Kentucky Supreme Court
Immunity - Schools - Supervision
Marson v. Thomason, 438 S.W.3d 292, 2014 WL 1499498 (Ky. April 17, 2014), petition for rehearing filed April 29. 2014.

In the latest attempt to clarify the distinction between discretionary and ministerial acts the Court once again demonstrates that the concepts are unhelpful as analytical tools in practice. In close cases the result is not actually dictated by the test, but instead the framing of the issue dictates which test applies. This has been implicit in many of the cases decided since Yanero v. Davis, 65 SW 3d 510 (Ky. 2001), and in fact this case would have been an opportunity to express this fact. Of course, then the Court would have to explain the bases for framing the issues one way or another, so it is easier to pretend the decision is based on the discretionary/ministerial criterion. Absent analytical rules, however, the Court engages in result based analysis by simply choosing the framing that leads to the desired result. This opinion comes as close as any in addressing this aspect of the analysis, although it is not clear the Court realized it.

The South Floyd Middle School had a pre-school program whereby students waited either in the gymnasium or cafeteria. In the gymnasium sections were designated for each grade level. On the date in question, the custodian had not extended the bleachers. Anthony, a 12 year old with vision impairment, followed the usual procedure and walked of the bleachers, injuring his head and arm. While he did not sue the custodian, he sued two principals and a teacher in their individual capacities. According to the opinion, the complaint alleged a failure to supervise and provide a safe environment. The Court observed that had the custodian been sued the act of extending the bleachers was clearly a ministerial duty.

Principal Martin had never personally extended the bleachers. She was responsible for directing various employees in their performance of their duties, and to assign those duties. The Court found, without difficulty, that the principal's duties with respect to the activities of that morning were discretionary. The Court characterized the principal's duty as a general duty, one that the principal had discretion in deciding how best to execute. The Court also suggested that it was significant that the principal acted at an operational level, although it is not clear how that observation is helpful in applying the rules.

Teacher Hamilton was on bus duty, and his duties were to make sure the children behaved and lookout for any safety things that might cause problems for the kids. There was a regular procedure to be followed. When the children got off the bus, they were monitored in the foyer. Some of the children were sent to the cafeteria, while the remaining children were moved to the gymnasium. The children were moved in the same path each day. They proceeded from the foyer down the hall to the gym doors, then walked around the top of the gym and descended the stairs to their designated sections. On the day in question, Hamilton walked with the children to the gym doors, and stood there until about half the children had gone through. He testified he could not see whether the bleachers had been extended from where he stood. The Court held that Hamilton was performing ministerial functions at the time of the injury and thus could be sued. The issue was thus framed as what duties were being performed at the time as opposed to what duties are alleged to have been performed negligently. This leads to a result where both the principal and the teacher are alleged to have breached a general duty to supervise, but one is discretionary and one is ministerial. In the future this rule will cause the Court problems and will probably be limited in some ways, but for now the focus is on the tasks assigned, not the breach alleged. As a practical matter, this is a broad expansion of the exposure teachers have to individual lawsuits.

Kentucky Supreme Court
Employment - Ministerial Exception
Kirby v. Lexington Theological Seminary, 426 S.W.3d 597, 2014 WL 1512223 (Ky. April 17, 2014)

Plaintiff Kirby was a tenured professor employed by Lexington Theological Seminary to teach Christian social ethics. His position was eliminated due to severe financial difficulties. When his employment was terminated he filed this claim alleging breach of contract, breach of implied covenants of good faith and race discrimination. In this case the Supreme Court followed the lead of the United States Supreme Court in Hosanna-Tabor Evangelical v. EEOC, 132 S. Ct. 694, 181 L.Ed.2d 650 (2012) and found a ministerial exception to exist under the Kentucky Civil Rights Act. The Court also held, however, that the exception did not apply to a breach of contract claim asserted by an employee of a religious employer. In order to invoke the ministerial exception, the employer must be a religious institution and the employee must be a minister.

Religious Institution

The term religious institution has been given a broad construction, and included religiously affiliated hospitals, schools and corporations. The key is that a religiously affiliated entity must have a mission that is marked by clear religious characteristics. Applying this test to the Seminary, the Court found it to clearly be a religious institution. Its principal source of funding was the Christian Church's (Disciples of Christ) Disciples Mission Fund, which is in turn funded by individuals within the church congregation. The Seminary was required to support the mission of the Church and educate staff and volunteers to support the Church's wider mission. The governing structure had a clear and direct relationship with the Church. Finally, the degrees offered at the time all required religious and theological study.

Ministerial Employee

The Court declined to announce a rigid rule as to whether an employee is a ministerial employee, but concluded that Kirby was one. While Kirby was not an ordained minister, the Court held that was not dispositive. In Hosanna-Tabor, the US Supreme Court announced four factors to be considered: (1) the formal title given by the religious institution, (2) the substance reflected in that title, (3) her own use of the title, and (4) the important religious functions performed for the religious institution. The Kentucky Court addressed each factor in an effort to provide future guidance for trial Courts. In this case, the Court felt that Kirby's work instructing on Christian principles and serving as a representative of the church on numerous occasions compelled the finding that Kirby was a ministerial employee.

Scope of Exception

The ministerial exception is based on the First Amendment protections from government action afforded to religions. Since the Kentucky Civil Rights Act is government action, the ministerial exception applies to its prohibitions against discrimination. However, this rationale does not apply to a breach of contract claim, because by definition the standards are agreed to by the religious institution, not imposed on it by government action.

Kentucky Supreme Court
Arbitration - Scope of Agreement
Linden v. Griffin, 436 S.W.3d 521, 2014 WL 1511305 (Ky. April 17, 2014), modified on denial of petition for rehearing August 21, 2014

Linden and Griffin developed a filtration system and formed a company to monetize it. As the company grew new members were added. When the time came to raise new capital, a law firm was hired by the company to prepare a private placement memorandum and an amended operating agreement. The amended operating agreement contained an arbitration agreement, which applied to "any dispute . . . as to the rights and liabilities under this agreement". Linden and Griffin thereafter developed differences, which ultimately led to the removal of Linden as an officer and director of the company at a meeting Linden did not attend.

Following the meeting, Linden issued checks on the company account which were dishonored by the bank. He claimed to not know he no longer had the authority to sign for the company. A criminal complaint was filed but it is not clear who filed it. Linden filed suit claiming fraud, defamation, abuse of process, breach of fiduciary duty, violation of Blue Sky laws, mutual mistake and fraud in the inducement. The Court construed the arbitration agreement quite literally. The defamation and abuse of process claims were not subject to arbitration because they constituted a personal dispute not relating to the rights and liabilities under the operating agreement.

Kentucky Court of Appeals
Arbitration - Authority to Agree
LP Pikeville, LLC v. Wright, ___ S.W.3d ___, 2014 WL 1345293 (Ky.App. April 4, 2014), motion for discretionary review filed May 12, 2014 (2014-SC-238-D )

This is the next in the long line of cases dealing with the authority to enter into an arbitration agreement in the context of a nursing home. In this case, the family member that signed the agreement had been appointed legal guardian by a District Court. The Pike Circuit Court somehow found that a guardian had no such authority even though recent cases clearly suggest otherwise. The Court of Appeals reversed.

A guardian's authority to waive a ward's right to a jury trial is limited to circumstances where it is necessary to provide care and services to the ward. The trial Court reasoned that since the arbitration agreement was not required for admission, it was not necessary to accomplish the care and services needed. The Court of Appeals held that a legal guardian has the power to do for his ward whatever the ward could have done for himself, so long as the action is in the best interest of the ward. The Court pointed out that arbitration enjoys the same constitutional mention as does a trial by jury, and the legislature has set policy to promote arbitration.