Richardson v. Murray

• Decision Date: 18 August 2017
• Docket Number: No. 115,745.,115,745.
• Citation: 402 P.3d 588
• Parties: Douglas K. RICHARDSON and Mary K. Richardson, Appellants, v. Marilyn K. MURRAY and Paul E. Murray, Appellees.
• Court: Kansas Court of Appeals

402 P.3d 588

Douglas K. RICHARDSON and Mary K. Richardson, Appellants,

v.Marilyn K. MURRAY and Paul E. Murray, Appellees.

No. 115,745.

Court of Appeals of Kansas.

Opinion filed August 18, 2017

Gregory P. Goheen, Douglas M. Greenwald, and Robert M. Smith, of McAnany, Van Cleave & Phillips, P.A., of Kansas City, for appellants.

Mark B. Schaffer, of Frischer & Schaffer, Chtd., of Overland Park, for appellees.

Before Standridge, P.J., Leben, J., and Patricia Macke Dick, District Judge, assigned.

Standridge, J.:

Douglas K. Richardson and Mary K. Richardson brought suit against Marilyn K. Murray and Paul E. Murray alleging breach of contract and various tort claims after the Richardsons experienced water intrusion in a residence they purchased from the Murrays. The Murrays submitted an offer of judgment prior to trial, which the Richardsons accepted. The Richardsons sought attorney fees and related expenses in conjunction with the offer of judgment, claiming the fees and expenses were part of "court costs accrued" or, in the alternative, as due and owing directly under the real estate contract or the Kansas Consumer Protection Act (KCPA), K.S.A. 50-623 et seq . The district court denied the Richardsons' request under all of these theories. At the same time, the district court granted the Murrays' request to order the Richardsons to pay sanctions in the form of a statutory penalty and attorney fees based on the Richardsons' failure to file a timely satisfaction of judgment. The Richardsons appeal from both the district court's decision to deny their application for attorney fees and from its decision to assess sanctions relating to the satisfaction of judgment. Although we agree with the district court that it is not proper to award attorney fees under the theory that they constitute court costs as provided in the offer of judgment, we are persuaded that the district court has the authority to award reasonable attorney fees to the Richardsons based on their status as prevailing parties under the KCPA and the underlying contract for purchase of the residence upon which the Richardsons brought suit. Nevertheless, we affirm the district court's decision to grant the Murrays' motion for sanctions in the form of the statutory penalty and attorney fees related to the Richardsons' failure to file a timely satisfaction of judgment.

FACTS

In March 2013, Marilyn sold a residence in Overland Park, Kansas, to the Richardsons. The Richardsons subsequently experienced water intrusion in their basement. As a result, the Richardsons filed an eight-count petition for damages in Johnson County District Court against the Murrays based on numerous inaccuracies in the disclosure statement provided by Marilyn. The claims set forth in the petition included breach of contract, fraudulent misrepresentation, violation of the KCPA, gross and wanton negligence, negligence, negligent misrepresentation, fraud by omission, and breach of implied duty of good faith and fair dealing.

On October 9, 2015, the Murrays submitted an offer of judgment pursuant to K.S.A. 2016 Supp. 60-2002(b) to allow judgment to be taken against them in the amount of $30,000 with court costs accrued. Under this statute, a defendant may make an offer to the plaintiff for judgment to be taken against the defendant, with costs then accrued. If the plaintiff accepts the offer, judgment is entered by the clerk for the amount of the offer. If the plaintiff rejects the offer and then at trial recovers less than the amount tendered in the pretrial offer of judgment, the plaintiff must pay for the defendant's postoffer costs and cannot recover his or her own postoffer costs. The purpose of the offer of judgment rule is to promote settlement. See K.S.A. 2016 Supp. 60-2002(b).

On October 16, 2015, the Richardsons accepted the Murrays' offer of judgment. On October 20, 2015, a journal entry of judgment was filed as required by K.S.A. 2016 Supp. 60-2002(b). Judgment was entered in favor of the Richardsons and against the Murrays in an amount of $30,000 with court costs accrued. On November 19, 2015, the Richardsons filed an application for attorney fees and expenses and a bill of costs. In support of their application, the Richardsons argued that the "court costs accrued" in the offer of judgment included attorney fees. Alternatively, the Richardsons argued that as prevailing parties in the lawsuit, they were entitled to attorney fees under the real estate contract and under K.S.A. 50-634(e), a provision of the KCPA. The Murrays filed a motion in opposition to the application for attorney fees and expenses, arguing that neither the contract nor the KCPA provides that attorney fees are an element of court costs. The parties argued the motion to the district court on March 8, 2016. The court ultimately allowed the Richardsons $3,598.80 in court costs but denied their request for attorney fees and related expenses.

After the hearing, the Murrays tendered payment to the Richardsons in the amount of the $30,000 judgment plus $3,598.80 in court costs as ordered by the district court. The Richardsons, however, failed to file a satisfaction of judgment within 21 days as required by K.S.A. 2016 Supp. 60-2803(a). As a result, the Murrays filed a motion on April 12, 2016, asking the court to order the Richardsons to immediately file a satisfaction of judgment. Relying on the sanction provision in K.S.A. 2016 Supp. 60-2803(b), the Murrays also sought an award of $100 in statutory penalties and $594 in attorney fees for the Richardsons' failure to file a timely satisfaction of judgment as required by statute. The Richardsons opposed the motion, claiming it was impracticable to file a satisfaction of judgment because their time for appeal from the district court's decision to deny their request for attorney fees and related expenses had not yet expired. On May 6, 2016, the district court granted the Murrays' motion, ordered the Richardsons to file a satisfaction of judgment, assessed a $100 statutory penalty, and assessed $594 in attorney fees against the Richardsons. The Richardsons timely appealed.

ANALYSIS

1. The Richardsons' application for attorney fees and related expenses

The Richardsons first contend on appeal that the district court erred in denying their application for attorney fees and related expenses. They rely on two separate theories of recovery to support their application: (a) the "court costs" included in the offer of judgment should be construed to incorporate attorney fees and (b) as the prevailing party, they are entitled to attorney fees as provided for in the real estate contract and under the KCPA. The district court denied the Richardsons' request on both grounds.

Whether the district court has authority to award attorney fees is a question of law over which this court's review is unlimited. Where the district court has authority to grant attorney fees, its determination will not be reversed on appeal absent a showing of abuse of discretion. Unruh v. Purina Mills , 289 Kan. 1185, 1200, 221 P.3d 1130 (2009) ; Fletcher v. Anderson , 29 Kan. App. 2d 784, 786, 31 P.3d 313 (2001).

a. Attorney fees as "court costs accrued"

The Murrays submitted their offer of judgment pursuant to K.S.A. 2016 Supp. 60-2002, which provides in relevant part:

"(b) Offer of judgment . At any time more than 21 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against such party for the money or property or to the effect specified in such party's offer, with costs then accrued. If within 14 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the clerk shall enter judgment."

The Murrays' offer specified it was for $30,000 "with court costs accrued"; thus, the Murrays included costs in their offer as required by statute. However, the offer was silent on whether attorney fees were intended to be included in the costs.

"The term ‘costs' ordinarily means the fees and charges of the court—filing fees, fees for service of process and the like." Divine v. Groshong , 235 Kan. 127, 141, 679 P.2d 700 (1984). Attorney fees generally are not included in the costs of an action. Legislative Coordinating Council v. Stanley , 264 Kan. 690, 703, 957 P.2d 379 (1998) ("Attorney fees are not a part of costs, absent express statutory authority."). Under K.S.A. 2016 Supp. 60-2003, costs are defined as follows:

"Items which may be included in the taxation of costs are:

"(1) The docket fee as provided for by K.S.A. 60-2001, and amendments thereto.

"(2) The mileage, fees, and other allowable expenses of the sheriff, other officer or private process server incurred in the service of process or in effecting any of the provisional remedies authorized by this chapter.

"(3) Publisher's charges in effecting any publication of notices authorized by law.

"(4) Statutory fees and mileage of witnesses attending court or the taking of depositions used as evidence.

"(5) Reporter's or stenographic charges for the taking of depositions used as evidence.

"(6) The postage fees incurred pursuant to K.S.A. 60-303, and amendments thereto.

"(7) Alternative dispute resolution fees shall include fees, expenses and other costs arising from mediation, conciliation, arbitration, settlement conferences or other alternative dispute resolution means, whether or not such means were successful in resolving the matter or matters in dispute, which the court shall have ordered or to which the parties have agreed.

"(8) Convenience fees and other administrative fees levied for the privilege of paying assessments, fees, costs, fines or forfeitures by credit card or other means, including, but not limited to, fees for electronic filing of documents or pleadings with the court.

"(9) Such other charges as are by statute authorized to be

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