Opinion
Opinion By: Gregory D. Stumbo,Attorney General;Amye L. Bensenhaver,Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether Murray State University violated the Open Records Act in denying Courier-Journal reporter James Malone's November 12, 2003 request for various records relating to Minger v. Murray State University. For the reasons that follow, we affirm MSU's denial of Mr. Malone's request for "any settlement agreement and any related documents . . .," but find that MSU's denial of Mr. Malone's request for "the cost of MSU and/or its insurance carriers to defend and resolve this suite" violated the Open Records Act. 1
In a response dated November 17, 2003, MSU Records Custodian Sandra Rogers denied Mr. Malone's request for any settlement agreement and related documents, explaining that "no final documents exist," and invoking KRS 61.878(1)(h) and (i). Ms. Rogers denied Mr. Malone's request for costs related to the defense and resolution of Minger v. Murray State University on the same grounds, explaining:
It is assumed you intend a broad reading of cost to defend, and we understand that to mean not only fees relating to witnesses and costs of depositions, but fees for attorney time. Until the Agreed Order of Dismissal is entered, the time for any appeal has expired, the terms of all orders have been complied with, and any outstanding bills are submitted and paid, final documents will not exist.
Again, Ms. Rogers invoked KRS 61.878(1)(h) and (i).
On behalf of his client, The Courier-Journal, Jon L. Fleischaker initiated this open records appeal shortly after Mr. Malone received MSU's response to his request. It was Mr. Fleischaker's position that neither of the cited exemptions authorize nondisclosure of the records withheld. Citing Lexington-Fayette Urban County Government v. Lexington Herald-Leader, Ky., 941 S.W.2d 469 (1997), and a number of decisions of this office, for the proposition that settlement agreements are public records and "not exempted under the personal privacy exemption to the Open Records Act, " he observed:
Murray State University is arguing that the settlement agreement is not a final document. However, on November 12, 2003, the Courier-Journal reported that Calloway Circuit Judge Foust stated an agreement had been reached just before midday on November 11, 2003. Obviously, the Court considered the agreement final because the judge stopped the case from going to trial which was scheduled to start the next day. Therefore, some document must exist now which evidences this agreement. Even if the parties have not signed the settlement agreement containing the standard boilerplate language, some document must exist which sets out the terms of the settlement agreement. Such a document does not constitute a preliminary draft or note, but a final document evidencing the agreement between the parties.
With reference to costs incurred in the defense and resolution of the Minger case, Mr. Fleischaker asserted:
To the extent that any bills have been paid in defense of this lawsuit, these records constitute final documents and must be disclosed. Any records of payments made to date are not drafts or notes, but final documents evidencing payments made by Murray State University or its insurance carrier to defend this lawsuit. The same is true of documents evidencing any payment by Murray State University, or on its behalf, in settlement of the Minger case.
Mr. Fleischaker questioned MSU's invocation on KRS 61.878(1)(h) 2 in denying either of these requests, noting that the agency failed to allege any facts supporting its reliance on the exception. MSU subsequently acknowledged its error, explaining that Ms. Rogers intended to rely on KRS 61.878(1)(i) and (j) rather than KRS 61.878(1)(h) and (i).
In supplemental correspondence directed to this office following commencement of The Courier-Journal's appeal, MSU General Counsel John P. Rall elaborated on the University's position. Reaffirming the agency's earlier response that no final settlement agreement exists, he advised:
Resolution of Minger v. Murray State anticipates a final settlement agreement and the entering by the Court of an order of dismissal. Those documents have been preceded by proposals, counter-proposals, negotiations, and ultimately an agreement. Invariably, some of those documents are enforceable as a contract. However, incorporating the settlement terms in one document in an orderly and formal manner was always expected.
Consistent with this, the appeal acknowledges the possibility that the "parties have not signed the settlement agreement containing the standard boilerplate language." If that is so, what is the final document for purposes of the Open Records Act? That, in itself, is clear recognition that for Open Records purposes a final document does not exist and is realization that the presence of an agreement between the parties does not mean that the agreement has been memorialized in its final form. See OAG 90-107, "Obviously, only the final agreed order actually signed and agreed to by the parties is correspondence giving notice of final action of a public agency. "
After such a document is signed the parties will jointly apply to the Court via agreed order for the action to be dismissed. If such a formal document, for some unforeseen reason, should not be forthcoming an action to enforce the settlement and to secure an involuntary order of dismissal will be filed. That simply is the way of settlement.
In either event, the litigation is not settled until the Judge dismisses the case. At that point, there is no question of finality. However, as of yet, no formal settlement document has been executed and Minger v. MSU has not been dismissed.
Emphasizing the potential for prejudice if the settlement agreement is not executed, Mr. Rall continued:
Contrary to Mr. Malone's assertion that MSU "is arguing that the settlement agreement is not a final document, " MSU has simply stated that no final settlement document presently exists. Similarly, Murray State University never indicated that it would not produce final settlement documents and it realizes that ultimately it may have to provide the settlement agreement and agreed order of dismissal. However, that should not occur before the parties are given the opportunity to finally memorialize their settlement terms and the matter is dismissed.
Mr. Malone's argument that such a document must exist because Judge Foust cancelled the trial is misplaced. The day before trial, Judge Foust was orally informed that the parties were in agreement and the case settled. That is common practice in civil litigation. However, that has nothing to do with whether there is a final settlement document. Murray State's position is entirely consistent with Lexington Fayette-Urban County Government v. Lexington Herald-Leader Co., cited by Mr. Malone, where the Court stated, "there could be no viable contention that an agreement which represents the final settlement of a civil lawsuit . . . is not a public record." 941 S.W.2d at 471 (emphasis added). Until dismissed, the settlement is not final.
As evidence that MSU understands its obligations relative to disclosure of final settlement agreements, Mr. Rall noted that Mr. Malone requested, and the University released, the final settlement agreement and order of dismissal in related litigation, Minger v. Wilson.
Amplifying upon MSU's position that it is not obligated to disclose the costs incurred by the University or its insurance carrier in defending and resolving the suit, Mr. Rall maintained:
Unlike the appeal, which asks for "records of payments made to date," Mr. Malone did not request interim billings or expenses to date. He asked for the costs of "defend and resolve" which clearly indicates costs for bringing the matter to conclusion. As noted, the matter has not been concluded so Murray States' response to entirely correct. The appeal should be dismissed.
Murray State is aware of opinions indicating that amounts paid for attorneys' fees must be revealed even in the middle of litigation. Moreover, Murray State has recognized the broad nature of the request here. As indicated, this litigation is not over and releasing the "costs to defend" before the case is finally dismissed is inherently prejudicial and a proper balancing approach indicates such costs should be provided when the matter is final. Any such costs do not result from some project Murray State has chosen to do. It has been sued and must defend itself. If costs are released and publicized, and the case is not dismissed and is eventually tried, the potential jury pool will have been exposed to information - defense costs - it would never have in litigation between private individuals. Regardless of amount, it simply injects an extraneous issue into the minds of potential jurors that has nothing to do with the merits of the case.
It was Mr. Rall's position that "[s]uch an interim request is, if nothing else, an undue burden on the agency due to the prejudice it engenders. KRS 61.872(6)." In the interest of avoiding "piece-meal requests and . . . any chance of prejudice" to the agency, he urged this office to affirm MSU's position until "the litigation is final."
We address first the propriety of MSU's reliance on KRS 61.878(1)(i) and (j) as the basis for denying Mr. Malone access to "any settlement agreement and any related documents . . . ." The Courier-Journal is entirely correct in the assertion that "[s]ettlement agreements involving a public agency historically have been open to inspection by the public in Kentucky." The authorities cited in support of this proposition firmly established that "[i]n balancing the sacrosanct right of an individual to privacy against legitimate public concerns and the right of the public to inquire 'into the workings of government, . . . a settlement of litigation between private citizens and a governmental entity is a matter of legitimate public concern which the public is entitled to scrutinize'." Lexington-Fayette Urban County Government v. Lexington Herald-Leader at 473. Resolution of that case, as well as the open records decisions cited, turned on the application of KRS 61.878)1)(a), 3 the privacy exemption, to final settlement agreements. Our research discloses, and The Courier-Journal identifies, no cases or open records decisions in which resolution of the issue of access to settlement agreements turned on the application of KRS 61.878(1)(i) and (j) to those records. It is undisputed that all references to settlement agreements in Lexington-Fayette Urban County Government, above, and the cited Attorney General's decisions, are to final settlements.
KRS 61.878(1)(i) and (j) authorize nondisclosure of:
(i) Preliminary drafts, notes, correspondence with private individuals, other than correspondence which is intended to give notice of final action of a public agency;
(j) Preliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated or recommended;
In construing these exemptions, and discharging the statutory duties assigned to him by KRS 61.880(2), the Attorney General is guided by the legislative statement of policy codified at KRS 61.871, declaring that "free and open examination of public records is in the public interest and the exceptions provided for by KRS 61.878 or otherwise provided by law shall be strictly construed" as well as by the Kentucky Supreme Court's holding in Board of Examiners of Psychologists v. Courier-Journal and Louisville Times Co., Ky., 826 S.W.2d 324, 327 (1992), that the Open Records Act "exhibits a general bias favoring disclosure. " Nevertheless, we are also fully cognizant of the fact that:
[d]espite its manifest intention to enact a disclosure statute, the General Assembly determined that certain public records should be excluded from disclosure. Among such records are ? "Preliminary drafts, notes, correspondence with private individuals, other than correspondence which is intended to give notice of final action of a public agency; " and "Preliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated are recommended. " KRS 61.878(1)[(i)-(j)]. From these exclusions we must conclude that with respect to certain records, the General Assembly has determined that the public's right to know is subservient to . . . the need for governmental confidentiality.
Beckham v. Board of Education of Jefferson County, Ky., 873 S.W.2d 575, 577-578; see also, Courier-Journal and Louisville Times Co. v. Jones, Ky.App., 895 S.W.2d 6, 8 (1995) (recognizing that "the concept of governmental confidentiality has not been totally diluted by the Open Records Act" ). Further, we recognize, as in Beckham, that "with any case involving statutory interpretation, our duty is to ascertain and give effect to the intent of the General Assembly," and not "to add or subtract from the legislative enactment or discover meaning not reasonably ascertainable from the language used." Beckham at 577, citing Gateway Construction Co. v. Wallbaum, Ky., 356 S.W.2d 247 (1962).
Guided by these principles, as well as an evolving body of case law, the Attorney General has long recognized that public records that are preliminary in nature forfeit their exempt status only after they are finalized or adopted by the agency as part of its final action. City of Louisville v. Courier-Journal and Louisville Times, Ky.App., 637 S.W.2d 658 (1982); Kentucky State Board of Medical Licensure v. Courier-Journal and Louisville Times Co., Ky.App., 663 S.W.2d 953 (1983); University of Kentucky v. Courier-Journal and Louisville Times Co., Ky., 830 S.W.2d 373 (1992). In an evergrowing body of open records decisions, the Attorney General has demonstrated a commitment to implementing the intent of the General Assembly in enacting KRS 61.878(1)(i) and (j), and the courts in interpreting these exemptions. Thus, in an early open records decision, this office opined:
Not every paper in the office of a public agency is a public record subject to public inspection. Many papers are simply work papers which are exempted because they are preliminary drafts and notes. Yellow pads can be filled with outlines, notes, drafts and doodlings which are unceremoniously thrown in the wastebasket or which may in certain cases be kept in a desk drawer for future reference. Such preliminary drafts and notes and preliminary memoranda are part of the tools which a public employee or officer uses in hammering out official action within the function of his office.
OAG 78-626, p. 2. In a similar vein, we observed:
[P]reliminary drafts, notes, etc., are simply part of the tools which a public officer or employee uses in carrying out his statutory functions. [Citation omitted.] The public has a right to inspect a complete public action . . . . The work papers are merely the informal and trial and error approach to the problem in the inchoate period leading up to the formulation of the completed [action].
OAG 78-816, p. 2. Although not identical on their facts, a long line of precedents support MSU's denial of Mr. Malone's request for records relating to the settlement of Minger v. Murray State University that have been, and are being, created in the inchoate period leading up to the execution of the final settlement agreement. See, e.g., OAG 88-24; OAG 88-60; OAG 89-34; 93-ORD-125; 94-ORD-38; 98-ORD-140. The absence of any directly controlling authority is not attributable to the validity or invalidity of the arguments MSU advances, but is instead attributable to the fact that in no previous open records dispute involving settlement agreements have the agreements not been finalized by the execution of the agreements and the dismissal of the cases out of which they arose.
The final settlement of a case attended by such wide publicity, and involving such tragic circumstances, is, of necessity, "preceded by proposals, counter-proposals, [and] negotiations . . . ." At this juncture, "no formal settlement document has been executed[,] . . . Minger v. MSU not been dismissed [, and] . . . the matter remains preliminary." Mindful that the General Assemby has recognized "the need for governmental confidentiality. " Beckham at 578, by enacting KRS 61.878(1)(i) and (j), that the courts have further recognized that "the concept of governmental confidentiality has not been totally diluted by the Open Records Act, " Jones at 8, and that MSU has fully demonstrated that the need for confidentiality of preliminary matters relating to the settlement of Minger v. MSU will exist until a formal settlement agreement is executed and the case dismissed, frankly acknowledging its obligation to disclose that agreement upon the occurrence of these events, we affirm the University's denial of Mr. Malone's request to "any settlement agreement and any related documents . . . ."
We do not affirm the University's denial of Mr. Malone's request for records reflecting "the cost to MSU and/or its insurance carriers to defend and resolve this suit." Mr. Rall candidly acknowledges that the overwhelming weight of authority does not support the position his client takes, and we decline the invitation to depart from precedent based on the highly speculative "chance" of harm which he postulates and the alleged inconvenience associated with "piece-meal" requests. As recently as November of 2003, this office reaffirmed its position on the duty to disclose attorney billing statements. See, 03-ORD-237. In 93-ORD-58, we held as a general matter that:
The public is . . . entitled to review the contacts, vouchers, and other business records of a public agency, including records of payments made to attorneys, and bills and statements submitted to an agency by its attorneys. Should these invoices and billing statements disclose substantive legal matters protected by the attorney client privilege, and exempt under KRS 61.878(1)[(l)], the exempt material should be separated by the nonexempt material, and the nonexempt material released for inspection. OAG 92-14; OAG 92-92.
93-ORD-58, p. 3. Amplifying on this view in 01-ORD-56, we later observed:
In OAG 92-14, the Attorney General held that records of payments made to attorneys by a public agency, and bills and statements submitted to the agency by its attorneys, should be made available for inspection. Relying on OAG 82-169 and OAG 85-91, we also held that records which reflect the general nature of legal services rendered are not exempt. Only those records, or portions of records, which disclose substantive matters protected by the attorney-client privilege, and are exempt under KRS 61.878(1)(l), can properly be withheld. [Public agencies are] therefore obligated, pursuant to KRS 61.878(4), to separate the exempt material from the nonexempt material, and release the latter for inspection.
In an attempt to provide additional guidance to public agencies relative to a determination of what may properly be withheld under KRS 61.878(1)(l) and the attorney-client privilege found at KRE 503, this office subsequently observed:
Citing OAG 92-92.
As noted above, we do not find MSU's arguments sufficiently persuasive to warrant a departure from precedent. Attorney billing records cannot be properly characterized as preliminary drafts, notes, or correspondence with private individuals. Nor can they be characterized as preliminary memoranda in which opinions are expressed or policies formulated or recommended. Moreover, the rationale that underlies the preliminary documents exceptions, and that supports nondisclosure of records generated in settlement negotiations prior to the execution of a final settlement agreement and dismissal of the case giving rise to the agreement, does not support nondisclosure of bills paid in defense of a lawsuit. Accordingly, we find that Murray State University violated the Open Records Act in denying this portion of Mr. Malone's request.
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), the Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.
Jon L. FleischakerDinsmore & Shohl, LLP1400 PNC Plaza500 West Jefferson StreetLouisville, KY 40202
Sandra RogersRecords CustodianMurray State UniversityOffice of the President218 Wells HallMurray, KY 42071-3318
John Rall, General CounselMurray State UniversityPouge LibraryMurray, KY 42071-3318
Footnotes
Footnotes
1 Mr. Malone requested a number of other records relating to Minger v. Murray State University and Minger v. Wilson. MSU's disposition of these requests is not in dispute.
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2 KRS 61.878(1)(h) authorizes public agencies to withhold:
Records of law enforcement agencies or agencies involved in administrative adjudication that were compiled in the process of detecting and investigating statutory or regulatory violations if the disclosure of the information would harm the agency by revealing the identity of informants not otherwise known or by premature release of information to be used in a prospective law enforcement action or administrative adjudication.
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3 KRS 61.878(1)(a) authorizes public agencies to withhold:
Public records containing information of a personal nature where the public disclosure thereof would constitute a clearly unwarranted invasion of personal privacy;
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