Dunn v. Dunn

• Decision Date: 18 May 2012
• Docket Number: No. 104,916.,104,916.
• Parties: Rene DUNN, Sandra Dunn, Phillip Dunn, Pattie Peterson, and Linda Knoblauch, Appellants, v. Doris E. DUNN, Jeff Breault, Carey Thomas Hoover Breault, Inc., and Lincoln National Life Insurance Company, Appellees.
• Court: Kansas Court of Appeals

47 Kan.App.2d 619

281 P.3d 540

Rene DUNN, Sandra Dunn, Phillip Dunn, Pattie Peterson, and Linda Knoblauch, Appellants,

v.Doris E. DUNN, Jeff Breault, Carey Thomas Hoover Breault, Inc., and Lincoln National Life Insurance Company, Appellees.

No. 104,916.

Court of Appeals of Kansas.

May 18, 2012.

Syllabus by the Court

1. When the district court grants summary judgment, a reviewing appellate court considers the summary judgment motion de novo.

2. Statutes of limitations and statutes of repose express distinct concepts under the law. A statute of limitations is remedial and procedural, while a statute of repose is substantive. A statute of limitations creates a procedural barrier to bringing an action after a stated number of years. Once the time period in a statute of limitations has expired, the claim still exists but the plaintiff is barred from obtaining any relief on it. Because it is procedural in nature, the statute of limitation is waived by a defendant who fails to assert it. In contrast, a statute of repose entirely extinguishes the cause of action after the passage of time even if the cause of action has not yet accrued.

3. A statute of limitations that predicates the accrual of a cause of action on its discoverability generally includes a statute of repose that prevents the period for bringing suit from being open-ended. A cause of action for breach of a written contract, which is controlled by the 5–year limitation period found in K.S.A. 60–511(1), accrues at the time of the breach, regardless of when the breach is discovered or is discoverable. For this reason, there is no need for a statute of repose and none exists with respect to breach of contract claims.

4. Certain tort actions controlled by the 2–year limitation period found in K.S.A. 60–513(a) do not accrue until the fact of injury is discoverable. To avoid an open-ended time for bringing such actions, the legislature has created a statute of repose in K.S.A. 60–513(b) that imposes a 10–year drop-dead date for commencing the action.

5. The doctrine of equitable estoppel can bar a defendant from invoking the applicable statute of limitations when sufficient facts are shown.

6. There is no definite rule governing estoppel which can be applied to every situation. Few, if any, relationships may not be effected to some degree by the principles of estoppel. But each case in which the principleof estoppel is invoked must be determined on its own individual facts.

7. The Kansas cases discussing the doctrine of equitable estoppel teach that fraud, bad faith, or the intent to deceive is not essential to create an estoppel. But using equitable estoppel to bar application of the statute of limitations requires an element of deception. A common factual thread running through the cases is conduct by a party that lulls the adverse party into a false sense of security, forestalling the filing of suit until the statute has run. On the other hand, equitable estoppel can arise from a party's silence when that party had a duty to speak. But in order to be estopped by silence, the defendant must have the intent to deceive, or at least a willingness that others would be deceived, and reason to believe that others would rely on such silence.

8. Equitable estoppel generally involves questions of fact and, when the facts are disputed or when necessary facts come from ambiguous documents, summary judgment is inappropriate and the factual dispute must await resolution at trial. But when the facts are undisputed, the district court may rule on the availability of the doctrine as a matter of law.

9. A fiduciary relationship may be created by contract or implied in law based upon the facts surrounding the transaction and the relationship between the parties. In determining whether a fiduciary relationship exists, one must determine whether a special confidence has been placed in one who, in equity and good conscience, is bound to act in good faith and with due regard to the interest of the one placing the confidence.

10. The continuous representation rule has been recognized in Kansas to toll the statute of limitations only in the context of legal malpractice claims.

Elizabeth A. Carson, of Bruce, Bruce & Lehman, L.L.C., of Wichita, for appellants.

Stephen M. Kerwick, of Foulston Siefkin LLP, of Wichita, for appellee Lincoln National Life Insurance Company.

Randall K. Rathbun, of Depew Gillen Rathbun & McInteer LC, of Wichita, for appellees Jeff Breault and Carey Thomas Hoover Breault, Inc.

Before STANDRIDGE, P.J., McANANY and ATCHESON, JJ.

McANANY, J.

The suit that resulted in this appeal was prompted by a stepmother who her stepchildren claim cheated them out of their inheritance. The stepchildren (referred to as the children) obtained what may be a worthless judgment against their stepmother. This suit is against the insurance company and others who, according to the children, were complicit in the loss. The issue before us is whether the district court erred in granting summary judgment in favor of the defendants because the children's claims were barred by the applicable statutes of limitations or statutes of repose.

STANDARDS FOR SUMMARY JUDGMENT

The parties are well acquainted with the standards for granting summary judgment and our standard for reviewing the ruling on appeal, all of which can be found in K.S.A. 60–256; Supreme Court Rule 141 (2011 Kan. Ct. R. Annot. 232); and in Osterhaus v. Toth, 291 Kan. 759, 768, 249 P.3d 888 (2011); Kuxhausen v. Tillman Partners, 291 Kan. 314, 318, 241 P.3d 75 (2010); and Mitchell v. City of Wichita, 270 Kan. 56, 59, 12 P.3d 402 (2000). We need not repeat them here, other than to note that our review of the parties' summary judgment motions is de novo.

THE VARIOUS MOTIONS AND RESPONSES

We turn to the record on appeal for the parties' motions, statements of uncontroverted facts, and briefs which were before the district court. They consist of the following:

4/27/10

Lincoln National Life Insurance Company's (Lincoln National) motion for summary judgment and supporting memorandumwhich includes its statement of uncontroverted facts.

4/28/10

Jeff Breault's and his securities brokerage firm's (Carey Thomas Hoover Breault, Inc.) motion for summary judgment and supporting memorandum and statement of uncontroverted facts.

6/3/10

The children's response to Lincoln National's motion, their response to Lincoln National's statement of uncontroverted facts, and their own statement of additional uncontroverted facts. (There is no response in the record from Lincoln National to the children's statement of additional uncontroverted facts regarding Lincoln National.)

6/3/10

The children's response to Breault's and his firm's motion, their response to Breault's and his firm's statement of uncontroverted facts, and their own statement of additional uncontroverted facts regarding Breault and his firm.

6/21/10

Breault's and his firm's reply brief to the children's brief in opposition to the motions for summary judgment and their reply to the children's statement of additional uncontroverted facts with respect to Breault.

BACKGROUND FACTS

Our first task is to identify the uncontroverted facts. The parties' statements of uncontroverted facts do not fully frame the factual background of the case. From their briefs, however, we have put together the following scenario over which we find no disagreement, though the parties have not formally spelled it out pursuant to Supreme Court Rule 141.

Lynn Dunn died on September 12, 1993. He was survived by his wife, Doris Dunn, and his five adult children from a prior marriage—Phillip Dunn, Rene Dunn, Sandra Dunn, Pattie Peterson, and Linda Knoblauch. These children are the plaintiffs in the present suit.

Lynn's will was submitted for probate administration. It directed Lynn's heirs to spend no more than $375,000 to buy an annuity that would provide Doris, then age 59, with income of approximately$2,500 per month to age 62, and $1,825 per month thereafter for the remainder of her life. Upon her death, the remainder would be divided among his children per stirpes.

Unfortunately, the amount available in Lynn's estate was insufficient to carry out this provision in his will. So securities broker Breault was contacted to obtain an investment vehicle that would come as close as possible to accomplishing Lynn's wishes. Breault proposed replacing the fixed annuity called for in the will with a variable annuity consisting of investments in stocks and bonds, the values of which, and the resulting value of the annuity, would fluctuate with the market. The family agreed, so Doris and the children entered into a family settlement agreement reflecting the change. The family settlement agreement provided for purchase of an annuity policy through Lincoln National. Doris and Phillip were to be the joint owners of the annuity, and Phillip and his four siblings were to be designated irrevocable beneficiaries. The family settlement agreement also provided that Doris and Phillip would determine the initial allocation of the annuity investments and withdrawals. “Thereafter, any changes in the allocation or amount of withdrawals shall be made only upon the joint signature of both of such co-owners.”

The district court approved the family settlement agreement on December 5, 1994. Doris and Phillip then purchased the variable annuity through Breault for $241,307.62. Doris began receiving $2,000 per month beginning January 5, 1995.

In June 2009 the children filed suit, claiming damages of $642,484.99. In their second-amended petition, they asserted the following claims:

• Count I: breach of contract and conversion by Doris.

• Count II: breach of agency duties by Breault and his firm.

• Count III: vicarious liability of Lincoln National for Breault's conduct.

• Count IV: breach of contract by Lincoln National.

• Count V: conversion by Lincoln National.

• Count VI: failure of Lincoln National to inform the joint account owner of...