Opinion
2023-CA-0512-MR
10-04-2024
SCHILLER TERRACE, LLC APPELLANT v. LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT O/B/O DEPARTMENT OF CODES & REGULATIONS APPELLEE
BRIEFS FOR APPELLANT: J. Bissell Roberts Louisville, Kentucky BRIEF FOR APPELLEE: Michael J. O'Connell Jefferson County Attorney Robbie J. Howard Assistant Jefferson County Attorney Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM JEFFERSON CIRCUIT COURT HONORABLE SUSAN SCHULTZ GIBSON, JUDGE ACTION NO. 19-CI-007107
BRIEFS FOR APPELLANT: J. Bissell Roberts Louisville, Kentucky
BRIEF FOR APPELLEE: Michael J. O'Connell Jefferson County Attorney Robbie J. Howard Assistant Jefferson County Attorney Louisville, Kentucky
BEFORE: THOMPSON, CHIEF JUDGE; A. JONES AND LAMBERT, JUDGES.
OPINION
JONES, A., JUDGE
The Appellant, Schiller Terrace, LLC ("Schiller"), seeks review of the Jefferson Circuit Court's March 30, 2023 judgment in favor of the Appellee, the Louisville Jefferson County Metro Government O/B/O Department of Codes &Regulations ("Louisville Metro"). Having reviewed the record and being otherwise sufficiently advised in the law, we affirm.
I. Background
Schiller is the owner of the Schiller Terrace Apartments ("Apartments") located at 1137 Schiller Avenue, Louisville, Jefferson County, Kentucky 40204. Schiller acquired the Apartments by deed dated March 24, 2015. Between 2016 and 2019, Louisville Metro issued nine citations to Schiller for failure to maintain the Apartments as required by the Louisville/Jefferson County Metro Government Code of Ordinances ("LMGCO"), Chapter 156: Property Maintenance Code. The citations were mailed to Schiller via First Class Mail at 707 N. Arbor Drive, Louisville, KY 40223-2359, which is the address listed by the Jefferson County Property Valuation Administrator for the Apartments' owner.
Each of the nine citations contained language advising that failure to pay the fine and remedy the property issues would result in a lien, along with additional fines, fees, and interest. Each citation further informed Schiller that it could appeal the matter to the Louisville Metro Code Enforcement Board by submitting a hearing request form within seven days of receiving the notice and that failure to file an appeal would waive its right to contest the citation and violation in the future. Schiller did not appeal any of the nine citations to the Louisville Metro Code Enforcement Board, nor did it pay any of the fines.
On November 12, 2019, Louisville Metro filed a complaint against Schiller in Jefferson Circuit Court seeking the amounts owed as related to the nine citations along with filing fees, administrative fees, and interest. In lieu of filing an answer, Schiller moved to dismiss Louisville Metro's complaint on the ground that it had not been properly provided notice of the citations. According to Schiller, Louisville Metro's lawsuit was the first notice it received regarding any property maintenance code violations at the Apartments. The circuit court denied Schiller's motion to dismiss by order entered November 12, 2020. Schiller filed an answer on November 17, 2020.
Schiller's failure to timely appeal the citations resulted in liens being placed on the Apartments. Kentucky Revised Statutes (KRS) 65.8835(1). The purpose of the lawsuit was to obtain a personal judgment against Schiller. KRS 65.8835(2).
On December 7, 2021, Louisville Metro moved for summary judgment against Schiller. Louisville Metro supported its motion with affidavits from: (1) Leonard Lawrence, Louisville Metro Codes and Regulations, Administrative Coordinator; (2) Casey Hendrick, United Mail, President; (3) Teri Geraghty, Jefferson County Sheriff's Office, Chief Financial Officer; and (4) Carrie Peers, Louisville Metro Office of Management and Budget, Finance Supervisor. Louisville Metro argued that because the citations were sent to Schiller's last known address via First Class Mail, it had provided proper notice pursuant to KRS 65.8825(2). Louisville Metro further asserted that because it used a regular system of mailing Schiller could not prevail by merely alleging that it did not receive the notices. As there was no dispute that Schiller failed to timely avail itself of the administrative appeals process, Louisville Metro asserted it was entitled to a judgment as a matter of law.
Schiller responded that the affidavits actually demonstrated that Louisville Metro did not provide proper notice. According to Schiller, the clear and unambiguous language of KRS 65.8825(2) authorizes only a Louisville Metro Enforcement Officer to mail a code violation, and Louisville Metro violated the statute by contracting with a private third party to send its notices. Schiller further argued that Louisville Metro did not use a regular system for mailing citations, and therefore, no presumption of service should apply. As such, Schiller contended that there was a genuine issue of material fact regarding whether it received any of the nine citations, making summary judgment inappropriate.
After a thorough review of the information contained in the affidavits of record, the circuit court concluded that:
Louisville Metro through its regular mailing system provided notice to Schiller of the underlying code violations and the citations proposing fines or any other possible criminal sanctions for the alleged violation of any code as required by due process under the United States and the Kentucky Constitution. Therefore, the evidence relied upon by Louisville Metro establishes that Louisville Metro in compliance with KRS 65.882(2)(c) provided due process to Schiller of the underlying code violations and the citations proposing fines, along with the right to appeal the finding.
The record reflects that United Mail [the third-party company Louisville Metro hired for its mailings] does
not alter the citations in any way other than to add the barcode to the citations; that the purpose of the barcode is to ensure that the correct printed pages are collated, folder, inserted and mailed to the intended recipient; and that the printer utilizes the barcode, unique to each notice for citation, to ensure that the complete document is mailed to the proper party. The record reflects that the copies of the citations entered in the record are actual originals forwarded to United Mail such that the original citations entered into the record establish that the proper entity was cited, and the correct mailing address was utilized. ...
The record reflects that Schiller did not timely respond to any of the nine (9) citations and did not timely appeal any of the citations to the Code Enforcement Board or Jefferson District Court. Thus, through the processes of the above-cited ordinances, the citations issued against Schiller became final orders. The record reflects that over a period of years, Schiller was issued numerous civil citations and failed to avail itself of any of the available administrative processes by either not properly appealing the citations to the Code Enforcement Board or not appealing the final orders of the Board to the Jefferson District Court. Thus, the citations issued against Schiller became final orders upholding the assessment fines and costs.3/30/2023 Mem. & Or. at 14, 16.
After concluding that Schiller had lost its right to contest the citations by failing to timely avail itself of the administrative review process, the circuit court entered summary judgment in favor of Louisville Metro awarding it "the sum of $8,065.54 plus $2,975.19 of pre-judgment interest accruing at the rate of 6% per annum from the date of entry of this Order until it paid in full, plus, its court costs in the amount of $438.00 for all of which execution may issue forthwith." Id. at 19. This appeal followed.
II. Standard of Review
Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56.03. The movant bears the initial burden of demonstrating that there is no genuine issue of material fact in dispute.
Kentucky Rules of Civil Procedure.
The party opposing the motion then has the burden to present, "at least some affirmative evidence showing that there is a genuine issue of material fact for trial." Steelvest, Inc. v. Scansteel Serv. Ctr, Inc., 807 S.W.2d 476, 482 (Ky. 1991); Watson v. Landmark Urology, P.S.C., 642 S.W.3d 660, 666 (Ky. 2022). "A party responding to a properly supported summary judgment motion cannot merely rest on the allegations in its pleadings." Versailles Farm Home and Garden, LLC v. Haynes, 647 S.W.3d 205, 209 (Ky. 2022) (citing Continental Cas. Co. v. Belknap Hardware &Mfg. Co., 281 S.W.2d 914, 916 (Ky. 1955)). "[S]peculation and supposition are insufficient to justify a submission of a case to the jury, and that the question should be taken from the jury when the evidence is so unsatisfactory as to require a resort to surmise and speculation." O'Bryan v. Cave, 202 S.W.3d 585, 588 (Ky. 2006) (quoting Chesapeake &Ohio Ry. Co. v. Yates, 239 S.W.2d 953, 955 (Ky. 1951)).
"An appellate court's role in reviewing a summary judgment is to determine whether the trial court erred in finding no genuine issue of material fact exist[ed] and the moving party was entitled to judgment as a matter of law." Feltner v. PJ Operations, LLC, 568 S.W.3d 1, 3 (Ky. App. 2018). The standard of review for an appellate court is de novo because only legal issues are involved. Isaacs v. Sentinel Ins. Co. LTD., 607 S.W.3d 678, 681 (Ky. 2020).
III. Analysis
The Louisville Metro Code Enforcement Board was created was created in January 2005 pursuant to the Local Government Enforcement Board Act, ("LGEBA"), KRS 65.8801 through 65.8839. The LGEBA's purpose is to "to protect, promote, and improve the health, safety, and welfare of the citizens residing within the local governments of this state by authorizing the creation of administrative boards with the authority to issue remedial orders and impose civil fines in order to provide an equitable, expeditious, effective, and inexpensive method of ensuring compliance with the ordinances in force in local governments." KRS 65.8801. The LMGCO Property Maintenance Code applies to all existing residential and nonresidential structures and all existing premises. LMGCO § 156.002. It establishes the "minimum requirements and standards for premises, structures, equipment, and facilities for light, ventilation, space, heating, sanitation, protection from the elements, life safety, safety from fire and other hazards, and for safe and sanitary maintenance." Id. The Department of Property Maintenance Inspection is responsible for enforcing the Property Maintenance Code, including making inspections of regulated properties and issuing citations. LMGCO § 156.801.
According to Mr. Lawrence, the Administrative Coordinator for Louisville Metro's Department of Codes and Regulations, nine citations were issued for the Apartments between 2016-2019, and those citations were mailed to Schiller via First Class Mail using a third-party vendor, United Mail. Mr. Lawrence explained that after a citation is issued for mailing on a particular day, Louisville Metro collates it into a single PDF file ordered by the address to which the document is to be mailed. Louisville Metro then numbers each specific mailing. The PDF file, which includes all citations, notices and orders is then forwarded to United Mail for final processing and mailing via First Class Mail. Ms. Hendrick, United Mail's President, provided a detailed description of the process after United Mail receives the PDF file from Louisville Metro. She indicated that while United Mail adds a barcode to the documents, it does not alter the documents in any other way. In short, after arriving at United Mail, each document is barcoded, printed, folded, inserted into sealed metered envelopes, sorted based by destination, and submitted to the United States Postal Service for delivery via First Class Mail. There are random quality control checks built into each step of the process.
Ms. Hendrick explained that the barcode is added to each page to ensure that the correct printed pages are collated, folded, inserted, and mailed to the intended recipient. The printer utilizes the barcode unique to each notice or citation to ensure that the complete document is mailed to the proper party. The barcode has no substantive meaning and is used only a processing tool.
A. Use of a Third-Party Mailing Service
Schiller's first argument is that Louisville Metro violated KRS 65.8825 when it delegated the task of mailing code violations to United Mail, a private, third-party company. In relevant part, this statute provides:
(1) Enforcement proceedings before a code enforcement board or hearing officer shall be initiated by the issuance of a citation by a code enforcement officer.
(2) When a code enforcement officer, based upon personal observation or investigation, has reasonable cause to believe that a person has committed a violation of a local government ordinance, the officer is authorized to issue a citation by:
(a) Personal service to the alleged violator;
(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;
(c) Mailing a copy of the citation by regular first-class mail to the last known recorded mailing address of the alleged violator; or
(d) If, in the exercise of reasonable diligence, the issuance of a citation using the methods set out in paragraphs (a) to (c) of this subsection is not possible, then the citation is properly served by posting a copy of the citation in a conspicuous place on the premises.KRS 65.8825.
Citing KRS 65.8805(4), Schiller notes that a "code enforcement officer" as that term is used in KRS 65.8825(2) "means a city police officer, safety officer, citation officer, county police officer, sheriff, deputy sheriff, university police officer, airport police officer, or other public law enforcement officer with the authority to issue a citation." It asserts that under the plain language of KRS 65.8825 only code enforcement officers are authorized to mail citations, and Louisville Metro ran afoul of the law when it contracted with United Mail to assist it in mailing the citations.
The nine citations at issue are signed by four different code enforcement officers: (1) James G. Galligan; (2) Cindy Calvelo; (3) Tammy Goatley; and (4) Donald Gentry. Each citation is in the form of a letter to Schiller from the code enforcement officer. Each citation indicates the date and time the code enforcement officer visited the property and the violations observed by the officer. Each citation further advises of the fine amount and due date as well as how and when to appeal.
When interpreting statutes, we must "effectuate the intent of the legislature." Commonwealth v. Plowman, 86 S.W.3d 47, 49 (Ky. 2002) (citing Commonwealth v. Harrelson, 14 S.W.3d 541 (Ky. 2000)). "The most logical and effective manner by which to determine the intent of the legislature is simply to analyze the plain meaning of the statutory language[.]" Stephenson v. Woodward, 182 S.W.3d 162, 169-70 (Ky. 2005). However, "[i]n construing statutory provisions, it is [also] presumed that the legislature did not intend an absurd result." Commonwealth, Cent. State Hosp. v. Gray, 880 S.W.2d 557, 559 (Ky. 1994).
A plain reading of the statute makes it clear that only a code enforcement officer has the authority to determine whether a property violates a local government ordinance. If a citation is to be issued, the officer must prepare a written statement in compliance with KRS 65.8825(4)(a)-(j) and then decide which of the four methods of notice outlined in KRS 65.8825(2)(a)-(d) will be used. These tasks require judgment and cannot be delegated to one who does not meet the definition of a code enforcement officer under KRS 65.8805(4).
However, the physical act of preparing the signed citation for mailing - such as printing, folding, stuffing, sorting, and delivering the citation to the post office - is a ministerial task. As long as the mailing process is initiated by a code enforcement officer in line with established business practices, as it was in this case, administrative staff (whether internal or external) may carry out the routine, ministerial tasks necessary to complete service in accordance with the statute.
Interpreting the statute otherwise would lead to an impractical and absurd result. Instead of relying on competent support staff, code enforcement officers would be forced to spend hours each day performing menial tasks like printing, folding, and mailing letters - tasks that require no expertise and would take them away from their primary responsibility of inspecting and investigating properties. We cannot countenance such a result.
B. United Mail's Failure to Retain Barcoded Originals
As explained above, prior to printing off the citations for mailing, United Mail attached a barcode to each page, which helps ensure printing accuracy. Louisville Metro retained a copy of the citations that were forwarded to United Mail, and it provided the full citations to the circuit court as an exhibit to Mr. Lawrence's affidavit. United Mail, however, does not retain copies of the citations with the sorting barcodes. According to Ms. Hendrick, only one copy of the citation is printed after the barcode is added and that copy is mailed out to the addressee. Citing KRE 1002, Schiller argues that since United Mail cannot produce an exact copy of what was allegedly mailed to it, Louisville Metro has "absolutely no legal way of proving the contents of any of the nine citations."
Kentucky Rules of Evidence.
KRE 1002 provides "[t]o prove the content of a writing, recording, or photograph, the original writing, recording, or photograph is required, except as otherwise provided in these rules, in other rules adopted by the Kentucky Supreme Court, or by statute." "Essentially, this rule requires a party to introduce the most authentic evidence which is within their power to produce." Johnson v. Commonwealth, 231 S.W.3d 800, 805 (Ky. App. 2007). Since United Mail does not retain copies of its mailings, the only evidence Louisville Metro can produce is the citations contained in its files prior to the addition of the barcodes. Additionally, KRE 1003 states that, with exceptions not relevant here, "[a] duplicate is admissible to the same extent as an original[.]" According to both Mr. Lawrence and Ms. Hendrick, the citations are virtually identical to what was mailed to Schiller, the only difference being that an administrative bar code was added to the mailed copies. In light of these affidavits, we conclude that Louisville Metro sufficiently established that the citations in its system are the best evidence of and substantially identical to the notices United Mail sent to Schiller. Savage v. Three Rivers Medical Center, 390 S.W.3d 104, 115 (Ky. 2012) ("[B]ecause the originals are now destroyed and unobtainable, it would not be unfair to admit the duplicate kept by Sophia in lieu of the original. Thus, KRE 1003 is satisfied.").
The two exceptions within KRE 1003 are when "[a] genuine question is raised as to the authenticity of the original" and when "it would be unfair to admit the duplicate in lieu of the original."
C. Disputed Issues of Fact Regarding Schiller's Receipt of the Citations
Schiller relied on the affidavit of its property manager, Robert Chastain, to oppose Louisville Metro's motion for summary judgment. According to Mr. Chastain, neither Schiller nor any agent of Schiller ever received any notice of the code violations prior to Louisville Metro filing its complaint in circuit court. Schiller contends that the affidavit creates genuine issues of material fact regarding whether it was properly served with notice of the citations as required by KRS 65.8825.
The law regarding mailing of notices is well-settled. In Koscot Interplanetary, Inc. v. Commonwealth, By Allphin, 649 S.W.2d 201 (Ky. 1983), the Supreme Court of Kentucky held:
While we agree with the Court of Appeals that to require proof of mailing of the particular notice would be clearly unreasonable, we, nonetheless, hold that summary judgment is improper where there is no proof of a regular system or scheme for mailing the notices. Once such positive proof of a regular system of mailing has been offered, a mere denial of receipt would not overcome the presumption that a letter properly mailed has been received. In the absence of such proof, it is a question of fact whether the movant received the notice of assessment.Id. at 202.
Schiller argues that Louisville Metro should not be permitted to rely on Koscot because it used a private third party to mail the notices instead of performing the task itself. While Koscot involved a notice allegedly sent by the Commonwealth, it was recently applied by the Kentucky Supreme Court to the mailing of statutory notice by a third-party purchaser of delinquent tax bills, Kentucky Tax Company, LLC. Pleasant Unions, LLC v. Kentucky Tax Company, LLC, 615 S.W.3d 39 (Ky. 2021). In that case, the Kentucky Supreme Court held that an entity wishing to rely on the Koscot course of business exception,
must offer proof of a standard office mailing procedure designed to ensure that the notices were properly addressed and mailed by first-class mail, sworn to by someone with personal knowledge of that procedure, as well as proof of compliance with that specific procedure as to the particular notice at issue.Id. at 51. The Court then held that an attorney's affidavit that he caused notices to be mailed by first class on the dates set forth on certain letters was not sufficient proof of a standard office mailing procedure. Id.
In this case, Mr. Lawrence and Ms. Hendrick provided detailed descriptions of the standard office mailing procedures used to transmit citations to property owners. Mr. Lawrence further stated that he had reviewed all nine citations at issue and verified that they were correctly forwarded to and received by United Mail in accordance with the parties' standard procedures. The circuit court correctly concluded Louisville Metro offered sufficient proof of its standard office mailing procedure sworn to by individuals with knowledge of the procedure as well as proof of compliance with the procedure as to the particular notices at issue.
This proof allowed Louisville Metro to rely on the presumption that Schiller received the mailed notices. To overcome the presumption, Schiller had to offer more than a mere denial of receipt. For example, in Benefit Association of Railway Employees v. Hancock, 58 S.W.2d 578, 581 (Ky. 1933), the Court held that a widow's testimony that she always reviewed all mail addressed to her husband and that she never saw a postcard from Mary Alson was sufficient to overcome the presumption and create an issue of fact for the jury. Notably absent from Mr. Chastain's affidavit, however, is any statement regarding mail at the 707 N. Arbor Drive address on file with the PVA and where the notices were sent. At most his affidavit amounts to a blanket denial of receipt, which is insufficient to create an issue of fact.
While Schiller has intimated that notice should have been provided to it at 1137 Schiller Avenue where the Apartments were located, or by serving Mr. Chastain, it has stopped short of asserting that it was legally impermissible for Louisville Metro to send notice to Schiller at the 707 N. Arbor address. Likely this is because such an argument would fall short. KRS 65.8825(2)(c) specifies that notice be directed to the property owner's last known address, which Louisville Metro established was the 707 N. Arbor address on file with the PVA.
IV. Conclusion
Louisville Metro adduced clear and undisputed evidence as to its system of mailing and adherence to that system in relation to the nine citations at issue. Schiller's blanket denial of the receipt of the notices was insufficient to overcome the presumption of receipt. It is likewise undisputed that Schiller did not timely avail itself of the administrative appeal process. Its failure to do so resulted in the citations becoming final orders, KRS 65.8831(3), which Louisville Metro had the right to convert into a personal judgment for "the amount of the lien, including all civil fines assessed for the violation and for all charges, fees, and abatement costs incurred by the local government in connection with the enforcement of the ordinance" pursuant to KRS 65.8835(2). Accordingly, we affirm the Jefferson Circuit's order and judgment in favor of Louisville Metro.
ALL CONCUR.