Date: 08-23-2001

Case Style: Cynthia Reyes v. Hardin County d/b/a Hardin Memorial Hospital and Hardin County Fiscal Court d/b/a Hardin Memorial Hospital

Case Number: 199-SC-0887-DG

Judge: Cooper

Court: Supreme Court of Kentucky

Plaintiff's Attorney: H. Phillip Grossman and Michael R. Mazzoli of Fernandez, Friedman, Grossman & Kohn, Louisville, Kentucky

Defendant's Attorney: John R. Grise, Laura M. Hagan and Shawn Rosso Alcott of Kerrick, Grise & Stivers, Bowling Green, Kentucky and Ken M. Howard, Hardin County Attorney, Elizabethtown, Kentucky

Description: Hardin Memorial Hospital is owned and operated by Hardin County, Kentucky, and the elected members of the Hardin Fiscal Court serve as its board of directors. Appellant Cynthia Reyes brought this action in the Hardin Circuit Court claiming that while a patient at the hospital in January 1995, she was injured when a hospital employee negligently inserted an intravenous needle into her hand. The Hardin Circuit Court dismissed the action as barred by sovereign immunity. The Court of Appeals affirmed and we granted discretionary review. The only issue before us is whether KRS 67.186(3) permits a suit to be brought against a county hospital for the sole purpose of measuring a negligence claimant's entitlement to proceeds from the hospital's policy of liability insurance.' We find that it does and, thus, reverse and remand to the Hardin Circuit Court for further proceedings.

KRS 67.186 provides:

(1) The fiscal court of any county in which there is a county operated hospital may provide for liability and indemnity insurance for the benefit of the hospital against the negligence of the employees of such hospital.

(2) The insurance policies so purchased by the fiscal court shall be purchased only from insurance companies authorized to transact business in this state, and any such policy shall bind the insurer to pay, subject to the terms and conditions of the policy, any final judgment, not in excess of the policy limits, rendered against the insured hospital or hospital employees for the death or injury of any patient, or damage to the property of any patient, resulting from the negligence of the hospital, its agents or employees.

(3) This section shall not be construed as waiving the immunity of the county or county operated hospital from suit only to the extent of the policy limits, and no judgment may be enforced or collected against the county, fiscal court, the members thereof, or such hospital, but shall only measure the liability of the insurance carrier. No attempt shall be made in the trial of any suit to suggest the existence of any insurance which covers in whole or in part any judgment or award which has been rendered in favor of the claimant, but if the verdict rendered by the jury exceeds the limits of applicable insurance, the court shall reduce the amount of said judgment to a sum equal to the applicable limit stated in the policy.

At the time of Reyes's claimed injury, Hardin Memorial Hospital was insured by an insurance agreement with the Kentucky Hospital Association Trust with limits of $1 ,OOO,OOO per claim and an aggregate annual limit of $3,000,000.2 The Hardin Fiscal Court paid an annual premium (referred to in the policy as a "contribution") of $460,340 for this coverage.

The concept of sovereign immunity arose from the common law of England and was recognized as an accepted principle of law early in our nation's history. Chisholm v. Georaia, 2 U.S. (2 Dall.) 419, 1 L.Ed. 440 (1793). Its existence was first recognized by our predecessor Court without question or citation to authority in Divine v. Harvie, 23 Ky. (7 T.B. Mon.) 439 (1828): "It seems to be conceded on all hands, that the State can not be made a party defendant, and is not suable in her own courts." Id. at 441. The words "sovereign immunity" are not found in our Constitution. However, Section 230 provides that "[n]o money shall be drawn from the State Treasury, except in pursuance of appropriations made by law . . . ;" and Section 231 provides that "[t]he General Assembly may, by law, direct in what manner and in what courts suits may be brought against the Commonwealth." Virtually identical provisions were contained in the Constitutions of 1792 (Article VIII, $5 3, 4) 1799 (Article VI, §§ 5, 6), and 1850 (Article VIII, §§ 5, 6). Although some cases suggest that Sections 230 and 231 are the source of sovereign immunity in Kentucky, m, Bach v. Bach, Ky., 288 S.W.2d 52, 54 (1956) those sections are more accurately viewed as delegating to the General Assembly the authority to waive the Commonwealth's inherent immunity by direct appropriation of money from the state treasury and/or by specifying where and in what manner the Commonwealth may be sued. Of course, the most significant waiver of immunity to date was the enactment of the Board of Claims Act by the 1946 General Assembly and its substantial amendment to its present-day form by the 1950 General Assembly. KRS 44.070, et seq. (formerly KRS 176.290, et seq.) (1946 Ky. Acts, ch. 189, $$j 1, 3, par. 1; 1950 Ky. Acts, ch. 50, § 1).

This is our first occasion to specifically construe KRS 67.186, though we did state in dicta in Rather v. Allen Countv War Memorial Hosoital, Ky., 429 S.W.2d 860, 862 (1968) that the statute "creates an exception to immunity," and in Cullinan v. Jefferson County, Ky., 418 S.W.2d 407, 409 (1967), that it "authorize[s] relief against the negligence of county employees in the operation of. . . hospitals." The Hardin Circuit Court and the Court of Appeals both held that Reyes's suit was precluded by our more recent decisions in Withers v. Universitv of Kentucky, Ky., 939 S.W.2d 340 (1997) and Franklin Countv v. Malone, Ky., 957 S.W.2d 195 (1997).

* * *

Click the case caption above for the full text of the Court's opinion.

Outcome: Decision of the Court of Appeals reversed and action remanded.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None