Opinion
NO. 2017-CA-000539-MR
06-28-2019
CITY OF LUDLOW, KENTUCKY APPELLANT v. LUDLOW YOUTH FOOTBALL LEAGUE APPELLEE
BRIEF FOR APPELLANT: Frederick J. Johnson Covington, Kentucky Kevin Moser Fort Mitchell, Kentucky BRIEF FOR APPELLEE: Michael Schulkens Cold Spring, Kentucky
NOT TO BE PUBLISHED APPEAL FROM KENTON CIRCUIT COURT
HONORABLE KATHLEEN LAPE, JUDGE
ACTION NO. 15-CI-02252 OPINION
AFFIRMING
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BEFORE: CLAYTON, CHIEF JUDGE; COMBS AND KRAMER, JUDGES. COMBS, JUDGE: This case involves a rather unusual issue relating to the Kentucky Open Records Act. The parties are at odds over its applicability.
Kentucky Revised Statutes (KRS) 61.870 et seq. --------
The City of Ludlow appeals from a summary judgment of the Kenton Circuit Court dismissing its action against Ludlow Youth Football, Inc. (LYF). After our review, we affirm.
LYF is a private, non-profit corporation formed in 1992 for the purpose of promoting and operating a community youth football program. For many years, the City and LYF sponsored the Ludlow Summer Fireworks Festival, a two-day event held in Ludlow's city park each June. According to printed flyers, the 2015 festival included "rides - games - shopping - gambling - beer - music - food - fireworks." The City customarily provided electricity, police officers for public safety, temporary sanitation stalls, and a portion of the fireworks for the festival. In 2015, the City paid $6,000 to Vito's Fireworks toward the $8,000 purchase price of the fireworks show ordered by LYF. On appeal, we must decide whether this arrangement subjects LYF to the Open Records Act as a public agency. We concur with the conclusion of the circuit court that it does not. Hence, we affirm its judgment in favor of LYF.
In June 2015, the Ludlow Summer Fireworks Festival was held as usual in Ludlow's city park. Following the event, in August 2015, the City advised LYF that it had begun organizing a separate annual summer event of its own to be held each May. The City indicated that revenue spent for a fireworks show, children's activities, live music, food trucks, and drinks would "celebrate Ludlow for the residents, and bring in new visitors to the City." The City invited LYF to participate in this event for LYF's fundraising purposes. In response, LYF indicated that it intended to continue hosting the Ludlow Summer Fireworks Festival in Ludlow's city park each June. Additionally, LYF expressed concern that the City would be competing directly with the annual Fireworks Festival and would interfere with LYF's ability to raise funds benefitting the community football program.
In a letter dated October 1, 2015, the City advised LYF that it needed documentation concerning "monies that have passed from the City of Ludlow's account to that of Ludlow Youth Football." The City requested "a copy of [LYF's] 990 tax return and any documentation from your Fireworks Festival for this past fiscal year of 2015." The City indicated that the documentation that it sought would include:
your invoices and/or contract with Vito's Fireworks . . . any invoice and proof of event insurance, invoice for marketing materials (fliers/printing/design/etc...), documentation of sponsorships, how much money was provided as a result of the sponsorship, who provided the sponsorship, and any designated purpose of that sponsorship, (if applicable.) Was the sponsorship for the event or for Ludlow Youth Football. Appellee brief, Appendix 1, letter from Jeffrey J. Otis, City Solicitor.
The City indicated that it also sought "documentation of donations, booth fees and documentation of amounts collected from rides and alcohol sales (as Ludlow Youth Football collects a direct percentage of each)." The correspondence explained as follows:
[t]his documentation will provide us with proof that City of Ludlow monies went directly to Vito's (which we have a copy of our cancelled check in the amount of $6,000) and that the additional funds (portable toilets, garbage collection and clean up, electrical services, police detail, police overtime detail, public works for set up of the park, etc. . . .) were covered by the additional funds or the $2,000.00 that was allotted in the budget line item for the fireworks festival.The City's letter explained that it was requesting the information in preparation for an annual audit. The City took the position that a copy of LYF's financial records would purportedly help the City to determine whether its tax revenues were being used to benefit taxpayers.
LYF responded promptly. In its correspondence, LYF advised that "no documentation exists regarding monies that have passed from the City of Ludlow's accounts to Ludlow Youth Football in 2015 relative to the Ludlow Summer Fireworks Festival" as no funds passed from the City to LYF's accounts. LYF indicated that it knew only that the City had expended $6,000.00 for the festival, which was paid directly to Vito's for the fireworks, and expressed its understanding that the City had in its possession the cancelled check memorializing the transaction. In November 2015, the City sent to LYF a duplicate of the letter that it had sent on October 1, 2015.
On December 10, 2015, the City filed an action against LYF in Kenton Circuit Court. The City alleged that it had "consistently provided monies and services to [LYF] for [LYF's] fundraising festival" and that the action was brought "to enforce [LYF's] obligation under the Kentucky Open Records Act." The City alleged that it had made an open records request of LYF through its October letter and that "[n]either the Ludlow Youth Football League nor anyone acting on their behalf responded in conformance with the requirements of the Kentucky Open Records Act." It alleged that it made a second open records request through its November letter and that "the requested records have not been produced by [LYF] and no explanation for [LYF's] failure to produce the records has been supplied." The City sought production of the requested documents, statutory damages, and an award of attorney fees and costs.
In its answer, LYF denied that it was subject to the provisions of Kentucky's Open Records Act. It filed a counterclaim against the City for injury to its reputation. The City answered the counterclaim. Contentious discovery ensued in which the City filed a request for production of LYF's financial records.
On April 27, 2016, LYF filed a motion for summary judgment. The City responded on July 14, 2016. The circuit court ruled that the City's expenditures for the 2015 Ludlow Summer Fireworks Festival were not transfers of funds to LYF. It held that the City's payment of a portion of the fireworks and its payment of costs associated with public safety, sanitation, and clean up for the festival held in the city park were not the expenditures of LYF within the meaning of KRS 61.870(1)(h). Consequently, the circuit court concluded that LYF was not a public agency, and by its order entered on February 14, 2017, the circuit court granted summary judgment in favor of LYF. The City's action was dismissed.
The court denied the motion of LYF for summary judgment on its counterclaim. Upon its determination that there was no just cause for delay and pursuant to the provisions of Kentucky Rules of Civil Procedure (CR) 54.02, the court made its judgment final as to the City's claim, leaving only LYF's counterclaim in the action. This appeal followed.
Pursuant to the provisions of KRS 61.870(1)(h), the definition of a "public agency" includes "[a]ny body which . . . derives at least twenty-five percent (25%) of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds." LYF argues that the City's expenditure of tax dollars to sponsor the annual fireworks festival cannot be included in any calculation of the football club's funds because the City's funds were paid directly to the fireworks vendor, City employees, and others not associated with LYF. The City contends that the disputed funds constitute donations to LYF and arguably might be considered an illegal diversion of public funds for private purposes.
We agree with the circuit court that the City's payment of a portion of the costs of fireworks for the annual festival directly to the vendor, overtime pay to City employees, and payment directly to the supplier for temporary sanitation are not funds expended by LYF from state or local authority funds. Funds expended by the City in support of the annual festival are not sources of revenue to LYF. The private funds raised by LYF as a result of citizen's enjoying booths, food and drink, and other activities are not attributable to the City. Consequently, LYF is not a "public agency" as that term is defined by the provisions of KRS 61.870. LYF is not subject to our open records laws. It is entitled to judgment as a matter of law, and the trial court did not err in so ruling.
As an alternative, the City argues that its receipt of LYF's financial records was necessary to show that LYF is, in fact, a public agency and that the trial court erred by failing to permit sufficient discovery. We disagree.
Written discovery was propounded by the City on February 25, 2016. The City filed a motion to compel on April 4, 2016. LYF filed its verified responses on April 7, 2016. The City did not pursue its motion to compel; it did not lodge a complaint concerning the sufficiency of the discovery responses.
LYF filed its motion for summary judgment three weeks later. Summary judgment was not granted until nearly a year later on February 14, 2017. During this time, the City never requested time to take additional discovery. Nor did it list a discovery dispute as an issue on appeal in its pre-hearing statement to this Court. Under these circumstances, we must conclude the City's argument is not well founded.
Generally, courts should not take up motions for summary judgment until "the opposing party has been given ample opportunity to complete discovery." Blankenship v. Collier, 302 S.W.3d 665, 668 (Ky. 2010) (quoting Pendleton Bros. Vending, Inc. v. Commonwealth Finance and Admin. Cabinet, 758 S.W.2d 24, 29 (Ky. 1988)). "It is not necessary that litigants be allowed to complete discovery but only that they be granted sufficient time to complete discovery and then fail to produce any evidence to create a genuine issue of material fact." Martin v. Pack's, Inc., 358 S.W.3d 481, 485 (Ky. App. 2011) (citing Pendleton, supra ). Our review involves a consideration of "whether the trial court gave the party opposing the motion an ample opportunity to respond and complete discovery before the court entered its ruling." Blankenship, 302 S.W.3d at 668. We conclude that the trial court did so. There was no error.
We AFFIRM the judgment of the Kenton Circuit Court.
ALL CONCUR. BRIEF FOR APPELLANT: Frederick J. Johnson
Covington, Kentucky Kevin Moser
Fort Mitchell, Kentucky BRIEF FOR APPELLEE: Michael Schulkens
Cold Spring, Kentucky