Request By:
Mr. Bremer Ehrler
Jefferson County Court Clerk
Courthouse
Louisville, Kentucky
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your problem was stated as follows:
"In Jefferson County, for a one year period, we recorded 89,000 liens, released 100,000 liens on automobile registrations and sold 390,000 decals. During my term we have had four omissions, which were due to human error.
"Banks and Loan Companise come back on the County Clerk for the omission and we now have four claimants requesting restitution, which would amount to approximately $4,000. We were carrying insurance for errors and omissions for protection, but the State Auditor's Office has advised this cannot be paid from our fees."
You have indicated by phone that approximately 600,000 motor vehicle registrations are processed in your office. n1 You say that there are between 300,000 to 400,000 liens which must be noted on the certificates of registration. See KRS 186.045. With this tremendous volume, there will always be a potential for omission in noting the liens on the certificate of registration.
We concluded in OAG 77-63, copy enclosed, that, under an appropriate ordinance of fiscal court, that body can authorize the premiums on such errors and omissions insurance, covering a county court clerk, to be paid out of the county general fund, subject to proper budgeting as required by KRS Chapter 68. See KRS 67.083 [Home Rule law]. We also concluded that the premiums on such insurance could be paid out of excess fees of the clerk under a fiscal court order. See KRS 67.083 and Funk v. Milliken, Ky., 317 S.W.2d 499 (1958).
In your case, since KRS 64.345 applies, we believe the panel of judges of circuit and county court could enter an order authorizing the payment of such premiums out of your 75% account as a necessary office expense. The rationale is simply that the public has a definite interest in the quality of the official's performance of his public duties. Such insurance coverage benefits the public by making it possible for good officers and those who work in good faith to continue to effectively function for the public and in a better paychological frame of mind than would be possible where there is no insurance coverage for errors and omissions.
We suggest you approach either fiscal court or the panel of judges to get an authorization to pay the insurance premiums either out of the county general fund or out of your 75% account. You should also be sure to obtain adequate coverage based upon the experience of your office.
As for paying actual damage claims for such errors or omissions, we know of no statutory basis for those claims to be paid out of the county treasury or 75% account. We believe you would have to go to the legislature with this aspect of your problem.