THE JOURNAL of the
Kansas Bar Association
November/December 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: David J. Rebein (620) 227-8126 Dodge City drebein@rebeinbangerter.com
Young Lawyers Section President: Paul T. Davis (785) 843-7674 Lawrence pauldavis@sunflower.com
President-elect: Linda S. Parks (316) 265-7741 parks@hitefanning.com
KDJA Representative: Hon. Daniel L. Love (620) 227-4620 dlove@16thdistrict.net
Vice President: Ernest C. Ballweg (913) 491-6900 ernie@jbtlawkc.com
Wichita
Overland Park
Secretary-Treasurer: Thomas E. Wright (785) 232-2200 tew@wrighthenson.com
Topeka
Executive Director: Jeffrey J. Alderman (785) 234-5696 jalderman@ksbar.org
Topeka
Immediate Past President: Richard F. Hayse (785) 232-2662 rhayse@morrislaing.com
Topeka
KBA Delegates to ABA: Sara S. Beezley (620) 724-4111 beezleylaw@ckt.net
Girard
Hon. David J. Waxse (913) 551-5434 Kansas City, Kan. judge_waxse@ksd.uscourts.gov Kansas Delegate to ABA: Thomas A. Hamill (913) 491-5500 Overland Park tahamill@martinpringle-kc.com ABA Delegate at Large: Hon. Christel E. Marquardt (785) 296-6146 marquardt@kscourts.org
Topeka
Dodge City
District 1: Eric G. Kraft (913) 498-3536 Overland Park ekraft@kc-dsdlaw.com Kip A. Kubin (816) 531-8188 Kansas City, Mo. kak@kc-lawyers.com Lee M. Smithyman (913) 661-9800 Overland Park smithyman@smizak-law.com District 2: Gerald R. Kuckelman (913) 367-2008 aca@journey.com
Atchison
Teresa L. Watson (785) 232-7761 Topeka twatson@fisherpatterson.com District 6: Gabrielle M. Thompson (785) 537-2943 thompsong@klsinc.org
Manhattan
District 7: Laura L. Ice (316) 660-1258 lice@cfc.textron.com
Wichita
Rachael K. Pirner (316) 630-8100 rkpirner@twgfirm.com
Wichita
Mary Kathryn “Kathy� Webb (316) 263-5851 Wichita kwebb@mtsqh.com District 8: Gerald L. Green (620) 662-0537 jerry@gh-hutch.com
Hutchinson
Jeffrey S. Southard (816) 329-8527 Lawrence jeff_southard@hotmail.com
District 9: Hon. Kim R. Schroeder (620) 428-6500 judge263@pld.com
District 3: Dennis D. Depew (620) 325-2626 dennis@depewlaw.biz
District 10: Glenn R. Braun (785) 625-6919 grbraun@haysamerica.com
Neodesha
District 4: William E. Muret (620) 221-7200 Winfield muret@winfieldattorneys.com District 5: Martha J. Coffman (785) 271-3105 m.coffman@kcc.state.ks.us
Topeka
Hugoton
Hays
District 11: Melissa A. Taylor Standridge (913) 551-5405 Kansas City, Kan. melissa_taylor_standridge@ksd. uscourts.gov District 12: Michael A. Williams (816) 292-2000 Kansas City, Mo. mwilliams@lathropgage.com
J
THE OURNAL of the Kansas Bar Association
November/December 2006 • Volume 75 • No. 10
ITEMS OF INTEREST 5 Casemaker – the Ultimate Member Benefit – has Arrived!
9
Shifting the Balance from Work to Fatherhood for His Children
6
Law Marketing 101
Help build your law practice through the KBA LRS
14 Advance Notice: Elections for
2007 KBA Officers and Board of Governors
Vacancies
Kansas Attorneys Sworn in Before the U.S. Supreme Court
4 President’s Message 7 Young Lawyers Section News 8 A Nostalgic Touch of Humor 10 Law Students’ Corner 12 Members in the News 12 “Jest is for All” 13 Obituaries 29 Appellate Decisions 36 Appellate Practice Reminders 38 Classifieds
39 CLE Docket
Cover design by David Gilham, desktop publishing coordinator
15 Kansas Legal Services Board 15
REGULAR FEATURES
16 Kansas Controlled Business Law 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 Reform By Larry A. Pittman II and Jeffrey A. Deines
37 Notice of U.S. District Court
for the District of Kansas Local Rules Amendment
Our Mission: The Kansas Bar Association is dedicated to advancing the professionalism and legal skills of lawyers, providing services to its members, serving the community through advocacy of public policy issues, encouraging public understanding of the law, and promoting the effective administration of our system of justice. The Journal of the Kansas Bar Association is published monthly with combined issues for July/August and November/December for a total of 10 issues a year. Periodical Postage Rates paid at Topeka, Kan., and at additional mailing offices. The Journal of the Kansas Bar Association (ISSN 0022-8486) is published by the Kansas Bar Association, 1200 S.W. Harrison, P.O. Box 1037, Topeka, KS 66601-1037; Phone: (785) 234-5696; Fax: (785) 234-3813. Member subscription is $25 a year, which is included in annual dues. Nonmember subscription rate is $45 a year. POSTMASTER: Send address changes to The Journal of the Kansas Bar Association, P.O. Box 1037, Topeka, KS 66601-1037. The Kansas Bar Association and the members of the Board of Editors assume no responsibility for any opinion or statement of fact in the substantive legal articles published in The Journal of the Kansas Bar Association. For advertising information contact Suzanne Green at (800) 211-1344 or e-mail sgreen@ksbar.org. Publication of advertisements is not to be deemed an endorsement of any product or service advertised unless otherwise indicated. COPYRIGHT 2006 Kansas Bar Association, Topeka, Kan.
The Journal Board of Editors Assistant Executive Director: René Eichem Managing Editor: Susan McKaskle Terri Savely Bezek, Chair Anne L. Baker Hon. Monti L. Belot Hon. Donald W. Bostwick Boyd Byers Tamara Lee Davis Hon. Jerry Elliott J. Lyn Entrikin Goering Connie Hamilton Mark D. Hinderks Evan Ice Katharine J. Jackson
Topeka Topeka Wichita Wichita Wichita Dodge City Topeka Topeka Topeka Overland Park Lawrence Manhattan
Michael T. Jilka Overland Park Casey Law McPherson Michelle Reinert Mahieu Dodge City Hon. Tom Malone Topeka Michelle Masoner Kansas City, Mo. Jill A. Michaux Topeka Julene Miller Topeka Brian J. Moline Topeka Hon. Lawton R. Nuss Topeka Hon. James P. O’Hara Overland Park Prof. John Peck Lake Quivira Richard D. Ralls Kansas City, Mo. Richard H. Seaton Manhattan Marty M. Snyder Topeka Angela M. Stoller Lawrence Catherine A. Walter Topeka Diane S. Worth Wichita Martha Coffman, board liaison Topeka
Terri Bezek, Board of Editors chairperson, bezekt@kscourts.org Susan McKaskle, managing editor, smckaskle@ksbar.org
From the President David J. Rebein
In Search of Sandra Day O’Connor J
he Su pre me Cou rt H istoric al Society.
Th n, tio llec Co nner O’Co Sandra Day
Elizabeth Rogers is a third-year law student. She recently acudges have taken a beating lately. It is no trick to find critics. Judges 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 for the job and his respect for the law. He told Liz that job and a paradoxical one; a great judge is devoted to the he would have high expectations and that he believed rule of law, but does this without sacrificing his or her she would be well-suited for the challenge. Liz Roghumanity or love of the community. ers, the girl from Bucklin, who worked her way Great judges have the capacity to inspire the through college and law school walked out of the lawyers who practice in front of them. I have an Judicial Center with purpose and a determinaold-fashioned and idealistic view that the hightion to live up to those expectations. est honor a lawyer can attain is to be a judge. Judge Deanell Tacha is the Chief Judge of Who was the best judge you ever appeared bethe 10th U.S. Circuit Court of Appeals. She fore and how would you describe his or her is also an aunt. So, when Judge Tacha’s niece attributes? Scholarly? Stern, but fair? Interasked her to speak to a high school class in ested in you personally? A coach and a menOakley, she accepted and went the extra mile. tor? Funny? Passionate about the law? What This talk to the high school class became a did you learn? Did he or she teach you how to daylong moot court presentation involving write or to make an argument? Did he or she several area high schools and a half-dozen lawbuild your confidence or help you love the law? eS t yers. Those of us who spent the day with Judge Gail Agrawal is the new dean of the KU Law f up o rem esy eC urt Tacha learned more about the judiciary and its role School. She was a clerk to Justice Sandra Day o c ourt , of the United States in community service than the students. O’Connor. I asked Dean Agrawal to relate to me a Regine Thompson is a lawyer in Scandia. She recently memory of Justice O’Connor. Her face brightened and 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 the Supreme Court, she was surprised when Chief Justice John O’Connor impacted her life. 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. I am reminded of a quote attributed to Justice O’Connor, knew what she was getting into. I guess that I did have an unfair 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 indepenme in jail, but that is for another column. I would say that Judge dent judiciary is a unique part of our system. It deserves defending. Our judges are not just umpires, but rather citizens called Reynolds impacted my life. 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 drebein@rebeinbangerter.com or by phone at (620) 227-8126. 4 – NOVEMBER/DECEMBER 2006
THE JOURNAL OF THE KANSAS BAR ASSOCIATION
Law Marketing 101 ... serving the citizens of Kansas and the legal profession through funding charitable and educational projects that foster the welfare, honor, and integrity of the legal system by improving its accessibility, equality, and uniformity, and by enhancing public opinion of the role of lawyers in our society. Kansas Law Center 1200 S.W. Harrison St. P.O. Box 1037 Topeka, Kansas 66601-1037 Telephone: (785) 234-5696 Fax: (785) 234-3813 Web site: www.ksbar.org OFFICERS Sally D. Pokorny, Lawrence President Bruce W. Kent, Manhattan President-elect Sarah B. Shattuck, Ashland Secretary-Treasurer H. David Starkey, Colby Immediate Past President BOARD OF TRUSTEES Robert M. Collins, Wichita Daniel H. Diepenbrock, Liberal James C. Dodge, Sublette Kenneth J. Eland, Hoxie Joni J. Franklin, Wichita John D. Jurcyk, Roeland Park Terence E. Leibold, Lawrence David K. Markham, Parsons Teresa M. Meagher, Leawood James D. Oliver, Overland Park Randall J. Pankratz, Newton H. Douglas Pfalzgraf, Wellington J. Ronald Vignery, Goodland James C. Wright, Topeka Christopher J. Masoner, Kansas City, Mo. Young Lawyers Representative Katherine L. Kirk, Lawrence Kansas Trial Lawyers Association Representative Susan G. Saidian, Wichita Kansas Women Attorneys Association Representative Vaughn L. Burkholder, Overland Park Kansas Association of Defense Counsel Representative Sara S. Beezley, Girard Kansas Bar Association Representative Michael P. Crow, Leavenworth Kansas Bar Association Representative Edward J. Nazar, Wichita Kansas Bar Association Representative EXECUTIVE DIRECTOR Jeffrey J. Alderman, Topeka MANAGER, PUBLIC SERVICES Meg Wickham, Topeka
Help build your law practice through the KBA Lawyer Referral Service
T
he Kansas Bar Association sponsors many important public service activities. One increasingly popular service is the KBA Lawyer Referral Service, which matches prospective clients with qualified participating attorneys. The Lawyer Referral Service (LRS) has grown to become a convenient resource for Kansans who are in need of a lawyer, but do not know how to go about locating suitable counsel. On average, the LRS answers about 1,400 calls each month, making nearly 5,000 referrals last year alone. It is very important to note that the service is not just for low-income individuals, which is a misnomer that attorneys sometimes hear about referral panels. In fact, referrals from the LRS can be lucrative, with more than $1.2 million in client fees being generated in 2005. This year also promises to be financially rewarding for panel members. When LRS personnel answer incoming calls, they screen the inquiries to determine whether the caller needs to hire a lawyer or simply needs legal advice. Callers who possess the resources to pay for attorney fees and have a legitimate legal need are then referred on to an LRS lawyer in that area of the law. Lawyer Referral Service staff refer clients in a variety of areas of law. The most common referrals are made in the areas of divorce, medical malpractice, and contested custody. Many other areas of the law, of course, are represented, and referrals are available in those areas. The LRS markets its services through a variety of sources, including yellow page advertising, its relationships with the courts, through Kansas Legal Services, as well as from word-of-mouth by other agencies and attorneys or judges. Any lawyer who is in good standing with the Kansas Supreme Court may qualify to be a member of the LRS. To join the LRS panel, attorneys must meet the following requirements for acceptance:
• LRS attorneys must grant a consultation as soon as practicable after the request is made; • LRS attorneys must agree upon any charges for further service with the client, in keeping with the objectives of the LRS and the client’s ability to pay; • LRS attorneys must keep their professional liability insurance in force while on the LRS panel; • LRS attorneys must refer any clients not accepted back to the LRS; • Status reports must be submitted to the LRS within 30 days of referral; • 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 registration fee is required to receive bankruptcy referrals in lieu of paying a percentage of fees on bankruptcy cases; • 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.
If you would like more information about the KBA’s Lawyer Referral Service or would like an LRS application, please contact us at (785) 234-5696 or simply visit www.ksbar.org/LRS/lrs06.pdf. n
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
I
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 was a darn good baseball player and coach. But he really be- O’Neil always saw the good in people. He was always courtecame 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 unThe 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 behave observed that many young came the first African-American lawyers take the notion of “zealcoach 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 exAfter 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 keyThe 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 Paul T. Davis is a partner with the firm of Skepnek Fagan him to Overland Park. Talk about a great car ride! I walked 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 pauldavis@sunflower.com. 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 2007 been bored for a minute. I had just read a recent book he had Annual Meeting written about his baseball career and I asked him if I could 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 Benefiting the player. Buck had probably told these stories a few thousand Kansas Bar times, but he shared his memories with me with the excitement 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 search for fulfillment. Buck had all the reasons in the world to the silent auction, please contact Meg Wickham, 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 mwickham@ksbar.org. 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.
T
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. 1970s, 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 brimhe 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 hindcousin continued the blame game until it insight 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 toNow, before I describe how this adventure gether the scraps but it was hopeless. My couswent 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 Harsuggest 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 printMatthew Keenan grew up in Great ing company in Topeka. Major novels like “War and Peace” Bend and attended the University of involved less work. And the other thing is, of course, there Kansas, where he received his B.A. in were no paper shredders outside of Langley, Va. So document 1981 and his J.D. in 1984. For the destruction in the 1970s was no simple task. last 21 years, Keenan has practiced with And the day arrived my dad needed shredders, he put us to Shook, Hardy & Bacon. He may be work. My Uncle Bob was the one to give us marching orders. reached at mkeenan@shb.com. The attendees — my kid brother, my cousin (Bob’s son), and yours truly. Folks, let’s be frank — this was no Mensa convention. 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
T
im Emerson had wanted to be a lawyer since he was him that Kristi “should have had the triple-screen test” durabout 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 a paleontologist or an ophthalmologist, but his focus would son with Down syndrome.” “During the first five minutes of my son’s life,” Emerson always return to law. 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.” “The very last thing on my mind was my career. After takalso seven months pregnant with their first child. ing it all in, I asked the doctor “My family life sort of took a if he was finished with his explaback seat during law school benation so that I could go back cause we were always told, ‘The into the room with my wife and study of law is a full-time job,’” son. That was when the shift he said. occurred.” Their first daughter, Amy, Within hours of Aidan’s birth, was born in October 1996, and representatives from Rainbows Emerson remembers working United (Rainbows) and the on a midterm project and since Down Syndrome Society of Kristi seemed to be doing well, Wichita (DSSW) were present he left during her early labor, at the hospital to help them unwith her permission, to print derstand the diagnosis. Emerson his paper. He barely made it is now a volunteer with both orback in time for Amy’s birth. ganizations, sits on the executive “I don’t think I ever attempted 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 nonprofit status. all, end all’ was school,” Emerson said. Emerson’s main focus now has been to maintain a balEmerson’s second daughter, Sophie, was born in October 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. He said he is still trying to find the right balance and probEmerson’s family returned to Wichita prior to the exam, where he joined them a day or two after taking the exam. His ably always will be. “I think while I may never find the perfect balance, knowwife then informed him that prior to the bar exam, Sophie 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 life. I do shift back to work frequently.” focus on studying, not worrying. Everytime he has to travel for work at Martin Pringle, EmHis first son, Timothy Augustine (Gus), was born around 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 thing his said to his kids was that he loved them. and wanted to impress the partners. “This helps my nerves when I travel,” he said. “Every once “I took clients calls at home during the few days I took off 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 too, Daddy.’” to hold my first son.” He said he has noticed a theme in his journey to this point They had always wanted a big family, but the concept of a big family became a reality when their fourth child was is his life. When faced with a new challenge, he will often obdue in October 2003. Everything was different with Aidan, serve how other, successful people handle things and then try to emulate their virtues. Emerson said. “As my wife said, I was afforded the opportunity to reconThe pregnancy was also different, more intense for Kristi. 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 ‘differAfter 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
A
Study abroad programs are great, but they may not be for lthough many undergraduates have studied abroad, 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 law 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 the plentiful space, easy travel, various American and English and readily available technology law professors. of their home school. By the end of my second Finally, time overseas goes by year in law school, I had taken quickly, but the extended abthe core law school classes so sence can possibly impact a law studying abroad seemed like student’s long-term personal rean exciting way to capstone lationships and commitments. my law school career, see the Studying abroad is probably a world, and take some genugreat option for most students. ine international law courses. The academic value of the proAnother factor that weighed grams is real, the chance to travheavily in my decision was the el and experience a new culture realization that when I start to is exciting, and the relationships practice, international travel formed with other students and opportunities will be lessoned faculty can prove very valuable by time and geography. Study- Crown Court Judge Richard Brown, Lewes, England, takes a in the future. At the very least, I ing abroad in London was a moment from his busy schedule to visit with Holly Lou Hydeencourage all law students to ingreat way to experience a cul- man, University of Kansas School of Law. vestigate the study abroad proture that I have always found grams offered by their school to fascinating, to explore the roots of the common law and the see if one is right for them. After all, you might never have origin of American jurisprudence, and to compare American such an opportunity for a very long time. n law to a contemporary English legal system that is different in many respects. First- or second-year law students should consider study About the Author abroad as a great addition to their legal education. Because Holly Lou Hydeman received her law degree from the Unistudy abroad programs are individually accredited, the quality versity of Kansas in May 2006. Prior to law school she earned of the professors and classes are equal to those of an American a graduate diploma in legal studies from the University of law school. The classroom dynamic is refreshingly diverse and Oxford (England) and a Bachelor of Science degree in chemical thought provoking as students come from numerous public engineering from the University of Kansas. She will begin her and private law schools throughout the United States. Comcareer this fall in Shook, Hardy & Bacon’s intellectual property bined with the typical small-class size, these factors make it department. very easy to have close, meaningful friendships with others students and professors that are part of the program. Aside from the academic opportunities, these programs allow students to learn about and participate in the legal instiForensic 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 Phone/Fax: (303) 663-2450 government ministers that our program director arranged. 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: rdacelentano@att.net 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 Jen J. Augustine has joined Applebee’s International Inc., Overland Park. Susan Barker Andrews has joined the Kansas Department of Health and Environment, Topeka. Wendie C. Bryan has joined Rork Law Office, Topeka. Tiffany A. Buban has joined Cordell & Cordell P.C., Overland Park. Stacy M. Bunck has joined Ogletree, Deakins, Nash, Smoak & Stewart P.C., Kansas City, Mo., as an associate. Monique K. Centeno has joined Shores, Williamson & Ohaebosim LLC, Wichita. Matthew K. Corbin and Rachel E. Stephens have joined Lathrop & Gage L.C., Kansas City, Mo., as associates. Jeremy J. Crist has joined the North Central Regional Public Defender’s Office, Junction City. Thurston K. Cromwell has joined TMNG Global, Overland Park. Kim Cudney has been appointed 12th Judicial District judge by Gov. Kathleen Sebelius. Randy R. Debenham and Kendall M. McVay have joined Scott, Quinlan, Willard, Barnes & Keehan LLC, Topeka, as associates. Maria C. Fogliasso has joined Sloan, Eisenbarth, Glassman, McEntire & Jarboe LLC, Topeka, as an associate. Schyler D. Goodwin has joined Athena Management Solutions LLC, Topeka. Christopher J. Hanson has joined Montee Law Firm P.C., Kansas City, Mo. Lynnette A. Herrman has joined the Saville Law Office, Wichita. 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. Raimond 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 Kansas Health Policy Authority, Topeka. Herman A. Loepp has joined Global Aerospace Inc., Overland Park. Amy P. Maloney has joined Shank & Hamilton P.C., Kansas City, Mo., as of counsel. 12 – NOVEMBER/DECEMBER 2006
David R. Maslen has joined the Montgomery County Attorney’s Office, Independence, Kan. James C. Maurer has joined DST Systems Inc., Kansas City, Mo. Boyd R. McPherson has joined the Wichita office of Joseph & Hollander P.A. as an associate. Andrea J. Mengedoth has joined the Hallier Law Firm, Phoenix. Clare Noel Murphy has joined the staff of the Missouri Court of Appeals, Kansas City, Mo. Sean J. O’Hara has joined the firm of Snell & Wilmer LLP, Phoenix, as an associate. Rachel B. Ommerman has joined the Missouri Attorney General’s Office, Kansas City, Mo. Ryan E. Ringelman has joined BNSF Railway, Fort Worth, Texas, as in-house counsel. Mark J. Ross has joined Polsinelli Shalton Welte & Suelthaus P.C., Kansas City, Mo. Charles L. Rutter has joined Stinson Morrison Hecker LLP, Wichita, as an associate. Kara L. Schartz has joined the City of Garden City Prosecutor’s Office. K. Kim Shaffer has joined Swanson Midgley LLC, Kansas City, Mo. Dell Marie Shanahan Swearer has joined the Commerce Trust Co., Hutchinson. Robert G. Shivley has joined the Riley County Attorney’s Office, Manhattan.
Patrick T. Smith has joined Husch & Eppenberger LLC, Kansas City, Mo., as of counsel. Rachael A. Taggart has joined Scharnhorst & Ast P.C., Kansas City, Mo., as an associate. Elisa D. Waldman has become of counsel for Sader & Garvin LLC, Kansas City, Mo.
CHANGING PLACES Bangs & Associates has moved to 8595 College Blvd., Ste. 135, Overland Park, KS 66210. Berkowitz Oliver Williams Shaw & Eisenbrandt LLP has moved its Missouri office to 2600 Grand Blvd., Ste. 1200, Kansas City, MO 64108 and its Overland Park office to 7300 W. 110th St., Ste. 700, Overland Park, KS 66210. Chapin Law Firm has moved to 10561 Barkley, Ste. 510, Overland Park, KS 66216. Gilbert & Renton LLC has moved its office to 344 N. Main St., Andover, MA 01810. Law Office of Andrew Lyons has moved to 7201 Metcalf, Overland Park, KS 66204. Law Office of Jennifer Berger has moved to 1243 S.W. Topeka Blvd., Ste. C, Topeka, KS 66612-1852. Law Offices of J. Thomas Smith J.D. Ph.D. has moved to 2855 Mangum Road, Ste. 525, P.O. Box 681113, Houston, TX 77268-1113. (continued on next page)
“Jest Is For All” by Arnie Glick
“With all the bizarre and unexpected things that can happen prior to a closing, sometimes I wonder if my legal specialty is real estate or surreal estate.”
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 Junior 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 practiced law in Topeka and Florida until his retirement in 1987. His four children, Craig Rice, Steve Rice, Linda Schwenkmeyer, and Mike Rice; and 10 grandchildren survive him. n
M embers ... (continued from Page 12) Roger L. McCollister has started Midland Professional Associates 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 selected 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) 2345696 or via e-mail at bhendricks@ksbar.org. 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 rhayse@morrislaing.com or Jeffrey Alderman at (785) 234-5696 or via e-mail at jalderman@ksbar.org.
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
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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 recepopportunity 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 associaour 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 mornother attorneys, including Sophia KBA members recently admitted to practice before the ing of Oct. 16, when we arrived at U.S. Supreme Court: First row (l-r): Laura Ice, Wichita; and Rex Templin, the children of the Supreme Court. Roger and Mitra Templin (Roger Marcia L. Montgomery, Overland Park; KBA President We arrived by taxi in a timely David J. Rebein, Dodge City; Hon. Cheryl Rios Kingwas 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 Overland Park; Gary M. Peterson, Topeka; Robert Lee building, and passed through the II, Wichita; Third row (l-r): Doug Witteman, Burlington; us. We were lined up in alphabetisecurity 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 inspired negotiation about the expected Park; Leo Logan, Overland Park; David J. Kuckelman, ing, especially with the nine large Germantown, Md.; and Craig L. Uhrich, Dallas. Also behavior and dress code for kids, admitted was Ross Alexander, Wichita (not pictured). chairs waiting for the justices. Sevbut 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.
K
ansas real estate brokers and mortgage lenders may now refer title insurance customers to an affiliated title insurance agency without limitation, if the title agency is also affiliated with a bank or financial holding company. The Kansas Department of Insurance (KDI) issued a May 1, 2006, legal opinion that the federal Gramm-LeachBliley Act pre-empts K.S.A. § 40-2404(14)(g) (commonly known as the “Controlled Business Law”) with respect to a Kansas title insurance agent that is 25 percent owned by a bank or financial holding company. The Kansas Controlled Business Law (KCBL) limits the amount of title business that a title agency may accept from its affiliates. The KDI issued the federal pre-emption opinion based upon a proposed affiliated business arrangement and joint venture among a bank, a bank holding company (which elected to be a financial holding company), an existing title insurance agency, a real estate broker, various individuals, and a newly formed title insurance agency. The new title agency would be owned 25 percent by the financial holding company and 75 percent by the other joint venture owners. It would be formed as a limited liability company (to pass through the income and avoid double taxation) and as a financial subsidiary of the holding company. Each owner would refer title business to the new title agency. The KCBL would prohibit the new title agency from accepting referrals of title business from its affiliates if 70 percent or more of its closed title orders during the preceding 12 full calendar months were derived from “controlled business.” By Kansas regulation, controlled business includes referrals from 5 percent owners that are real estate brokers or lenders. The U.S. Congress, however, legislated in Gramm-Leach that “no [s]tate may, by statute [or] regulation ... prevent or significantly interfere with the ability of a depository institution, or an affiliate thereof, to engage, directly or indirectly ... in any insurance sales, solicitation or cross marketing activity.” 15 U.S.C. § 6701(d)(2)(A). Under Gramm-Leach and federal banking laws, an entity (such as the new title agency) that is 25 percent owned by a financial holding company is an affiliate of each depository institution (such as a bank) owned by the holding company. Since the new title agency is an affiliate of the bank, Gramm-Leach prohibits the state of Kansas from significantly interfering with cross marketing and sales of title insurance by the new title agency, including referrals by affiliated owners. The KDI concluded that limiting referral of title orders from affiliates to 70 percent of the new title agency’s business significantly interferes with its cross marketing activities. Because by constitutional law federal statutes pre-empt inconsistent state statutes, the KDI opined that the KCBL 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 customers to title agencies owned by referral sources. It prohibited a Kansas title insurance agency from accepting referrals from affiliates if more than 20 percent of its gross operating revenues during the preceding six months was derived from controlled 16 – NOVEMBER/DECEMBER 2006
business. The original KCBL was challenged as a violation of due process and equal protection clauses, and ruled unconstitutional by the trial court. However, in Guardian Title Co. v. Bell, 805 P.2d 33 (Kan. 1991), the Kansas Supreme Court reversed the trial court and upheld the original KCBL as constitutional. After Gramm-Leach was passed in November 1999, the KDI issued a Feb. 1, 2001, legal opinion that the prior KCBI was pre-empted by Gramm-Leach as applied to a title insurance agency that was 75 percent owned by a financial holding company. In 2004, the Legislature repealed the original KCBL and replaced it with the current KCBL (with the 70 percent test). The joint venture must satisfy various legal requirements. For example, the operating agreement must provide that income and profits from the new title agency are distributed in proportion to ownership of the agency. Under the Real Estate Settlement Practices Act, profits from such an affiliated business relationship may not be distributed in proportion to the title insurance business that each owner refers to the title agency. Regulatory authorities are increasingly focused on this issue and have brought enforcement actions for violation of this requirement. Also, the new title agency and the referring owners should provide written disclosure to the referred customer of their affiliated relationship and financial interests. A mortgage lender or real estate broker may not require that a customer purchase title insurance through their affiliated title insurance agency. Many states have some variation of a controlled business law. Most such statutes would be pre-empted based upon the affiliated business arrangement presented to the KDI. Affiliation of title insurance agencies with financial holding companies and other referral sources is part of the consolidation of the financial services and insurance industries. In light of the uneven playing field that Gramm-Leach federal pre-emption creates within the Kansas title insurance industry, one can ask whether the KCBL is now outdated. The overwhelming national trend is to permit such affiliations and referrals of business. n About the Author Mike W. Lochmann is a partner in the Financial Services division of Stinson Morrison Hecker LLP, Kansas City, Mo. He requested the federal pre-empt opinion that was issued by the Kansas Insurance Department.
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
P
roperty tax relief for the business community received a big boost this year when Gov. Kathleen Sebelius made the decision to make personal property tax relief a primary component of her legislative agenda for the 2006 session. Sebelius’ decision to include this relief as part of her legislative agenda was the culmination of years of discussion and concerns from within the business community regarding the shortcomings of the Kansas personal property tax scheme. The business community has for years complained about the fact that even after personal property was depreciated pursuant to the state’s personal property tax formula, taxpayers were still required to pay personal property tax on the subject property based on 20 percent of the retail cost when it was new. Unfortunately, this placed Kansas in an uncomfortable position to the extent that most of the surrounding states either exempted the same personal property or taxed it at a more favorable level. In response to this chorus of concern that the Kansas personal property tax scheme was inhibiting new investment, the governor decided to act. The legislation that ultimately passed was the result of a collaborative effort between the governor, the Kansas Department of Revenue, and the business community (through the Kansas Chamber and National Federation of Independent Business, as well as other interested organizations). The exemption, which is prospective, applies to all commercial and industrial machinery and equipment contemplated by Category 5 within the Kansas Constitution’s Classification Amendment. That category would not include state-assessed property, although specific language was crafted that extends the benefits of this new exemption to the telecommunications industry as well as railroads. The effective date of the exemption was July 1. Significantly, the new exemption also applies to machinery and equipment transported into Kansas after the effective date of the act if the machinery and equipment is being used to expand an existing business or create a new business. The legislation does provide that the exemption would not be applicable to property acquired through the exchange of stocks, 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 nature, taxpayers will still be required to pay tax on any machinery 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 proposal 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 involved the broadcast industry. This legislation was in response THE JOURNAL OF THE KANSAS BAR ASSOCIATION
to a very unique situation that has confronted the broadcast industry given the upcoming transition from analog to digital equipment. For some time, it had been clear that the broadcast industry was in effect being penalized for being required to acquire and pay tax on digital equipment while still owning and paying tax on analog equipment. As a consequence, until the official transition from analog to digital in February 2009, broadcasters have been placed in the uncomfortable position of having to pay personal property tax on both sets of equipment, even though from a national perspective, the digital equipment is serving a de minimis number of households. The Kansas Association of Broadcasters (KAB) took the lead this year in an attempt to address this very unique set of circumstances. With respect to the legislation advocated by the KAB, television broadcasters will be granted a temporary property tax credit equivalent to the amount of property taxes paid on digital television equipment acquired prior to July 1, times the estimated percentage of nondigital television sets in the United States. The credit will expire when the Federal Communications Commission has ended the broadcast of analog television by all full-powered commercial television stations in Kansas. Radio broadcasters will be granted a temporary property tax credit equivalent to the amount of property taxes paid on digital radio equipment prior to July 1, times the estimated percentage of nondigital radio sets in the United States. The credit for radio stations will expire after tax year 2013, or when one-half of the radios in the United States are capable of receiving a digital signal, whichever occurs first. If the Feb. 17, 2009, cutoff date for analog broadcasting holds, a Kansas television station will benefit from the reduced assessments on digital equipment for three years. As indicated previously, to the extent that more digital televisions are sold, the credit will decrease. At the same time, the formula for calculating the taxable value of the digital equipment reduces (continued on next page)
NOVEMBER/DECEMBER 2006 – 17
Legal news
Legislature Passes (continued from Page 17)
the appraised value. Assuming the Feb. 17, 2009, cutoff date does hold, the digital equipment will be appraised using the standard tables beginning in 2010. Through the efforts of all those mentioned above, the 2006 legislative session proved to be one of the most productive with respect to improving the business tax environment in Kansas. n About the Author
Editor’s note: “Legislature Passes Property Tax Exemptions and Credits” was first published in the Fall 2006 edition of the Tax Law News, which is published by the KBA Tax Law Section. The Tax Law Section plans and promotes education programs; supports and recommends legislation; distributes information through newsletters, bulletin boards, or other means of communication; and provides networking opportunities for practitioners with attorneys or law firms that specialize in tax law. If you are interested in joining this or any other KBA section, you may register online at www.ksbar.org or call (785) 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, Kansas, and Topeka bar associations. He is a past president of the KBA Tax and Administrative law sections. He is on the executive committee of the National Association 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 commenced 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 answered “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 Consumer 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 interpretation of consumer bankruptcy practice after BAPCPA without composing a treatise, this article is geared toward the occasional bankruptcy practitioner and aims to debunk prevalent myths about bankruptcy 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 reviews 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 organizational 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 1. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat 23, was enacted on April 20, 2005, and,
20 – NOVEMBER/DECEMBER 2006
with a few exceptions, was implemented fully on Oct. 17, 2005. All references to the BAPCPA amendments are to the pertinent sections of the U.S. Bankruptcy Code, Title 11 U.S.C. § 101, et seq. (2006).
THE JOURNAL OF THE KANSAS BAR ASSOCIATION
LEGAL ARTICLE: A HITCHHIKER’S GUIDE ...
most debts are discharged after a debtor’s nonexempt assets are liquidated and the resulting proceeds are distributed by the trustee according to the priority scheme in the Bankruptcy Code. Chapter 13 allows individuals with regular income who fall within certain debt limits to keep property, which would otherwise be liquidated while making monthly payments toward their debts over a three-to-five-year period. Upon completing their Chapter 13 payments, most individuals qualify to receive a discharge of that portion of their prepetition unsecured debts, with certain exceptions, which was not repaid during the three-to-five-year period. Individuals sometimes opt to file under Chapter 11, traditionally a vehicle for business reorganization, when they have considerable income or assets or they otherwise have too much debt to qualify for Chapter 13. Finally, individual farmers may qualify to proceed under Chapter 12, which allows the individual to reorganize debts while continuing to operate the farming business.
II. Prepetition Considerations While bankruptcy can be a useful tool for individuals coping with financial distress, it does not solve all problems. Therefore, before filing a case for your client, it is of paramount importance to understand what obligations your client will be left with once the case is completed. When contemplating filing a bankruptcy for a client, attorneys should consider the following issues. A. Eligibility An individual’s eligibility for discharge is the first important change brought by BAPCPA. Under Chapter 7, individuals generally are entitled to discharge their debts unless they previously received discharge under Chapters 7 or 11 in a case commenced within the eight years preceding the date of the current petition.2 Prior to BAPCPA, the time period was six years. However, individuals who previously received a discharge
under Chapters 12 or 13 must still wait, (2) states that the debtor requestwith certain exceptions, six years after ed credit counseling services from receiving the discharge before becoman approved nonprofit budget ing eligible to receive discharge under and credit counseling agency, but Chapter 7.3 Under Chapter 13, prior to was unable to obtain the services BAPCPA, debtors were entitled to proreferred to in paragraph (1) durceed to discharge regardless of whether ing the five-day period beginning they had received discharge in a previon the date on which the debtor ous case. Under BAPCPA, however, inmade that request; and dividuals generally are (3) is satisfactory entitled to discharge Attorneys who take to the court. their debts only if they did not receive a dison new debtor clients Without the certificharge:4 should immediately cate of credit counsel(1) In a case filed familiarize themselves ing or a showing of exigent circumstances under Chapter 7, with the prepetition under § 109(h)(3)(A) 11, or 12 … during credit counseling re- sufficient to excuse the four-year period compliance with § preceding the date quirements imposed 109(h)(1), an individof the order for reual may not be a debtunder the Bankruptcy lief under this chapter, or Abuse Prevention and or under an chapter. Consumer Protection B. Dischargeability (2) In a case filed The dischargeabilunder Chapter 13 Act of 2005. ity of certain debts … during the twomay weigh heavily in year period precedfavor of, or against, 5 ing the date of such order. seeking relief under Chapters 7 or 13. 1. Generally 1. Prefiling credit counseling Consumer debts aggregating more requirement than $500 owed to a single creditor for Attorneys who take on new debtor luxury goods purchased on or within 90 clients should immediately familiarize days before the order for relief is filed themselves with the prepetition credit are now presumed to be nondischargecounseling requirements imposed un6 der BAPCPA. Under § 109(h)(1) and able. Similarly, cash advances that are § 521(b)(1), a debtor must participate extensions of consumer credit under an in a prepetition credit counseling ses- open-end credit plan aggregating more 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 pre7 tion with the court at the time of the sumed to be nondischargeable. While debts incurred to pay nondischargeable bankruptcy filing. If a debtor cannot obtain credit coun- taxes owed to the United States were seling before filing, the debtor must previously nondischargeable, debts inmeet the requirements contained in curred to pay nondischargeable taxes § 109(h)(3)(A). Under that section, a owed to a governmental unit other than the United States have been added to debtor must file a certificate that: the list of nondischargeable debts.8 (1) describes exigent circumstanc2. Chapter 7 es that merit a waiver of the counThe substance of discharge under seling requirement; Chapter 7 has changed very little. One of the most notable changes relates to
2. § 727(a)(8). 3. § 727(a)(9). 4. Even though, under BAPCPA, an individual is restricted from receiving a discharge, it appears that an individual is still eligible to seek protection under a Chapter 13 bankruptcy case. In such a case, the debtor
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receives the benefit of the automatic stay, even though no discharge will result from the filing of the bankruptcy case. 5. § 1328(f ). 6. § 523(a)(2)(C). 7. Id. 8. § 523(a)(14A).
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property settlement obligations, which are discussed more fully in Section IV. For now, it is important to note that the “ability to pay test” was removed from § 523(a)(15). Because the court will no longer balance the relative abilities of ex-spouses to pay those obligations, property settlement obligations are no longer dischargeable in Chapter 7 under any circumstances. 3. Chapter 13 Significant change to the substance of discharge under Chapter 13 has occurred. Prior to BAPCPA, discharge under Chapter 13 was often identified as the “super-discharge” because of its broad scope. The “super-discharge” has found its Kryptonite in BAPCPA. While some priority taxes are still technically dischargeable through the consummation of a Chapter 13 plan, tax obligations “required to be collected or withheld and for which the debtor was liable in whatever capacity” are no longer dischargeable.9 In addition, whereas an individual could previously discharge
nonpriority taxes under Chapter 13, if an individual fails to file a return, files a return within two years of filing bankruptcy, files a false return, or willfully evades payment of taxes, the resulting tax obligations are no longer dischargeable regardless of their priority status.10 Under the “super-discharge,” debtors were entitled to discharge certain debts related to frauds they committed. Chapter 13 is no longer a means for discharging debts related to fraud. Whether a debtor’s acts of fraud related to actions in a fiduciary capacity, embezzlement, larceny, or whether they were related to obtaining credit under false pretenses, such debts are not dischargeable in Chapter 13.11 Debtors can also no longer discharge an obligation in Chapter 13 if they fail to notify creditors of the filing of the bankruptcy in time to allow that creditor to assert a claim.12 Finally, an individual can no longer discharge under Chapter 13 debts resulting from “willful or malicious” injury by the debtor that causes personal injury or death to an individual.13 C. Exemptions Protecting a debtor’s real and personal property in bankruptcy are primary considerations demanding an attorney’s close scrutiny prior to filing any bankruptcy. BAPCPA has brought many changes to an individual’s right to exempt property from the bankruptcy estate. Generally, an individual’s domicile in the 730 days prior to filing a bankruptcy petition determines the state laws under which the individual may claim exemptions. Accordingly, Kansas residents may claim Kansas exemptions only if they were domiciled in Kansas for at least 730 days before filing.14 If individuals were not domiciled in the same state for the 730 days prior to the date of filing, the state law governing their eligibility for claiming exemptions 9. §§ 507(a)(8)(C) and 523(a). 10. § 1328(a)(2). 11. Id. 12. Id. 13. § 1328(a)(4). 14. § 522(b)(3). 15. Id. 16. It should be noted that at least one court, in In re McNabb, 326 B.R. 785 (Bankr. D. Ariz. 2005) (Haines, J.), has concluded the new homestead exemption limitations do not apply to debtors residing in so-called “opt-out” states,
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is the state in which they were domiciled for the greatest period of time for the 180-day period preceding the 730 days before the date of filing.15 A number of specific changes to an individual’s eligibility to claim certain property as exempt are noteworthy. 1. The homestead Few things are more precious to people than their homes. While Kansas residents have historically enjoyed almost unfettered protection of home equity, BAPCPA places new limitations on the homestead exemption.16 The most dramatic change is a new $125,000 cap on the value a debtor may claim under the homestead exemption on any homestead acquired within the 1,215 days preceding the debtor’s date of filing.17 The 1,215day period, which is approximately three years and four months (or about 3.33 years), will not apply to an interest transferred from another homestead in the same state.18 In addition, a debtor owing a debt arising in the preceding five years from various federal and state crimes, including fiduciary fraud, racketeering, and crimes or serious torts giving rise to serious bodily injury or death will be allowed a maximum $125,000 homestead exemption unless the homestead is otherwise reasonably necessary for the support of the debtor and any dependent of the debtor.19 Discharge may also be delayed under Chapters 7, 13, and 11 or denied under Chapter 7 if a proceeding is pending that may result in the application of the $125,000 cap (e.g., your client is being tried for racketeering or a crime giving rise to serious bodily injury). Finally, the value of a homestead exemption will be reduced to the extent of any addition in value derived from a disposition of nonexempt property made by the debtor with the intent to hinder, delay, or defraud creditors during the 10 years preceding the date of filing.20 like Kansas, that do not allow debtors to choose between electing federal or state exemptions. For a more complete discussion of whether the new homestead exemption limitations apply in “opt-out” states, see Michael D. Sousa, Scrivener’s Error or Congressional Intent? Section 522(p) and the Homestead Exemption, 15 J. Bankr. L. & Prac. 2 Art. 1 (April 2006). 17. § 522(p). 18. Id. 19. § 522(q). 20. § 522(o).
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2. Self-settled trusts Although not a true exemption, trusts have traditionally been a valuable tool in estate planning. It is noteworthy that a trustee will be able to avoid a transfer by a debtor into a self-settled trust where the debtor is also a beneficiary and the transfer was made within the 10 years preceding the date of filing if the transfer was made with actual intent to hinder, delay, or defraud a specific entity or entities and if the transfer occurred on or after the debt arose.21 3. Individual retirement accounts Tax qualified retirement funds under the Internal Revenue Code are now explicitly exempt under the Bankruptcy Code.22 The exemption also includes amounts rolled-over from a qualified fund or funds into another qualified fund, provided the transfer is consummated within 60 days.23 However, the exemption for certain Individual Retirement Accounts is generally limited to $1 million.24 It should be noted that IRS tax liens may have attached to retirement funds prior to bankruptcy. D. The means test The means test is one of the most recognizable components of BAPCPA. 21. § 548(e). 22. § 522(b). 23. Id. 24. § 522(n). 25. Most of the widely-used bankruptcy software packages contain automated tools to perform the means test. For example, many of the software packages automatically import the IRS expense guidelines and other relevant data and perform the underlying arithmetic to complete the means test. Although the software packages do much of the internal calculation, it is still of paramount importance for an attorney to understand the fundamental workings of the means test. 26. The means test also does not apply to certain disabled veterans, as more fully described in § 707(b)(2)(D). 27. § 101(10A). 28. In a joint case, the income of both spouses is considered. If only one spouse files, the nondebtor spouse’s income is generally included in the calculation of CMI to the extent that nonfiling spouse’s income is regularly used for household expenses. 29. § 101(10A). 30. The U.S. Census Bureau tracks income data and provides compiled results of median income for each state. This information is generally available on the U.S. Trustee’s Web site and is subject to change periodically.
Given its significance, it is important to have a working knowledge of the means test. On a basic level, the means test is a mathematical formula25 used to determine whether a filing under Chapter 7 by a debtor with primarily consumer debts26 triggers a presumption of abuse. If a debtor fails the means test, a presumption of abuse arises and a debtor must either rebut the presumption before the court or opt for Chapter 13 instead of Chapter 7. Under the means test, the first task confronting an attorney is a determination of the debtor’s Current Monthly Income (CMI).27 CMI is a new concept under BAPCPA and is not the same as the income disclosed on Schedule I. A debtor’s CMI is defined generally as the average monthly income the debtor28 receives from all sources during the six months prior to the filing of the bankruptcy case. Social Security benefits, though, are specifically excluded from the calculation of CMI.29 Once an attorney calculates the CMI, the next step is to compare the debtor’s CMI to the median income for the debtor’s state of residence.30 Under current guidelines, in Kansas the median 31. For families with more than four members, an extra $6,300 per person is added for each family member in excess of four. 32. The term “Monthly Disposable Income” is not specifically defined in the U.S. Bankruptcy Code. Some scholars, commentators, and courts use the term “Monthly Disposable Income” interchangeably with terms such as “net monthly income.” These terms, though, are not to be confused with the terms “Disposable Income” or “Projected Disposable Income,” which have separate meanings and implications under § 1322(a)(4). 33. This article is intended as a general overview of BAPCPA and its application. The means test and expense calculations are very complex and intricate, but this article is intended only as a general overview of the operation of the means test. As such, practitioners are advised to study in detail the operation of the means test and all of the underlying rules, forms, and data. 34. IRS expense guidelines for housing, utilities, and transportation vary in amount from county to county, and are thus referred to as “local standards.” The other IRS expense guidelines are “national standards” and include expense categories such as food, household supplies, clothing, and personal supplies. All of the necessary U.S. Census Bureau data and IRS expense guidelines can be found at www.usdoj. gov/ust/eo/bapcpa/meanstesting.htm.
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income for a single person is $36,631, the median income for a family of two is $48,672, the median income for a family of three is $54,114, and the median income for a family of four is $64,929.31 If the debtor’s CMI is less than the median income for the debtor’s family size, then the debtor passes the means test and no presumption of abuse arises. If the debtor’s CMI exceeds the median income relative to family size, the attorney must proceed to the next part of the means test, which requires a determination of the debtor’s Monthly Disposable Income (MDI).32 A debtor’s MDI is generally determined by subtracting permissible expenses from a debtor’s CMI. Permissible expenses are generally determined33 by the aggregate of: (1) Internal Revenue Service expense guidelines (e.g., housing, transportation, food, clothing, and personal supplies);34 (continued on next page)
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(2) Other necessary expenses allowed by the IRS (e.g., federal and state tax payments, alimony, maintenance, day care, and unreimbursed medical services or prescriptions); (3) Additional expenses allowed under § 707(b)(2)(A) (e.g., health insurance, educational expenses for children, and, if necessary and reasonable an additional 5 percent allowance for food and clothing expenses); and (4) Secured debt payments contractually due in the next 60 months plus amounts past due on secured claims for necessary property (including a debtor’s house and car) plus all priority claims plus administrative expenses incurred if a debtor was a hypothetical debtor in a Chapter 13 case, all divided by 60. Once the debtor’s MDI has been calculated, the final step is to compare the MDI for a 60-month period to certain standards established by BAPCPA. If a
debtor’s total disposable income for a period of 60 months is less than $6,000 (which equates to $100 per month in disposable income), the debtor passes the means test and no presumption of abuse arises. If the debtor’s total disposable income for a period of 60 months is greater than $10,000 (which equates to $166.67 per month), the debtor fails the means test and a presumption of abuse arises. If the debtor’s total disposable income for a period of 60 months is between $6,000 and $10,000, an attorney must analyze whether the total disposable income available is sufficient to satisfy at least 25 percent of the debtor’s general unsecured debt. If the debtor’s disposable income is sufficient to pay at least 25 percent of the debt, the debtor fails the means test and a presumption of abuse arises. If, however, the debtor’s disposable income is not sufficient to pay at least 25 percent of the debt, the debtor passes the means test and a presumption of abuse does not arise. The means test calculation should be undertaken before any type of bankruptcy case is actually filed. If the debtor fails the means test, an attorney must decide whether to file the case as a Chapter 13 or proceed with a Chapter 7 and attempt to rebut the presumption of abuse. As a final cautionary note, if an attorney decides to file a Chapter 7 case for a debtor who failed the means test and the trustee subsequently moves for dismissal or conversion, the attorney is susceptible to sanctions for the payment of the trustee’s costs and legal fees in prosecuting the motion to convert or dismiss.35
III. Case Administration Once an individual has made the decision to seek bankruptcy relief, and the petition is filed, attorneys should be aware of substantive changes in case administration that will affect the outcome of the case. 35. § 707(b)(4)(A) provides the mechanism for a trustee to seek sanctions for costs and legal fees incurred in bringing a motion to convert or dismiss under § 707(b)(2). 36. § 362(c)(4). 37. § 362(c)(3). While one reading of this section suggests that the automatic stay may still be in effect as to property of the bankruptcy
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A. The automatic stay Some of the biggest challenges for attorneys under BAPCPA are changes to the automatic stay. 1. Not-so-automatic anymore Of the more significant changes is the absence of any stay where two prior cases by the debtor have been dismissed within the year preceding the current filing.36 While any party in interest may try to convince the court to impose the stay, it may be days or weeks before the court reaches its decision. Meanwhile, if one prior case by the debtor has been dismissed within the year preceding the current filing under Chapters 7, 11, or 13, the automatic stay will terminate after 30 days unless the court, on the motion of a party in interest, extends the stay.37 2. Debtor’s failure to redeem or reaffirm The automatic stay will now terminate as to a Chapter 7 debtor’s personal property, which secures an obligation, or is subject to an unexpired lease, if the debtor fails to timely file the statement of intention under § 521(a)(2). The statement of intention must indicate whether the debtor will either surrender the property or retain it by redemption or reaffirmation.38 Even if the statement of intention is timely filed, the automatic stay will still terminate if the debtor does not timely take the action specified in the statement of intention.39 3. Domestic relations As discussed more fully in Section IV of this article, the stay exception for domestic relations has significantly broadened. One important change, which may affect attorneys who take assignment of tax refunds as compensation or security for work done in a bankruptcy case, is a new exception allowing taxing authorities to intercept tax refunds under certain conditions.40
estate, see In re Brandon, No. 06-80439, 2006 WL 2512758 (Bankr. M.D. N.C. Aug. 29, 2006), the bankruptcy courts in Kansas have yet to consider the issue. 38. § 362(h). 39. Id. 40. § 362(b)(2).
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4. Evictions from residential property Where a landlord obtains judgment for possession of residential property in which the debtor resides as a tenant under a lease or rental agreement prior to the date of filing of the bankruptcy petition, the automatic stay will no longer apply to the continuation of any eviction, unlawful detainer action, or similar proceeding relating to the residential property unless certain procedures are followed.41 In addition, where a landlord takes certain actions, the stay may not apply to an eviction action that seeks possession of residential property where a debtor resides as a tenant based on endangerment of such property or the illegal use of controlled substances at the property unless the debtor takes certain actions within a relatively short timeframe.42 5. Leases Under Chapter 7, debtors may now assume a lease of personal property by notifying the lessor in writing of their intent.43 However, the automatic stay will terminate as to property leased if debtors fail to timely assume the lease.44 Under Chapter 13, debtors are now required to assume a lease of personal property through the plan or the lease is deemed rejected upon confirmation.45 The automatic stay, as to the lease, terminates with respect to both debtors and co-debtors upon confirmation if the lease is rejected.46 6. Prospective relief from serial filers A mortgagee may now seek an order granting stay relief, which will be effective in subsequent bankruptcy cases, regardless of who the debtor is, where the court finds the filing of the petition was part of a scheme to delay, hinder, and defraud creditors through the transfer of property or through multiple bankruptcy filings affecting the property.47
41. § 362(b)(22) and (l). 42. § 362(b)(23) and (m). 43. § 365(p) and Fed. R. Bankr. P. 6006. 44. § 362(h)(1). 45. § 365(p)(3). 46. Id. 47. § 362(d)(4) and (b)(20). 48. § 362(j) (“On request of a party in interest, the court shall issue an order under subsec-
7. Ask and thou shall receive – maybe One of the more questionable changes to the automatic stay is not found in a new exception. Rather, read literally, § 362(j) appears to require the court to issue an order granting relief from the automatic stay simply upon the request of a party in interest.48 Section 362(j) does not provide that the court shall hold a hearing after notice or even make any factual findings on the request. Neither does § 362(j) afford the debtor an opportunity to respond to a request thereunder. While it is unclear whether courts will issue orders terminating the automatic stay without finding cause to do so after notice and hearing, attorneys should remain cognizant of § 362(j)’s potential. 8. Satisfaction guaranteed Under pre-BAPCPA law, if a creditor sought stay relief under § 362(d) and did not join its motion for relief with any other request for relief, the court was required to hold a hearing thereon within 30 days.49 If a hearing was not held within the 30-day period, the automatic stay would terminate. However, if the court held a preliminary hearing within the 30-day period, it could hold the final hearing outside of the 30-day window. Under BAPCPA, § 362(e) has been amended to include a new subsection terminating the automatic stay 60 days after the date of the request unless the court renders a final decision within the 60-day period or the period is extended by agreement of all parties in interest or by the court for good cause.
46.51 Debtors are also now required to provide to their trustee, or any creditor that requests a copy, their latest federal tax returns within relatively short timeframes.52 On request of the court, the U.S. Trustee, or any party in interest, individuals filing under Chapters 7, 11, or 13 are also now required to file copies of federal income tax returns for years ending while the case was pending.53 The same debtors may also be required to provide upon request any return filed subsequent to the commencement of the case for a tax year ending in the threeyear period preceding commencement of the bankruptcy case.54 Finally, shortly after commencing a case, Chapter 13 debtors are required to file required tax returns with the appropriate authorities for all taxable periods ending during the four-year period ending on the date the case was commenced.55 (continued on next page)
B. The debtor’s disclosure duties Debtors are now required to file within 45 days all pay stubs or other evidence of payment received within the 60 days preceding the date of petition.50 Where a debtor fails to provide the required information within 45 days, the court may automatically dismiss the case on day tion (c) confirming that the automatic stay has been terminated.”) 49. § 362(e)(1). 50. §§ 521(a)(iv), 521(i)(1), (3) and (4). 51. Id. 52. § 521(e)(2). 53. § 521(f ). 54. Id. 55. § 1308(a).
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C. Reaffirmation agreements While the general concept of reaffirmation is still present, BAPCPA significantly altered the procedures associated with reaffirmation agreements and added a certain amount of liability for attorneys. Section 521(a)(6) now requires a debtor under Chapter 7 to redeem or reaffirm56 property within 45 days57 after the first meeting of creditors. If a debtor fails to act, the automatic stay under § 362(a) is terminated as to the particular property. Aside from procedural changes58 to reaffirmation agreements, BAPCPA also established new requirements59 for attorneys. Specifically, § 524(c)(3) now requires an attorney to sign an affidavit or declaration stating the reaffirmation agreement: (1) “represents a fully informed and voluntary agreement of the debtor,” (2) “does not impose an undue hardship on the debtor or a dependant of the debtor,” and (3) the “attorney fully advised the debtor of the legal effect and consequences of ” the reaffirmation agreement and default under such an agreement. D. Financial management course Chapters 7 and 13 debtors must now complete a personal financial management course and file a certificate of completion with the court to become eligible to receive a discharge. Chapter 7 debtors must file a certificate within 45 days after the first date set for the meeting of creditors under § 341.60 Chapter 13 debtors must file the certificate no later than the last payment made under a confirmed plan.61 While the deadline for filing the certificate may be extended under certain circumstance, a motion requesting an extension of time to file the certificate should be filed before the deadline passes or the court will only extend the deadline upon a showing of excusable neglect.62 E. Property valuation 1. Generally Under Chapters 7 or 13, the court is now required to value personal property securing an allowed claim based upon its replacement value as of the petition date without deducting the costs of sale or marketing.63 Where the property is acquired 56. For cases filed before the enactment of BAPCPA, debtors generally were able to retain property and keep current on the payments for the property without having to enter into a formal reaffirmation agreement. This practice is often referred to as the “fourth option” or the “ride through.” While the provisions implemented by BAPCPA appear to eliminate this “fourth option,” some commentators have noted that the “fourth option” may still exist under principles of state law. A detailed analysis of this issue is outside the scope of this article, but attorneys are advised to more fully investigate and analyze this issue. 57. Section 521(a)(2) also now requires a debtor to file a statement of intention within 30 days after filing a petition and to perform under the statement of intention within 30 days after the first meeting of creditors. If a debtor fails to comply with the deadlines contained in § 521(a)(2), the automatic stay is terminated under § 362(h). There is a certain tension and inconsistency between the deadlines contained in § 521(a)(2) and § 521(a)(6). Due to this tension and inconsistency, practitioners are advised to carefully analyze a client’s situation in order to provide the best advice and guidance. 58. Under BAPCPA, a debtor wishing to reaffirm a debt must now receive certain disclosures, as more fully described in § 524(k).
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for personal, family, or household purposes, the replacement value is the price a retail merchant would charge for property of similar age and condition as of the date of valuation.64 Because well-known guides that publish retail values typically include value added after a dealer reconditions a vehicle, guides reflecting private party sales may be a better starting point in valuation. 2. The hanging paragraph of § 1325(a) Under prior law, a debtor was permitted under § 506(a) to bifurcate a creditor’s allowed claim into secured and unsecured portions. The secured portion of a creditor’s claim was limited to the value of the collateral securing the claim, while the unsecured portion reflected any amount of the claim in excess of the collateral’s value. BAPCPA created an exception to bifurcation within the Chapter 13 context with the addition of a hanging paragraph following § 1325(a). For the purposes of a Chapter 13 plan, the hanging paragraph provides that § 506 does not apply to claims secured by a purchase money security interest in motor vehicles purchased for the debtor’s personal use within the 910 days preceding the date of the filing of the petition. The hanging paragraph also provides that 506(a) does not apply to any other personal property subject to a purchase money security interest, which the debtor purchased within the year before the petition date. The majority of courts considering the hanging paragraph have concluded that affected claims must be paid under a Chapter 13 plan as fully secured and with interest accruing at the Till rate.65 The Till rate, taking its name from the U.S. Supreme Court’s opinion in Till v. SCS Credit Corp.,66 is considered as the cost of funds adjusted upward to reflect the risk of payment.67 Because creditors receiving the full value of their claim through a Chapter 13 plan are arguably overprotected with respect to the cost of funds and the risk of payment, it logically follows that any interest the creditor is entitled to receive on its claim should be the cost of payment adjusted downward to offset any overcompensation.68 F. Adequate protection Under Chapter 13, secured creditors are now entitled to equal monthly payments not less than the amount sufficient 59. As more post-BAPCPA cases work through the courts, attorneys are advised to pay particular attention to how courts are interpreting the new Code sections dealing with attorney declarations and potential liability under same. 60. Fed. R. Bankr. P. 1007(c). 61. Id. 62. Fed. R. Bankr. P. 9006(b). 63. § 506(a)(2). 64. Id. 65. In Kansas, See In re Lowder, No. 05-44802, 2006 WL 1794737 (Bankr. D. Kan. June 28, 2006) (Karlin, J.) (compiling cases); but see In re Wampler, 345 B.R. 730 (Bankr. D. Kan. 2006) (Berger, J.). 66. 541 U.S. 465, 124 S. Ct. 1951, 158 L. Ed. 2d 787 (2004). 67. Id. at 478-79. 68. See In re Taranto, 344 B.R. 857, 862 (“[The] artificial inflation of the amount of the 910 Claim reduces the risk exposure against which the U.S. Supreme Court was trying to protect pre-BAPCPA creditors in the cram down-strip down situation addressed in Till. To allow both inflation of the allowed amount of the claim and application of interest under Till ignores the economic realities of this case and perhaps the vast majority of 910 Claims.”).
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to provide adequate protection of their claim.69 Debtors must directly pay a lessor that portion of the obligation that becomes due after the order for relief is entered.70 Debtors must also pay adequate protection directly to a creditor holding an allowed claim secured by a purchase money security interest in personal property.71 Payments made to the trustee are reduced to reflect the payments to lessors or secured creditors. However, upon request, courts regularly order the required payments to lessors and secured creditors be made through the Chapter 13 trustee. In Kansas, local rule even requires adequate protection payments to secured creditors be paid through the trustee unless the court orders otherwise.72 Where possible, attorneys should consider advising clients to direct payments through the trustee as a reliable and credible means for establishing the debtor’s payment record should the lessor or secured creditor deny payment.
IV. Domestic Support Obligations BAPCPA brings changes in two areas, which warrant special recognition. The first area includes the many changes in favor of creditors holding domestic support obligation claims.73 A domestic support obligation (DSO), is broadly defined to include virtually any debt accruing pre- or postpetition to a spouse, former spouse, child, or governmental unit which, regardless of its designation, is in the nature of alimony, maintenance, or support.74 Under this definition, virtually any obligation that is arguably a DSO will be nondischargeable 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 certification 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). 70. § 1326(a)(1)(B). 71. § 1326(a)(1)(C). 72. D. Kan. LBR 3015(b).1(g). 73. For a detailed discussion of Domestic Support Obligations under BAPCPA, see Elizabeth A. Carson, “The Domestic Support Obligation Under BAPCPA,” No. 06 Norton Bankr. L. Advisor 2. (2006) 74. § 101(14A).
DSOs under a judicial or administrative order or a statute, whether relating to property of the estate or the debtor, are also now excepted from the automatic stay.80 Despite state law to the contrary, it appears property exempt under state law is now liable for DSOs.81 Similarly, a judicial lien securing a DSO may no longer be avoided.82 DSOs are even protected from the trustee’s attempts to avoid payments thereon provided the transfer was a bona fide payment toward a DSO.83
V. Attorney Liability Provisions The second area of changes brought by BAPCPA warranting special recognition involves attorney liability. Of all the BAPCPA amendments, the debate surrounding the addition of statutory provisions governing “Debt Relief Agencies” has likely been the most poignant. Any attorney may be a Debt Relief Agency (DRA), if the attorney “provides any bankruptcy assistance to an assisted person in return for the payment of money or other valuable consideration ... .”84 In relation to the definition of a DRA, “Bankruptcy Assistance” includes any goods or services sold or otherwise provided to an assisted person for the purpose of providing counsel to or appearing in court or at the creditor’s meeting on behalf of an “assisted person.”85 “Assisted person” refers to any person whose debts are primarily consumer and whose nonexempt assets total less than $150,000 in value.86 (continued on next page)
75. § 1328(a). 76. § 507(a)(1). 77. § 1325(a)(10). 78. § 1328(a). 79. § 362(b)(2). 80. Id. 81. § 522(c)(1). 82. § 522(f )(1)(A). 83. § 547(c)(7). 84. § 101(12A). 85. § 101(4A). 86. § 101(3).
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LEGAL ARTICLE: A HITCHHIKER’S GUIDE ...
The designation as a DRA is significant because of liability associated with the failure to satisfy the resulting mandate to make or refrain from making several onerous disclosures.87 Because the definition of DRA is not limited in scope to a particular type of representation, for example, representing either debtors or creditors, any attorney who provides counsel to an individual in relation to a bankruptcy proceeding is potentially a DRA. In other words, as this article’s introduction suggests, if you give counsel regarding the effect of the automatic stay to an individual whose ex-spouse files for bankruptcy, you may be a DRA. Even an attorney who provides estate planning advice or services regarding what effect bankruptcy might have on an individual’s assets may be a DRA under an extreme, but literal interpretation of the new provisions. Although opinions interpreting the DRA provisions are beginning to emerge, it will be some time before the true reach of the DRA provisions is known.88 In addition to any DRA related obligations, attorneys representing debtors are also now required to make a “reasonable investigation” into the circumstances underlying the bankruptcy petition. The attorneys must certify they have no knowledge the information provided by the debtor is incorrect and the petition is “well grounded in fact.”89 However, it is unlikely the new certification requirements will substantially change an attorney’s risk of liability, as the provisions governing sanctions incorporate an older version of the Rule 11 of the Federal Rules of Civil Procedure.90
VI. Conclusion The enactment of BAPCPA has created a liability nightmare for the unwary attorney. While this article addresses many of the changes to consumer practice under Chapters 7 and 13, many more exceptions and issues either too complex to discuss or beyond the general scope of this article exist, which demand an attorney’s attention and understanding. In the new age of BAPCPA, the best defense against liability is to know, understand, and comply with the amendments to the Bankruptcy Code or to refer your questions to practitioners specializing in bankruptcy. n About the Authors Larry A. Pittman II is an associate at the Kansas City, Mo., office of the Lathrop & Gage L.C. His practice focuses on all aspects of bankruptcy, secured transactions, and loan enforcement/workouts. Prior to joining the firm, Pittman served as law clerk to U.S. Bankruptcy Judge Robert D. Berger from 2003 to 2006. He earned his bachelor’s de87. See §§ 526-528. A detailed discussion of the requirement imposed upon a DRA is beyond the scope of this article, but attorneys are advised to more fully investigate and analyze this issue. 88. See, e.g., Hersh v. United States, No. CIV.A. 3:05-CV-2330-N, 2006 WL 2088270 (N.D. Tex. July, 26, 2006). 89. § 707(b)(4). 90. Id.
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gree, with distinction, in 2000, and his juris doctorate in 2003 from the University of Missouri-Kansas City, where he was a member of the National Moot Court team and was included on the dean’s list. He is a member of the American Bankruptcy Institute, is lead editor for the ABI’s Tenth Circuit Case Update and is co-vice chair for Kansas City Metropolitan Bar Association’s Commercial & Bankruptcy Law Committee. Jeffrey A. Deines is an associate with Lentz & Clark P.A., Overland Park. His practice focuses on all aspects of bankruptcy, including Chapter 11 debtor, creditor, and committee representation and related tax matters, receiverships, and out-of-court workouts and insolvency matters. He received his bachelor’s degree from the University of Kansas in 1998, with honors, and his juris doctorate from Loyola Law School of Los Angeles, where he was a member of the Loyola Law Review and was included on the dean’s list. He is a regular contributor of bankruptcy articles to the Johnson County Barletter and is a member of the American Bankruptcy Institute.
U.S. Supreme Court (Continued from Page 15)
Stevens, Antonin Scalia, David Souter, Clarence Thomas, Ruth Bader Ginsburg, and Stephen Breyer. Justices Anthony Kennedy and Samuel Alito were not present. First, the individuals were sworn in (including the Schneider family). The KBA members were sworn in next, with KBA President David Rebein introducing each inductee. The eye contact and expressions of acknowledgment from our country’s most famous jurists as our names were read was an experience I will not soon forget. After the swearing in, we again returned to the reception room where Chief Justice Roberts and Justice Ginsburg came and greeted everyone. After meeting and greeting everyone, Chief Justice Roberts made a beeline for the children who attended the swearing in, including the children of the Templins, the children of Judge Cheryl Kingfisher, and our children. Chief Justice Roberts took pictures with attorneys and families and had a great conversation with our sons Jack (Chief Justice Roberts has a son named Jack) and Dane about who was going to wear what for Halloween. Justice Ginsburg also met everyone. We then gathered outside the Supreme Court building for a group photo to complete the swearing in process. Several of us then went back inside the Supreme Court 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, the White House canceled this tour and many of us left D.C. without seeing the inside of the White House. Our family did not give up though. Sen. Pat Robert’s staff helped us reschedule a White House tour later in the week to complete our planned itinerary. Thanks to the KBA for organizing this fine event. n 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 info@ksbar.org or at (785) 234-5696. You may go to the courts’ Web site at www.kscourts.org for the full opinions.
Supreme Court Criminal STATE V. MARSH REMAND FROM U.S. SUPREME COURT NO. 81,135 – SUPPLEMENTAL OPINION FILED 10-18-06 FACTS: Kansas Supreme Court affirmed Marsh’s convictions and sentences for first-degree premeditated murder and aggravated burglary, and reversed his convictions for capital murder and aggravated arson. State v. Marsh, 278 Kan. 520 (2004). Majority of court held the weighing equation in K.S.A. 21-4624(e) was unconstitutional,
but U.S. Supreme Court reversed that holding and remanded case to Kansas Supreme Court. Kansas v. Marsh, U.S. __, 126 S.Ct. 2516 (2006). ISSUE: Constitutionality of K.S.A. 21-4624(e) HELD: That portion of Marsh holding K.S.A. 21-4624(e) unconstitutional is vacated. That portion of Marsh reversing his convictions for capital murder and aggravated arson, and affirming his convictions and sentence for first-degree premeditated murder and aggravated burglary, remains unchanged. Case is remanded for new trial on capital murder and aggravated arson charges. STATUTE: K.S.A. 21-4624(e)
Court of Appeals Civil ADOPTION, CONSENT, AND NOTARY PUBLIC IN RE ADOPTION OF X.J.A. FORD DISTRICT COURT – REVERSED NO. 96,003 – SEPTEMBER 15, 2006 FACTS: After the natural mother moved in with M.A and E.M., it is contested whether the natural mother agreed to let M.A. and E.M. adopt the child she was expecting. X.J.A. remained hospitalized after childbirth. The day after the birth, the mother signed a consent form given to her by M.A., but no one explained the form to the mother and there was conflicting evidence as to the mother’s understanding of English. M.A.’s attorney told M.A. that she needed the consent form signed before a notary public, and M.A. convinced a notarial officer to execute the notary’s portion of the acknowledgment without the mother present. X.J.A. went home from the hospital with M.A. and E.M. The mother had periodic visits with X.J.A., but they were discontinued because of the mother’s attempts to take custody of the child. Mother filed a motion to revoke consent. The district court upheld the mother’s consent finding no coercion and that the mother failed to establish the consent was not freely and voluntarily given. ISSUES: (1) Adoption, (2) consent, and (3) notary public HELD: Court found that the acknowledgment of the consent to adopt failed to substantially comply with the Uniform Law on Notarial Acts, resulting in an impermissible shifting of the burden of proof to the mother. Court held that where the consenting party does not appear and sign before and make the requisite declaraTHE JOURNAL OF THE KANSAS BAR ASSOCIATION
tion to a notarial officer, and the officer executes a false certification of acknowledgment, the acknowledgment does not substantially comply with the notary statutes. An acknowledgment, which is not in substantial compliance with the notary statutes, cannot serve as prima facie proof that the written consent was freely and voluntarily given. STATUTES: K.S.A. 59-2113, -2114(a), -2143; K.S.A. 592129(d) (Furse 1994); K.S.A. 59-2102 (Weeks); and K.S.A. 53-501 et seq., -502(b), -503(a), 508(a) and (c) CLOSE CORPORATION EXCEPTION AND CERTIFIED PUBLIC ACCOUNTANT PROFESSIONAL NEGLIGENCE SPARKS V. CBIZ ACCOUNTING ET AL. JOHNSON DISTRICT COURT – REVERSED AND REMANDED WITH DIRECTIONS NO. 95,538 – SEPTEMBER 22, 2006 FACTS: Sparks, a former minority shareholder of Alexcio Corp., alleges CBIZ Accounting committed malpractice while handling Alexcio’s accounts. Sparks filed a derivative action. CBIZ filed a motion for partial summary judgment, alleging Sparks lacked standing to pursue his derivative claim because he was not a stockholder when the lawsuit was commenced. Sparks filed a motion to pursue his case as a direct action under the close corporation exception. The district court granted Sparks’ motion, denied CBIZ’s motion for summary judgment, and authorized an interlocutory appeal by CBIZ. ISSUES: (1) Application of the close corporation exception recognized in Richards v. Bryan, 19 Kan. App. 2d 950, 965, 879 P.2d 638 (1994), and (2) certified public accountant professional negligence NOVEMBER/DECEMBER 2006 – 29
HELD: Court held that the close corporation exception recognized in Richards only applies when an oppressed minority shareholder brings suit against majority directors, officers, or directors for breach of a fiduciary duty. Under the fact of this case, the court held the close corporation exception does not apply. Court reversed and remanded for summary judgment to be entered in favor of CBIZ. Court stated it considered CBIZ’s claims and held the close corporation exception should not be extended in Kansas to permit litigation against a third party for professional negligence in the performance of a duty owed to the corporation. Court held that Sparks did not directly engage CBIZ as accountants and therefore K.S.A. 1-402 does not apply. STATUTES: K.S.A. 1-402(a) and K.S.A. 60-223a, -2102(c) CONSERVATORSHIP AND CHILD SUPPORT PAYMENTS IN RE CONSERVATORSHIP OF CHAPMAN SEDGWICK DISTRICT COURT – AFFIRMED IN PART AND REVERSED IN PART NO. 94,765 –OCTOBER 20, 2006 FACTS: Deborah and Thomas were married in December 1984 and before 2003, they would have three children and would divorce and remarry and then divorce again. Effective July 15, 1989, Thomas retired from his police job after an injury left him disabled. The Kansas Police and Fireman’s Retirement System (KPFRS) paid Thomas 50 percent of his final average salary and paid Ethan, Thomas’ son, 10 percent of Thomas’ final average salary. After a change in the law, Thomas was appointed as conservator for the disability benefits for each of his children after they were born. Thomas used the conservatorship funds to pay his child support and to reimburse himself for medical and insurance costs. By 2003, Thomas had withdrawn approximately $66,000 from the conservatorships. In 2004, Deborah filed petitions to remove Thomas as conservator for each child and to reimburse money that he wrongfully misused. In the divorce court proceedings, the court held that monies from Thomas’ disability designated for the children could no longer be credited towards Thomas’ child support obligation prospectively. Equating a right to offset against a child support obligation with the right to withdraw funds from the children’s conservatorship estates, the conservatorship court ultimately denied Deborah’s requests to remove Thomas as conservator, to appoint a successor conservator, and to order the reimbursement of funds withdrawn by Thomas. ISSUES: (1) Conservatorship and (2) child support payments
HELD: Court held that any right that a parent may acquire to reduce his or her court-ordered child support payment in a divorce proceeding because of the child’s separate share of the parent’s disability or retirement benefits does not automatically translate into a right to take the child’s conservatorship funds or assets to pay the full amount of court-ordered child support notwithstanding the source of the conservatorship assets. Court also stated that a conservator is precluded from using any amount of the assets of a minor’s conservatorship estate to pay any portion of a parent’s court-ordered child support obligation without specific approval of the court that is supervising the conservatorship. Court held that when a conservator, without specific court approval, withdraws funds from a minor’s conservatorship estate to use for the court-ordered child support payment for that minor, the supervising court must order that the conservator repay the conservatorship estate no less than the amount of those misused funds. Court affirmed the decision that Deborah should not personally receive attorney fees and expenses she personally expended. STATUTES: K.S.A. 59-3051(1), -3053, -3069, -3078, -3088(f ), -3089(d) and K.S.A. 74-4953(1), -4960(1)(c) DIVORCE IN RE MARRIAGE OF COX JOHNSON DISTRICT COURT – AFFIRMED NO. 95,036 – JULY 21, 2006 PUBLISHED VERSION FILED OCTOBER 3, 2006 FACTS: Thomas appealed district court’s modification of child support due to ex-wife, Diana, claiming district court erred in not allowing deduction of depreciation expense from rental property income in calculating child support. Diana seeks costs and attorney fees, claiming appeal was frivolous and Thomas failed to comply with court rules for appellate brief. ISSUES: (1) Depreciation expenses and (2) motion for costs and attorney fees HELD: Under facts of case, no abuse of discretion in district court not allowing Thomas to deduct a depreciation expense from his rental property income in calculating child support. Cox failed to show that depreciation was reasonably necessary for production of income from the rental properties. Motion for costs and attorney fees is denied. Sufficient compliance with Supreme Court Rule 6.02. Appeal not frivolous in light of 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 retirement 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 division of property. The trial court reserved jurisdiction over the question 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
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in In re Marriage of Harrison, 13 Kan. App. 2d 313, has no application where a retirement plan does not exist. STATUTES: K.S.A. 2005 Supp. 23-201 and K.S.A. 601610(b)(1)
value of similar property but fails to do so. Court held the Warrens only presented evidence to support an award of $415.50 for rental of a substitute vehicle. STATUTE: K.S.A. 60-226(b), -456(b)
DUI AND DRIVER’S LICENSE SUSPENSION MARTIN V. KANSAS DEPARTMENT OF REVENUE JOHNSON DISTRICT COURT – REVERSED AND REMANDED WITH DIRECTIONS NO. 94,033 – SEPTEMBER 15, 2006 FACTS: Martin was driving his vehicle with the passenger side brake light inoperable, but the other two brake lights (driver’s side and rear window) were operating properly. Officers stopped Martin for the brake light and he was arrested for DUI. The district court dismissed the DUI case concluding Martin had met his burden of proof in establishing the officer made a mistake of law in pulling him over because he had two operational brake lights and there was no reasonable and articulable suspicion existing that Martin had committed a traffic violation. Following an administrative hearing, the Kansas Department of Revenue suspended Martin’s license for failing the breath test. The district court dismissed the suspension order for the reason that the certifying police officer did not have a reasonable and articulable suspicion to stop Martin in the first place. ISSUES: (1) DUI and (2) driver’s license suspension HELD: Court upheld the KDOR suspension of Martin’s license. Court held that nowhere in K.S.A. 8-1020(h)(2) does it mention that a driver may challenge his or her driver’s license suspension at a suspension hearing on the basis that the law enforcement officer lacked a reasonable and articulable suspicion to stop the driver in the first place. Court stated the reason why a law enforcement officer stops a person has no relevance at an administrative hearing to suspend the driver’s license of that person. Court stated the second issue was rendered moot due to its holding. STATUTE: K.S.A. 8-1020(h)(2)
INSURANCE DAVIS V. ALLSTATE INSURANCE CO. RENO DISTRICT COURT – AFFIRMED NO. 96,043 – OCTOBER 6, 2006 FACTS: Jay and Jonell Davis owned vehicles insured by Allstate, and Jay owned motorcycle insured by American Modern Home Insurance Co. After being injured in motorcycle accident as passenger while Jay was driving, Jonell filed claim for underinsured motorist (UIM) damages. When Allstate denied Jonell’s claim, she filed action for breach of contract. District court granted summary judgment to Allstate, finding policy did not cover damages because motorcycle was provided for Jonell’s regular use. Jonell appealed, claiming exclusion in Allstate policy to include a vehicle owned by a “resident relative” was broader than allowed by K.S.A. 40-283(e)(1), and claiming error to find motorcycle was provided for her regular use. ISSUES: (1) Breadth of Allstate exclusion and (2) UIM claim HELD: First case heard to test court’s new procedure for expediting appeals from orders granting summary judgment in civil cases. Exclusion to include vehicle owned by a “resident relative” was immaterial to court’s ruling. Summary judgment was entered in favor of Allstate based upon district court’s conclusion that motorcycle was provided for Jonell’s regular use. Analysis of UM claim in Ball v. Midwestern Ins. Co., 250 Kan. 738 (1992), is applied. Under facts presented, a motorcycle was provided for regular use of wife who rode on her husband’s motorcycle as a passenger two or three times a month. STATUTE: K.S.A. 40-284(e)(1)
EXPERT TESTIMONY AND LOSS OF USE DAMAGES WARREN V. HEARTLAND AUTOMOTIVE SERVICE INC., D/B/A JIFFY LUBE WYANDOTTE DISTRICT COURT AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH DIRECTIONS NO. 95,577 – OCTOBER 20, 2006 FACTS: Heartland Automotive Services Inc., operates the Jiffy Lube facility in western Wyandotte County where Shawn and Jennifer Warren had their automobile serviced before a vacation trip to Minnesota. In the course of the trip, the automobile lost its oil, causing the engine to throw a rod. When the Warrens returned to Kansas City, Heartland told them that the engine failure was not its fault and refused to pay for the rental car or any repairs. The Warrens sued. The Warrens’ damage suit against Heartland resulted in a jury verdict finding Heartland was 100 percent at fault and awarded $17,500.34 in damages to the Warrens. ISSUES: (1) Expert testimony and (2) loss of use damages HELD: The Court found no abuse of discretion in the trial court’s decisions on expert testimony. However, the court held that in an action for recovery of damages for the loss of use of a damaged automobile, the plaintiff may recover loss of use damages even if the plaintiff has not rented a substitute vehicle. The appropriate measure of damages, in the absence of the plaintiff renting a substitute vehicle, is the reasonable rental value of a substitute vehicle. Loss of use damages are limited to a reasonable period of time needed to make repairs. This period should be extended only if the defendant causes or adds to any delay. Loss of use damages should not be allowed if the plaintiff could provide evidence of the reasonable rental THE JOURNAL OF THE KANSAS BAR ASSOCIATION
KANSAS WAGE PROTECTION ACT, DISCHARGED EMPLOYEE, AND VACATION PAY A.O. SMITH CORP. V. KANSAS DEPARTMENT OF HUMAN RESOURCES ET AL. SHAWNEE DISTRICT COURT – AFFIRMED IN PART, REVERSED IN PART, AND REMANDED NO. 93,477 – MOTION TO PUBLISH ORIGINAL OPINION FILED DECEMBER 9, 2005 FACTS: A.O. Smith (AOS) is a Delaware corporation that purchased a manufacturing facility in Kansas. At the time of the acquisition, the former plant owner had an “earn-in-arrears” vacation policy, where employees earned vacation time and then used it the following year. AOS claimed that it transitioned to a “pop-up policy” in 1997, where employees could take vacation in the year earned based on years of service. In 2000, AOS decided to work toward divestiture of the Kansas facility and determined the existing pop-up-vacation policy should be changed to an “earn-as-you-go” policy. Although the new policy was issued in December 2000 dated June 1, 2000, the local human resources manager was directed not to post or communicate the new policy to employees. CST Industries acquired the Kansas facility and complaints emerged concerning the unannounced changed in vacation policy. Employees began filing claims for wages under the Kansas Wage Protection Act (KWPA) for accrued vacation pay. The Kansas Department of Human Resources (KDHR) hearing officer held AOS never advised employees of the 2000 change in policy until after the sale, that a “discharge” under the KWPA involved any separation from the employer, and that AOS willfully failed to pay accrued vacation. The district court held that the claimants were discharged from their employment with AOS, notwithstanding their immediately re-employment with CST, that accrued vacation was “wages” under the KWPA, and the policy at the Kansas facility was earned vacation time in one year to NOVEMBER/DECEMBER 2006 – 31
be utilized the next. The district court reversed the KDHR’s penalty finding AOS took “positive action to protect its employees during the negotiations leading to the sale.” ISSUES: (1) Discharge under the KWPA and (2) willful withholding of accrued vacation pay HELD: Court held that under the facts of this case, the employer was not entitled to change its vacation policy without notice to its employees. An employer may impose a cut in wages if the change is announced before any wages are earned. In the case of nonsalary wages such as vacation pay, they become actual wages when the conditions required for entitlement, eligibility, accrual, or earning have been met by the employee. Court also held that where an employer applies an interpretation of its own vacation policy that is not expressly contained therein and is in conflict with a “proper reading” of that policy, such action is a willful violation of the KWPA. Court stated that where an employer attempted to apply an interpretation inconsistent with its vacation policy, acted unilaterally to change its vacation policy without communicating it to employees, urged its purchaser not to discuss accrued vacation liability with employees, and attempted through an asset purchase agreement to avoid litigation by assuring some vacation would be earned and payable by the successor in the first year after discharge, the court stated it could not conclude that the KDHR’s findings regarding willfulness were unsupported when viewed in light of the record as a whole. Court affirmed KDHR’s findings and conclusions and reversed the district court’s reversal of penalty. Court remanded to the district court for the limited purpose of remanding to the KDHR with directions to reinstate the KDHR’s final action. STATUTES: K.S.A.44-312 et seq., -315, -323; K.S.A. 2005 Supp. 44-313; and K.S.A. 77-621(c)(4), (5), (7), and (8) TORTS CHRISTOPHER V. STATE SHAWNEE DISTRICT COURT – AFFIRMED NO. 95,077 – OCTOBER 6, 2006 FACTS: Christopher injured as resident of juvenile justice facility operated by Southeast Kansas Education Service Center (SKESC). He filed negligence action against state, and amended the petition to add SKESC as a defendant. District court dismissed Christopher’s claims against SKESC based upon Christopher’s failure to file notice of claim, K.S.A. 12-105(d), and dismissed Christopher’s claims against state pursuant to immunity under juvenile justice program exception to KTCA, K.S.A. 2005 Supp. 75-6104(u). Christopher appealed. ISSUES: (1) Notice of claim and (2) immunity exception to KTCA HELD: Christopher’s filing within the limitation period, but without prior notice to SKESC, was void ab initio because district court lacked jurisdiction. Savings statute, K.S.A. 60-518, did not permit refiling after limitation period had run. Christopher’s equal protection arguments regarding application of KTCA are discussed and rejected. K.S.A. 2005 Supp. 75-6104(u) is rationally related to state’s interest in providing education to juvenile offenders. State did not violate its duty to Christopher by delegating responsibilities to SKESC. STATUTES: K.S.A. 2005 Supp. 75-6103, -6104, -6104(u) and K.S.A. 17-105b, -105b(d), 60-513, - 518, 75-6101 et seq.
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TORTS TROUTMAN V. CURTIS SHAWNEE DISTRICT COURT – AFFIRMED NO. 94,667 – SEPTEMBER 22, 2006 FACTS: Plaintiffs who suffered complications following cardiac catheterization procedures brought product liability case alleging Perclose was negligent in the design of the “Closer,” a Class III prescription medical device to provide polyester suture to close artery access site following catheterization. District court granted summary judgment to Perclose, and plaintiffs appealed on issue of whether pre-emption provision in 21 U.S.C. § 360k(a) (2000) of 1976 Medical Device Amendments (MDA) to 1938 Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. pre-empts state common-law tort claims alleging liability as to Class III medical devices that have entered the market pursuant to FDA’s rigorous premarket approval (PMA) process. ISSUE: Federal pre-emption HELD: Issue of first impression in Kansas. Consensus of legal authority elsewhere is followed. State common-law tort claims alleging liability to PMA-approved Class III medical device are pre-empted by § 360k(a), except for a claim that manufacturer failed to comply with approved federal standards. Here, plaintiffs failed to come forward with any evidence to support a claim that Perclose failed to comply with approved federal standards in the design, manufacturing, and labeling of the Closer. Summary judgment in favor of Perclose is affirmed. Opinion provides overview of MDA, discusses Medtronic Inc. v. Lohr, 518 U.S. 470 (1996), and post-Lohr case law, and applies two-prong Lohr test. STATUTES: 7 U.S.C. § 136 et seq. (2000), § 136v(b) (1988); 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., -3302(c) TRANSFER ON DEATH DEED, REAL ESTATE, AND GROWING CROPS IN RE ESTATE OF ROLOFF ATCHISON DISTRICT COURT – REVERSED NO. 95,542 – SEPTEMBER 29, 2006 FACTS: Charles Schletzbaum was a grantee beneficiary of real estate under a transfer-on-death (TOD) deed executed by Roloff and recorded with the Atchison Register of Deeds in June 2004. The TOD deed was devoid of any language reserving the growing crops. Roloff died intestate in July 2004. The trial court determined that the growing crops should be considered personal property and that the proceeds should go to Roloff’s estate rather than to Schletzbaum. ISSUE: Whether the trial court properly determined that the growing crops on the real estate were personal property under K.S.A. 59-1206 and belonged to the grantor’s estate rather than to Schletzbaum. HELD: Court held the growing crops on the real estate transferred by the TOD deed passed to Schletzbaum, as the grantee beneficiary, because the TOD deed did not contain a reservation of the growing crops, the same as if Roloff and Schletzbaum had owned the property in joint tenancy with right of survivorship. The survivorship attribute for both forms of deeds is a contractual relationship, which causes title in such property to vest immediately upon either the record 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. 84-2107(2); and K.S.A. 2005 Supp. 84-9-334(j)
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UNDERINSURED BENEFITS AND UMBRELLA POLICY FIORELLA V. TRAVELERS PROPERTY CASUALTY INSURANCE JOHNSON DISTRICT COURT – AFFIRMED NO. 94,628 – SEPTEMBER 15, 2006 FACTS: Fiorella had auto, homeowner’s, and an umbrella policy with Travelers. The umbrella policy made no mention of uninsured (UM) or underinsured (UIM) motorist coverage. In 1998, Travelers issued a new umbrella policy explicitly excluding UM and UIM coverage, but Fiorella had an accident at the time when the pre-1998 form of the umbrella policy was still in effect. In January 1999, Fiorella was seriously injured in an automobile accident with a driver insured by State Farm with a liability coverage limit of $100,000. Fiorella’s automobile policy (which had UM and UIM coverage) had a liability limit of $500,000. The umbrella policy applied after exhaustion of the $500,000 limit, but the umbrella had a liability limit of $1 million per occurrence. State Farm paid $100,000. Travelers paid $400,000 as UIM benefits, plus medical and personal injury protection benefits. Fiorella commenced an action to obtain a judicial declaration that the umbrella policy provides additional UIM coverage and he sought recovery of the full $1 million. The district court granted summary judgment in favor of Travelers on the grounds that the umbrella policy did not provide UIM coverage. ISSUE: UIM coverage in umbrella policies HELD: Court stated that K.S.A. 40-284(a) requires that all Kansas auto liability policies provide UM motorist coverage equal to the policyholder’s liability limits under those policies. However, insurers need not offer coverage in accordance with K.S.A. 40-284 in umbrella policies, which do not provide primary auto liability coverage. Court held the plain language of K.S.A. 40-284 makes it clear that UM and UIM coverages are not mandatory in an umbrella policy, which does not provide primary liability coverage for specified insured vehicles. Such an umbrella policy does not become the primary policy simply because the insured has exhausted the limits of the primary auto liability policy. STATUTE: K.S.A. 40-284
Criminal STATE V. ARAUJO SEDGWICK DISTRICT COURT – AFFIRMED NO. 94,831 – OCTOBER 20, 2006 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 hearsay 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 confrontation issue is considered on merits. Lewis’ statements to police officers were not testimonial, thus admission of these statements did not violate Crawford v. Washington, 541 U.S 36 (2004) (out-of-court statements made to 911 emergency 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
was to assess threat in order to meet emergency in progress when Araujo arrived at scene. Lewis’ statements are considered nontestimonial, and thus were admissible. STATUTE: K.S.A. 60-404 STATE V. BLACK SEDGWICK DISTRICT COURT – AFFIRMED NO. 94,599 – SEPTEMBER 15, 2006 FACTS: Black convicted of possession of cocaine. District court imposed 12-month probation with underlying 32-month-prison term, and later modified conditions of probation to require successful completion of an Adult Daily Reporting Center (ADRC) program instead of residential community correction program earlier ordered. Upon revocation of Black’s probation, district court denied credit for time spent at ADRC. Black appealed. ISSUE: Sentencing credit HELD: A defendant may not receive jail time credit for time spent in an ADRC program as a condition of probation. The ADRC program, which requires participants to be at its facility only during the day if they do not have a job or are not participating in some other authorized activity, does not come within the “residential facility” language of K.S.A. 21-4614a(a). STATUTE: K.S.A. 21-4614a, -4614(a) STATE V. CURLS SHAWNEE DISTRICT COURT – AFFIRMED NO. 94,629 – MAY 5, 2006 PUBLISHED VERSION FILED OCTOBER 10, 2006 FACTS: Curls convicted of violating a protection order by making numerous phone calls to Murdock. Officers dispatched to Murdock’s home did not listen to the recorded calls, but Murdock testified and Curls denied making the calls. Curls appealed, challenging the nature and sufficiency of the evidence supporting the conviction. ISSUE: Sufficiency of the evidence HELD: Better practice dictates that officers investigating domestic abuse allegations confirm any recorded call messages when given the opportunity to do so. Under facts, Murdock’s testimony alone was enough for rational factfinder to find Curls guilty beyond a reasonable doubt. STATUTES: None
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STATE V. DELGADO HARVEY DISTRICT COURT – AFFIRMED NO. 95,019 – SEPTEMBER 22, 2006 FACTS: Delgado convicted of drug offenses based on evidence obtained when officer stopped car for missing or weak headlight, and then detected strong odor of marijuana coming from car. Delgado appealed, challenging the trial court’s decision to not suppress the evidence from that stop and search. ISSUE: Legality of stop and search HELD: Under facts, arresting officer had reasonable suspicion to stop car in which Delgado was a passenger; once car was stopped, officer’s detection of the smell of marijuana coming from car provided probable cause for search of car. Residential search in State v. Huff, 278 Kan. 214 (2004), is distinguished. Case controlled instead by automobile search in State v. McDonald, 253 Kan. 320 (1993). State failed to raise issue of whether Delgado as a passenger had standing to object to search, and argument is not addressed for first time on appeal. STATUTE: K.S.A. 8-1701 et seq., -1705, -1725, 22-2402 STATE V. GOMEZ SEDGWICK DISTRICT COURT – AFFIRMED IN PART, REVERSED IN PART, SENTENCE VACATED, AND REMANDED WITH DIRECTIONS NO. 93,591 – SEPTEMBER 29, 2006 FACTS: Gomez drove Gauna to a prearranged fight with Justin Kutilek at a parking lot in Wichita. Kutilek was seeing Gauna’s ex-girlfriend. Kutilek drove to the fight with the ex-girlfriend as a passenger. Kutilek’s roommate, Morrison, arrived separately. At some point during the altercation, Gomez drew a handgun, pointed it toward Kutilek and began running toward him. Kutilek, in fear of being shot, ran to his vehicle. As Kutilek drove away, Gomez fired seven shots striking the vehicle. Gomez grazed Kutilek’s scalp and the ex-girlfriend felt a bullet pass below her legs. Gomez approached Morrison, pointed the handgun in his face and threatened him. Morrison said he did not want any trouble and then Gomez returned to his vehicle and drove away. The jury convicted Gomez of two counts of aggravated assault, a lesser-included criminal discharge of a firearm based on Kutilek suffering bodily harm, but not great bodily harm, and criminal discharge of a firearm related to the girlfriend. ISSUES: Multiplicity and (2) jury instruction HELD: Court held that the number of persons occupying a vehicle or building at the time of the firearm’s discharge is not determinative of the unit of prosecution. Accordingly, the court held that Gomez’s two convictions for criminal discharge of a firearm are multiplicitous and violate the double jeopardy clause and the Kansas Bill of Rights. However, court held that Gomez’s convictions of aggravated assault and criminal discharge of a firearm at an occupied vehicle were not multiplicitous. Court held that although the jury instructions contained an inaccurate statement of law, the court stated the jury could not have been mislead by the instructions or coerced into rendering a verdict. Court reversed the criminal discharge of a firearm at an occupied vehicle related to the ex-girlfriend and vacated that sentence. The remaining convictions were affirmed. STATUTES: K.S.A. 21-3107(2), -3408, -3410(a) and K.S.A. 2005 Supp. 21-4219(b)
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STATE V. LOPEZ ELLIS DISTRICT COURT AFFIRMED IN PART, REVERSED IN PART, AND REMANDED NO. 93,560 – OCTOBER 13, 2006 FACTS: Lopez charged with second-degree murder, aggravated battery, and intimidation of two witnesses. Jury convicted him of aggravated battery. District court assessed court costs (including preliminary hearing witness fees and mileage, jury trial witness fees, docket fees) and expenses (including travel and lodging expenses for trial witnesses), and ordered reimbursement to Board of Indigents’ Defense Services (BIDS) for entire attorney fees. On appeal, Lopez challenged (1) sufficiency of the evidence because victim was unaware of attack until stab wound discovered the next morning, (2) assessment of costs and expenses not related to his conviction, and (3) reimbursement to BIDS of attorney fees. ISSUES: (1) Sufficiency of evidence, (2) costs and fees, and (3) attorney fees HELD: Under facts, sufficient evidence supports Lopez’s conviction of aggravated battery. K.S.A. 22-3801 and K.S.A. 2005 Supp. 28-172a are examined. Whether these statutes authorize award of costs and expenses (other than docket fees) unrelated to a defendant’s ultimate conviction is question of first impression in Kansas. Joining other jurisdictions, court holds it is beyond district court’s discretion to award costs and expenses unrelated to prosecution of crimes of conviction. Case remanded for district court to determine which costs and expenses were necessary to prove the crime of conviction. State concedes that district court failed to consider Lopez’s ability to pay at time it assessed reimbursement of attorney fees to BIDS. Order is reversed and matter is remanded for district court to comply with K.S.A. 2005 Supp. 22-4513 as construed by State v. Robinson, 281 Kan. 538 (2006). STATUTES: K.S.A. 2005 Supp. 22-4513, 28-172a, -172a(d) and K.S.A. 22-3801, -3801(a) STATE V. MALONEY JOHNSON DISTRICT COURT – AFFIRMED NO. 95,887 – OCTOBER 6, 2006 FACTS: Maloney appealed from district court’s order of restitution for theft of household goods, and claimed district court erred in calculating restitution based on replacement cost of stolen property rather than its fair market value. ISSUE: Determining restitution HELD: No departure from general rule that proper measure of restitution in theft case is fair market value of property at time of its taking, rather than replacement costs, whenever fair market value can be ascertained. However, when fair market value is not readily ascertainable, district court may consider other factors in determining restitution, including purchase price, condition, age, and replacement cost of the property, as long as the valuation is based on reliable evidence, which yields a defensible restitution figure. Under circumstances of this case, no abuse of discretion in district court’s determination of restitution. STATUTE: K.S.A. 2005 Supp. 21-4610(d)(1) STATE V. SMITH 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; THE JOURNAL OF THE KANSAS BAR ASSOCIATION
(3) fair trial denied when state failed to elect in aggravated burglary jury instruction whether he “entered into” or “remained” in victim’s residence without authority; (4) prosecutorial error in closing argument warranted a new trial; (5) error to require reimbursement to Board of Indigents’ Defense Service (BIDS) without considering ability to pay, financial burden of payment, and validity of fee; and (6) use of prior conviction to increase his sentence violated Apprendi v. NJ, 530 U.S. 366 (2000). ISSUES: (1) Multiplicity, (2) sufficiency of evidence, (3) jury instruction, (4) prosecutorial error, (5) BIDS reimbursement, and (6) sentencing HELD: Single act of violence test no longer applicable to multiplicity analysis. Under same-elements test in State v. Schoonover, 281 Kan. 453 (2006), Smith’s convictions were not multiplicitous. Under State v. Maxwell, 234 Kan. 393 (1983), sufficient evidence that Smith “entered into” victim’s residence without authority. This is an alternative-means case. Although state concedes the “remaining within” alternative was not supported by the evidence, pursuant to State v. Dixon, 279 Kan. 563 (2005), evidence for alternative means of “entering into” was sufficient to support the conviction. Prosecutor’s misstatement to jury that Smith’s entry was authorized was not cured by jury instructions, and jury was likely confused about proper law to apply. Smith entitled to new trial on aggravated burglary conviction. Trial court never considered Smith’s financial resources or the nature of burden that payment of fees would impose. Pursuant to State v. Robinson, 281 Kan. 538 (2006), case is remanded for resentencing in compliance with K.S.A. 2005 Supp. 22-4513. Apprendi claim is defeated by State v. Ivory, 273 Kan. 44 (2002). STATUTES: K.S.A. 2005 Supp. 21-3107, 22-4513 and K.S.A. 21-3426, -3715, -3716
liar. Rather, defense counsel’s references to perjury and comments on defendant’s credibility were outside the scope of evidence presented at trial. There is more than sufficient evidence to support Wahweotten’s DUI conviction. Only error was trial court’s failure to give limiting instruction to jury regarding evidence of preliminary breath test refusal. Cumulative error claim fails. STATUTES: K.S.A. 2005 Supp. 8-1001, -1001(i), -1012, -1013(f )(2), -1013(i), -1567, -1567(a)(3), -1567(f ); K.S.A. 8-1001, -1006(a), 40-3104, 60-261, -404; K.S.A. 8-1013(f )(2) (1991 Furse); and K.S.A. 8-1006(a) (Furse). STATE V. WHITLOCK RENO DISTRICT COURT – APPEAL DISMISSED NO. 93,875 – SEPTEMBER 15, 2006 FACTS: Whitlock convicted of indecent liberties with and indecent solicitation of a child, and criminal history fell within border box on nondrug sentencing grid. Trial court imposed prison sentence. Whitlock appealed, arguing abuse of discretion to deny Whitlock’s request for optional nonprison sentence. ISSUE: Sentencing appeal HELD: Under facts, appellate court lacked jurisdiction under K.S.A. 2005 Supp. 21-4704 and K.S.A. 21-4721(c)(1) to review Whitlock’s presumptive prison sentence for indecent liberties with a child. Even if there were jurisdiction, there is no abuse of discretion to impose prison sentence in this case. STATUTES: K.S.A. 2005 Supp. 21-4704, -4704(a), -4704(f )(1)(3); K.S.A. 2004 Supp. 21-3510(a)(1); K.S.A. 21-3503, -4721(c), -4721(e), -4721(c)(1); and K.S.A. 1994 Supp. 214721(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 warrantless 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) doctrine 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 preliminary 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 conditions 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
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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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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
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38 – NOVEMBER/DECEMBER 2006
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