Hernandez v. Pistotnik

• Citation: 472 P.3d 110,58 Kan.App.2d 501
• Decision Date: 31 July 2020
• Docket Number: No. 120,228,120,228
• Parties: Yudi HERNANDEZ, Appellant, v. Brad PISTOTNIK and Brian Pistotnik, Appellees.
• Court: Court of Appeals of Kansas

58 Kan.App.2d 501

472 P.3d 110

Yudi HERNANDEZ, Appellant,

v.Brad PISTOTNIK and Brian Pistotnik, Appellees.

No. 120,228

Court of Appeals of Kansas.

Opinion filed July 31, 2020.

Stephen L. Brave, of Brave Law Firm, LLC, of Wichita, for appellant.

N. Russell Hazlewood, Donald N. Peterson, and Nathan R. Elliott, of Graybill & Hazlewood LLC, of Wichita, for appellees.

Before Gardner, P.J., Warner, J., and Robert J. Wonnell, District Judge, assigned.

MEMORANDUM OPINION

Gardner, J.:

Yudi Hernandez sued Brad Pistotnik and Brian Pistotnik for fraud and violation of the KCPA based on defendants' allegedly misleading television advertisements for legal services. The district court granted summary judgment to defendants on both claims, finding Yudi failed to prove she relied on defendants' advertisements in securing their legal services. Yudi appeals, arguing the district court improperly granted summary judgment, shielded discovery, and transferred venue. Finding no error, we affirm.

Factual and Procedural Background

In June 2013, Yudi was injured as a passenger in a two-car accident. She was 17 years old and suffered multiple injuries. The accident rendered her unconscious and doctors placed her in a drug-induced coma

for one month. She was also given a tracheostomy tube so she was unable to speak for two months after she regained consciousness.

After the accident, Yudi's father (Ernesto Hernandez) told Yudi's sister (Mirna Hernandez) that Yudi had been involved in a serious car accident. Because Yudi's parents spoke little English and Ernesto could not read in English or Spanish, Mirna helped the family find an attorney. Mirna first called a family friend who recommended that they hire Brad. The family friend knew about Brad from his television commercials. So Mirna looked for Brad's television advertisements and saw he was claiming he could collect millions of dollars for car accidents. Those advertisements touted large settlement amounts and no attorney fees if the client got no money for the injury. Mirna went to Brad's office—the law office for the Affiliated Attorneys of Pistotnik Law Offices (AAPLO) in Wichita.

Mirna had an initial consultation with Brian Pistotnik. A few days later, Ernesto—with Mirna's assistance—retained AAPLO to pursue Yudi's bodily injury claim against the drivers of the two vehicles involved in the accident. This agreement defined AAPLO as the attorney and Yudi as the client through her natural father. But according to Brad, Brian was the only person who negotiated that agreement for AAPLO and was the only attorney who worked on Yudi's case.

In August 2013, Electric Insurance Company offered to pay its liability policy limits of $100,000 to settle Yudi's claim. And in October 2013, Farmers Insurance Group tendered its liability policy limits of $50,000. So, by November 2013, Brian had obtained policy limit offers totaling $150,000 from the liability insurers of the drivers alleged to be at fault for Yudi's injuries. Yet before accepting these offers, Ernesto fired AAPLO and hired Steve Brave, who had previously worked at AAPLO, to perform the remaining work necessary to resolve Yudi's claim.

Shortly after his termination, Brian filed a notice of attorney's lien for AAPLO and served it on the liability insurers. The lien sought $1,504.25 for costs and $49,498.58 in attorney fees against any funds, proceeds, or monies payable to Yudi as a result of injuries and damages sustained in her accident.

In May 2014, Ernesto and Yudi entered into written settlement agreements. These agreements released the drivers of the two vehicles in the accident and the automobile insurers from all liability in exchange for $150,000—the same amount insurers had earlier offered to Brian. That money was to be paid directly to Ernesto and was not payable to Yudi.

After the settlement agreements were signed, Brave contacted the health care providers to whom Ernesto owed unpaid medical bills for Yudi. The providers agreed to take reduced amounts of money to settle their accounts in full. After Brave's negotiations, Ernesto paid $51,570.80 to health care providers for Yudi's injuries, and $32,809.73 to Brave for attorney fees. Brave then paid Ernesto the remaining $65,619.47 by check payable to Ernesto. Ernesto immediately endorsed this check to Yudi, who deposited it into her personal bank account.

Brian then sued Ernesto to recover the amount sought in the AAPLO lien. And Yudi sued Brian and Brad, arguing they had defrauded her and violated the Kansas Consumer Protection Act. She filed her suit in Cowley County, but the district court later granted Brad's motion to transfer venue to Sedgwick County.

Throughout litigation, several discovery disputes arose when Yudi requested production of AAPLO advertisements and settlements with other clients, and a response Brad had made to the office of the Kansas Disciplinary Administrator (KDA) when someone filed a complaint against him. Defendants objected, responding that the settlement and disciplinary documents were privileged and not subject to discovery. At first, the district court found that the settlements were discoverable. But after an in camera inspection, the district court determined the settlements were confidential so it issued a protective order limiting the production of information in them. The district court also found that Brad's response to the KDA was not discoverable.

In due course, Brad moved for summary judgment, arguing Yudi had failed to state a claim on which relief could be granted and had failed to produce sufficient evidence of fraud. Brad also argued that Yudi could not recover under the KCPA because she was not an aggrieved party.

The district court granted Brad's motion. It found that because Yudi had not seen Brad's advertisements before hiring AAPLO, Yudi's misrepresentation claim necessarily relied on an indirect reliance theory. Even assuming, however, the applicability of that theory, the district court found no evidence suggesting that Ernesto—through Mirna or any other party—had received and indirectly relied on the alleged misrepresentations in the advertisements when he hired AAPLO on Yudi's behalf. Thus, Yudi failed to present sufficient evidence of fraud. Similarly, the district court held that Yudi showed no legal authority that she could bring a KCPA claim based on indirect reliance on a misrepresentation. Thus, the district court dismissed Yudi's claims and granted summary judgment for Brad. Although Yudi moved to reconsider, the district court denied her request.

Yudi timely appeals.

Did the District Court Err in Granting Summary Judgment on Yudi's KCPA Claims?

We first address Yudi's claim that the district court erred in granting summary judgment to defendants on her KCPA claim. She contends the district court misapplied the KCPA by requiring her to establish reliance, failed to resolve all inferences in her favor, and ignored disputed issues of material fact. Brad argues that because Yudi failed to establish that she was an aggrieved consumer under the KCPA, the district court was correct.

In an appeal from the district court's ruling on a summary judgment motion, we consider the motion de novo and apply the same standards which the district court applied. We owe no deference to the district court's decision or rationale. Cady v. Schroll , 298 Kan. 731, 734, 317 P.3d 90 (2014).

Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Cady , 298 Kan. at 734, 317 P.3d 90. Any court considering the motion must resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom summary judgment is sought. When opposing a motion for summary judgment, an adverse party must come forward with evidence to establish a dispute as to a material fact. To preclude summary judgment, the facts subject to the dispute must be material to the conclusive issues in the case. The court must deny a motion for summary judgment if reasonable minds could differ over the conclusions drawn from the evidence. See Patterson v. Cowley County , 307 Kan. 616, 621, 413 P.3d 432 (2018) ; Siruta v. Siruta , 301 Kan. 757, 766, 348 P.3d 549 (2015).

Analysis

Yudi argues that she established that she is an aggrieved consumer based on Brad's allegedly false and misleading advertisements, which touted large recoveries and promised zero fees if AAPLO did not recover money for the client. She mainly asserts that the KCPA does not require her to show direct or indirect reliance on Brad's misrepresentations to recover under the KCPA.

The KCPA exists in part to "protect consumers from suppliers who commit deceptive and unconscionable practices." K.S.A. 50-623(b). We construe that Act liberally to ensure that purpose is fulfilled. See K.S.A. 50-623 ; Unruh v. Purina Mills , 289 Kan. 1185, 1207, 221 P.3d 1130 (2009) (Rosen, J., concurring).

To prevail on a KCPA claim, a plaintiff must prove: "(1) plaintiffs were consumers under the KCPA, (2) defendants were suppliers under the KCPA, (3) defendants engaged in a deceptive or unconscionable act or practice in violation of K.S.A. § 50-626 ... or K.S.A. § 50-627, and (4) plaintiffs were ‘aggrieved’ by such act." In re Motor Fuel Temperature Sales Practices , 279 F.R.D. 598, 604-05 (D. Kan. 2012). The parties concede that Yudi was a consumer, defendants were suppliers, and they engaged in a "consumer transaction" under the KCPA. The district court found solely that Yudi failed to establish she was "aggrieved," as the Act requires. See K.S.A. 50-634(a), (b).

The Act does not define the term "aggrieved." But our cases have done so. We begin with our Supreme Court's decision in Finstad v. Washburn University , 252 Kan. 465, 845 P.2d 685 (1993). There, a group of students sued...