Gillespie v. Seymour

• Decision Date: 23 January 1998
• Docket Number: No. 77368,77368
• Parties: Warren Brown GILLESPIE, Appellee, and Polly Gillespie Townsend, Appellant, v. Dorothea Wofford SEYMOUR, as Co-Trustee of the Brown-Gillespie Trust Estate, et al., Defendants.
• Court: Kansas Supreme Court

Page 1313

952 P.2d 1313

263 Kan. 650

Warren Brown GILLESPIE, Appellee, and Polly Gillespie Townsend, Appellant, v. Dorothea Wofford SEYMOUR, as Co-Trustee of the

Brown-Gillespie Trust Estate, et al., Defendants.

No. 77368.

Supreme Court of Kansas.

Jan. 23, 1998.

Syllabus by the Court

In a case concerning an appeal under a K.S.A. 60-254(b) certification, the record is examined and it is held that multiple claims are not present and there is no appellate jurisdiction.

Glenn D. Young, Jr., and Jerry D. Bogle, of Young, Bogle, McCausland, Wells & Clark, P.A., Wichita, argued the cause and were on the brief, for appellee.

Jeffrey L. Carmichael, of Morris, Laing, Evans, Brock & Kennedy, Chartered, Wichita, argued the cause, and Karl R. Swartz of the same firm, was with him on the brief, for appellant.

SIX, Justice:

This case concerns appellate jurisdiction. K.S.A. 60-254(b), the multiple parties-multiple claims final judgment statute, is relied on by the parties as their key to appellate review. Multiple parties are not involved, thus the only question is, are there multiple claims? We say, "No" and dismiss the appeal for lack of jurisdiction.

Polly Gillespie Townsend brings an interlocutory appeal. Her brother, Warren Brown Gillespie, moved for a district court division of litigation expenses incurred in their settlement and recovery of $2,250,000 in the underlying lawsuits. The law firm of Young, Bogle, McCausland, Wells & Clark, P.A., (Young, Bogle) represented both Warren and Polly in the litigation. Each sibling separately signed a contingent fee agreement with Young, Bogle. Warren advanced all litigation costs and expenses. The district court held that Polly was required to pay litigation costs and expenses, with the amount left for future determination. The journal entry contained a K.S.A. 60-254(b)

"no just reason for delay" finding, [263 Kan. 651] but did not contain any K.S.A. 60-2102(b) interlocutory appeal findings. We ordered the parties to show cause why this appeal should not be dismissed for lack of jurisdiction as an improper and untimely interlocutory appeal. The case was transferred here under K.S.A. 20-3018(c) on our motion.

FACTS

The Gillespie litigation was the subject of three earlier appeals, Gillespie v. Seymour, 250 Kan. 123, 823 P.2d 782 (1991) (Gillespie I ); 253 Kan. 169, 853 P.2d 692 (1993); and 255 Kan. 774, 877 P.2d 409 (1994). The factual background is set forth in Gillespie I, 250 Kan. at 125-29, 823 P.2d 782. Warren and Polly, as remainder beneficiaries, sought an accounting, including punitive damages, against the co-trustees (and others) of a trust established by their grandfather. The litigation also concerned various breach of trust allegations.

The separate contingent fee agreements Polly and Warren each signed with Young, Bogle were similar, except that Polly had crossed out and initialed the phrase "but [Young, Bogle] shall be reimbursed for all out-of-pocket expenses incurred in the prosecution of said suit and claim." Young, Bogle's contingent fee percentage share was 45% in Warren's agreement and 50% in Polly's.

During the litigation, Warren paid $480,521.09, the total of all litigation costs and expenses. After many appeals and a bankruptcy, the litigation was eventually settled for $2,250,000. The settlement proceeds were held in trust by Young, Bogle. The amounts not in controversy have been distributed. Polly has received $395,243, and interest, but claims she is entitled to $562,500 (50% of $1,125,000). Young, Bogle is holding the difference, $167,257, and interest, in trust. Warren claims the funds as Polly's share of the litigation costs and expenses that he paid.

Warren, by his attorneys, Young, Bogle, filed a motion under Model Rule of Professional Conduct (MRPC) 1.5(d) (1997 Kan. Ct. R. Annot. 289) requesting that the court divide the litigation expenses between himself and Polly. It appears that the motion should have referenced MRPC 1.5(e). In the motion, Warren alleged that Polly had orally agreed that she would share the litigation expenses equally with him in the event of an ultimate recovery (although she would not be responsible for any expenses if there was no recovery). The motion also identified the reasonableness of the expenses as an issue. (The record is silent on why Warren's claim is only for $167,257, as one-half of the total expenses, $480,521.09, is $240,260.54.)

Polly, represented by Morris, Laing, Evans, Brock & Kennedy, Chartered (Morris, Laing), responded, denying that she had agreed to share responsibility for any litigation expenses. Polly also argued that an MRPC 1.5(d) motion was improper for resolving this dispute. According to Polly, the controversy did not involve a fee dispute between an attorney and client, but rather an alleged oral contract between a brother and sister.

Over Polly's objection, Young, Bogle moved for, and the district court approved, withdrawal as Polly's counsel due to a conflict of interest. Polly contended that Young, Bogle should have withdrawn from representing either party, as the firm now had a conflict of interest under MRPC 1.7 (1997 Kan. Ct. R. Annot. 297). The district court (1) withheld ruling on Polly's motion to disqualify Young, Bogle, (2) decided that Warren's MRPC 1.5(d) motion was proper, (3) held that the MRPC are incorporated as part of the contingent fee agreement between Polly and Young, Bogle, and (4) decided Polly was required to pay litigation costs and expenses, which should be deducted before the contingent fee is calculated. The court did not adjudicate the reasonableness of the fees and expenses or decide what portion was Polly's responsibility.

DISCUSSION

The propriety of the district court's decision to certify under 60-254(b) is subject to appellate review. The standard of review is stated in St. Paul Surplus Lines Ins. Co. v. International Playtex, Inc., 245 Kan. 258, 276, 777 P.2d 1259 (1989), cert. denied 493 U.S. 1036, 110 S.Ct. 758, 107 L.Ed.2d 774 (1990):

" 'The court of appeals must, of course, scrutinize the district court's evaluation of such factors as the interrelationship of the claims so as to prevent piecemeal appeals in cases which should be reviewed only as single units. But once such judicial concerns have been met, the discretionary judgment of the district court should be given substantial deference, for that court is "the one most likely to be familiar with the case and with any justifiable reasons for delay." [Citation omitted.] The reviewing court should disturb the trial court's assessment of the equities only if it can say that the judge's conclusion was clearly unreasonable.' " (Quoting Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 10, 100 S.Ct. 1460, 1466, 64 L.Ed.2d 1 [1980], and adopting its rationale).

Quoting Curtiss-Wright, 446 U.S. at 8, 100 S.Ct. at 1465, further, we said:

"[T]he function of the district court under the Rule is to act as 'dispatcher.' The district court is to determine the 'appropriate time' when each final decision in a multiple claims action is ready for appeal. The district court's discretion is to be exercised ' "in the interest of sound judicial administration." ' " 245 Kan. at 276-77, 777 P.2d 1259.

K.S.A. 60-254(b) provides in part:

"When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim or third-party claim or, when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment."

K.S.A. 60-254(b) is identical to Fed. R. Civ. Proc. 54(b). "Because Fed. R. Civ. Proc. 54(b) is identical to K.S.A .... 60-254(b), Kansas has followed the federal cases interpreting 54(b) certifications." St. Paul Surplus Lines Ins. Co., 245 Kan. at 275, 777 P.2d 1259.

A leading text on federal procedure identifies the purposes of a 54(b) certification:

"The basic purpose of Rule 54(b) is to avoid the possible injustice of a delay in entering judgment on a distinctly separate claim or as to fewer than all of the parties until the final adjudication of the entire case by making an immediate appeal available." 10 Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 2d § 2654 (1983).

"The rule attempts to strike a balance between the undesirability of more than one appeal in a single action and the need for making review available in multiple-party or multiple-claim situations at a time that best serves the needs of the litigants. Although it does this by empowering the court to enter a judgment before all the claims or rights of all the parties have been finally adjudicated, Rule 54(b) does not represent a departure from or an abandonment of the fundamental principle against splitting a claim and determining cases at the appellate level in piecemeal fashion." 10 Wright, Miller & Kane, § 2654, p. 37.

This dispute is between two plaintiffs over responsibility for litigation expenses incurred in their recently settled lawsuit. Warren seeks the $167,257, plus interest, now held in trust by Young, Bogle. Polly claims that same amount is wrongfully withheld from her. The district court made only a partial ruling on Warren's motion. The appealed order is interlocutory, governed by K.S.A. 60-2102(b), not 60-254(b).

During oral argument, Polly's counsel asserted that the K.S.A. 60-254(b) certification was proper, because if we reverse the district court, this case will be disposed of in that Warren's motion will be denied. Young, Bogle would then turn over the withheld funds to Polly, and Warren would have to file a separate lawsuit against his sister to recover any of that money. Warren's counsel also contends the 60-254(b) certification was proper because multiple claims and different fact situations are...