Request By:
Mr. Vic Hellard, Jr.
Director
Legislative Research Commission
State Capitol
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Carl Miller, Assistant Attorney General
You have requested an opinion of the Attorney General as to the correctness of the staff memorandum of the Professional Employment Commission which opined that subject professional employment contract between the Department of Insurance and an attorney employed to represent an employee of the State Fire Marshal's Office is illegal because the Attorney General rejected the request of the employee to provide defense in suits arising from the Beverly Hills fire. We believe the staff memorandum is in error for the following reasons:
The memorandum does not take into account or make mention of KRS 12.210 which reads as follows:
"(1) The governor, or any department with the approval of the governor, may employ and fix the term of employment and the compensation to be paid to an attorney or attorneys for legal services to be performed for the governor or for such department. Before approving the employment of an attorney the governor shall consult the attorney general as to whether legal services requested by departments are available in the attorney general's office. The compensation and expenses of any attorney or attorneys employed under the provisions of this section shall be paid out of the appropriations made to such department as other salaries, compensation and expenses are paid, except when the terms of employment provide that the compensation shall be on a contingent basis, and in such event the attorneys may be paid the amount specified out of the moneys recovered by them or out of the general fund. If the governor approves the employment, the terms of employment shall be duly entered by executive order upon the executive journal in the office of the secretary of state.
"(2) Any attorney may be employed pursuant to the provisions of subsection (1) of this section to render legal services for one or more departments, boards, program cabinets, offices or commissions."
Under this statute the Governor or a department head with the approval of the Governor may employ legal counsel to represent the department. The Attorney General is not involved except that he should first be consulted as to whether legal services requested by departments are available in the Attorney General's office. In this case this was done and the Attorney General advised that he would not provide such services.
The staff memorandum is premised upon the assumption that the enactment of the State Employees' Defense Act, KRS 12.211-12.215, preempted the Executive Branch from providing legal defense for employees in every case and placed such defense entirely in the discretion of the Attorney General. We do not agree because the language of the act does not express or imply such a preemption. Going back at least as far as 1962 (OAG 62-883) it has been the opinion of the Attorney General's office that the Executive Branch may employ attorneys or use its staff attorneys to defend state employees in suits in which the state has an interest. Although the Attorney General decided that under the strictures of KRS 12.212 he could not provide defense for Boyd and others, the Commissioner of Insurance had the legal authority to provide legal services for the employees if he had reason to believe that the state had an interest in the outcome of the litigation. In OAG 73-874 we stated as follows:
"The state has an interest in a case when there is the possibility that a legal precedent will be established creating any liability for the state or state employees thereby making state employment less attractive to professional and policy making personnel."
This opinion was given before HB 761 was enacted, and HB 761 did nothing to invalidate that opinion.
The Franklin Circuit Court found many of the provisions of HB 761 to be void for vagueness and issued an opinion which applied to three cases before it, Huffman, Sheckles and Delaney v. McClure. These cases are now on appeal to the Supreme Court, and if the circuit court judgments are affirmed, we will be practically back to where we were before HB 761 was enacted. Also the General Assembly repealed KRS 12.214 by HB 142 in 1978, which provided for the payment of private judgments against state employees. The General Assembly left intact KRS 12.212 which provides that the Attorney General may provide defense. We have been advising the Department for Human Resources that it may provide defense for its employees by its own counsel when it believes that the Department has an interest in the litigation.
We believe that the key to this question is KRS 12.210 because it allows the Governor and department heads to employ legal counsel in all cases where the Attorney General declines to provide such services. This provision has been important in situations where the Governor and Attorney General have not seen eye to eye as during the Nunn administration. If the Legislature had intended that suits which are nominally against state employees individually should only be defended by the Attorney General under HB 761 it could have said so. We believe that the purpose of HB 761 was to allow a state employee who was being sued to apply directly to the Attorney General without the intervention of his department head, and if the Attorney General took the defense of the employee, the state was automatically subjected to liability for any personal judgment against the employee up to $50,000. Before the enactment of HB 761 the state had often paid the legal expenses of decision making employees who were sued. Often a special appropriation of the Legislature was required for this purpose, and each case had to be dealt with individually. House Bill 761 sought to establish a standard procedure for such defense, but it also went further by authorizing the payment of judgments and settlements up to $50,000.
The contract for the defense of Boyd is between the Department of Insurance and the attorney and was entered into under the authority of KRS 12.210 with the approval of the Governor. It was therefore legal at its inception and may legally be renewed until the purpose of the contract is accomplished. The fact that the Attorney General decided under KRS 12.211 not to undertake the defense is immaterial as to the validity of the contract.