Interlocutory Immunity Appeals Cannot Reach Subject-Matter Jurisdiction; Boards of Education Are Within KRS 45A.245’s Contract-Immunity Waiver

Introduction

In Board of Education of Paris, Kentucky v. Earlywine, the Supreme Court of Kentucky resolved two significant and recurrent issues in Kentucky public law: (1) whether local boards of education are covered by the statutory waiver of governmental immunity for actions on written contracts in KRS 45A.245(1); and (2) whether an appellate court may entertain subject-matter jurisdiction challenges—here, failure to exhaust administrative remedies under KRS 161.790—on an interlocutory appeal limited to the denial of governmental immunity.

The case arises from a teacher’s multi-year suspension without pay following a student’s allegation of sexual abuse. After criminal charges were resolved in his favor and later expunged, the teacher, Jason Earlywine, sued the Board of Education of Paris Independent School District (BEP) to recover back pay for the period of unpaid administrative leave. BEP moved to dismiss on governmental immunity and failure-to-exhaust grounds. The case ultimately reached the Supreme Court via interlocutory review focused on immunity.

The Court affirmed in part—holding that KRS 45A.245(1) waives governmental immunity for written contract claims against boards of education—and reversed in part—holding the Court of Appeals erred by reaching the subject-matter jurisdiction question (failure to exhaust) in an interlocutory immunity appeal. The matter returns to the Franklin Circuit Court to address exhaustion and any recognized or potentially adoptable exceptions in the first instance.

Summary of the Opinion

The Supreme Court affirmed that local boards of education are “departments or agencies” of the Commonwealth for purposes of KRS 45A.245(1), and thus fall within the statute’s waiver of governmental immunity for written contract suits. The Court reaffirmed University of Louisville v. Rothstein, which characterizes KRS 45A.245(1) as an “unqualified” waiver for written contracts with the Commonwealth, including employment contracts.
The Court reversed the Court of Appeals’ sua sponte conclusion that Earlywine’s failure to exhaust administrative remedies under KRS 161.790 deprived the circuit court of subject-matter jurisdiction. On an interlocutory appeal limited to immunity, appellate courts may not reach collateral issues such as subject-matter jurisdiction grounded in exhaustion. That question belongs to the trial court and, if necessary, the “normal appellate process.”
The case is remanded to the Franklin Circuit Court to adjudicate exhaustion and any applicable exceptions. The venue issue (Franklin Circuit under KRS 45A.245(1) versus local circuit venue under the more specific KRS 161.790(9)) may also be raised on remand.
Justice Bisig, joined by Chief Justice Lambert and Justice Keller, concurred that KRS 45A.245(1) waives immunity but dissented as to remand. The dissent would treat exhaustion as a jurisdictional prerequisite that must be considered even in an interlocutory appeal and would direct dismissal because Earlywine did not timely invoke KRS 161.790’s procedures.

Analysis

I. The Two Issues and the Court’s Holdings

This appeal presented a procedural paradox: (a) appellate courts have jurisdiction on interlocutory appeal to review denials of governmental immunity because immunity confers an entitlement not to stand trial; yet (b) the Court of Appeals declared that the trial court lacked subject-matter jurisdiction due to Earlywine’s unexhausted administrative remedies under KRS 161.790, raising that issue sua sponte. The Supreme Court resolved this by holding that interlocutory review is limited to the immunity question and cannot be used to reach subject-matter jurisdiction or exhaustion. In parallel, the Court held that boards of education fall within the KRS 45A.245(1) waiver for written contracts, reaffirming Rothstein and a decades-long line of cases.

II. Precedents Cited and Their Roles

Breathitt County Bd. of Ed. v. Prater, 292 S.W.3d 883 (Ky. 2009) — Establishes that immunity provides freedom from suit, not merely liability, warranting interlocutory review of immunity denials; undergirds the Court’s jurisdiction to hear the immunity question now.
University of Louisville v. Rothstein, 532 S.W.3d 644 (Ky. 2017) — Key precedent deeming KRS 45A.245(1) an “unqualified waiver” of governmental immunity in written contract cases with the Commonwealth, including employment contracts. The Court reaffirms Rothstein and refuses to overrule it.
Hensley v. Haynes Trucking, LLC, 549 S.W.3d 430 (Ky. 2018) and Baker v. Fields, 543 S.W.3d 575 (Ky. 2018) — Anchor the principle that interlocutory appeals must be confined to the questions that authorize them. Here, immunity is the only gateway issue; the Court of Appeals exceeded its remit by addressing subject-matter jurisdiction based on exhaustion.
Commonwealth Health Corp. v. Croslin, 920 S.W.2d 46 (Ky. 1996) and Duncan v. O’Nan, 451 S.W.2d 626 (Ky. 1970) — Cited to underscore the gravity of true subject-matter jurisdiction defects; yet the Court clarifies that even jurisdictional arguments are not cognizable on interlocutory appeal unless within the authorized scope (immunity here).
Commonwealth v. DLX, Inc., 42 S.W.3d 624 (Ky. 2001); Popplewell Alligator Dock No. 1, Inc. v. Revenue Cabinet, 133 S.W.3d 456 (Ky. 2004); Kentucky State Police v. Scott, 529 S.W.3d 711 (Ky. 2017) — These cases hold that failure to exhaust administrative remedies is jurisdictional, subject to limited exceptions. The majority distinguishes their context: those rules apply, but they must be addressed in the trial court or on writ/direct appeal, not inserted into interlocutory immunity appeals.
Furtula v. University of Kentucky, 438 S.W.3d 303 (Ky. 2014) (Noble, J., dissenting) — Influential discussion on reconciling the Model Procurement Code (KMPC) with specific statutes governing state universities’ employment; supports using the general/specific canon here to harmonize KRS 45A.245(1) with KRS 161.790.
University of Louisville v. Martin, 574 S.W.2d 676 (Ky. App. 1978) — Early and seminal case under KRS 44.270 (predecessor to KRS 45A.245) recognizing waiver for written employment contracts; reinforced in Rothstein and treated as part of a strong stare decisis chain.
University of Kentucky v. Regard, 670 S.W.3d 903 (Ky. 2024) — Majority embraced KRS 45A.245(1)’s application to written contracts with students; disputes were about whether a written contract existed. The Court cites Regard as further confirmation of the breadth of the waiver.
Letcher County Bd. of Ed. v. Hall, 671 S.W.3d 374 (Ky. 2023) and Abel v. Austin, 411 S.W.3d 728 (Ky. 2013) — Support the general/specific canon: specific statutes (KRS 161.790 for teacher discipline) govern procedure and remedies in their domain; the general waiver in KRS 45A.245(1) remains operative where not in conflict.
Yanero v. Davis, 65 S.W.3d 510 (Ky. 2001) — Clarifies boards of education enjoy governmental immunity (as agencies), not “sovereign” immunity of the Commonwealth itself; frames how the waiver interacts with boards.
Mills v. City of Barbourville, 117 S.W.2d 187 (Ky. 1938) and Fed. Chem. Co. v. Paddock, 94 S.W.2d 645 (Ky. 1936) — Discuss ejusdem generis; the Court explains why the doctrine does not narrow “all types of state agreements” in KRS 45A.030(8).
Benningfield ex rel. Benningfield v. Zinsmeister, 367 S.W.3d 561 (Ky. 2012) — Courts should not infer holdings from silence; supports discounting Ammerman as controlling on KRS 45A.245(1) since it never addressed the statute.
Cases on notice-tolling exceptions in other fields — Lacy v. Fulbright & Jaworski, 405 F.3d 254 (5th Cir. 2005); Ross v. USPS, 696 F.2d 720 (9th Cir. 1986); Sewak v. INS, 900 F.2d 667 (3d Cir. 1990) — Cited not as binding but to show that lack-of-notice-based exceptions exist elsewhere, reinforcing that “exhaustion” is a rule with possible exceptions; the Court does not adopt any such exception here but preserves the question for the trial court.

III. The Court’s Legal Reasoning

A. Scope of Interlocutory Review: Immunity-Only

The Court grounds its jurisdiction in the well-settled principle that denials of governmental immunity are immediately appealable because immunity is an entitlement to be free from suit. But with that limited entry point comes a limited scope: the appellate court may address only the immunity question. Relying on Hensley and Baker, the Court holds that the Court of Appeals erred by sua sponte deciding subject-matter jurisdiction based on exhaustion during an interlocutory immunity appeal. Subject-matter jurisdiction challenges—though non-waivable and capable of being raised at any time—must travel through the ordinary channels: trial court adjudication, direct appeal, or writ practice. Interlocutory review is not a bypass ride for collateral issues.

B. Governmental Immunity Waiver for Boards of Education Under KRS 45A.245(1)

The Court reaffirms Rothstein’s reading of KRS 45A.245(1) as an unqualified waiver for written contracts with the Commonwealth, “including but not limited to” employment contracts. The Board’s attempt to cabin the waiver to contracts overseen by the Finance and Administration Cabinet or to exclude employee contracts via definitional arguments under the KMPC fails for several reasons:

The KMPC’s general definition of “contract” encompasses “all types of state agreements” (KRS 45A.030(8)), language the Court deems unambiguous in its breadth. Ejusdem generis does not narrow the phrase because the general term comes first, and in any event the statutory purpose is clear.
The KMPC is architected with section-specific definitions (e.g., KRS 45A.345(11)’s “local public agency”), which cannot be exported to alter the meaning of “Commonwealth” in KRS 45A.245(1). KRS 45A.240(1) controls here: the “Commonwealth” includes “any of its departments or agencies,” and boards of education qualify.
Employment contracts for teachers are expressly required to be in writing (KRS 161.730), and teacher salaries are expenditures of public funds (KRS 157.010; KRS 157.075). Thus, teacher employment agreements are “state agreements” within the procurement framework.
Through the general/specific canon, the Court harmonizes KRS 45A.245(1) with KRS 161.790: the teacher-discipline statute is the more specific procedural statute governing suspensions and dismissals, while 45A.245(1) supplies the global immunity waiver for written contract suits. There is no conflict; both apply in their spheres.
Stare decisis is strong. The waiver’s reach to written employment contracts traces back to Martin (1978) under the predecessor statute, through Rothstein (2017), and more recently Regard (2024). The General Assembly has not amended KRS 45A.245(1) to narrow the courts’ construction despite decades of opportunity.

C. Addressing Contrary Authority and Arguments

“Local public agency” vs. “Commonwealth”: KRS 45A.345(11)’s definition applies only to KRS 45A.343–.460 (local adoption of purchasing provisions). It does not limit KRS 45A.245(1). The latter relies on KRS 45A.240(1), which includes agencies and departments of the Commonwealth—boards of education qualify.
Clevinger and Ammerman: Neither case controls the waiver issue here. Clevinger turned on federal § 1983 immunity and has been undermined on that point; it did not address KRS 45A.245(1). Ammerman involved claims styled as contract but functionally about harassment; it never analyzed KRS 45A.245(1) and thus cannot be read as silently limiting the statute.
Parade of horribles: The Board’s concern that all manner of contract suits (construction, leases, procurement, vendor contracts) will lie against boards of education is, the Court says, precisely what the General Assembly contemplated in KRS 45A.235 and 45A.245. The waiver is a policy choice codified by the legislature.
Venue: While KRS 45A.245(1) channels contract suits to Franklin Circuit Court, KRS 161.790(9) (the more specific statute) empowers the local circuit court to hear teacher-discipline appeals; the opinion acknowledges that the venue question may be revisited on remand in light of this specificity principle.

D. Exhaustion of Administrative Remedies: Not for Interlocutory Review Here

The Court acknowledges Kentucky’s doctrine that exhaustion under KRS 161.790 is jurisdictional, subject to recognized exceptions (e.g., futility, express statutory authorization for direct review, facial constitutional challenge). But whether exhaustion occurred and whether an exception applies are matters for the trial court on remand. Importantly, the Court preserves Earlywine’s ability to argue exceptions, including a lack-of-notice rationale analogous to those in other jurisdictions (without adopting any such rule).

Bottom line: the Court of Appeals exceeded its authority by reaching exhaustion/subject-matter jurisdiction on interlocutory review limited to immunity. That question must be litigated and decided below, with any appellate review to follow in the ordinary course.

IV. The Dissent: A Competing View of Interlocutory Scope and Exhaustion

Justice Bisig (joined by Chief Justice Lambert and Justice Keller) agrees that KRS 45A.245(1) waives immunity for written contract claims against boards of education but contends the Court must first confirm that the trial court had subject-matter jurisdiction even to decide immunity. Citing Hensley’s bifurcated discussion of jurisdiction in class-certification interlocutory review, the dissent argues that courts may (and must) ensure the trial court had jurisdiction to act at all. Because Earlywine indisputably did not invoke KRS 161.790’s procedures within ten days, the dissent reads subsection (3)’s “finality” clause as foreclosing any exception and would direct dismissal.

The majority answers that Hensley permits only limited jurisdictional checks necessary to adjudicate the authorized interlocutory issue (e.g., whether at least one claim supports the class-certification ruling). It does not permit an appellate court to decide the entire case’s subject-matter jurisdiction on an immunity interlocutory appeal. Moreover, exhaustion is an exception-ridden doctrine; inserting it here, sua sponte, deprived Earlywine of the opportunity to develop those arguments in the trial court.

V. The Impact

Clarified appellate boundaries: Kentucky appellate courts are now squarely instructed: interlocutory appeals from denials of governmental immunity are limited to the immunity question. They cannot be used as vehicles to resolve subject-matter jurisdiction issues such as administrative exhaustion.
Boards of education exposed to written-contract suits: The Court cements that boards of education are “departments or agencies” of the Commonwealth for KRS 45A.245(1). Where there is a lawfully authorized written contract (including teacher employment contracts), the governmental immunity defense does not bar suit. This will affect litigation strategy for school districts and contractual counterparties alike.
Teacher-discipline framework preserved but harmonized: KRS 161.790 remains the specific procedural avenue for discipline disputes. However, the immunity waiver in KRS 45A.245(1) independently allows contract suits where a written contract exists, subject to compliance with (or valid excuse from) KRS 161.790’s process.
Exhaustion exceptions and notice: The Court leaves open that recognized exceptions can apply and that Kentucky might consider additional limited exceptions (e.g., defective notice) in appropriate cases, though it makes no holding on that point. Litigants should expect focused development of the exhaustion record in the trial court.
Venue refinements: Parties should prepare to brief venue on remand, balancing the general Franklin Circuit venue in KRS 45A.245 against the more specific local venue contemplated in KRS 161.790(9).

Complex Concepts Simplified

Governmental immunity vs. sovereign immunity: “Sovereign immunity” is the Commonwealth’s immunity as the state; “governmental immunity” extends comparable protection to state agencies and departments. Local boards of education are state agencies entitled to governmental immunity—but the General Assembly can waive that immunity, as it has for written contracts in KRS 45A.245(1).
Interlocutory appeal: An appeal taken before final judgment. Kentucky allows interlocutory appeals to review denials of governmental immunity because immunity confers an entitlement not to stand trial at all.
Subject-matter jurisdiction: A court’s power to hear a class of cases. It cannot be conferred by agreement or waiver. However, not every procedural defect is a jurisdictional bar; here, “exhaustion” is treated as jurisdictional in Kentucky, but its adjudication belongs in the trial court unless properly before an appellate court in the normal way.
Exhaustion of administrative remedies: A rule requiring parties to use prescribed administrative procedures (e.g., KRS 161.790’s ten-day notice and tribunal process) before going to court. Kentucky recognizes exceptions (futility, statutory direct review, facial constitutional challenge), and the Court hints that notice-related tolling arguments may be considered in the right case.
General/specific canon: When two statutes apply, the more specific controls over the more general in the event of conflict. Here, KRS 161.790 (teacher discipline) is specific and controls procedure; KRS 45A.245(1) (immunity waiver for written contracts) is general and coexists where not in conflict.
Stare decisis: The doctrine of adhering to precedent, particularly strong in statutory interpretation, where the legislature can amend if it disagrees. The Court emphasizes nearly five decades of consistent construction of the written-contract waiver.

Practice Notes

For boards of education: Review written contracting practices and risk management protocols. The immunity defense will not bar suit on lawfully authorized written contracts; draft with precision, ensure compliance with KRS 161.790 in discipline cases, and preserve exhaustion defenses in the trial court—not on interlocutory appeal.
For educators and employees: Written employment contracts are actionable under KRS 45A.245(1), but strict adherence to KRS 161.790 remains critical. If notice or process was deficient, develop the record and present recognized (or proposed) exceptions to exhaustion in the trial court.
For appellate practitioners: In interlocutory immunity appeals, confine briefing to immunity. Jurisdictional issues like exhaustion should be raised via writ practice or after final judgment. Be prepared to address Hensley’s limited threshold inquiries without overreaching into merits jurisdiction.
On venue: Anticipate arguments that KRS 161.790(9) (local venue) may displace KRS 45A.245(1)’s Franklin Circuit venue for teacher-discipline disputes due to the general/specific canon.

Key Citations

KRS 45A.245(1): Waiver of governmental immunity for lawfully authorized written contracts with the Commonwealth; venue in Franklin Circuit (subject to specific statutes).
KRS 45A.240(1): “Commonwealth” includes any departments or agencies.
KRS 161.730; KRS 161.790: Written teacher contracts and procedures for suspension/dismissal and appeals.
University of Louisville v. Rothstein, 532 S.W.3d 644 (Ky. 2017): Waiver applies to written employment contracts.
Breathitt Cnty. Bd. of Ed. v. Prater, 292 S.W.3d 883 (Ky. 2009): Interlocutory review of immunity denials.
Hensley v. Haynes Trucking, LLC, 549 S.W.3d 430 (Ky. 2018); Baker v. Fields, 543 S.W.3d 575 (Ky. 2018): Scope limits on interlocutory appeals.
University of Louisville v. Martin, 574 S.W.2d 676 (Ky. App. 1978); University of Kentucky v. Regard, 670 S.W.3d 903 (Ky. 2024): Longstanding breadth of the written-contract waiver.

Conclusion

This decision meaningfully reshapes two intersecting areas of Kentucky public law. First, it cements that KRS 45A.245(1)’s waiver of governmental immunity for written contracts reaches local boards of education, solidifying a long line of precedent and rejecting attempts to narrow the waiver through KMPC definitional detours. Second, it draws a clear jurisdictional boundary for interlocutory appeals: appellate courts reviewing the denial of immunity may address immunity only, leaving subject-matter jurisdiction arguments such as administrative exhaustion to the trial court and the standard post-judgment appellate pathway.

On remand, the Franklin Circuit Court must address whether Earlywine failed to exhaust and whether any exception applies, including potential notice-related arguments. The decision ensures both that contractual accountability to public employees and vendors remains available where written contracts exist, and that procedural regularity governs when and how jurisdictional issues are adjudicated in Kentucky courts.