Request By:
William T. Rosenberg
Director of General Services
Morehead State University
Morehead, Kentucky 40351-1689
Opinion
Opinion By: Chris Gorman, Attorney General; Lynne Schroering, Assistant Attorney General,
You have asked our office several questions regarding the ability of a state university to enter into settlements prior to a claim being filed with the Board of Claims.
KRS 44.073 specifically includes a state university as an agency of the Commonwealth for purposes of the Board of Claims Act. This statute states in pertinent part:
For purposes of KRS 44.072, state institutions of higher education under KRS Chapter 164 are agencies of the state.
Thus, since Morehead State University is included as a state institution of higher education pursuant to KRS Chapter 164, the University is entitled to sovereign immunity and may only be sued in the Board of Claims. KRS 44.072 and 44.073.
Sovereign immunity is a well established legal theory which holds that the state is immune from suit.
Foley Construction Company v. Ward, Ky., 375 S.W.2d 392, 393 (1964). The Constitution of Kentucky Section 231 provides that the Commonwealth is entitled to sovereign immunity unless specifically waived by the legislature. Section 231 of the Kentucky Constitution states that the General Assembly may by law direct in what manner and in what courts suits may be brought against the Commonwealth.
Due to the harshness of the doctrine of sovereign immunity the General Assembly enacted KRS 44.070, commonly known as the Kentucky Board of Claims Act.
Rooks v. University of Louisville, Ky., 574 S.W.2d 923, 925 (1978). The Board of Claims Act is the exclusive method for receiving monetary relief from the state treasury for those injured by the negligence of state agencies. KRS 44.073 and
Rooks v. University of Louisville, 574 S.W.2d 923, 925. However, the Board of Claims Act is only a limited waiver of sovereign immunity. For example, KRS 44.070 provides that an individual may only receive up to $ 100,000 in damages as a result of the negligence of a state agency or state employee. Additionally, before any state funds are paid, the board must examine whether the claimant could recover from a collateral source such as worker's compensation or insurance. While claimants may recover for medical expenses and lost wages, KRS 44.070 specifically excludes an award for pain and suffering.
Cooke v. Board of Claims, Ky., 743 S.W.2d 32, 33 (1987).
The board may not award any damages unless it determines that the state was negligent and the claimant is entitled to damages. KRS 44.120 provides:
An award shall be made only after consideration of the facts surrounding the matter in controversy, and no award shall be made unless the board is of the opinion that the damage claimed was caused by such negligence on the part of the Commonwealth or its agents as would entitle claimant to a judgment in an action at law if the state were amenable to such action.
In response to your specific question, an agency of the state subject to the provisions of KRS 44.072 and 44.073 may not settle negligence claims against the state without first forwarding such claims to the Kentucky Board of Claims. To allow a state agency to enter into a "friendly settlement" outside of the watchful eye and limitations of the Board of Claims is contrary to the sovereign immunity clause of the Kentucky Constitution and the Board of Claims Act KRS 44.070. When money is paid out of the state treasury to satisfy a negligence claim the state agency must have the approval of the Board of Claims.
Thus, Morehead State University, as an agency of the state pursuant to KRS 44.073(1), may not settle a claim to be paid out of the state treasury unless a claim has been filed with the Board of Claims. This is consistent with the purpose of the Board of Claims Act in that the board has exclusive jurisdiction regarding claims of negligence against state agencies. The board must determine if it is appropriate for the state to pay the claim, if the sum is beneath the statutory maximum limit, and must rule out the possibility of collateral sources contributing to the claimant.
We are not suggesting that a state agency must actively litigate a case in the Board of Claims if negligence and the amount of damages are not in dispute. In that scenario, the agency would file an Agency Answer to the Complaint, and the board would verify the facts and determine independently whether the settlement terms are acceptable. On the other hand, often the agency will dispute the liability or damages and the claim may go to a hearing if the sum is over $ 500. KRS 44.086.
We hope this letter has answered your questions.