Opinion
NO. 2011-CA-000372-MR CROSS-APPEAL NO. 2011-CA-000414-MR
03-29-2013
MARGARET HARRISON AND KENNETH WOLFE APPELLANTS v. CITY OF PARK HILLS, KENTUCKY, A MUNICIPALITY OF THE FOURTH CLASS; AND KENTON COUNTY, KENTUCKY APPELLEES CITY OF PARK HILLS, KENTUCKY CROSS-APPELLANT v. MARGARET HARRISON CROSS-APPELLEE
BRIEFS FOR APPELLANT/CROSS- APPELLEE MARGARET HARRISON: Peter J. Summe Ft. Wright, Kentucky V. Ruth Klette Ft. Mitchell, Kentucky BRIEFS FOR APPELLEE/CROSS- APPELLANT CITY OF PARK HILLS: Robert A. Winter, Jr. Ft. Mitchell, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM KENTON CIRCUIT COURT
HONORABLE GREGORY M. BARTLETT, JUDGE
ACTION NO. 06-CI-02875
CROSS-APPEAL FROM KENTON CIRCUIT COURT
HONORABLE GREGORY M. BARTLETT, JUDGE
ACTION NO. 06-CI-02875
OPINION
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
APPEAL NO. 2011-CA-000372-MR
AND AFFIRMING CROSS-APPEAL NO. 2011-CA-000414-MR
BEFORE: KELLER, TAYLOR, AND THOMPSON, JUDGES. BEFORE: TAYLOR, JUDGE: Margaret Harrison and Kenneth Wolfe (collectively referred to as appellants) bring Appeal No. 2011-CA-000372-MR and the City of Park Hills, Kentucky, brings Cross-Appeal No. 2011-CA-000414-MR from a December 1, 2010, summary judgment of the Kenton Circuit Court. We affirm in part, reverse in part, and remand Appeal No. 2011-CA-000372-MR and affirm Cross-Appeal No. 2011-CA-000414-MR.
Kenneth Wolfe was named in the foreclosure action by virtue of his marriage to Margaret Harrison and his curtesy interest in the subject property.
Harrison is the owner of commercial property known as the Den-Lou Motel. The Den-Lou Motel is located in Park Hills, Kentucky. In 2006, Harrison was cited for violation of the International Property Maintenance Code as adopted by ordinance of Park Hills and for violation of Park Hills' zoning ordinance. In February 2006, Park Hills sent Harrison a written notice of the violation by mailing a copy of same to a post office box in Ft. Mitchell, Kentucky. After receiving no response from Harrison, Park Hills sent a second notice of violation to Harrison in March of 2006 by again mailing a copy to the same post office box in Ft. Mitchell. Once again, no response or remedial action was taken by Harrison to abate the violations at the Den-Lou Motel.
Apparently, Margaret Harrison had previously provided the City of Park Hills, Kentucky, with the P.O. box address as the mailing address for the Den-Lou Motel.
Consequently, a code enforcement officer for Park Hills issued a citation against Harrison on April 10, 2006. Kentucky Revised Statutes (KRS) 65.8825. The citation was served by sending a copy via certified mail to the physical address for the Den-Lou Motel in Park Hills. The manager of the Den-Lou Motel, Miranda Diebold, signed for the citation on April 11, 2006. The citation informed Harrison that she could request a hearing before the Park Hills Code Enforcement Board (Board) within seven days of receipt of the citation. There was again no response or remedial action taken by Harrison.
On August 9, 2006, the Board issued its Final Order. Therein, the Board found that Harrison failed to contest the citation and imposed a $50 per day fine. Also, the Board concluded that Harrison and "the premises at 1430 Dixie Highway" (Den-Lou Motel) were "jointly and severely liable" for fines and civil penalties totaling $19,600. Harrison neither appeared before the Board nor appealed its decision. On September 26, 2006, the Board recorded a lien in the Kenton County Clerk's Office to secure the payment of the fines and penalties as provided by KRS 65.8835(1).
Kentucky Revised Statutes (KRS) 65.8835(1) creates a statutory lien upon real property owned by a person found to have violated local government ordinances resulting in a final judgment assessing fines and penalties.
Thereafter, on October 23, 2006, Park Hills instituted a foreclosure action upon its lien against the Den-Lou Motel in order to recover the fines and penalties imposed by the Board in its Final Order. Harrison answered and collaterally attacked the Board's Final Order. Harrison alleged that Park Hills failed to properly serve her with notice of the citation as required by KRS 65.8825(2)(a), thus depriving the Board of jurisdiction.
By order entered December 1, 2010, the circuit court found:
Defendants were on notice of the action of the Code Enforcement Board and failed to respond or participate in the proceedings. The [F]inal Order of the Code Enforcement Board and the lien filed against the premises are enforceable. Triple M Mining Co. v. Natural Resources and Environmental Protection Cabinet, 906 S.W.2d 346 (Ky. App. 1995); [s]ee also, Godman v. City of Ft. Wright, 234 S.W.3d 362 (Ky. App. 2007). However, the Court notes that the Defendant, Margaret Harrison, title owner of the premises, was never personally served with a Citation or the Final Order of the Code Enforcement Board. This Court is of the opinion and finds that the failure to effect personal service upon Margaret Harrison will not support a personal Judgment against her. See, Kentucky Farm Bureau Mut. Ins. Co. v. Ryan, 177 S.W.3d 797 (Ky. 2005), (Justice Scott dissent)[.]This appeal and cross-appeal follow.
In summary, the Court finds that the Defendants, Margaret Harrison and Kenneth Wolfe, were given sufficient and reasonable notice of the Code Enforcement proceedings against the premises which they owned. They were provided due process in the proceedings. Furthermore, they failed to file a timely appeal from the Final Order of the Code Enforcement Board as required by law. KRS 65.8831. As a result, an In Rem Judgment will be entered in favor of the Plaintiff, City of Park Hills, Kentucky, in the amount of $19,600.00 against the premises located at 1430 Dixie Highway, Park Hills, Kentucky, and against any interests of the Defendants, Margaret Harrison and Kenneth Wolfe.
Appeal No. 2011-CA-000372-MR
Appellants contend that the circuit court erred by rendering summary judgment concluding that Park Hills was entitled to foreclose upon its lien against the Den-Lou Motel to recover $19,600 in fines and penalties. Appellants point out that the $19,600 in fines and penalties were levied against Harrison and the Den-Lou Motel by Final Order of the Board. Appellants collaterally attack the Board's Final Order and claim that the Board's Final Order is invalid because of lack of jurisdiction. For the following reasons, we agree.
To begin, summary judgment is proper where there exists no material issue of fact and movant is entitled to judgment as a matter of law. Kentucky Rules of Civil Procedure (CR) 56; Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky. 1991). The facts necessary to resolve these appeals are undisputed and resolution centers upon questions of law. Thus, our review proceeds de novo.
As previously pointed out, Harrison did not appeal the Final Order of the Board imposing the $19,600 in penalties and fines. Rather, when Park Hills instituted foreclosure proceedings upon its lien against Den-Lou Motel, appellants collaterally attacked the Board's Final Order by claiming lack of jurisdiction.
In this Commonwealth, it is well-established that an administrative agency's decision is subject to collateral attack. Rollins v. Bd. of Drainage Comm'rs, 281 Ky. 771, 136 S.W.2d 1094 (1939). To collaterally attack an agency's decision, it must be demonstrated that the agency lacked jurisdiction; hence, judicial review is limited to the issue of jurisdiction. Id.
KRS 65.8825 mandates that to initiate code enforcement proceedings before the Board a party must receive notice of the issuance of a citation and specifically sets forth three methods of service of said notice:
(a) Personal service to the alleged violator;KRS 65.8825(2)(a-c).
(b) Leaving a copy of the citation with any person eighteen (18) years of age or older who is on the premises, if the alleged violator is not on the premises at the time the citation is issued; or
(c) Posting a copy of the citation in a conspicuous place on the premises and mailing a copy of the citation by regular, first-class mail of the United States Postal
Service to the owner of record of the property if no one is on the premises at the time the citation is issued.
In our case, the parties dispute whether Harrison received notice by "personal service" as mandated by KRS 65.8825(2)(a). Harrison claims that the citation was never directly served upon her; the manager of the Den-Lou Motel was not her agent for service of process; and even if the manager were her process agent, the manager was never personally served as required by KRS 65.8825(2)(a). By contrast, Park Hills argues that Harrison was served in conformity with KRS 65.8825(2)(a) by mailing two notices of violation to the post office box in Ft. Mitchell, by mailing the citation to the physical address of the Den-Lou Motel, and by mailing the Final Order of the Board to the post office box in Ft. Mitchell.
To resolve whether Harrison received notice by personal service under KRS 65.8825(2)(a), we must initially determine what the term "personal service" means as utilized in KRS 65.8825(2)(a). In the legal arena, the term "personal service" has taken on a "well-defined meaning." 66 C.J.S. Notice § 29 (1998). It has been eruditely defined as:
We note that interpretation of a statute is a matter of law for court. City of Worthington Hills v. Worthington Fire Protection Dist., 140 S.W.3d 584 (Ky. App. 2004).
[T]he actual or direct delivery of a summons or a copy thereof to the person to whom it is directed or to someone who is authorized to receive it in his behalf. The term does not include service by leaving a copy of the papers at the place of residence or abode of the defendant, nor does it include service by mail.62B Am. Jur. 2d Process § 201 (1990)(footnotes omitted). Personal service has been commonly understood to require in-hand service or service that must be personally served upon the individual or the individual's agent authorized to receive service of process. R.F. Burton & Burton Tower Co. v. Dowell Div. of Dow Chem. Co., 471 S.W.2d 708 (Ky. 1971). Hence, we interpret the term "personal service" in KRS 65.8825(2)(a) as requiring in hand service upon the individual or the individual's agent for service of process.
In the case sub judice, the record plainly demonstrates that no attempt was ever made to personally serve or to in-hand serve the citation on Harrison or Harrison's agent for service of process. Based upon this undisputed fact, we conclude that neither Harrison nor Harrison's agent was personally served with the citation and the notice requirements of KRS 65.8825(2)(a) were not followed.
An administrative agency like the Board must comply with all procedural dictates of a statute, including a statutory notice requirement. Natural Res. & Envtl. Prot. Cabinet v. Pinnacle Coal Corp., 729 S.W.2d 438 (Ky. 1987). Where a method of service of notice is specifically set forth in a statute, our Courts have held that such method must be strictly followed, particularly where property rights are involved. Minton v. Fiscal Court of Jefferson County, 850 S.W.2d 52 (Ky. App. 1992). As an administrative agency only possesses that authority as conveyed by statute, the failure to strictly follow statutorily mandated notice requirements may deprive the administrative agency of authority or jurisdiction. Id.
The common-law rule of strict compliance with statutory notice requirements has been abrogated by statute in planning and zoning cases involving the validity of "comprehensive plan, land use or zoning regulation, subdivision regulation, public improvements program, or official map regulation" per KRS 100.182. See Minton v. Fiscal Court of Jefferson County, 850 S.W.2d 52 (Ky. App. 1992).
The "jurisdiction" of an administrative agency generally consists of three separate components:
(1) personal jurisdiction, referring to the agency's authority over the parties and intervenors involved in the proceedings; (2) subject matter jurisdiction, referring to an agency's power to hear and determine the causes of a general class of cases to which a particular case belongs; and (3) the agency's scope of authority under the statute.2 Am. Jur. 2d Administrative Law § 281 (2013). In this case, we are concerned with the first and third components of jurisdiction.
The first component is obvious and self-explanatory - an administrative agency must have authority over the individual parties in the administrative proceeding (personal jurisdiction). Dep't of Conservation v. Sowders, 244 S.W.2d 464 (Ky. 1951). Generally, to obtain jurisdiction over a person, notice of the administrative proceeding must be given to such person, and when a statute specifies the method of service of notice, the notice must be given in conformity with the method set forth in the statute. The failure to strictly follow statutory notice requirements generally deprives the administrative agency of jurisdiction over the individual. Succinctly stated, an administrative agency lacks personal jurisdiction to proceed against an individual if notice does not comport with statutory mandates. Here, it is undisputed that Harrison did not receive notice as mandated by KRS 65.8825; thus, the Board lacked personal jurisdiction over Harrison.
The third component is not so obvious or self-explanatory - an administrative agency's scope of authority under a statute. Stated differently, this component may be also referred to as the statutory authority of the administrative agency to act in a particular case. This legal concept deals specifically with the power of an administrative agency to adjudicate a particular case within a class of cases. As an administrative agency's authority is limited and its actions must conform with statutory dictates, statutory notice requirements must be followed to vest an administrative agency with authority to act in a particular case. Where a statutory notice requirement is not strictly followed, the statutory authority of an administrative agency is not triggered; consequently, the administrative agency is deprived "of authority to act and renders actions void ab initio." Minton, 850 S.W.2d at 54; see also Yeary v. Union Transfer & Storage Co., 306 Ky. 684, 209 S.W.2d 77 (1948). Simply put, a statutory notice requirement is a mandatory prerequisite that must be followed to trigger an administrative agency's authority to act in a particular case. If an administrative agency acts without statutory authority, its actions are considered a nullity.
In this case, to initiate a code enforcement proceeding before the Board, KRS 65.8825 mandates that the violator must be given notice of the issuance of the citation. It is the issuance of the citation coupled with notice that statutorily triggers the authority of the Board and initiates a code enforcement proceeding before the Board under KRS 65.8825. As Harrison was not properly given notice as required by KRS 65.8825 through personal service, the initiation of the review proceeding before the Board was fundamentally flawed, and as a consequence, the statutory authority of the Board to act upon the citation was never properly triggered. Thus, the Board was not vested with statutory authority to review the citation issued against Harrison.
Accordingly, we hold that the Board lacked proper statutory authority or jurisdiction over Harrison personally and also lacked statutory authority to particularly act on the citation issued against Harrison. As a result, we conclude that the Board did not have statutory authority to render its Final Order on August 9, 2006, and therefore set aside the August 9, 2006, Final Order of the Board as a nullity.
Cross-Appeal No. 2011-CA-000414-MR
Park Hills argues that the circuit court erred by concluding that the Board did not possess personal jurisdiction over Harrison. For the reasons previously set forth in our disposition of Appeal No. 2011-CA-000372-MR, we conclude that the Board did lack personal jurisdiction over Harrison and that the circuit court was correct in so deciding.
In sum, we hold that the circuit court properly determined that the Board lacked personal jurisdiction over Harrison, but the circuit court erred by concluding that the Board possessed authority to render its Final Order on August 9, 2006. The August 9, 2006, Final Order of the Board is set aside as a nullity.
In support of its decision, the circuit court cited to Godman v. City of Fort Wright, 234 S.W.3d 362 (Ky. App. 2007), and Triple M. Mining Co., Inc. v. Natural Resources and Environmental Protection Cabinet, 906 S.W.2d 364 (Ky. App. 1995), as authority. These cases are, however, distinguishable. Godman was a planning and zoning case; thus, the common-law rule requiring strict compliance with statutory notice requirements was abrogated by statute in this case. See Godman, 234 S.W.3d 362. For a more complete discussion, please refer to footnote 5 of this Opinion. In Triple M. Mining, there were no statutory notice requirements; rather, the cabinet promulgated a regulation containing the notice requirement. See Triple M. Mining Co., Inc., 906 S.W.2d 364. And, the regulatory notice requirement was fully complied with, so appellant's argument on appeal centered upon the constitutionality of the notice regulation. See id.
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For the foregoing reasons, the summary judgment the Kenton Circuit Court in Appeal No. 2011-CA-000372-MR is affirmed in part, reversed in part, and this case is remanded for proceedings consistent with this opinion, and Cross-Appeal No. 2011-CA-000414-MR is affirmed. ALL CONCUR. BRIEFS FOR APPELLANT/CROSS-
APPELLEE MARGARET
HARRISON:
Peter J. Summe
Ft. Wright, Kentucky
V. Ruth Klette
Ft. Mitchell, Kentucky
BRIEFS FOR APPELLEE/CROSS-
APPELLANT CITY OF PARK
HILLS:
Robert A. Winter, Jr.
Ft. Mitchell, Kentucky