J and B Oil & Gas v. Ace Energy ( 2021 )

NOT DESIGNATED FOR PUBLICATION
No. 122,242
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
J AND B OIL & GAS, LLC, BRUCE SCHULZ and JESSE SCHULZ,
Appellees,
v.
ACE ENERGY, LLC and JONATHAN L. FREIDEN,
Appellants.
MEMORANDUM OPINION
Appeal from Crawford District Court; LORI BOLTON FLEMING, judge. Opinion filed August 20,
2021. Affirmed.
Blake Hudson, of Hudson Law L.L.C., of Fort Scott, for appellants.
Lisa A. McPherson and Amy F. Cline, of Triplett Woolf Garretson, LLC, of Wichita, for
appellees.
Before SCHROEDER, P.J., MALONE, J., and BURGESS, S.J.
PER CURIAM: Jonathan L. Freiden, and his company Ace Energy, LLC
(collectively Freiden), appeals the jury verdict and damages entered in favor of J and B
Oil & Gas, LLC, Bruce Schulz, and Jesse Schulz for fraud and breach of contract.
Freiden raises various claims on appeal, including (1) the district court erred in denying
his motion in limine; (2) the district court erred in denying his motion for summary
judgment on the fraud claims; (3) the verdict is not supported by sufficient evidence; (4)
the district court erred in instructing the jury; (5) the district court erred in denying his
motion to compel an election of remedies; and (6) the jury verdict was excessive. Finding
no reversible error, we affirm the district court's judgment.
1
FACTUAL AND PROCEDURAL BACKGROUND
This case involves a dispute over the purported sale of an oil and gas lease and a
trencher. The jury entered a verdict for fraud regarding the sale of the lease and for
breach of contract on the trencher against Freiden, not his company. As a result, the facts
will proceed by referring to the defendants collectively as Freiden.
Bruce Schulz owned a company called Double 7 to drill gas and oil wells in
Labette and Crawford Counties. In 2008, Bruce acquired the Beachner Lease, which
contained 33 oil wells. Bruce and his son, Jesse, then created J and B Oil & Gas (J and B
Oil) to work the Beachner Lease. Jesse did an "extensive overhaul" of the Beachner
Lease which included replacing old equipment, replacing all the pipe in the wells and
pumps, and electrical work. Jesse also worked with the Kansas Corporation Commission
(KCC) to get the injection wells and producing wells approved. Jesse testified that his
total cost of repairs, not including his sweat equity, totaled $292,475.73.
During the repairs, Bruce and Jesse got five of the wells to produce up to 18
barrels a day, and one day they hit 21 barrels. The seven-day production average for the
five wells was 16.08 barrels per day. But the production started to go down as the wells
lost their natural pressure, so Bruce and Jesse decided to shut the production down and
install a water injection system.
Meanwhile, in 2012, Bruce found out he had prostate cancer, had surgery, and
completed other cancer treatments. During this time, the KCC ordered Bruce to plug
some wells on another lease operated by Double 7, which he failed to do. As a result, the
KCC suspended his operating license.
Freiden discovered the KCC suspended Bruce's license and began to pursue the
Beachner lease. In 2013, Freiden called the landowner to try to get the Schultz' lease
2
cancelled but the landowner refused and told Freiden to call Bruce. Freiden then called
Bruce about purchasing the Beachner lease. Bruce told Freiden that the Beachner lease
was not for sale, but Freiden kept calling so Bruce decided to meet with him. Freiden met
with Bruce at the lease and looked around. After about six months, Bruce started to
seriously consider selling the Beachner lease because of his health problems. Freiden and
Bruce talked several more times on the phone and had two more in person meetings.
On September 14, 2014, Freiden emailed Jesse and told him he had the paperwork
drafted for a sale. In the email, Freiden stated that he would pay $40,000 per barrel based
on the average production over the first six months as the purchase price. Freiden would
pay $10,000 up front and pay the balance after the six-month period. Freiden also
mentioned to Bruce that he would be interested in purchasing the equipment.
In October 2014, Freiden told Bruce that he needed a trencher on another lease.
Bruce told Freiden that he could buy the trencher for $20,000 or rent it for half the price
of a rental in town. Jesse delivered the trencher to Freiden's lease. Dwayne Lansdown, an
employee of Freiden's, testified the trencher ran fine when Jesse delivered it.
On October 24, 2014, Freiden emailed Jesse the purchase agreement his attorney
drafted. In the agreement, Freiden proposed to pay $50,000 per barrel for the lease to
include some equipment in the sale. The agreement also proposed that Bruce and Jesse
would finance the purchase for five years. Bruce had three problems with the proposed
agreement. First, Bruce told Freiden that he had not agreed to the five-year finance term
and that term needed to be removed. Second, the proposed agreement lacked a provision
allowing a representative, Jesse, from J and B Oil to be present to oversee the operations
during the six-month period, a term Freiden had agreed to in the original meetings. Third,
Bruce noticed the proposed agreement listed the wrong county. Freiden told Bruce that he
agreed to the three changes and that Bruce's attorney could correct the agreement. Bruce
sent the agreement to his attorney for review and to make the three changes.
3
On November 10, 2014, before Bruce received the revised agreement back from
his attorney, Bruce and Freiden met in person. Freiden brought an assignment of oil and
gas lease to the meeting. Bruce signed the assignment because Freiden promised Bruce
that as soon as Bruce got the revised contract, he would drop everything and sign it. After
Bruce signed the assignment, Freiden took him to a bank to have it notarized.
A few days later, Bruce received the revised purchase agreement back from his
attorney and tried to call and text Freiden about signing the agreement, but Freiden never
responded. Jesse also tried to contact Freiden multiple times. Within a week or two of
signing the assignment, Bruce drove by the Beachner lease several times trying to find
Freiden and noticed that "everything was tore up." Jesse also went by the lease. Once, he
encountered Lansdown on the lease while he was trying to find Freiden. Lansdown called
Freiden and told him that Jesse was trying to contact him, and Freiden said, "he was
hoping that the son of a bitch would have died by now," referring to Bruce. Freiden told
Lansdown in another call that because he had validly purchased the Beachner lease, Jesse
had no business out there and Lansdown should call the police if Jesse came back.
Jesse also tried to find the trencher. At one point, Jesse found out its location
through neighbors and discovered the trencher's tires were flat, the seat was torn, there
were pack rat nests, and wires "jerked out of" the dash. Jesse said the trencher was
inoperable. Freiden paid no money to anyone for the Beachner lease. Freiden also paid
nothing for the trencher.
More than a year later, on January 15, 2016, Freiden emailed Bruce asking if he
wanted the Beachner lease assigned back to him or if he wanted to buy a working interest
in the lease. Jesse spoke with Bruce about Freiden's offer and they decided that Freiden
had run the lease down and the condition was too poor to accept it back.
4
Legal proceedings in district court
On January 5, 2017, J and B Oil filed suit. The petition advanced several claims:
(1) breach of contract by Ace Energy for the Beachner lease; (2) breach of contract for
the trencher by Ace Energy or Freiden; (3) fraudulent concealment or fraud by silence by
Freiden or Ace Energy; (4) fraudulent or negligent misrepresentation by Freiden and Ace
Energy; (5) breach of duty of good faith and fair dealing by Freiden and Ace Energy; (6)
promissory estoppel against Freiden and Ace Energy; (7) conversion of the trencher by
Freiden or Ace Energy; (8) unjust enrichment against Ace Energy; and (9) accounting.
In May 2017, Freiden called Jesse. During the long phone conversation, which
Jesse recorded, Freiden said he knew several bad people who were pissed off at Bruce
and could take care of him or shake him up, and that if the lawsuit continued Bruce
would end up in a ditch. He also said he knew people who could burn Bruce's house
down. Freiden told Jesse he hoped Bruce would die of cancer. Freiden also asked Jesse to
help him get rid of the lawsuit by closing J and B Oil. When Jesse stated that he did not
have any money, Freiden told him that he knew people who could steal his equipment so
Jesse could file an insurance claim.
Freiden filed a motion for partial summary judgment. J and B Oil responded. The
district court issued its order on Freiden's motion for partial summary judgment, granting
it in part and denying it in part. The district court granted summary judgment on Count 4
for the negligent representation claim but not on the fraudulent misrepresentation claim.
The district court also granted summary judgment for Freiden, but not Ace Energy, on
Counts 5, 6, 8, and 9. But the district court denied his motion for summary judgment on
the remaining fraud claims.
On October 9, 2018, J and B Oil filed its amended petition to reflect the summary
judgment ruling, claiming: (1) breach of contract for the Beachner lease against Ace
5
Energy; (2) breach of contract for the trencher against Freiden or Ace Energy; (3)
fraudulent concealment or fraud by silence against Freiden or Ace Energy; (4) fraudulent
misrepresentation against Freiden or Ace Energy; (5) breach of duty of good faith and
fair dealing against Ace Energy; (6) promissory estoppel against Ace Energy; (7)
conversion against Freiden or Ace Energy; (8) unjust enrichment against Ace Energy;
and (9) accounting against Ace Energy.
On December 14, 2018, J and B Oil moved to amend the petition to add a claim
for punitive damages, which the district court granted. J and B Oil filed the second
amended petition, adding Count 10 for punitive damages.
On February 27, 2019, Freiden moved to compel an election of remedies, which
the district court denied. On July 29, 2019, Freiden filed a motion in limine, requesting
that the statements made by Freiden in telephone conversations with Jesse be excluded.
The district court denied the motion except for two portions J and B Oil agreed to redact.
Jury trial proceedings
Starting on August 21, 2019, the district court held a three-day jury trial. Bruce
testified to the above events and that the Beachner lease was in perfect condition and in
good standing with the KCC when he assigned it to Freiden. Bruce testified that during
all their conversations, Freiden never mentioned that he wanted to operate the lease on a
trial basis before signing the purchase agreement. He asked the jury to award $900,000
based on the five wells producing 18 barrels a day at $50,000 per barrel.
Lansdown testified for J and B Oil. Lansdown testified that the lease was in
"decent" condition but there was a brief period when some wells needed a temporary
abandonment. Lansdown testified that Freiden told him that he did not want him doing a
lot of work in the first six months because the price of the agreement was based on
6
production in the first six months. Thus, Lansdown had a few wells going up and down,
so it looked like something was getting done. Lansdown testified that the trencher ran
fine when Jesse delivered it. Lansdown used the trencher at the Beachner lease for about
a week until Freiden called at 2:30 in the morning and told him to move the equipment
and take it to another lease. Lansdown testified that the last time he saw the trencher, a
pack of rats had started to make a mess of it.
Freiden testified that he believed that he would not have to pay anything for the
Beachner lease if it did not produce. But when pressed, Freiden admitted that the contract
he sent over in October 2014 said nothing about operating the Beachner lease on a trial
basis. J and B Oil admitted transcripts of the recorded calls over Freiden's objection.
Freiden claimed the phone calls were merely his attempt to settle. Freiden testified that he
was still operating the lease and it produced at least four or five barrels a day.
Jesse testified that when Bruce transferred the Beachner lease to Freiden, the lease
was in "excellent condition" with "no leaks or outstanding work to be done." But Freiden
failed to maintain the lease and the condition became poor. Jesse said there were
noticeable oil leaks on the property. He also testified that the injection system did not
seem to have been turned on. Jesse testified that Freiden never mentioned wanting to
purchase the lease on a trial basis. He believed the production on the lease with all wells
running would be around 30 barrels per day. Jesse and Bruce never produced oil under
the injection system because Freiden had shown interest in buying the lease.
J and B Oil rested. Freiden moved for a directed verdict on the trencher claim,
which the district court denied. Freiden then presented his case.
Freiden called Casey Jesseph, who worked on the Beachner lease starting in
February 2016. Jesseph testified that when he started working the Beachner lease there
was just general maintenance and a few minor repairs. He testified that there was an
7
average production of about 2.04 barrels per day in 2016, 2.32 barrels per day in 2017,
and 1.38 barrels per day in 2018. Jesseph explained that the lower production in 2018
could be because of a few storms that snapped overhead wiring, which caused production
to stop. He also pointed to the extremely wet year in 2019 which prevented some repairs
from being done as causing the lower production in 2019. Jesseph testified that he did not
believe the lease was ruined and that the amount of production the lease was producing
was about what he would expect under the circumstances.
Freiden also testified during his case-in-chief. Freiden testified that he never knew
there was a revised agreement that Bruce was trying to get him to sign and that he did not
have any missed calls from Bruce. Freiden also claimed that Bruce assigned him the lease
so that the lease could be turned on to see what it would produce. He testified that none
of the repairs Jesse and Bruce claimed they did on the lease had been done. He testified
he never intended to take the lease without paying for it. He intended to either purchase it
or return it if it did not produce what Bruce represented. Freiden said he offered to assign
the lease back to J and B Oil when it was not producing but Bruce refused to take it back.
Freiden admitted that he had paid no money for the Beachner lease.
At the close of evidence, J and B Oil withdrew Count 1 for breach of contract on
the sale of the lease, Count 5 for breach of duty of good faith and fair dealing, and Count
7 for conversion. J and B Oil elected to pursue a breach of contract claim for the trencher
and its fraud claims for the Beachner lease against Freiden. The district court instructed
the jury accordingly. The jury found that Freiden breached his contract on the trencher
and awarded $20,000 and found Freiden committed fraud and awarded $750,000. The
jury also found that punitive damages should be assessed against Freiden. The district
court awarded $93,000 in punitive damages. The district court entered judgment against
Freiden in the amount of $863,000, in accordance with the jury verdict and punitive
damages award. Freiden timely appealed the district court's judgment.
8
DID THE DISTRICT COURT ERR IN DENYING FREIDEN'S MOTION IN LIMINE?
Freiden first claims the district court erred in denying his motion in limine
requesting the telephone conversations between him and Jesse be excluded from trial.
Freiden challenges three categories of statements: statements about Bruce ending up in a
ditch; statements about Freiden burning Bruce's house down; and statements about
Freiden stealing equipment so that Jesse could make insurance claims. Freiden argues the
statements were irrelevant and inadmissible under K.S.A. 60-455.
J and B Oil argues the district court correctly admitted the statements as they were
highly relevant. J and B Oil also asserts the statements were a basis for impeachment. J
and B Oil asserts that it did not offer the transcripts as K.S.A. 60-455 evidence. J and B
Oil also argues the statements were not more prejudicial than probative.
Preservation
A party must lodge a timely and specific objection to evidence to preserve the
issue for appeal. State v. Sean, 306 Kan. 963, 971, 399 P.3d 168 (2017); see K.S.A. 60-
404. Freiden does not mention preservation at all in his brief on this this issue. Under
Supreme Court Rule 6.02(a)(5), Freiden should have included "a pinpoint reference to the
location in the record on appeal where the issue was raised and ruled on." (2021 Kan. S.
Ct. R. 36). He does reference that he filed a pretrial motion in limine addressing the three
statements he challenges. But "[w]hen the trial court grants or denies a motion in limine
and the evidence is introduced at trial, the moving party must object at trial to the
admission of the evidence to preserve the issue for appeal." Unruh v. Purina Mills, LLC,
289 Kan. 1185, 1193, 221 P.3d 1130 (2009). Thus, Freiden must point to a
contemporaneous objection made at trial to preserve his claim.
9
He fails to point to a contemporaneous objection in his brief, but our review of the
record reveals that Freiden did lodge a contemporaneous objection to J and B Oil's
questions related to the telephone conversations and to its subsequent admission of the
transcripts of the telephone calls. Freiden objected citing the arguments raised in his
pretrial motion in limine, and the district court overruled his objection.
In his motion in limine, Freiden objected to the statements on the bases of
relevance, as impermissible K.S.A. 2020 Supp. 60-455(b) evidence, and as more
prejudicial than probative. The district court denied his motion, finding Freiden's
arguments went to the weight of the evidence, that the evidence was highly relevant to
show the intent and motive of Freiden, that the statements were more probative than
prejudicial, and that the statements were statements could be considered admissions
against interest.
Standard of Review
Generally, "[a] motion in limine is appropriate when: '(1) the material or evidence
in question will be inadmissible at trial; and (2) the pretrial ruling is justified as opposed
to ruling during trial.'" State v. Knox, 301 Kan. 671, 688, 347 P.3d 656 (2015). We apply
a multistep analysis to a challenge of a district court's ruling on a motion in limine:
"'Under the multistep evidentiary analysis, the first question is relevance. K.S.A.
60-401(b) defines relevant evidence as evidence that is probative and material. On
appeal, the question of whether evidence is probative is judged under an abuse of
discretion standard; materiality is judged under a de novo standard. The second step is to
determine which rules of evidence or other legal principles apply. On appeal, this
conclusion is reviewed de novo. In the third step of the analysis, a district court must
apply the applicable rule or principle. The appellate court's standard of review of this
third step varies depending on the rule or principle that is being applied. Some rules and
principles grant the district court discretion, while others raise matters of law. Finally, an
analysis under K.S.A. 60-445 may be required, depending on the issue and parties'
10
arguments. Under that statute, a district judge "may in his or her discretion exclude
evidence if he or she finds that its probative value is substantially outweighed by the risk
that its admission will unfairly and harmfully surprise a party who has not had reasonable
opportunity to anticipate that such evidence will be offered." This analysis is reviewed
under an abuse of discretion standard.'
"Evaluation of the second factor of the motion in limine test rests in the sound
discretion of the district judge and is reviewed for abuse of that discretion. [Citations
omitted.] " State v. Frierson, 298 Kan. 1005, 1015-16, 319 P.3d 515 (2014).
Analysis
Freiden's brief does not identify with specificity or citation to the record which
statements he is challenging. In his brief, he lays out the three types of statements he is
challenging—a statement "to the effect" that Freiden wanted the lawsuit dropped because
it was a nuisance and that Bruce would end up in a ditch if he kept it up; a statement "to
the effect" that Freiden told Jesse that guys could take things of Bruce and burn his house
down; and statements "to the effect" that Freiden offered to steal equipment and
suggested that Jesse could file an insurance claim—and "statements of a 'similar' nature."
His reference to statements of a "similar nature" provides this court with no guidance on
what statements he is challenging. As a result, we decline to address any other statements
than the three types explicitly identified. See In re Marriage of Williams, 307 Kan. 960,
977, 417 P.3d 1033 (2018) (finding an argument inadequately briefed is abandoned).
As for the three types of statements he did identify, he also fails to identify with
any specificity which statements he is challenging. In his argument, Freiden cites to his
motion in limine, he does not cite to trial testimony or to the statements in the transcript
of the telephone conversations that were admitted at trial. Still, our review of the record
reveals that the statements Freiden challenges were admitted at trial through testimony
and the transcript of the telephone call. First, Freiden testified to telling Jesse in the call
to "'make sure your dad drops his trouble against me because it is a nuisance and he's
11
going to end up in a ditch if he keeps it up because I'm not the only one that is mad at
him.'" Second, he stated, "I've got all the guys that can go and take whatever they need
off your dad. They will burn his house down.'" Third, Freiden elaborated that "'I've got
the people that could go there and take your equipment and you wouldn't have anything
to do with it . . . it will be stolen, and then you can file an insurance claim if you want.'"
Freiden first challenges the relevance of the statements. The threshold question of
admissibility is whether the evidence is relevant. State v. Lowrance, 298 Kan. 274, 288,
312 P.3d 328 (2013). All relevant evidence is admissible unless it is otherwise excluded
by statute. K.S.A. 60-407(f). In determining whether evidence is relevant, the trial court
must determine whether "there is a material or logical connection between the asserted
facts and the inference or result the facts are intended to establish." 298 Kan. at 288.
Thus, there is a materiality element and a probative element for relevancy. 298 Kan. at
288. The evidence is material if it supports a fact or issue in dispute, and evidence is
probative if it has "a logical tendency to prove a material fact." 298 Kan. at 289. This
court applies a de novo standard of review to determining materiality and an abuse of
discretion standard to the probative element. 298 Kan. at 289.
Freiden argues that the statements were not relevant because they occurred almost
two and a half years after the alleged fraudulent act and none of the challenged
statements reference the lease assignment or purchase agreement. J and B Oil asserts that
the statements were relevant because they showed Freiden was trying to bribe Jesse or
coerce him not to testify, which implies Freiden was conscious of his guilt about
committing fraud. J and B Oil also assert that the statements were relevant to prove intent
and motive, mainly Freiden's intent not to sign the purchase agreement.
J and B Oil presents a persuasive argument about consciousness of guilt. The
Kansas Supreme Court has stated that in criminal cases, evidence showing consciousness
of guilt can be material to several issues, including intent. State v. Huddleston, 298 Kan.
12941, 960-61, 318 P.3d 140 (2014) (citing cases from Kansas and other jurisdiction for
support). Other jurisdictions have also recognized the attempted bribing or tampering
with a witness in a civil case shows a consciousness of guilt or an awareness of the
weakness of the case. See, e.g., Scrivner v. American Car & Foundry Co., 330 Mo. 408,
443, 50 S.W.2d 1001 (1932) (finding evidence of trying to bribe a witness admissible to
show consciousness of the weakness of cause); White v. White, No. CA 03-540, 2004 WL
243039, at *5 (Ark. Ct. App. 2004) (unpublished opinion) (stating evidence of an attempt
to bribe witness for favorable testimony showed "awareness of the weakness" of the suit).
Similarly, the statements about potential harm to Bruce or his house and any
attempt to help Jesse get an insurance payout on equipment could be considered an
attempt to prevent Jesse from testifying. Thus, as J and B Oil asserts, the evidence is
material and probative, proving Freiden's consciousness of guilt, which could be used to
infer Freiden knew he acted fraudulently in this transaction.
Also, as the district court found, the statements can be used to infer Freiden's
intent. Freiden's statements about harming or getting rid of Bruce can be used to infer that
Freiden never intended to pay for the lease or go through with the agreement once he got
the assignment. And these statements must be considered in tandem with Lansdown's
testimony that when Freiden learned that Jesse had come around the lease, Freiden stated
he had hoped Bruce would have died by now. It would be a reasonable inference that
Freiden had no intention of ever paying for the lease and instead hoped or even would
make sure something happen to Bruce before Freiden had to pay for the lease.
To the extent that Freiden argues that the statements could not be relevant to his
intent because the statements do not mention the purchase agreement or assignment, his
argument is unpersuasive. It is unlikely that there will be direct evidence of a person's
fraudulent intent. Instead, circumstantial evidence will often support inferences of intent.
See State v. Gonzalez, 311 Kan. 281, 288, 460 P.3d 348 (2020) ("Intent is usually proven
13
by inference arising from circumstantial evidence because direct evidence of a
defendant's state of mind is rarely available."). Thus, although the challenged statements
do not directly reference Freiden's intent about the transaction, as analyzed above, the
statements can be used to infer that Freiden never intended to pay for the lease. In sum,
the challenged statements were relevant.
The second step of the motion in limine analysis is to determine which rules of
evidence or other legal principles apply. On appeal, this conclusion is reviewed de novo.
In the third step of the analysis, a district court must apply the applicable rule or
principle. The appellate court's standard of review of this third step varies depending on
the rule or principle that is being applied. Some rules and principles grant the district
court discretion, while others raise matters of law. Frierson, 298 Kan. at 1015-16.
But the only argument Freiden makes that would fall under this step of the
analysis is that the statements were inadmissible because they were not crimes or civil
wrongs contemplated under K.S.A. 2020 Supp. 60-455(b), instead they were, at best,
conversations regarding possible future wrongs. But J and B Oil asserts that it did not
offer the challenged statements under K.S.A. 60-455. We agree with J and B Oil that the
statements did not discuss crimes or civil wrongs as contemplated by K.S.A. 60-455, and
that statute is not implicated here.
Finally, the district court did not abuse its discretion by finding that the probative
value of the statements outweighed any prejudicial effect. In weighing the probative
value of evidence against its prejudicial effect, the district court must determine whether
there is a risk of undue or unfair prejudice. State v. Claerhout, 54 Kan. App. 2d 742, 753,
406 P.3d 380 (2017). The risk of undue or unfair prejudice "'turns not on whether the
evidence is damaging but on whether the evidence is likely to contribute to an improper
jury verdict or distract from the central issues at trial.'" 54 Kan. App. 2d at 754.
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The prejudice about which Freiden complains is not the type of unfair or undue
prejudice on which the district court was empowered to exclude evidence. The fact that
Freiden's statements were incriminating does not make them prejudicial. All evidence
harmful to a defendant's case is by its nature prejudicial. But only evidence that brings
about a wrong result under the circumstances of the case is unduly prejudicial. State v.
Clark, 261 Kan. 460, 477, 931 P.2d 664 (1997).
In sum, the district court did not err in denying Freiden's motion in limine seeking
to exclude the recorded telephone conversations based on the arguments Freiden makes
on appeal. The statements Freiden challenges were relevant to show consciousness of
guilt and to prove fraudulent intent. The district court did not abuse its discretion in
finding that the probative value of the statements outweighed any prejudicial effect.
DID THE DISTRICT COURT ERR IN DENYING FREIDEN'S MOTION FOR SUMMARY
JUDGMENT ON J AND B OIL'S FRAUD CLAIMS?
Freiden next claims the district court erred in denying his motion for summary
judgment on J and B Oil's fraud claims. J and B Oil first asserts that Freiden has not
preserved this issue for review. J and B Oil argues that because the district court denied
Freiden's motion on the fraud claims, but a jury later heard those claims and entered a
verdict, Freiden's challenge to the district court's denial of the motion for summary
judgment is waived. Freiden did not respond to this argument in his reply brief.
J and B Oil cites Evergreen Recycle v. Indiana Lumbermens Mut. Ins. Co., 51
Kan. App. 2d 459, 350 P.3d 1091 (2015), to support its argument. In that case, the district
court denied the insurance company's motion for summary judgment on a claim that the
insured failed to provide a prompt notice of loss. This claim proceeded to jury trial and
the jury entered a verdict for the insured. The insurance company appealed the district
court's denial of its summary judgment motion. On appeal, the insured argued "that an
15
appeal of the denial of a motion for summary judgment is not procedurally sound after
the court has held a full jury trial on the merits of that issue." 51 Kan. App. 2d at 490.
This court agreed and explained that "[g]enerally, a party may not 'appeal an order
denying summary judgment after a full trial on the merits' because that 'order retains its
interlocutory character as simply a step along the route to final judgment.'" 51 Kan. App.
2d at 490 (quoting Ortiz v. Jordan, 562 U.S. 180, 184, 131 S. Ct. 884, 178 L. Ed. 2d 703[2011]). This court found that a party who lost on summary judgment can preserve the
legal issues by incorporating them into a motion for judgment as a matter of law.
Evergreen, 51 Kan. App. 2d at 490. Ultimately, this court declined to examine the district
court's ruling on the summary judgment motion. 51 Kan. App. 2d at 490.
Freiden challenges the district court's denial of his summary judgment motion on J
and B Oil's fraud claims. But the fraud claims were submitted to the jury and a verdict
was rendered in J and B Oil's favor. Freiden did not move for a judgment as a matter of
law on the fraud claims. Applying the reasoning in Evergreen, we could decline to revisit
the district court's denial of summary judgment on the fraud claims because they were
heard by a jury and Freiden never filed a judgment as a matter of law. See Sigg v. Severt,
No. 118,631, 2019 WL 1213245, at *4-5 (Kan. App. 2019) (unpublished opinion)
(declining to review challenge to trial court's denial of summary judgment when party did
not move for judgment as a matter of law and the issue proceeded to a jury trial).
But even if we ignore the preservation issue and reach the merits of Freiden's
claim on appeal, he has no right to relief. Freiden argues that J and B Oil's fraud claims
lacked proof of fraudulent intent. He asserts the only "admissible" evidence supporting
intent was the fact that he never signed a written agreement. Freiden claims that the lack
of a contract alone cannot establish fraudulent intent because J and B Oil did not present
him with a contract for signature when the lease was assigned. He also asserts that no
fraud was involved because he offered to reassign the lease back to J and B Oil. Freiden
argues that summary judgment was appropriate because J and B Oil failed to establish
16
that it reasonably or justifiably relied on Freiden's promise when it assigned the lease. J
and B Oil argues that the district court correctly denied the summary judgment motion
because it provided sufficient evidence of fraudulent intent and did not waive any claim.
The district court found that "[t]he parties disagree whether a revised purchase
agreement exists" and explained that Freiden claimed he was never presented with one
while J and B Oil claims that Freiden agreed to sign the revised agreement at the time of
the lease assignment. The district court also found that there were sufficient facts to
establish that Feiden never intended to sign the purchase agreement, including the
statements he made in the telephone conversations. The district court also pointed out that
whether J and B Oil's reliance was reasonable is a question of fact.
"Summary judgment is appropriate when the pleadings, depositions, answers to
interrogatories, admissions on file, and supporting affidavits show that no genuine issue
exists as to any material fact and the moving party is entitled to judgment as a matter of
law. The district court must resolve all facts and reasonable inferences drawn from the
evidence in favor of the party against whom the ruling [is] sought. When opposing
summary judgment, a party must produce evidence to establish a dispute as to a material
fact. In order to preclude summary judgment, the facts subject to the dispute must be
material to the conclusive issue in the case. Appellate courts apply the same rules and,
where they find reasonable minds could differ as to the conclusions drawn from the
evidence, summary judgment is inappropriate. Appellate review of the legal effect of
undisputed facts is de novo." GFTLenexa, LLC v. City of Lenexa, 310 Kan. 976, 981-82,
453 P.3d 304 (2019).
The existence of fraud is normally a question of fact. Chism v. Protective Life Ins.
Co., 290 Kan. 645, 654, 234 P.3d 780 (2010). Intent is usually proven by circumstantial
evidence, making summary judgment inappropriate when a state of mind is at issue.
Boldridge v. National City Bank, No. 104,139, 2011 WL 3891867, at *6 (Kan. App.
2011) (unpublished opinion) (finding summary judgment inappropriate on fraud claim
when intent was at issue); see also Gonzalez, 311 Kan. at 288 ("Intent is usually proven
17
by inference arising from circumstantial evidence because direct evidence of a
defendant's state of mind is rarely available."). Thus, if J and B Oil presented any facts to
support an inference of fraudulent intent, summary judgment would be inappropriate.
Contrary to Freiden's assertion, there was sufficient evidence that could be used to
infer a fraudulent intent beyond the mere lack of a signed agreement. J and B Oil asserted
in its response to summary judgment that Freiden agreed to sign a revised agreement but
ignored Jesse's attempts to contact him after Bruce assigned the lease. It also asserted that
Freiden told others that Bruce was foolish to assign the lease without a written purchase
agreement. J and B Oil asserted that Freiden spoke to Jesse on the phone and threatened
Bruce, suggested the insurance claim scheme, and reiterated that it was Bruce's fault for
assigning the lease before getting a signed contract. These facts, taken in J and B Oil's
favor, could be used to infer a fraudulent intent. Thus, whether Freiden had a fraudulent
intent was a material question of fact inappropriate for decision by summary judgment.
Freiden then asserts summary judgment was appropriate because J and B Oil could
not establish it reasonably relied on Freiden's promise. He argues that J and B Oil's
reliance was unreasonable because "[m]ere trust of the other party in a business
transaction does not, in the eyes of the law, justify a party to rely on any representations
spoken or unspoken by the other party." Freiden quotes half of a sentence from Wolf v.
Brungardt, 215 Kan. 272, 283, 524 P.2d 726 (1974), in support of his argument: "There
would seem to be little doubt that while, in the ordinary business transactions of life, men
are expected to exercise reasonable prudence and not rely upon others with whom they
deal to care for and protect their interests." Interestingly, the second half of the sentence
that Freiden omits states that "this requirement is not to be carried so far that the law shall
ignore or protect positive, intentional fraud successfully practiced upon the simple
minded or unwary." 215 Kan. at 283.
18
In any event, Wolf does not establish that Freiden is entitled to summary judgment.
First, Wolf does not suggest that trusting a party's assertion that it would sign a contract is
per se unreasonable. Second, and more importantly, whether Bruce or Jesse "reasonably"
relied on Freiden's promise would be a question of fact for the jury. See, e.g., Bouton v.
Byers, 50 Kan. App. 2d 34, 43, 321 P.3d 780 (2014) ("The reasonableness of a party's
actions, including reliance on statements of another party, typically reflects a fact
question reserved for the factfinder."). Thus, whether the reliance was reasonable is a
material question of fact precluding summary judgment. As a result, Freiden has failed to
show that he was entitled to judgment as a matter of law.
In sum, Freiden has no right to relief. First, his claim is likely unpreserved.
Second, he fails to establish there were no material questions of fact and that he was
entitled to judgment as a matter of law. As a result, the district court did not err in
denying his motion for summary judgment.
WAS THERE SUFFICIENT EVIDENCE TO
SUPPORT THE JURY'S VERDICT ON J AND B OIL'S FRAUD CLAIMS?
Freiden argues the jury verdict on the fraud claims is not supported by clear and
convincing evidence. The jury was instructed on a fraud by silence and fraudulent
promise of future events claim. A claim of fraud by silence requires the plaintiff to show:
"(1) that defendant had knowledge of material facts which plaintiff did not have and
which plaintiff could not have discovered by the exercise of reasonable diligence; (2) that
defendant was under an obligation to communicate the material facts to the plaintiff; (3)
that defendant intentionally failed to communicate to plaintiff the material facts; (4) that
plaintiff justifiably relied on defendant to communicate the material facts to plaintiff; and
(5) that plaintiff sustained damages as a result of defendant's failure to communicate the
material facts to plaintiff. [Citation omitted.]" Miller v. Sloan, Listrom, Eisenbarth, Sloan
& Glassman, 267 Kan. 245, 260, 978 P.2d 922 (1999).
19
Similarly, a claim of fraudulent promise of future events requires the plaintiff to
show: that when the promisor promised to do something in the future, the promisor had
no intention to carry out the promise; the statement was made with the intent to deceive;
and the other party reasonably relied on the promise to their detriment. See Gerhardt v.
Harris, 261 Kan. 1007, 1013, 934 P.2d 976 (1997).
In district court, J and B Oil alleged that Freiden committed fraud by silence by
failing to inform the Schulzes that he only intended to purchase the lease after a trial
period. The fraudulent promise of future events claim was based on the assertion that
when Bruce assigned the lease to Freiden, Freiden fraudulently promised to sign the
revised purchase agreement once the agreement was ready. Both claims require an intent
to deceive, which is the only element Freiden challenges in this issue. Freiden argues that
the jury should not have relied on the phone conversation and, without that evidence, the
only evidence of fraudulent intent was that no written agreement was ever signed.
Freiden asserts that the lack of a signed agreement "is hardly clear and convincing
evidence of fraudulent intent" and thus the verdict must be reversed.
J and B Oil argues that the telephone calls were sufficient to show intent but points
to other evidence also supporting the verdict. J and B Oil also argues Freiden's conduct at
trial and evidence on the trencher helped establish an intent to defraud.
When a party challenges a jury verdict for insufficiency of evidence or as being
contrary to the evidence, it is not the function of the appellate court to weigh the evidence
or pass on the credibility of the witnesses. If the evidence, when considered in the light
most favorable to the prevailing party, supports the verdict, the appellate court should not
intervene. Wolfe Electric, Inc. v. Duckworth, 293 Kan. 375, 407, 266 P.3d 516 (2011).
Claims of fraud must be established by clear and convincing evidence. Alires v.
McGehee, 277 Kan. 398, 403, 85 P.3d 1191 (2004). This court must affirm the jury's
verdict if it is supported by substantial competent evidence. 277 Kan. at 403; Blizzard
20
Energy v. Alexandrov, No. 118,656, 2019 WL 1746834, at *9 (Kan. App. 2019)
(unpublished opinion) (addressing whether sufficient evidence supported jury's verdict on
plaintiff's fraud claims), rev. denied 310 Kan. 1061 (2019).
Contrary to Freiden's assertion, there was more evidence supporting his fraudulent
intent than the lack of a signed agreement. As discussed in the summary judgment issue,
intent is generally proven by circumstantial evidence. Boldridge, 2011 WL 3891867, at
*6 (stating intent is usually proven through circumstantial evidence); see also State v.
Gibson, 311 Kan. 732, 742, 466 P.3d 919 (2020) ("'Intent is usually proven by inference
arising from circumstantial evidence because direct evidence of a defendant's state of
mind is rarely available.'"). As a result, the question is whether J and B Oil presented
sufficient evidence to allow the jury to infer Freiden acted with a fraudulent intent. J and
B Oil did so for both claims.
The evidence presented at trial on the promise of future events claim established
that Freiden promised Bruce that as soon as he received the revised contract, Freiden
would drop everything and get it signed. But after Bruce assigned the lease to Freiden,
neither Bruce nor Jesse could get a hold of Freiden even though they tried multiple times.
Freiden claimed he did not know there was a revised agreement and he had no missed
calls from the Schulzes. Thus, whether the jury believed Freiden or Bruce is a credibility
determination that this court does not reweigh. See Duckworth, 293 Kan. at 407.
Further, speaking to intent, Lansdown testified that Freiden, upon being informed
that Jesse was looking for him, stated that "he was hoping that the son of a bitch would
have died by now." Freiden also instructed Lansdown to call the police if Jesse came
around the lease again. Finally, the telephone conversation was properly admitted
evidence that clarified Freiden's intent. Taking this evidence in the light most favorable to
J and B Oil, there is sufficient evidence to infer that Freiden never intended to sign the
21
revised purchase agreement because he continued to avoid the Schulzes after the lease
assignment and never paid them any money for the lease.
There was also sufficient evidence to support that Freiden committed fraud by
silence by not telling Bruce or Jesse that he only intended to purchase the lease after a
trial period. Landsdown testified that Freiden said that he did not want them doing a lot
of work in the first six months and they had a few wells going up and down, so it looked
like something was getting done. Freiden testified that he believed that he would not have
to pay anything for the Beachner lease if it did not produce, and he intended to return it if
it did not produce. But Freiden admitted that the contract he sent over in October 2014
said nothing about operating the Beachner lease on a trial basis. Jesse testified that in the
meetings he attended with Freiden, Freiden never mentioned wanting to purchase the
lease on a trial basis. Taking the evidence in the light most favorable to J and B Oil, there
is clear and convincing evidence to infer that Freiden intentionally failed to communicate
his desire to only operate the lease on a trial basis.
As a final matter, in his reply brief, Freiden correctly asserts that J and B Oil
mischaracterized one piece of evidence it pointed to in its brief to support the verdict. In
its brief, J and B Oil asserts that Freiden contacted the landowner of the Beachner lease
after Bruce initially refused to sell to Freiden. But as Freiden correctly asserts in his reply
brief, the testimony J and B Oil cites established that he called Bruce after he talked to
the landowner about getting the lease cancelled. Thus, J and B Oil mischaracterized the
sequence of events, but it does not affect the above analysis. In sum, there was substantial
competent evidence to support the jury's verdict on the fraud claim.
DID THE DISTRICT COURT ERR IN INSTRUCTING THE JURY?
Freiden next claims the district court erred in instructing the jury on the fraud
claims, but more specifically he claims there was no basis for the fraud by silence
22
instruction. Freiden argues that the instruction on the fraud by silence claim was improper
"as a matter of law" because J and B Oil premised the fraud by silence claim on Freiden's
alleged failure to communicate that he had no intention to sign a contract. According to
Freiden, this claim "involve[d] only promised actions in the future for which a fraud
through silence claim does not lie."
J and B Oil argues that Freiden conflates J and B Oil's two fraud claims. It asserts
that the fraud by silence claim was based on Freiden's intent to only operate the Beachner
lease on a trial basis and failing to disclose that fact to Bruce or Jesse. Under this theory,
J and B Oil argues the instruction was proper because Freiden himself testified that he
had no intention of paying for the lease if it did not produce, but none of his
communications to Bruce and Jesse conveyed that fact.
"'For jury instruction issues, the progression of analysis and corresponding
standards of review on appeal are: (1) First, the appellate court should consider the
reviewability of the issue from both jurisdiction and preservation viewpoints, exercising
an unlimited standard of review; (2) next, the court should use an unlimited review to
determine whether the instruction was legally appropriate; (3) then, the court should
determine whether there was sufficient evidence, viewed in the light most favorable to
the defendant or the requesting party, that would have supported the instruction; and (4)
finally, if the district court erred, the appellate court must determine whether the error
was harmless . . . .' [Citations omitted.]" Burnette v. Eubanks, 308 Kan. 838, 845, 425
P.3d 343 (2018).
The district court instructed the jury on both fraud by silence under PIK Civ. 4th
127.41 and a fraudulent promise of future events claim under PIK Civ. 4th 127.42. The
fraud by silence claim was covered by Instruction No. 16 and the fraudulent promise of
future events claim was covered by Instruction No. 17. The verdict form only asked the
jury to answer whether "Freiden committed fraud as defined in instructions 16 or 17?"
23
On appeal, Freiden asserts, without citation to the record, that he objected to
Instruction No. 16 on fraud by silence. Under Supreme Court Rule 6.02(a)(5), Freiden
should have included "a pinpoint reference to the location in the record on appeal where
the issue was raised and ruled on." But our review of the record reveals that Freiden did
object to the fraud by silence instruction, asserting that the type of claim being brought
was based on future actions. J and B Oil asserted that it was presenting alternative fraud
claims, one based on future events for Freiden's failure to sign the contract and one based
on silence for Freiden's failure to inform Bruce or Jesse that he only intended to operate
the lease on a trial basis. The district court agreed that the instructions each spoke to a
separate factual situation present in the case, so it gave both instructions.
As J and B Oil points out, Freiden's challenge to the fraud by silence instruction
stems from a faulty premise. Contrary to Freiden's argument, and as explained by J and B
Oil and the district court in response to his objection at trial, the fraud by silence claim
was submitted to the jury based on Freiden's testimony that he only intended to operate
the lease on a trial basis, a material fact that he did not share with the Schulzes. The fraud
by silence claim was not based on his promise to later enter into the written agreement.
Based on J and B Oil's theory of recovery and the evidence presented at trial, the district
court's fraud by silence instruction was legally and factually appropriate. Thus, the
district court did not err in instructing the jury on the fraud claims.
DID THE DISTRICT COURT ERR IN DENYING
FREIDEN'S MOTION TO COMPEL AN ELECTION OF REMEDIES?
Freiden next claims the district court erred in denying his motion to compel an
election of remedies. The doctrine of election of remedies is designed to prevent a party
from taking inconsistent positions and to prevent double redress for a single wrong.
Griffith v. Stout Remodeling, Inc., 219 Kan. 408, 411, 548 P.2d 1238 (1976). But "the
doctrine has no application where under the facts the remedies asserted by a party are
24
concurrent and consistent . . . . To make actions inconsistent one action must allege what
the other denies, or the allegation in one must necessarily repudiate or be repugnant to the
other. [Citations omitted.]" 219 Kan. at 412.
Freiden argues that the district court erred in denying his pretrial motion to compel
an election of remedies between J and B Oil's contract and fraud claims about the lease.
The district court denied his motion, finding it premature to require J and B Oil to elect a
remedy and that the contract and fraud claims were not inconsistent. Important to this
issue is the fact that before instructing the jury, J and B Oil elected to pursue only its
fraud claims in regard to the lease.
Freiden spends the first four pages on this issue arguing that J and B Oil's fraud
and contract claims were inconsistent and thus implicated the election of remedies
doctrine. But then he concedes that a pretrial election of remedies is not required under
Kansas law and that J and B Oil elected the fraud claims before submission to the jury.
He then asserts that the timing of an election of remedies should be left to the discretion
of the trial judge. He asserts that a pretrial election should have been required here based
on factors "looked into by Colorado courts." He asserts that he suffered prejudice because
the district court did not require J and B Oil to make a pretrial election of remedies.
J and B Oil argues the district court correctly allowed it to pursue its alternative
claims until the close of evidence, at which time it elected which claims to submit to the
jury. J and B Oil argues that the doctrine of elective remedies is inapplicable because its
claims were consistent and it did not seek inconsistent remedies. It also argues that it
never asked for or received a double recovery. J and B Oil argues it did not abandon its
fraud claims. It also asserts that Freiden was not prejudiced by the district court's denial
of the motion to compel an election of remedies.
25
Whether tort and contract claims can be brought in the same case is a question of
law, which this court reviews de novo. Diederich v. Yarnevich, 40 Kan. App. 2d 801,
813, 196 P.3d 411 (2008).
Freiden's argument fails for five reasons. First, the election of remedies doctrine
likely does not apply. Second, even assuming the doctrine did apply, J and B Oil
properly, and in accordance with Kansas law, elected to pursue only its fraud claims
before final submission to the jury. Third, Freiden fails to establish Kansas should require
pretrial elections and fails to make a persuasive argument that one was required in this
case. Fourth, Freiden's argument that J and B Oil made an irrevocable election is
unpersuasive. And fifth, Freiden does not establish he suffered any prejudice.
As J and B Oil asserts, and the district court found, the fraud and contract claims
were not inconsistent and thus did not implicate the election of remedies doctrine. J and B
Oil's breach of contract claim about the lease was based on Freiden failing to pay the
purchase price and failing to properly operate the lease during the first six months. J and
B Oil's fraud claim was based on Freiden taking possession of the lease based on his
fraudulent promise to sign, and go through with, the revised agreement when Bruce
received it from his lawyer. In both claims, J and B Oil is trying to secure the same
remedy—having Freiden pay the purchase price for the Beachner lease—under
alternative legal theories. Nothing in the fraud claim denies or repudiates an element of
the breach of contract claim. Instead, the same conduct satisfies the elements of both.
Thus, the election of remedies doctrine does not apply.
Even assuming J and B Oil asserted inconsistent claims, by electing to proceed
only on the fraud claims prior to submission to the jury, J and B Oil complied with the
election of remedies doctrine. In Griffith, the Kansas Supreme Court explained that the
election of remedies doctrine does not require a pretrial election because a party may
plead alternative causes of actions and shift the theory of the case as facts develop so long
26
as the other party is informed of the "'the transaction or "aggregate of operative facts"
involved in the litigation.'" 219 Kan. at 413. Similarly, other Kansas courts have found
that an election must be made before final submission to the jury. See, e.g., Scott v.
Strickland, 10 Kan. App. 2d 14, 18, 691 P.2d 45 (1984) (explaining that a party can
proceed on theories of both contract and tort until facts have been developed and case is
ready for submission to the jury). Thus, J and B Oil properly elected a remedy before
final submission to the jury in accordance with the election of remedies doctrine.
Freiden's remaining arguments under this issue are difficult to follow. He claims
that the real issue is whether the district court should have required a pretrial election
based on factors considered by "Colorado courts." Freiden asserts that "Colorado courts"
require the district court to consider various factors in determining whether a pretrial
election is appropriate including whether a delay in requiring election would prejudice
the defense by having the jury hear irrelevant evidence, whether trial preparation would
be unnecessarily complicated, whether trial procedures would be awkward or unduly
protracted, and whether the time and resources of the parties would be wasted.
But even assuming the district court could exercise discretion in requiring a
pretrial election of remedies based on these factors, Freiden fails to establish the district
court erred here. Freiden asserts "all of the factors listed . . . were present" in this case.
After making this conclusory remark, he states he was "most concerned" by the fact that
if the telephone conversations were admitted in connection with the fraud claims and J
and B Oil later elected to pursue a contract claim then the jury would have heard
irrelevant and highly prejudicial evidence. But J and B Oil did not elect to proceed on a
breach of contract claim so this argument is purely hypothetical.
Freiden next asserts that J and B Oil already made an "irrevocable election to
proceed on its breach of contract claim." He asserts that "J and B Oil claimed the
assignment of the Beachner lease, which is itself a contract, was fraudulently induced,"
27
thus it could either sue for damages for the breach of the assignment agreement or sue for
rescission to cancel the assignment. Freiden asserts that because it offered to reassign the
lease back and J and B Oil refused to accept the reassignment, J and B Oil "ratif[ied] the
assignment" which "operated as an election of its breach of contract theory and an
abandonment of its fraudulent inducement theories." J and B Oil counters that Freiden's
offer to return the Beachner lease is irrelevant to his motion to elect remedies and that it
properly refused to accept the lease back because Freiden waited more than a year to
make the offer and he had ruined the lease.
Freiden's argument misses the mark. First, J and B Oil's breach of contract claim
was not based on the assignment. It was based on Freiden's failure to pay the purchase
price of the lease. Second, J and B Oil never sought rescission of the contract. Freiden
even admits that J and B Oil could either sue for damages or sue for rescission. Thus, his
argument defeats itself by acknowledging that J and B Oil could sue for damages, and it
chose to do so. Freiden cites no law to support his argument that J and B Oil's refusal to
accept Freiden's return of the lease precluded J and B Oil from pursuing its fraud claims.
Finally, Freiden argues that although J and B Oil elected to pursue only the fraud
claims before the case was submitted to the jury, he already had suffered prejudice by the
time of its election and thus a pretrial election should have been required. Freiden claims
that he was forced to "defend against two entirely different cases" and his "defense
against one theory could be interpreted by the jury as proving the other." But Freiden
does not identify how his defense against one theory could be interpreted by the jury as
proving another. Freiden's defense at trial was that he was never presented with a revised
agreement and that it was always the agreement that he would operate the lease on a trial
basis before deciding whether to purchase it. Nothing in his defense of the breach of
contract claim could be interpreted as proving the fraud claim.
28
In sum, the district court did not err in denying Freiden's pretrial motion to elect
remedies. Even if the election of remedies doctrine applied, J and B Oil elected to pursue
the fraud claims before final submission to the jury, which is all that is required under
Kansas law. Freiden fails to persuasively argue that he was unduly prejudiced by the
district court's failure to require a pretrial election of remedies.
WAS THE JURY VERDICT INFLUENCED BY PASSION OR
PREJUDICE AND BASED ON SPECULATION?
Freiden's final claim is that the verdict in this case "appears to have been entered
by a jury influenced by passion or prejudice." He summarizes some of the evidence on
the production of the Beachner lease, with no reference to where the evidence he cites
appears in the record. Freiden asserts that the jury award was "presumably calculated on
the basis of [an] average daily production of 15 barrels a day," but he asserts there was no
evidence presented to support this production and thus the award was "based solely on
speculation." He then argues that the excessive verdict likely occurred because of the
inflammatory telephone conversations. Freiden concludes by arguing that the
"impropriety of the verdict . . . requires a new trial."
J and B Oil first argues that this court should not consider this issue because
Freiden never raised a challenge to the jury verdict before the district court. It then asserts
that there is sufficient evidence to support the verdict.
As a preliminary matter, Freiden has failed to adhere to Supreme Court Rule
6.02(a)(5) on the required contents of an appellate brief. The rule states:
"Each issue must begin with citation to the appropriate standard of appellate review and a
pinpoint reference to the location in the record on appeal where the issue was raised and
ruled on. If the issue was not raised below, there must be an explanation why the issue is
properly before this court." (2021 Kan. S. Ct. R. 36).
29
Freiden cites no standard of review or legal test for this court to apply. He also
fails to include citations to the record for any of the evidence he asserts establishes the
production of the Beachner lease. More importantly, he fails to assert that he raised this
issue below or why this issue should be heard for the first time on appeal. "'As a general
rule, matters not raised before the district court cannot be raised for the first time on
appeal.'" In re Adoption of Baby Girl G., 311 Kan. 798, 801, 466 P.3d 1207 (2020), cert.
denied sub nom. P. F. v. J. S., 141 S. Ct. 1464 (2021). The Kansas Supreme Court has
warned litigants that "Rule 6.02(a)(5) means what it says and is ignored at a litigant's own
peril," which includes the court finding that the issue is improperly briefed and thus
waived or abandoned. 311 Kan. at 803. Because Freiden fails to assert that he raised this
issue before the district court or explain why he raises it for the first time on appeal, we
could decline to reach his argument. See Ruhland v. Elliott, 302 Kan. 405, 417, 353 P.3d
1124 (2015) (citing Rule 6.02[a][5] and declining to reach the argument). But even if we
ignore these issues, Freiden's claim fails on the merits.
"'Where a charge of excessive verdict is based on passion or prejudice of the jury
but is supported solely by the size of the verdict, the trial court will not be reversed for
not ordering a new trial, and no remittitur will be awarded unless the amount of the
verdict in light of the evidence shocks the conscience of the appellate court. Where the
alleged passion or prejudice of the jury is not shown by definite proof, but depends for
support solely on the size of the verdict, the award will be upheld unless it shocks the
conscience of the court. There is no simple, symmetrical pattern or design for
determining whether a verdict is sufficient or insufficient, since each case must stand on
its own facts.'" Jackson v. City of Kansas City, 263 Kan. 143, 154-55, 947 P.2d 31(1997).
Here, the jury's verdict does not shock the conscience of the court. Freiden
proposed to pay $50,000 per barrel based on the average produced over six months. At
trial, there were various statements about the production capacity of the Beachner lease.
Jesse testified that with only five wells running, the seven-day production average was
30
16.08 barrels per day. Similarly, Bruce asked the jury to award $900,000 based on the
five of the 33 wells producing 18 barrels a day. Bruce even testified that the five wells
they did produce were not "even the good wells." Bruce estimated that with all the wells
going and using the injection system, which he never used before Freiden took over, the
Beachner lease should produce 30 barrels per day.
Freiden and his witnesses presented a different version of the production. Jesseph
testified that there was an average production of about 2.04 barrels per day in 2016, 2.32
barrels per day in 2017, and 1.38 barrels per day in 2018. Freiden testified that he was
getting at least four or five barrels a day. But Lansdown testified that Freiden told him
that he did not want Lansdown doing a lot of work in the first six months because the
price of the agreement was based on production in the first six months. And Jesse
testified that he did not believe Freiden had turned the injection system on.
As we stated earlier in this opinion, when a verdict is challenged for insufficiency
of evidence or as being contrary to the evidence, an appellate court does not reweigh the
evidence or pass on the credibility of the witnesses. If the evidence, when considered in
the light most favorable to the prevailing party, supports the verdict, the verdict will not
be disturbed on appeal. Duckworth, 293 Kan. at 407.
Given all the evidence presented at trial, it cannot be said that the jury's award of
$750,000—which presumably represented a 15 barrel per day average at the $50,000
agreed price—is shocking. While it may be higher than Freiden and his witnesses
testified about the production, it was below what Bruce and Jesse testified the Beachner
lease produced with only five of the 33 wells operating without the injection system. The
verdict was within the realm of the evidence, and it cannot be said that the damages the
jury awarded were speculative. As a result, Freiden's challenge to the verdict fails.
Affirmed.
31