with the majority’s application of the test to the facts and circumstances presently before us.
The first prong of the Berns test relates to the “direction and control of the central State government.” Id. at 331. In reaching its conclusion that the Authority fails this prong, the majority simply states that “although the Authority’s board members are appointed by the County Judge-Executive, they serve for a term of years and have independent responsibility for making decisions for the Authority.”
Unfortunately, the majority overlooks our analysis in Withers v. University of Kentucky, Ky., 939 S.W.2d 340 (1997), in which we implicitly acknowledged that control by the central State government does not refer to day-to-day management, but rather to Kentucky’s long-term goals and *709the mission of the undertaking. Surely, the Authority is much more controlled by state government than the University of Kentucky or a local school board. Moreover, the advancement of economic development is clearly a fundamental function of state government as compared with the promotion of the arts that we faced in Bems.
The second prong of the Bems test consists of whether the Authority is “supported by monies which are disbursed by authority of the Commissioner of Finance out of the State treasury.” Berns, 801 S.W.2d at 331. There can be little doubt about this prong of the test. The Authority’s support from the state treasury is outlined in KRS Chapter 154 and it is undisputed that the project at issue was to be funded by state money. I cannot find a requirement set forth in Berns which mandates exclusive reliance by governmental entities on the state treasury, a distinction the majority attempts to draw. Certainly the University of Kentucky could not have satisfied such a test in Withers.
Finally, I disagree with the majority’s holding that Chairman Spurlock’s act of sending a letter regarding interim financing was a ministerial rather than a discretionary act. It is well settled in this Commonwealth that if an official is engaged in discretionary activity, he or she is entitled to official immunity. When confronted with inquiries about funding, Chairman Spurlock could have responded in a number of ways, or refused to respond at all. The majority seems to concede that Spur-lock exercised his discretion in deciding what response to make, but concludes that once the decision was made, his actions in conveying the information were purely ministerial. I would hold otherwise.
For the foregoing reasons, I would affirm the Court of Appeals in all respects.
KELLER, J., joins this dissent.