York v. InTrust Bank, N.A.

• Decision Date: 05 June 1998
• Docket Number: No. 75834,75834
• Parties: Richard B. YORK and Vesta L. York, Husband and Wife, Appellees/Cross-appellants, v. INTRUST BANK, N.A., a federally chartered banking corporation, Appellant/Cross-appellee, and Lost Creek Estates, Inc., a Kansas corporation; J.W. Russell; Marge Delmar; Plaza Del Sol Real Estate, Inc., a real estate firm; Sharon West; Breezy Lake Homeowners Association, a nonprofit corporation, and the Architectural Control Committee for Breezy Lake Homeowners Association, Defendants.
• Court: Kansas Supreme Court

Page 405

962 P.2d 405

265 Kan. 271

Richard B. YORK and Vesta L. York, Husband and Wife, Appellees/Cross-appellants, v. INTRUST BANK, N.A., a federally chartered banking

corporation, Appellant/Cross-appellee,

and

Lost Creek Estates, Inc., a Kansas corporation; J.W.

Russell; Marge Delmar; Plaza Del Sol Real Estate, Inc., a

real estate firm; Sharon West; Breezy Lake Homeowners

Association, a nonprofit corporation, and the Architectural

Control Committee for Breezy Lake Homeowners Association, Defendants.

No. 75834.

Supreme Court of Kansas.

June 5, 1998.

Syllabus by the Court

1. The effect of a release or covenant not to sue is a legal question, over which we have unlimited review. Insofar as factual matters pertain to whether a defendant was an active or passive tortfeasor, which has bearing on the legal question of the effect of the settlement, we apply a mixed standard of review. Thus, we apply a substantial competent evidence test to the factual findings and then decide if those findings support the legal conclusions.

2. The law is well settled in Kansas that the execution of a covenant not to sue does not result in a release of claims against all other joint tortfeasors.

3. A release or covenant not to sue an agent also releases a principal who is purely vicariously liable for imputed negligence under a theory of respondeat superior. Such a release or covenant not to sue does not release a principal who is independently liable for its own actions and not merely for the conduct of other actors.

4. Although all participants in a conspiracy may be held vicariously liable for acts injuring others committed while in furtherance of a conspiracy, all participants are directly liable for injuries to others which are the objects of the conspiracy, regardless of whether the participants were active or passive conspirators.

5. When a lender regularly acquires collateral upon default which it sells to consumers, the lender is engaging in consumer transactions in the ordinary course of its business and is a "supplier" as defined by K.S.A. 50-624(i) of the Kansas Consumer Protection Act.

6. When a verdict is challenged for insufficiency of evidence or as being contrary to the evidence, it is not the function of this court to weigh the evidence or pass on the credibility of the witnesses. If the evidence, with all reasonable inferences to be drawn therefrom, considered in the light most favorable to the prevailing party, supports the verdict, it will not be disturbed on appeal.

7. The Kansas Consumer Protection Act prohibits suppliers from engaging in any deceptive acts or practices in connection with a consumer transaction. A deceptive act includes the willful use, in any oral or written representation, of exaggeration, falsehood, innuendo, or ambiguity as to a material fact, regardless of whether any consumer has in fact been misled. A material fact is one to which a reasonable person would attach importance in determining his or her choice of action in the transaction involved.

8. There is no requirement that a person or entity willfully violate the Kansas Consumer Protection Act in order to find a violation of the Act under K.S.A. 50-626. Rather, K.S.A. 50-626 prohibits suppliers from engaging in deceptive acts, including the willful use, in any oral or written representation, of a falsehood as to any material fact.

9. The five elements necessary for a conspiracy to exist are: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds in the object or course of action; (4) one or more unlawful overt acts; and (5) damages proximately caused by those acts.

10. Although agents or employees acting only in their official capacities on behalf of a corporate defendant and whose acts are considered those of the corporation may not form a conspiracy with the corporation, separate entities who contract with a corporation and pursue their own interests do not act in an official capacity of the corporation and may conspire with it.

11. In proving the existence of a meeting of the minds in a conspiracy, a plaintiff is not required to prove an actual agreement. Rather, circumstantial evidence of the agreement is universally recognized as the proper means of proving a conspiracy. Thus, a conspiracy may be proven by either showing the conspiracy itself or by showing the separate acts of the conspirators involving the same purpose or object.

12. The elements necessary to find a defendant liable for aiding and abetting others are: (1) The party whom the defendant aids must perform a wrongful act causing injury; (2) at the time the defendant provides assistance, he or she must be generally aware of his or her role in part of an overall tortious or illegal activity; and (3) the defendant must knowingly and substantially assist in the principal violation.

13. The six factors to be used to determine whether a defendant knowingly provided substantial aid to a tortfeasor are:(1) the nature of the act encouraged by the defendant; (2) the amount of the defendant's assistance; (3) the defendant's presence or absence at the time of the tortious act; (4) the defendant's relation to the other party; (5) the defendant's state of mind; and (6) the duration of the defendant's assistance.

14. A remittitur is, in effect, a post-trial settlement negotiation where the court utilizes its discretion to reduce what it believes to be an excessive judgment to one which it believes both parties should accept.

15. Where a verdict is reduced by a remittitur on motion of the party against whom the verdict was entered, said party has neither consented to nor acquiesced in the new judgment and is not barred from appeal. However, when a party rejects the benefit of the remitted verdict and appeals, the party who accepted the remittitur rather than undertaking the expense of a new trial is not barred from raising the propriety of the remittitur and other issues on a cross-appeal.

16. Cross-appeals of remittiturs should be permitted when the party for whom the remittitur was granted appeals on other grounds. Judicial economy is best achieved by reviewing the remittitur judgment at the same time other issues in the case are resolved. A new trial may be completely avoided if the trial court's order is found erroneous and the original verdict is reinstated. Moreover, such a rule encourages the appellant to pursue only meritorious appeals because of the chance that the appellate court may reinstate the original verdict while ruling against the appellant on all other issues.

17. A party is entitled to recover only his or her actual damages less those he or she might have reasonably prevented; however, the doctrine of avoidable consequences is simply one of good faith and fair dealing. The injured party need not undertake extraordinary efforts or do what is unreasonable or impracticable in an effort to minimize damages.

18. When the sufficiency of the evidence supporting a jury determination that punitive damages should be awarded is challenged, our standard of review is the same as on any other issue where the evidence is alleged to be insufficient, except that we must find that the substantial evidence supporting the punitive damages finding is clear and convincing.

19. The reasonable value of attorney fees rests within the sound discretion of the trial court, and the trial court's determination will not be disturbed in the absence of an abuse of discretion. If the trial court's award of fees is supported by substantial competent evidence, there is no abuse of discretion.

20. Statutory attorney fees constitute a remedy under the Kansas Consumer Protection Act which is in addition to and separate from the allowance of damages under K.S.A. 50-634(b).

21. In the present case, there is substantial evidence to support the trial court's award of attorney fees. It was clearly necessary for all of the underlying facts of the transaction to be fully developed in order to prosecute the Kansas Consumer Protection Act claim, which is inextricably intertwined with the single transaction which is the subject of this litigation.

22. Our standard of review over whether the trial court erred in granting a remittitur is one of abuse of discretion, not whether substantial evidence supported the jury verdict.

23. The trial court erred in computing a lump-sum amount of damages which could be applied at the beginning of the loan to reduce the amount of increased interest expense when payments on the loan had already been made for 14 months at the time the damages reduction was computed.

24. When a right of action is once satisfied, it ceases to exist. If part satisfaction has already been obtained, further recovery can only be had of a sum sufficient to accomplish satisfaction. It is not necessary that the party making payment in partial satisfaction was in fact liable. Anything received on account of the injury inures to the benefit of all and operates as a payment pro tanto. The plaintiff is entitled to only one satisfaction from whatever source it may come.

25. A covenant not to sue one joint tortfeasor does not release other joint tortfeasors; however, anything received by way of a covenant not to sue operates as a payment pro tanto upon any judgment obtained against the others.

26. The imposition of joint and several liability for punitive damages is contrary to the purpose for which punitive damages are awarded. Punitive damages are awarded to punish the wrongdoer. Each wrongdoer is liable to pay the punitive damages assessed against it. The amount of the award is to be calculated with the individual defendant's financial status and conduct in mind. Joint and several liability undermines these considerations and therefore is unavailable. A defendant is not entitled to apply a pro tanto credit to any amount awarded as punitive damages or to apply a pro tanto credit of any amount previously recovered which was specifically...