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University of Louisville v. Rothstein

Supreme Court of Kentucky

November 2, 2017

UNIVERSITY OF LOUISVILLE APPELLANT
v.
MARK ROTHSTEIN APPELLEE

         ON REVIEW FROM COURT OF APPEALS CASE NO. 2014-CA-000997-MR FRANKLIN CIRCUIT COURT NO. 13-CI-00202

          COUNSEL FOR APPELLANT: Craig Christman Dilger Steven Clark Emily Mattingly Stoll Keenon Ogden PLLC

          COUNSEL FOR APPELLEE: Robert W. Bishop John Saoirse Friend Tyler Zachary Korus Bishop Korus Friend, P.S.C.

          OPINION

          KELLER, JUSTICE

         Appellant, University of Louisville (U of L), appeals the decision of the Court of Appeals affirming the order of the Franklin Circuit Court, denying U of L's immunity against suit in this case. We granted discretionary review and, for the reasons stated herein, affirm the Court of Appeals and remand to the Franklin Circuit Court for further proceedings.

         I. BACKGROUND.

         U of L recruited Appellee, Mark Rothstein (Rothstein), as a professor of medicine in 2000. He was granted tenure as the Herbert F. Boehl Chair of Law and Medicine and appointed as a Distinguished University Scholar (DUS) under a five-year renewable contract. This DUS contract is at issue in the underlying case. As we do not reach the substantive merits of this case based on its procedural stance, we need not unnecessarily recite the terms and minutia of the process. However, importantly here, disputes arose between U of L and Rothstein regarding the adherence of the parties to this DUS contract. Ultimately, Rothstein's DUS contract was terminated and he filed suit against U of L for breach of this written contract.

         Both parties moved the Franklin Circuit Court for summary judgment; U of L partially based its motion on its status as a state agency and its resulting immunity from suit. Although U of L agreed that Kentucky Revised Statute (KRS) 45A.245 waives immunity for breach of contract actions against the Commonwealth, U of L argued that this immunity does not extend to employment contracts. U of L stated that the KRS in question was part of the Kentucky Model Procurement Code (KMPC), which had no bearing on the hiring of faculty by a university and, thus, the waiver did not extend to the employment contract in question.

         Franklin Circuit Court denied U of L's argument that sovereign immunity barred Rothstein's claims for breach of the written contract. It found KRS Chapter 45A applicable to written employment contracts and that the legislature had thus waived immunity for suits like Rothstein's.

         U of L appealed solely on the issue of whether it should have been shielded by the doctrine of sovereign immunity for Rothstein's claims of breach of contract. The Court of Appeals found there was a written employment contract and that KRS 45A.245 clearly constituted an unequivocal waiver of immunity for such contract claims.

         Once again, U of L appealed this decision and moved this Court for discretionary review. We granted review and for the reasons stated herein, affirm the Court of Appeals and hold that the legislature has waived immunity for all claims arising out of lawfully authorized written contracts with the Commonwealth and its agencies.

         II. STANDARD OF REVIEW.

         The issue of whether a defendant is entitled to the defense of sovereign or governmental immunity is a question of law. See Rowan County v. Sloas, 201 S.W.3d 469, 475 (Ky. 2006) (citing Jefferson County Fiscal Court v. Peerce, 132 S.W.3d 824, 825 (Ky. 2004)). Questions of law are reviewed de novo. Cumberland Valley Contractors, Inc. v. Bell County Coal Corp., 238 S.W.3d 644, 647 (Ky. 2007). We also note that "an order denying a substantial claim of absolute immunity is immediately appealable even in the absence of a final judgment." Breathitt County Bd. of Educ. v. Prater, 292 S;W.3d 883, 887 (Ky. 2009).

         III. ANALYSIS.

         Today, this Court is faced with a decision it has declined to answer before: whether KRS 45A.245, codified within the KMPC, waives immunity for all contracts with the state, including written employment contracts. We now hold that KRS 45A.245 is an unqualified waiver of immunity iri all cases based, on a written contract with the Commonwealth, including but not limited to employment contracts. We hold that this immunity is not limited to contracts entered into pursuant to the KMPC and thus, therefore, decline to dictate whether the hiring of university professors must comply with the remaining provisions of the KMPC.

         A. ...


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