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Kansas Law Blog Legal updates, news, and commentary from the attorneys of Baker Sterchi Cowden & Rice LLC

Kansas Saving Statute Only Works Once

June 27, 2017 | Bryan Mouber

On May 26, 2017, the Kansas Supreme Court in Lozano v. Alvarez, (No. 113,060) 2017 Kan. LEXIS 287 (May 26, 2017)[1] tested the Kansas saving statutes, which states:

If any action be commenced within due time, and the plaintiff fail in such action otherwise than upon the merits, and the time limited for the same shall have expired, the plaintiff, or, if the plaintiff die, and the cause of action survive, his or her representatives may commence a new action within six (6) months after such failure.

Kan. Stat. Ann. § 60-518. The statute allows a case that has been dismissed for a reason other than the merits to be refiled within 6 months of the dismissal, notwithstanding that the statute of limitations has expired.

The Kansas Supreme Court held that the dismissal of an action that was filed during K.S.A. 60-518's 6-month grace period does not trigger another 6-month grace period.  Thus, a third lawsuit does not relate back to the original filing and may be barred by the statute of limitations.

Lozano filed a civil action against the Alvarezes alleging injuries as a result of a battery.  Lozano I was dismissed without prejudice by the Ford County District Court for lack of prosecution.  Lozano refiled his case less than 6 months later using the Kansas savings statute. The district court dismissed Lozano II without prejudice on December 31, 2013, once again for a lack of prosecution.

Lozano refiled the action on June 18, 2014, attempting to invoke K.S.A. 60-518 a second time. (Lorenzo III). The Alvarezes moved to dismiss Lorenzao III with prejudice, claiming the savings statute did not permit the refiling.

The Kansas Supreme Court affirmed the dismissal of Lorenzo III with prejudice and declined to apply the saving statute in serial fashion, because “the 6-month grace period in the savings statute applies only to an action that was commenced during the statute of limitations period.” Id. at *12.  The Court reasoned,

the dismissal of an action that was filed during K.S.A. 60-518's 6-month grace period does not trigger another grace period because it is not an "action" to which K.S.A. 60-518 applies. In short, a plaintiff is limited to one 6-month period of grace to get a determination on the merits; refilings beyond that 6-month period are barred by the statute of limitations. Id. at *12-13.



[1] See the full opinion at http://www.kscourts.org/Cases-and-Opinions/opinions/SupCt/2017/20170526/113060.pdf

Reunited and it Feels so Good

May 9, 2017 | Bryan Mouber

On April 21, 2017, the Kansas Supreme Court in FV-I, Inc. v. Kallevig, (No. 111,235) 2017 Kan. LEXIS 135 (Apr. 21, 2017)[1] reviewed a mortgage foreclosure. The dispute was between FV-I, the first mortgage holder, and Bank of the Prairie (BOP), the second mortgage holder[2]

One week before the foreclosure, the mortgage was assigned to FV-I.  Attached to the petition was a copy of the mortgage and a copy of the note with an undated endorsement to a third-party.  At trial, FV-I presented the original note containing an additional two endorsements, ending with an endorsement in blank.  BOP undisputedly had three junior mortgages.

BOP challenged FV-I’s standing to foreclose and the priority of its mortgages.

1.      FV-I’s Standing to Foreclose

BPO alleged that FV-I did not have standing to pursue its claim without establishing enforcement rights in the promissory note as of the date of the filing.  First, FV-I argued that it need not prove possession of the note and the existence of enforcement rights in it at the time it filed its petition in order to establish standing to pursue mortgage foreclosure. Second, FV-I argued that standing could be established by its undisputed possession of the mortgage prior to filing, even without possession of the note.

The Kansas Supreme Court held that:

standing in a foreclosure action is predicated on the plaintiff's ability to demonstrate—either in the pleadings, upon motion for summary judgment, or at trial—that it was in possession of the note with enforcement rights at the time it filed the foreclosure action. Allowing a lack of standing to be cured by a post-petition assignment granting enforcement rights in the note after the foreclosure action has been filed would defeat any incentive for a note holder to ensure that it has enforcement rights prior to filing the action.

Id. at *29.

The Court further held that “possession of the mortgage alone does not establish standing,” because “a person or entity possessing only the mortgage would never experience the cognizable injury, i.e., the default necessary to foreclose the mortgage.” Id. at 46.

The Kansas Supreme Court remanded the action to determine whether FV-I had enforcement rights in the promissory note as of the date of the filing such that it had standing to bring a foreclosure action. Id. at *37.

2.      BOP’s Priority

BOP argued that FV-I’s mortgage was unenforceable, because the note and mortgage had been split; thus, BOP’s mortgages were superior.  The District Court held that FV-I's mortgage and note had split, because the note and mortgage FV-I held had not followed the same path to FV-I, which rendered FV-I's mortgage unenforceable and allowed BOP's mortgages to jump ahead in priority. 

The Supreme Court, in overturning the holding that BOP’s mortgages had priority, noted that the lower court’s decision was based on an “overreading” Landmark Nat. Bank v. Kesler, 289 Kan. 528, 539-40, 216 P.3d 158 (2009)Landmark, did not address the effect of a split on the priority of the mortgage or whether a separated note and mortgage could later be reunited. In short, Landmark never held that a currently unenforceable mortgage, in effect, no longer exists. The Kansas Supreme Court held that, “[r]egardless of whether a split occurred or the party capable of enforcing the note was not a party to this case, the mortgage itself still exists.” Id. at *50.

The Court remanded the case with instruction to determine whether FV-I or BOP had priority consistent with the general rules that the first to record a mortgage has priority so long as the mortgage is not released. Id.



[1] See the full opinion at http://www.kscourts.org/Cases-and-Opinions/opinions/SupCt/2017/20170421/111235.pdf

[2] The homeowners/debtors were no longer involved in the case, because the parties agreed to sell the property and place the proceeds in escrow pending resolution of the matter.  

Jury verdicts in the Kansas City area are little changed from last year

February 9, 2017 | Jeffery KruseThe calendars said the years were different, but data from the Greater Kansas City Jury Verdict Service shows that 2016 and 2015 were nearly the same in many respects. Every year, the Greater Kansas City Jury Verdict Service issues a “Summary and Statistics of Jury Verdicts” for the greater Kansas City area. The report includes verdicts from the U.S. District Courts in the Western District of Missouri as well as Jackson, Clay and Platte counties in Missouri and Johnson and Wyandotte counties in Kansas. The statistics in 2016 were remarkably similar to those in 2015.

Comparable Number of Trials and Plaintiffs’ Verdicts

The Jury Verdict Service’s annual summary reported on 113 trials in 2016 compared to 110 in 2015. These numbers are down from the preceding two-year period: there were 133 trials in 2014, and 122 trials in 2013.

Because trials may involve multiple claims and multiple verdicts, the verdict statistics are based on the claims and not the cases. For the 113 trials in 2016, there were 199 verdicts for claims and for the 110 cases in 2015, there were 178 verdicts for claims.

Although the number of trials has decreased from 2013 and 2014, the percentage of plaintiff verdicts is little changed. In both 2015 and 2016, 42% of the verdicts were for plaintiffs compared to 38% for plaintiffs in 2014 and 40% in 2013. These numbers are down from the 55% of the verdicts for plaintiffs in 2012.

Comparable Average Monetary Awards

The overall average of the monetary awards for plaintiffs’ verdicts also remained almost the same in 2016 as they were in 2015. In 2016, the average of plaintiffs’ verdicts was $1,383,549 while the average in 2015 was $1,376,323. Both of those averages are over $1 million more than the average plaintiffs’ verdict in 2014, which was $350,730. While each of these figures is far below the $5,577,689 average verdict in 2013 and somewhat lower than the $1,772,469 average in 2012, the 2013 numbers were skewed by a single $400 million verdict that inflated the 2013 average.

Fluctuating Number of Large Verdicts

Although the average plaintiff’s verdict was similar in 2016 compared to 2015, the number of verdicts exceeding $1 million more than doubled in 2016. There were 16 verdicts of $1 million or more in 2016 and only six such verdicts in 2015. The number of million dollar or more verdicts has fluctuated over the last five years. In 2012, there were 19 such verdicts but only five in 2013 and then ten in 2014, the recent year with the lowest average monetary award in plaintiffs’ verdict matters.



Juries in the following venues awarded million dollar or more verdicts over the last five years.



Key Observations
  • Over the last four years, the percentage of defense verdicts on plaintiffs’ claims has consistently hovered around 60%.
  • When money has been awarded, the average verdict amounts over the last two years were nearly identical.
  • Half of the seven-figure jury awards over the last five years have occurred in Jackson County, Missouri state court .

Conclusion

Although every case is different, information regarding verdict percentages and jury award amounts in the specific venues can help assess the values of cases and claims. For instance, recent data confirms the received wisdom among experienced practitioners that juries in Jackson County, Missouri, are more likely to assess million dollar or more awards on plaintiffs’ claims than juries in Platte County, Missouri. As always, clients, as well as national counsel who are working with local counsel, should carefully consider the forum when assessing the value of a case.

Source: Greater Kansas City Jury Verdict Service Year-End Reports 2012-2016
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About Kansas Law Blog

The BSCR Kansas Law Blog examines significant developments, trends and changes in Kansas law on a broad range of topics that are of interest to Kansas practitioners and to businesses evaluating risks under Kansas law or managing litigation subject to Kansas law. Learn more about the editor, Bryan Mouber.

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