Opinion
NO. 2012-CA-001109-MR NO. 2012-CA-001134-MR
03-04-2016
LOUISVILLE METRO POLICE DEPARTMENT APPELLANT v. WALTER BAKER AND LOUISVILLE METRO POLICE MERIT BOARD APPELLEES AND LOUISVILLE METRO POLICE MERIT BOARD APPELLANT v. WALTER BAKER APPELLEE
BRIEFS FOR APPELLANT LOUISVILLE METRO POLICE DEPARTMENT: Kristie Alfred Daugherty Louisville, Kentucky BRIEFS FOR APPELLANT LOUISVILLE METRO POLICE MERIT BOARD: Mark W. Dobbins Sandra F. Keene Louisville, Kentucky BRIEFS FOR APPELLEE WALTER BAKER: Thomas E. Clay Louisville, Kentucky Melissa Eyre Yeagle Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE FREDERIC COWAN, JUDGE
ACTION NO. 11-CI-001161 OPINION
REVERSING AND REMANDING BEFORE: COMBS, DIXON, AND VANMETER, JUDGES. VANMETER, JUDGE: These consolidated appeals raise three issues: whether the trial court erred in denying the Louisville Metro Police Merit Board's motion to dismiss Walter Baker's administrative appeal for failure to join an indispensable party to the appeal, i.e., the Louisville Metro Police Department; whether the trial court erred in denying the Department's post-judgment motion to intervene; and whether the trial court erred in its decision to reverse the decision of the Board and reinstate Baker. For the reasons hereinafter set forth, we hold that the trial court did not err in its disposition of the first two procedural issues, but that it did err in its decision to order reinstatement of Baker. We therefore vacate the Jefferson Circuit Court's opinion and order, and remand to that court with instructions to affirm the Board's decision.
I. Factual and Procedural Background.
Walter Baker was terminated from his position as an officer with the Department after he illegally rented a house he owned to his mother under the federal Section 8 Housing Choice Voucher Program. Baker took good faith steps to resolve the situation, and ultimately negotiated a diversion agreement with the United States Attorney for the Western District of Kentucky. The first sentence of that agreement recited, "[i]t appear[s] that you have committed an offense against the United States," by completing the housing lease and accompanying forms, "in violation of 18 U.S.C. 1001[.]" The Board found that this language meant that Baker acknowledged a violation of federal law, which constitutes a violation of Department Standard Operating Procedure 5.1.2, and affirmed the Department's decision to terminate Baker on January 18, 2011.
With the exception for tenants with disabilities, the United States Department of Housing and Urban Development ("HUD") regulations expressly prohibit a landlord from leasing Section 8 housing to an immediate family member. Baker's mother is not disabled.
United States Code.
The Federal Criminal False Statements Statute.
On February 14, 2011, Baker filed a complaint in Jefferson Circuit Court, appealing the Board's decision upholding his termination, claiming denial of due process, estoppel, and insufficient evidence. However, Baker named only the Board as a defendant in the action, not the Department. On February 24, 2012, the Board filed a motion to dismiss Baker's complaint for failure to name an indispensable party, the Department. The Board argued that the Department was a necessary party to the action since it could be affected and controlled by a final decision of the circuit court. On April 20, 2012, the circuit court entered an Opinion and Order denying the Board's motion to dismiss for failure to join an indispensable party and reversing the decision of the Board upholding the Department's decision to terminate Baker. The circuit court held that KRS 67C.323 requires only that the Board be named as a respondent to the appeal of a Board decision, not the Department.
Kentucky Revised Statutes.
The Board filed a motion to alter, amend or vacate the circuit court order, and the Department filed a motion to intervene pursuant to CR 24. The circuit court denied both the Board's motion to alter, amend or vacate and the Department's motion to intervene. Subsequently, both the Department and the Board appealed the circuit court's decision, and those appeals were consolidated into the appeal presently before this court.
II. Standard of Review.
A trial court's order denying a motion to intervene as a matter of right pursuant to CR 24.01 is immediately appealable. Carter v. Smith, 170 S.W.3d 402, 407 (Ky. 2004). An appellate court reviews a denial of a motion to intervene as a matter of right for clear error. Id. at 409. With respect to the appeal of a Police Force Merit Board determination, KRS 67C.323(3)(a) provides "[t]he appeal taken to the Circuit Court shall be docketed by the clerk as a civil action with the appropriate judicial review of an administrative action or decision."
As an aside, we note that the statutorily imposed "appropriate judicial review of an administrative action or decision[,]" required by KRS 67C.323(3)(a), contrasts with other statutory and case authority, e.g., Crouch v. Jefferson Cnty., Ky. Police Merit Bd, 773 S.W.2d 461, 464 (Ky. 1988) (applying KRS 78.455(2)(a) which directs that an "appeal taken to the circuit court shall be docketed by the clerk thereof as a civil action and shall be tried anew, as if no action had been rendered by the board[]"), and Brady v. Pettit, 586 S.W.2d 29 (Ky. 1979) (applying KRS 67A.290, which provides for a trial de novo in the circuit court).
The judicial standard of review in administrative appeals is well-settled in the Commonwealth. "An administrative agency is afforded great latitude in its evaluation of the evidence heard and the credibility of witnesses, including its findings and conclusions of fact." McManus v. Kentucky Ret. Sys., 124 S.W.3d 454, 458 (Ky. App. 2003) (internal quotation marks and citation omitted). Thus, "[a] reviewing court is not free to substitute its judgment for that of an agency on a factual issue unless the agency's decision is arbitrary and capricious." Id. at 458.
In determining whether an agency's action was arbitrary, the reviewing court should look at three primary factors. The court should first determine whether the agency acted within the constraints of its statutory powers or whether it exceeded them. . . . Second, the court should examine the agency's procedures to see if a party to be affected by an administrative order was afforded his procedural due process. The individual must have been given an opportunity to be heard. Finally, the reviewing court must determine whether the agency's action is supported by substantial evidence. . . . If any of these three tests are failed, the reviewing court may find that the agency's action was arbitrary.Bowling v. Nat. Res. & Envtl. Prot. Cabinet, 891 S.W.2d 406, 409 (Ky. App. 1994) (internal quotation marks and citation omitted). "'Substantial evidence' means evidence of substance and relevant consequence having the fitness to induce conviction in the minds of reasonable men." Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky. 1998) (citing Kentucky State Racing Comm'n v. Fuller, 481 S.W.2d 298, 308 (Ky. 1972)). A court reviews an agency's conclusions of law de novo. See Aubrey v. Office of Attorney General, 994 S.W.2d 516, 519 (Ky. App. 1998). "A court's function in administrative matters is one of review, not reinterpretation." Thompson v. Kentucky Unemployment Ins. Comm'n, 85 S.W.3d 621, 624 (Ky. App. 2002) (footnote omitted).
III. Issues on Appeal.
A. Motion to Dismiss for Failure to Join an Indispensable Party.
As noted, the Department, through the Chief, terminated Baker's employment. Baker thereafter, in accordance with KRS 67C.323(1), filed his request for review by the Board. This section states, in part:
If a majority of the members of the board are of the opinion that the action of the chief is unjustified or unsupported by proper evidence, the order of the chief may be set aside and revoked by the board, and the board may impose the penalty or punishment it deems necessary and appropriate, if any; provided however, the board shall not impose a penalty or punishment in excess of the action of the chief.After the Board affirmed the dismissal, Baker filed his action in Jefferson Circuit Court, which, as noted above, is an administrative appeal. When "an appeal is filed in the circuit court by grant of a statute, as in this case, the parties must strictly comply with the dictates of that statute. An appeal from an administrative decision is a matter of legislative grace[.]" Spencer Cnty. Pres., Inc. v. Beacon Hill, LLC, 214 S.W.3d 327, 329 (Ky. App. 2007). In other words, the legislature may dictate the parameters of any administrative appeal.
In this case, the legislature set out that in an administrative appeal from a decision of the Board, the Board is to be named as a party. KRS 67C.323(3)(a). Obviously, the party aggrieved, whether the sanctioned officer or the Department, will be the petitioner/plaintiff, and the Board will be the respondent/defendant. While the prevailing party before the Board, as the real party in interest, may desire and is entitled to intervene, Louisville Metro Police Merit Bd. v. Marlowe, 2013-CA-000123-MR, 2013-CA-000133-MR, 2014 WL 3887931 (Ky. App., Aug. 8, 2014), we are unable to say, given the provisions of KRS 67C.323(3)(a), that the Department is an indispensable party, and the failure to name it as a party in the circuit court is fatal to the appeal.
B. Denial of Department's Motion's to Intervene
As to the Department's appeal, the trial court denied its post-judgment motion to intervene. In Marlowe, we noted that the Department clearly has an interest in the subject of these types of appeals and its ability to protect its interests would obviously be affected by a decision ordering reinstatement of a terminated officer. Accordingly, we reversed the trial court's order in that case denying the Department's motion. The key difference between Marlowe and this case, of course, is that the Department in Marlowe sought to intervene soon after the appeal was filed in the circuit court.
CR 24.01(1) states:
Upon timely application anyone shall be permitted to intervene in an action . . . (b) when the applicant claims an interest relating to the property or transaction which is the subject of the action and is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless that interest is adequately represented by existing parties.(emphasis added).
This rule has been interpreted as establishing a four-part test requiring the party seeking to intervene to prove: (1) the motion was timely; (2) the party has an interest in the subject of the action; (3) the party's ability to protect his or her interest may be impaired or impeded; and (4) none of the existing parties can adequately represent his or her interest. Carter, 170 S.W.3d at 409-10. While we believe the Department has met three of these requirements, we note that the motion to intervene was not filed until thirty-six days after the circuit court rendered its opinion addressing the merits of Baker's appeal.
A court may consider the following factors to determine whether a motion to intervene was timely:
(1) the point to which the suit has progressed; (2) the purpose for which intervention is sought; (3) the length of time preceding the application during which the proposed intervenor knew or reasonably should have known of his interest in the case; (4) the prejudice to the original parties due to the proposed intervenor's failure, after he or she knew or reasonably should have known of his or her interest in the case, to apply promptly for intervention; and (5) the existence of unusual circumstances militating against or in favor of intervention.Id. at 408 (citation omitted).
Although post-judgment intervention is not strictly forbidden, it is widely within the discretion of the circuit judge. Timeliness is a question of fact, which generally should be left to the circuit court. A "party wishing to intervene after final judgment has a 'special burden' to justify the untimeliness." Hazel Enterprises, LLC v. Community Fin. Serv. Bank, 382 S.W.3d 65, 67 (Ky. App. 2012) (internal citations omitted). In this case, we find it difficult to believe that the Department or the Chief was unaware that Baker had filed his appeal. Thus, the first, third and fourth "timeliness" factors weigh against permitting the Department to intervene post-judgment. To permit intervention at this late date would only serve to encourage parties to wait to see what the circuit court ruling might be and then seek to intervene only after an unfavorable ruling. The circuit court did not err in denying the Department's post-judgment motion to intervene.
C. Baker's Termination
Lastly, the Board contends that the circuit court erred by reversing the Board's decision to uphold Baker's termination. We agree. "[J]udicial review of administrative action is concerned with arbitrariness." Am. Beauty Homes Corp. v. Louisville & Jefferson Cnty. Planning & Zoning Comm'n, 379 S.W.2d 450, 456 (Ky. 1964). Here, we do not believe the Board's decision was arbitrary. The Board carefully considered the evidence presented at Baker's hearing prior to concluding that Baker violated federal law and acknowledged as much in his diversion agreement. This violation of federal law also constituted a violation of LMPD's Standard Operating Procedure ("SOP") Section 5.1.2, which prohibits members of the department from committing any act that constitutes a violation of any law applicable to their jurisdiction. "If the findings of fact are supported by substantial evidence of probative value, then they must be accepted as binding and it must then be determined whether or not the administrative agency has applied the correct rule of law to the facts so found." Johnson v. Galen Health Care, Inc., 39 S.W.3d 828, 832 (Ky. App. 2001) (citation omitted). Baker himself admitted that he violated federal law. Substantial evidence more than supports the Board's conclusion that Baker violated SOP Section 5.1.2, and therefore, the circuit court erred by reversing the Board's decision.
We note that a criminal conviction is not necessary to an administrative body's consideration of the underlying criminal conduct. See Louisville Civil Serv. Bd. v. Blair, 711 S.W.2d 181, 183 (Ky. 1986). --------
IV. Conclusion
For the foregoing reasons, the order of the Jefferson Circuit Court is reversed and remanded to that court with instructions to reinstate the Board's decision.
DIXON, JUDGE, CONCURS.
COMBS, JUDGE, CONCURS IN RESULT ONLY. BRIEFS FOR APPELLANT
LOUISVILLE METRO
POLICE DEPARTMENT: Kristie Alfred Daugherty
Louisville, Kentucky BRIEFS FOR APPELLANT
LOUISVILLE METRO
POLICE MERIT BOARD: Mark W. Dobbins
Sandra F. Keene
Louisville, Kentucky BRIEFS FOR APPELLEE
WALTER BAKER: Thomas E. Clay
Louisville, Kentucky Melissa Eyre Yeagle
Louisville, Kentucky