Lanier Trucking, Inc. v. Long
| Decision Date | 14 August 2020 |
| Docket Number | No. 120,061,120,061 |
| Citation | 469 P.3d 102 (Table) |
| Parties | LANIER TRUCKING, INC., Steven Lanier, Appellants, v. James J. LONG, Appellee. |
| Court | Kansas Court of Appeals |
Brian C. Wright, of Wright Law Office, Chartered, of Great Bend, for appellants.
Michelle Moe Witte, of Martin, Pringle, Oliver, Wallace & Bauer, L.L.P., of Wichita, for appellee.
Before Malone, P.J., McAnany, S.J., and Burgess, S.J.
James J. Long provided legal representation for Lanier Trucking, Inc. (LTI), a company in which Steven Lanier was 50 percent owner. Through transactions that involved Elvis Lundquist, who owned the other 50 percent of LTI, Long acquired ownership interest in companies that potentially had interests adverse to LTI. Lanier and LTI sued Long for legal malpractice and breach of fiduciary duty, but the district court dismissed the case for lack of prosecution. After Lanier and LTI refiled the suit, the district court granted three motions for summary judgment in Long's favor. Lanier and LTI appeal those rulings, arguing that the district court misapplied statutes of limitations, Kansas' savings statute, and the standard for deciding a motion for summary judgment. Finding no error, we affirm the district court's judgment.
Lanier and Lindquist each own 50 percent of LTI. Lindquist also owned a company called Elite Transportation (Elite) and in 2012, at Lindquist's request, Long formed another company called Elite Dedicated Services, LLC (EDS). Long had an ownership share in EDS and was paid to manage EDS, but he did not provide EDS with legal representation. Also in 2012, Lanier and Lindquist agreed to move some of LTI's customers to Elite. Under this agreement, LTI and Elite shared some expenses, such as labor and fuel, but held separate bank accounts.
In January 2013, Long was attorney of record for LTI in a lawsuit brought against RESS Properties, LLC (RESS), referred to as the RESS lawsuit. At the time, Lanier and Lindquist each owned one-third of RESS; Sunflower Investments, LLC (Sunflower) owned 30 and one-third percent of RESS; and Randy Burris owned 3 percent of RESS. In August 2013, Lindquist, who was LTI's point of contact with Long, directed Long not to pursue the RESS lawsuit; a settlement agreement was pending.
In September 2013, before a settlement agreement was executed, Lindquist asked Long if he was interested in acquiring an interest in RESS; Long said he might be. Lanier later executed an assignment of interest that purported to transfer LTI's interest in RESS to Lindquist, even though LTI had no interest in RESS to transfer. Despite the wording of the assignment, Lindquist said he would transfer Lanier's interest in RESS to Long.
On October 1, 2013, representatives of LTI and RESS—including Lanier—signed a settlement agreement abandoning LTI's claims against RESS. Also under that settlement agreement, Sunflower transferred its interest in RESS to EDS. Burris sold his interest in RESS to Lindquist, and Lindquist transferred a 40 percent interest in RESS to Long. So as of January 2014, Long and Lindquist were the sole owners of RESS. On February 19, 2014, the district court dismissed the RESS lawsuit for lack of prosecution.
Long continued to provide legal representation for LTI through at least January 2015, representing LTI in at least two cases that went to trial. Also through 2015, Long continued working with EDS and he oversaw Elite's accounting and bookkeeping. At least once, Long authorized payment of revenue generated by LTI into a bank account held by EDS. Along with LTI revenue, some revenue generated by Elite was deposited into EDS's account. In July 2014, Lanier wrote to the Kansas Disciplinary Administrator's Office and informed them that he believed Long was improperly funneling payments into EDS's bank account. Also in 2014, Lanier agreed to move LTI's remaining customers to Elite; LTI ceased operation in August 2015.
On February 19, 2016, Lanier and LTI sued Long, alleging legal malpractice related to Long's actions in the RESS lawsuit and breach of a fiduciary duty Long owed to both Lanier and LTI. To the extent that the specific claims raised in this lawsuit, referred to as Lanier I , are relevant to this appeal, they are detailed in the analysis below. On November 15, 2016, the district court dismissed Lanier I for lack of prosecution.
On March 16, 2017, Lanier and LTI refiled the lawsuit, referred to as Lanier II . Generally, Lanier and LTI's claims in Lanier II were of legal malpractice and breach of fiduciary duty arising from two categories of circumstances—those related to Long's action or inaction involving RESS and those unrelated to RESS.
On August 1, 2017, Long filed a motion for partial summary judgment arguing that LTI's RESS-related claims of legal malpractice and breach of fiduciary duty were barred by the applicable two-year statute of limitations in K.S.A. 60-513(a)(4). Long contended that LTI's RESS-related claims accrued on October 1, 2013, when the parties signed the settlement agreement to resolve the RESS lawsuit, so the statute of limitations expired October 1, 2015, over four months before Lanier I and over two years before Lanier II . Lanier and LTI disagreed, contending that the continuing representation rule tolled the statute of limitations.
On September 13, 2017, Long filed a "Second Amended Motion for Partial Summary Judgment and for the Dismissal of Steven Lanier as a Party Plaintiff." Long argued that Lanier's personal claims for legal malpractice and breach of fiduciary duty were barred by the two-year statute of limitations and that Lanier lacked standing to bring an individual action for harm LTI suffered. Lanier responded to this motion, arguing that summary judgment would be improper because material facts remained controverted.
The district court held a hearing on October 26, 2017, at which it addressed Long's second amended motion for partial summary judgment. After hearing argument, the district court ruled from the bench that there was no attorney/client relationship between Long and Lanier, so Lanier could not pursue a legal malpractice claim. Thus, the district court granted summary judgment in Long's favor and dismissed all of Lanier's legal malpractice claims, whether they stemmed from RESS-related or non-RESS-related facts.
As for Lanier's breach of fiduciary duty claims, the district court found that Lanier had "not come forward with facts sufficient to create a question of fact that Long owed a fiduciary duty to Steve Lanier over the RES[S] transaction." The district court granted summary judgment in Long's favor on Lanier's RESS-related breach of fiduciary duty claim. But to the extent that Lanier brought claims for a non-RESS-related breach of fiduciary duty, the district court denied summary judgment as premature and did not decide whether Long had a non-RESS-related fiduciary duty to Lanier. The district court later issued a minute order incorporating by reference the reasons articulated at the October 26, 2017 hearing.
In November or December 2017, the district court held a hearing on Long's August 2017 motion for partial summary judgment, but the record on appeal contains no transcript of that hearing. In any event, on January 16, 2018, the district court issued its written memorandum and order on Long's first motion for partial summary judgment, which sought summary judgment on LTI's claims and a ruling that Lanier lacked authority to bring claims on LTI's behalf. The district court found that Lanier could bring Lanier II on behalf of LTI. Next, the district court found that the statute of limitations for LTI's RESS-related claims against Long began to run on October 1, 2013, at the latest, so the statute of limitations barred those claims. But the district court found that to the extent that LTI's claims were unrelated to RESS, summary judgment was premature as discovery was still ongoing. Thus, the district court granted partial summary judgment in Long's favor "on LTI's claims for malpractice and breach of fiduciary duty but only on the claims arising out of the RESS litigation and the acquisition of the interest in RESS."
On April 23, 2018, Long filed a motion for summary judgment on LTI's breach of fiduciary duty claim. Long again argued that the statute of limitations barred this claim, which stemmed from allegations about the formation of EDS and funds that should have been paid to LTI being directed to EDS. It appears the district court held a hearing on the motion on August 2, 2018, but the record on appeal contains no transcript.
On August 7, 2018, the district court issued its written order on the motion, granting summary judgment in Long's favor on LTI's non-RESS-related breach of fiduciary claim as barred by the statute of limitations. The district court rejected LTI's argument that the Kansas savings statute applied to save Lanier II , and it rejected LTI's argument that the later asserted breaches began the statute of limitations period anew.
On September 6, 2018, Lanier and LTI filed a notice of appeal from the three partial summary judgment rulings described above. On June 30, 2020, this court issued a show-cause order noting that the record does not contain final judgment on all the claims against Long, nor does it reflect that LTI and Lanier sought to take an interlocutory appeal. The parties responded to the show-cause order and agreed at oral argument that the district court's findings on the rulings granting partial summary judgment necessarily resolved any remaining claims. We retain jurisdiction over this appeal on that basis.
Did the district court err by finding that Long was entitled to summary judgment because Lanier had failed to sufficiently show that Long owed him a fiduciary duty?
Lanier first argues that the district court erred by granting summary judgment in Long's favor on Lanier's RESS-related breach of fiduciary duty claims. Lanier contends,...
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