Opinion
Opinion By: Jack Conway, Attorney General; James M. Herrick, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the Kentucky School Board Insurance Trust Property and Liability Fund ("KSBIT-PL") violated the Open Records Act in the disposition of Dr. Bruce M. Tyler's March 4, 2015, request dated March 4, 2015, for copies of fee records connected to his lawsuits against the University of Louisville. For the reasons that follow, we find the record inconclusive as to whether KSBIT-PL is a public agency, and therefore can find no definite violation of the Act.
KSBIT-PL, a self-insurance pool providing property and liability insurance to various Kentucky schools, was dissolved in 2013 and placed under the governance of Commissioner of Insurance Sharon P. Clark, in the role of rehabilitator, by the Franklin Circuit Court pursuant to KRS 304.33. Dr. Tyler addressed his request letter to Mr. David Hurt in care of KSBIT-PL, stating as follows:
Hello. I need to request another copy of the fee records on my two lawsuits against the University of Louisville from 2006 to 2009. One case in an AA/EEOC [ sic ] in the Federal District Court. I'd like the itemized accounts and dated and who paid to and the same for the Franklin Circuit Court in a breach of contract case with the same information, if possible. There was a third payment that the University of Louisville refused to respond to with specificity on the fees to Mediator and attorney C. Cleveland Gambill hired by attorney Aubrey Williams but paid by the U of L. If you do not have this itemized in his name, request it from the U of L people and their university Counsel Office and please do not let them weasel out. They bitterly resent me or anyone who stands up to them. It is best that you do not use my name because they will not respond. Thanks in advance for your help and effort in this matter.
Dr. Tyler states that on March 20, 2015, 1 he received an e-mail from J. Clarke McCulloch, Claims Supervisor with Risk Management Services Company ("RMSC"), the third party administrator (TPA) for KSBIT. After some further discussion not contained in the record, Mr. McCulloch stated that RMSC would not assist Dr. Tyler in obtaining the documents. Dr. Tyler initiated an appeal to the Attorney General on March 27, 2015.
On April 3, 2015, Mr. McCulloch responded to the appeal. He advised that RMSC did not have the records requested by Mr. Tyler because the cases were already closed files in October 2014 when the previous TPA, Collins and Company, handed over its open files to RMSC. Mr. McCulloch additionally argued that RMSC was not a public agency under KRS 61.870(1). He suggested that Mr. Tyler contact the University of Louisville to request copies of the records.
On May 7, 2015, this office received a letter from Shaun T. Orme, General Counsel for the Department of Insurance. He stated that Dr. Tyler's request had been "sent to David Hurt, who is a special deputy rehabilitator" of KSBIT-PL, 2 and that "Prof. Tyler is requesting records potentially in the possession of the deputy rehabilitator. "
Mr. Orme points out that a special deputy rehabilitator has "all the powers and responsibilities of the rehabilitator" pursuant to KRS 304.33-160(1). He further argues that the rehabilitator is not subject to the Open Records Act under the Court of Appeals' decision in Kentucky Central Life Ins. Co. v. Park Broadcasting of Kentucky, Inc., 913 S.W.2d 330 (Ky. App. 1996):
The [c]ourt in the Kentucky Central case concluded that, for Open Records purposes, although the commissioner is appointed as the rehabilitator under KRS 304.33, the position[s] of commissioner and rehabilitator are legally distinguishable. The [c]ourt specifically found, "In our view, the Insurance Code creates a court-appointed position of rehabilitator that is legally distinguishable from the office of commissioner. While it is the commissioner who is the statutorily designated appointee who must serve as the rehabilitator of an insurance company, it does not follow that the two positions are one entity for purposes of the Open Records Act. To the contrary, the fact that the code mandates a court order appointing the commissioner to serve as rehabilitator suggests the legislature contemplated a separate office of rehabilitator. " Id. at p. 332. In evaluating the functions that the rehabilitator performs in a rehabilitation, the [c]ourt concluded that the rehabilitator is not a public agency as defined in the Open Records Act and ultimately decided that the rehabilitator is not subject to the Act. Kentucky Central at pp. 334-335.
Mr. Orme's analysis is correct as far as it goes. In the Kentucky Central case, the court was dealing with the records of a private entity , Kentucky Central Life Insurance Company. The issue before the court was whether those private records became public records by virtue of being in the possession of the Commissioner of Insurance, who as a state officer was deemed a "public agency" under KRS 61.870(1)(a). The court held that Commissioner Don Stephens possessed the records only in his capacity as rehabilitator, not in the capacity of Commissioner of Insurance, and therefore the private records were not transformed into public records.
Here, the facts are potentially the opposite. In the current appeal, there is a threshold issue of whether the underlying records of KSBIT-PL are public or private records. If they were public records in the hands of KSBIT-PL prior to its dissolution, they would not become private records merely because they were transferred to a rehabilitator. Placing "records in the hands of a third party ? does not put the records outside the reach of the Open Records Act. " 13-ORD-003. "In the end, it is the nature and purpose of the document, not the place where it is kept, that determines its status as a public record." 04-ORD-123 (quoting unpublished disposition in City of Louisville v. Brian Cullinan , Nos. 1998-CA-001237-MR and 1998-CA-001305-MR (Ky. App. 1999)). Therefore, the inverse of the Kentucky Central holding is also true: public records are not transformed into private records by virtue of being in the possession of a rehabilitator.
Whether the records of KSBIT-PL are public records turns upon the question of whether KSBIT-PL was a public agency. Unfortunately, the answer is far from clear based on the limited record on appeal, which contains no information as to the composition of the erstwhile governing body of KSBIT-PL or its finances. KRS 61.870(1) defines "public agency" as including, inter alia :
(h) Any body which, within any fiscal year, derives at least twenty-five percent (25%) of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds. However, any funds derived from a state or local authority in compensation for goods or services that are provided by a contract obtained through a public competitive procurement process shall not be included in the determination of whether a body is a public agency under this subsection;
(i) Any entity where the majority of its governing body is appointed by a public agency as defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (j), or (k) of this subsection; by a member or employee of such a public agency; or by any combination thereof; [and]
(j) Any board, commission, committee, ad hoc committee, advisory committee, council, or agency, except for a committee of a hospital medical staff, established, created, and controlled by a public agency as defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (i), or (k) of this subsection;
(k) Any interagency body of two (2) or more public agencies where each public agency is defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (i), or (j) of this subsection[.]
While a significant amount of KSBIT-PL funding was no doubt derived from state or local authority funds during the relevant years, the record contains no indication of the proportion of funds received from contributing private entities. As a further complication under KRS 61.870(1)(h), we are unaware of what proportion of KSBIT-PL's insurance products may have been sold to public entities through a public competitive bidding process; therefore, we cannot conclusively determine whether KSBIT-PL was a public agency based on its funding. Furthermore, we have no specific information as to how KSBIT-PL was established, created, and controlled prior to its dissolution. Nor can we conclude that KSBIT-PL was an interagency body under KRS 61.870(1)(k), as it is not apparent that all contributing entities were public agencies or in what manner KSBIT-PL was formed. 3
If KSBIT-PL was in fact a public agency under KRS 61.870(1) during the time period to which the requested records pertain, then the records are public records notwithstanding their current possession by a rehabilitator. If, however, KSBIT did not qualify as a public agency, then its records were not subject to the Open Records Act. Since the record is inconclusive as to the former status of KSBIT-PL, we can find no definite violation of the Act in this case.
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 proceedings.
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