In re Estate of Butler, 108,747.

• Decision Date: 23 August 2013
• Docket Number: No. 108,747.,108,747.
• Citation: 307 P.3d 262,49 Kan.App. 335
• Parties: In the Matter of the ESTATE OF Kenneth Lee BUTLER, Deceased.
• Court: Kansas Court of Appeals

49 Kan.App. 335

307 P.3d 262

In the Matter of the ESTATE OF Kenneth Lee BUTLER, Deceased.

No. 108,747.

Court of Appeals of Kansas.

Aug. 23, 2013.

Syllabus by the Court

1. The right to appeal is based entirely on statute. Appellate courts have jurisdiction to entertain an appeal only if the appeal is taken within the time limitations and in the manner prescribed by the applicable statutes. This court has a duty to question jurisdiction on its own initiative, and the court must dismiss an appeal when the record discloses a lack of jurisdiction.

2. When the legislature revises an existing law, the court presumes that the legislature intended to change the law that existed prior to the amendment.

3. An appeal of orders in decedents' estates arising from the district court to an appellate court shall be taken in the manner provided by Chapter 60 of the Kansas Statutes Annotated for civil proceedings.

Barry D. Martin and Jadh J. Kerr, of Speer & Holliday, LLP, of Olathe, and Diane D. Durbin, of Prairie Village, for appellant Judy Butler McHenry, Administrator of the Estate of Leo E. Butler.

Bruce Hanson, of Oskaloosa, for appellee Estate of Kenneth Lee Butler, Franklin Burch Administrator.

Before HILL, P.J., POWELL, J., and HEBERT, S.J.

HILL, J.

Leo Butler appeals the district court's denial of his challenge to an order of partial distribution in his deceased son's estate. Leo, who is not an heir, claims he is entitled to more money from the pension settlement received from his son's former employer. The district court ruled that Leo should have appealed the court's order allocating the pension benefits within 30 days of its entry, 4 years earlier, and is now out of time to make such a challenge. We agree. Because Leo did not timely appeal the district court's allocation order he has not filed a timely appeal to this court. We dismiss this appeal as we have no jurisdiction.

Severance benefits from employment become the subject of an estate controversy.

Kenneth Lee Butler died intestate on October 21, 2006, in Wyandotte County, Kansas. His adult son, Franklin Burch, was Butler's only heir. In November 2006, Burch received letters of administration from the probate court and began to administer his father's estate.

One of the apparent assets of the estate was a retirement plan. The Colgate–Palmolive Company in Kansas City had employed Butler. As a participant in Colgate's retirement plan, Butler had signed a form designating his plan beneficiaries as his father, Leo, who was to receive 50 percent of the proceeds, and his mother, Jenny Butler, who was to receive 50 percent of the proceeds. At the time of Butler's death, his mother was already deceased but his father was still alive.

Importantly, before Butler's death, Colgate was negotiating a severance program with its employees. In order to exercise an option under the program, Butler was required to sign a general waiver and release form that gave him some options. Butler died before he designated an option. Thus, in March 2007, Colgate sent a letter to Burch, in his capacity as administrator of the estate, stating:

“Had he been actively employed at the time of [Colgate's] Kansas City plant closing in December 2006, [Butler] would have had the following option: (i) to elect his lump sum Personal Retirement Account, which amounts to approximately $127,000, and severance [pay] in the amount of $54,000 (for a total of $182,000), or (ii) to forego his PRA and any severance, and instead elect a lump sum payment of $10,000 per year of service, which, given his 24 years of service, amounts to $240,000. This amount is paid out of the Company's pension plan as an enhanced pension. In order to receive either option, Mr. Butler would have been required to sign a general waiver and release, which, as we discussed, the estate will now execute.

“Mr. Butler's father is named as the beneficiary for pension purposes. Thus, dependingon which election is made by Mr. Butler's estate, the Company will disburse the money to the appropriate party (the estate in the case of severance; Mr. Butler's father in the case of pension). Please let me know which option the estate will elect, and we can proceed accordingly.”

As the administrator of Butler's estate, Burch sought guidance from the probate court in May 2007. In his petition to the court Burch indicated that under Option I of the program, Leo would receive a lump sum of $127,000 and the estate would receive $54,000 in severance; but Colgate would conversely allow a lump-sum payment of $240,000 under Option II. Burch concluded it was “seeking a Court determination” as to which election to make and how the funds should be allocated between Leo and the estate.

At the hearing on Burch's petition, the probate court confirmed that despite having notice of the hearing, Leo did not appear. After the hearing, the court issued an “Order Determining Allocation of Severance and Pension Benefits of Colgate–Palmolive Company.” In its order, after acknowledging the two options given by Colgate–Palmolive the court found that Leo was the named beneficiary of 50 percent of Butler's pension benefits, while Jenny was the named beneficiary of the other 50 percent. The court then found that because Jenny predeceased Butler, her 50 percent share of Butler's pension benefits lapsed to Butler's estate in the absence of any contrary plan provision.

The court ultimately determined Leo was entitled to $63,640.50—which the court said was 50 percent of Butler's pension benefits under Option I of the program. However, the court directed Burch, as the administrator of the estate, to elect Option II of the program. Thus, the estate would receive $240,000 under Option II but pay Leo $63,640.50—leaving the estate a total of $176,359.50.

Nearly 2 months later, on August 27, 2007, Leo filed a motion to set aside the court's June 28, 2007, order allocating Butler's retirement benefits (hereafter referred to as the “allocation order”). Citing K.S.A. 60–260(b)(4) and (b)(6), Leo argued the allocation order should be set aside because:

• the order was void in that it was based on state law as opposed to federal ERISA law;

• Burch failed to follow the proper procedure because he proceeded under state probate law as opposed to federal law;

• the probate court improperly ignored the program administrator's discretion in allocating the benefits; and

• the court's allocation of benefits was inconsistent with the program options.

The court denied Leo's motion. The court found it was uncontroverted that Leo received notice of the hearing on Burch's petition for allocation—but found he chose neither to appear at the hearing nor provide the court with any pleadings or documentation voicing an objection to the court's ultimate findings. The court also found it was uncontroverted that Leo's attorney entered her appearance on Leo's behalf within 30 days of the court's allocation order but the order was not appealed and the motion to set aside was not filed within 30 days of the order.

In response to Leo's objection to the application of state law in allocating the benefits, the court said Leo was confusing the issue of subject matter jurisdiction with choice of law principles. In denying Leo's motion, the court concluded:

“The court, under the circumstances existing in this case, had concurrent jurisdiction with the Federal Court to hear and determine the issues contained herein. The issue of whether the trial court utilized the proper law required by ERISA in making a determination of the allocation of these benefits is one which, if the movant felt aggrieved by, must have been pursued by the movant in an appeal to the Kansas Court of Appeals and is not properly the subject, two months after the order is entered of a motion to set same aside pursuant to K.S.A. 60–260. Again, as argued by the petitioner, K.S.A. 60–260 is not properly utilized in a matter in which there is a specific statutory provision setting forth the time limits within which a notice of appeal must be filed which in this case set out in K.S.A. 60–2103, when the failure to act pursuant to the provisions of this latter statute is voluntary or is the result of negligence.”

On May 21, 2008, the court amended some of the language pertaining to its findings of fact but left its legal ruling (as quoted above) intact.

Nearly 4 years later, Burch asked the probate court for a partial distribution of Butler's assets. On April 18, 2012, the court approved the request and ordered a partial distribution of $120,000. Leo appealed that order of partial distribution, the June 28, 2007, allocation order, and all other rulings and orders of the court. Leo acknowledged his appeal was untimely but contended there was “excusable neglect” in that he did not receive notice of the petition for partial distribution.

The district court denied Leo's motion to appeal out of time on August 14, 2012. The court found that Leo did not receive notice of the court's April 18, 2012, order on the petition for partial distribution. However, in denying Leo's motion, the court held Leo was not an “interested party” to the order of partial distribution. The court reasoned:

“The petitioner is wishing to appeal an order entered by the Court May 21, 2008. That order dealt with the allocation of certain severance and pension benefits of Colgate–Palmolive as and between [Leo] and the Estate of Kenneth Butler. The Court ruled on this matter in 2008, and no appeal was taken from those rulings. [Leo] now maintains that the Order of Partial Distribution begins the appeal time on those rulings. This Court does not agree. A review of K.S.A. 60–2103 persuades this Court that the ruling made by the Court in 2008 was a final order as to the rights of [Leo] and that appeal from those [ sic ] ruling had to have been filed within 30 days of May 21, 2008. Nothing in the record indicates any excusable reason for delay in doing so and as such [Leo] at this...