Request By:
James T. Ahler
Executive Director
State Board of Accountancy
310 West Liberty
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; Martin Glazer, Assistant Attorney General
The attorney for the Department of Insurance has forwarded your letter of December 24, 1980, seeking advice as to whether the individual board members of the Board of Accountancy have sovereign immunity and are protected from liability suits and civil rights actions.
You also mentioned the possibility of providing a blanket policy for board members.
Your questions are general and necessarily must be answered in general terms. Only specific fact situations could refine the issues and answers to your query in more specific terms.
In
Spillman v. Beauchamp, Ky., 362 S.W.2d 33 (1962), the Kentucky Court of Appeals held that ordinarily a public officer, when acting in good faith within the scope of his authority, is not personally liable for damages sustained by a member of the public as a result of his action, unless he acted negligently in failing to meet standards of the ordinarily prudent man.
A more recent case that discussed the problem is
Thompson v. Huecker, Ky.App., 559 S.W.2d 488 (1977). There, the personnel officer (Thompson) or the former Department of Economic Security (now merged into Department for Human Resources) was laid off as a result of a layoff plan issued by the Commissioner of the Department (Heucker) and approved by the Personnel Commissioner of the Department of Personnel (Miller). The Personnel Board held that the layoff was proper. Thompson both appealed that Board decision and sued the two Commissioners, seeking damages from them personally.
The Court stated that, "a governor and other high state officers have no absolute official immunity from personal liability in an action under the Civil Rights Act of 1871 (42 U.S.C. § 1983). In such an action, the state officers have only a qualified immunity.
Scheuer v. Rhodes, 416 U.S. 232, 94 S. Ct. 1683, 40 L. Ed. 2d 90 (1974)."
The Court pointed out a number of decisions in Kentucky holding government officers personally liable for negligence or bad faith in performing ministerial duties.
Cottongim v. Stewart, 283 Ky. 615, 142 S.W.2d 171 (1940);
Whitt v. Reed. Ky., 239 S.W.2d 489, 32 A.L.R.2d 1160 (1051);
Upchurch v. Clinton Co. Ky., 330 S.W.2d 428 (1959).
Sometimes it is difficult to distinguish between what is a ministerial act and what is a discretionary act.
In
Thompson v. Huecker, supra, the Court adopted the approach of the Restatement of Torts § 895D(3) (Tentative Draft Nov. 19, 1973) 1 that a Court would need to consider whether the activity was a discretionary function and the degree of immunity of the officer.
If the officer has absolute immunity, he is not liable so long as he acts within the general scope of his authority. If he has only limited or qualified immunity, he is not liable if he acts reasonably and in good faith.
In our view, a member of the Board of Accountancy (or any similar board) would be cloaked only with qualified immunity.
If the act complained of requires him to perform a ministerial duty, and he refuses to do so, he may be personally liable.
If the act involves his discretion, that is, he can choose course A or B, and he chooses A, as long as his choice is reasonable under the circumstances, he is not personally liable.
A more specific answer would need to await a more specific set of facts.
As to the possibility of purchasing indemnity insurance for the officer, in the absence of explicit state legislation authorizing the purchase of insurance for such purposes, the Board could not do so and pay for same out of state funds.
KRS 12.213(2) authorizes the Governor, by regulation, to provide for the purchase of insurance to underwrite the cost of defense of officers sued for the performance of their duties. However, such statutes were declared void by the Franklin Circuit Court in 1978. On appeal to the Supreme Court of Kentucky, that Court stated that KRS 12.214 was unconstitutional. The General Assembly subsequently repealed that one section.
Thus, it is doubtful that the remaining sections (KRS 12.212 - 12.215) could be implemented.
The Board of Claims Act, however, is still available to persons claiming injury by a public officer and awards there are paid by the state.
Footnotes
Footnotes
1 "(3) A public officer acting within the general scope of his authority is not subject to tort liability for an administrative act or omission if
"(a) He is immune because engaged in the exercise of a discretionary function
"(b) He is privileged and does not exceed or abuse the privilege, or
"(c) He is not negligent because he acted as a reasonable prudent person in the exercise of his discretion."