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COMMONWEALTH OF KENTUCKY

FRANKLIN CIRCUIT COURT


DIVISION I
ELECTRONICALLY FILED

CIVIL ACTION NO. 16-CI-00656

ALLISON BALL, in her official capacity


as Treasurer of the Commonwealth of Kentucky,

VS.

INTERVENING PLAINTIFF

INTERVENING COMPLAINT FOR DECLARATION


OF RIGHTS & PERMANENT INJUNCTION

THOMAS K. ELLIOTT
324 Browns Lane
Louisville, KY 40207

INTERVENING DEFENDANT

Serve: Kevin Chlarson


Counsel for Intervening Defendant
Middleton Reutlinger
401 South Fourth Street, Suite 2600
Louisville, KY 40202
&
MARY HELEN PETER
18 Pembroke Road
Louisville, KY 40220

INTERVENING DEFENDANT

Serve: Kevin Chlarson


Counsel for Intervening Defendant
Middleton Reutlinger
401 South Fourth Street, Suite 2600
Louisville, KY 40202
&
WILLIAM A. THIELEN, in his official capacity
as Executive Director of the Kentucky Retirement Systems
1260 Louisville Road

INTERVENING DEFENDANT

Frankfort, KY 40601
Serve: William A. Thielen
Executive Director, Kentucky Retirement Systems
1260 Louisville Road
Frankfort, KY 40601
&
KENTUCKY RETIREMENT SYSTEM
1260 Louisville Road
Frankfort, KY 40601

DEFENDANT

Serve: William A. Thielen


Executive Director, Kentucky Retirement Systems
1260 Louisville Road
Frankfort, KY 40601
- AND Andy Beshear
Attorney General of the Commonwealth of Kentucky
700 Capitol Avenue, Suite 118
Frankfort, KY 40601
***************
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.

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 Defendants 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 418.050 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 2016-211, issued on or about April 20, 2016.
7.

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

Pursuant to Executive Order 2016-340, issued on June 17, 2016, the Board of Trustees was reorganized as the
Board of Directors.
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Employees Retirement System pursuant to KRS 61.645(1)(d). Intervening Defendant Peters term
of office was not affected by Executive Order 2016-340, 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 418.040,

and Civil Rules 57 and 65.


11.

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
452.405.
13.

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.

16.

On April 20, 2016, Governor Matthew G. Bevin (Governor Bevin) issued

Executive Order 2016211, 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 2016211 is attached hereto as Exhibit A.
17.

Governor Bevin subsequently replaced Intervening Defendant Elliott on the Board.

True and accurate copies of Executive Orders 2016214 and 2016273 are attached hereto
collectively as Exhibit B.
18.

On June 17, 2016, Governor Bevin issued Executive Order 2016340, which

reorganized the Board of Trustees as the Board of Directors. A true and accurate copy of Executive
Order 2016-340 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 Elliotts 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.

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. 1.
24.

As of the filing of the suit, Intervening Defendant Elliott was not a member of the

Board, pursuant to Executive Order 2016211.


25.

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 $50,000.00 in attorney fees to be paid to counsel for Intervening Defendant
Elliott.2
27.

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 61.645, 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 61.645(15)(h).

See, Mcnair, James State Pension System Picks Up $50,000 Tab to Sue Bevin KENTUCKY CENTER FOR
INVESTIGATIVE REPORTING, July 7, 2016 (available at http://kycir.org/2016/07/07/state-pension-system-picks-up50000-tab-to-sue-bevin/) (last visited July 11, 2016).
6

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 61.645, 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 2016211 on April 20, 2016. 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 61.645.
37.

The Intervening Defendants have impermissibly requested and authorized payment

of attorney fees pursuant to KRS 61.645.


38.

A payment of approximately $30,000.00 was paid to counsel, from Kentucky

Retirement Systems funds, in late June or early July, 2016.

39.

Upon information and belief, a further payment of approximately $19,000.00 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 61.645.
42.

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 61.
43.

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 Plaintiffs 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.

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-00656 to be placed in
escrow pending further orders of this Honorable Court;
C. A declaration that, pursuant to KRS 61.645, 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, 2016.

__
Noah R. Friend
General Counsel
Allison Ball, Kentucky State Treasurer
1050 U.S. Hwy 127 S, Suite 100
Frankfort, KY 40601
Phone. (502) 564-4722
Fax. (502) 564-6545
noah.friend@ky.gov
COUNSEL FOR DEFENDANT ALLISON BALL,
KENTUCKY STATE TREASURER

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