FROM FAYETTE CIRCUIT COURT HONORABLE PAMELA R. GOODWINE,
JUDGE ACTION NOS. 16-CI-03065 & 16-CI-03594
FOR APPELLANT: Joshua M. Salsburey Bryan H. Beauman Megan K.
George Lexington, Kentucky William E. Thro General Counsel
University of Kentucky Lexington, Kentucky
Argument for Appellant: Joshua M. Salsburey Lexington,
FOR APPELLEE: Thomas W. Miller Elizabeth C. Woodford
Argument for Appellee: Thomas W. Miller Lexington, Kentucky
BEFORE: COMBS, DIXON AND MAZE, JUDGES.
University of Kentucky (the University) appeals from an
Opinion and Order by the Fayette Circuit Court which affirmed
an opinion by the Attorney General on an Open Records Act
request by Lexington H-L Services, Inc. d/b/a the Lexington
Herald Leader (the Herald-Leader). The University argues that
certain audit records were exempt from disclosure under the
Act because they were preliminary and not incorporated into
its final action, and because they were protected by the
attorney-client privilege or the work-product doctrine. We
find that the circuit court correctly found that the records
were not exempt from disclosure under the Open Records Act.
Hence, we affirm.
Facts and Procedural History
relevant facts of this action are not in dispute. In the
summer of 2013, the University pursued an affiliation with
the Appalachian Heart Center in Hazard, Kentucky ("the
Clinic"). Under the terms of the affiliation, the
University would purchase the Clinic's assets and enter
into professional and adjunct medical facility staff
agreements with the cardiologists. Prior to the acquisition,
the University sought an independent valuation of the
agreements with the physicians, and independent reviews of
the care provided by the physicians and of the Clinic's
operations and revenue.
a year after the acquisition, the University received two
complaints concerning treatment practices at the Clinic. In
response to these complaints, the University directed an
audit of the physicians' medical documentation and the
billing for their services. Those records were ultimately
provided to the University's Chief Medical Compliance
Officer and its General Counsel.
audits revealed that the Clinic's medical record
documentation was inadequate and likely resulted in
overpayments. Rather than determining the precise amount of
the overpayments, the University elected to refund all
payments received for the period in question. The University
subsequently terminated its affiliation with the Clinic. At a
May 2, 2016, dinner meeting, the University's outside
counsel presented a summary of this information to the
University's Board of Trustees.
learning of the information provided at the dinner meeting,
the Herald-Leader requested a copy of the audit performed in
response to the University's description of the problems
that were uncovered at the Clinic. The Herald-Leader also
requested a copy of the agenda and the PowerPoint
presentation shown at the dinner meeting. The University
denied these requests.
7, 2016, the Herald-Leader sought the Kentucky Attorney
General's review of the University's failure to
produce the documents. The Herald-Leader also sought review
of the University's failure to prepare an agenda or to
keep minutes of the dinner. The University refused to grant
the Attorney General's office access to the materials
in camera, taking the position that it may be
considered a waiver of its claims of privilege.
August 31, 2016, the Attorney General's office issued an
opinion on the Herald-Leader's Open-Records Request.
In re: Lexington Herald Leader/University of
Kentucky, 16-ORD-193, 2016 WL 4607945 (2016) (A.
Beshear, A.G.). The Attorney General held that the audit
records were not preliminary and, therefore, were not exempt
from disclosure under the Act. In a separate opinion, the
Attorney General concluded that: (1) the University violated
the requirements of Kentucky Revised Statute (KRS) 61.835 by
not creating minutes of the dinner meeting; (2) the Board of
Trustees' discussion at the dinner meeting with the
outside counsel was not privileged; (3) the University was
required to create minutes that "reflect the
substance" of that discussion; (4) even if the Board of
Trustee's discussion with counsel was privileged, the
privilege is not an exception to the Open Meetings Act unless
the discussion concerned actual proposed or pending
litigation per KRS 61.810(1)(c). In re: Lexington
Herald-Leader/University of Kentucky, 16-OMD-154 (2016)
(A. Beshear, A.G.).
University brought an appeal from both opinions, and the
matters were consolidated into the current action. The
circuit court directed the University to provide the
documents at issue for an in camera review. There
were three categories of documents at issue. The first
category consists of documents relating to the audit
initiated by the University's Medical Chief Compliance
Officer in August 2014. The second category consisted of the
PowerPoint presentation presented by outside counsel at the
May 2, 2016, dinner meeting. The third category consisted of
the unredacted invoices by outside counsel to the University
of Kentucky from April 2, 2015, through May 31, 2016. Only
the documents in the first category are at issue in this
pertinent part, the circuit court concluded that the audit
documents, excluding any patient records or identifying
information, were subject to disclosure under the Open
Records Act. The court first found that the audit records
ceased to be preliminary in nature after the University took
its final action of refunding the payments received during
the period in question. The court further found that the
audit records were not prepared for the sole purpose of
rendering legal advice or in anticipation of litigation.
Consequently, the court concluded that the ...