COMMONWEALTH OF KENTUCKY FRANKLIN CIRCUIT COURT DIVISION I ELECTRONICALLY FILED

Transcription

1 COMMONWEALTH OF KENTUCKY FRANKLIN CIRCUIT COURT DIVISION I ELECTRONICALLY FILED CIVIL ACTION NO. 16-CI ALLISON BALL, in her official capacity as Treasurer of the Commonwealth of Kentucky, INTERVENING PLAINTIFF VS. INTERVENING COMPLAINT FOR DECLARATION OF RIGHTS & PERMANENT INJUNCTION THOMAS K. ELLIOTT 324 Browns Lane Louisville, KY INTERVENING DEFENDANT Serve: Kevin Chlarson Counsel for Intervening Defendant Middleton Reutlinger 401 South Fourth Street, Suite 2600 Louisville, KY & MARY HELEN PETER 18 Pembroke Road Louisville, KY INTERVENING DEFENDANT Serve: Kevin Chlarson Counsel for Intervening Defendant Middleton Reutlinger 401 South Fourth Street, Suite 2600 Louisville, KY & WILLIAM A. THIELEN, in his official capacity as Executive Director of the Kentucky Retirement Systems 1260 Louisville Road INTERVENING DEFENDANT

2 & Serve: William A. Thielen Executive Director, Kentucky Retirement Systems 1260 Louisville Road KENTUCKY RETIREMENT SYSTEM 1260 Louisville Road DEFENDANT Serve: William A. Thielen Executive Director, Kentucky Retirement Systems 1260 Louisville Road - AND - Andy Beshear Attorney General of the Commonwealth of Kentucky 700 Capitol Avenue, Suite 118 * * * * * * * * * * * * * * * Comes now the Intervening Plaintiff, Allison Ball, in her official capacity as Treasurer of the Commonwealth of Kentucky, and for her Intervening Complaint herein, states as follows: INTRODUCTION 1. This is an action for declaration of rights and injunctive relief brought by the Intervening Plaintiff, against Intervening Defendants Thomas K. Elliott, Mary Helen Peter, William A. Thielen and the Kentucky Retirement Systems (collectively Intervening Defendants ). 2. The Kentucky State Treasurer is tasked with disbursing public funds, and assuring, to the highest degree possible, that public funds are spent in accordance with the Constitution and laws of the Commonwealth. 2

3 3. The Intervening Defendants have, in direct violation of Kentucky law, depleted state monies to pay for private litigation. KRS Chapter 61 does not permit the Intervening Defendants to use public resources to attempt to restore a former employee to his position, and the Intervening Defendant s continued efforts to do so must be immediately enjoined, pending final resolution of this case. 4. Due to the nature of the relief requested herein and the risk of diminution of public funds if this matter is not timely resolved, the Treasurer requests an expedited hearing and review of this matter, pursuant to KRS and Civil Rule 57. PARTIES 5. The Intervening Plaintiff is the duly elected Treasurer of the Commonwealth of Kentucky, vested with all powers afforded to her by the Constitution and laws of this Commonwealth. The Constitution and laws of the Commonwealth of Kentucky provide the Treasurer with legal standing to raise questions in a court of competent jurisdiction regarding the legality of a claim made for payment from funds held by the Treasury. 6. Intervening Defendant Thomas K. Elliott is a natural person, and a Plaintiff in this case. Intervening Defendant Elliott is a former member of the Kentucky Retirement Systems Board of Trustees ( Board ), 1 who was removed by Governor Matthew G. Bevin pursuant to Executive Order , issued on or about April 20, Intervening Defendant Mary Helen Peter is a natural person, and a Plaintiff in this case. Intervening Defendant was, at the time of the filing of this suit, a member of the Kentucky Retirement Systems Board. Intervening Defendant Peter was elected to the Board by the Kentucky 1 Pursuant to Executive Order , issued on June 17, 2016, the Board of Trustees was reorganized as the Board of Directors. 3

4 Employees Retirement System pursuant to KRS (1)(d). Intervening Defendant Peter s term of office was not affected by Executive Order , which reorganized the Board. 8. Intervening Defendant William A. Thielen is the Executive Director of the Kentucky Retirement Systems. Intervening Defendant Thielen is responsible for day-to-day operations of the Board and, through information and belief, approved payment of the legal expenses at issue herein. 9. Defendant Kentucky Retirement Systems is an agency of the Commonwealth of Kentucky which oversees the Kentucky Employees Retirement System, the State Police Retirement System, and the County Employees Retirement System. Defendant Kentucky Retirement Systems is a named Defendant in this case. JURISDICTION & VENUE 10. Jurisdiction is conferred on this Court pursuant to KRS 23A.010, KRS , and Civil Rules 57 and The Court has personal jurisdiction over all Intervening Defendants herein. 12. Venue in this judicial district is appropriate as the events giving rise to the claims herein occurred within this judicial district. Moreover, venue is also appropriate pursuant to KRS This Intervening Complaint presents an actual, justiciable controversy, which is ripe for review by this Honorable Court. FACTS 14. The foregoing paragraphs are incorporated herein by reference. 15. The Governor may, through the proper use of his executive power, issue Executive Orders which carry the force of law. 4

5 16. On April 20, 2016, Governor Matthew G. Bevin ( Governor Bevin ) issued Executive Order , which removed Intervening Defendant Thomas K. Elliott as a member of the Board of Trustees of the Kentucky Retirement Systems. A true and accurate copy of Executive Order is attached hereto as Exhibit A. 17. Governor Bevin subsequently replaced Intervening Defendant Elliott on the Board. True and accurate copies of Executive Orders and are attached hereto collectively as Exhibit B. 18. On June 17, 2016, Governor Bevin issued Executive Order , which reorganized the Board of Trustees as the Board of Directors. A true and accurate copy of Executive Order is attached hereto as Exhibit C. 19. Following his replacement on the Board, Intervening Defendant Elliott, purporting to act both individually and in his official capacity as a member of the Board, filed the present suit in Franklin Circuit Court seeking declaratory and injunctive relief. 20. Intervening Defendant Elliott seeks, inter alia, to have this Honorable Court overturn the Executive Orders of Governor Bevin, and declare that Intervening Defendant Elliott remains a member of the Board. 21. Intervening Defendant Peter joined Intervening Defendant Elliott as a Plaintiff in the present case 22. On or about June 20, 2016, Intervening Defendant Thielen sent a letter to Intervening Defendant Elliott regarding payment of Intervening Defendant Elliott s legal fees for bringing the present suit. A true and accurate copy of the letter from Intervening Defendant Thielen is attached hereto as Exhibit D. 5

6 23. Intervening Defendant Thielen incorrectly asserts in the letter that Intervening Defendant Elliott is a party to this litigation in your capacity as a member of the Kentucky Retirement Systems Board of Trustees. See Exhibit D, pg As of the filing of the suit, Intervening Defendant Elliott was not a member of the Board, pursuant to Executive Order Intervening Defendant Thielen informed Intervening Defendant Elliott that the Kentucky Retirement Systems could provide reimbursement for legal fees incurred in bringing this suit. 26. Through information and belief, the Intervening Defendants have to date obtained approval for nearly $50, in attorney fees to be paid to counsel for Intervening Defendant Elliott The funds used to pay for the attorney fees for the Intervening Defendants are funds held by the State Treasury. 28. The payment of attorney fees on behalf of a former trustee are not appropriate pursuant to KRS , where the purpose of the litigation is to restore a former trustee to his position. 29. Injunctive relief is necessary to prevent irreparable harm to public funds, which occurs when said funds are impermissibly depleted. 30. The significant depletion of public funds in order to pay outside counsel to restore a former trustee to his position on the Board is not the efficient and cost-effective use of taxpayer funds as required by KRS (15)(h). 2 See, Mcnair, James State Pension System Picks Up $50,000 Tab to Sue Bevin KENTUCKY CENTER FOR INVESTIGATIVE REPORTING, July 7, 2016 (available at tab-to-sue-bevin/) (last visited July 11, 2016). 6

7 COUNT I DECLARATORY JUDGMENT & INJUNCTIVE RELIEF Violations of KRS Chapter 61 Improper Request and Payment of Attorney Fees 31. The allegations in the above paragraphs of this complaint are realleged and incorporated herein by this reference. 32. The Intervening Defendants, acting individually and/or in concert, have impermissibly requested payment of funds under KRS , which allows reimburse[ment] of any trustee, officer, or employee for any legal expense resulting from a civil action arising out of the performance of his official duties. 33. Intervening Defendant Elliott was removed from his position with the Kentucky Retirement Systems pursuant to Executive Order on April 20, See Exhibit A. 34. The Intervening Defendant has filed the present suit in an attempt to restore himself to his position. See Amended Complaint. 35. At the time of the filing of the Complaint, and to the present time, the Intervening Defendant is not a trustee, officer, or employee of the Kentucky Retirement Systems. 36. Seeking to be restored to a position as a trustee, officer, or employee of the Kentucky Retirement Systems is not part of the performance of his official duties within the meaning of KRS The Intervening Defendants have impermissibly requested and authorized payment of attorney fees pursuant to KRS A payment of approximately $30, was paid to counsel, from Kentucky Retirement Systems funds, in late June or early July,

8 39. Upon information and belief, a further payment of approximately $19, has been requested and/or approved by the Intervening Defendants, but as of the filing of this Intervening Complaint, has not yet been transmitted to counsel for the Intervening Defendants. 40. Based on the prior invoices and payments, it appears to the Intervening Plaintiff that there will be further significant requests made for payment in relation to the present litigation. 41. As set forth in the claim for relief, the Intervening Plaintiff requests a Declaratory Judgment that the payment of legal expenses to the Intervening Plaintiffs in this matter is impermissible under KRS Chapter 61, including KRS As set forth in the claim for relief, the Intervening Plaintiff requests injunction relief, both temporary and permanent, restraining and enjoining the Intervening Defendants, and all their agents, attorneys and any other person acting in concert or under the authority of the Intervening Defendants, from making further requests of the Treasurer to pay legal expenses to the Intervening Defendants, unless and until such time as this Honorable Court issues a final opinion and order which would entitle the Intervening Defendants to payment under KRS Chapter By reasons of the actions and violations set forth herein, the Commonwealth is suffering immediate, irreparable and ongoing injury, which warrants and necessitates immediate injunctive relief from this Honorable Court. 44. The Intervening Plaintiff has no adequate remedy at law or otherwise to address this injury. 45. The Intervening Plaintiff, nor to the best of the Intervening Plaintiff s knowledge, any other party, has been previously refused injunctive relief related to payment of the Intervening Defendants legal expenses. 46. The Intervening Plaintiff reserves the right to amend this complaint as necessary. 8

9 WHEREFORE, the Intervening Plaintiff, having set forth her claim for relief against the Intervening Defendants, respectfully requests judgment be entered against the Intervening Defendants, for the following: A. A temporary injunction, to be followed by a permanent injunction, barring the Defendants from seeking further payment of legal expenses pursuant to KRS Chapter 61 in relation to the facts giving rise to Franklin Circuit Court Action 16-CI-00656; B. A temporary injunction ordering any legal expenses previously paid by the Intervening Defendants in relation to Franklin Circuit Court Action 16-CI to be placed in escrow pending further orders of this Honorable Court; C. A declaration that, pursuant to KRS , the Kentucky Retirement Systems shall not make any reimbursement to the Intervening Defendants for legal expenses arising in connection with this action; D. A permanent injunction barring the Intervening Defendants from paying the legal expenses of the Intervening Defendants pursuant to KRS Chapter 61. E. Any and all other relief that this Honorable Court deems appropriate. DATED: July 11, Noah R. Friend General Counsel Allison Ball, Kentucky State Treasurer 1050 U.S. Hwy 127 S, Suite 100 Phone. (502) Fax. (502) noah.friend@ky.gov COUNSEL FOR DEFENDANT ALLISON BALL, KENTUCKY STATE TREASURER 9