Jeanes v. Bank of Am., N.A.

• Decision Date: 08 March 2013
• Docket Number: No. 97,855.,97,855.
• Citation: 295 P.3d 1045
• Parties: Janet J. JEANES, as Administrator C.T.A. of the Estate of Maxine J. Anton, Deceased, Appellant, v. BANK OF AMERICA, N.A.; Bank of America Corporation; Rudy Wrenick; and Sharon Kunard, Appellees.
• Court: Kansas Supreme Court

295 P.3d 1045

Janet J. JEANES, as Administrator C.T.A. of the Estate of Maxine J. Anton, Deceased, Appellant,

v.BANK OF AMERICA, N.A.; Bank of America Corporation; Rudy Wrenick; and Sharon Kunard, Appellees.

No. 97,855.

Supreme Court of Kansas.

March 8, 2013.

Syllabus by the Court

1. In a case before the Kansas Supreme Court on a granted petition for review, any issue not presented in the petition for review or fairly included therein generally will not be considered.

2. Interpretation of a statute is a question of law, and an appellate court's review is unlimited.

3. To decide whether a cause of action survives the death of the plaintiff, a court must first determine when the cause of action accrued. Generally a cause of action accrues as soon as the right to maintain a legal action arises.

4. Under the facts of this case, the cause of action accrued when the decedent died because the alleged injury—excessive taxes on the estate—did not arise until after her death.

5. A cause of action does not survive in favor of a personal representative of a decedent unless it accrued in favor of the decedent in his or her lifetime.

6. Under the facts of this case, because the cause of action did not accrue during the lifetime of the decedent, it does not qualify as a survival claim under K.S.A. 60–1801.

John R. Hamilton, of Hamilton, Laughlin, Barker, Johnson & Watson, of Topeka, argued the cause and was on the briefs for appellant.

Curtis E. Woods, of Sonnenschein Nath & Rosenthal LLP, of Kansas City, Missouri, and Dolly R. Livingston, of the same firm, were on the brief for appellee Rudy Wrenick.

Thomas D. Haney, of Henson, Clark, Hutton, Mudrick & Gragson, LLP, of Topeka, argued the cause, and Thomas E. Beall, of the same firm, was with him on the briefs for appellee Sharon Kunard.

PER CURIAM:

We are asked to determine if the personal representative of a decedent's estate may maintain a malpractice cause of action against the decedent's attorney for substandard estate planning that resulted in increased tax liability. We answer this question “no” because the cause of action arose after the decedent's death which means it does not qualify as a survival claim under K.S.A. 60–1801.

Accordingly, we affirm the judgment of the Court of Appeals and the district court on this issue.

Facts

On June 13, 1991, Maxine J. Anton created an inter vivos revocable trust. From the trust's inception to her death, Anton served as its sole trustee. Upon her death, the vast majority of the assets was to pass to her niece, Janet Jeanes, with the remainder funding charitable trusts for Anton's stepson and her personal assistant.

At Anton's request, Topeka attorney Sharon Kunard drafted the trust documents and a pour-over will. All later amendments were prepared by Kunard, who was last contacted by Anton for legal services in June 2000.

Bank IV, the predecessor of Bank of America (the Bank), was named successor trustee of Anton's trust and helped Anton serve as trustee by acting as her agent. Under a written agency agreement, Anton deposited her common stock and securities with the Bank and the Bank performed certain tasks for her. Since 1998, Rudy Wrenick helped manage Anton's account.

Anton died on April 25, 2003. Her estate tax return revealed a gross estate of $39,491,806. On January 24, 2004, her estate paid estate and inheritance taxes of $21,860,864.61.

On November 24, 2004, in Jeanes' capacity as administrator C.T.A. of Anton's estate, she sued the Bank, its parent company Bank of America Corporation (BAC), Wrenick, and Kunard. Against the Bank, BAC, and Wrenick, the petition alleged claims of negligence—and of breaches of fiduciary duty, contract, and trust. Against attorney Kunard, the petition alleged claims of negligence and breaches of fiduciary duty and contract. These claims were based on the alleged failure of all the defendants to protect Anton's assets from tax liability. Specifically, Jeanes alleged that setting up a family limited partnership would have saved more than $6 million in death and estate taxes.

The Bank, BAC, and Wrenick moved for summary judgment. While noting that Jeanes had withdrawn her claims against BAC, the district court granted the motions. Kunard moved separately for summary judgment, which the district court likewise granted. Specifically, the court held that Jeanes' tort claims for legal malpractice did not survive Anton's death.

Jeanes appealed only the grant of summary judgment to Wrenick and Kunard to the Court of Appeals.

The Court of Appeals panel reversed part of the summary judgment for Wrenick, but affirmed it for Kunard. More particularly, the panel held:

“[S]ubstantial injury resulting from Kunard's alleged malpractice would have been the estate taxes imposed against Anton's estate, which did not arise until after Anton's death. Therefore, the cause of action for legal malpractice did not accrue in Anton's lifetime and did not survive her death.” Jeanes v. Bank of America, 40 Kan.App.2d 281, 299, 191 P.3d 325 (2008).

In her petition for review to this court, Jeanes only requests review of the panel's affirmation of the district court's grant of summary judgment to Kunard. Neither Wrenick nor Kunard filed a cross-petition. Accordingly, we now consider only whether the summary judgment for Kunard was correct. See Cohen v. Battaglia, 296 Kan. ––––, 293 P.3d 752 (2013).

Analysis

Issue: Administrator Jeanes' malpractice claim on behalf of Anton's estate for Kunard's negligent estate planning does not survive Anton's death under K.S.A. 60–1801.

As a threshold matter, we observe that administrator Jeanes' first amended petition alleged that Kunard committed “professional negligence,” breached her fiduciary duty owed to Anton and her estate, and breached her contract with Anton. In the district court's order granting Kunard summary judgment, the court determined that all of Jeanes' causes of action against Kunard “sound[ed] in tort.” The Court of Appeals panel specifically affirmed that part of the order. Jeanes, 40 Kan.App.2d at 288, 191 P.3d 325 (“Consequently, the trial court correctly determined that the evidence did not support a breach of contract claim and that the gravamen of Jeanes' claims against Kunard sounded in tort.”).

In administrator Jeanes' petition for review, she does not request our review of these court decisions that her claims sound in tort. And we generally do not consider issues that are not presented in the petition for review. See Rucker v. DeLay, 295 Kan. 826, 829, 289 P.3d 1166 (2012) (absent application of a permissive exception for plain error, this court will not consider any issues not presented in the petition for review or fairly included therein). Consequently, the sole specific issue before us is whether Jeanes' claim for legal malpractice against Kunard qualifies as a survival action so she may pursue it after Anton's death.

Standard of review

This court's standard for reviewing a district court's grant of summary judgment is well known:

“Summary judgment is appropriate 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. The trial court is required to resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the ruling 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. In order to preclude summary judgment, the facts subject to the dispute must be material to the conclusive issues in the case. On appeal, we apply the same rules and where we find that reasonable minds could differ as to the conclusions drawn from the evidence, summary judgment must be denied. [Citations omitted.]” Osterhaus v. Toth, 291 Kan. 759, 768, 249 P.3d 888 (2011).

To the extent we are asked to interpret statutes, we exercise unlimited review. Sloop v. Kansas Dept. of Revenue, 296 Kan. 13, 290 P.3d 555 (2012).

Jeanes' cause of action did not accrue until after Anton died.

As an introductory matter, we observe that generally, under common law, tort claims did not survive either the death of the tortfeasor or the plaintiff. See Price, Administrator v. Holmes, 198 Kan. 100, 105–06, 422 P.2d 976 (1967) (citing 1 C.J.S., Abatement & Revival § 136) (the general rule is that a tort action does not survive the death of either the person to whom or the person by whom the wrong was done). A Kansas statute now controls whether a cause of action survives one's death. See Nicholas v. Nicholas, 277 Kan. 171, 189, 83 P.3d 214 (2004). That statute, K.S.A. 60–1801, states:

“In addition to the causes of action which survive at common law, causes of action for mesne profits, or for an injury to the person, or to real or personal estate, or for any deceit or fraud, or for death by wrongful act or omission, shall also survive; and the action may be brought notwithstanding the death of the person entitled or liable to the same.” (Emphasis added.)

To determine if administrator Jeanes' malpractice cause of action survived Anton's death so it may be pursued against Kunard, we must first determine when that cause of action accrued. See Price, 198 Kan. at 104, 422 P.2d 976 (“To determine whether a cause of action survived [death], either in tort or in contract, we must ascertain when each would have accrued.”).

We observe that generally a cause of action accrues as soon as the right to maintain a legal action arises. Estate of Draper v. Bank of America, 288 Kan. 510, 534, 205 P.3d 698 (2009). The test to determine when an action accrues is that point when a plaintiff could have first filed and prosecuted an action to a successful conclusion. Pancake House, Inc. v. Redmond, 239 Kan. 83, 87, 716 P.2d 575 (1986). While K.S.A. 60–513(b) is most frequently...