Archive for September, 2009

Decision: Moser v. KDoR

September 4, 2009

August 28th. The Kansas Supreme Court has issued its opinion in Moser v. Kansas Department of Revenue (No. 96,734) an appeal from a suspension of a driving license. In a unanimous opinion, written by Justice Lee Johnson, the court held that an administrative appeal against a driving license suspension must be filed within 10 days of the suspension, or be procedurally blocked from further relief.

Brandon Moser was in a car accident and police suspect him of DUI. He refused a breath test. This was not the first time this had happened. Given all this, his license was suspended by the police officer attending the scene, who filled out a form notifying Moser that in 30 days his license would be suspended for 10 years, absent his appealing. Moser did not file an administrative appeal, and outside the 10 day period to do so filed a suit in District Court seeking to overturn his suspension on the grounds that the 10 year suspension was excessively penal.

The District Court heard his motion, because it was filed within 30 days of the suspension notice. The Court found that in this case the 10 day rule did not apply and that a separate 30 day rule did. The Court then rejected Moser’s case on the grounds that he had not used up his administrative remedies.

Moser appealed the latter part, the Department of Revenue appealed the ruling about the 30 day rule applying. The Court of Appeals held that the 10 day rule applied but affirmed the District Court’s ruling that it could not reach the merits of the case. Moser appealed to the Kansas Supreme Court.

The Kansas Supreme Court agreed with the Court of Appeals. It found that the District Court’s ruling that the 30 day appeal period applied was not supportable based on the plain reading of the statute. The 10 day rule is the one which applies. Therefore it found that there was no jurisdiction for the case to be heard in any court and affirmed the lower Courts’ dismissal of Moser’s actions.

Decision: Landmark National Bank v. Kesler

September 3, 2009

August 28th. The Kansas Supreme Court has issued its opinion in Landmark National Bank v. Kesler (No. 98,489), a complex foreclosure proceeding. In a unanimous opinion, written by Justice Eric Rosen, the Court held that under the circumstances of this case the second-mortgage holder could not undo the foreclosure that had been performed and settled by the first-mortgage holder, owing to the complex legal relationship between that second-mortgage holder, the property and an intermediary company.

Boyd Kesler took out two mortgages against some property in Ford County. The first was with Landmark National Bank. The second with Millenia Mortgage Company. Millenia generated its documents using Mortgage Electronic Registration Systems (MERS), which carried out the administration of the loan, but received none of the money and was not legally the owner of the loan. MERS operates a system where it stands in for lenders who provide the money and allows the trading of loan notes between different institutions.

At some point, via this process Millenia’s ownership of the note transferred (or may have transferred) to Sovereign Bank. Meanwhile Kesler went through bankruptcy proceedings and the first lienholder – Landmark – foreclosed on the property. The property was sold at auction, for more than the amount owed to Landmark and Kesler and Landmark filed a motion to settle the monies between them.

Subsequent to this, Sovereign and later MERS sought to block the foreclosure on the grounds that they (as second lienholders) had not received notification of the sale. As it transpires, Ford County never received a registration for the mortgage as belonging to anyone but Millenia.

The District Court denied this motion, and various appeals resulted. The Kansas Supreme Court rejected the appeal by MERS and Sovereign, finding that since MERS did not own the note its status in law as relates to the mortgage is tenuous. Therefore none of the criteria for setting aside the foreclosure could be met. In ruling this way the Court rejected the amicus brief filed by various financial organizations which endorsed the MERS system, saying that it must follow the law as written, notwithstanding the amicus brief’s complaint that the recording scheme stems from “seventeenth-century property law that is entirely unsuited to twentieth-century financial transactions”.

The Court also rejected a Due Process argument from MERS, finding that throughout the various proceedings it had had its arguments listened to in court and therefore had certainly received the process it was due in this case.

Decision: Landmark National Bank v. Kesler

August 28th. The Kansas Supreme Court has issued its opinion in Landmark National Bank

v. Kesler (No. 98,489), a complex foreclosure proceeding. In a unanimous opinion,

written by Justice Eric Rosen, the Court held that under the circumstances of this case

the second-mortgage holder could not undo the foreclosure that had been performed and

settled by the first-mortgage holder, owing to the complex legal relationship between

that second-mortgage holder, the property and an intermediary company.

Boyd Kesler took out two mortgages against some property in Ford County. The first was

with Landmark National Bank. The second with Millenia Mortgage Company. Millenia

generated its documents using Mortgage Electronic Registration Systems (MERS), which

carried out the administration of the loan, but received none of the money and was not

legally the owner of the loan. MERS operates a system where it stands in for lenders

who provide the money and allows the trading of loan notes between different

institutions.

At some point, via this process Millenia’s ownership of the note transferred (or may

have transferred) to Sovereign Bank. Meanwhile Kesler went through bankruptcy

proceedings and the first lienholder – Landmark – foreclosed on the property. The

property was sold at auction, for more than the amount owed to Landmark and Kesler and

Landmark filed a motion to settle the monies between them.

Subsequent to this, Sovereign and later MERS sought to block the foreclosure on the

grounds that they (as second lienholders) had not received notification of the sale. As

it transpires, Ford County never received a registration for the mortgage as belonging

to anyone but Millenia.

The District Court denied this motion, and various appeals resulted. The Kansas Supreme

Court rejected the appeal by MERS and Sovereign, finding that since MERS did not own

the note its status in law as relates to the mortgage is tenuous. Therefore none of the

criteria for setting aside the foreclosure could be met. In ruling this way the Court

rejected the amicus brief filed by various financial organizations which endorsed the

MERS system, saying that it must follow the law as written, notwithstanding the amicus

brief’s complaint that the recording scheme stems from “seventeenth-century property

law that is entirely unsuited to twentieth-century financial transactions”.

The Court also rejected a Due Process argument from MERS, finding that throughout the

various proceedings it had had its arguments listened to in court and therefore had

certainly received the process it was due in this case.

http://www.kscourts.org/Cases-and-Opinions/opinions/supct/2009/20090828/98489.htm

Decision: Philips v. St Paul Marine & Fire

September 1, 2009

August 28th. The Kansas Supreme Court has issued its decision in Phillips v. St Paul Marine and Fire Insurance Company (No. 97,806), a coverage dispute. In a unanimous opinion, written by Justice Carol Beier, the Court held that the plain wording of KSA 40-284(c) meant that the Wyandotte County Government’s opt out of certain coverage limits carried over between one policy term and another, even though that new term was non-contiguous.

Douglas Phillips, an employee of the Unified Government of Wyandotte County and Kansas City, Kansas (Unified Government) was driving a Unified Government vehicle and was involved in an accident with a juvenile in 2003. He pursued a lawsuit for underinsured motorist benefits (UIM) against St Paul which was the insurer used by the Unified Government. In 1999 the Unified Government had taken out a policy with St Paul and opted out of (rejected) the statutorily required UIM benefits of $500,000. This policy was not renewed, but in 2003 the Unified Government again used St Paul for its insurance. This time no explicit opt out was lodged, though the Unified Government and the insurer used the same terms as previously.

Phillips was covered under the 2003 policy and argued that in the absence of the express rejection of the minimum UIM benefits that they reasserted themselves. He prevailed in the District Court which also awarded him attorneys fees. The Court of Appeals reversed, but on a split panel.

In its ruling the Kansas Supreme Court rejected Phillips argument. Noting that the statute in question states that ‘valid UIM rejection forms will remain in force and effect for “any subsequent policy” with the same insurer unless the insured requests a change in writing’. As a result, the statute was clear and unambiguous and therefore the rejection of the higher UIM benefits remained at the time of the accident.

The Court therefore held that Summary Judgment should be issued against Phillips and reversed his award of attorney’s fees.

Decision: State v. Leshay

September 1, 2009

August 28th. The Kansas Supreme Court has issued its opinion in State v. Leshay (No. 99,725), an appeal of a dismissal of drug charges in District Court. In a unanimous decision, written by Justice Lee Johnson, the Court held that the Sixth Amendment Right to Confront one’s accusers does not apply at a Preliminary Hearing to a forensic lab report, where Kansas law does not require a lab technician to testify. Note: Court of Appeals Judge Christel Marquardt served on this case, in place of former Chief Justice Kay MacFarland.

Wendell Leshay was accused of possessing Cocaine. After a Preliminary Hearing following his indictment, he moved to dismiss the charges against him on the grounds that the Kansas Bureau of Investigation (KBI) lab technician who had prepared the forensic evidence did not appear for cross-examination at the hearing. The District Court agreed, holding that the United States Supreme Court’s decision in Crawford v. Washington (2004) meant that the Confrontation Clause of the Sixth Amendment required that the technician be present.

The State appealed and the Kansas Supreme Court reversed the decision of the District Court. The court noted the U.S. Supreme Court decision in Melendez-Diaz v. Massachusetts (2009), which made it clear that the confrontation clause applies to forensic evidence reports, but ultimately held that the Sixth Amendment Confrontation Clause does not apply at a Preliminary Hearing, rather it applies at trial. The Preliminary Hearing is a statutory creation, and therefore there is not a Constitutional obligation to allow confrontation regarding testimonial evidence introduced there.

The Court did note that there might be a Due Process argument about the inability to confront an accuser at a Preliminary Hearing. However, Leshay had not raised this argument in the District Court and therefore it was not available within the appeal.

The District Court’s dismissal of the charges was reversed and the charges reinstated. The case was then remanded back to the District Court to proceed.