Opinion
NO. 2014-CA-000516-MR
01-08-2016
MARK ANDREW BLACKBURN APPELLANT v. BOARD OF EDUCATION OF MARTIN COUNTY APPELLEE
BRIEFS FOR APPELLANT: Brian Cumbo Inez, Kentucky BRIEF FOR APPELLEE: Michael J. Schmitt Jonathan C. Shaw David M. Runyon Paintsville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM MARTIN CIRCUIT COURT
HONORABLE JOHN DAVID PRESTON, JUDGE
ACTION NO. 13-CI-00036 OPINION
AFFIRMING BEFORE: ACREE, CHIEF JUDGE; COMBS AND MAZE, JUDGES. ACREE, CHIEF JUDGE: Appellant Mark Blackburn appeals the April 22, 2013, judgment of the Martin Circuit Court finding Appellee, the Board of Education of Martin County, had violated Kentucky's Open Meetings Act (OMA) when it voted in open session to award Blackburn a new superintendent contract after illicitly deliberating the merits of doing so in closed session and, for that reason, declared the new contract voidable. Blackburn also appeals the May 30, 2013, order and March 12, 2014, judgment that collectively found certain provisions of Blackburn's original superintendent contract inapplicable and/or unenforceable. We affirm.
I. Facts and Procedure
Blackburn served as the Superintendent of the Martin County School System from July 1, 2009, to June 30, 2013, pursuant to a four-year contract mutually agreed upon by the parties (2009 Contract). Blackburn worked in the school district's central office immediately prior to becoming superintendent. He is also a tenured teacher.
On July 10, 2012, the Board entered into executive session, closed to the public, at its regular monthly meeting to discuss entering into a new contract with Blackburn as superintendent. The Board then returned to open session and voted, 3-1, to award Blackburn a new four-year contract, effective July 1, 2013, through June 30, 2017 (2013 Contract). The parties executed the contract during or directly after the meeting.
One board member was absent from the meeting.
A local citizen submitted a written complaint to the Board's chairperson alleging that the Board had violated the OMA when it went into executive session to discuss renewing Blackburn's superintendent contract. The Board made no response, and the citizen requested review by the Attorney General pursuant to KRS 61.846(2). The Attorney General issued an opinion on August 8, 2012, finding the Board had indeed violated the OMA by discussing Blackburn's new contract in executive (closed) session; no exception to the OMA, the Attorney General found, authorized the Board to discuss the grant of a new contract outside public view. No appeal from this opinion was taken.
Kentucky Revised Statute.
The Board sought to remedy the violation at its next meeting on August 14, 2012. It unanimously voted to set aside the votes issued during the July 2012 meeting awarding the new superintendent contract. Effectively, the Board rescinded the 2013 Contract.
In the meantime, the terms of three board members were due to expire on December 31, 2012. Two new members were elected in November 2012. The change in Board membership proved pivotal. At its January 2013 regular meeting, the Board voted, 3-2, not to renew Blackburn's superintendent contract. Blackburn quickly notified the Board that he believed the 2013 Contract to be valid and that he expected the Board to honor it; contrary action would compel Blackburn to pursue a claim against the Board under that contract.
In a preemptive strike, the Board filed this declaratory judgment action on February 21, 2013. The Board asked the circuit court to declare the rights and obligations of the parties with respect to the 2013 Contract. Blackburn filed a counterclaim requesting a declaration of rights and obligations with regard to paragraphs 16 and 17 of the 2009 Contract in the event the circuit court renounced the 2013 Contract. Those provisions state:
16. In the event the contract is terminated, not renewed or not re-negotiated, Mark Andrew Blackburn shall be reassigned to his previous or comparable position at the Martin County Board of Education central office.
17. The Board agrees that it shall defend, hold harmless, and indemnify the Superintendent from any and all demands, claims, suits, actions, and legal proceedings brought against the Superintendent in his individual capacity or in his official capacity as an agent and employee of the Board, provided the incident arose while the Superintendent was acting within the scope of employment. If, in the good faith opinion of the Superintendent, a conflict exists regarding the defense to any such claim between the legal position of the Superintendent and that of the Board, the Superintendent may engage counsel, in which event the Board shall indemnify the Superintendent for the cost of legal defense.
The Board moved for entry of a declaratory judgment related to the 2013 Contract. Blackburn responded and moved for entry of a declaratory judgment related to the 2009 Contract. In response to the Board's motion related to the 2013 Contract, Blackburn offered four affidavits in which the affiants swore that "[w]hen the Board came out of executive session, the floor was opened for discussion regarding offering Mark Blackburn a new contract as superintendent of the Martin County School System to become effective July 1, 2013." (R. at 130-31, 221-22).
On April 22, 2013, the circuit court issued Findings of Fact, Conclusions of Law, and a Judgment declaring the 2013 Contract void and unenforceable as a matter of law. Leaning heavily on the case of Carter v. Smith, 366 S.W.3d 414 (Ky. 2012), the circuit court found that "the real discussion of the extension of the contract took place in closed session," and therefore concluded "that the action taken by the Board of Education was in violation of the Open Meetings Act." The circuit court also found that, if there was any discussion of the contract in open session, it was limited in nature and "merely window dressing" for the discussion that took place in closed session.
Blackburn moved to amend several of the circuit court's findings and requested that the circuit court make additional findings specifically related to his counterclaim and paragraphs 16 and 17 of the 2009 Contract. By order entered May 30, 2013, the circuit court declined to amend its previous findings, but did address Blackburn's counterclaim. The circuit court found premature and non-justiciable any declaration of rights with respect to paragraph 16 because Blackburn's 2009 Contract had not yet expired and his new position not yet decided. With respect to paragraph 17, the circuit court declared:
7) . . . The paragraph contains two sentences. If they are read conjunctively, the Court concludes that the paragraph would not apply to the case at bar. The first sentence states that the [Board] will hold [Blackburn] harmless for any claims brought in his capacity as Superintendent. The second sentence states that if a conflict exists regarding the defense to a claim between the position of [Blackburn] and that of the [Board], [Blackburn] may engage his own counsel, in which case the [Board] will indemnify [Blackburn] for the cost of legal defense. Certainly, that provision implies an action brought against the Board of Education and against the Superintendent by some third party. It also requests [sic] that the parties have inconsistent defenses to that claim. In that circumstance, [Blackburn] is entitled to his own counsel, and the Board would be required to cover the cost of that counsel. It is clear to the Court that at [sic]
both sentences of paragraph 17 are read together, [Blackburn] would not be entitled to recover attorney's fees from the [Board].
8) The Court also considers the first sentence of paragraph 17 separately from the second sentence. That sentence requires the Board to [Blackburn], hold harmless, and indemnify the Superintendent from any claims or suits brought against the Superintendent in his capacity as Superintendent provided that the incident giving rise to the claim arose while the Superintendent was acting within the scope of his employment. This appears to exist in the context of a claim or lawsuit brought against the Board and the Superintendent arising, from example, from a slip and fall on school premises, a motor vehicle accident involving a Board vehicle, a claim of excessive force in disciplining a student, the dismissal of a teacher, or other similar actions involving a claim against the Board.
9) The key question in deciding this issue is what is meant by "incident". Certainly, an incident would be one of the claims that might arise by third parties against the Board or Superintendent. The question is whether a contractual issue between the Board and the Superintendent is an "incident" as that term is stated in paragraph 17. The only reasonable or logical conclusion that the Court can draw from the language of the document is that the intent of the paragraph was to require the Board to indemnify and hold harmless the Superintendent in the event of claims brought by third parties against the Superintendent in his capacity as Superintendent. There is nothing in the language that indicates that the Board is to hold harmless and indemnify or pay attorney's fees for [Blackburn] arising out of a contractual dispute between [Blackburn] and the Board.
Blackburn's 2009 Contract expired by its terms on June 30, 2013. A new superintendent was hired, and Blackburn was assigned to a teaching position in the Martin County School District. Dissatisfied, Blackburn moved the circuit court to make additional findings relative to paragraph 16 of the 2009 Contract and his employment status which had now become known. The circuit court also gave Blackburn leave to amend his counterclaim to include a breach of contract claim.
Upon prompting by the circuit court, the Board demanded a trial by jury to resolve outstanding factual issues. The Board later withdrew its request, and a bench trial was held on March 5, 2014. Blackburn, the only sworn witness, testified that he relied upon paragraph 16 in negotiating his contract; that the Board violated that provision when he was not re-assigned to a position in central office, and that he suffered damages by way of considerable salary loss. On cross-examination, Blackburn admitted that he knew that the Board lacked the authority to hire supervisory or administrative personnel when he entered into the 2009 Contract. The Board may only, Blackburn explained, hire the superintendent and the school board's attorney; it cannot legally fill central-office positions.
The circuit court denied Blackburn's counterclaim by judgment entered on March 12, 2014. The circuit court concluded the Board lacked the authority to enter into paragraph 16 of the 2009 Contract and, as a matter of equity, Blackburn should not be allowed to profit from the terms of the contract when he knew quite well of the Board's limited authority at the time he ratified the contract. Blackburn appealed.
II. Analysis
Blackburn presents four arguments for our review. First he argues the Board did not violate the OMA. Second, the Board lacked authority to rescind the 2013 Contract. Third, the Board violated paragraph 16 of the 2009 Contract when it failed to re-assign him to a central-office position. And, fourth, the Board violated paragraph 17 of the 2009 Contract when it refused to indemnify or reimburse his legal fees. We will address each argument separately. A. The Board Violated the OMA.
Blackburn first argues the Board did not violate the OMA. He declares the superintendent's contract was properly announced for call at the Board's July 2012 meeting, discussed, put to a vote, and approved, all during open session and in compliance with the OMA. Our review persuades us otherwise.
The circuit court entered judgment without first taking evidence by means of a bench trial. When a declaratory judgment has been entered "and no bench trial held, the standard of review for summary judgments is utilized." Ladd v. Ladd, 323 S.W.3d 772, 776 (Ky. App. 2010). The question before us is "whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law." Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996). We "need not defer to the trial court's decision and will review the issue de novo." Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001) (footnote omitted).
KRS 61.810 requires that "[a]ll meetings of a quorum of the members of any public agency at which any public business is discussed or at which any action is taken by the agency, shall be public meetings, open to the public at all times[.]" The legislative rationale underpinning this statutory directive is that the "formation of public policy is public business and shall not be conducted in secret[.]" KRS 61.800. There is no doubt that a school board is a public agency subject to the OMA. KRS 61.805(2)(c); Webster Cnty. Bd. of Educ. v. Franklin, 392 S.W.3d 431, 435 (Ky. App. 2013). Its meetings may not be unduly shielded from the public eye and public accountability.
There are limited exceptions to the "open meeting" rule. See KRS 61.810(1)(a) - (m). These exceptions "shall be strictly construed," KRS 61.800, "so as to avoid improper or unauthorized closed, executive or secret meetings." Floyd Cnty. Bd. of Educ. v. Ratliff, 955 S.W.2d 921, 923 (Ky. 1997).
Blackburn has abandoned his prior argument that the personnel exception, KRS 61.810(1)(f), authorized the Board to enter closed session to discuss his new four-year contract. He also does not dispute that discussions of a new superintendent contract occurred in executive session. Instead, Blackburn claims that, after the closed session, regardless of the validity or invalidity of what was discussed there, the Board voted in open session upon the new four-year contract after the floor was opened for discussion. In other words, by opening the floor for discussion after the executive session and taking the vote in open session, the Board remedied any blunder or misstep, thereby conforming its conduct to the requirements of the OMA.
To embrace Blackburn's argument would be to sanction the Board's conduct; we can do neither without ignoring the spirit and fundamental object of the OMA. And that we cannot do. In Carter v. Smith, supra, our Supreme Court stressed that the OMA demands that "'general personnel matters' are not to be discussed 'in secret.'" 266 S.W.3d at 421 (quoting KRS 61.810(1)(f))(emphasis added). The OMA rests on a triple foundation of public awareness and disclosure, an informed electorate, and governmental openness. Ratliff, 955 S.W.2d at 923 ("The express purpose of the Open Meetings Act is to maximize notice of public meetings and actions."). "A public agency's authority to go into a closed session relative to personnel matters is severely restricted." Carter, 366 S.W.3d at 420.
Carter is on point, instructive, persuasive, and dispositive. In that case, the board of education entered into closed session for the purpose of discussing the superintendent's resignation and the possibility of issuing him a consulting contract. In response to allegations that the board's conduct ran afoul of the OMA, the superintendent argued that the board was permitted, under the personnel and litigation exceptions, to enter closed session to discuss his resignation and consulting contract and, alternatively, that the board ratified its illegal conduct by taking a vote in open session. The Court found the OMA provided the board no such safe haven. After first finding that the board's discussions were not proper under any exception to the OMA, the Court then rejected the superintendent's argument that ratification insulated the board:
A public agency cannot ratify actions improperly taken in closed session. When conversations and actions regarding the public's business should not have occurred in private in the first place, an agency cannot render those actions valid by simply taking a vote in open session with any discussion of the matter. To permit the Board to do just that in this case would eviscerate the Open Meetings
Act. . . . [I]t is inconceivable that the General Assembly intended to allow a public agency to conduct its business behind closed doors, regardless of whether an exception authorized the closed session, and then protect its private dealings by taking a quick vote in open session and claiming the secret actions valid by ratification. Such an interpretation is fundamentally at odds with the purpose and spirit of the Open Meetings Act.Carter, 266 S.W.3d at 423. Nothing meaningful distinguishes Carter from this case.
As in Carter, the Board's discussions concerning Blackburn's new superintendent contract "should not have occurred in private in the first place." Id. We think it contrary to the OMA to adopt a resolution in an open meeting that resulted from deliberations or discussions that wrongly occurred in closed session. The weight of the evidence reveals that the Board decided to issue a new superintendent contract as a result of its nonpublic deliberations. Its decision to open the floor for discussion, if this indeed occurred, was a mere formality. This conclusion is supported by the void in the record of any substantive discussion during open session. There is no evidence that the Board's privately-held conversations were laid before the public eye. This is the precise type of "secret discussions" that the OMA and Carter prohibit. In all respects, the Board's conduct violated the letter and spirit of the OMA. We agree with the Attorney General and the circuit court on this issue. B. The 2013 Contract is Voidable.
Blackburn declares that the affidavits attached to his response to the Board's motion for entry of a declaratory judgment prove that the floor was opened for discussion upon re-entry into open session and that a discussion of his new contract in fact occurred. However, under Kentucky law, "a board of education speaks only through its records . . . . [and t]he records may not be enlarged or restricted by parol evidence." Bd. of Educ. of Perry Cnty. v. Jones, 823 S.W.2d 457, 459 (Ky. 1992); Lewis v. Bd. of Ed. of Johnson Cnty., 348 S.W.2d 921, 923 (Ky. 1961). The official minutes from the Board's July 10, 2012 meeting simply state: "X. Approval to enter closed session for the purpose of discussion of the Martin County School District - Superintendents Contract[,]" rationale and motion passed, "XI. Approval to exit closed session and return to regular session,]" rationale and motion passed, and "XII. Approval of the contract for Martin County School District and Superintendent - Mark Andrew Blackburn[,]" rationale and motion passed. (R. at 25).
Blackburn also argues that the Board did not violate another board policy, number 02.1311. In light of our prior analysis, we need not address this issue.
Blackburn next argues that, by voting to unilaterally rescind the 2013 Contract at its August 2012 meeting, the Board violated Board Policy No. 02.1314 and breached the contract's termination provision, which permits termination only upon a showing of legal cause and in accordance with the statutory procedures identified in KRS 160.350(3). Carter indicates the Board's conduct was proper, stating:
The statute states:
A superintendent of schools may be removed for cause by a vote of four-fifths (4/5) of the membership of a board of education and upon approval by the commissioner of education. However, if the dismissal of the superintendent has been recommended by a highly skilled certified educator pursuant to KRS 158.6455 and the action is approved by the commissioner of education, the board shall terminate the superintendent's contract. Written notice setting out the charges for removal shall be spread on the minutes of the board and given to the superintendent. The board shall seek approval by the commissioner of education for removing the superintendent. The commissioner of education shall investigate the accuracy of the charges made, evaluate the superintendent's overall performance during the superintendent's appointment, and consider the educational performance of the students in the district. Within thirty (30) days of notification, the commissioner of education shall either approve or reject the board's request.
If a public agency wants to effectuate actions that were originally taken in an improper closed session, it must, to the extent possible, begin anew. Though a bell can never truly be un-rung, the agency must take up the matter and
start over in open session, handling the matter as the agency would any business the law requires be conducted before the public.Carter, 366 S.W.3d at 423. The Board attempted to "begin anew" by unanimously agreeing to rescind the votes awarding the 2013 Contract and then taking up the issue, properly this time, at its January 2013 meeting. Unfortunately for Blackburn, events did not turn in his favor.
Further support for the propriety of the Board's actions is found in KRS 61.846. That statute permits a public agency to remedy an alleged violation of the OMA upon submission of a written complaint. KRS 61.846(1). If the public agency fails or refuses to do so, the offended party may complain to the Attorney General. KRS 61.846(2). The Attorney General's opinion, if not appealed, carries the force and effect of law. KRS 61.846(4)(b). Here, the Board did not remedy its improper conduct upon initial request, but only upon receiving the Attorney General's opinion declaring it had violated the OMA. It seems incongruous to permit a public agency to remedy an alleged violation, but disallow it to remedy an actual violation, as found by the Attorney General. We think the Board in this case acted within the ambit of the OMA when it sought to remedy its prior improper actions.
Regardless, and perhaps most importantly, the circuit court declared the 2013 Contract void well before its July 2013 effective date. Presuming for argument's sake that the Board could not declare the new superintendent contract null and void by simply rescinding its vote, the circuit court certainly possessed the authority to do so. We again turn to Carter.
In Carter, the Supreme Court discussed at length whether a public agency's improper actions are void from the outset or voidable by a court. The Court held, in keeping with the plain language of KRS 61.848, that "when an agency takes action that is not in 'substantial compliance' with the law, that action 'shall be voidable by a court.'" Carter, 366 S.W.3d at 424 (quoting KRS 61.848). Accordingly, a "noncompliant action is valid until nullified by a court." Id.
Here, the circuit court nullified the 2013 Contract upon entry of its April 22, 2013, Judgment. Because that contract had not yet gone into effect, the Board's rescission attempt, whether proper or not, is of little consequence. It was well within the circuit court's authority upon finding a violation of the OMA to declare the 2013 Contract voidable. C. The Board is Not Required to Indemnify Blackburn's Legal Fees and Costs.
Under Blackburn's interpretation, paragraph 17 of the 2009 Contract requires that the Board indemnify the cost of his legal defense. He claims the circuit court committed clear error by finding otherwise. The Board counters that this paragraph is void and unenforceable because it contravenes public policy of the Commonwealth. Applying well-known rules of construction, the circuit court found the paragraph inapplicable to the case at bar. We are likewise convinced.
The goal when construing a contract or written instrument "is to effectuate the intentions of the parties." Cantrell Supply Inc. v. Liberty Mutual Insurance Co., 94 S.W.3d 381, 384 (Ky. App. 2002). We gather the parties' intention from the four corners of the instrument at issue. Hoheimer v. Hoheimer, 30 S.W.3d 176, 178 (Ky. 2000). Where the contract's language is clear and unambiguous, the agreement is to be given effect according to its terms, and "the court will interpret the contract's terms by assigning language its ordinary meaning and without resort to extrinsic evidence." Frear v. P.T.A. Industries, Inc., 103 S.W.3d 99, 106 (Ky. 2003). "An ambiguous contract is one that is capable of multiple, reasonable interpretations." Richey v. Perry Arnold, Inc., 391 S.W.3d 705, 709 (Ky. 2012) (footnote omitted). "The primary rule for construing an ambiguous or inconsistent contract is to discern the parties' intent from the entire document; reconcile inconsistent terms where possible; and effectuate the parties' intent." Id. Contract interpretation is a matter of law subject to de novo review. McMullin v. McMullin, 338 S.W.3d 315, 320 (Ky. App. 2011).
Upon examination of paragraph 17, we conclude it is inapplicable to this contract dispute. The first sentence is admittedly broad - the Board shall defend, hold harmless, and indemnify the superintendent for any and all claims brought against him as superintendent, provided the "incident" arose while the superintendent was acting within the scope of employment. The second sentence qualifies the first, at least as it relates to legal fees and expenses incurred by the superintendent. That sentence states that if a conflict exists regarding the defense to such a claim between the superintendent and the Board, then the superintendent may engage his own counsel and the Board will reimburse his legal fees and costs. This indicates that, at least at the lawsuit's inception, the Board and Blackburn are not on opposing sides but are co-parties; it is only when the superintendent's and the Board's defenses conflict that the superintendent is entitled to indemnification for the cost of his legal defense. The language of paragraph 17 alone suggests the parties did not intend for this provision to govern a contract dispute wherein the Board and the superintendent are pitted against one another from the beginning.
The circuit court also found ambiguous the term "incident" as it is used in paragraph 17. That expression is certainly susceptible to different meanings. Blackburn argues "incident" refers to any event involving the superintendent - including contractual disputes between the Board and superintendent - while the Board contends that "incident" refers only to occurrences, accidents, or incidents involving third-parties. Reviewing the contract and provision 17 as a whole, we agree with the circuit court that the intent of the parties was to protect the superintendent against third-party claims, not lawsuits between these contracting parties, and to indemnify the superintendent's legal costs where the superintendent and the Board are co-defendants in the same lawsuit, but possess incompatible legal defenses necessitating separate counsel. We again affirm the circuit court's ruling.
Appellate review can be accomplished in this case without accepting the Board's request that we find paragraph 17 void as against public policy. Therefore, we decline to address the question. D. The Board did not Breach Paragraph 16 of the 2009 Contract.
Finally, Blackburn argues that the Board violated paragraph 16 of the 2009 Contract and the circuit court's finding to the contrary amounts to clear error. The circuit court reached its decision following a short bench trial. When the circuit court is operating as the fact finder, we will not set aside its factual findings unless those findings are clearly erroneous - that is to say, unless those factual findings are unsupported by substantial evidence. CR 52.01; Carroll v. Meredith, 59 S.W.3d 484, 489 (Ky. App. 2001). Substantial evidence is evidence which, "when taken alone or in light of all the evidence, has sufficient probative value to induce conviction in the mind of a reasonable person." Gosney v. Glen, 163 S.W.3d 894, 898 (Ky. App. 2005). We review de novo the circuit court application of those facts to the law. Id.
Kentucky Rule of Civil Procedure. --------
As noted, paragraph 16 of the 2009 Contract required that Blackburn be reassigned to his previous or a comparable position at central office should his superintendent contract not be renewed. The Board was wholly without authority to make such a promise to Blackburn. The authority to hire central-office personnel is vested solely in the superintendent. KRS 160.380(2)(a)(only the superintendent may appoint, promote, and transfer school employees); KRS 160.370 ("[The superintendent] shall be responsible for the hiring and dismissal of all personnel in the district."); KRS 160.390 ("[The superintendent] shall be responsible for all personnel actions including hiring, assignments, transfer, dismissal, suspension, reinstatement, promotion, and demotion and reporting the actions to the local board."). The only personnel matters within the Board's authority include the hiring (and firing) of the superintendent and the board attorney. KRS 160.350; KRS 160.170. Notably, each board member must swear under oath before assuming the duties of office that he or she "will not in any way influence the hiring or appointment of district employees, except the hiring of the superintendent of schools or school board attorney." KRS 160.170.
The circuit court dispensed with the issue "as a matter of equity that it would be inappropriate to allow the Defendant to profit from the terms of the contract, when he knew quite well that the Board of Education had no authority to enter into that contract" provision. Without denominating his analysis as such, the circuit court effectively applied the equitable doctrines of "unclean hands" and "in pari delicto." Suter v. Mazyck, 226 S.W.3d 837, 843 (Ky. App. 2007) ("unclean hands doctrine is a rule of equity").
The court found of no help to Blackburn the fact that the Board was aware of the illegality of the contract term; these parties "are deemed to be in pari delicto [and e]quity will not relieve one party against another where both are in pari delicto." Eline Realty Co. v. Foeman, 252 S.W.2d 15, 19 (Ky. 1952) (citations omitted). In such a case as this, "recovery is barred by the principles of equity." Sandoz Inc. v. Com. ex rel. Conway, 405 S.W.3d 506, 512 (Ky. App. 2012).
The circuit court in this case heard the testimony, balanced the equities, and issued its opinion. However, "because this issue can be resolved on legal grounds, equitable principles are inapplicable as equity follows the law." Morton v. Bank of the Bluegrass and Trust Co., 18 S.W.3d 353, 358 n.4 (Ky. App. 1999) (citing Kaufman v. Kaufman's Adm'r, 292 Ky. 351, 166 S.W.2d 860, 867 (1942)). "A widely recognized principle of contract law is that agreements that run contrary to law, or are designed to avoid the effect of a statute, are illegal and will not be enforced." McClanahan v. Commonwealth, 308 S.W.3d 694, 701 (Ky. 2010) (citing S.J.L.S. v. T.L.S., 265 S.W.3d 804, 821 (Ky. App. 2008)). As a matter of law, then, this provision is not enforceable. McMullin, 338 S.W.3d at 322 ("the law has long condemned allowing an individual to benefit from his own fraud or deceit in drafting or procuring a contract or otherwise"). While we find no fault with the circuit court's equitable analysis as such, we affirm the decision based on McClanahan, that this provision is unenforceable because it runs contrary to law and was designed to avoid the effect of several statutes.
III. Conclusion
For the foregoing reasons, we affirm the May 30, 2013, order, and April 22, 2013, and March 12, 2014, judgments of the Martin Circuit Court.
ALL CONCUR. BRIEFS FOR APPELLANT: Brian Cumbo
Inez, Kentucky BRIEF FOR APPELLEE: Michael J. Schmitt
Jonathan C. Shaw
David M. Runyon
Paintsville, Kentucky