Request By:
Honorable Charles M. Leibson
Jefferson Circuit Court Judge
Common Pleas Branch
Third Division
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You have requested our opinion as to the interpretation and application of a new statute relating to disqualification of judges.
Section 4 (2)(C) of H.B. 23 [Ch. 22, 1976 Extraordinary Session] provides that any justice or judge of the Court of Justice or master commissioner shall disqualify himself in any proceeding "where he knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a pecuniary or proprietary interest in the subject matter in controversy or in a party to the proceeding." (Emphasis added).
You ask: "What is a pecuniary or proprietary interest in a party to the proceeding? Section 4(1)(C) defines "financial interest" as meaning ownership of a legal or equitable interest, however small, or a relationship as director, adviser, or other active participant in the affairs of a party, with designated exceptions.
It is our view that the definition of "financial interest" was given with the intent to equate "financial interest" with "pecuniary or proprietary interest. " The ordinary meaning of "pecuniary" is "monetary" or "financial". Black's Law Dictionary, p. 1288. The ordinary meaning of "proprietary" is "relating to an owner." Ibid., p. 1384. Thus a pecuniary or proprietary interest in the subject matter in controversy or in a party to the proceeding refers to a financial interest in the subject matter or ownership in a party, i.e., in a company, corporation, or partnership [business organization]. The definition of "financial interest" given in Section 4(1)(C) is compatible with this construction. Generally all words and phrases must be construed according to the common and approved usage of language. KRS 446.080(4). Unless there is something in the act plainly indicating a contrary sense in which the language was employed, the appellate court has held that the usual and ordinary meaning of the words used will be attributed to them. Green v. Moore, 281 Ky. 305, 135 S.W.2d 682 (1940).
Thus a pecuniary or proprietary interest in a party to the proceeding is simply a financial or ownership interest, however small, in a business organization which is a party to the law suit. As you say, this would include stock ownership, corporate bonds and bank or savings and loan association certificates of deposit. An exception is ownership in a mutual or common investment fund that holds securities, or a proprietary interest of a policyholder in a mutual insurance company, or a depositor in a mutual savings assocation if the outcome of the litigation could not substantially affect the value of the interest.
Specifically you ask if you would be disqualified from trying a case involving Louisville Gas & Electric Company. You own a substantial amount of Jefferson County, Kentucky Pollution Control Revenue Bonds, which are payable solely from and secured by payments to be received by the county pursuant to a loan agreement with Louisville Gas & Electric. We assume you refer to county pollution control area revenue bonds issued by Jefferson County pursuant to KRS 103.200 et seq. Our answer is that under Section 4(1)(C) your ownership in the county revenue bonds would be a financial interest, and would thus disqualify you from trying the case only if the outcome of the case could substantially affect the value of your interest.
Next, the statute, Section 4(2)(d) of H.B. 23 [Ch. 22, 1976 Extraordinary Session], states a ground for judge disqualification where he [the judge] or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person, is a party to the proceeding, or is an officer, director, or trustee of a party, or is acting as a lawyer in the case, or is known by the judge or master commissioner to have an interest that could be substantially affected by the outcome of the case, or is to the knowledge of the judge or master commissioner likely to be a material witness. (Emphasis added). You ask: What is meant by "third degree" ?
At the outset we believe the term refers to consanguinity, i.e., relationship by blood. Sizemore v. Commonwealth, 210 Ky. 637, 276 S.W. 524 (1925) 525. Undoubtedly the legislative intent here, in its broadest aspect, was to establish disqualification for a judge where the degree of blood relationship of a person having an interest in the suit is such that the family connection would be reasonably calculated to prevent the judge from being impartial or objective. See Sizemore v. Commonwealth, above. That "degree" is stated as "third degree of relationship" in the statute. A judge cannot respect persons or be influenced by kinship. See Deuteronomy, XVI, 19, and Canon 3C of the Code of Judicial Conduct. 1 Canon 3C says that a judge should disquality himself in an action where he or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person, is a party etc. The degree of relationship is calculated according to the civil law system. This basic idea is adopted in H.B. 23. "Consanguinity" is defined in Black's Law Dictionary, p. 375, as "kinship; blood relationship; the connection or relation of persons descended from the same stock or common ancestor. 2 Bl. Comm. 202." The question remains: What is the "third degree of relationship?"
Collateral consanguinity is the relation among persons who descend from the same commonancestor, but not from each other. Lineal consanguinity is the relation among persons where one is descended from the other, as between the son and father. In computing the degree of lineal consanguinity between two persons, every generation in the direct course of relationship between the two persons makes a degree; and the rule is the same by the common law and civil law. However, in computing the degree of collateral consanguinity, a different method is used under the common law and civil law. See definition of "consanguinity" , Bouvier's Law Dictionary (1934) p. 211.
To answer your question, we must decide which system of consanguinity, civil or common law, the legislature intended to use. Actually the statute does not expressly mention either. However, in order to rescue the legislation from the absurdity of holding out optional systems [i.e., take your choice, common law or civil law] , we note that not only did the legislature adopt the basic concept of "interest" of the Judicial Code of Conduct of 1972, which, for purposes of determining the degree of relationship necessary to merit disqualification of a judge, uses the civil law system, but it also essentially adopted the federal disqualification statute, 28 U.S.C. § 455, which statute employs the civil system of degree of relationship.
Since the legislature did not spell out explicitly its wishes as to the modal system, we conclude that it may be reasonably implied from its adoption of the disqualification concept articulated in the Judicial Canons and federal judicial disqualification statute that it intended to also adopt the civil law method of computing the degree of relationship. It is written in 26A C.J.S., Descent & Distribution, § 22, p. 563, that "except in a few states, where it is expressly provided by statute that degrees of kindred shall be computed by the rules of the canon or common law, the rule adopted in the various states, either by express statutory enactment or judicial construction, is that of civil law. " (Emphasis added). Bouvier's Law Dictionary, 2 p. 211, contains this: "The mode of the civil law is preferable, for it points out the actual degree of kindred in all cases; by the mode adopted by the common law, different relations may stand in the same degree."
In Wells v. Walter, Ky., 501 S.W.2d 259 (1973), the court was faced with interpreting the disqualification principle as expressed in the Code of Judicial Conduct of 1972, the judge's wife being a first cousin of one of the parties. The court, in applying the code provision, indicated in effect that the judge should have disqualified himself, regardless of whether the common law or civil system of relationship is used. The court said that "A first cousin by blood or marriage is a sufficiently close kin to require disqualification. " Ibid., p. 260. The wife of the defendant, in Barnes v. Cooper, Ky., 507 S.W.2d 157 (1974), was the first cousin to the judge's father-in-law. The court held the kinship sufficient for disqualification of the judge. However, neither of these two cases stands for an explicit declaration in favor of employing the common law or civil system of kinship.
According to the chart listed in Webster's Collegiate Dictionary (1961 ed.), p. 176, the following relationships are listed schematically as falling within the first three degrees of consanguinity under the civil law method of computation: 3 1st Degree2nd Degree3rd Degreeparentsisterauntchildgrandparentniecegrandchildgreat grandparentbrothergreat grandchildunclenephew
It should be noted that the range of kinship which should disqualify a judge includes, of course, the 1st degree, 2nd degree, and 3rd degree, as mentioned above.
The disqualification statute is of great importance, and as Justice Palmore cited in Wells v. Walter, 4 ". . . Every litigant is entitled to nothing less than the cold neutrality of an impartial judge and should be able to feel that his cause has been tried by a judge who is wholly free, disinterested, impartial and independent." 5
Mr. Bill Davis raises a third question. He asks whether the disqualification of the judge required by H.B. 23 should be applied in a case filed before March 19, 1977, on which litigation continues after that date. Under Section 79 of H.B. 23, Section 4 [the disqualification section] became effective on March 19, 1977. The statutory principle is that no statute shall be construed to be retroactive, unless expressly so declared. KRS 446.080(3). H.B. 23 contains no such express declaration of retroactivity; and it cannot be necessarily implied. We therefore conclude that the disqualification statute [section 4 of H.B. 23] should be applied, where applicable under its terms in cases that are in any stage of active litigation on and after March 19, 1977. Taylor v. Asher, Ky., 317 S.W.2d 895 (1958) 897. Under this approach the statute is actually not being applied retroactively.
Footnotes
Footnotes
1 The Code of Judicial Conduct was adopted by the House of Delegates of the American Bar Association on August 16, 1972. See Martindale-Hubbell Law Directory, Vol. VI (1977).
2 Banks-Baldwin Law Publishing Company (1934).
3 Also Cox's Chart, M.C. Cox & Company, International Probate Research, Chicago, Ill., on display in State Law Library, Frankfort, Kentucky.
4 Ky., 501 S.W.2d 259 (1973).
5 Commonwealth v. Murphy, 295 Ky. 466, 174 S.W.2d 685, quoting 30 Am.Jur., Judges, Section 53.