Archive for April, 2009

Kansas v. Ventris – Decision

April 29, 2009

April 29th. As reported earlier, today the United States Supreme Court reversed the decision of the Kansas Supreme Court in a 7-2 decision. The case of Kansas v. Ventris revolved around whether prosecutors could use evidence gained in admitted violation of the 6th Amendment right to counsel to impeach a defendants testimony at trial (i.e. where a defendant claimed one thing in their testimony, could the prosecution bring otherwise inadmissible evidence in to show that the defendant was likely lying). The Kansas Supreme Court had said “No”, the U.S. Supreme Court said “Yes”.

Donnie Ray Ventris and Rhonda Theel were involved in the (decidedly murky) killing of Ernest Hicks in 2004. They left his property with $300 and his truck. After a tip-off police arrested the pair, but charges against Theel were dropped in return for her testimony that Ventris had shot Hicks. While in police custody, Ventris was placed in a cell with Johnny Doser, who had agreed to act as an informant. Doser was to testify at trial that Ventris admitted shooting Hicks. Ventris was charged with aggravated burglary and felony murder and chose to testify in his defense that Theel was the shooter. His attorney successfully objected to Doser’s testimony on the grounds that Doser’s presence in the cell amounted to uncounselled interrogation in violation of the 6th amendment. The State conceded this, but convinced the trial court to allow Doser to testify to impeach Ventris’ own testimony. The jury acquitted Ventris of murder but convicted him of aggravated burglary, which conviction was vacated by the Kansas Supreme Court in its State v. Ventris decision.

Today’s U.S. Supreme Court decision reverses this. Justice Scalia’s brief opinion contains two principle holdings. The first of these concerns when the 6th Amendment violation took place in this case. The second concerns what the appropriate remedy is for the violation. In her dissent in the State case, former Chief Justice Kay McFarland had suggested that there had been no 6th Amendment violation at all here. The State of Kansas did not raise this argument before the Supreme Court, and Justice Scalia’s opinion assumes (without ruling on the matter) that what happened did violate the 6th.

The U.S. Supreme Court decision found that the 6th Amendment was violated when Doser spoke with Ventris in the cell. As such, the violation had already occurred by the time of the trial. Ventris’ lawyers had argued that the violation of the right to counsel persisted into the trial itself at the point that the evidence was admitted since the evidence gathered while Ventris was without a lawyer prevented effective assistance of counsel. Justice Scalia rejects this, stating “A defendant is not denied counsel merely because the prosecution has been permitted to introduce evidence of guilt—even evidence so overwhelming that the attorney’s job of gaining an acquittal is rendered impossible.”

Having determined that the violation was already past at the time of the trial, the U.S. Supreme Court determined what the proper remedy would be. As suggested by the State of Kansas it draws analogies here with the 4th Amendment exclusionary rule which prevents admission of evidence found during an unreasonable search or seizure from being admitted, except where a defendant testifies to something that can be directly contradicted by raising the excluded evidence. The Court applied the same test that results in this rule (which balances the interests of preventing perjury against the deterrant effect the rule has against police misconduct) arriving at the same result: the evidence can be admitted for impeachment purposes. Justice Scalia notes that the deterrant effect is still present – since it would be easier to abide by the rules than gather inadmissable evidence of this sort in the hope that the defendant puts themself on the stand thus allowing impeachment evidence to be presented.

Accordingly the Kansas Supreme Court’s decision was reversed.

Justice Stevens (joined by Justice Ginsburg) dissented, arguing that allowing the State to benefit in any way from evidence gained in violation of a constitutional right weakens the deterrent effect of exclusionary rules and weakens the adversarial process at trial and the essential fairness it creates. Justice Stevens was also in dissent in the 1990 case of Michigan v. Harvey which allowed the admission of this kind of evidence under different circumstances. In that case he was joined by three other Justices rather than only one.

U.S. Supreme Court overrules Kansas Supreme Court

April 29, 2009

April 29th. Splitting 7-2 the United States Supreme Court today overturned a ruling of the Kansas Supreme Court in the case of Kansas v. Ventris (formerly State v. Ventris). Justice Scalia wrote the opinion and was joined by Chief Justice Roberts, Justice Kennedy, Justice Souter, Justice Thomas, Justice Breyer and Justice Alito. Justice Stevens and Justice Ginsburg dissented. The ruling reversed a 6-1 decision of the Kansas Supreme Court, written by Justice Rosen with former Chief Justice McFarland in dissent. This is the second time in the past four years that the Kansas Supreme Court has been reversed by the U.S. Supreme Court.

Our earlier coverage of this case is located here.

The U.S. Supreme Court opinion is here.

We will have further analysis posted later tonight.

Decision: Dodge City Implement, Inc v. Board of Barber County Commissioners

April 25, 2009

April 24th. The Kansas Supreme Court has issued its opinion in Dodge City Implement, Inc v. Board of Barber County Commissioners (No. 96,784) a negligence suit arising out of a truck-train collision in 2003. In a unanimous decision, written by Justice Beier, the court affirmed the Court of Appeals (the opinion of which was quoted extensively) decision which in turn affirmed the District Court’s dismissal of the suit as barred under Kansas’ “one-action” rule. Note: this was the only decision issued this week.

In September 2003, a DCI truck was hit by a Burlington Northern and Santa Fe train at a railroad crossing in Barber County. The collision resulted in damage to the truck and the derailment of the train. BNSF sued DCI, who ultimately settled for $3m in damages. DCI then initiated a case against Barber County (and subsequently Moore Township, following discovery findings regarding responsibilities for the crossing). DCI sought the $3m from the BNSF settlement, plus around $90,000 in damages to their truck. The District Court dismissed the case in a summary judgement finding that since Barber County and Moore Township had not been joined to BNSF’s lawsuit, DCI could not bring a separate case against them under Kansas’ “one-action” rule. The District Court also dismissed the separate negligence claim for $90,000, finding that DCI’s notification to the defendants under the Kansas Tort Claims Act did not meet the statutory requirements.

DCI appealed these rulings and lost in the Court of Appeals. DCI appealed to the Kansas Supreme Court, where it also lost. The Kansas Supreme Court decision spends the bulk of its time reviewing the “one-action” rule, its origins and its apparent exceptions. It concludes that the rule (which basically requires all liability claims to be handled through a single case in which comparative fault between several parties can be determined) remains valid. The rule has its origins in a 1974 law, but had been confused by a line of cases which did not seem to apply it. The Court’s opinion investigates these and differentiates them from the main rule, which it applies in this case. As indicated above, a sizable portion of the Court’s opinion is actually a direct quote from the Court of Appeals opinion of Judge Nancy Caplinger, which is effusively praised by Justice Beier.

On the second point (the $90,000 claim) the Kansas Supreme Court also rules against DCI. It notes that the Court of Appeals has decided multiple cases regarding the Kansas Tort Claims Act based on a kind of checklist of the notice requirements of that statute. In this opinion the Kansas Supreme Court declines to make an endorsement or otherwise of that approach, but finds that the notices sent by DCI in this case were so deficient that they could not meet the statutory rule.

April 17th Disciplinary Decisions

April 24, 2009

April 17th. The Kansas Supreme Court handed down two attorney discipline decisions. The cases were In Re Ellis (No. 101,485) and In Re Piekalkiewicz (No. 101,518). In the interests of balancing our workload against reader interest we do not write up Attorney Discipline cases, except in unusually newsworthy circumstances.

Decision: State v. Pennington

April 24, 2009

April 17th. The Kansas Supreme Court has issued its opinion in State v. Pennington (No. 100,261) a motion to correct an illegal sentence. In a unanimous decision, written by Justice Nuss, the Court rejected Reginald Pennington’s claim that his life sentence for second-degree murder was an illegal sentence. Note: Former Chief Justice Kay McFarland was still a member of the Court at the time this case was argued but took no part in the decision. Her place was taken by Court of Appeals Judge Christel Marquardt.

In 1997 Pennington was charged with second-degree murder over the strangulation death of Caresa Akins in Wyandotte County. He was arraigned for the lesser included offense of voluntary manslaughter. Prior to trial, the State filed an amended information, again charging Pennington with second-degree murder and the District Court filed a memorandum opinion concluding that there was sufficient probable cause to support charging him. Pennington was convicted by a jury and sentenced to life imprisonment with parole eligibility after 10 years. Pennington’s direct appeal was rejected by the Kansas Supreme Court in 2000.

Pennington filed this case to correct an illegal sentence, arguing that there were defects in his trial including prosecutorial misconduct in his being charged with second-degree murder twice, without the first charge being dismissed. He argued that he was not properly charged with second-degree murder and therefore could not have been convicted of it. The District Court summarily rejected Pennington’s claim without holding a hearing, leading to this appeal.

Pennington argued two things. Firstly that he should have been granted a hearing on his claim, secondly that he should prevail on it. The Kansas Supreme Court rejected both positions in a brief opinion. It first notes that the right to a hearing in illegal sentence correction motions is not automatic. The person claiming that their sentence is illegal must show that there is some chance of success. Here the District Court correctly determined that there was none. Kansas Law allows prosecutors some flexibility in amending information pretrial and does not require a new arraignment for each amended filing. The procedures surrounding preliminary proceedings are statutory. For Pennington to have been able to get anywhere with his case he would have had to object at trial to the lack of a new preliminary hearing and failure to dismiss the original charge. Since he did not, his right to appeal against them was deemed as waived.

Governor signs new ‘prior bad acts’ law

April 23, 2009

Kansas Governor Kathleen Sebelius (D) has signed Senate Bill 44 into law. While this act was primarily devoted to enacting a false claims statute for Kansas, it was amended by the House and Senate conference committee to include a section which rewrites part of Kansas law regarding the admissibility of evidence of prior bad acts.

This legislation was spurred by the decision in January by the Kansas Supreme Court in the case of State v. Prine. In an opinion written by Justice Carol Beier the court vacated the conviction of John Prine for the rape of a six year old girl on the grounds that evidence of his having committed similar acts in the past was wrongly admitted as it was not similar enough to the case at hand. Chief Justice Kay McFarland (who has since retired) dissented, arguing that the Court had misread its precedents and created the standard it applied unnecessarily.

SB44 was signed into law on April 20th. It takes effect on the date of its publication in the Kansas Register.

Decision: Nelson v. Nelson

April 23, 2009

April 17th. The Kansas Supreme Court has issued its opinion in Albert H. Nelson III and Markeyta Nelson Dewey v. Doris H. Nelson (No. 97,664), a case brought by a pair of adult children against their stepmother for their late father’s failure to abide by the terms of his divorce settlement in drawing his will. In a unanimous opinion, written by Justice Luckert, the Court found that the claim which was brought was for a breach of contract by the late Albert H. Nelson Jr and that it was not filed in time to avoid being barred by the Kansas nonclaim statute. In the course of the ruling the Court also overrules one line of its precedents and determines that constructive trusts do not require fraud be shown in order to be created.

In 1975 Albert Nelson Jr and his wife divorced. Under the terms of the divorce settlement he was to leave his entire estate to his two children. In 1978 Nelson remarried and structured his affairs in such a way that almost all his property was held in two trusts or in his new wife’s name (Doris). One trust was to ultimately benefit his children, but on their deaths to bequeath the assets to Oklahoma State and Wichita State Universities. The other was to benefit OSU and WSU after the death of Doris. Mr Nelson died in 2003 and this case was brought by his children to assert that a constructive trust existed which meant that the trusts he had funded should return the assets to the children under the terms of the 1975 divorce settlement.

The District Court and the Court of Appeals rejected this argument, finding that the case which had been brought did not show constructive fraud to have taken place, and that therefore under established precedent of the Kansas Supreme Court a constructive trust could not have been created. The Kansas Supreme Court agreed in part, finding that the Albert (III) and Markeyta had not shown that their action was one for constructive fraud, rather they were bringing an action for breach of contract, which ultimately was against Albert (Jr)’s estate, not his trusts.

However, the Court went on to investigate whether the rule in Kansas that a constructive trust could only be created where constructive fraud was shown was valid. After reviewing the case law it concluded that it was not, finding that there were two lines of cases, a recent one which asserted this principle and an older one which took a broader view. The older cases were from a time when contracts to include someone in a will were common and therefore there were more cases regarding them. The modern cases were based around constructive fraud claims, however there was not reason to limit the law this way and therefore that part of precedent was overturned.

As a result of this, the Court considered whether the claim could therefore be brought that a constructive trust existed. It found that it could not because it had not been brought in a timely manner under the Kansas nonclaim statute which sets time limits on actions such as these to allow probate to conclude with finality. While an exception exists to this statute for tort claims, the Court ruled that that exception did not apply in this case since this was essentially a contracts case (breach of the 1975 divorce settlement). Therefore the claim was time barred and the lower courts’ decisions were upheld.

Decision: U.S.D. 232 vs CWD Investments

April 22, 2009

Note: An earlier version of this article erroneously referred to the school district as “Shawnee Mission School District”. In fact USD 232 is the DeSoto school district, which also encompasses some of the outer parts of Shawnee and Lenexa. The article has been corrected.

April 17th. The Kansas Supreme Court has issued its opinion in Unified School District No. 232 vs. CWD Investments, an eminent domain valuation appeal. In a unanimous decision, written by Justice Nuss, the Court determined that the District Court had not abused its discretion in summarily ruling against some of a Johnson County property developer’s damage claims, and had not abused its discretion in barring the developer from raising some others at trial. The case arose over the condemnation of 17 acres of a subdivision in western Shawnee for the purpose of building an Elementary School. The property developer argued that this cost them around two million dollars in total losses compared to the Unified School District’s valuation of $700,000. A jury awarded the developer $8000 more than the school district appraisal.

CWD Investments and Duggan Homes planned to develop a residential subdivision near 55th Street and K-7. The property was intended to be developed into 307 lots. Prior to any ground being broken, the Unified School District condemned 17 acres to build a school. The developers say this led to the loss of 57 fewer units. The land was appraised, but the developers brought an appeal of the condemnation to the Johnson County District Court. During the discovery phase of the trial, John Duggan (President of Duggan Homes and one of the owners of CWD Investments) was deposed as an expert witness to testify about the claims he was making about the true losses his companies were experiencing as a result of the condemnation.

A key point of law regarding eminent domain in Kansas is that it is well established that future profits cannot be a factor in the damages awarded to those losing their property. The Kansas Supreme Court held this in the 1970s. The District Court did however make an evidentiary ruling that information about the way this aspect of the development might affect the fair market value of the land was admissible.

Duggan Homes (the builder for the project) and CWD Investments (the property developer) sought losses for a range of things over and above the appraiser’s value of the land. These included the cost of an extension to Clear Creek Parkway, the impact of having to spread development costs for the subdivision across fewer units on the competitiveness of the homes on the market, the costs of redesigning some of the subdivision, the impact on home values of the school and sewer costs. John Duggan described these and other damages in his deposition.

During the trial phase the District Court ruled that only the items discussed by Duggan in his deposition could be brought up. Yet, Duggan’s counsel took a broader view of that ruling and introduced evidence about items which Duggan had mentioned but not quantified. This ultimately resulted in a mistrial.

Prior to the next trial, the School District sought a summary judgment to rule against some of the developer’s claims since these constituted lost profits disguised as other items. The District Court granted the summary judgment, finding that the developer had failed to establish that it had any facts to support its argument that these costs did impact fair market value. The developer on appeal argued that the ruling was premature since the evidence it intended to present at trial would show the link. The Kansas Supreme Court rejected this argument, finding that the onus was on the developer to have shown this evidence during the summary judgment motion and that since it did not the District Court acted properly in granting summary judgment to the School District.

After this, but before the new trial, the developer altered their argument and included some costs which had not been detailed in the original depositions, such as the costs of the intersection of Clear Creek Parkway and K-7. This represented approximately 1.5 million dollars of additional damages. The School District sought to have evidence supporting this argument barred since it had not been included in the depositions and thus breached the District Court’s evidentiary ruling before the mistrial. The District Court agreed with the School District and barred evidence from being presented on these matters. The Kansas Supreme Court ruled that the District Court did not abuse its discretion in doing so, citing the latitude granted District Courts to determine admissibility of evidence and the fact that Duggan, who is also a lawyer, had signed a statement that his depositions were a complete account of the damages being sought. Just because the developer now had a new theory of its case did not entitle it to alter the evidence it was to present right before a trial.

As a result, the jury’s award of $718,100 damages was affirmed.

Decision: Estate of Draper v. Bank of America

April 17, 2009

April 17th. The Kansas Supreme Court has issued its opinion in Estate of Draper v. Bank of America (No. 96,060), a probate case. In a unanimous decision, written by Justice Luckert the Court ruled against First Christian Church of Olathe, two private individuals, Olathe Medical Center and the American Cancer Society retaining the proceeds from two trusts created by the late Ethel Draper. The property conveyed in these trusts more properly belonged in Draper’s estate for the benefit of her stepson’s due to a 1967 antenuptial agreement. Notes: While named in the litigation the American Cancer Society and Olathe Medical Center had settled with the Estate out of court. Bank of America’s naming in the lawsuit stems from its position as trustee of one of the trusts at issue. The other trust involved is overseen by UMB Bank.

In 1967 Clark Draper married Ethel Catlin. They signed an antenuptial agreement which stated that while each brought separate assets to the marriage and would retain control over those assets independently, if Clark predeceased Ethel his assets would pass to her, and she would leave at least one quarter of her estate to each of Clark’s sons by a previous marriage. Clark died in 1977. In 1977 and 1982 Ethel created two irrevocable trusts from which she benefited during her lifetime, but which upon her death would transfer the benefits to those listed above. Ethel Draper died in 2002, leaving her entire estate of $10,000 to the three sons of Clark Draper, while the two trusts contained combined assets totalling around $1 million. Clark’s son Gerald, acting as executor of Ethel’s estate sued the two trusts, arguing that their creation was a breach of Ethel’s fiduciary obligation under the 1967 antenuptial agreement.

The Johnson County District Court issued a Summary Judgement in favor of the Estate. This was reversed by the Court of Appeals. In this decision the Kansas Supreme Court reverses the Court of Appeals, reinstating the District Court’s Summary Judgement.

The essence of the decision comes down to the determination that Ethel held the property under a Constructive Trust while she was alive, that was created by the 1967 antenuptial agreement. The transfer of the property into the two irrevocable trusts was therefore a constructive fraud (essentially a legal fiction, unbeknownst to the beneficiaries). To reach this conclusion the Court finds that Ethel had a Confidential Relationship with her husband (something which does not arise automatically just from marriage) because of the agreement – under Kansas law a Confidential Relationship arises when two spouses agree to write their wills in a manner co-ordinated between the two of them. The second part of the constructive fraud finding is that Ethel had a duty under the 1967 agreement, since she owed Clark a duty to carry out her part of the bargain in good faith, which she breached by divesting her estate of most of her assets through the two trusts.

The Court also cleared a path through a number of statutory rules regarding timing. It found for example that the statute which bars out of time claims against an Estate did not apply in this instance because the lawsuit was initiated as part of the process of marshaling the assets of the Estate (in spite of the fact that the Executor doing the marshaling was also a beneficiary), where that particular rule did not apply. A claim that the suit was barred under the statute of limitations regarding fraud (on the argument that the fraud took place in 1982) was rejected on the grounds that the terms of the antenuptial agreement were not actually breached until Ethel’s death in 2002.

Decision: Tilzer v. Davis, Bethune and Jones

April 13, 2009

April 3rd. The Kansas Supreme Court has issued its decision in Tilzer v. Davis, Bethune and Jones (No. 99,678), a legal malpractice suit. In a unanimous opinion, written by Justice Johnson, the Court reversed a summary judgment issued by the Johnson County District Court to dismiss an action brought by the Tilzer family against their former attorneys over a class action lawsuit in Missouri. Note: This case was argued in the January sitting of the Court, after former Chief Justice Kay McFarland’s retirement. District Judge David King served as the seventh member of the court hearing the case.

The exact details of the case are unclear, due to the the records being under seal. The background is that the Tilzer family were among a group of people who sued Eli Lilly and Bristol-Myers Squibb for negligently allowing a pharmacist to dilute cancer drugs. They hired the Davis, Bethune and Jones law firm to act as their attorneys. This action was brought in Missouri. The pharmaceutical companies settled and the Missouri court established a process using two special masters to assess each claim and allocate money out of a capped settlement pot. The facts of the case, and documents obtained during the case were sealed as part of the settlement. The Tilzer’s objected to the terms of the settlement, but were compelled by a court order of the Missouri court to go along with it. Their attorneys filed an attorney’s lien to get their payment for services rendered from the Tilzers.

The Tilzers attempted to resist this, arguing that the terms of the settlement constituted an aggregate settlement, which would have required their attorneys to disclose certain information which they had not done. The Missouri court rejected this argument, but stated that its ruling did not foreclose any legal malpractice action they might want to bring. The Tilzers did not appeal the ruling in Missouri, but instead brought a fresh action alleging legal malpractice in Kansas.

Missouri has a rule which states that if one of two parties in a lawsuit might bring their counterargument as a separate claim, they cannot do so but must rather bring the matter up in the instant case (couterparty claim rule). Davis, Bethune and Jones successfully argued in the Kansas District Court that the legal malpractice claim should have been brought under this rule in the attorney’s lien hearing (the trial judge’s comments notwithstanding). In addition, the District Court also ruled that the Tilzer’s claim was blocked under collateral estoppel since it was already litigated in the Missouri actions. During the Kansas case the pharmaceutical companies intervened in the case to ensure the continued sealing of the documents. The other matter decided in the District Court was that that Court ruled that the settlement of the Missouri action was not an aggregate settlement.

In its decision the Kansas Supreme Court reverses the District Court on all but the sealing of the documents. On that point it held that the public policy interests of out of court settlement of class action lawsuits were served by the documents remaining under seal, while the Tilzers suffered no ill effects from the sealing. The Court noted that the proper venue for having challenged the sealing of the documents would have been an appeal in Missouri of the original settlement.

On the remaining points the Court ruled for the Tilzers:

Counterparty claim rule – the District Court had expanded the Missouri counterparty claim rule beyond its normal parameters influenced greatly by a decision in New Mexico regarding a similar rule. During the time the case has been on appeal the New Mexico Supreme Court overturned that decision, rather undercutting the logic behind the District Court’s decision. Therefore the Court determined that “Missouri’s compulsory counterclaim rule does not require a client to litigate a claim for legal malpractice in response to an attorney’s motion to enforce an attorney’s fee lien in the underlying action that gave rise to both the malpractice claim and the attorney’s fee lien”.

Collateral Estoppel – the Kansas Supreme Court ruled that the case was not collaterally estopped. It bases its decision on some disagreements with the Missouri Court’s process for arriving at a ruling which foreclosed certain avenues to the Tilzers to make their case which are open in the fresh case. Based on Missouri’s more lenient rules around collateral estoppel the Court held that there were sufficient parts of the Tilzer’s case which had not been adjudicated completely or properly to prevent them litigating them in the legal malpractice case.

Aggregate Settlement – in perhaps the most significant aspect of the decision, the Court held that the settlement in the Missouri case was an aggregate settlement, despite the ruling of the Missouri Court saying otherwise. The Court based this decision on a report compiled by the American Law Institute to define what exactly an aggregate settlement is. In this case the fact that the damages awarded to each participant in the lawsuit was not purely based on the facts of the case but influenced by the fact that the settlement pot was capped. This created an interdependency between the various claimants (since they shared in the award), which the Court held was the abiding mark of an aggregate settlement.

The case was therefore remanded to District Court for further proceedings on the merits of the Tilzer’s case.