Harder v. Estate

• Decision Date: 15 May 2020
• Docket Number: 118,845
• Citation: 464 P.3d 382
• Parties: Evelyn HARDER, Appellant, v. Estate of Ronald H. FOSTER, et al., Appellees.
• Court: Kansas Court of Appeals

464 P.3d 382

Evelyn HARDER, Appellant,

v.Estate of Ronald H. FOSTER, et al., Appellees.

118,845

Court of Appeals of Kansas.

May 15, 2020

Kurt S. Brack, of Brown & Ruprecht, PC, of Kansas City, Missouri, for appellant.

Gary A. Nelson, of Leavenworth, for appellee Estate of Ronald H. Foster, and William E. Pray, of Leavenworth, for appellee Terrie Foster.

Before Hill, P.J., Buser and Bruns, JJ.

Bruns, J.:

In this interlocutory appeal, Evelyn Harder challenges the district court's ruling that she is not entitled to a jury trial to determine an award of attorney fees and expenses in two cases consolidated for appeal. Both cases arise out of a dispute over the sale of real property from Ronald Foster—who is now deceased—to Harder. The first lawsuit was filed in 2013 and the second was filed in 2015. This is the second time these cases have been before our court. In Harder v. Foster , 54 Kan. App. 2d 444, 401 P.3d 1032 (2017) ( Harder I ), this court affirmed the district court's decision in part but remanded both cases for consideration of Harder's claims for attorney fees and expenses against Foster's estate.

On remand, the district court determined that Harder's claim for attorney fees and expenses should be decided by the court and not by a jury. Subsequently, our court granted a petition for interlocutory appeal. For the reasons set forth in this opinion, we conclude that Section 5 of the Kansas Constitution Bill of Rights does not guarantee the right to a jury trial to determine an award of attorney fees and expenses. We also find that Harder waived her request for a jury trial to determine attorney fees and expenses in the 2013 case. In addition, we find that Harder's claim for attorney fees and expenses under the third-party litigation exception to the American rule is an equitable claim that should be decided by the district court—not by a jury. Thus, we affirm the district court's decision and remand this matter for further proceedings consistent with this opinion.

FACTS

The underlying facts of the two cases consolidated for appeal were set forth in Harder I . In the opinion, this court summarized the factual and procedural history of the two cases as follows:

"Evelyn Harder bought property with a house, dam, and lake from Ronald Foster. Shortly thereafter, Harder discovered that the dam, which Foster had assured her did not have any problems, was in fact illegal and would need extensive repairs. Harder filed suit against Foster [in 2013], and the jury found Foster guilty of negligent misrepresentation, intentional misrepresentation, and breach of contract. The parties' Residential Real Estate Contract provided that the party who breached the contract would pay any attorney fees the nonbreaching party incurred ‘in connection with the default,’ so Harder filed a motion requesting attorney fees incurred up through the verdict. The court granted her motion for attorney fees, but the issue took months to litigate. Harder filed a second motion for attorney fees requesting compensation for the fees generated while litigating the first motion. The district court denied her motion, holding that the fees incurred defending the first award of attorney fees were not generated ‘in connection with the default.’ Foster appealed.

"After the trial and the first motion for attorney fees, Harder filed a second lawsuit against Foster [in 2015], three of his children, and his son-in-law [under the Uniform Fraudulent Transfer Act]. Her petition alleged that Foster had fraudulently transferred all of the proceeds of the property sale to his family members for no consideration, leaving him unable to satisfy the judgment. She asked ‘to have the transfers avoided, set aside, and held for naught; for an attachment of the assets transferred; for execution on the transferred assets; and for injunctive relief prohibiting further disposition of the transferred assets.’ She later asked the court for leave to amend her petition to add a claim for punitive damages. Foster died a few months later, and his estate was substituted as a party. The estate then paid the judgment from the first case in full and filed a motion for summary judgment on Harder's second lawsuit. The district court granted the motion, holding that payment of the judgment extinguished Harder's fraudulent conveyance claim. Fofster appealed the district court's grant of summary judgment to Foster and the denial of her request to amend her petition. Both cases were consolidated on appeal." 54 Kan. App. 2d at 445-46, 401 P.3d 1032.

In Harder I , this court agreed that the district court appropriately granted summary judgment on Harder's statutory claim and that it properly denied her motion for leave to amend her petition in the 2015 case to include a claim for punitive damages. However, the district court's decision to deny attorney fees and expenses in both cases was reversed. 54 Kan. App. 2d at 474-75, 401 P.3d 1032. Consequently, this court remanded the two cases to the district court "for determination of any attorney fees to be assessed against Foster's estate." 54 Kan. App. 2d at 475, 401 P.3d 1032.

In addressing the request for attorney fees and expenses in the 2013 case in Harder I , this court found that "[t]he district court erred when it held that [attorney] fees generated in defending the postverdict motions were not generated in connection with the [breach of the real estate sales contract] and therefore not recoverable." The court noted that "payment of attorney fees was within the contemplation of the parties at the time of contracting." 54 Kan. App. 2d at 455-56, 401 P.3d 1032. As a result, this court concluded that remand of the 2013 case was appropriate "for a determination of the amount of attorney fees to be awarded, a fact that remains in the sound discretion of the district court." 54 Kan. App. 2d at 460, 401 P.3d 1032.

Turning to Harder's claim for attorney fees and expenses in the 2015 case, this court found that "Kansas adheres to the American rule" that "proscribes courts from awarding attorney fees unless specifically authorized by statute or contract." The court then found that the Uniform Fraudulent Transfer Act (UFTA) does not provide for statutory attorney fees. Thus, this court held that "under the American rule, attorney fees are not allowed under the UFTA." 54 Kan. App. 2d at 463, 401 P.3d 1032.

Even so, this court remanded the 2015 case to allow Harder the opportunity to attempt to prove that she is entitled to recover attorney fees and expenses under the third-party litigation exception to the American rule. 54 Kan. App. 2d at 463, 401 P.3d 1032 (quoting Hawkinson v. Bennett , 265 Kan. 564, 575, 962 P.2d 445 [1998] ). In doing so, it was noted that even if Harder succeeds in establishing that the third-party litigation exception to the American rule applies, "she is only able to recover attorney fees specifically related to the third-party claims." 54 Kan. App. 2d at 473, 401 P.3d 1032. For these reasons, this court remanded the 2015 case to the district court for the limited purpose of determining "whether the principles outlined [in the opinion regarding the third-party litigation exception] apply and what if any attorney fees are in order ...." 54 Kan. App. 2d at 474, 401 P.3d 1032.

On remand, the district court held a joint pretrial conference in the 2013 and 2015 cases. At the pretrial conference, Harder's counsel asserted that his client had a right to have a jury determine attorney fees and expenses in both cases. In denying the request for a jury trial on the issue of attorney fees and expenses in the 2013 case, the district court pointed out that Harder's counsel was taking an inconsistent position from the one he had taken during trial and at posttrial hearings. Specifically, the district court noted Harder's counsel had "argued long and hard" that the question of attorney fees and expenses should be decided by the court and not by a jury. Ultimately, the district court determined that the remaining issues in both cases will be heard by the Court and not a jury.

Thereafter, this court granted Harder's petition for interlocutory appeal.

ANALYSIS

Section 5 of the Kansas Constitution

Section 5 of the Kansas Constitution Bill of Rights provides that "[t]he right of trial by jury shall be inviolate." In a civil context the right to a jury trial is codified in K.S.A. 2019 Supp. 60-238. Nevertheless, the right to a jury trial in a civil action is not absolute. Rather, Section 5 of the Kansas Constitution Bill of Rights only preserves the common law right to a jury trial as it existed at the time of its adoption. Hilburn v. Enerpipe Ltd. , 309 Kan. 1127, 1133-34, 442 P.3d 509 (2019).

The Kansas Constitution was adopted by the delegates to the Wyandotte Constitutional Convention on July 29, 1859. A few months later, on October 4, 1859, the Kansas Constitution was approved by popular vote. Accordingly, Section 5 of the Kansas Constitution Bill of Rights does not guarantee a right to a jury trial to resolve a claim for attorney fees and expenses unless it can be shown that such a right existed at common law in 1859.

As the Kansas Supreme Court has found, there was no right to recover attorney fees at common law. Wolf v. Mutual Benefit , 188 Kan. 694, 700, 366 P.2d 219 (1961). Although English courts have regularly awarded attorney fees to prevailing parties for several centuries, the authority to award attorney fees in Great Britain has been traditionally granted by statute—not under common law. See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y , 421 U.S. 240, 247, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975). Moreover, under the English rule, attorney fees are not awarded by a jury. Instead, "separate hearings [are held] before special ‘taxing Masters’ in order to determine the appropriateness and the size of an award of counsel fees." 421 U.S. at 247 n.18, 95 S.Ct. 1612.

In the years following the American Revolution, the English rule was...