Jessica M. Karmasek Mar. 21, 2013, 2:30pm

FRANKFORT, Ky. (Legal Newsline) -- The Kentucky Supreme Court says communications made to Attorney General Jack Conway's office in a case over a condominium owners association's funds were not part of a judicial proceeding and thus are entitled to only a "qualified" privilege.

Appellant Dennis J. Stilger appealed to the state's high court over the state Court of Appeals' reversal of his award of summary judgment against appellee Edward H. Flint. Flint is the owner of a condominium managed by the Coach House and a member of the condominium owners' association.

Flint became suspicious that association funds were being misappropriated, and thus requested that Coach House's board of directors allow him access to the financial records and minutes of its meetings from 2005 to 2007.

Stilger, who was the attorney for the board, informed Flint that his request was "unreasonable."

Thereafter, Flint wrote to Conway's office, asking that it prosecute the matter.

Stilger responded by sending a letter to Conway, detailing the reasons that restrictions were placed on access to the records, including some that were "unflattering" to Flint.

In response, Flint filed a lawsuit against Stilger, asserting that his letter to the attorney general was defamatory.

Stilger then filed a motion for summary judgment.

The Jefferson Circuit Court determined that Stilger's letter to Conway, although unflattering, was a direct response to an appeal for prosecution and was thus part of a judicial proceeding. It was for this reason that the trial court granted his motion for summary judgment.

Flint appealed the lower court's decision to the Court of Appeals, which reversed and remanded the court's grant of summary judgment.

Stilger then appealed the Court of Appeals' reversal to the state's high court, arguing that the circuit court correctly granted summary judgment due to the fact that communications between an attorney, on behalf of his client, and the attorney general enjoy an "absolute" privilege.

The state's high court sided with Flint, affirming the appeals court's decision.

"We agree that upon an examination of the record in its entirety there was an issue that needed to be resolved, i.e., whether the communication between Appellant and the AG is entitled to an absolute or qualified privilege," Justice Will T. Scott wrote in the court's opinion, rendered Feb. 21 and corrected March 12.

"Therefore Appellant was not entitled to summary judgment."

The court said whether the communication in question is protected by an absolute or qualified privilege is an issue of first impression.

"Kentucky has a longstanding acceptance of the rule that statements made during the course of a judicial proceeding shall enjoy an absolute privilege," Scott wrote in the six-page ruling.

"However, '[a] qualified privilege attaches to reports made to law enforcement authorities for investigation, and like any other qualified privilege, the speaker is afforded immunity unless it is shown that the defamatory statement was malicious.'

"Furthermore, '[c][/c]ommunications made to a state attorney general's office enjoy a qualified rather than an absolute privilege, since the attorney general does not act in a judicial or quasi-judicial capacity because, although he or she investigates allegedly fraudulent or illegal acts, he or she must seek enforcement in court.'"

The court explained that in the case at hand there is a genuine dispute as to whether the letter written by Stilger to Conway was, in fact, correspondence relevant to a judicial proceeding.

"The trial court determined that Appellee's letter to the AG was clearly a communication in preparation for a judicial proceeding and thus so was Appellant's response. However, Appellee argues that there is a significant difference between a proposed judicial action and a judicial proceeding. We agree," Scott wrote.

"In the case at hand, Appellee wrote the letter to the AG in hopes that he would investigate the situation, as the AG's office is an investigatory body. In order for any judicial proceedings to ensue, the AG would have to seek enforcement in a court of law.

The court concluded that the communications made to the Attorney General's Office were not part of a judicial proceeding and thus are not entitled to only a qualified privilege, and remanded the case to the circuit court.

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