Bryson v. Wichita State University

• Decision Date: 09 September 1994
• Docket Number: No. 70684,70684
• Citation: 880 P.2d 800,19 Kan.App.2d 1104
• Parties: , 94 Ed. Law Rep. 558 Sheryl R. BRYSON and Cindy Vanover, Appellants, v. The WICHITA STATE UNIVERSITY, Appellee.
• Court: Kansas Court of Appeals

Page 800

880 P.2d 800

19 Kan.App.2d 1104, 94 Ed. Law Rep. 558

Sheryl R. BRYSON and Cindy Vanover, Appellants, v. The WICHITA STATE UNIVERSITY, Appellee.

No. 70684.

Court of Appeals of Kansas.

Sept. 9, 1994.

Review Denied Nov. 8, 1994.

Syllabus by the Court

1. The "right for any reason" appellate doctrine is construed and applied.

2. Appellate rules concerning what issues may be properly raised on appeal are construed and applied.

3. K.S.A.1993 Supp. 60-513 is construed and applied.

4. Under the facts presented, plaintiffs in a fraud suit must file suit within two years of discovering the fraud if plaintiffs suffered ascertainable injury at that time. If not, plaintiffs must sue within two years of when substantial injury resulting from the fraud was or should have been reasonably ascertainable (not to exceed 10 years).

5. Where the evidence is in dispute as to when substantial injury first appears or when it becomes reasonably ascertainable, the issue is for determination of the trier of fact.

6. Rules for reviewing a trial court's decision on a motion for directed verdict are applied.

7. Under the facts presented, when plaintiffs discovered or should have discovered the alleged fraud is a question of fact.

Paul S. McCausland, Young, Bogle, McCausland, Wells & Clark, P.A., Wichita, for appellants.

Randall H. Elam, Wichita, for appellee.

Before ELLIOTT, P.J., BRAZIL, J., and RICHARD W. WAHL, District Judge, Retired, Assigned.

ELLIOTT, Presiding Judge:

Sheryl Bryson and Cindy Vanover appeal the trial court's grant of Wichita State University's (WSU) motion for directed verdict on the ground plaintiffs' suit was time barred.

We reverse and remand.

WSU decided to split one of its departments into two new departments and hire two new executive directors. The new people were hired by Robert Hartsook, Vice president for University Advancement. The new organization was approved by Roger Lowe, Vice president, Administration and Finance, and by Warren Armstrong, WSU president.

Plaintiffs were hired for the new positions, and those positions were unclassified, provisional, annual appointments. Plaintiffs claim certain definitions of funds are accepted in higher education: "Hard money" is predictable, such as taxes and tuition; "soft money" is contingent, such as grants.

On arrival at WSU, plaintiffs received copies of their respective budgets. And while those budgets indicated that some monies were restricted use funds, plaintiffs claim they did not know those funds were soft money.

About eight months after their arrival at WSU, plaintiffs were in a meeting in which they claim they first discovered the restricted use funds were actually soft money and that those funds were no longer available. The WSU president informed plaintiffs the university was committed to their departments and offered plaintiffs another annual appointment, which they accepted.

At the end of their second appointment period, WSU notified plaintiffs their positions were being eliminated due to budget restraints.

Plaintiffs then sued WSU, claiming it misrepresented (through silence) its ability to fund and maintain their positions.

At the close of plaintiffs' evidence, WSU moved for a directed verdict on two grounds: Plaintiffs failed in their burden of proof for a fraud claim, and plaintiffs' suit was time barred. The trial court denied WSU's motion on the first ground but sustained it on the second.

The "Right for any Reason" Issue

WSU argues we may consider the merits of plaintiffs' claim under the "right for any reason" rule. We disagree.

That rule may be applied in two situations. First, it may be applied where the trial court's findings do not rise to the level of a judicial finding, such as a ruling on an objection. Williams v. Amoco Production Co., 241 Kan. 102, 116, 734 P.2d 1113 (1987).

Second, if the ruling does rise to the level of a judgment, the rule may be applied where an appellee urges affirmance based on new reasons the trial court ignored. Ellis v. State Farm Mut. Auto. Ins. Co., 249 Kan. 599, 604, 822 P.2d 35 (1991).

In the present case, the trial court rejected WSU's motion on the merits of the fraud claim. No cross-appeal was filed. Accordingly, we will not consider the merits. See K.S.A.1993 Supp. 60-2103(h); Barkley v. Toland, 7 Kan.App.2d 625, 646 P.2d 1124, rev. denied, 231 Kan. 799 (1982).

WSU also argues plaintiffs' brief goes beyond the scope of their appellate docketing statement. The issues presented in the docketing statement are not binding on an appellant. The issues stated in an appellant's brief are binding. See Supreme Court Rules 2.041, 6.02 (1993 Kan.Ct.R.Annot. 10, 26).

On this appeal, we will consider only the statute of limitations issue raised by plaintiffs.

The Statute of Limitations Issue

K.S.A.1993 Supp. 60-513 provides:

"(a) The following actions shall be brought within two years: ... (3) An action for relief on the ground of fraud, but the cause of action shall not be deemed to have accrued until the fraud is discovered....

"(b) ... [T]he causes of action listed in subsection (a) shall not be deemed to have accrued until the act giving rise to the cause of action first causes substantial injury, or, if the fact of injury is not reasonably ascertainable until some time after the initial act, then the period of limitation shall not commence until the fact of injury becomes reasonably ascertainable to the injured party, but in no event shall an action be commenced more than 10 years beyond the time of the act giving rise to the cause of action."

Plaintiffs argue they were not injured until they were forced to take different positions at lower wages than those earned while at WSU. In Admire Bank & Trust v. City of Emporia, 250 Kan. 688, 829 P.2d 578 (1992), the Supreme Court explained the "substantial injury test" found in subsection (b):

"If the original wrongful act causes substantial injury, the two-year statute of limitations begins to run at the time of the original act. If substantial injury does not occur at the time of the original act but occurs later, then the two-year statute of limitations begins to run when the injury is reasonably ascertainable. Both prongs of the substantial injury test are subject to the ten-year 'discovery' rule." 250 Kan. at 698, 829 P.2d 578.

A reasonably ascertainable injury is inferentially a substantial injury. See Olson v. State Highway Commission, 235 Kan. 20, 26, 679 P.2d 167 (1984).

The legal malpractice cases illustrate that when a claim for relief accrues, or when substantial injury occurs, is fact specific. Depending on the facts, there are at least four theories which can apply as to when a claim accrues and the statute of limitations begins to run. Dearborn Animal Clinic, P.A. v. Wilson, 248 Kan. 257, 264, 806 P.2d 997 (1991).

Although legal malpractice claims fall under K.S.A. 60-513(a)(4), three of the four theories follow the language of 60-513(a)(3) and 60-513(b): The statute begins to run at the time of the negligent/fraudulent act; the statute begins to run when plaintiff suffers actual damage; or the statute begins to run when plaintiff discovers, or should have discovered, the essential material facts. See Pancake House, Inc. v. Redmond, 239 Kan. 83, 87, 716 P.2d 575 (1986).

Applying Admire Bank and the legal malpractice theories to the present case, a plaintiff in a fraud suit must file suit within two years of discovering the fraud if plaintiff suffered ascertainable injury at that time. If not, plaintiff must file within two years of when substantial injury resulting from the fraud is reasonably ascertainable (not to exceed 10 years).

The trial court was incorrect in rejecting plaintiffs' argument that the statute did not begin to run until they first sustained substantial injury. The statute of limitations does not begin to run until the claim accrues, and that occurs when substantial injury occurs. See Pizel v. Zuspann, 247 Kan. 54, 76, 795 P.2d 42, modified 247 Kan. 699, 803 P.2d 205 (1990).

What constitutes "substantial injury" is somewhat open to question. In Olson, the court held the initial injury was not necessarily substantial enough to trigger the running of the statute of limitations, reasoning that parties should not be "forced into court at the first sign of injury, regardless of how slight it might be." 235 Kan. at 27, 679 P.2d 167.

Later, however, the court held that "substantial injury" does not require a plaintiff to have knowledge of the full extent of the injury. "Rather, it means the victim must have sufficient ascertainable injury to justify an action for recovery of damages, regardless of extent." Roe v. Diefendorf, 236 Kan. 218, 222, 689 P.2d 855 (1984).

Thus, the critical information is knowledge of the fact of injury, not the extent of injury. Brueck v. Krings, 230 Kan. 466, 470-71, 638 P.2d 904 (1982). The Supreme Court has also said the discovery of fraud is simultaneous with the discovery of the injury resulting from the fraud. Jennings v. Jennings, 211 Kan. 515, 527...