Harder v. Estate of Foster ( 2020 )

118,845
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
EVELYN HARDER,
Appellant,
v.
ESTATE OF RONALD H. FOSTER, et al.,
Appellees.
SYLLABUS BY THE COURT
1.
Section 5 of the Kansas Constitution Bill of Rights preserves the common law
right to a jury trial as it existed at the time of its adoption.
2.
At common law, there was no right to recover attorney fees and expenses in a civil
action. As a result, Section 5 of the Kansas Constitution Bill of Rights does not guarantee
the right to a jury trial to determine whether attorney fees and expenses should be
awarded or to determine a reasonable amount of attorney fees to be awarded.
3.
Kansas follows the American rule under which each party is responsible for
paying its own attorney fees and expenses unless a statute or contract specifically
authorizes assessment of those fees to the other party.
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4.
In the exercise of their equitable powers, courts have recognized a limited number
of exceptions to the American rule. Kansas recognizes the third-party litigation exception
to the American rule to protect those who are drawn into litigation due to the wrongful
conduct of third parties.
5.
The factors required to be shown to recover attorney fees and expenses under the
third-party litigation exception to the American rule were set forth in Harder v. Foster,
54 Kan. App. 2d 444, 401 P.3d 1032 (2017).
6.
Because the third-party litigation exception to the American rule is an equitable
remedy and is not a common law remedy recognized at the time Section 5 of the Kansas
Constitution Bill of Rights was adopted, there is no right to a jury trial to determine
whether the exception applies in a particular case.
7.
Even when a jury has been requested in a civil action, a party may waive the
request based on conduct that is inconsistent with an intention to insist on a jury trial.
8.
If a party invites or encourages a district court to commit error or proceed in a
particular way, that party is generally precluded from challenging such ruling on appeal.
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9.
To promote judicial efficiency, the law of the case doctrine provides that an
appellate court's decision on a legal issue is binding on both the district court and the
parties on remand.
10.
A party is not entitled to a jury trial as a matter of right in a suit in equity. In
determining whether an action is one in equity, the test is whether the essential nature of
the claim is grounded on equitable principles and is one in which equitable relief is
sought.
11.
Because the third-party litigation exception to the American rule is grounded in
the equitable powers of the court, a party seeking to recover attorney fees and expenses
under the exception does not have a right to a jury trial to determine whether it should be
applied in a particular case.
12.
District courts are experts in determining reasonable attorney fees and expenses
using the methodology set forth in Kansas Rule of Professional Conduct 1.5(a) (2020
Kan. S. Ct. R. 297).
Appeal from Leavenworth District Court; DAVID J. KING, judge. Opinion filed May 15, 2020.
Affirmed and remanded with directions.
Kurt S. Brack, of Brown & Ruprecht, PC, of Kansas City, Missouri, for appellant.
Gary A. Nelson, of Leavenworth, for appellee Estate of Ronald H. Foster, and William E. Pray, of
Leavenworth, for appellee Terrie Foster.
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Before HILL, P.J., BUSER and BRUNS, JJ.
BRUNS, J.: In this interlocutory appeal, Evelyn Harder challenges the district
court's ruling that she is not entitled to a jury trial to determine an award of attorney fees
and expenses in two cases consolidated for appeal. Both cases arise out of a dispute over
the sale of real property from Ronald Foster—who is now deceased—to Harder. The first
lawsuit was filed in 2013 and the second was filed in 2015. This is the second time these
cases have been before our court. In Harder v. Foster, 54 Kan. App. 2d 444, 401 P.3d
1032 (2017) (Harder I), this court affirmed the district court's decision in part but
remanded both cases for consideration of Harder's claims for attorney fees and expenses
against Foster's estate.
On remand, the district court determined that Harder's claim for attorney fees and
expenses should be decided by the court and not by a jury. Subsequently, our court
granted a petition for interlocutory appeal. For the reasons set forth in this opinion, we
conclude that Section 5 of the Kansas Constitution Bill of Rights does not guarantee the
right to a jury trial to determine an award of attorney fees and expenses. We also find that
Harder waived her request for a jury trial to determine attorney fees and expenses in the
2013 case. In addition, we find that Harder's claim for attorney fees and expenses under
the third-party litigation exception to the American rule is an equitable claim that should
be decided by the district court—not by a jury. Thus, we affirm the district court's
decision and remand this matter for further proceedings consistent with this opinion.
FACTS
The underlying facts of the two cases consolidated for appeal were set forth in
Harder I. In the opinion, this court summarized the factual and procedural history of the
two cases as follows:
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"Evelyn Harder bought property with a house, dam, and lake from Ronald Foster.
Shortly thereafter, Harder discovered that the dam, which Foster had assured her did not
have any problems, was in fact illegal and would need extensive repairs. Harder filed suit
against Foster [in 2013], and the jury found Foster guilty of negligent misrepresentation,
intentional misrepresentation, and breach of contract. The parties' Residential Real Estate
Contract provided that the party who breached the contract would pay any attorney fees
the nonbreaching party incurred 'in connection with the default,' so Harder filed a motion
requesting attorney fees incurred up through the verdict. The court granted her motion for
attorney fees, but the issue took months to litigate. Harder filed a second motion for
attorney fees requesting compensation for the fees generated while litigating the first
motion. The district court denied her motion, holding that the fees incurred defending the
first award of attorney fees were not generated 'in connection with the default.' Foster
appealed.
"After the trial and the first motion for attorney fees, Harder filed a second
lawsuit against Foster [in 2015], three of his children, and his son-in-law [under the
Uniform Fraudulent Transfer Act]. Her petition alleged that Foster had fraudulently
transferred all of the proceeds of the property sale to his family members for no
consideration, leaving him unable to satisfy the judgment. She asked 'to have the transfers
avoided, set aside, and held for naught; for an attachment of the assets transferred; for
execution on the transferred assets; and for injunctive relief prohibiting further
disposition of the transferred assets.' She later asked the court for leave to amend her
petition to add a claim for punitive damages. Foster died a few months later, and his
estate was substituted as a party. The estate then paid the judgment from the first case in
full and filed a motion for summary judgment on Harder's second lawsuit. The district
court granted the motion, holding that payment of the judgment extinguished Harder's
fraudulent conveyance claim. Foster appealed the district court's grant of summary
judgment to Foster and the denial of her request to amend her petition. Both cases were
consolidated on appeal." 54 Kan. App. 2d at 445-46.
In Harder I, this court agreed that the district court appropriately granted summary
judgment on Harder's statutory claim and that it properly denied her motion for leave to
amend her petition in the 2015 case to include a claim for punitive damages. However,
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the district court's decision to deny attorney fees and expenses in both cases was reversed.
54 Kan. App. 2d at 474-75. Consequently, this court remanded the two cases to the
district court "for determination of any attorney fees to be assessed against Foster's
estate." 54 Kan. App. 2d at 475.
In addressing the request for attorney fees and expenses in the 2013 case in
Harder I, this court found that "[t]he district court erred when it held that [attorney] fees
generated in defending the postverdict motions were not generated in connection with the
[breach of the real estate sales contract] and therefore not recoverable." The court noted
that "payment of attorney fees was within the contemplation of the parties at the time of
contracting." 54 Kan. App. 2d at 455-56. As a result, this court concluded that remand of
the 2013 case was appropriate "for a determination of the amount of attorney fees to be
awarded, a fact that remains in the sound discretion of the district court." 54 Kan. App.
2d at 460.
Turning to Harder's claim for attorney fees and expenses in the 2015 case, this
court found that "Kansas adheres to the American rule" that "proscribes courts from
awarding attorney fees unless specifically authorized by statute or contract." The court
then found that the Uniform Fraudulent Transfer Act (UFTA) does not provide for
statutory attorney fees. Thus, this court held that "under the American rule, attorney fees
are not allowed under the UFTA." 54 Kan. App. 2d at 463.
Even so, this court remanded the 2015 case to allow Harder the opportunity to
attempt to prove that she is entitled to recover attorney fees and expenses under the third-
party litigation exception to the American rule. 54 Kan. App. 2d at 463 (quoting
Hawkinson v. Bennett, 265 Kan. 564, 575, 962 P.2d 445 [1998]). In doing so, it was
noted that even if Harder succeeds in establishing that the third-party litigation exception
to the American rule applies, "she is only able to recover attorney fees specifically related
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to the third-party claims." 54 Kan. App. 2d at 473. For these reasons, this court remanded
the 2015 case to the district court for the limited purpose of determining "whether the
principles outlined [in the opinion regarding the third-party litigation exception] apply
and what if any attorney fees are in order . . . ." 54 Kan. App. 2d at 474.
On remand, the district court held a joint pretrial conference in the 2013 and 2015
cases. At the pretrial conference, Harder's counsel asserted that his client had a right to
have a jury determine attorney fees and expenses in both cases. In denying the request for
a jury trial on the issue of attorney fees and expenses in the 2013 case, the district court
pointed out that Harder's counsel was taking an inconsistent position from the one he had
taken during trial and at posttrial hearings. Specifically, the district court noted Harder's
counsel had "argued long and hard" that the question of attorney fees and expenses
should be decided by the court and not by a jury. Ultimately, the district court determined
that the remaining issues in both cases will be heard by the Court and not a jury.
Thereafter, this court granted Harder's petition for interlocutory appeal.
ANALYSIS
Section 5 of the Kansas Constitution
Section 5 of the Kansas Constitution Bill of Rights provides that "[t]he right of
trial by jury shall be inviolate." In a civil context the right to a jury trial is codified in
K.S.A. 2019 Supp. 60-238. Nevertheless, the right to a jury trial in a civil action is not
absolute. Rather, Section 5 of the Kansas Constitution Bill of Rights only preserves the
common law right to a jury trial as it existed at the time of its adoption. Hilburn v.
Enerpipe Ltd., 309 Kan. 1127, 1133-34, 442 P.3d 509 (2019).
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The Kansas Constitution was adopted by the delegates to the Wyandotte
Constitutional Convention on July 29, 1859. A few months later, on October 4, 1859, the
Kansas Constitution was approved by popular vote. Accordingly, Section 5 of the Kansas
Constitution Bill of Rights does not guarantee a right to a jury trial to resolve a claim for
attorney fees and expenses unless it can be shown that such a right existed at common
law in 1859.
As the Kansas Supreme Court has found, there was no right to recover attorney
fees at common law. Wolf v. Mutual Benefit, 188 Kan. 694, 700, 366 P.2d 219 (1961).
Although English courts have regularly awarded attorney fees to prevailing parties for
several centuries, the authority to award attorney fees in Great Britain has been
traditionally granted by statute—not under common law. See Alyeska Pipeline Serv. Co.
v. Wilderness Soc'y, 421 U.S. 240, 247, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975).
Moreover, under the English rule, attorney fees are not awarded by a jury. Instead,
"separate hearings [are held] before special 'taxing Masters' in order to determine the
appropriateness and the size of an award of counsel fees." 421 U.S. at 247 n.18.
In the years following the American Revolution, the English rule was
overwhelmingly rejected throughout the United States. In Arcambel v. Wiseman, 3 U.S.
(3 Dall.) 306, 1 L. Ed. 613 (1796), the United States Supreme Court held that "[t]he
general practice of the United States is in opposition to [the English rule]." Soon, the
American rule—under which each party pays its own attorney fees and expenses unless a
statute or contract specifically authorizes assessment to the other party—replaced the
English rule that had been followed in British colonies. The American rule quickly spread
across the new nation, and it continues to be the predominant method of handling the
payment of attorney fees and expenses across the United States. See Leubsdorf, Toward a
History of the American Rule on Attorney Fee Recovery, 47 Law & Contemp. Probs. 9
(Winter 1984).
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Kansas continues to adhere to the American rule, and courts are prohibited from
awarding attorney fees and expenses unless specifically authorized by statute or contract.
Snider v. American Family Mut. Ins. Co., 297 Kan. 157, 162, 298 P.3d 1120 (2013); see
Robinson v. City of Wichita Employees' Retirement Bd. of Trustees, 291 Kan. 266, 279,
241 P.3d 15 (2010); Harder I, 54 Kan. App. 2d at 463. Even so, in the exercise of their
equitable powers, courts have recognized a few exceptions to the American rule. See
Sprague v. Ticonic National Bank, 307 U.S. 161, 164, 59 S. Ct. 777, 83 L. Ed. 1184
(1939). One of these exceptions is the third-party litigation exception—sometimes called
the "collateral litigation" or "tort of another" exception—to the American rule. As this
court recognized in Harder I, Kansas recognizes this equitable exception to the American
rule to protect a party who is drawn into litigation because of the wrongful conduct of a
third-party. 54 Kan. App. 2d at 463-64; see also Scott-LaRosa v. Lewis, 44 N.E.3d 89, 96
(Ind. Ct. App. 2015).
Under the third-party litigation exception to the American rule, a party forced to
litigate against a third party may recover attorney fees and expenses that are otherwise
not allowable by statute or contract if certain factors can be established. 54 Kan. App. 2d
at 464. As also noted in Harder I, the Kansas Supreme Court first recognized a similar
principle in First National Bank of Hutchinson v. Williams, 62 Kan. 431, 434, 63 P. 744
(1901). Of course, this was more than 40 years after the Kansas Constitution was
approved by the voters in the Kansas Territory.
Based on our review of the history of Kansas law, we find no authority to suggest
that there was a common law right to recover attorney fees and expenses when the
Kansas Constitution was adopted—much less that a jury must make a determination
regarding when attorney fees should be awarded. Likewise, we find no authority to
suggest that a determination of whether the third-party litigation exception to the
American rule is a common law right or that it was recognized in 1859. Rather, we find
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that it is an equitable exception to the general rule prohibiting courts from awarding
attorney fees to a prevailing party in the absence of statutory or contractual authority.
Accordingly, we conclude that Section 5 of the Kansas Constitution Bill of Rights does
not guarantee the right to a jury trial to determine whether attorney fees and expenses
should be awarded, to determine a reasonable amount of attorney fees to be awarded, or
to determine whether the third-party litigation exception to the American rule should be
applied.
Determination of Attorney Fees in 2013 Case
At the outset, we note that the 2013 case was tried to verdict more than five years
ago without Harder submitting her contractual claim for attorney fees and expenses to the
jury. Furthermore, as this court found in Harder I, the judgment rendered by the jury in
the 2013 case has been fully and completely satisfied by Foster's estate. Nevertheless,
Harder now contends that she is entitled to a separate jury trial in the 2013 case solely on
her claim for attorney fees and expenses arising out of the real estate contract.
It is undisputed that the residential real estate contract executed by Harder and
Foster required a party in default on the agreement to reimburse the nondefaulting party
for reasonable legal expenses, including attorney fees. Yet a review of the record reflects
that Harder voluntarily chose not to present her claim for attorney fees and expenses
under the contract to the jury in the 2013 case. Instead, she requested—through her
attorney—that the claim for attorney fees and expenses be resolved by the district court
after completion of the jury trial.
On the last day of the jury trial, the district court discussed Harder's claim for
attorney fees and expenses with her attorney. Specifically, Harder's counsel represented
to the district court:
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"[PLAINTIFF'S COUNSEL]: . . . Finally, his last argument with regard to attorney's
fees. Your Honor, it was pled in the petition, and those attorney's fees obviously are
ongoing. There was a basis for them under the contract between Mr. Foster and Ms.
Harder.
"THE COURT: That wasn't a claim that was included in the pretrial order, was it?
"[PLAINTIFF'S COUNSEL]: It was included in the pretrial questionnaires that was
submitted—
"THE COURT: It was not included in the pretrial order. We didn't go through that at the
pretrial conference, did we?
"[PLAINTIFF'S COUNSEL]: We—Your Honor, we did in the sense of—I think you
were going to take the pretrial questionnaires, kind of merge them together.
"THE COURT: And I did. And I—
"[PLAINTIFF'S COUNSEL]: And it was listed.
"THE COURT: —generated—and I generated a pretrial order. It did not include any
claim for attorney's fees and no objection was made to the pretrial order, was it?
"[PLAINTIFF'S COUNSEL]: Judge, there was no objection to the pretrial order.
"THE COURT: Okay. And there was no evidence presented regarding attorney's fees for
submission to this fact finder?
"[PLAINTIFF'S COUNSEL]: At this point, no, Your Honor.
"THE COURT: Let's say that I was to allow the pretrial order to be amended to conform
to the evidence at the time of trial. And—and the only evidence that was in the trial of
this case would be that there was inquiry made of the plaintiff while she was testifying,
that she had a contract and referenced the contract's provision regarding an entitlement to
attorney's fees if there was a breach of the contract.
"[PLAINTIFF'S COUNSEL]: Correct.
"THE COURT: And that was the only evidence.
"[PLAINTIFF'S COUNSEL]: Correct.
"THE COURT: There—there was no submission as to—to an amount of attorney's fees
or anything of the nature.
"[PLAINTIFF'S COUNSEL]: That's correct, Your Honor.
"THE COURT: Okay.
"[PLAINTIFF'S COUNSEL]: And that's because we haven't actually completed all of
the attorney's fees that have been incurred in the case.
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"THE COURT: How can this jury award attorney fees then?
"[PLAINTIFF'S COUNSEL]: Well, I think that's probably a matter for the Court's
decision, not maybe the jury's decision.
"THE COURT: So you're not asking that the jury determine an award of attorney fees?
"[PLAINTIFF'S COUNSEL]: Correct, Your Honor. Because it's still ongoing. It's kind
of difficult to hit a moving target." (Emphasis added.)
After the jury returned a verdict in favor of Harder, she filed a posttrial motion in
which she asked the district court to grant her attorney fees and expenses based on the
real estate contract. Her motion was successful, and the district court ordered Foster to
pay $51,862 in attorney fees and $13,871.34 in expenses to Harder. Later, Foster moved
to set aside the district court's order granting attorney fees and expenses. At a hearing on
the motion, Harder's attorney explicitly argued to the district court that the question of
attorney fees and expenses arising out of the real estate contract "is not a jury decision."
At a subsequent hearing, Harder's attorney again emphatically argued that the
decision on awarding of attorney fees and expenses arising out of the real estate contract
is one for the judge—not for a jury. Harder's attorney told the district court that because
the language of the real estate contract had a specific requirement that the attorney fees
be reasonable, it "puts [the claim for attorney fees and expenses] in your domain to
decide that issue and [it is] not a jury decision." In addition, Harder's counsel argued that
the district court should decide the issue because the PIK Jury Instructions lack an
instruction to assist a jury in awarding attorney fees and expenses. After considering
these arguments, the district court upheld its prior order granting Harder attorney fees and
expenses arising out of the real estate contract.
Later, Harder filed a second motion for attorney fees and expenses arising out of
legal work performed after the jury trial related to various posttrial motions. At a hearing
on the second motion, Harder's counsel argued that the additional attorney fees and
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expenses were incurred "in connection with the default." Once again, Harder's attorney
argued to the district court that a determination of his client's claim for attorney fees and
expenses arising out of the real estate contract should be made by the district court—not
by a jury.
In denying Harder's second motion for attorney fees and expenses, the district
court noted the confusion about whether Harder had preserved a claim for attorney fees
and expenses in the pretrial order. In addition, the district court pointed out the deluge of
motions and delays that followed the jury's verdict in the 2013 case. Ultimately, the
district court found that "none of this had anything to do with actions of the defendant"
and that "the amount of time that was devoted really related to certain failures of
[Harder's] counsel to present a record supporting the award of attorney's fees." Harder
then filed her first appeal to this court.
In Harder I, this court held that attorney fees and expenses incurred as a result of
defending the jury verdict fell within the language in the real estate contract. In
remanding this issue to the district court, this court found:
"Here, the parties agreed that the defaulting party would pay the attorney fees of
the nondefaulting party. Thus, payment of attorney fees was within the contemplation of
the parties at the time of contracting. It is reasonably foreseeable that, should the
defaulting party attempt to evade its duty to pay attorney fees, the nondefaulting party
would incur even more attorney fees defending its rights under the contract. It was
reasonably foreseeable to Foster that Harder would defend her rights under the contract,
the rights that were only bestowed upon Harder because Foster defaulted." 54 Kan. App.
2d at 455-56.
On remand, the district court held a pretrial conference on the claim for attorney
fees and expenses in both cases. In contradiction to the position he had taken during the
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jury trial and at several posttrial hearings, Harder's counsel now argued that his client has
a right to a jury trial to determine her claim for attorney fees and expenses in the 2013
case. In rejecting this argument, the district court found that "the plaintiff was taking an
inconsistent position about how . . . the issue of attorney's fees should be determined.
Having argued long and hard that it was proper to not have the attorney's fee[s] in the
2013 . . . case determined by a jury but rather by the Court." We agree with the concerns
expressed by the district court about the inconsistent positions taken by Harder's counsel.
In this interlocutory appeal, Harder argues the district court erred in not granting a
jury trial on the issue of attorney fees and expenses. Specifically, Harder argues that
despite the inconsistent positions taken by her attorney before the district court, there has
been no "consent to a withdrawal of the jury demand." See K.S.A. 2019 Supp. 60-238(d)
(addressing the waiver and withdrawal of a demand for jury trial) and K.S.A. 2019 Supp.
60-239(a)(1) (addressing stipulations to withdraw a demand for a jury trial). In response,
Foster contends that Harder should be held to the position previously taken by her
attorney who "insisted that the District Court had the authority to hear and decide the
amount of attorney fees to be awarded."
In Dickinson, Inc. v. Balcor Income Properties Ltd., 12 Kan. App. 2d 395, 745
P.2d 1120 (1987), this court decided a similar issue to the one presented in this case. In
Dickinson, the plaintiff likewise argued that the district court erred in not granting a jury
trial on the issue of attorney fees and expenses in an action for breach of contract.
Finding that the plaintiff's argument lacked merit, this court found that "'[c]onduct or
acquiescence inconsistent with an intention to insist on a jury trial may constitute waiver
thereof.'" 12 Kan. App. 2d at 401 (quoting Westamerica Securities, Inc. v. Cornelius, 214
Kan. 301, 306, 520 P.2d 1262 [1974]). Ultimately, this court determined that a plaintiff
"may not complain of matters to which it has consented, or take advantage of error which
it has invited or in which it has participated. [Citation omitted.]" 12 Kan. App. 2d at 401.
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In this case, a review of the record reveals that Harder consented or acquiesced—
through the representations made by her attorney at the jury trial and at posttrial
hearings—to the district court deciding the issue of attorney fees and expenses in the
2013 case. As discussed above, Harder's attorney repeatedly argued to the district court
that the question of attorney fees and expenses arising out of the real estate contract
should not be decided a jury. So, we have no difficulty finding the position now taken by
Harder to be inconsistent with her earlier position.
Moreover, the error that Harder now claims was invited by Harder's counsel based
on his repeated representations to the district court at trial as well as during posttrial
hearings. An invited error is "[a]n error that a party cannot complain of on appeal because
the party, through its conduct, encouraged or prompted the trial court to make the
erroneous ruling." Black's Law Dictionary 660 (10th ed. 2014). See Thoroughbred
Assocs. v. Kansas City Royalty Co., 297 Kan. 1193, 1203, 308 P.3d 1238 (2013) (party
may not invite error and then complain of that error as a ground for reversing an adverse
judgment). "Where a party procures a court to proceed in a particular way thereby
inviting a particular ruling, that party is precluded from assailing such proceeding and
ruling on appellate review." In re Estate of Broderick, 34 Kan. App. 2d 695, Syl. ¶ 10,
125 P.3d 564 (2005).
Here, the record reveals that even though the district court expressed reluctance to
do so, Harder's attorney was successful in persuading it that the claim for attorney fees
and expenses arising out of the real estate contract should not be decided by a jury.
Significantly, the 2013 case was tried to a jury more than five years ago and the judgment
has been satisfied. For Harder's attorney to argue an inconsistent position at this late
date—after the repeated arguments made at trial and during posttrial hearings—is at best
questionable. Consequently, we find that Harder should not be allowed to capitalize on
the alleged error that her attorney invited.
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In summary, we find that the repeated representations made by Harder's attorney
below are sufficient to establish consent or acquiescence to the district court's decision to
deny a jury trial on the issue of attorney fees and expenses arising out of the real estate
contract. We also find that even if the district court committed error in denying the
request for a jury to determine Harder's claim for attorney fees and expenses, any error
was invited by her attorney. Thus, we conclude that the district court did not err in
denying Harder's request for a jury trial on the issue of attorney fees and expenses in the
2013 case.
Application of the Third-Party Exception in 2015 Case
Harder also contends that the district court erred in denying her request for a jury
to determine the issue of whether the third-party litigation exception to the American rule
is applicable in the 2015. For the reasons set forth above, Harder does not have a right to
a jury trial on this issue under Section 5 of the Kansas Constitution Bill of Rights.
Moreover, this court previously ruled in Harder I that "under the American rule, attorney
fees are not allowed under the UFTA." 54 Kan. App. 2d at 463. Because neither party
sought review of the decision in Harder I, the legal conclusions announced in that
opinion now serve as "the law of the case" under which the parties and district court must
abide.
"Under the law of the case doctrine, when a second appeal is brought in the same
case, the first decision is the settled law of the case on all questions involved in the first
appeal, and reconsideration will not normally be given to such questions." State v.
Kleypas, 305 Kan. 224, Syl. ¶ 2, 382 P.3d 373 (2016). "The law of the case doctrine
prevents a party from serially litigating an issue on appeal already presented and decided
in the same proceeding." Garetson Brothers v. American Warrior, Inc., 56 Kan. App. 2d
623, Syl. ¶ 7, 435 P.3d 1153 (2019). The doctrine promotes judicial efficiency while
16
allowing litigants a full and fair opportunity to present their arguments on a particular
point. See State v. Parry, 305 Kan. 1189, 1194, 390 P.3d 879 (2017).
In Harder I, this court remanded the 2015 case to the district court for the limited
purpose of making "a determination whether the principles outlined [in the opinion
regarding the third-party litigation exception] apply and what if any attorney fees are in
order . . . ." 54 Kan. App. 2d at 474. As discussed above, the United States Supreme
Court has found that the authority to recognize exceptions to the American rule falls
within the equitable powers of the courts. Sprague, 307 U.S. at 164; see Hall v. Cole, 412
U.S. 1, 5, 93 S. Ct. 1943, 36 L. Ed. 2d 702 (1973). Thus, we find that the question of
whether the third-party litigation exception to the American rule applies is firmly
grounded in equity.
As Harder recognizes in her brief, "[i]t has been uniformly held [by the Kansas
Supreme Court], since the early history of the state that a party is not entitled to a jury
trial as a matter of right in a suit in equity." Spena v. Goffe, 119 Kan. 831, 833, 241 P.
257 (1925) (citing Kimball v. Connor, 3 Kan. 414, 432 [1866]); see also Vanier v.
Ponsoldt, 251 Kan. 88, Syl. ¶ 6, 833 P.2d 949 (1992); Jensen Int'l, Inc. v. Kelley, 29 Kan.
App. 2d 836, 843, 32 P.3d 1205 (2001). "In determining whether an action is one in
equity, the test is whether the essential nature of the action is grounded on equitable
rights and is one in which equitable relief is sought." In re Petition of City of Moran, 238
Kan. 513, Syl. ¶ 1, 517-18, 713 P.2d 451 (1986). Because exceptions to the American
rule arise out of the court's equitable powers and because they are a means to seek
equitable relief not allowable by statute or contract, we conclude that there is no right to a
jury trial to decide claims asserted under the third-party litigation exception.
In remanding the issue of attorney fees in Harder I, this court anticipated that the
district court—not a jury—would determine whether Harder is able to establish the
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necessary elements to recover under the third-party exception to the American rule in the
2015 case. In particular, this court found that the district court should determine whether
Harder is able to show that "(1) the defendant committed a tort or violated a contractual
duty; (2) third-party litigation is the natural and proximate consequence of the defendant's
wrongdoing; (3) it was necessary for the claimant to engage in the third-party litigation;
and (4) the claimant exercised good faith in the third-party litigation." 54 Kan. App. 2d at
473. Furthermore, this court provided guidance to assist the district court on remand in
deciding whether the third-party litigation exception applies in the 2015 case. 54 Kan.
App. 2d at 474.
We conclude that the district court did not err in deciding that the limited issue
upon which the 2015 case was remanded should be determined by the court rather than
by a jury. As a result, we once again remand this matter to the district court for a
determination of whether the principles outlined in Harder I regarding the applicability of
the third-party litigation exception should be applied and, if so, to decide the amount of
attorney fees and expenses that reasonably relate to the claims asserted by Harder against
third parties. In reaching this conclusion, we note that the district court is an expert in
determining reasonable attorney fees and expenses. So, it is "well within [the court's]
discretion to make this determination and use KRPC 1.5(a) as the methodology to resolve
this dispute." Westar Energy, Inc. v. Wittig, 44 Kan. App. 2d 182, 206, 235 P.3d 515, 530
(2010) (citing Johnson v. Westhoff Sand Co., 281 Kan. 930, 940-41, 135 P.3d 1127
[2006]).
Affirmed and remanded with directions.
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