THE OURNAL of the Kansas Bar Association November/DecemberJ 2006 • Volume 75 • No. 10
A Hitchhiker’s Guide to Consumer Bankruptcy Reform Let Your Voice be Heard!
KBA Officers and Board of Governors President: Young Lawyers Section President: Teresa L. Watson David J. Rebein Paul T. Davis (785) 232-7761 Topeka (620) 227-8126 Dodge City (785) 843-7674 Lawrence [email protected] [email protected] [email protected] District 6: President-elect: KDJA Representative: Gabrielle M. Thompson Linda S. Parks Hon. Daniel L. Love Dodge City (785) 537-2943 Manhattan (316) 265-7741 Wichita (620) 227-4620 [email protected] [email protected] [email protected] District 7: Vice President: District 1: Laura L. Ice Ernest C. Ballweg Eric G. Kraft (316) 660-1258 Wichita (913) 491-6900 Overland Park (913) 498-3536 Overland Park [email protected] [email protected] [email protected] Rachael K. Pirner Secretary-Treasurer: Kip A. Kubin (316) 630-8100 Wichita Thomas E. Wright (816) 531-8188 Kansas City, Mo. [email protected] (785) 232-2200 Topeka [email protected] [email protected] Mary Kathryn “Kathy” Webb Lee M. Smithyman (316) 263-5851 Wichita Executive Director: (913) 661-9800 Overland Park [email protected] Jeffrey J. Alderman smithyman@smizak-law.com (785) 234-5696 Topeka District 8: [email protected] District 2: Gerald L. Green Gerald R. Kuckelman (620) 662-0537 Hutchinson Immediate Past President: (913) 367-2008 Atchison [email protected] Richard F. Hayse [email protected] (785) 232-2662 Topeka District 9: [email protected] Jeffrey S. Southard Hon. Kim R. Schroeder (816) 329-8527 Lawrence (620) 428-6500 Hugoton KBA Delegates to ABA: [email protected] [email protected] Sara S. Beezley (620) 724-4111 Girard District 3: District 10: [email protected] Dennis D. Depew Glenn R. Braun (620) 325-2626 Neodesha (785) 625-6919 Hays Hon. David J. Waxse [email protected] [email protected] (913) 551-5434 Kansas City, Kan. [email protected] District 4: District 11: William E. Muret Melissa A. Taylor Standridge Kansas Delegate to ABA: (620) 221-7200 Winfield (913) 551-5405 Kansas City, Kan. Thomas A. Hamill [email protected] melissa_taylor_standridge@ksd. (913) 491-5500 Overland Park uscourts.gov [email protected] District 5: Martha J. Coffman District 12: ABA Delegate at Large: (785) 271-3105 Topeka Michael A. Williams Hon. Christel E. Marquardt [email protected] (816) 292-2000 Kansas City, Mo. (785) 296-6146 Topeka [email protected] [email protected] THE OURNAL of the Kansas Bar Association November/DecemberJ 2006 • Volume 75 • No. 10
ITEMS OF INTEREST REGULAR FEATURES 5 Casemaker – the Ultimate 4 President’s Message Member Benefit – 7 Young Lawyers Section News has Arrived! 8 A Nostalgic Touch of Humor 9 Shifting the Balance from 10 Law Students’ Corner Work to Fatherhood for 6 Law Marketing 101 12 Members in the News His Children Help build your law practice 12 “Jest is for All” through the KBA LRS 13 Obituaries 29 Appellate Decisions 14 Advance Notice: Elections for 36 Appellate Practice Reminders 2007 KBA Officers and Board 38 Classifieds of Governors 39 CLE Docket
15 Kansas Legal Services Board Cover design by David Gilham, desktop pub- Vacancies lishing coordinator
15 Kansas Attorneys Sworn in Before the U.S. Supreme 16 Kansas Controlled Business Law Court Pre-empted
17 Legislature Passes Property Tax Exemptions and Credits
37 Notice of U.S. Bankruptcy Court Local Rules Amendment
20 A Hitchhiker’s Guide to Consumer Bankruptcy 37 Notice of U.S. District Court Reform for the District of Kansas Local By Larry A. Pittman II and Rules Amendment Jeffrey A. Deines
Our Mission: The Journal Board of Editors Michael T. Jilka Overland Park The Kansas Bar Association is dedicated to advancing the professionalism and legal Casey Law McPherson skills of lawyers, providing services to its members, serving the community through Assistant Executive Director: Michelle Reinert Mahieu Dodge City advocacy of public policy issues, encouraging public understanding of the law, and René Eichem Hon. Tom Malone Topeka promoting the effective administration of our system of justice. Managing Editor: Susan McKaskle Michelle Masoner Kansas City, Mo. Jill A. Michaux Topeka The Journal of the Kansas Bar Association is published monthly with combined issues for Terri Savely Bezek, Chair Topeka Julene Miller Topeka July/August and November/December for a total of 10 issues a year. Periodical Postage Anne L. Baker Topeka Brian J. Moline Topeka Rates paid at Topeka, Kan., and at additional mailing offices. The Journal of the Kansas Hon. Monti L. Belot Wichita Hon. Lawton R. Nuss Topeka Bar Association (ISSN 0022-8486) is published by the Kansas Bar Association, 1200 Hon. Donald W. Bostwick Wichita Hon. James P. O’Hara Overland Park S.W. Harrison, P.O. Box 1037, Topeka, KS 66601-1037; Phone: (785) 234-5696; Fax: Boyd Byers Wichita Prof. John Peck Lake Quivira (785) 234-3813. Member subscription is $25 a year, which is included in annual dues. Tamara Lee Davis Dodge City Richard D. Ralls Kansas City, Mo. Nonmember subscription rate is $45 a year. POSTMASTER: Send address changes to Hon. Jerry Elliott Topeka Richard H. Seaton Manhattan The Journal of the Kansas Bar Association, P.O. Box 1037, Topeka, KS 66601-1037. J. Lyn Entrikin Goering Topeka Marty M. Snyder Topeka Connie Hamilton Topeka Angela M. Stoller Lawrence The Kansas Bar Association and the members of the Board of Editors assume no Mark D. Hinderks Overland Park Catherine A. Walter Topeka responsibility for any opinion or statement of fact in the substantive legal articles Evan Ice Lawrence Diane S. Worth Wichita published in The Journal of the Kansas Bar Association. Katharine J. Jackson Manhattan Martha Coffman, board liaison Topeka For advertising information contact Suzanne Green at (800) 211-1344 or e-mail [email protected]. Publication of advertisements is not to be deemed an endorsement of any product or service advertised unless otherwise indicated. Terri Bezek, Board of Editors chairperson, [email protected] COPYRIGHT 2006 Kansas Bar Association, Topeka, Kan. Susan McKaskle, managing editor, [email protected] From the President David J. Rebein In Search of Sandra Day O’Connor
udges have taken a beating lately. It is no trick to find critics. Elizabeth Rogers is a third-year law student. She recently ac- JJudges are in the public arena and their work is the proper cepted a clerkship with Kansas Supreme Court Justice Lawton subject of review, critique, and commentary. They are, however, Nuss. She will spend the next two years in a front row seat in citizens who sacrifice much to advance the law. It is a difficult Kansas litigation. In the interview, Justice Nuss expressed his love job and a paradoxical one; a great judge is devoted to the for the job and his respect for the law. He told Liz that rule of law, but does this without sacrificing his or her he would have high expectations and that he believed humanity or love of the community. she would be well-suited for the challenge. Liz Rog- Great judges have the capacity to inspire the ers, the girl from Bucklin, who worked her way lawyers who practice in front of them. I have an through college and law school walked out of the old-fashioned and idealistic view that the high- Judicial Center with purpose and a determina- est honor a lawyer can attain is to be a judge. tion to live up to those expectations. Who was the best judge you ever appeared be- Judge Deanell Tacha is the Chief Judge of fore and how would you describe his or her the 10th U.S. Circuit Court of Appeals. She S
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i attributes? Scholarly? Stern, but fair? Inter- r is also an aunt. So, when Judge Tacha’s niece c a
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a l ested in you personally? A coach and a men- a asked her to speak to a high school class in y c
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’ o C t tor? Funny? Passionate about the law? What s Oakley, she accepted and went the extra mile. o i n H
n t did you learn? Did he or she teach you how to e r This talk to the high school class became a r u C o o C write or to make an argument? Did he or she ll e daylong moot court presentation involving e c m t e io r n p build your confidence or help you love the law? , u several area high schools and a half-dozen law- Th S h e e h S f t yers. Those of us who spent the day with Judge Gail Agrawal is the new dean of the KU Law up o re esy me urt School. She was a clerk to Justice Sandra Day Co , co Tacha learned more about the judiciary and its role urt o tates O’Connor. I asked Dean Agrawal to relate to me a f the United S in community service than the students. memory of Justice O’Connor. Her face brightened and Regine Thompson is a lawyer in Scandia. She recently she told me that Justice O’Connor would sometimes show up was sworn into the U.S. Supreme Court. She was accompanied at the Court on Saturday, knowing that her clerks were working by her husband, Jeffrey, who was also sworn in before the U. S. over the weekend and bringing them a lunch she had cooked at Supreme Court that day, and her two children. It was a great home. Sometimes she would take them on “outings,” perhaps experience. After she was admitted, she stood with her family to a museum or other place of interest. As Dean Agrawal told in a paneled conference room beneath the new portrait of Chief me the story she couldn’t stop smiling. I would say that Justice Justice Rehnquist. Still basking in the glow of her first trip to O’Connor impacted her life. the Supreme Court, she was surprised when Chief Justice John I could tell you many personal stories but will stop at two. Roberts walked into the reception. Justice Roberts strode over to Judge Jay Don Reynolds introduced me to my wife, Bernice, Regine’s son and, smiling, asked, “What are you going to be for by arranging a blind date. I remember that he made the call in Halloween?” Justice Roberts, listening, laughed and said that his chambers. While embarrassed, I wondered if this poor woman young son, Jack, was going to be Superman too. knew what she was getting into. I guess that I did have an unfair I am reminded of a quote attributed to Justice O’Connor, advantage. She had to date me because she was under a court “The Court is not the post office. It is the common thread that order. I could also tell you about the time he threatened to throw holds the social fabric of this country together.” Our indepen- me in jail, but that is for another column. I would say that Judge dent judiciary is a unique part of our system. It deserves defend- Reynolds impacted my life. ing. Our judges are not just umpires, but rather citizens called Judge Don C. Smith lived and breathed politics. Over the to a higher purpose. As we should be proud to be lawyers, we course of 10 years, we had many, many hours of political discus- should look upon judges as the highest service a member of the sions and he probably recommended at least a hundred books to profession can render. We should expect a lot from them and me. He would always ask if I had read them too. After his retire- they should inspire us. We need to do a better job of respecting ment from the bench, I helped manage his campaign for the Leg- the institution. Sometimes judges get a bad rap and sometimes islature. He was a Democrat and I was a Republican. He assured it is deserved. But I bet you that there are far more judges who me that he was a very pro-business and conservative Democrat. mentor young lawyers and go above and beyond than ever get Once elected, he immediately backslid to his natural pro-labor credit in the community. In other words, there are a lot of Justice and staunchly liberal roots. I would say that Judge Smith im- Gernons out there. n pacted my life. David J. Rebein can be reached by e-mail at [email protected] or by phone at (620) 227-8126.
4 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION
Law Marketing 101 Help build your law practice through the KBA Lawyer Referral Service
... serving the citizens of Kansas and the legal profession through funding charitable and educational projects that foster the welfare, he Kansas Bar Association sponsors many important public service activities. One honor, and integrity of the legal system by increasingly popular service is the KBA Lawyer Referral Service, which matches improving its accessibility, equality, and uniformity, and by enhancing public opinion prospective clients with qualified participating attorneys. of the role of lawyers in our society. TThe Lawyer Referral Service (LRS) has grown to become a convenient Kansas Law Center resource for Kansans who are in need of a lawyer, but do not know how 1200 S.W. Harrison St. to go about locating suitable counsel. On average, the LRS answers P.O. Box 1037 Topeka, Kansas 66601-1037 about 1,400 calls each month, making nearly 5,000 referrals last Telephone: (785) 234-5696 year alone. It is very important to note that the service is not Fax: (785) 234-3813 Web site: www.ksbar.org just for low-income individuals, which is a misnomer that at- torneys sometimes hear about referral panels. In fact, referrals OFFICERS Sally D. Pokorny, Lawrence from the LRS can be lucrative, with more than $1.2 million President in client fees being generated in 2005. This year also prom- Bruce W. Kent, Manhattan ises to be financially rewarding for panel members. President-elect When LRS personnel answer incoming calls, they screen Sarah B. Shattuck, Ashland the inquiries to determine whether the caller needs to hire Secretary-Treasurer a lawyer or simply needs legal advice. Callers who possess H. David Starkey, Colby the resources to pay for attorney fees and have a legitimate Immediate Past President legal need are then referred on to an LRS lawyer in that BOARD OF TRUSTEES area of the law. Robert M. Collins, Wichita Lawyer Referral Service staff refer clients in a variety of Daniel H. Diepenbrock, Liberal James C. Dodge, Sublette areas of law. The most common referrals are made in the areas Kenneth J. Eland, Hoxie of divorce, medical malpractice, and contested custody. Many Joni J. Franklin, Wichita John D. Jurcyk, Roeland Park other areas of the law, of course, are represented, and referrals Terence E. Leibold, Lawrence are available in those areas. The LRS markets its services through David K. Markham, Parsons Teresa M. Meagher, Leawood a variety of sources, including yellow page advertising, its relation- James D. Oliver, Overland Park ships with the courts, through Kansas Legal Services, as well as from Randall J. Pankratz, Newton H. Douglas Pfalzgraf, Wellington word-of-mouth by other agencies and attorneys or judges. J. Ronald Vignery, Goodland Any lawyer who is in good standing with the Kansas Supreme Court may qualify to be a James C. Wright, Topeka member of the LRS. To join the LRS panel, attorneys must meet the following requirements for acceptance: Christopher J. Masoner, Kansas City, Mo. Young Lawyers Representative • LRS attorneys must grant a consultation as soon as practicable after the request is made; Katherine L. Kirk, Lawrence Kansas Trial Lawyers Association • LRS attorneys must agree upon any charges for further service with the client, in keeping Representative with the objectives of the LRS and the client’s ability to pay; Susan G. Saidian, Wichita • LRS attorneys must keep their professional liability insurance in force while on the Kansas Women Attorneys Association LRS panel; Representative • LRS attorneys must refer any clients not accepted back to the LRS; Vaughn L. Burkholder, Overland Park • Status reports must be submitted to the LRS within 30 days of referral; Kansas Association of Defense Counsel Representative • LRS attorneys who are Kansas Bar Association members must pay an annual registration fee of $85 while nonmembers pay a registration fee of $260. An additional $100 annual Sara S. Beezley, Girard Kansas Bar Association Representative registration fee is required to receive bankruptcy referrals in lieu of paying a percentage of fees on bankruptcy cases; Michael P. Crow, Leavenworth Kansas Bar Association Representative • When a fee from an LRS client amounts to $300 or more, the LRS attorney must remit 10 percent of that fee to the LRS. Edward J. Nazar, Wichita Kansas Bar Association Representative If you would like more information about the KBA’s Lawyer Referral Service or EXECUTIVE DIRECTOR Jeffrey J. Alderman, Topeka would like an LRS application, please contact us at (785) 234-5696 or simply visit www.ksbar.org/LRS/lrs06.pdf. n MANAGER, PUBLIC SERVICES Meg Wickham, Topeka
6 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION Lessons from Buck O’Neil By Paul T. Davis, KBA Young Lawyers Section president f you haven’t heard of Buck O’Neil, you’ve been missing that would allow blacks when they were on the road for games out. One of the great treasures of Kansas City passed away so they would sometimes have to sleep in the team bus. a few weeks ago on Oct. 6 at the age of 94. Buck O’Neil Despite facing a great deal of racial discrimination, Buck Iwas a darn good baseball player and coach. But he really be- O’Neil always saw the good in people. He was always courte- came well-known for his engaging personality. Buck could ous to everyone he encountered. When the Baseball Hall of light up a room like nobody I have ever seen. If you ever met Fame turned him down last year, he just kept smiling and him, you would never forget it. never said anything negative. He just had an effect on people As lawyers, we can learn a that would leave you feeling like lot from Buck. Our profession a million bucks. has at times become too un- The story of Buck O’Neil is civilized. Far too many lawyers an inspiration to Americans. He see the practice of law in a Us was a standout baseball player in versus Them adversarial way. I the Negro Leagues and later be- have observed that many young came the first African-American lawyers take the notion of “zeal- coach in Major League Baseball. ous representation” to the point During his career as a coach and where civility is sacrificed. It is scout, O’Neil was instrumental important for all lawyers who in the development of many star understand the need for civility, players including Ernie Banks, Baseball great Buck O’Neil enthralled the audience with his understanding, and compassion Lou Brock, and Ozzie Smith. keynote address at the 2002 KBA Annual Meeting. in our profession to set an ex- After coaching, Buck worked ample for new lawyers. to establish the Negro Leagues Baseball Museum in Kansas On Nov. 3, myself and several other young lawyers spoke City, Mo., and had been the face of this institution since its at a continuing legal education program for newly admitted inception. Kansas lawyers. I shared the story of Buck O’Neil with them I was lucky enough to meet him on a couple of occasions. and asked them to remember to treat their fellow lawyers just I remember each occurrence quite vividly. Two of these meet- like Buck treated all of us. ings were at bar association events. In 2002, Buck was the key- The world is a better place because of the contributions of note speaker at the KBA Annual Meeting in Overland Park. Buck O’Neil. If we take a few lessons from him and continue I somehow managed to get myself assigned to pick him up his legacy, our profession will be better off as well.n at the museum just east of downtown Kansas City and drive him to Overland Park. Talk about a great car ride! I walked Paul T. Davis is a partner with the firm of Skepnek Fagan into the museum and informed an employee that I was there Meyer & Davis P.A., Lawrence. He may be reached by phone at to drive Buck to his speech at the KBA Annual Meeting in (785) 843-7674 or by e-mail at [email protected]. Overland Park. I waited a few minutes and then he walked out and hugged me like I was his best friend. Wow! I could have driven him to Mexico and back and never have been bored for a minute. I had just read a recent book he had 2007 written about his baseball career and I asked him if I could Annual Meeting pose a few questions about the book to him. He marveled Silent Auction me with stories about the Negro Leagues and life as a baseball player. Buck had probably told these stories a few thousand Benefiting the times, but he shared his memories with me with the excite- Kansas Bar ment of a little kid who can’t wait to tell his parents about the Foundation home run he hit at a game. When he gave his speech to the KBA members, he shared The Kansas Bar Foundation is soliciting even more stories with the same enthusiasm. But his talk was donated items for the 2007 Annual Meeting Silent more focused on how blessed he had been in his life and what Auction. Any KBA member wishing to donate to the importance of a positive attitude can do for an individual’s the silent auction, please contact Meg Wickham, search for fulfillment. Buck had all the reasons in the world to be bitter. After all, he played baseball in a era where African- manager of public services, at (785) 234-5696 or Americans could not compete on the same field as white play- e-mail [email protected]. All proceeds raised ers. He and the likes of Satchel Paige were at the top of their by the silent auction will benefit the Kansas Bar game, but made so little money they barely could make ends Foundation and its many public service programs. meet. He talked about how they often couldn’t find motels
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 7 A Nostalgic Touch of Humor Shredding Documents, 1972 Style By Matthew Keenan, Shook, Hardy & Bacon, Kansas City, Mo.
he following story is true. No names have been changed paper. In a nanosecond, Bob appreciated the enormity of the to protect the innocent. In this story, there were no catastrophe and went completely insane. His eyes rolled back in innocents. You see, back in the early his head. It was a disaster of FEMA proportions. T1970s, in the Keenan Law Firm there were rare Think Katrina without water. He began to yell, occasions when my dad had use for his three “Oh my God. Oh no. Call Judge Woleslagel,” sons to assist in his firm’s operations. over and over again. Judge Woleslagel was the But one day, long ago, that changed. Dad judge back then. In the universe of Keenan & and his brother, Bob, needed assistance with Keenan, he had more power than Chief Justice “document management.” Their office had a Warren Burger. mountain of paper. And most they really didn’t My cousin did what any teenager would do: need. The entire attic of their office was brim- he blamed his cousins. We were probably guilty ming with old files, some dating back 30 years. too, but we at least were able to recognize the So my dad and Uncle Bob did something that mail that came in that day was off limits. My at the time perhaps made sense, but in hind- cousin continued the blame game until it in- sight was completely preposterous: they hired cluded virtually everyone in the 20th Judicial three teenagers already with a penchant for District. destruction. Dad and Uncle Bob attempted to piece to- Now, before I describe how this adventure gether the scraps but it was hopeless. My cous- went horribly wrong, for the younger set you in was just too good. The fallout continued for need to be reminded that back then originals many months. I’m sure the issue ended up with were copied with carbon paper, sometimes the malpractice carrier, a deductible was paid, with as many as 10 carbon pages. Everything and another chapter in the Keenan Law Firm was typed on a typewriter; making copies was was written. And, if you are still waiting for a an enormous production. A hard drive was reply to that settlement offer you extended to known as the commute between Barton and Chief Shredder, circa 1972 Robert Keenan on or about July 14, 1972, I Ford counties. Bill Gates had not yet quit Har- suggest you consider the matter closed. n vard. A virus was something you picked up at age 16 at the Ellinwood After Harvest Festival. Legal briefs were even more About the Author work. Dad had appellate briefs typed and then sent to a print- ing company in Topeka. Major novels like “War and Peace” Matthew Keenan grew up in Great involved less work. And the other thing is, of course, there Bend and attended the University of were no paper shredders outside of Langley, Va. So document Kansas, where he received his B.A. in destruction in the 1970s was no simple task. 1981 and his J.D. in 1984. For the And the day arrived my dad needed shredders, he put us to last 21 years, Keenan has practiced with work. My Uncle Bob was the one to give us marching orders. Shook, Hardy & Bacon. He may be The attendees — my kid brother, my cousin (Bob’s son), and reached at [email protected]. yours truly. Folks, let’s be frank — this was no Mensa conven- tion. But the orders were pretty straightforward — take the stack of files on one desk and tear them up into small pieces. The stack was well-defined. So was the desk, though it stood in a row of other secretarial desks. “Only these files,” said Uncle Bob. Then something came up and Bob left the room. Where he went remains one of life’s mysteries. But he vanished for about an hour. And that set into motion a series of events that would make the Titanic sinking look uneventful. Let’s just say that my cousin “wandered off the reservation,” and I mean way off ! He went from the one desk, the one stack, and started on other desks. When Bob returned, he quickly noticed that my cousin was destroying briefs, wills, trusts, birth certificates, passports, retainers, settlement checks. My cousin did as he was taught — reducing these critical documents into itsy, bitsy pieces of
8 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION KBA Member Profile Shifting the Balance from Work to Fatherhood for His Children By Beth Warrington, committees and sections coordinator im Emerson had wanted to be a lawyer since he was him that Kristi “should have had the triple-screen test” dur- about 3 or 4 years old. Every once in a while he would ing her pregnancy,” which would have told them if their son get distracted by a different career goal, like becoming might eventually have Down syndrome and “now you have a Ta paleontologist or an ophthalmologist, but his focus would son with Down syndrome.” always return to law. “During the first five minutes of my son’s life,” Emerson Emerson and his wife, Kristi, both quit their full-time jobs said, “his Daddy was outside the delivery room with a doctor, in Wichita, borrowed $18,000, and moved to Topeka so he learning about all of the things he would never be able to do could attend law school at Washburn University. Kristi was in life, at least according to this doctor.” also seven months pregnant with their first child. “The very last thing on my mind was my career. After tak- “My family life sort of took a ing it all in, I asked the doctor back seat during law school be- if he was finished with his expla- cause we were always told, ‘The nation so that I could go back study of law is a full-time job,’” into the room with my wife and he said. son. That was when the shift Their first daughter, Amy, occurred.” was born in October 1996, and Within hours of Aidan’s birth, Emerson remembers working representatives from Rainbows on a midterm project and since United (Rainbows) and the Kristi seemed to be doing well, Down Syndrome Society of he left during her early labor, Wichita (DSSW) were present with her permission, to print at the hospital to help them un- his paper. He barely made it derstand the diagnosis. Emerson back in time for Amy’s birth. is now a volunteer with both or- “I don’t think I ever attempt- ganizations, sits on the executive ed to reach a balance of family, The Emerson family (l-r): Aidan, Tim, Gus, Sophie, Kristi, and Amy. board and the board of directors church, school, and work during law school because the ‘be of Rainbows, and is currently assisting DSSW in obtaining all, end all’ was school,” Emerson said. nonprofit status. Emerson’s second daughter, Sophie, was born in October Emerson’s main focus now has been to maintain a bal- 1998, near the end of law school. Only having a few more ance with how all things in life are connected – family, work, credits left to take should have left more time for family, but church, community service, etc. He thinks he probably would Emerson started working more hours at the Department of have eventually had this epiphany, but Aidan propelled him Revenue and got an early start on studying for the bar exam. to open his eyes and see what was truly important. Emerson’s family returned to Wichita prior to the exam, He said he is still trying to find the right balance and prob- where he joined them a day or two after taking the exam. His ably always will be. wife then informed him that prior to the bar exam, Sophie “I think while I may never find the perfect balance, know- had become dehydrated and was hospitalized overnight. She ing that I should be trying to do so is the important thing,” he waited until after to tell him because she knew he needed to said. “It is probably the most difficult thing I’ve had to do in focus on studying, not worrying. life. I do shift back to work frequently.” His first son, Timothy Augustine (Gus), was born around Everytime he has to travel for work at Martin Pringle, Em- the time Emerson started at Martin, Pringle, Oliver, Wallace erson has a ritual of going into each of his kids’ rooms and & Bauer LLP in October 2001, but said he wanted to stay telling them that he loves them. He knows that if something focused on work as he was given an incredible opportunity were to ever happen on one of his trips, he could say the last and wanted to impress the partners. thing his said to his kids was that he loved them. “I took clients calls at home during the few days I took off “This helps my nerves when I travel,” he said. “Every once work,” Emerson said. “I knew there would be plenty of time in a while, even if I am leaving at 4 a.m., I’ll get ‘I love you to hold my first son.” too, Daddy.’” They had always wanted a big family, but the concept of He said he has noticed a theme in his journey to this point a big family became a reality when their fourth child was is his life. When faced with a new challenge, he will often ob- due in October 2003. Everything was different with Aidan, serve how other, successful people handle things and then try Emerson said. to emulate their virtues. The pregnancy was also different, more intense for Kristi. “As my wife said, I was afforded the opportunity to recon- The trip to the hospital came early too – Aidan was born in cile my standard life goals with those that may be modified to the early morning on Sept. 23, not in October like expected. include and provide for a member of our family who is ‘differ- After Aidan’s birth, Emerson was pulled aside by a neona- ent than standard,’” Emerson said. n tologist who gave news of his son’s diagnosis by informing
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 9 Law Students’ Corner Learn the Law Abroad By Holly Lou Hydeman, University of Kansas School of Law lthough many undergraduates have studied abroad, Study abroad programs are great, but they may not be for law students rarely take advantage of the multiple study everyone. For students wanting to participate in a year-long abroad programs that are available through American activity like law review or law journal, a semester-long absence lawA schools. This past semester, I participated in one of the may be impossible. These students may want to consider a study abroad programs offered by the University of Kansas summer study abroad program instead. Moreover, the costs of School of Law. The first four months of 2006 found me liv- studying abroad can be high. Coupled with the fact that many ing, studying, and attending classes with students from across creature comforts we enjoy in the United States are unavailable the United States in a consortium-based program taught by abroad, some students experience sticker shock and long for various American and English the plentiful space, easy travel, law professors. and readily available technology By the end of my second of their home school. year in law school, I had taken Finally, time overseas goes by the core law school classes so quickly, but the extended ab- studying abroad seemed like sence can possibly impact a law an exciting way to capstone student’s long-term personal re- my law school career, see the lationships and commitments. world, and take some genu- Studying abroad is probably a ine international law courses. great option for most students. Another factor that weighed The academic value of the pro- heavily in my decision was the grams is real, the chance to trav- realization that when I start to el and experience a new culture practice, international travel is exciting, and the relationships opportunities will be lessoned formed with other students and faculty can prove very valuable by time and geography. Study- Crown Court Judge Richard Brown, Lewes, England, takes a ing abroad in London was a moment from his busy schedule to visit with Holly Lou Hyde- in the future. At the very least, I great way to experience a cul- man, University of Kansas School of Law. encourage all law students to in- ture that I have always found vestigate the study abroad pro- fascinating, to explore the roots of the common law and the grams offered by their school to origin of American jurisprudence, and to compare American see if one is right for them. After all, you might never have law to a contemporary English legal system that is different in such an opportunity for a very long time. n many respects. First- or second-year law students should consider study About the Author abroad as a great addition to their legal education. Because study abroad programs are individually accredited, the quality Holly Lou Hydeman received her law degree from the Uni- of the professors and classes are equal to those of an American versity of Kansas in May 2006. Prior to law school she earned law school. The classroom dynamic is refreshingly diverse and a graduate diploma in legal studies from the University of thought provoking as students come from numerous public Oxford (England) and a Bachelor of Science degree in chemical and private law schools throughout the United States. Com- engineering from the University of Kansas. She will begin her bined with the typical small-class size, these factors make it career this fall in Shook, Hardy & Bacon’s intellectual property very easy to have close, meaningful friendships with others department. students and professors that are part of the program. Aside from the academic opportunities, these programs al- low students to learn about and participate in the legal insti- Forensic Document Examiner tutions of the country in which the program is based. As an Plum Creek Forensic Laboratory, LLC example, I earned academic credit for shadowing an English barrister for the semester as he argued before various English Darla McCarley-Celentano courts. Greater insight of the English legal system was gained P.O. Box 21 from a special tour of Parliament and meetings with various Castle Rock, CO 80104-0021 government ministers that our program director arranged. Phone/Fax: (303) 663-2450 I took advantage of London’s great entertainment by tour- Cell Phone: (303) 229-8002 ing museums, visiting local markets, and viewing the latest E-mail: [email protected] musicals. I joined other program students on personal trips Specialization: Identification and/or elimination through throughout England adding to my exposure to the English examination and comparison of handwriting, typewriters, culture. Study abroad can serve as a great “jumping off point” photocopiers, printing processes, paper and inks. Forensic to travel and visit places outside of the city where the program document apprenticeship with the Colorado Bureau of Investigation. is based. 10 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 11 Members in the News CHANGING POSITIONS David R. Maslen has joined the Mont- Patrick T. Smith has joined Husch & Jen J. Augustine has joined Applebee’s gomery County Attorney’s Office, Eppenberger LLC, Kansas City, Mo., as International Inc., Overland Park. Independence, Kan. of counsel. Susan Barker Andrews has joined the James C. Maurer has joined DST Sys- Rachael A. Taggart has joined Scharn- Kansas Department of Health and tems Inc., Kansas City, Mo. horst & Ast P.C., Kansas City, Mo., as Environment, Topeka. Boyd R. McPherson has joined the an associate. Wendie C. Bryan has joined Rork Law Wichita office of Joseph & Hollander Elisa D. Waldman has become of coun- Office, Topeka. P.A. as an associate. sel for Sader & Garvin LLC, Kansas Tiffany A. Buban has joined Cordell & Andrea J. Mengedoth has joined the City, Mo. Cordell P.C., Overland Park. Hallier Law Firm, Phoenix. Stacy M. Bunck has joined Ogletree, Clare Noel Murphy has joined the staff CHANGING PLACES Deakins, Nash, Smoak & Stewart P.C., of the Missouri Court of Appeals, Kan- Bangs & Associates has moved to 8595 Kansas City, Mo., as an associate. sas City, Mo. College Blvd., Ste. 135, Overland Park, Monique K. Centeno has joined Shores, Sean J. O’Hara has joined the firm of KS 66210. Williamson & Ohaebosim LLC, Snell & Wilmer LLP, Phoenix, as an Berkowitz Oliver Williams Shaw Wichita. associate. & Eisenbrandt LLP has moved its Matthew K. Corbin and Rachel E. Rachel B. Ommerman has joined the Missouri office to 2600 Grand Blvd., Stephens have joined Lathrop & Gage Missouri Attorney General’s Office, Ste. 1200, Kansas City, MO 64108 and L.C., Kansas City, Mo., as associates. Kansas City, Mo. its Overland Park office to 7300 W. Jeremy J. Crist has joined the North Ryan E. Ringelman has joined BNSF 110th St., Ste. 700, Overland Park, KS Central Regional Public Defender’s Railway, Fort Worth, Texas, as in-house 66210. Office, Junction City. counsel. Chapin Law Firm has moved to 10561 Thurston K. Cromwell has joined Mark J. Ross has joined Polsinelli Shalton Barkley, Ste. 510, Overland Park, KS TMNG Global, Overland Park. Welte & Suelthaus P.C., Kansas City, 66216. Kim Cudney has been appointed 12th Mo. Gilbert & Renton LLC has moved its Judicial District judge by Gov. Kath- Charles L. Rutter has joined Stinson office to 344 N. Main St., Andover, leen Sebelius. Morrison Hecker LLP, Wichita, as an MA 01810. Randy R. Debenham and Kendall M. associate. Law Office of Andrew Lyons has moved McVay have joined Scott, Quinlan, Kara L. Schartz has joined the City of to 7201 Metcalf, Overland Park, KS Willard, Barnes & Keehan LLC, Garden City Prosecutor’s Office. 66204. Topeka, as associates. K. Kim Shaffer has joined Swanson Law Office of Jennifer Berger has Maria C. Fogliasso has joined Sloan, Midgley LLC, Kansas City, Mo. moved to 1243 S.W. Topeka Blvd., Ste. Eisenbarth, Glassman, McEntire & Dell Marie Shanahan Swearer has C, Topeka, KS 66612-1852. Jarboe LLC, Topeka, as an associate. joined the Commerce Trust Co., Law Offices of J. Thomas Smith J.D. Schyler D. Goodwin has joined Athena Hutchinson. Ph.D. has moved to 2855 Mangum Management Solutions LLC, Topeka. Robert G. Shivley has joined the Riley Road, Ste. 525, P.O. Box 681113, Christopher J. Hanson has joined Mon- County Attorney’s Office, Manhattan. Houston, TX 77268-1113. tee Law Firm P.C., Kansas City, Mo. (continued on next page) Lynnette A. Herrman has joined the Saville Law Office, Wichita. “Jest Is For All” by Arnie Glick Shannon K. Hill has joined Thayer Aerospace, Wichita. Erin M. Hoestje has joined the Office of the Kansas Securities Commissioner, Topeka. Casey A. Jenkins and Richard J. Rai- mond have joined Goodell, Stratton, Edmonds & Palmer LLP, Topeka, as associates. Juliann Johnson has become a partner with Blackwell Sanders Peper Martin LLP, Kansas City, Mo. Marta F. Linenberger has joined the Kan- sas Health Policy Authority, Topeka. Herman A. Loepp has joined Global Aerospace Inc., Overland Park. Amy P. Maloney has joined Shank & “With all the bizarre and unexpected things that can happen prior to Hamilton P.C., Kansas City, Mo., as of a closing, sometimes I wonder if my legal specialty is real estate or counsel. surreal estate.”
12 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION Obituaries Ernest J. Rice Ernest J. Rice, 81, died Aug. 26 in San Diego. He was born July 4, 1925, in Coffeyville, the son of Clyde E. and Mildred Johnson Rice. Rice attended public schools in Fort Scott, graduating from high school in 1942. After attending one year at Fort Scott Ju- nior College, he enlisted in the Army Air Corps. He received an honorable discharge as a second lieutenant. After discharge, Rice enrolled at the University of Kansas and received a Bachelor of Arts degree in 1948 and a Bachelor of Laws in 1949, which was retroactively awarded as a Juris Doctor in 1968. He joined the Kansas Bar Association in 1949, becoming a lifetime member in 1999. He served as a law clerk for the Hon. Walter Huzman of the 10th U.S. Circuit Court of Appeals, as an assistant U.S. attorney for the District of Kansas, and prac- ticed law in Topeka and Florida until his retirement in 1987. His four children, Craig Rice, Steve Rice, Linda Schwenk- meyer, and Mike Rice; and 10 grandchildren survive him. n Members ... (continued from Page 12) Roger L. McCollister has started Midland Professional As- sociates Group, located at 5020 Bob Billings Parkway, Ste. C, Lawrence, KS 66049. Daniel G. Menzie has a new business address, 901 E. St. Louis St., Ste. 200-3, Springfield, MO 65806. Richard H. Rumsey has started his own firm, located at 2308 Hyacinth, Wichita, KS 67204. Arthur K. Shaffer has a new business address, 10110 W. 141st St., Overland Park, KS 66221. John W. Thurston has started Thurston Law Office, located at 727 Poyntz Ave., Manhattan, KS 66502. MISCELLANEOUS Philip L. Bowman, Adams & Jones Chtd., Wichita, was se- lected as the first recipient of the Robert L. Gernon Award by the Kansas Continuing Legal Education Commission. Cheryl L. Clark, Fleeson, Gooing, Coulson & Kitch LLC, Wichita, has been awarded the National Association of Legal Assistants’ Affiliate Award. Karen Sanders-West, Foulston Siefkin LLP, Wichita, has been awarded NALA’s Founders’ Award. Gerald L. Goodell, Goodell, Stratton, Edmonds & Palmer LLP, Topeka, has been named as the Kansas Supreme Court’s appointee to the Kansas Governmental Ethics Commission by Chief Justice Kay McFarland. Thomas V. Murray, Lathrop & Gage L.C., Overland Park, was recently appointed chairman of the Kansas Board of Law Examiners by the Kansas Supreme Court. Donald W. Vasos, Vasos Law Offices, Fairway, was inducted as a fellow of the American College of Trial Lawyers at its annual meeting in London. n
Editor’s note: It is the policy of The Journal of the Kansas Bar Association to include only persons who are members of the Kansas Bar Association in its Members in the News section. THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 13 Advance Notice: Elections for 2007 KBA Officers and Board of Governors
Out of State - 12
It’s not too early to start thinking about KBA leadership positions for the 2007-2008 leadership year.
KBA President-elect (Current – Linda S. Parks, Wichita) KBA Vice President (Current – Ernest C. Ballweg, Overland Park) KBA Secretary-Treasurer (Current – Thomas E. Wright, Topeka)
The KBA Nominating Committee, chaired by Rich Hayse, Topeka, is seeking information about individuals who are interested in serving in the positions of president-elect, vice president, and secretary-treasurer of the Kansas Bar Association. If you are interested, or know someone who should be considered, please send detailed information to Jeffrey Alderman, KBA Executive Director, P.O. Box 1037, Topeka, KS 66601-1037, by Jan. 12, 2007. This information will be distributed to the Nominating Committee prior to its meeting on Jan. 26, 2007.
Board of Governors
There will be five positions on the KBA Board of Governors up for election in 2007. Candidates seeking a position on the Board of Governors must file a nominating petition — signed by at least 25 KBA members from that district — with Jeffrey Alderman by March 9, 2007. If no one files a petition by March 9, the Nominating Committee will reconvene and nominate one or more candidates for open positions on the Board of Governors. KBA districts with seats on the Board of Governors up for election in 2007 are:
• District 1: Incumbent Kip A. Kubin is eligible for re-election. Johnson County • District 2: Incumbent Jeffrey S. Southard is not eligible for re-election. Atchison, Brown, Doniphan, Douglas, Franklin, Jackson, Jefferson, Leavenworth, Miami, Nemaha, Osage, Pottawatomie, and Wabaunsee counties • District 7: Incumbent Laura L. Ice is eligible for re-election. Sedgwick County • District 9: Incumbent Hon. Kim R. Schroeder is eligible for re-election. Clark, Comanche, Edwards, Finney, Ford, Grant, Gray, Greeley, Hamilton, Haskell, Hodgeman, Kearney, Kiowa, Lane, Meade, Morton, Ness, Pawnee, Rush, Scott, Seward, Stanton, Stevens and Wichita counties • District 11: Incumbent Melissa A. Taylor Standridge is eligible for re-election. Wyandotte County
KBA Delegate to ABA House of Delegates: Sara S. Beezley is eligible for re-election.
For more information:
Petitions for the Board of Governors can be obtained by contacting Becky Hendricks at the KBA office at (785) 234- 5696 or via e-mail at [email protected].
If you have any questions about the KBA nominating or election process or serving as an officer or member of the Board of Governors, please contact Rich Hayse at (785) 232-2662 or via e-mail at [email protected] or Jeffrey Alderman at (785) 234-5696 or via e-mail at [email protected].
14 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION Kansas Attorneys Sworn in Before the U.S. Supreme Court By Regine Thompson, Thompson & Thompson, Scandia n Oct. 16, our family participated in the event of We had a wonderful time visiting with the other attorneys a lifetime sponsored by the Kansas Bar Association in our group from Kansas. After waiting for a while, we were (KBA). Together, my husband, Jeff, and I had the all lined up and, after waiting some more, taken to a recep- Oopportunity to be sworn in at the tion room, where we ate cookies, U.S. Supreme Court with other mingled, and waited some more. members of the KBA, and to bring There were two other bar associa- our two boys, Jack and Dane, to tion groups being sworn in as well the big event. as several individuals, including 10 Why be sworn in at the Supreme members of the Schneider family Court? Why spend the money for from New York, the largest family something that will most likely group ever sworn in at one time in never be used? Why subject our the history of the Supreme Court. children to wearing dress clothes Our families were seated first, for several hours? These were the and kind family members of the questions on my mind the morn- other attorneys, including Sophia ing of Oct. 16, when we arrived at KBA members recently admitted to practice before the and Rex Templin, the children of U.S. Supreme Court: First row (l-r): Laura Ice, Wichita; the Supreme Court. Marcia L. Montgomery, Overland Park; KBA President Roger and Mitra Templin (Roger We arrived by taxi in a timely David J. Rebein, Dodge City; Hon. Cheryl Rios King- was one of the attorneys being fashion, entered the North en- fisher, Topeka; Regine Thompson, Scandia. Second row sworn in), took our children with trance of the Supreme Court (l-r): Deborah C. Westphal, Mission; Michael G. Norris, them to the chambers ahead of building, and passed through the Overland Park; Gary M. Peterson, Topeka; Robert Lee us. We were lined up in alphabeti- II, Wichita; Third row (l-r): Doug Witteman, Burlington; security checkpoint before Dane, John G. Kite, St. Francis; John E. Taylor, Kansas City, cal order and entered the Supreme 5, insisted he had to get out of his Mo.; Jeff Thompson, Scandia; Fourth row (l-r): Hon. Court chambers. dress shirt and tie. We had a spirit- Karl W. Friedel, Wichita; Roger H. Templin, Overland The chambers were awe inspir- ed negotiation about the expected Park; Leo Logan, Overland Park; David J. Kuckelman, ing, especially with the nine large behavior and dress code for kids, Germantown, Md.; and Craig L. Uhrich, Dallas. Also chairs waiting for the justices. Sev- admitted was Ross Alexander, Wichita (not pictured). but I finally agreed to letting him en of the nine justices appeared, wear just his white T-shirt, as long as he kept his pants on and including Chief Justice John Roberts, and justices John Paul behaved perfectly in every other way. (Continued on Page 28) Kansas Legal Services Board Vacancies At its meeting in February 2007, the KBA Board of Governors will appoint five members to the Kansas Legal Services (KLS) Board of Directors to serve two-year terms of office (2007-2008). The positions representing the following constituencies will be appointed:
Constituency Current Director Eligible for Reappointment
University of Kansas School of Law Charles Briscoe No
Pittsburg Service Area Dave McLane No
Kansas City Metro Service Area Melanie Branham No
Salina Service Area Patrick Thompson No
Wichita Service Area Hon. Jerry Elliott Yes
The KBA Board of Governors appoints 10 of the 11 attorney members of the KLS board. If you are interested in serving on the KLS board, please send a letter and résumé by Dec. 29, 2006, to Jeffrey J. Alderman, KBA Executive Director, P.O. Box 1037, Topeka, KS 66601-1037. The primary mission of Kansas Legal Services is to provide equal access to justice for persons not able to pay for legal and other essential services. The KLS offices provide legal advice and representation in each of the state’s 105 counties. n
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 15 Legal news Kansas Controlled Business Law Pre-empted By Mike W. Lochmann, Stinson Morrison Hecker LLP, Kansas City, Mo.
ansas real estate brokers and mortgage lenders may business. The original KCBL was challenged as a violation of now refer title insurance customers to an affiliated due process and equal protection clauses, and ruled uncon- title insurance agency without limitation, if the title stitutional by the trial court. However, in Guardian Title Co. Kagency is also affiliated with a bank or financial holding com- v. Bell, 805 P.2d 33 (Kan. 1991), the Kansas Supreme Court pany. The Kansas Department of Insurance (KDI) issued a reversed the trial court and upheld the original KCBL as May 1, 2006, legal opinion that the federal Gramm-Leach- constitutional. Bliley Act pre-empts K.S.A. § 40-2404(14)(g) (commonly After Gramm-Leach was passed in November 1999, the known as the “Controlled Business Law”) with respect to a KDI issued a Feb. 1, 2001, legal opinion that the prior KCBI Kansas title insurance agent that is 25 percent owned by a was pre-empted by Gramm-Leach as applied to a title insur- bank or financial holding company. The Kansas Controlled ance agency that was 75 percent owned by a financial hold- Business Law (KCBL) limits the amount of title business that ing company. In 2004, the Legislature repealed the original a title agency may accept from its affiliates. KCBL and replaced it with the current KCBL (with the 70 The KDI issued the federal pre-emption opinion based upon percent test). a proposed affiliated business arrangement and joint venture The joint venture must satisfy various legal requirements. among a bank, a bank holding company (which elected to For example, the operating agreement must provide that in- be a financial holding company), an existing title insurance come and profits from the new title agency are distributed in agency, a real estate broker, various individuals, and a newly proportion to ownership of the agency. Under the Real Es- formed title insurance agency. The new title agency would be tate Settlement Practices Act, profits from such an affiliated owned 25 percent by the financial holding company and 75 business relationship may not be distributed in proportion to percent by the other joint venture owners. It would be formed the title insurance business that each owner refers to the title as a limited liability company (to pass through the income agency. Regulatory authorities are increasingly focused on this and avoid double taxation) and as a financial subsidiary of the issue and have brought enforcement actions for violation of holding company. Each owner would refer title business to this requirement. Also, the new title agency and the referring the new title agency. owners should provide written disclosure to the referred cus- The KCBL would prohibit the new title agency from ac- tomer of their affiliated relationship and financial interests. A cepting referrals of title business from its affiliates if 70 per- mortgage lender or real estate broker may not require that a cent or more of its closed title orders during the preceding 12 customer purchase title insurance through their affiliated title full calendar months were derived from “controlled business.” insurance agency. By Kansas regulation, controlled business includes referrals Many states have some variation of a controlled business from 5 percent owners that are real estate brokers or lend- law. Most such statutes would be pre-empted based upon ers. The U.S. Congress, however, legislated in Gramm-Leach the affiliated business arrangement presented to the KDI. that “no [s]tate may, by statute [or] regulation ... prevent or Affiliation of title insurance agencies with financial holding significantly interfere with the ability of a depository institu- companies and other referral sources is part of the consoli- tion, or an affiliate thereof, to engage, directly or indirectly ... dation of the financial services and insurance industries. In in any insurance sales, solicitation or cross marketing activity.” light of the uneven playing field that Gramm-Leach federal 15 U.S.C. § 6701(d)(2)(A). Under Gramm-Leach and federal pre-emption creates within the Kansas title insurance indus- banking laws, an entity (such as the new title agency) that is try, one can ask whether the KCBL is now outdated. The 25 percent owned by a financial holding company is an affili- overwhelming national trend is to permit such affiliations and ate of each depository institution (such as a bank) owned by referrals of business. n the holding company. Since the new title agency is an affiliate of the bank, Gramm-Leach prohibits the state of Kansas from About the Author significantly interfering with cross marketing and sales of title insurance by the new title agency, including referrals by affili- ated owners. The KDI concluded that limiting referral of title Mike W. Lochmann is a partner in the orders from affiliates to 70 percent of the new title agency’s Financial Services division of Stinson business significantly interferes with its cross marketing activi- Morrison Hecker LLP, Kansas City, Mo. He ties. Because by constitutional law federal statutes pre-empt requested the federal pre-empt opinion that was inconsistent state statutes, the KDI opined that the KCBL issued by the Kansas Insurance Department. does not apply to the new title agency. The Legislature passed the original Controlled Business Law in 1989 to limit alleged anti-competitive steering of custom- ers to title agencies owned by referral sources. It prohibited a Kansas title insurance agency from accepting referrals from af- filiates if more than 20 percent of its gross operating revenues during the preceding six months was derived from controlled 16 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION Legal news Legislature Passes Property Tax Exemptions and Credits By S. Lucky DeFries, Coffman, DeFries & Nothern P.A., Topeka
roperty tax relief for the business community received a to a very unique situation that has confronted the broadcast big boost this year when Gov. Kathleen Sebelius made industry given the upcoming transition from analog to digital the decision to make personal property tax relief a equipment. For some time, it had been clear that the broad- Pprimary component of her legislative agenda for the 2006 cast industry was in effect being penalized for being required session. Sebelius’ decision to include this relief as part of her to acquire and pay tax on digital equipment while still own- legislative agenda was the culmination of years of discussion ing and paying tax on analog equipment. As a consequence, and concerns from within the business community regarding until the official transition from analog to digital in February the shortcomings of the Kansas personal property tax scheme. 2009, broadcasters have been placed in the uncomfortable The business community has for years complained about the position of having to pay personal property tax on both sets fact that even after personal property was depreciated pursu- of equipment, even though from a national perspective, the ant to the state’s personal property tax formula, taxpayers were digital equipment is serving a de minimis number of house- still required to pay personal property tax on the subject prop- holds. The Kansas Association of Broadcasters (KAB) took the erty based on 20 percent of the retail cost when it was new. lead this year in an attempt to address this very unique set of Unfortunately, this placed Kansas in an uncomfortable posi- circumstances. tion to the extent that most of the surrounding states either With respect to the legislation advocated by the KAB, tele- exempted the same personal property or taxed it at a more vision broadcasters will be granted a temporary property tax favorable level. In response to this chorus of concern that the credit equivalent to the amount of property taxes paid on Kansas personal property tax scheme was inhibiting new in- digital television equipment acquired prior to July 1, times vestment, the governor decided to act. the estimated percentage of nondigital television sets in the The legislation that ultimately passed was the result of a col- United States. The credit will expire when the Federal Com- laborative effort between the governor, the Kansas Department munications Commission has ended the broadcast of analog of Revenue, and the business community (through the Kansas television by all full-powered commercial television stations Chamber and National Federation of Independent Business, in Kansas. as well as other interested organizations). The exemption, Radio broadcasters will be granted a temporary property which is prospective, applies to all commercial and industrial tax credit equivalent to the amount of property taxes paid on machinery and equipment contemplated by Category 5 with- digital radio equipment prior to July 1, times the estimated in the Kansas Constitution’s Classification Amendment. That percentage of nondigital radio sets in the United States. The category would not include state-assessed property, although credit for radio stations will expire after tax year 2013, or specific language was crafted that extends the benefits of this when one-half of the radios in the United States are capable of new exemption to the telecommunications industry as well receiving a digital signal, whichever occurs first. as railroads. The effective date of the exemption was July 1. If the Feb. 17, 2009, cutoff date for analog broadcasting Significantly, the new exemption also applies to machinery holds, a Kansas television station will benefit from the reduced and equipment transported into Kansas after the effective assessments on digital equipment for three years. As indicated date of the act if the machinery and equipment is being used previously, to the extent that more digital televisions are sold, to expand an existing business or create a new business. The the credit will decrease. At the same time, the formula for legislation does provide that the exemption would not be ap- calculating the taxable value of the digital equipment reduces plicable to property acquired through the exchange of stocks, (continued on next page) securities, or the transfer of assets from one ongoing concern to another due to a merger, reorganization, or consolidation. To the extent that the new legislation is prospective in na- ture, taxpayers will still be required to pay tax on any machin- ery and equipment, which was owned as of June 30. However, the refundable income tax credit based on one’s property tax paid on machinery and equipment will continue as is with respect to existing equipment. Another positive component of this year’s legislation was that the existing exemption for equipment and supplies costing less than $400 was raised to $1,500 beginning with the 2007 tax year. This provision, sometimes referred to as the “paper clip” provision, was a nice addition to the other exemption initiative. Originally, the pro- posal was to increase the limit from $400 to $1,000, but was increased even further to the $1,500 level at the very end of the session. Another tax initiative passed during this past session in- volved the broadcast industry. This legislation was in response
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 17 Legal news Legislature Passes Editor’s note: “Legislature Passes Property Tax Exemptions (continued from Page 17) and Credits” was first published in the Fall 2006 edition of the Tax Law News, which is published by the KBA Tax Law the appraised value. Assuming the Feb. 17, 2009, cutoff date Section. The Tax Law Section plans and promotes education does hold, the digital equipment will be appraised using the programs; supports and recommends legislation; distributes standard tables beginning in 2010. information through newsletters, bulletin boards, or other Through the efforts of all those mentioned above, the 2006 means of communication; and provides networking opportu- legislative session proved to be one of the most productive nities for practitioners with attorneys or law firms that special- with respect to improving the business tax environment in ize in tax law. Kansas. n If you are interested in joining this or any other KBA section, you may register online at www.ksbar.org or call (785) About the Author 234-5696.
S. Lucky DeFries, Coffman, DeFries & Nothern P.A., Topeka, practices in the areas of state and local taxation, corporate law, and real estate. In connection with his tax practice, DeFries practices regularly before the Kansas Board of Tax Appeals. He received his undergraduate degree from Ottawa University and his juris doctorate from Washburn University. He is a member of the American, Kan- sas, and Topeka bar associations. He is a past president of the KBA Tax and Ad- ministrative law sections. He is on the executive committee of the National As- sociation of State Bar Tax Sections and also serves on the Secretary of Revenue’s Advisory Council.
18 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION
A Hitchhiker’s Guide to Consumer Bankruptcy Reform
By Larry A. Pittman II and Jeffrey A. Deines
I. Introduction Have you ever given legal advice to an individual about the effect of an ex-spouse’s bankruptcy? Have you ever given advice to an individual named as a defendant to a preference action com- menced by a bankruptcy trustee? Have you ever explained the effect of the automatic stay to individuals who just received notice that a bankruptcy petition has been filed by someone who owes them money? If you an- swered “yes” to any of these questions, you may be a “Debt Relief Agency.” This is because the phrase “Debt Relief Agency,” like many other bankruptcy terms and provisions found in the Bankruptcy Abuse Prevention and Consum- er Protection Act of 2005 (BAPCPA), is a misnomer and ready trap set to spring on those unfamiliar with bankruptcy reform.1 Reader be warned – ignore BAPCPA and expose yourself to professional liability. Because no writer could reasonably hope to cover every aspect and interpre- tation of consumer bankruptcy practice after BAPCPA without composing a trea- tise, this article is geared toward the occa- sional bankruptcy practitioner and aims to debunk prevalent myths about bank- ruptcy reform while providing the reader with a basic understanding of changes in consumer bankruptcy practice after the implementation of BAPCPA. This article is not intended as a comprehensive review and should not be used as a substitute for reading and understanding the amended provisions of the Bankruptcy Code. Section II of this article re- views issues attorneys should consider before filing a bankruptcy petition. Section III addresses changes in case administration and discharge. Section IV addresses changes governing the treatment of Domestic Support Obligations. Finally, Section V addresses the new provisions governing lawyer liability. It may be beneficial to begin with a very general review of the or- ganizational structure of the Bankruptcy Code, which is found in Title 11 of the U.S. Code, as it applies to the individual consumer. Individual consumer debtors most often file cases under Chapters 7 or 13, but may also file under Chapter 11 and, under certain circumstances, Chapter 12. This article will focus primarily on the changes in consumer practice under Chapters 7 and 13. Under Chapter 7,
FOOTNOTES with a few exceptions, was implemented fully on Oct. 17, 2005. All refer- 1. The Bankruptcy Abuse Prevention and Consumer Protection Act of ences to the BAPCPA amendments are to the pertinent sections of the 2005, Pub. L. No. 109-8, 119 Stat 23, was enacted on April 20, 2005, and, U.S. Bankruptcy Code, Title 11 U.S.C. § 101, et seq. (2006).
20 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION LEGAL ARTICLE: A HITCHHIKER’S GUIDE ... most debts are discharged after a debtor’s under Chapters 12 or 13 must still wait, (2) states that the debtor request- nonexempt assets are liquidated and the with certain exceptions, six years after ed credit counseling services from resulting proceeds are distributed by the receiving the discharge before becom- an approved nonprofit budget trustee according to the priority scheme ing eligible to receive discharge under and credit counseling agency, but in the Bankruptcy Code. Chapter 13 Chapter 7.3 Under Chapter 13, prior to was unable to obtain the services allows individuals with regular income BAPCPA, debtors were entitled to pro- referred to in paragraph (1) dur- who fall within certain debt limits to ceed to discharge regardless of whether ing the five-day period beginning keep property, which would otherwise they had received discharge in a previ- on the date on which the debtor be liquidated while making monthly ous case. Under BAPCPA, however, in- made that request; and payments toward their debts over a dividuals generally are three-to-five-year period. Upon com- entitled to discharge (3) is satisfactory pleting their Chapter 13 payments, their debts only if they Attorneys who take to the court. most individuals qualify to receive a did not receive a dis- on new debtor clients discharge of that portion of their prepe- charge:4 Without the certifi- tition unsecured debts, with certain ex- should immediately cate of credit counsel- ceptions, which was not repaid during (1) In a case filed familiarize themselves ing or a showing of exigent circumstances the three-to-five-year period. Individu- under Chapter 7, with the prepetition als sometimes opt to file under Chapter 11, or 12 … during under § 109(h)(3)(A) 11, traditionally a vehicle for business the four-year period credit counseling re- sufficient to excuse reorganization, when they have consid- preceding the date quirements imposed compliance with § erable income or assets or they other- of the order for re- 109(h)(1), an individ- wise have too much debt to qualify for lief under this chap- under the Bankruptcy ual may not be a debt- Chapter 13. Finally, individual farmers ter, or Abuse Prevention and or under an chapter. may qualify to proceed under Chapter B. Dischargeability (2) In a case filed Consumer Protection 12, which allows the individual to reor- The dischargeabil- under Chapter 13 ganize debts while continuing to oper- Act of 2005. ity of certain debts … during the two- ate the farming business. may weigh heavily in year period preced- favor of, or against, ing the date of such order.5 II. Prepetition Considerations seeking relief under Chapters 7 or 13. 1. Generally While bankruptcy can be a useful tool 1. Prefiling credit counseling for individuals coping with financial requirement Consumer debts aggregating more distress, it does not solve all problems. Attorneys who take on new debtor than $500 owed to a single creditor for Therefore, before filing a case for your clients should immediately familiarize luxury goods purchased on or within 90 client, it is of paramount importance themselves with the prepetition credit days before the order for relief is filed counseling requirements imposed un- are now presumed to be nondischarge- to understand what obligations your 6 client will be left with once the case is der BAPCPA. Under § 109(h)(1) and able. Similarly, cash advances that are completed. When contemplating fil- § 521(b)(1), a debtor must participate extensions of consumer credit under an ing a bankruptcy for a client, attorneys in a prepetition credit counseling ses- open-end credit plan aggregating more should consider the following issues. sion from an approved credit counseling that $750 incurred on or within 70 days agency and file a certificate of comple- prior to the order for relief are now pre- A. Eligibility tion with the court at the time of the sumed to be nondischargeable.7 While An individual’s eligibility for discharge bankruptcy filing. debts incurred to pay nondischargeable is the first important change brought by If a debtor cannot obtain credit coun- taxes owed to the United States were BAPCPA. Under Chapter 7, individu- seling before filing, the debtor must previously nondischargeable, debts in- als generally are entitled to discharge meet the requirements contained in curred to pay nondischargeable taxes their debts unless they previously re- § 109(h)(3)(A). Under that section, a owed to a governmental unit other than ceived discharge under Chapters 7 or 11 debtor must file a certificate that: the United States have been added to in a case commenced within the eight the list of nondischargeable debts.8 years preceding the date of the current (1) describes exigent circumstanc- 2. Chapter 7 petition.2 Prior to BAPCPA, the time es that merit a waiver of the coun- The substance of discharge under period was six years. However, individu- seling requirement; Chapter 7 has changed very little. One als who previously received a discharge of the most notable changes relates to
2. § 727(a)(8). receives the benefit of the automatic stay, even though no discharge will 3. § 727(a)(9). result from the filing of the bankruptcy case. 4. Even though, under BAPCPA, an individual is restricted from re- 5. § 1328(f). ceiving a discharge, it appears that an individual is still eligible to seek 6. § 523(a)(2)(C). protection under a Chapter 13 bankruptcy case. In such a case, the debtor 7. Id. 8. § 523(a)(14A).
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 21 LEGAL ARTICLE: A HITCHHIKERS GUIDE ... property settlement obligations, which nonpriority taxes under Chapter 13, if is the state in which they were domiciled are discussed more fully in Section IV. an individual fails to file a return, files a for the greatest period of time for the For now, it is important to note that the return within two years of filing bank- 180-day period preceding the 730 days “ability to pay test” was removed from ruptcy, files a false return, or willfully before the date of filing.15 § 523(a)(15). Because the court will no evades payment of taxes, the resulting A number of specific changes to an longer balance the relative abilities of tax obligations are no longer discharge- individual’s eligibility to claim certain ex-spouses to pay those obligations, able regardless of their priority status.10 property as exempt are noteworthy. property settlement obligations are no Under the “super-discharge,” debtors 1. The homestead longer dischargeable in Chapter 7 under were entitled to discharge certain debts Few things are more precious to peo- any circumstances. related to frauds they committed. Chap- ple than their homes. While Kansas resi- 3. Chapter 13 ter 13 is no longer a means for discharg- dents have historically enjoyed almost Significant change to the substance ing debts related to fraud. Whether a unfettered protection of home equity, of discharge under Chapter 13 has oc- debtor’s acts of fraud related to actions BAPCPA places new limitations on the curred. Prior to BAPCPA, discharge in a fiduciary capacity, embezzlement, homestead exemption.16 The most dra- under Chapter 13 was often identified larceny, or whether they were related matic change is a new $125,000 cap on as the “super-discharge” because of its to obtaining credit under false pretens- the value a debtor may claim under the broad scope. The “super-discharge” es, such debts are not dischargeable in homestead exemption on any homestead has found its Kryptonite in BAPCPA. Chapter 13.11 Debtors can also no lon- acquired within the 1,215 days preceding While some priority taxes are still tech- ger discharge an obligation in Chapter the debtor’s date of filing.17 The 1,215- nically dischargeable through the con- 13 if they fail to notify creditors of the day period, which is approximately three summation of a Chapter 13 plan, tax filing of the bankruptcy in time to allow years and four months (or about 3.33 obligations “required to be collected or that creditor to assert a claim.12 Finally, years), will not apply to an interest trans- withheld and for which the debtor was an individual can no longer discharge ferred from another homestead in the liable in whatever capacity” are no lon- under Chapter 13 debts resulting from same state.18 In addition, a debtor owing ger dischargeable.9 In addition, whereas “willful or malicious” injury by the a debt arising in the preceding five years an individual could previously discharge debtor that causes personal injury or from various federal and state crimes, death to an individual.13 including fiduciary fraud, racketeering, C. Exemptions and crimes or serious torts giving rise to Protecting a debtor’s real and personal serious bodily injury or death will be al- property in bankruptcy are primary lowed a maximum $125,000 homestead considerations demanding an attorney’s exemption unless the homestead is oth- close scrutiny prior to filing any bank- erwise reasonably necessary for the sup- port of the debtor and any dependent ruptcy. BAPCPA has brought many 19 changes to an individual’s right to ex- of the debtor. Discharge may also be empt property from the bankruptcy es- delayed under Chapters 7, 13, and 11 or tate. Generally, an individual’s domicile denied under Chapter 7 if a proceeding in the 730 days prior to filing a bank- is pending that may result in the appli- ruptcy petition determines the state cation of the $125,000 cap (e.g., your laws under which the individual may client is being tried for racketeering or claim exemptions. Accordingly, Kansas a crime giving rise to serious bodily in- residents may claim Kansas exemptions jury). Finally, the value of a homestead only if they were domiciled in Kansas exemption will be reduced to the extent for at least 730 days before filing.14 If of any addition in value derived from a individuals were not domiciled in the disposition of nonexempt property made same state for the 730 days prior to the by the debtor with the intent to hinder, delay, or defraud creditors during the 10 date of filing, the state law governing 20 their eligibility for claiming exemptions years preceding the date of filing.
9. §§ 507(a)(8)(C) and 523(a). like Kansas, that do not allow debtors to choose 10. § 1328(a)(2). between electing federal or state exemptions. 11. Id. For a more complete discussion of whether the 12. Id. new homestead exemption limitations apply in 13. § 1328(a)(4). “opt-out” states, see Michael D. Sousa, Scriven- 14. § 522(b)(3). er’s Error or Congressional Intent? Section 522(p) 15. Id. and the Homestead Exemption, 15 J. Bankr. L. 16. It should be noted that at least one court, & Prac. 2 Art. 1 (April 2006). in In re McNabb, 326 B.R. 785 (Bankr. D. 17. § 522(p). Ariz. 2005) (Haines, J.), has concluded the new 18. Id. homestead exemption limitations do not apply 19. § 522(q). to debtors residing in so-called “opt-out” states, 20. § 522(o).
22 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION LEGAL ARTICLE: A HITCHHIKER’S GUIDE ... 2. Self-settled trusts Given its significance, it is important to income for a single person is $36,631, Although not a true exemption, trusts have a working knowledge of the means the median income for a family of two is have traditionally been a valuable tool in test. On a basic level, the means test is $48,672, the median income for a fam- estate planning. It is noteworthy that a a mathematical formula25 used to deter- ily of three is $54,114, and the median trustee will be able to avoid a transfer by mine whether a filing under Chapter 7 income for a family of four is $64,929.31 a debtor into a self-settled trust where by a debtor with primarily consumer If the debtor’s CMI is less than the me- the debtor is also a beneficiary and the debts26 triggers a presumption of abuse. dian income for the debtor’s family size, transfer was made within the 10 years If a debtor fails the means test, a pre- then the debtor passes the means test preceding the date of filing if the trans- sumption of abuse arises and a debtor and no presumption of abuse arises. If fer was made with actual intent to hin- must either rebut the presumption be- the debtor’s CMI exceeds the median der, delay, or defraud a specific entity or fore the court or opt for Chapter 13 in- income relative to family size, the attor- entities and if the transfer occurred on stead of Chapter 7. ney must proceed to the next part of the or after the debt arose.21 Under the means test, the first task means test, which requires a determina- 3. Individual retirement accounts confronting an attorney is a determina- tion of the debtor’s Monthly Disposable Tax qualified retirement funds under tion of the debtor’s Current Monthly Income (MDI).32 the Internal Revenue Code are now ex- Income (CMI).27 CMI is a new concept A debtor’s MDI is generally deter- plicitly exempt under the Bankruptcy under BAPCPA and is not the same as mined by subtracting permissible ex- Code.22 The exemption also includes the income disclosed on Schedule I. A penses from a debtor’s CMI. Permissible amounts rolled-over from a qualified debtor’s CMI is defined generally as the expenses are generally determined33 by fund or funds into another qualified average monthly income the debtor28 the aggregate of: fund, provided the transfer is consum- receives from all sources during the six mated within 60 days.23 However, the months prior to the filing of the bank- (1) Internal Revenue Service ex- exemption for certain Individual Retire- ruptcy case. Social Security benefits, pense guidelines (e.g., housing, though, are specifically excluded from transportation, food, clothing, ment Accounts is generally limited to $1 34 million.24 It should be noted that IRS the calculation of CMI.29 and personal supplies); tax liens may have attached to retire- Once an attorney calculates the CMI, (continued on next page) ment funds prior to bankruptcy. the next step is to compare the debtor’s CMI to the median income for the D. The means test debtor’s state of residence.30 Under cur- The means test is one of the most rent guidelines, in Kansas the median recognizable components of BAPCPA.
21. § 548(e). 31. For families with more than four mem- 22. § 522(b). bers, an extra $6,300 per person is added for 23. Id. each family member in excess of four. www.crashforensics.com 24. § 522(n). 32. The term “Monthly Disposable Income” 25. Most of the widely-used bankruptcy is not specifically defined in the U.S. Bankrupt- software packages contain automated tools to cy Code. Some scholars, commentators, and perform the means test. For example, many courts use the term “Monthly Disposable In- of the software packages automatically import come” interchangeably with terms such as “net the IRS expense guidelines and other relevant monthly income.” These terms, though, are data and perform the underlying arithmetic to not to be confused with the terms “Disposable complete the means test. Although the software Income” or “Projected Disposable Income,” packages do much of the internal calculation, it which have separate meanings and implications is still of paramount importance for an attorney under § 1322(a)(4). CRASH to understand the fundamental workings of the 33. This article is intended as a general over- means test. view of BAPCPA and its application. The means 26. The means test also does not apply to cer- test and expense calculations are very complex tain disabled veterans, as more fully described and intricate, but this article is intended only as in § 707(b)(2)(D). a general overview of the operation of the means FORENSICS 27. § 101(10A). test. As such, practitioners are advised to study 28. In a joint case, the income of both in detail the operation of the means test and all spouses is considered. If only one spouse files, of the underlying rules, forms, and data. the nondebtor spouse’s income is generally in- 34. IRS expense guidelines for housing, utili- cluded in the calculation of CMI to the extent ties, and transportation vary in amount from that nonfiling spouse’s income is regularly used county to county, and are thus referred to as .COM for household expenses. “local standards.” The other IRS expense guide- 29. § 101(10A). lines are “national standards” and include ex- 30. The U.S. Census Bureau tracks income pense categories such as food, household sup- data and provides compiled results of median plies, clothing, and personal supplies. All of the income for each state. This information is gener- necessary U.S. Census Bureau data and IRS ally available on the U.S. Trustee’s Web site and expense guidelines can be found at www.usdoj. is subject to change periodically. gov/ust/eo/bapcpa/meanstesting.htm. www.crashforensics.com
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 23 LEGAL ARTICLE: A HITCHHIKER’S GUIDE ... (2) Other necessary expenses al- debtor’s total disposable income for a A. The automatic stay lowed by the IRS (e.g., federal period of 60 months is less than $6,000 Some of the biggest challenges for at- and state tax payments, alimony, (which equates to $100 per month in torneys under BAPCPA are changes to maintenance, day care, and un- disposable income), the debtor passes the automatic stay. reimbursed medical services or the means test and no presumption of 1. Not-so-automatic anymore prescriptions); abuse arises. If the debtor’s total dispos- Of the more significant changes is able income for a period of 60 months is the absence of any stay where two prior (3) Additional expenses allowed greater than $10,000 (which equates to cases by the debtor have been dismissed under § 707(b)(2)(A) (e.g., health $166.67 per month), the debtor fails the within the year preceding the current fil- insurance, educational expenses means test and a presumption of abuse ing.36 While any party in interest may for children, and, if necessary and arises. try to convince the court to impose the reasonable an additional 5 percent If the debtor’s total disposable income stay, it may be days or weeks before the allowance for food and clothing for a period of 60 months is between court reaches its decision. Meanwhile, if expenses); and $6,000 and $10,000, an attorney must one prior case by the debtor has been analyze whether the total disposable in- dismissed within the year preceding the (4) Secured debt payments con- come available is sufficient to satisfy at current filing under Chapters 7, 11, or tractually due in the next 60 least 25 percent of the debtor’s general 13, the automatic stay will terminate af- months plus amounts past due on unsecured debt. If the debtor’s dispos- ter 30 days unless the court, on the mo- secured claims for necessary prop- able income is sufficient to pay at least tion of a party in interest, extends the erty (including a debtor’s house 25 percent of the debt, the debtor fails stay.37 and car) plus all priority claims the means test and a presumption of 2. Debtor’s failure to redeem or plus administrative expenses in- abuse arises. If, however, the debtor’s reaffirm curred if a debtor was a hypotheti- disposable income is not sufficient to The automatic stay will now termi- cal debtor in a Chapter 13 case, all pay at least 25 percent of the debt, the nate as to a Chapter 7 debtor’s personal divided by 60. debtor passes the means test and a pre- property, which secures an obligation, Once the debtor’s MDI has been cal- sumption of abuse does not arise. or is subject to an unexpired lease, if the culated, the final step is to compare the The means test calculation should be debtor fails to timely file the statement MDI for a 60-month period to certain undertaken before any type of bank- of intention under § 521(a)(2). The standards established by BAPCPA. If a ruptcy case is actually filed. If the debtor statement of intention must indicate fails the means test, an attorney must whether the debtor will either surrender decide whether to file the case as a the property or retain it by redemption Chapter 13 or proceed with a Chapter or reaffirmation.38 Even if the statement 7 and attempt to rebut the presumption of intention is timely filed, the automat- of abuse. As a final cautionary note, if ic stay will still terminate if the debtor an attorney decides to file a Chapter 7 does not timely take the action specified case for a debtor who failed the means in the statement of intention.39 test and the trustee subsequently moves 3. Domestic relations for dismissal or conversion, the attorney As discussed more fully in Section IV is susceptible to sanctions for the pay- of this article, the stay exception for do- ment of the trustee’s costs and legal fees mestic relations has significantly broad- in prosecuting the motion to convert or ened. One important change, which dismiss.35 may affect attorneys who take assign- ment of tax refunds as compensation or III. Case Administration security for work done in a bankruptcy Once an individual has made the case, is a new exception allowing taxing authorities to intercept tax refunds un- decision to seek bankruptcy relief, and 40 the petition is filed, attorneys should be der certain conditions. aware of substantive changes in case ad- ministration that will affect the outcome of the case.
35. § 707(b)(4)(A) provides the mechanism estate, see In re Brandon, No. 06-80439, 2006 for a trustee to seek sanctions for costs and le- WL 2512758 (Bankr. M.D. N.C. Aug. 29, gal fees incurred in bringing a motion to con- 2006), the bankruptcy courts in Kansas have vert or dismiss under § 707(b)(2). yet to consider the issue. 36. § 362(c)(4). 38. § 362(h). 37. § 362(c)(3). While one reading of this 39. Id. section suggests that the automatic stay may 40. § 362(b)(2). still be in effect as to property of the bankruptcy
24 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION LEGAL ARTICLE: A HITCHHIKER’S GUIDE ... 4. Evictions from residential 7. Ask and thou shall receive 46.51 Debtors are also now required to property – maybe provide to their trustee, or any creditor Where a landlord obtains judgment One of the more questionable changes that requests a copy, their latest federal for possession of residential property to the automatic stay is not found in a tax returns within relatively short time- in which the debtor resides as a tenant new exception. Rather, read literally, frames.52 On request of the court, the under a lease or rental agreement prior § 362(j) appears to require the court U.S. Trustee, or any party in interest, to the date of filing of the bankruptcy to issue an order granting relief from individuals filing under Chapters 7, 11, petition, the automatic stay will no lon- the automatic stay simply upon the re- or 13 are also now required to file copies ger apply to the continuation of any quest of a party in interest.48 Section of federal income tax returns for years eviction, unlawful detainer action, or 362(j) does not provide that the court ending while the case was pending.53 similar proceeding relating to the resi- shall hold a hearing after notice or even The same debtors may also be required dential property unless certain proce- make any factual findings on the request. to provide upon request any return filed dures are followed.41 In addition, where Neither does § 362(j) afford the debtor subsequent to the commencement of the a landlord takes certain actions, the stay an opportunity to respond to a request case for a tax year ending in the three- may not apply to an eviction action that thereunder. While it is unclear whether year period preceding commencement seeks possession of residential property courts will issue orders terminating the of the bankruptcy case.54 Finally, shortly where a debtor resides as a tenant based automatic stay without finding cause to after commencing a case, Chapter 13 on endangerment of such property or do so after notice and hearing, attorneys debtors are required to file required tax the illegal use of controlled substances should remain cognizant of § 362(j)’s returns with the appropriate authorities at the property unless the debtor takes potential. for all taxable periods ending during the certain actions within a relatively short 8. Satisfaction guaranteed four-year period ending on the date the timeframe.42 Under pre-BAPCPA law, if a creditor case was commenced.55 5. Leases sought stay relief under § 362(d) and did (continued on next page) Under Chapter 7, debtors may now not join its motion for relief with any assume a lease of personal property by other request for relief, the court was re- notifying the lessor in writing of their quired to hold a hearing thereon within intent.43 However, the automatic stay 30 days.49 If a hearing was not held with- will terminate as to property leased if in the 30-day period, the automatic stay debtors fail to timely assume the lease.44 would terminate. However, if the court Under Chapter 13, debtors are now held a preliminary hearing within the required to assume a lease of personal 30-day period, it could hold the final property through the plan or the lease hearing outside of the 30-day window. is deemed rejected upon confirmation.45 Under BAPCPA, § 362(e) has been The automatic stay, as to the lease, ter- amended to include a new subsection minates with respect to both debtors terminating the automatic stay 60 days and co-debtors upon confirmation if the after the date of the request unless the lease is rejected.46 court renders a final decision within the 6. Prospective relief from serial 60-day period or the period is extended filers by agreement of all parties in interest or A mortgagee may now seek an order by the court for good cause. granting stay relief, which will be effec- B. The debtor’s disclosure duties tive in subsequent bankruptcy cases, re- Debtors are now required to file with- gardless of who the debtor is, where the in 45 days all pay stubs or other evidence court finds the filing of the petition was of payment received within the 60 days part of a scheme to delay, hinder, and preceding the date of petition.50 Where defraud creditors through the transfer a debtor fails to provide the required in- of property or through multiple bank- formation within 45 days, the court may ruptcy filings affecting the property.47 automatically dismiss the case on day
41. § 362(b)(22) and (l). tion (c) confirming that the automatic stay has 42. § 362(b)(23) and (m). been terminated.”) 43. § 365(p) and Fed. R. Bankr. P. 6006. 49. § 362(e)(1). 44. § 362(h)(1). 50. §§ 521(a)(iv), 521(i)(1), (3) and (4). 45. § 365(p)(3). 51. Id. 46. Id. 52. § 521(e)(2). 47. § 362(d)(4) and (b)(20). 53. § 521(f). 48. § 362(j) (“On request of a party in inter- 54. Id. est, the court shall issue an order under subsec- 55. § 1308(a).
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 25 LEGAL ARTICLE: A HITCHHIKER’S GUIDE ... C. Reaffirmation agreements for personal, family, or household purposes, the replacement While the general concept of reaffirmation is still present, value is the price a retail merchant would charge for property BAPCPA significantly altered the procedures associated with of similar age and condition as of the date of valuation.64 Be- reaffirmation agreements and added a certain amount of li- cause well-known guides that publish retail values typically in- ability for attorneys. Section 521(a)(6) now requires a debtor clude value added after a dealer reconditions a vehicle, guides under Chapter 7 to redeem or reaffirm56 property within 45 reflecting private party sales may be a better starting point in days57 after the first meeting of creditors. If a debtor fails to valuation. act, the automatic stay under § 362(a) is terminated as to the 2. The hanging paragraph of § 1325(a) particular property. Under prior law, a debtor was permitted under § 506(a) Aside from procedural changes58 to reaffirmation agree- to bifurcate a creditor’s allowed claim into secured and unse- ments, BAPCPA also established new requirements59 for at- cured portions. The secured portion of a creditor’s claim was torneys. Specifically, § 524(c)(3) now requires an attorney to limited to the value of the collateral securing the claim, while sign an affidavit or declaration stating the reaffirmation agree- the unsecured portion reflected any amount of the claim in ex- ment: (1) “represents a fully informed and voluntary agree- cess of the collateral’s value. BAPCPA created an exception to ment of the debtor,” (2) “does not impose an undue hardship bifurcation within the Chapter 13 context with the addition on the debtor or a dependant of the debtor,” and (3) the “at- of a hanging paragraph following § 1325(a). For the purposes torney fully advised the debtor of the legal effect and conse- of a Chapter 13 plan, the hanging paragraph provides that quences of” the reaffirmation agreement and default under § 506 does not apply to claims secured by a purchase money such an agreement. security interest in motor vehicles purchased for the debtor’s D. Financial management course personal use within the 910 days preceding the date of the fil- Chapters 7 and 13 debtors must now complete a personal ing of the petition. The hanging paragraph also provides that financial management course and file a certificate of comple- 506(a) does not apply to any other personal property subject tion with the court to become eligible to receive a discharge. to a purchase money security interest, which the debtor pur- Chapter 7 debtors must file a certificate within 45 days after chased within the year before the petition date. The majority the first date set for the meeting of creditors under § 341.60 of courts considering the hanging paragraph have concluded that affected claims must be paid under a Chapter 13 plan as Chapter 13 debtors must file the certificate no later than the 65 last payment made under a confirmed plan.61 While the dead- fully secured and with interest accruing at the Till rate. line for filing the certificate may be extended under certain TheTill rate, taking its name from the U.S. Supreme Court’s opinion in Till v. SCS Credit Corp.,66 is considered as the cost circumstance, a motion requesting an extension of time to 67 file the certificate should be filed before the deadline passes of funds adjusted upward to reflect the risk of payment. or the court will only extend the deadline upon a showing of Because creditors receiving the full value of their claim through excusable neglect.62 a Chapter 13 plan are arguably overprotected with respect to the cost of funds and the risk of payment, it logically follows E. Property valuation that any interest the creditor is entitled to receive on its claim 1. Generally should be the cost of payment adjusted downward to offset Under Chapters 7 or 13, the court is now required to value any overcompensation.68 personal property securing an allowed claim based upon its re- F. Adequate protection placement value as of the petition date without deducting the Under Chapter 13, secured creditors are now entitled to costs of sale or marketing.63 Where the property is acquired equal monthly payments not less than the amount sufficient
56. For cases filed before the enactment of BAPCPA, debtors gener- 59. As more post-BAPCPA cases work through the courts, attorneys ally were able to retain property and keep current on the payments for are advised to pay particular attention to how courts are interpreting the the property without having to enter into a formal reaffirmation agree- new Code sections dealing with attorney declarations and potential li- ment. This practice is often referred to as the “fourth option” or the “ride ability under same. through.” While the provisions implemented by BAPCPA appear to 60. Fed. R. Bankr. P. 1007(c). eliminate this “fourth option,” some commentators have noted that the 61. Id. “fourth option” may still exist under principles of state law. A detailed 62. Fed. R. Bankr. P. 9006(b). analysis of this issue is outside the scope of this article, but attorneys are 63. § 506(a)(2). advised to more fully investigate and analyze this issue. 64. Id. 57. Section 521(a)(2) also now requires a debtor to file a statement of 65. In Kansas, See In re Lowder, No. 05-44802, 2006 WL 1794737 intention within 30 days after filing a petition and to perform under the (Bankr. D. Kan. June 28, 2006) (Karlin, J.) (compiling cases); but see In statement of intention within 30 days after the first meeting of creditors. re Wampler, 345 B.R. 730 (Bankr. D. Kan. 2006) (Berger, J.). If a debtor fails to comply with the deadlines contained in § 521(a)(2), 66. 541 U.S. 465, 124 S. Ct. 1951, 158 L. Ed. 2d 787 (2004). the automatic stay is terminated under § 362(h). There is a certain ten- 67. Id. at 478-79. sion and inconsistency between the deadlines contained in § 521(a)(2) 68. See In re Taranto, 344 B.R. 857, 862 (“[The] artificial inflation of and § 521(a)(6). Due to this tension and inconsistency, practitioners are the amount of the 910 Claim reduces the risk exposure against which the advised to carefully analyze a client’s situation in order to provide the best U.S. Supreme Court was trying to protect pre-BAPCPA creditors in the advice and guidance. cram down-strip down situation addressed in Till. To allow both inflation 58. Under BAPCPA, a debtor wishing to reaffirm a debt must now of the allowed amount of the claim and application of interest under Till receive certain disclosures, as more fully described in § 524(k). ignores the economic realities of this case and perhaps the vast majority of 910 Claims.”).
26 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION LEGAL ARTICLE: A HITCHHIKER’S GUIDE ... to provide adequate protection of their claim.69 Debtors must DSOs under a judicial or administrative order or a statute, directly pay a lessor that portion of the obligation that be- whether relating to property of the estate or the debtor, are comes due after the order for relief is entered.70 Debtors must also now excepted from the automatic stay.80 Despite state law also pay adequate protection directly to a creditor holding an to the contrary, it appears property exempt under state law allowed claim secured by a purchase money security interest in is now liable for DSOs.81 Similarly, a judicial lien securing a personal property.71 Payments made to the trustee are reduced DSO may no longer be avoided.82 DSOs are even protected to reflect the payments to lessors or secured creditors. Howev- from the trustee’s attempts to avoid payments thereon pro- er, upon request, courts regularly order the required payments vided the transfer was a bona fide payment toward a DSO.83 to lessors and secured creditors be made through the Chapter 13 trustee. In Kansas, local rule even requires adequate protec- V. Attorney Liability Provisions tion payments to secured creditors be paid through the trustee unless the court orders otherwise.72 Where possible, attorneys The second area of changes brought by BAPCPA warrant- should consider advising clients to direct payments through ing special recognition involves attorney liability. Of all the the trustee as a reliable and credible means for establishing the BAPCPA amendments, the debate surrounding the addition debtor’s payment record should the lessor or secured creditor of statutory provisions governing “Debt Relief Agencies” has deny payment. likely been the most poignant. Any attorney may be a Debt Relief Agency (DRA), if the attorney “provides any bankrupt- IV. Domestic Support Obligations cy assistance to an assisted person in return for the payment of money or other valuable consideration ... .”84 In relation to BAPCPA brings changes in two areas, which warrant spe- the definition of a DRA, “Bankruptcy Assistance” includes cial recognition. The first area includes the many changes any goods or services sold or otherwise provided to an assisted in favor of creditors holding domestic support obligation person for the purpose of providing counsel to or appearing claims.73 A domestic support obligation (DSO), is broadly in court or at the creditor’s meeting on behalf of an “assisted defined to include virtually any debt accruing pre- or postpe- person.”85 “Assisted person” refers to any person whose debts tition to a spouse, former spouse, child, or governmental unit are primarily consumer and whose nonexempt assets total less which, regardless of its designation, is in the nature of alimo- than $150,000 in value.86 ny, maintenance, or support.74 Under this definition, virtually any obligation that is arguably a DSO will be nondischarge- (continued on next page) able under § 523(a)(5). Section 523(a)(15), which generally makes nondischargeable any debt to a spouse, former spouse, or child incurred in a divorce or separation not addressed by § 523(a)(5), has been amended to eliminate the “ability to pay” test and effectively closes the door on discharging under Chapter 7 any debt incurred through a divorce or separation. Notwithstanding, obligations falling under § 523(a)(15) may still be discharged under Chapter 13.75 Among other changes, DSOs have generally been given higher priority for distribution from the debtor’s bankruptcy estate.76 Confirmation of a Chapter 13 plan will be denied if the debtor is not current on postpetition DSO obligations.77 Discharge under Chapter 13 is now contingent on certi- fication by debtors that they are current on all postpetition DSOs.78 The automatic stay has been amended to except the commencement or continuation of a number of additional actions related to DSOs, including actions concerning child custody or visitation, dissolution of marriage, or domestic violence.79 Income withholding orders relating to payment of
69. § 1325(a)(5)(B)(iii). 75. § 1328(a). 70. § 1326(a)(1)(B). 76. § 507(a)(1). 71. § 1326(a)(1)(C). 77. § 1325(a)(10). 72. D. Kan. LBR 3015(b).1(g). 78. § 1328(a). 73. For a detailed discussion of 79. § 362(b)(2). Domestic Support Obligations 80. Id. under BAPCPA, see Elizabeth A. 81. § 522(c)(1). Carson, “The Domestic Support 82. § 522(f)(1)(A). Obligation Under BAPCPA,” No. 83. § 547(c)(7). 06 Norton Bankr. L. Advisor 84. § 101(12A). 2. (2006) 85. § 101(4A). 74. § 101(14A). 86. § 101(3).
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 27 LEGAL ARTICLE: A HITCHHIKER’S GUIDE ... The designation as a DRA is significant because of liabil- gree, with distinction, in 2000, and his juris doctorate in 2003 ity associated with the failure to satisfy the resulting mandate from the University of Missouri-Kansas City, where he was a to make or refrain from making several onerous disclosures.87 member of the National Moot Court team and was included on Because the definition of DRA is not limited in scope to a par- the dean’s list. He is a member of the American Bankruptcy Insti- ticular type of representation, for example, representing either tute, is lead editor for the ABI’s Tenth Circuit Case Update and debtors or creditors, any attorney who provides counsel to an is co-vice chair for Kansas City Metropolitan Bar Association’s individual in relation to a bankruptcy proceeding is poten- Commercial & Bankruptcy Law Committee. tially a DRA. In other words, as this article’s introduction sug- gests, if you give counsel regarding the effect of the automatic Jeffrey A. Deines is an associate with Lentz & Clark P.A., stay to an individual whose ex-spouse files for bankruptcy, Overland Park. His practice focuses on all aspects of bankruptcy, you may be a DRA. Even an attorney who provides estate including Chapter 11 debtor, creditor, and planning advice or services regarding what effect bankruptcy committee representation and related tax might have on an individual’s assets may be a DRA under an matters, receiverships, and out-of-court work- extreme, but literal interpretation of the new provisions. Al- outs and insolvency matters. He received his though opinions interpreting the DRA provisions are begin- bachelor’s degree from the University of Kan- ning to emerge, it will be some time before the true reach of sas in 1998, with honors, and his juris doctor- the DRA provisions is known.88 ate from Loyola Law School of Los Angeles, In addition to any DRA related obligations, attorneys rep- where he was a member of the Loyola Law resenting debtors are also now required to make a “reason- Review and was included on the dean’s list. able investigation” into the circumstances underlying the He is a regular contributor of bankruptcy articles to the Johnson bankruptcy petition. The attorneys must certify they have no County Barletter and is a member of the American Bankruptcy knowledge the information provided by the debtor is incor- Institute. rect and the petition is “well grounded in fact.”89 However, it is unlikely the new certification requirements will substan- tially change an attorney’s risk of liability, as the provisions governing sanctions incorporate an older version of the Rule U.S. Supreme Court 11 of the Federal Rules of Civil Procedure.90 (Continued from Page 15) Stevens, Antonin Scalia, David Souter, Clarence Thomas, VI. Conclusion Ruth Bader Ginsburg, and Stephen Breyer. Justices Anthony The enactment of BAPCPA has created a liability nightmare Kennedy and Samuel Alito were not present. First, the indi- for the unwary attorney. While this article addresses many of viduals were sworn in (including the Schneider family). The the changes to consumer practice under Chapters 7 and 13, KBA members were sworn in next, with KBA President Da- many more exceptions and issues either too complex to dis- vid Rebein introducing each inductee. The eye contact and cuss or beyond the general scope of this article exist, which expressions of acknowledgment from our country’s most fa- demand an attorney’s attention and understanding. In the mous jurists as our names were read was an experience I will new age of BAPCPA, the best defense against liability is to not soon forget. know, understand, and comply with the amendments to the After the swearing in, we again returned to the reception Bankruptcy Code or to refer your questions to practitioners room where Chief Justice Roberts and Justice Ginsburg came and greeted everyone. After meeting and greeting everyone, specializing in bankruptcy. n Chief Justice Roberts made a beeline for the children who About the Authors attended the swearing in, including the children of the Tem- plins, the children of Judge Cheryl Kingfisher, and our chil- Larry A. Pittman II is an associate at dren. Chief Justice Roberts took pictures with attorneys and the Kansas City, Mo., office of the Lathrop families and had a great conversation with our sons Jack (Chief & Gage L.C. His practice focuses on all as- Justice Roberts has a son named Jack) and Dane about who pects of bankruptcy, secured transactions, and was going to wear what for Halloween. Justice Ginsburg also loan enforcement/workouts. Prior to joining met everyone. We then gathered outside the Supreme Court the firm, Pittman served as law clerk to U.S. building for a group photo to complete the swearing in pro- Bankruptcy Judge Robert D. Berger from cess. Several of us then went back inside the Supreme Court 2003 to 2006. He earned his bachelor’s de- for a self-guided tour of the interesting displays throughout the building and for a visit to the Court’s gift shop. Our KBA group was also scheduled to tour the White House the day after our swearing in ceremony. Unfortunately, 87. See §§ 526-528. A detailed discussion of the requirement im- posed upon a DRA is beyond the scope of this article, but attorneys are the White House canceled this tour and many of us left D.C. advised to more fully investigate and analyze this issue. without seeing the inside of the White House. Our family did 88. See, e.g., Hersh v. United States, No. CIV.A. 3:05-CV-2330-N, not give up though. Sen. Pat Robert’s staff helped us resched- 2006 WL 2088270 (N.D. Tex. July, 26, 2006). ule a White House tour later in the week to complete our 89. § 707(b)(4). planned itinerary. 90. Id. Thanks to the KBA for organizing this fine event. n
28 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION Appellate Decisions
All opinion digests are available on the KBA members-only Web site at www.ksbar.org. We also send out a weekly eJournal informing KBA members of the latest decisions. If you do not have access to the KBA members-only site, or if your e-mail address or other contact information has changed, please contact member services at [email protected] or at (785) 234-5696. You may go to the courts’ Web site at www.kscourts.org for the full opinions. Supreme Court
but U.S. Supreme Court reversed that holding and remanded case Criminal to Kansas Supreme Court. Kansas v. Marsh, U.S. __, 126 S.Ct. 2516 STATE V. MARSH (2006). REMAND FROM U.S. SUPREME COURT ISSUE: Constitutionality of K.S.A. 21-4624(e) NO. 81,135 – SUPPLEMENTAL OPINION FILED 10-18-06 HELD: That portion of Marsh holding K.S.A. 21-4624(e) uncon- FACTS: Kansas Supreme Court affirmed Marsh’s convictions and stitutional is vacated. That portion ofMarsh reversing his convictions sentences for first-degree premeditated murder and aggravated bur- for capital murder and aggravated arson, and affirming his convic- glary, and reversed his convictions for capital murder and aggravated tions and sentence for first-degree premeditated murder and aggra- arson. State v. Marsh, 278 Kan. 520 (2004). Majority of court held vated burglary, remains unchanged. Case is remanded for new trial the weighing equation in K.S.A. 21-4624(e) was unconstitutional, on capital murder and aggravated arson charges. STATUTE: K.S.A. 21-4624(e) Court of Appeals
tion to a notarial officer, and the officer executes a false certification Civil of acknowledgment, the acknowledgment does not substantially ADOPTION, CONSENT, AND NOTARY PUBLIC comply with the notary statutes. An acknowledgment, which is not IN RE ADOPTION OF X.J.A. in substantial compliance with the notary statutes, cannot serve as FORD DISTRICT COURT – REVERSED prima facie proof that the written consent was freely and voluntarily NO. 96,003 – SEPTEMBER 15, 2006 given. FACTS: After the natural mother moved in with M.A and E.M., STATUTES: K.S.A. 59-2113, -2114(a), -2143; K.S.A. 59- it is contested whether the natural mother agreed to let M.A. and 2129(d) (Furse 1994); K.S.A. 59-2102 (Weeks); and K.S.A. 53-501 E.M. adopt the child she was expecting. X.J.A. remained hospital- et seq., -502(b), -503(a), 508(a) and (c) ized after childbirth. The day after the birth, the mother signed a CLOSE CORPORATION EXCEPTION AND CERTIFIED consent form given to her by M.A., but no one explained the form PUBLIC ACCOUNTANT PROFESSIONAL NEGLIGENCE to the mother and there was conflicting evidence as to the moth- SPARKS V. CBIZ ACCOUNTING ET AL. er’s understanding of English. M.A.’s attorney told M.A. that she JOHNSON DISTRICT COURT – REVERSED AND needed the consent form signed before a notary public, and M.A. REMANDED WITH DIRECTIONS convinced a notarial officer to execute the notary’s portion of the ac- NO. 95,538 – SEPTEMBER 22, 2006 knowledgment without the mother present. X.J.A. went home from FACTS: Sparks, a former minority shareholder of Alexcio Corp., the hospital with M.A. and E.M. The mother had periodic visits alleges CBIZ Accounting committed malpractice while handling with X.J.A., but they were discontinued because of the mother’s at- Alexcio’s accounts. Sparks filed a derivative action. CBIZ filed a mo- tempts to take custody of the child. Mother filed a motion to revoke tion for partial summary judgment, alleging Sparks lacked standing consent. The district court upheld the mother’s consent finding no to pursue his derivative claim because he was not a stockholder when coercion and that the mother failed to establish the consent was not the lawsuit was commenced. Sparks filed a motion to pursue his case freely and voluntarily given. as a direct action under the close corporation exception. The district ISSUES: (1) Adoption, (2) consent, and (3) notary public court granted Sparks’ motion, denied CBIZ’s motion for summary HELD: Court found that the acknowledgment of the consent judgment, and authorized an interlocutory appeal by CBIZ. to adopt failed to substantially comply with the Uniform Law on ISSUES: (1) Application of the close corporation exception recog- Notarial Acts, resulting in an impermissible shifting of the burden nized in Richards v. Bryan, 19 Kan. App. 2d 950, 965, 879 P.2d 638 of proof to the mother. Court held that where the consenting party (1994), and (2) certified public accountant professional negligence does not appear and sign before and make the requisite declara-
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 29 HELD: Court held that the close corporation exception recog- HELD: Court held that any right that a parent may acquire to nized in Richards only applies when an oppressed minority share- reduce his or her court-ordered child support payment in a divorce holder brings suit against majority directors, officers, or directors for proceeding because of the child’s separate share of the parent’s dis- breach of a fiduciary duty. Under the fact of this case, the court held ability or retirement benefits does not automatically translate into a the close corporation exception does not apply. Court reversed and right to take the child’s conservatorship funds or assets to pay the remanded for summary judgment to be entered in favor of CBIZ. full amount of court-ordered child support notwithstanding the Court stated it considered CBIZ’s claims and held the close corpora- source of the conservatorship assets. Court also stated that a conser- tion exception should not be extended in Kansas to permit litigation vator is precluded from using any amount of the assets of a minor’s against a third party for professional negligence in the performance conservatorship estate to pay any portion of a parent’s court-ordered of a duty owed to the corporation. Court held that Sparks did not child support obligation without specific approval of the court that directly engage CBIZ as accountants and therefore K.S.A. 1-402 is supervising the conservatorship. Court held that when a conserva- does not apply. tor, without specific court approval, withdraws funds from a minor’s STATUTES: K.S.A. 1-402(a) and K.S.A. 60-223a, -2102(c) conservatorship estate to use for the court-ordered child support payment for that minor, the supervising court must order that the CONSERVATORSHIP AND CHILD SUPPORT PAYMENTS conservator repay the conservatorship estate no less than the amount IN RE CONSERVATORSHIP OF CHAPMAN of those misused funds. Court affirmed the decision that Deborah SEDGWICK DISTRICT COURT – AFFIRMED IN PART should not personally receive attorney fees and expenses she person- AND REVERSED IN PART ally expended. NO. 94,765 –OCTOBER 20, 2006 STATUTES: K.S.A. 59-3051(1), -3053, -3069, -3078, -3088(f), FACTS: Deborah and Thomas were married in December 1984 -3089(d) and K.S.A. 74-4953(1), -4960(1)(c) and before 2003, they would have three children and would divorce and remarry and then divorce again. Effective July 15, 1989, Thomas DIVORCE retired from his police job after an injury left him disabled. The Kan- IN RE MARRIAGE OF COX sas Police and Fireman’s Retirement System (KPFRS) paid Thomas JOHNSON DISTRICT COURT – AFFIRMED 50 percent of his final average salary and paid Ethan, Thomas’ son, NO. 95,036 – JULY 21, 2006 10 percent of Thomas’ final average salary. After a change in the law, PUBLISHED VERSION FILED OCTOBER 3, 2006 Thomas was appointed as conservator for the disability benefits for FACTS: Thomas appealed district court’s modification of child each of his children after they were born. Thomas used the conser- support due to ex-wife, Diana, claiming district court erred in not vatorship funds to pay his child support and to reimburse himself allowing deduction of depreciation expense from rental property in- for medical and insurance costs. By 2003, Thomas had withdrawn come in calculating child support. Diana seeks costs and attorney approximately $66,000 from the conservatorships. In 2004, Debo- fees, claiming appeal was frivolous and Thomas failed to comply rah filed petitions to remove Thomas as conservator for each child with court rules for appellate brief. and to reimburse money that he wrongfully misused. In the divorce ISSUES: (1) Depreciation expenses and (2) motion for costs and court proceedings, the court held that monies from Thomas’ disabil- attorney fees ity designated for the children could no longer be credited towards HELD: Under facts of case, no abuse of discretion in district Thomas’ child support obligation prospectively. Equating a right to court not allowing Thomas to deduct a depreciation expense from offset against a child support obligation with the right to withdraw his rental property income in calculating child support. Cox failed funds from the children’s conservatorship estates, the conservator- to show that depreciation was reasonably necessary for production ship court ultimately denied Deborah’s requests to remove Thomas of income from the rental properties. as conservator, to appoint a successor conservator, and to order the Motion for costs and attorney fees is denied. Sufficient compli- reimbursement of funds withdrawn by Thomas. ance with Supreme Court Rule 6.02. Appeal not frivolous in light of ISSUES: (1) Conservatorship and (2) child support payments In re Marriage of Lewallen, 21 Kan. App. 2d 73 (1995). STATUTES: None
DIVORCE, RETIREMENT PENSION, AND RESERVING JURISDICTION IN RE MARRIAGE OF CRANE JOHNSON DISTRICT COURT – REVERSED NO. 94,321 – SEPTEMBER 29, 2006 FACTS: John and Lola were divorced. John is the senior pastor of a small, nondenominational church. The church did not have a re- tirement plan, but when the previous two pastors retired, the church provided each pastor with lifetime retirement benefits or monetary gift. John has not been and is not now a participant in a retirement or pension plan at any time during his marriage to Lola. The church is a Missouri not-for-profit corporation. Lola objected to the divi- sion of property. The trial court reserved jurisdiction over the ques- tion of whether or not a retirement is going to be paid and what interest Lola’s 18 years of marriage would equate to in a retirement plan if and when it is ever granted. ISSUES: (1) Divorce, (2) retirement pension, and (3) reserving jurisdiction HELD: Court held the trial court cannot reserve jurisdiction to divide at some future time a retirement plan that is not in being and never has been in being. The reserve jurisdiction method recognized 30 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION in In re Marriage of Harrison, 13 Kan. App. 2d 313, has no applica- value of similar property but fails to do so. Court held the Warrens tion where a retirement plan does not exist. only presented evidence to support an award of $415.50 for rental STATUTES: K.S.A. 2005 Supp. 23-201 and K.S.A. 60- of a substitute vehicle. 1610(b)(1) STATUTE: K.S.A. 60-226(b), -456(b)
DUI AND DRIVER’S LICENSE SUSPENSION INSURANCE MARTIN V. KANSAS DEPARTMENT OF REVENUE DAVIS V. ALLSTATE INSURANCE CO. JOHNSON DISTRICT COURT – REVERSED AND RENO DISTRICT COURT – AFFIRMED REMANDED WITH DIRECTIONS NO. 96,043 – OCTOBER 6, 2006 NO. 94,033 – SEPTEMBER 15, 2006 FACTS: Jay and Jonell Davis owned vehicles insured by Allstate, FACTS: Martin was driving his vehicle with the passenger side and Jay owned motorcycle insured by American Modern Home In- brake light inoperable, but the other two brake lights (driver’s side surance Co. After being injured in motorcycle accident as passenger and rear window) were operating properly. Officers stopped Martin while Jay was driving, Jonell filed claim for underinsured motorist for the brake light and he was arrested for DUI. The district court (UIM) damages. When Allstate denied Jonell’s claim, she filed action dismissed the DUI case concluding Martin had met his burden of for breach of contract. District court granted summary judgment to proof in establishing the officer made a mistake of law in pulling Allstate, finding policy did not cover damages because motorcycle him over because he had two operational brake lights and there was was provided for Jonell’s regular use. Jonell appealed, claiming ex- no reasonable and articulable suspicion existing that Martin had clusion in Allstate policy to include a vehicle owned by a “resident committed a traffic violation. Following an administrative hearing, relative” was broader than allowed by K.S.A. 40-283(e)(1), and the Kansas Department of Revenue suspended Martin’s license for claiming error to find motorcycle was provided for her regular use. failing the breath test. The district court dismissed the suspension ISSUES: (1) Breadth of Allstate exclusion and (2) UIM claim order for the reason that the certifying police officer did not have HELD: First case heard to test court’s new procedure for expedit- a reasonable and articulable suspicion to stop Martin in the first ing appeals from orders granting summary judgment in civil cases. place. Exclusion to include vehicle owned by a “resident relative” was ISSUES: (1) DUI and (2) driver’s license suspension immaterial to court’s ruling. Summary judgment was entered in HELD: Court upheld the KDOR suspension of Martin’s license. favor of Allstate based upon district court’s conclusion that motor- Court held that nowhere in K.S.A. 8-1020(h)(2) does it mention cycle was provided for Jonell’s regular use. that a driver may challenge his or her driver’s license suspension at Analysis of UM claim in Ball v. Midwestern Ins. Co., 250 Kan. a suspension hearing on the basis that the law enforcement officer 738 (1992), is applied. Under facts presented, a motorcycle was pro- lacked a reasonable and articulable suspicion to stop the driver in vided for regular use of wife who rode on her husband’s motorcycle the first place. Court stated the reason why a law enforcement of- as a passenger two or three times a month. ficer stops a person has no relevance at an administrative hearing to STATUTE: K.S.A. 40-284(e)(1) suspend the driver’s license of that person. Court stated the second issue was rendered moot due to its holding. KANSAS WAGE PROTECTION ACT, DISCHARGED STATUTE: K.S.A. 8-1020(h)(2) EMPLOYEE, AND VACATION PAY A.O. SMITH CORP. V. KANSAS DEPARTMENT OF EXPERT TESTIMONY AND LOSS OF USE DAMAGES HUMAN RESOURCES ET AL. WARREN V. HEARTLAND AUTOMOTIVE SERVICE INC., SHAWNEE DISTRICT COURT – AFFIRMED IN PART, D/B/A JIFFY LUBE REVERSED IN PART, AND REMANDED WYANDOTTE DISTRICT COURT NO. 93,477 – MOTION TO PUBLISH ORIGINAL AFFIRMED IN PART, REVERSED IN PART, AND OPINION FILED DECEMBER 9, 2005 REMANDED WITH DIRECTIONS FACTS: A.O. Smith (AOS) is a Delaware corporation that NO. 95,577 – OCTOBER 20, 2006 purchased a manufacturing facility in Kansas. At the time of the FACTS: Heartland Automotive Services Inc., operates the Jiffy acquisition, the former plant owner had an “earn-in-arrears” vaca- Lube facility in western Wyandotte County where Shawn and Jen- tion policy, where employees earned vacation time and then used it nifer Warren had their automobile serviced before a vacation trip the following year. AOS claimed that it transitioned to a “pop-up to Minnesota. In the course of the trip, the automobile lost its oil, policy” in 1997, where employees could take vacation in the year causing the engine to throw a rod. When the Warrens returned to earned based on years of service. In 2000, AOS decided to work Kansas City, Heartland told them that the engine failure was not its toward divestiture of the Kansas facility and determined the existing fault and refused to pay for the rental car or any repairs. The War- pop-up-vacation policy should be changed to an “earn-as-you-go” rens sued. The Warrens’ damage suit against Heartland resulted in a policy. Although the new policy was issued in December 2000 dated jury verdict finding Heartland was 100 percent at fault and awarded June 1, 2000, the local human resources manager was directed not to $17,500.34 in damages to the Warrens. post or communicate the new policy to employees. CST Industries ISSUES: (1) Expert testimony and (2) loss of use damages acquired the Kansas facility and complaints emerged concerning the HELD: The Court found no abuse of discretion in the trial court’s unannounced changed in vacation policy. Employees began filing decisions on expert testimony. However, the court held that in an claims for wages under the Kansas Wage Protection Act (KWPA) action for recovery of damages for the loss of use of a damaged au- for accrued vacation pay. The Kansas Department of Human Re- tomobile, the plaintiff may recover loss of use damages even if the sources (KDHR) hearing officer held AOS never advised employees plaintiff has not rented a substitute vehicle. The appropriate mea- of the 2000 change in policy until after the sale, that a “discharge” sure of damages, in the absence of the plaintiff renting a substitute under the KWPA involved any separation from the employer, and vehicle, is the reasonable rental value of a substitute vehicle. Loss of that AOS willfully failed to pay accrued vacation. The district court use damages are limited to a reasonable period of time needed to held that the claimants were discharged from their employment make repairs. This period should be extended only if the defendant with AOS, notwithstanding their immediately re-employment with causes or adds to any delay. Loss of use damages should not be al- CST, that accrued vacation was “wages” under the KWPA, and the lowed if the plaintiff could provide evidence of the reasonable rental policy at the Kansas facility was earned vacation time in one year to THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 31 be utilized the next. The district court reversed the KDHR’s penalty TORTS finding AOS took “positive action to protect its employees during TROUTMAN V. CURTIS the negotiations leading to the sale.” SHAWNEE DISTRICT COURT – AFFIRMED ISSUES: (1) Discharge under the KWPA and (2) willful with- NO. 94,667 – SEPTEMBER 22, 2006 holding of accrued vacation pay FACTS: Plaintiffs who suffered complications following car- HELD: Court held that under the facts of this case, the employer diac catheterization procedures brought product liability case al- was not entitled to change its vacation policy without notice to its leging Perclose was negligent in the design of the “Closer,” a Class employees. An employer may impose a cut in wages if the change III prescription medical device to provide polyester suture to close is announced before any wages are earned. In the case of nonsal- artery access site following catheterization. District court granted ary wages such as vacation pay, they become actual wages when the summary judgment to Perclose, and plaintiffs appealed on issue conditions required for entitlement, eligibility, accrual, or earning of whether pre-emption provision in 21 U.S.C. § 360k(a) (2000) have been met by the employee. Court also held that where an em- of 1976 Medical Device Amendments (MDA) to 1938 Food, ployer applies an interpretation of its own vacation policy that is not Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. pre-empts state expressly contained therein and is in conflict with a “proper reading” common-law tort claims alleging liability as to Class III medical of that policy, such action is a willful violation of the KWPA. Court devices that have entered the market pursuant to FDA’s rigorous stated that where an employer attempted to apply an interpretation premarket approval (PMA) process. inconsistent with its vacation policy, acted unilaterally to change its ISSUE: Federal pre-emption vacation policy without communicating it to employees, urged its HELD: Issue of first impression in Kansas. Consensus of legal au- purchaser not to discuss accrued vacation liability with employees, thority elsewhere is followed. State common-law tort claims alleging and attempted through an asset purchase agreement to avoid litiga- liability to PMA-approved Class III medical device are pre-empted tion by assuring some vacation would be earned and payable by the by § 360k(a), except for a claim that manufacturer failed to com- successor in the first year after discharge, the court stated it could ply with approved federal standards. Here, plaintiffs failed to come not conclude that the KDHR’s findings regarding willfulness were forward with any evidence to support a claim that Perclose failed unsupported when viewed in light of the record as a whole. Court to comply with approved federal standards in the design, manufac- affirmed KDHR’s findings and conclusions and reversed the district turing, and labeling of the Closer. Summary judgment in favor of court’s reversal of penalty. Court remanded to the district court for Perclose is affirmed. Opinion provides overview of MDA, discusses the limited purpose of remanding to the KDHR with directions to Medtronic Inc. v. Lohr, 518 U.S. 470 (1996), and post-Lohr case law, reinstate the KDHR’s final action. and applies two-prong Lohr test. STATUTES: K.S.A.44-312 et seq., -315, -323; K.S.A. 2005 Supp. STATUTES: 7 U.S.C. § 136 et seq. (2000), § 136v(b) (1988); 44-313; and K.S.A. 77-621(c)(4), (5), (7), and (8) 21 U.S.C. §§ 301 et seq., 360c(a)(1)(A), (B), and (C), 360k(a), 360e(b)(1)(B), 360e(d)(2), 360e(e) (2000); and K.S.A. 3301 et seq., TORTS -3302(c) CHRISTOPHER V. STATE SHAWNEE DISTRICT COURT – AFFIRMED TRANSFER ON DEATH DEED, REAL ESTATE, AND NO. 95,077 – OCTOBER 6, 2006 GROWING CROPS FACTS: Christopher injured as resident of juvenile justice facility IN RE ESTATE OF ROLOFF operated by Southeast Kansas Education Service Center (SKESC). ATCHISON DISTRICT COURT – REVERSED He filed negligence action against state, and amended the petition to NO. 95,542 – SEPTEMBER 29, 2006 add SKESC as a defendant. District court dismissed Christopher’s FACTS: Charles Schletzbaum was a grantee beneficiary of real es- claims against SKESC based upon Christopher’s failure to file no- tate under a transfer-on-death (TOD) deed executed by Roloff and tice of claim, K.S.A. 12-105(d), and dismissed Christopher’s claims recorded with the Atchison Register of Deeds in June 2004. The against state pursuant to immunity under juvenile justice program TOD deed was devoid of any language reserving the growing crops. exception to KTCA, K.S.A. 2005 Supp. 75-6104(u). Christopher Roloff died intestate in July 2004. The trial court determined that the appealed. growing crops should be considered personal property and that the ISSUES: (1) Notice of claim and (2) immunity exception to proceeds should go to Roloff’s estate rather than to Schletzbaum. KTCA ISSUE: Whether the trial court properly determined that the HELD: Christopher’s filing within the limitation period, but growing crops on the real estate were personal property under without prior notice to SKESC, was void ab initio because district K.S.A. 59-1206 and belonged to the grantor’s estate rather than to court lacked jurisdiction. Savings statute, K.S.A. 60-518, did not Schletzbaum. permit refiling after limitation period had run. HELD: Court held the growing crops on the real estate trans- Christopher’s equal protection arguments regarding application ferred by the TOD deed passed to Schletzbaum, as the grantee ben- of KTCA are discussed and rejected. K.S.A. 2005 Supp. 75-6104(u) eficiary, because the TOD deed did not contain a reservation of the is rationally related to state’s interest in providing education to ju- growing crops, the same as if Roloff and Schletzbaum had owned the venile offenders. State did not violate its duty to Christopher by property in joint tenancy with right of survivorship. The survivorship delegating responsibilities to SKESC. attribute for both forms of deeds is a contractual relationship, which STATUTES: K.S.A. 2005 Supp. 75-6103, -6104, -6104(u) and causes title in such property to vest immediately upon either the re- K.S.A. 17-105b, -105b(d), 60-513, - 518, 75-6101 et seq. cord owner’s or the joint tenant’s death. STATUTES: K.S.A. 58-2202, -2203, -2204; K.S.A. 59-1201, -1206, -1410, -1413, -3501, -3502, -3503, -3504, -3507; K.S.A. 60-2416; K.S.A. 2005 Supp. 77-201, Twentieth; K.S.A. 84-2- 107(2); and K.S.A. 2005 Supp. 84-9-334(j)
32 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION UNDERINSURED BENEFITS AND UMBRELLA POLICY was to assess threat in order to meet emergency in progress when FIORELLA V. TRAVELERS PROPERTY CASUALTY Araujo arrived at scene. Lewis’ statements are considered nontesti- INSURANCE monial, and thus were admissible. JOHNSON DISTRICT COURT – AFFIRMED STATUTE: K.S.A. 60-404 NO. 94,628 – SEPTEMBER 15, 2006 FACTS: Fiorella had auto, homeowner’s, and an umbrella policy STATE V. BLACK with Travelers. The umbrella policy made no mention of uninsured SEDGWICK DISTRICT COURT – AFFIRMED (UM) or underinsured (UIM) motorist coverage. In 1998, Travel- NO. 94,599 – SEPTEMBER 15, 2006 ers issued a new umbrella policy explicitly excluding UM and UIM FACTS: Black convicted of possession of cocaine. District court coverage, but Fiorella had an accident at the time when the pre-1998 imposed 12-month probation with underlying 32-month-prison form of the umbrella policy was still in effect. In January 1999, Fio- term, and later modified conditions of probation to require success- rella was seriously injured in an automobile accident with a driver ful completion of an Adult Daily Reporting Center (ADRC) pro- insured by State Farm with a liability coverage limit of $100,000. gram instead of residential community correction program earlier Fiorella’s automobile policy (which had UM and UIM coverage) ordered. Upon revocation of Black’s probation, district court denied had a liability limit of $500,000. The umbrella policy applied af- credit for time spent at ADRC. Black appealed. ter exhaustion of the $500,000 limit, but the umbrella had a liabil- ISSUE: Sentencing credit ity limit of $1 million per occurrence. State Farm paid $100,000. HELD: A defendant may not receive jail time credit for time Travelers paid $400,000 as UIM benefits, plus medical and personal spent in an ADRC program as a condition of probation. The ADRC injury protection benefits. Fiorella commenced an action to obtain program, which requires participants to be at its facility only during a judicial declaration that the umbrella policy provides additional the day if they do not have a job or are not participating in some UIM coverage and he sought recovery of the full $1 million. The other authorized activity, does not come within the “residential facil- district court granted summary judgment in favor of Travelers on the ity” language of K.S.A. 21-4614a(a). grounds that the umbrella policy did not provide UIM coverage. STATUTE: K.S.A. 21-4614a, -4614(a) ISSUE: UIM coverage in umbrella policies HELD: Court stated that K.S.A. 40-284(a) requires that all Kan- STATE V. CURLS sas auto liability policies provide UM motorist coverage equal to the SHAWNEE DISTRICT COURT – AFFIRMED policyholder’s liability limits under those policies. However, insurers NO. 94,629 – MAY 5, 2006 need not offer coverage in accordance with K.S.A. 40-284 in um- PUBLISHED VERSION FILED OCTOBER 10, 2006 brella policies, which do not provide primary auto liability cover- FACTS: Curls convicted of violating a protection order by mak- age. Court held the plain language of K.S.A. 40-284 makes it clear ing numerous phone calls to Murdock. Officers dispatched to that UM and UIM coverages are not mandatory in an umbrella Murdock’s home did not listen to the recorded calls, but Murdock policy, which does not provide primary liability coverage for speci- testified and Curls denied making the calls. Curls appealed, chal- fied insured vehicles. Such an umbrella policy does not become the lenging the nature and sufficiency of the evidence supporting the primary policy simply because the insured has exhausted the limits conviction. of the primary auto liability policy. ISSUE: Sufficiency of the evidence STATUTE: K.S.A. 40-284 HELD: Better practice dictates that officers investigating domes- tic abuse allegations confirm any recorded call messages when given the opportunity to do so. Under facts, Murdock’s testimony alone Criminal was enough for rational factfinder to find Curls guilty beyond a rea- sonable doubt. STATE V. ARAUJO STATUTES: None SEDGWICK DISTRICT COURT – AFFIRMED NO. 94,831 – OCTOBER 20, 2006 (continued on next page) FACTS: Lewis called 911 to report Araujo’s threats against him, and told police who responded that Araujo was armed. When Araujo appeared at house as passenger in car, police questioned and searched Araujo, arrested him for possession of marijuana and outstanding felony warrants, and discovered cocaine in car. Over Araujo’s delayed objection to police testimony, bench trial judge found there was probable cause to detain and investigate Araujo, and found Araujo guilty of drug offenses. Araujo appealed on hear- say and confrontation grounds regarding the admission of Lewis’ out-of-court statements to officers. State contends Araujo’s hearsay objection was untimely and failed to preserve confrontation issue for appeal. ISSUES: (1) Appellate jurisdiction and (2) admission of out-of-court statements HELD: Under facts, Araujo’s objection was timely and confronta- tion issue is considered on merits. Lewis’ statements to police officers were not testimonial, thus ad- mission of these statements did not violate Crawford v. Washington, 541 U.S 36 (2004) (out-of-court statements made to 911 emergen- cy operator), or Davis v. Washington, __ U.S. __, 126 S. Ct. 2266 (2006) (out-of-court statements made to officers at victim’s home). Under facts, officers’ primary purpose in using Lewis’ statements
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 33 STATE V. DELGADO STATE V. LOPEZ HARVEY DISTRICT COURT – AFFIRMED ELLIS DISTRICT COURT NO. 95,019 – SEPTEMBER 22, 2006 AFFIRMED IN PART, REVERSED IN PART, AND FACTS: Delgado convicted of drug offenses based on evidence REMANDED obtained when officer stopped car for missing or weak headlight, NO. 93,560 – OCTOBER 13, 2006 and then detected strong odor of marijuana coming from car. Del- FACTS: Lopez charged with second-degree murder, aggravated gado appealed, challenging the trial court’s decision to not suppress battery, and intimidation of two witnesses. Jury convicted him of the evidence from that stop and search. aggravated battery. District court assessed court costs (including ISSUE: Legality of stop and search preliminary hearing witness fees and mileage, jury trial witness fees, HELD: Under facts, arresting officer had reasonable suspicion to docket fees) and expenses (including travel and lodging expenses stop car in which Delgado was a passenger; once car was stopped, of- for trial witnesses), and ordered reimbursement to Board of Indi- ficer’s detection of the smell of marijuana coming from car provided gents’ Defense Services (BIDS) for entire attorney fees. On appeal, probable cause for search of car. Residential search in State v. Huff, Lopez challenged (1) sufficiency of the evidence because victim was 278 Kan. 214 (2004), is distinguished. Case controlled instead by unaware of attack until stab wound discovered the next morning, automobile search in State v. McDonald, 253 Kan. 320 (1993). State (2) assessment of costs and expenses not related to his conviction, failed to raise issue of whether Delgado as a passenger had standing and (3) reimbursement to BIDS of attorney fees. to object to search, and argument is not addressed for first time on ISSUES: (1) Sufficiency of evidence, (2) costs and fees, and appeal. (3) attorney fees STATUTE: K.S.A. 8-1701 et seq., -1705, -1725, 22-2402 HELD: Under facts, sufficient evidence supports Lopez’s convic- tion of aggravated battery. STATE V. GOMEZ K.S.A. 22-3801 and K.S.A. 2005 Supp. 28-172a are examined. SEDGWICK DISTRICT COURT – AFFIRMED IN PART, Whether these statutes authorize award of costs and expenses (other REVERSED IN PART, SENTENCE VACATED, AND than docket fees) unrelated to a defendant’s ultimate conviction is REMANDED WITH DIRECTIONS question of first impression in Kansas. Joining other jurisdictions, NO. 93,591 – SEPTEMBER 29, 2006 court holds it is beyond district court’s discretion to award costs FACTS: Gomez drove Gauna to a prearranged fight with Jus- and expenses unrelated to prosecution of crimes of conviction. Case tin Kutilek at a parking lot in Wichita. Kutilek was seeing Gauna’s remanded for district court to determine which costs and expenses ex-girlfriend. Kutilek drove to the fight with the ex-girlfriend as a were necessary to prove the crime of conviction. passenger. Kutilek’s roommate, Morrison, arrived separately. At State concedes that district court failed to consider Lopez’s ability some point during the altercation, Gomez drew a handgun, pointed to pay at time it assessed reimbursement of attorney fees to BIDS. it toward Kutilek and began running toward him. Kutilek, in fear Order is reversed and matter is remanded for district court to com- of being shot, ran to his vehicle. As Kutilek drove away, Gomez ply with K.S.A. 2005 Supp. 22-4513 as construed by State v. Robin- fired seven shots striking the vehicle. Gomez grazed Kutilek’s scalp son, 281 Kan. 538 (2006). and the ex-girlfriend felt a bullet pass below her legs. Gomez ap- STATUTES: K.S.A. 2005 Supp. 22-4513, 28-172a, -172a(d) and proached Morrison, pointed the handgun in his face and threatened K.S.A. 22-3801, -3801(a) him. Morrison said he did not want any trouble and then Gomez returned to his vehicle and drove away. The jury convicted Gomez STATE V. MALONEY of two counts of aggravated assault, a lesser-included criminal dis- JOHNSON DISTRICT COURT – AFFIRMED charge of a firearm based on Kutilek suffering bodily harm, but not NO. 95,887 – OCTOBER 6, 2006 great bodily harm, and criminal discharge of a firearm related to the FACTS: Maloney appealed from district court’s order of restitu- girlfriend. tion for theft of household goods, and claimed district court erred in ISSUES: Multiplicity and (2) jury instruction calculating restitution based on replacement cost of stolen property HELD: Court held that the number of persons occupying a ve- rather than its fair market value. hicle or building at the time of the firearm’s discharge is not de- ISSUE: Determining restitution terminative of the unit of prosecution. Accordingly, the court held HELD: No departure from general rule that proper measure of that Gomez’s two convictions for criminal discharge of a firearm restitution in theft case is fair market value of property at time of its are multiplicitous and violate the double jeopardy clause and the taking, rather than replacement costs, whenever fair market value Kansas Bill of Rights. However, court held that Gomez’s convic- can be ascertained. However, when fair market value is not read- tions of aggravated assault and criminal discharge of a firearm at ily ascertainable, district court may consider other factors in deter- an occupied vehicle were not multiplicitous. Court held that al- mining restitution, including purchase price, condition, age, and though the jury instructions contained an inaccurate statement of replacement cost of the property, as long as the valuation is based on law, the court stated the jury could not have been mislead by the reliable evidence, which yields a defensible restitution figure. Under instructions or coerced into rendering a verdict. Court reversed the circumstances of this case, no abuse of discretion in district court’s criminal discharge of a firearm at an occupied vehicle related to the determination of restitution. ex-girlfriend and vacated that sentence. The remaining convictions STATUTE: K.S.A. 2005 Supp. 21-4610(d)(1) were affirmed. STATUTES: K.S.A. 21-3107(2), -3408, -3410(a) and K.S.A. STATE V. SMITH 2005 Supp. 21-4219(b) SEDGWICK DISTRICT COURT – AFFIRMED IN PART, REVERSED IN PART, SENTENCE VACATED IN PART, AND REMANDED NO. 94,758 – SEPTEMBER 15, 2006 FACTS: Smith convicted of aggravated burglary and robbery. On appeal he claimed (1) convictions were multiplicitous, because they were based on same physical act of force; (2) insufficient evidence that he entered or remained in victim’s residence without authority; 34 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION (3) fair trial denied when state failed to elect in aggravated burglary liar. Rather, defense counsel’s references to perjury and comments jury instruction whether he “entered into” or “remained” in victim’s on defendant’s credibility were outside the scope of evidence pre- residence without authority; (4) prosecutorial error in closing ar- sented at trial. gument warranted a new trial; (5) error to require reimbursement There is more than sufficient evidence to support Wahweotten’s to Board of Indigents’ Defense Service (BIDS) without considering DUI conviction. ability to pay, financial burden of payment, and validity of fee; and Only error was trial court’s failure to give limiting instruction to (6) use of prior conviction to increase his sentence violated Apprendi jury regarding evidence of preliminary breath test refusal. Cumula- v. NJ, 530 U.S. 366 (2000). tive error claim fails. ISSUES: (1) Multiplicity, (2) sufficiency of evidence, (3) jury STATUTES: K.S.A. 2005 Supp. 8-1001, -1001(i), -1012, instruction, (4) prosecutorial error, (5) BIDS reimbursement, and -1013(f)(2), -1013(i), -1567, -1567(a)(3), -1567(f); K.S.A. (6) sentencing 8-1001, -1006(a), 40-3104, 60-261, -404; K.S.A. 8-1013(f)(2) HELD: Single act of violence test no longer applicable to multi- (1991 Furse); and K.S.A. 8-1006(a) (Furse). plicity analysis. Under same-elements test in State v. Schoonover, 281 Kan. 453 (2006), Smith’s convictions were not multiplicitous. STATE V. WHITLOCK Under State v. Maxwell, 234 Kan. 393 (1983), sufficient evidence RENO DISTRICT COURT – APPEAL DISMISSED that Smith “entered into” victim’s residence without authority. NO. 93,875 – SEPTEMBER 15, 2006 This is an alternative-means case. Although state concedes the “re- FACTS: Whitlock convicted of indecent liberties with and in- maining within” alternative was not supported by the evidence, pur- decent solicitation of a child, and criminal history fell within bor- suant to State v. Dixon, 279 Kan. 563 (2005), evidence for alternative der box on nondrug sentencing grid. Trial court imposed prison means of “entering into” was sufficient to support the conviction. sentence. Whitlock appealed, arguing abuse of discretion to deny Prosecutor’s misstatement to jury that Smith’s entry was autho- Whitlock’s request for optional nonprison sentence. rized was not cured by jury instructions, and jury was likely con- ISSUE: Sentencing appeal fused about proper law to apply. Smith entitled to new trial on ag- HELD: Under facts, appellate court lacked jurisdiction under gravated burglary conviction. K.S.A. 2005 Supp. 21-4704 and K.S.A. 21-4721(c)(1) to review Trial court never considered Smith’s financial resources or the na- Whitlock’s presumptive prison sentence for indecent liberties with a ture of burden that payment of fees would impose. Pursuant to State child. Even if there were jurisdiction, there is no abuse of discretion v. Robinson, 281 Kan. 538 (2006), case is remanded for resentencing to impose prison sentence in this case. in compliance with K.S.A. 2005 Supp. 22-4513. STATUTES: K.S.A. 2005 Supp. 21-4704, -4704(a), Apprendi claim is defeated by State v. Ivory, 273 Kan. 44 (2002). -4704(f)(1)(3); K.S.A. 2004 Supp. 21-3510(a)(1); K.S.A. 21-3503, STATUTES: K.S.A. 2005 Supp. 21-3107, 22-4513 and K.S.A. -4721(c), -4721(e), -4721(c)(1); and K.S.A. 1994 Supp. 21- 21-3426, -3715, -3716 4721(e)
STATE V. WAHWEOTTEN SHAWNEE DISTRICT COURT – AFFIRMED NO. 94,523 – SEPTEMBER 15, 2006 FACTS: Wahweotten convicted of DUI as a third offense, of refusing to submit to preliminary breath test, and of failing to provide proof of insurance. On appeal Wahweotten claimed: (1) error to admit evidence of his preliminary breath test refusal, (2) error to force him to give up Fifth Amendment right against self-incrimination in favor of constitutional right against warrant- less search, (3) prosecutor’s closing argument denied due process and a fair trial, (4) insufficient evidence for DUI conviction, and (5) cumulative error denied a fair trial. ISSUES: (1) Evidence of preliminary breath test result, (2) doc- trine of unconstitutional conditions, (3) prosecutorial misconduct, (4) sufficiency of the evidence, and (5) cumulative error HELD: Issue considered notwithstanding Wahweotten’s failure to object to this evidence. Evidence of a defendant’s preliminary breath test refusal is admissible to prove misdemeanor offense of refusing to submit to preliminary breath test under K.S.A. 2005 Supp. 8-1012, but is not admissible to prove DUI under K.S.A. 2005 Supp. 8-1567. When defendant is tried for both offenses, jury should be instructed that evidence of preliminary breath test refusal is to be considered only for charge of refusing to submit to prelimi- nary breath test. No clear error in not having limiting instruction in this case where there was overwhelming evidence Wahweotten was guilty of DUI. Wahweotten’s breath test refusal does not implicate right against self-incrimination, thus he did not have to choose between Fourth and Fifth Amendment rights. Doctrine of unconstitutional condi- tions does not apply. Prosecutor commented on inferences that could be drawn from the evidence, and jury was properly instructed on burden of proof. No merit to claim that prosecutor repeatedly called Wahweotten a THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 35 Appellate Practice Reminders . . . From the Appellate Court Clerk’s Office
Docketing Fee
There is no longer a surcharge on appellate filings. Supreme Court Rule 2.04, as amended effective July 1, 2000, set the appellate docket fee at $125. That docketing fee can be paid by cash, check, or money order.
There are two ways to excuse or waive the docketing fee. One way is to provide a certified, file-stamped copy of an order from the district court finding the party indigent and that it is in the interest of the party’s right of appeal that the appeal should be docketed in forma pauperis. The other is for the attorney of an appellant who has been previously found indigent to certify to the clerk of the appellate courts that the appellant remains indigent. See Rule 2.04. Attorney Fees
Rule 7.07 was modified May 9, 2005, to clarify that a motion for attorney fees may be filed at any time but no later than 15 days after oral argument. If oral argument is waived or the case is assigned to the nonargument calendar, the motion must be filed no later than 15 days after either the day of waiver or the date of the letter assigning the case to a nonargument calendar, whichever is later.
If you have any questions about these or other appellate court rules and practices, call the Clerk’s Office and ask to speak with Jason Oldham, chief deputy clerk, (785) 368-7170.
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36 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOTICE OF AMENDMENT OF THE LOCAL RULES OF PRACTICE OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS
The U.S. District Court for the District of Kansas gives notice of amendments of local rules 38.1, 83.2.4, 83.5.4, 83.7, and 83.8.10. Copies of the amendments are available to the bar and the public at the offices of the clerk at Wichita, Topeka, and Kansas City, Kan. The offices are open from 9 a.m. to 4:30 p.m. on all days except Saturdays, Sundays, and federal legal holidays. The amendments are also available on the U.S. District Court Web site at www.ksd.uscourts.gov. Interested persons, whether members of the bar, may submit comments on the amendments addressed to the clerk at any of the record offices. All comments must be in writing and, to receive consideration by the court, must be received by the clerk on or before 4:30 p.m., Dec. 20. Copies of the proposed local rules will be available for review by the bar and the public from Nov. 20 through Dec. 20 at:
Wichita Clerk’s Office Topeka Clerk’s Office 204 U.S. Courthouse 490 U.S. Courthouse 401 N. Market 444 S.E. Quincy Wichita, KS 67202 Topeka, KS 66683
Kansas City Clerk’s Office 259 Robert J. Dole U.S. Courthouse 500 State Ave. Kansas City, KS 66101
NOTICE OF AMENDMENT OF THE LOCAL RULES OF PRACTICE AND PROCEDURE OF THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF KANSAS
The U.S. Bankruptcy Court for the District of Kansas gives notice of proposed Local Rules of Practice and Procedure. The proposed local rules amend the present local rules as recommended by of the Bench and Bar Committee of the U. S. Bankruptcy Court for the District of Kansas with the approval of the court. Interested persons, whether members of the bar, may submit comments on the proposed local rules addressed to the Clerk of the U.S. Bankruptcy Court for the District of Kansas at 401 N. Market, Room 167, Wichita, KS 67202. All comments must be in writing and must be received by the clerk no later than Dec. 20 to receive consideration by the court. Copies of the proposed local rules will be available for review by the bar and the public from Nov. 20 through Dec. 20 at:
Wichita Clerk’s Office Topeka Clerk’s Office 167 U.S. Courthouse 240 U.S. Courthouse 401 N. Market 444 S.E. Quincy Wichita, KS 67202 Topeka, KS 66683
Kansas City Clerk’s Office 161 U.S. Courthouse 500 State Ave. Kansas City, KS 66101
Also available at www.ksb.uscourts.gov.
Copies of the Bench and Bar Committee minutes from the April 3 and Aug. 30, meetings, at which most of the proposed changes were discussed, are also available at www.ksb.uscourts.gov.
THE JOURNAL OF THE KANSAS BAR ASSOCIATION NOVEMBER/DECEMBER 2006 – 37 Classified Advertisements
Positions Available For Sale For Sale
ATTORNEY: Kansas Legal Services, THE LAWBOOK EXCHANGE LTD. BEAUTIFUL reception station in mint a statewide nonprofit law firm, seeks a buys, sells, and appraises all major lawbook condition, 8’ x 9’, cherry finish with grey customer-focused licensed attorney for sets. Also antiquarian, scholarly. Reprints fabric, overhead cabinets, $2,500, pictures our Emporia office. Attorney will perform of legal classics. Catalogues issued in print available. (913) 829-5800. general civil casework in domestic, disabil- and online. Mastercard, Visa, and AmEx. ity and criminal law. Spanish bilingual a (800) 422-6686; fax: (732) 382-1887; plus. Excellent benefits. Send resume to: Ty www.lawbookexchange.com. For Rent Wheeler, Managing Attorney, Kansas Legal Services, 527 Commercial, Suite 521, Em- GREAT LAW OFFICE Built in 2006, poria, KS 66801 or e-mail wheelert@klsinc. 2000 sq. ft./Warm Shell, one block from HUNTING CABIN + 2,700 acres prime org. EOE & Affirmative Action Employer. Shawnee City Hall. 90 PERCENT TAX hunting, rural Finney County, Kansas, two www.kansaslegalservices.org. ABATEMENT FOR 10 YEARS. 11212 bedrooms, bath, sleeping porch, kitchen, Johnson Dr. Shawnee KS 66203. Call living room & dining room, all furnished; ATTORNEY: Kansas Legal Services, Joseph Lino (913) 207-5146. $150 a night plus deposit. (620) 966-2889. a statewide nonprofit law firm, seeks a customer-focused licensed attorney for our Wichita office. Attorney will perform gen- eral civil casework including Social Security law. Spanish bilingual a plus. Excellent ben- efits. Send resume to Marilyn Harp, Kansas Legal Services, 200 N. Broadway, Suite 500, Wichita, KS 67202 or e-mail harpm@klsinc. org. EOE & Affirmative Action Employer. www.kansaslegalservices.org.
KAMMCO, a professional liability carrier has an immediate opening for a Member Services Coordinator in our Topeka office. Primary responsibilities include working with physicians, hospitals, and other health care professionals to promote and deliver education, loss prevention, and health care legal information. This is not a “sales” posi- tion. The successful candidate should pos- sess a J.D. and excellent written, verbal and presentation skills. This position requires a basic understanding of the health care de- livery system and health care law. EOE. Competitive salary and benefits. Submit cover letter, salary history and resume to: [email protected]. Fax: (785) 232- 4860. Mail: KaMMCO, attn: HR 623 S.W. 10th Ave. #200 Topeka, KS 66612. Please visit our Web Site at www.kammco-msc. com for more information.
ATTORNEY needed for Overland Park office. Responsible for providing general corporate work and advises management on legal implications for domestic/internation- al business activities, including basic litiga- tion matters. Education requirement: law degree from an accredited law school, li- censed in at least one jurisdiction. 3-5 years experience required. Please forward resumes indicating REF# FOP922910 and source code OPKASBAS to: Fort Dodge Animal Health, P.O. Box 1262, Findlay, OH 45839. E-mail: [email protected]. Fax: (419) 429-3201.
38 – NOVEMBER/DECEMBER 2006 THE JOURNAL OF THE KANSAS BAR ASSOCIATION