I-135 Auto Auction v. McMaster ( 2024 )

NOT DESIGNATED FOR PUBLICATION
No. 125,458
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
I-135 AUTO AUCTION, LLC,
Appellee/Cross-appellant,
v.
LINDA C. MCMASTER, Defendant/Cross-appellee,
and
KEVIN M. MCMASTER,
Appellant/Cross-appellee.
MEMORANDUM OPINION
Appeal from Sedgwick District Court; ERIC A. COMMER, judge. Oral argument held May 21,
2024. Opinion filed July 5, 2024. Affirmed in part, reversed in part, and vacated in part.
Craig Schultz, of Shultz Law Office, P.A., of Wichita, and Kevin M. McMaster, appellant pro se.
Jeffery L. Carmichael, of Morris Laing Law Firm, of Wichita, for appellee.
Before BRUNS, P.J., HILL, J., and MARY E. CHRISTOPHER, S.J.
PER CURIAM: This is an appeal of a judgment a jury awarded for malicious
prosecution to I-135 Auto Auction to recover the costs and damages for defending itself
from prior litigation brought by Kevin and Linda McMaster. The McMasters had sued
Auto Auction for conversion based on their temporary loss of a $40 garage door opener
that was inside an automobile that had been repossessed and then stored on the Auto
Auction lot. The automobile was owned not by the McMasters but by someone else. In
the malicious prosecution action, the jury found Kevin McMaster lacked probable cause
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to file and then continue to pursue the conversion lawsuit and found that he acted with
malice. The jury awarded $57,692.74 in damages to Auto Auction.
In its cross-appeal, Auto Auction appeals the trial court's grant of judgment as a
matter of law in favor of Linda McMaster, based on the absolute defense of advice of
counsel.
A car repossession leads to a conversion lawsuit.
In January 2015, a vehicle owned by Elaine Parker was repossessed by Speedy
Cash for nonpayment on its note. Parker was a family friend of Kevin and Linda
McMaster, who are both attorneys. Because Parker would occasionally care for the
McMasters' pets, she would sometimes have the McMasters' spare garage door opener in
her car. The garage door opener has an approximate value of $40.
Parker called Linda McMaster when the car was being repossessed to notify her of
the incident because their garage door opener was in her car. Linda spoke with the
repossession agent on the phone. Parker then gave Linda the name of the place the car
was taken to and a phone number for Speedy Cash.
The day after the car was repossessed, Kevin McMaster learned from Linda that
Parker's car was stored in a secure lot at I-135 Auto Auction in Wichita. Kevin McMaster
went to the location. He was described as "belligerent" and demanded to retrieve his
personal property from a car. He identified himself as an attorney and insisted, "It is my
property, and if you don’t give it back to me, it is conversion."
Kevin McMaster waved around a printout of caselaw that defined the law of
conversion. He did not identify what the property was that he was seeking. He identified
the repossessed vehicle only by its color; he did not know the make or model. He did not
identify the owner of the vehicle. He pointed to a phone number on a scrap of paper. He
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told them to call the number. A representative of Auto Auction, Ryne Rivas, said she
could help him but that she needed more information about the vehicle, the owner, or the
lienholder. Kevin McMaster did not provide any more information. Instead, he threatened
to sue Auto Auction for conversion. Rivas, feeling threatened, then asked him to leave.
Later that day, Kevin McMaster sued Auto Auction and Rivas for conversion
because he "was so offended about the way [he] was treated." He named his wife, Linda,
as the plaintiff, though he did not have her permission to do so. He sought damages rather
than the return of the garage door opener.
To prevent the release of property to unauthorized persons, it was Speedy Cash's
policy to release any personal property found in a repossessed vehicle to the vehicle's
owner only after verifying the owner's identity and that they had authority from the
owner to recover the personal items in the car.
The next day, Parker and her son went to Auto Auction, identified her vehicle, and
presented her identification. Auto Auction contacted Speedy Cash. Speedy Cash sent
over a release form. Parker was permitted to retrieve her personal property from her
vehicle. Parker returned the garage door opener to the McMasters after that.
Despite having their garage door opener returned within two days, the McMasters
continued to litigate the conversion action for almost three years. Sometime during the
litigation, Auto Auction filed a third-party petition against Parker. The trial court
dismissed that claim. Auto Auction moved for summary judgment, which was denied
because issues of material fact were disputed.
Kevin McMaster acted as Linda's attorney until the bench trial. Linda was then
represented by a different attorney at trial. At trial, Linda's attorney called only one
witness—Kevin McMaster —and then rested. The trial court directed judgment for Auto
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Auction. The court found Linda failed to present any direct evidence that the defendants
ever had possession of her garage door opener and that, when the demand was made, she
did not present the defendants with sufficient information showing her ownership of or
right to possession of any property in the defendant's possession. Therefore, the
defendant's refusal to act was proper. The McMasters did not appeal that judgment.
Auto Auction sued.
On July 31, 2018, Auto Auction filed suit against Kevin and Linda McMaster for
malicious prosecution because of their prior suit. Kevin McMaster moved to dismiss,
making three claims: Auto Auction was not authorized to do business in Kansas and
therefore could not maintain this action under K.S.A. 17-7307(a); the petition failed to
state a claim upon which relief could be granted; and there was no legal basis for Auto
Auction's claim for attorney fees in this case. The trial court denied the motion. The
court ruled that since Auto Auction was reinstated to do business as of August 13, 2018,
it would serve no purpose to make them refile this action. The court pointed out that Auto
Auction had sufficiently pled a claim in the petition and that the attorney fees necessary
to prosecute a malicious prosecution claim could be awarded as damages.
Kevin McMaster then counterclaimed against Auto Auction for malicious
prosecution of Parker in the prior suit and sought relief from that judgment based on
fraud and misrepresentation. The trial court dismissed those claims. The court ruled
Kevin McMaster lacked standing to claim malicious prosecution—that claim belonged to
Parker and could not be assigned to Kevin McMaster. And the court ruled that Kevin
McMaster lacked standing to bring a claim for relief from judgment because no judgment
was taken against him in the prior case. The claims of fraud and misrepresentation were
barred by collateral estoppel. The court also held that the prior trial ended in favor of
Auto Auction because the McMasters did not present sufficient evidence to prove their
case.
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A year later, in June 2019, the McMasters filed motions for summary judgment.
The McMasters asked the court to find there was probable cause for filing the prior suit
because they believed the garage door opener was in the repossessed vehicle held by
Auto Auction. The McMasters argued there was no evidence of malice. Linda McMaster
also argued that she relied on advice of counsel and her husband, Kevin McMaster. The
trial court denied the motions. The court found the extent of Linda's involvement in,
knowledge of, or in the decision making in the prior lawsuit was an unknown material
fact and that none of Kevin McMaster's additional assertions of fact were uncontroverted.
Prior and during trial, the McMasters objected to an expert testifying about
whether they had probable cause to file the prior action or acted with malice. They argued
it invaded the province of the jury to be the fact-finder. The trial court overruled the
objection.
Auto Auction's claims go to trial.
The case proceeded to jury trial. Both parties called experts to testify about
whether the underlying suit was brought without probable cause and with malice. Auto
Auction also called its attorney from the underlying suit; Ryne Rivas; Rachel Russell;
and Kevin and Linda McMaster. Russell was CFO of Auto Auction and was present
when Kevin McMaster showed up at Auto Auction and demanded his property. Russell
corroborated Rivas' testimony about Kevin McMaster's actions and demeanor.
After the plaintiff's witnesses testified, the trial court granted judgment as a matter
of law in favor of Linda McMaster only, dismissing her from the case. The court found
there was evidence of a lack of probable cause to file or continue the litigation for both
defendants. But on the malice issue, there was no evidence showing Linda was malicious.
She was acting on the advice of counsel. There was evidence of malice by Kevin
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McMaster. The court denied Kevin McMaster 's motion for judgment as a matter of law.
Parker and Kevin McMaster testified for the defense.
The jury found Kevin McMaster lacked probable cause to initiate and to continue
the lawsuit against Auto Auction and that Kevin McMaster acted with malice when he
filed or continued the lawsuit. The jury awarded $57,692.74 in damages. The jury
declined to award punitive damages. The trial court entered judgment on January 3, 2022.
Auto Auction moved for assessment of costs under K.S.A. 60-2003. Auto Auction
sought reimbursement for the mileage costs of two witnesses and for the cost to depose
the McMasters. The trial court granted the motion in the amount of $2,192.63.
Auto Auction moved for an order of sanctions against Kevin McMaster under
K.S.A. 60-102 and K.S.A. 60-211. Auto Auction sought attorney's fees for having to
respond to Kevin McMaster's motion to dismiss, counterclaims, and unnecessary
witnesses he listed on the pretrial conference order. The trial court granted the motion
and awarded a sanction in the amount of $8,684.50.
On January 31, 2022, Kevin McMaster filed a renewed motion for judgment as a
matter of law. He argued that because the trial court in the prior suit denied Auto
Auction's motion for summary judgment, there was probable cause supporting that suit;
whether or not Kevin McMaster was rude when he went to retrieve the garage door
opener, Auto Auction converted the opener when they took the car; that Auto Auction did
not fully prevail in the prior suit because the McMasters got their property back; and that
it was sufficient that Kevin McMaster reasonably believed the garage door opener was in
the car. The trial court denied the motion. The court found the circumstances allowed the
jury to make the findings it did.
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Issues raised in this appeal
Kevin McMaster argues the trial court erred by denying his motion for summary
judgment because Auto Auction offered no admissible evidence from which a reasonable
fact-finder could find he filed or continued the underlying suit without probable cause or
that he acted with malice.
Kevin McMaster also argues the court erred in denying his motion for judgment as
a matter of law. In his view, there was no evidence to dispute his reasonable belief that
the garage door opener was in Auto Auction's possession when the suit was filed; that
Auto Auction refused to return the property; and that it was his filing of the suit that
caused Auto Auction to permit Parker to retrieve her personal property from the vehicle.
For his third error, Kevin McMaster claims the trial court had no authority to
award costs because they were not authorized by statute and were unreasonable. This
includes witness fees, mileage, and deposition expenses.
Kevin McMaster argues the trial court erred when it granted Auto Auction's
motion for sanctions under K.S.A. 60-211(c).
He also contends the trial court should have granted his motion to dismiss and
erred when it denied his counterclaims.
Cross-Appeal issue
Auto Auction cross-appeals the trial court's decision to grant judgment as a matter
of law in favor of Linda. It argues the question of malice should have been left for the
jury.
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We begin with the first issue that delves into the law of judgments.
It is inappropriate for us to review a denial of a motion for summary judgment after a full
trial on the merits.
Kevin McMaster asks us to review and overturn the district court's denial of his
motion for summary judgment even though there was a full trial on the merits. We will
not do so. This claim is like asking the judges at a boxing match to set aside a win by
knockout in the tenth round because the judges did not score the first round properly.
The law on this point is well-settled. 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. . . . Once the
case proceeds to trial, the full record developed in court supersedes the record existing at
the time of the summary judgment motion.'" Budd v. Walker, 60 Kan. App. 2d 189, 197,
491 P.3d 1273 (2021). The party who lost on summary judgment can preserve any legal
issues on appeal by including them in a motion for judgment as a matter of law. 60 Kan.
App. 2d 197. Judgments awarded after a full trial are always more trustworthy than
judgments rendered early in the proceedings.
This court cannot review the trial court's summary judgment ruling. We turn now
to the remaining issues after establishing a legal context.
A review of the law of conversion and malicious prosecution provides a legal context for
our rulings.
Conversion
"'Conversion is the unauthorized assumption or exercise of the right of ownership
over goods or personal chattels belonging to another to the exclusion of the other's
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rights.'" Armstrong v. Bromley Quarry & Asphalt, Inc., 305 Kan. 16, 22, 378 P.3d 1090(2016); Scholfield Bros., Inc. v. State Farm Mut. Auto. Ins. Co., 242 Kan. 848, 850, 752
P.2d 661 (1988) (citing Restatement [Second] of Torts § 222A [1965]). In general, the
intent required for conversion is satisfied merely by the use or disposition of goods
belonging to another. Knowledge by the actor concerning their ownership is not required.
Nelson v. Hy-Grade Construction & Materials, Inc., 215 Kan. 631, 634, 527 P.2d 1059(1974). A conversion may be based on the detention of or unreasonable withholding of
possession from one who has the right to possess the property. One in possession of
personal property—as a bailee or otherwise—who, on demand, refuses without proper
qualification to surrender it to another entitled to its immediate possession is subject to
liability for conversion. Queen v. Lynch Jewelers, LLC, 30 Kan. App. 2d 1026, 1036, 55
P.3d 914 (2002) (citing Restatement [Second] of Torts § 237 [1965]).
A bailee who receives the possession of personal property for storage or
safekeeping on behalf of a bailor is subject to liability for conversion only if the bailee
does so with knowledge or reason to know that a third person has the right to immediate
possession of the property. Restatement (Second) of Torts § 230 (1965).
One in possession of personal property does not become a converter by making a
qualified refusal to immediately surrender the property when the circumstances are such
that the demand for immediate surrender is unreasonable. Restatement (Second) of Torts
§ 238 (1965). For example, a bailee does not become a converter by making a qualified
refusal to surrender it to a claimant whose identity is in reasonable doubt, for the purpose
of a reasonable opportunity to identify him. Restatement (Second) of Torts § 239 (1965).
And, generally, one in possession of personal property who is in reasonable doubt as to
the right of a claimant to its immediate possession does not become a converter by
making a qualified refusal to surrender the property to the claimant for the purpose of
affording a reasonable opportunity to inquire into such right. Restatement (Second) of
Torts § 240 (1965).
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Malicious prosecution
In a civil action for malicious prosecution, the following elements must be shown:
• the defendant initiated, continued, or procured civil procedures against the
plaintiff;
• the defendant acted without probable cause;
• the defendant acted with malice;
• the proceeding terminated in favor of the plaintiff; and
• the plaintiff sustained damages. Bartal v. Brower, 268 Kan. 195, 200, 993 P.2d
629 (1999).
The attorney who represented the plaintiff in the prior action may be liable for
malicious prosecution. Special rules apply to such claims. An attorney must conduct a
reasonable investigation before filing a civil action on behalf of a client. The jury may
consider whether the attorney, before filing the action, made a demand on the other party
and allowed that party to respond with its version of the facts. Nelson v. Miller, 227 Kan.
271, 276, 282-85, 607 P.2d 438 (1980).
Our review of the record here reveals that the jury was properly instructed on the
law of conversion and malicious prosecution.
We find no error in the court denying Kevin McMaster's motion for judgment as a matter
of law.
The parties are poles apart on this issue. Kevin McMaster contends there was no
evidence to dispute his reasonable belief that the garage door opener was in Auto
Auction's possession when the suit was filed, that Auto Auction refused to return the
property, and that it was his filing of the suit that caused Auto Auction to permit Parker to
10
retrieve her personal property from the vehicle. He contends Auto Auction failed to show
it prevailed on all matters in the prior action because Auto Auction released the garage
door opener after he filed the suit. He argues Auto Auction failed to show he acted
without probable cause.
Auto Auction argues there was evidence Kevin McMaster acted without probable
cause and with malice. His demand for personal property out of a vehicle he did not own
without proper documentation was unreasonable, he conducted no investigation before
suing, he did not seek return of the garage door opener in the suit, he continued the suit
for almost three years after the garage door opener was returned, and he testified he filed
suit because he did not like the way he was treated. Auto Auction had a qualified right to
refuse to immediately surrender personal property to Kevin McMaster because Kevin
McMaster's demand was unreasonable. The underlying suit terminated in Auto Auction's
favor when judgment was entered in that case during the bench trial.
We review this as a matter of law. Therefore, we examine the record to see
whether evidence existed from which a reasonable jury could properly find a verdict for
the nonmoving party. See Siruta v. Siruta, 301 Kan. 757, 766, 348 P.3d 549 (2015).
For its part, when ruling on a motion for judgment as a matter of law, a district
court must resolve all facts and inferences that may reasonably stem from the evidence in
favor of the party against whom the ruling is sought. The district court must deny the
motion if reasonable minds could reach different conclusions based on the evidence. As
an appellate court, we must apply a similar analysis when reviewing the grant or denial of
a motion for judgment as a matter of law. See Dawson v. BNSF Railway Co., 309 Kan.
446, 454, 437 P.3d 929 (2019)
We begin our analysis with a review of the case history.
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The McMasters' conversion lawsuit ended in favor of Auto Auction.
The underlying proceeding was the suit for conversion against Auto Auction that
sought damages of up to $500. The proceeding terminated in favor of Auto Auction when
the district court directed judgment for Auto Auction on the conversion claim. Kevin
McMaster's argument that the garage door opener was returned because of the suit is
speculative and not supported by the record. Kevin McMaster continued to litigate the
conversion action for almost three years after the garage door opener was returned.
Kevin McMaster acted without probable cause.
It appears reasonable to us that Auto Auction had the right to make a qualified
refusal to immediately surrender the property if, under the circumstances, Kevin
McMaster's demand was unreasonable. Auto Auction did not become a converter of the
McMasters' property by making a qualified refusal to immediately surrender personal
property out of a vehicle in order to verify Kevin McMaster's identity and his right to the
property. See Queen, 30 Kan. App. 2d at 1036; Restatement (Second) of Torts §§ 238-
240.
Probable cause for filing a proceeding "exists when there is a reasonable ground
for suspicion supported by circumstances sufficiently strong in themselves to warrant a
cautious or prudent person in the belief that the party committed the act of which that
person is complaining." Bergstrom v. Noah, 266 Kan. 829, Syl. ¶ 2, 974 P.2d 520 (1999).
This inquiry is limited to the facts and circumstances as they appeared to the initiator at
the time the litigation was commenced. The question is not whether the initiator is correct
in believing that the court would sustain the claim but whether that person's opinion that
there was a sound chance that the claim might be sustained was a reasonable one.
Bergstrom, 266 Kan. at 837. Even if the suit is properly initiated, a person can be liable
for malicious prosecution for wrongfully continuing the suit if it becomes apparent that
12
probable cause is lacking. Miskew v. Hess, 21 Kan. App. 2d 927, 933, 910 P.2d 223(1996). When the facts tending to establish the existence or lack of probable cause are in
dispute, the jury decides. Bergstrom, 266 Kan. at 837.
We must view the facts and inferences that may reasonably be drawn from the
evidence in favor of Auto Auction. See Dawson, 309 Kan. at 454. That means where the
testimony of Rivas and Russell differed from Kevin McMaster's testimony about the
circumstances of his January 7 visit to Auto Auction, Rivas' and Russell's testimony
carries the day. A review of their evidence is helpful at this point.
According to Rivas and Russell, Kevin McMaster came into Auto Auction
"belligerent" and demanded to retrieve his personal property from a vehicle. He identified
himself as an attorney. He waved around a printout of some law he wanted them to read.
He did not identify what property he was seeking. He identified the vehicle only by its
color; he did not know the make or model. He did not identify the owner of the vehicle.
He pointed to a phone number on a scrap of paper and told them to call the number.
Rivas said several times that she could help him, but she needed more information
about the vehicle, the owner, or the lienholder. Kevin McMaster did not provide any
more information. Rather, he threatened to sue Auto Auction for conversion. Rivas,
feeling threatened, then asked him to leave. Kevin McMaster filed suit just a few hours
after making the demand.
Under these circumstances, we find that there was ample evidence for the jury to
find Kevin McMaster's demand on January 7 for immediate surrender of property was
unreasonable and, in turn, that Kevin McMaster's belief that there was a sound chance
that the claim for conversion might be sustained was unreasonable. He did not even
identify what property he was seeking or whose vehicle it was in. He made demands and
threats rather than providing Rivas with the information she needed so that she could
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retrieve his property. Auto Auction did not convert the McMasters' garage door opener
by asking for information to verify Kevin McMaster's right to the property he was
seeking.
Kevin McMaster offers us some weak evidentiary arguments. He argues the expert
testimony cannot be used to support the trial court's denial of his motion because the trial
court should not have allowed Auto Auction's expert to give an opinion about whether
the underlying suit was filed and continued without probable cause and with malice,
because there were no technical facts that necessitated an expert to help the jury
understand. He also argues testimony he sought to admit that would show probable cause
was improperly excluded as a collateral attack on the prior judgment. The testimony
would have shown that the McMasters' garage door opener was in Parker's vehicle at the
time it was repossessed and Auto Auction refused to return it. He makes these arguments
only to show the trial judge erred in denying his motion for judgment as a matter of law.
Because there was ample evidence to show a lack of probable cause without the
expert testimony, we need not address Kevin McMaster's argument about that testimony.
Rivas' and Russel's testimony was sufficient.
Kevin McMaster argues that since Parker testified that their garage door opener
was in her car when it was repossessed and Linda testified that she thought it was in the
car, his actions when trying to retrieve his property were reasonable. We see no
significance in this argument. It is uncontested that Auto Auction did not surrender
whatever property Kevin McMaster was demanding when he made the demand on
January 7. Additional testimony on these matters would not overcome the evidence that
Kevin McMaster's demand on January 7—for the immediate transfer of property he
would not identify out of a vehicle he could not identify and did not own—was
unreasonable.
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Kevin McMaster acted with malice.
In general, malice is "the intent to do harm without any reasonable justification or
excuse." PIK Civ. 4th 103.05; PIK Civ. 4th 127.30. For purposes of a malicious
prosecution claim, a defendant acted with malice where the underlying civil action "was
initiated primarily for a purpose other than that of securing proper adjudication of the
claim on which the action is based." Bartal, 268 Kan. at 200-01. Malice is not restricted
to personal hatred, spite, or revenge. It is enough that the prior action was initiated for
any improper or wrongful motive. The jury may infer malice from the absence of
probable cause. Nelson, 227 Kan. at 278-79.
There was direct evidence of malice. Kevin McMaster testified he filed the
underlying suit because he "was so offended about the way [he] was treated" when he
went to Auto Auction to retrieve his property.
There is nothing in this record that persuades us to overturn the findings of this
jury.
We modify the cost assessment.
After trial, Auto Auction moved for an assessment of costs under K.S.A. 60-
2003(4), (5) providing the following information:
"1. The mileage of Jay Piper who attended trial
from Kansas City, Missouri 199 miles x .56 = $111.44
"2. Terry Moore traveled from Jacksonville,
Florida to attend trial 1304 miles x .56 = $730.24
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"3. Deposition of Kevin McMaster used during trial $944.15
"4. Deposition of Linda McMaster used during trial $406.80
Total Costs $2,192.63."
Kevin McMaster opposed the motion, arguing the costs were not authorized by
statute and were unreasonable. He argued the witnesses were not compelled to attend
trial, Auto Auction did not prove the costs had been paid as required by K.S.A. 28-141,
the mileage requested was unreasonable, and the depositions were not admitted into
evidence.
The trial court granted the motion. The statute authorizing a taxation of costs—
K.S.A. 60-2003—provides for mileage of witnesses attending court. Piper testified he
was coming from Kansas City, Missouri. Moore testified he had moved to Jacksonville,
Florida. Though not admitted into evidence, the depositions were used as evidence in
cross-examination. The court noted that there was no claim the amount of mileage was
incorrect and that it recognized the mileage to Kansas City, Missouri as being
appropriate.
On appeal, Kevin McMaster argues the trial court erred in awarding mileage costs
for the two witnesses because Auto Auction did not claim or prove that mileage was paid
to those witnesses in accordance with K.S.A. 28-141. Kevin McMaster further argues the
trial court erred in awarding deposition costs because depositions cannot be taxed as costs
when they are only used in questioning witnesses and not admitted into evidence, citing
Bridges v. Bentley, 244 Kan. 434, 769 P.2d 635 (1989).
Auto Auction argues K.S.A 28-141 does not apply because it only deals with fees
paid by county employees. The depositions, although not placed into evidence, were used
as evidence for impeachment purposes.
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The award of costs in a civil case is discretionary with the trial court. We review
the trial court's taxing of costs for an abuse of discretion. Wendt v. Univ. of Kansas Med.
Ctr., 274 Kan. 966, 982-83, 59 P.3d 325 (2002).
The law provides that costs shall be allowed to the party in whose favor judgment
was rendered. See K.S.A. 2023 Supp. 60-2002(a). We look at the items separately.
Mileage
K.S.A. 60-2003 permits mileage of witnesses to be taxed as costs. It reads, "Items
which may be included in the taxation of costs are: . . . (4) Statutory fees and mileage of
witnesses attending court or the taking of depositions used as evidence." K.S.A. 2023
Supp. 60-2003.
Under K.S.A. 28-125, the statutory witness fee is $10 per day and mileage "at the
rate prescribed by law" "for each mile necessarily and actually traveled in going to and
returning from the place of attendance." K.S.A. 28-125; see Johnson v. Westhoff Sand
Co., 281 Kan. 930, 959, 135 P.3d 1127 (2006).
K.S.A. 28-141 applies to fees of witnesses and expenses paid by "either party" in
"any civil action." It reads:
"All fees and sums paid by either party for fees of witnesses and other necessary
expenses in any civil action or proceeding shall be proved by the affidavit of the party, or
of some person knowing the same to have been paid; and all such fees shall be taxed and
collected from the party ordered or adjudged to pay the costs." K.S.A. 28-141.
By its plain language, K.S.A. 28-141 applies here. Moreover, in Grant v.
Chappell, 22 Kan. App. 2d 398, 400, 916 P.2d 723 (1996), a panel of this court, in dicta,
connected K.S.A. 28-141 to K.S.A. 60-2003.
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But Kevin McMaster does not cite any decision finding an abuse of discretion in
an assessment of costs where the prevailing party failed to support its mileage request
with an affidavit.
The trial court did not make an error of fact. Piper testified he worked out of his
home in Kansas City, Missouri. Moore testified he lived in Jacksonville, Florida. A
reasonable person could agree with the trial court's decision to assess the mileage as
costs. Therefore, we see no reason to modify the award for mileage.
Depositions
K.S.A. 60-2003 permits charges for depositions to be assessed as costs if the
depositions were "used as evidence." It reads, "Items which may be included in the
taxation of costs are: . . . (5) Reporter's or stenographic charges for the taking of
depositions used as evidence." K.S.A. 2023 Supp. 60-2003.
In the absence of extraordinary circumstances, the charges for discovery
depositions not admitted into evidence may not be assessed as costs under K.S.A. 60-
2003. The reason is that discovery depositions fall into the realm of trial preparation.
Bridges, 244 Kan. at 446. In Bridges, our Supreme Court concluded the trial court abused
its discretion in assessing as costs the charges for discovery depositions that were used in
the questioning of witnesses but never admitted into evidence. No extraordinary
circumstances were alleged. 244 Kan. 446.
This court has allowed the assessment of costs for depositions not used as
evidence at trial in two circumstances that we think are inapplicable here. For example,
this court upheld the trial court's decision that taxed deposition charges as costs where the
depositions were used as evidence by the trial court in deciding a summary judgment
motion because the depositions served the same purpose as the depositions would have
18
served at trial. Frederking v. Frederking, 26 Kan. App. 2d 614, 615, 992 P.2d 1255(1999).
The next illustration is Cessna Aircraft Co. v. Metro. Topeka Airport Auth., 23
Kan. App. 2d 1038, 1060, 940 P.2d 84 (1997). In Cessna, during discovery the trial court
had ordered all experts designated be present for trial. The defendant designated seven
experts who did not appear at trial. This court held extraordinary circumstances justified
the trial court's assessment of those deposition costs even though they were not used as
evidence at trial against the defendant because the plaintiffs were put to the expense of
deposing so many experts who did not appear at trial. 23 Kan. App. 2d at 1060.
We are duty bound to follow Kansas Supreme Court precedent unless there is
some indication that the Supreme Court is departing from its previous position. State v.
Patton, 315 Kan. 1, 16, 503 P.3d 1022 (2022). We are bound by Bridges. Auto Auction
fails to assert any exceptional circumstances. Kevin McMaster cannot be assessed the
costs of the depositions used in questioning of witnesses but not admitted into evidence at
trial. The trial court abused its discretion by taxing the charges for the two depositions as
costs.
Accordingly, we set aside that portion of the district court's judgment that awards
the costs of the two depositions.
We find no abuse of discretion in the trial court's award of sanctions.
After trial, Auto Auction moved for an order of sanctions against Kevin McMaster
under K.S.A. 60-211 in the amount of $41,525.50. Auto Auction sought attorney's fees
for having to respond to, among other things, Kevin McMaster's (1) motion to dismiss,
(2) counterclaims, and (3) several witnesses he listed on the pretrial conference order who
did not appear at trial.
19
The trial court granted the motion in part and awarded a sanction in the amount of
$8,684.50. After presiding over almost five years of litigation in this and the underlying
suit, the court observed that Kevin McMaster's "intentionally pugnacious and bedeviling
strategy was repeatedly evident." The court noted Kevin McMaster was an attorney.
After almost three years of litigation preparation, Kevin McMaster presented only his
own testimony at trial in the underlying suit. He told Linda she did not need to show up
for trial even though she had been subpoenaed. The court found the motion to dismiss,
counterclaims, and 13 witnesses listed on the pretrial conference order in this case were
presented for the improper purposes of causing unnecessary delay, needlessly increasing
the cost of litigation, and harassment.
On appeal, Kevin McMaster argues the trial court erred when it granted Auto
Auction's motion for sanctions under K.S.A. 60-211(c).
The trial court may, in its discretion, sanction an attorney or party if they present
to the court a pleading, written motion, or other paper:
• for any improper purpose, such as to harass, cause unnecessary delay or needlessly
increase the cost of litigation;
• in which the claims, defenses and other legal contentions were unwarranted by
existing law or by a nonfrivolous argument for extending, modifying or reversing
existing law or for establishing new law;
• in which the factual contentions lacked evidentiary support.
The sanction may include an order to pay to the other party attorney's fees incurred
because of the filing of the pleading, motion or other paper. K.S.A. 2023 Supp. 60-
211(b),(c).
20
We review the trial court's imposition of sanctions under K.S.A. 2023 Supp. 60-
211 for an abuse of discretion. In re Marriage of Bergmann & Sokol, 49 Kan. App. 2d 45,
50, 305 P.3d 664 (2013).
A sanction for presenting claims, defenses, or other legal contentions unwarranted
by existing law is generally imposed when the legal theory contradicts a statute or
caselaw. See Vondracek v. Mid-State Co-op, Inc., 32 Kan. App. 2d 98, 104-05, 79 P.3d
197 (2003). Litigants must not be prevented from developing new theories or presenting
new causes of action merely because they are untested. "Where the weight of authority is
overwhelmingly unfavorable to a litigant's position or there is controlling authority
against it, there may be a question whether the claim is warranted by a good faith
argument for extension, modification or reversal." In re Hesston Corp., 254 Kan. 941,
990, 870 P.2d 17 (1994).
The purpose of K.S.A. 60-211 is to deter "'repetition of improper conduct.'" Wood
v. Groh, 269 Kan. 420, 430, 7 P.3d 1163 (2000). Courts consider nine factors when
determining whether to sanction a party and what kind of sanction to impose:
"(1) whether the improper conduct was willful or negligent;
(2) whether it was part of a pattern of activity or an isolated event;
(3) whether it infected the entire pleading or only one particular count or defense;
(4) whether the person has engaged in similar conduct in other litigation;
(5) whether it was intended to injure;
(6) what effect it had on the litigation process in time or expense;
(7) whether the responsible person is trained in the law;
(8) what amount, given the financial resources of the responsible person, is needed to
deter that person from repetition in the same case; and
(9) what amount is needed to deter similar activity by other litigants." Wood, 269 Kan. at
430-31.
21
Kevin McMaster objects to the trial court's references to his actions in the
underlying suit in its sanction analysis. But Wood expressly permits a trial court to
consider "whether the person has engaged in similar conduct in other litigation." 269
Kan. at 431. His objection is not persuasive.
We move now to examine the motion to dismiss, the counterclaims, and the
witness listing and see if there is an abuse of discretion by the district court.
Motion to dismiss
The trial court found that Kevin McMaster's motion to dismiss lacked any basis in
law. First, the court found Kevin McMaster's argument that the petition should be
dismissed because Auto Auction lacked authorization to transact business in Kansas was
contrary to K.S.A. 17-7932(a)(1).
Kevin McMaster argues K.S.A. 17-7932 is irrelevant. Auto Auction was not
authorized to do business in Kansas when the malicious prosecution action was filed
making the suit in violation of K.S.A. 17-7307(a). Auto Auction argues that the
deficiency was corrected before Kevin McMaster filed the motion to dismiss.
In its petition, Auto Auction alleged it was an Arkansas corporation with a place
of business in Wichita, Kansas. The petition was filed in July 2018. On August 28, 2018
Kevin McMaster moved to dismiss arguing Auto Auction was not authorized to do
business in Kansas and thus could not maintain a suit under K.S.A. 17-7307(a). In
response to Kevin McMaster's motion to dismiss, Auto Auction admitted that—based on
its failure to file an annual report in 2018—Auto Auction forfeited its status of good
standing in Kansas effective July 2018. But Auto Auction was reinstated on August 13,
2018. The testimony at trial revealed Auto Auction was still doing some kind of business
in Kansas.
22
Kansas does have "closed-door statutes." Out-of-state companies that have not
registered to do business in Kansas, when required by law to do so, may not sue in
Kansas courts. K.S.A. 2023 Supp. 17-7307(a); Douglas Landscape & Design, LLC v.
Miles, 51 Kan. App. 2d 779, 782, 355 P.3d 700 (2015). Registration is required only
when the company is doing business in Kansas. Douglas Landscape, 51 Kan. App. 2d at
782. Maintaining an action in Kansas, by itself, does not constitute doing business.
K.S.A. 2023 Supp. 17-7932(a)(1).
But a violation of K.S.A. 17-7307(a) can be cured. Compliance with K.S.A. 17-
7307(a) after an action has begun enables the corporation to maintain the action. See
Corco, Inc. v. Ledar Transport, Inc., 24 Kan. App. 2d 377, 378-79, 946 P.2d 1009 (1997)
(holding the proper remedy under the facts was dismissal without prejudice).
Kevin McMaster's legal theory that the petition should be dismissed under K.S.A.
17-7307(a) was not clearly contrary to Kansas statute or caselaw. Auto Auction admitted
it was not authorized to do business as of the date it filed suit. The trial court made an
error of law by relying on K.S.A. 17-7932 because, if Auto Auction was doing business
in Kansas outside of this legal action as shown by the trial testimony, then the K.S.A. 17-
7932(a)(1) exception would not apply. Therefore, the court abused its discretion.
Next, in his motion to dismiss, Kevin McMaster argued that the petition failed to
state a claim upon which relief could be granted because he had probable cause to file the
underlying lawsuit and acted without malice. The trial court found Kevin McMaster's
lack of probable cause to maintain the underlying action and malice was apparent from,
among other things, his failure in the first trial to present evidence other than his own
testimony after three years of litigation preparation. In the words of the judge, "The intent
to harass, cause unnecessary delay and needlessly increase the cost of litigation to I-135
was very evident to the Court."
23
Kevin McMaster argues it was reasonable to argue, based on the decision in
Porubsky v. Long, No. 120,727, 2021 WL 2385860 (Kan. App. 2021) (unpublished
decision), that Auto Auction's petition failed to state a claim because he had probable
cause to file the underlying action. Auto Auction argues it properly pled a claim for
malicious prosecution.
Kansas is a notice-pleading state. See Williams v. C-U-Out Bail Bonds, 310 Kan
775, 784, 450 P.3d 330 (2019). Generally, a petition needs only "(1) [a] short and plain
statement of the claim showing that the pleader is entitled to relief; and (2) a demand for
relief sought." K.S.A. 2023 Supp. 60-208(a). Factual disputes cannot be resolved or
decided on a motion to dismiss for failure to state a claim. If the well-pled facts and
inferences that may reasonably stem from them state any claim upon which relief can be
granted, then dismissal is improper. Dismissal is proper only when the allegations in the
petition clearly demonstrate the plaintiff does not have a claim. Kudlacik v. Johnny's
Shawnee, Inc., 309 Kan. 788, 790, 440 P.3d 576 (2019); see K.S.A. 2023 Supp. 60-
212(b)(6).
Kevin McMaster has failed to show that the trial court abused its discretion on this
point. The trial court could not resolve the factual disputes concerning probable cause and
malice on a motion to dismiss. As a trained lawyer, Kevin McMaster knew this. The trial
judge presided over both suits and was in the best position to judge Kevin McMaster's
intent to harass, cause unnecessary delay, and needlessly increase the cost of litigation.
Lastly, in his motion to dismiss, Kevin McMaster argued Auto Auction's request
in its petition for attorney fees for prosecuting the malicious prosecution action conflicted
with Kansas law. On appeal, he argues sanctions were unwarranted based on this claim.
He argues Auto Auction's request for attorney fees for prosecuting this malicious
prosecution action had no merit and was abandoned by Auto Auction. The abandonment
24
of the claim should equate to an acknowledgment that the sanctions were unwarranted.
Auto Auction states it withdrew the claim for attorney fees at the pretrial conference.
The trial court found Auto Auction did not abandon the claim. Rather, the court
recalled it had ruled prior to trial it would not allow Auto Auction to present evidence to
the jury of the attorney fees incurred to prosecute the malicious prosecution action.
In its petition, Auto Auction sought attorney fees for prosecuting the malicious
prosecution action. Kevin McMaster moved to dismiss the damage claim because
attorney fees are generally not recoverable absent statutory authority or agreement by the
parties. In denying the motion, the trial court ruled that attorney fees were "potentially
within the appropriate damages pursuant to Nelson v. Miller, 227 Kan. [at 282]." The
claim for attorney fees was in the pretrial order. An agreed amendment to the order
changed the amount requested from $14,000 to $78,970.88. The parties fail to cite to the
record for their contentions about what happened next.
Kevin McMaster's motion to dismiss the attorney fee claim was not clearly
contrary to Kansas statute or caselaw. The trial court ruled only that attorney fees for
prosecuting the malicious prosecution claim were potentially appropriate damages. The
trial court acknowledged it did not let the attorney fee claim go to the jury. It is unclear
from the trial court's ruling why it sanctioned Kevin McMaster for moving to dismiss the
attorney fee damages. This was an abuse of discretion.
Counterclaims
The trial court found Kevin McMaster's counterclaims were not supported by fact
or law. The counterclaim for malicious prosecution was void of evidentiary support
because there was no prior proceeding that Auto Auction procured, initiated, or continued
25
which terminated in favor of Kevin McMaster. The court also found that Kevin
McMaster had no standing to assert that counterclaim.
Kevin McMaster argues his counterclaim for malicious prosecution was warranted
by existing law and nonfrivolous arguments for extension of existing law. He had a stake
in the controversy because he was damaged by incurring the cost to defend Parker.
Kevin McMaster's counterclaim for malicious prosecution was based on Auto
Auction's third-party petition against Parker in the underlying suit. Auto Auction alleged
Parker should be liable because, but for her default on her line of credit with Speedy
Cash, Auto Auction would never have been in possession of the McMasters' garage door
opener. The trial court dismissed that claim. For his counterclaim in this case, he argued
Auto Auction filed the third-party petition because it knew Parker could not afford to
defend herself and, thus, Kevin McMaster was damaged by having to defend Parker.
Kevin McMaster's counterclaim was contrary to the clearly established elements
of malicious prosecution. In the underlying proceeding, Auto Auction did not initiate,
continue, or procure civil procedures against Kevin McMaster. The third-party petition
was against Parker. The claim was dismissed in favor of Parker, not Kevin McMaster.
See Bartal, 268 Kan. at 200.
A reasonable person could agree with the trial court's decision to sanction Kevin
McMaster for the counterclaim. The trial judge presided over both suits and was in the
best position to judge his intent to harass, cause unnecessary delay, and needlessly
increase the cost of litigation.
The trial court found that his fraud and misrepresentation counterclaims were
barred by collateral estoppel, lacked merit, and were not supported by fact or law. Kevin
26
McMaster argues collateral estoppel did not apply to his counterclaims for fraud and
misrepresentation as he was not a party to the underlying suit.
Kevin McMaster's counterclaims for fraud and misrepresentation were based on
his contention that in the underlying suit Auto Auction knew and had admitted that the
McMasters' garage door opener was in Parker's vehicle. In the underlying case, the trial
court found Linda McMaster failed to present any direct evidence at trial that the
defendants ever had possession of her garage door opener. Linda did not appeal.
A reasonable person could agree with the trial court's decision to sanction Kevin
McMaster for these counterclaims. His factual contentions lacked evidentiary support.
Listing more than a dozen witnesses
The trial court found 13 witnesses Kevin McMaster listed on the pretrial
conference order had nothing to do with the case. The witnesses included four district
court judges (including the presiding judge), the court reporter from the first trial, two
attorneys with the firm representing Auto Auction, four attorneys with no connection to
the case, and the prior owners of a former auction business similar to Auto Auction. The
trial court found these witnesses could not have provided any relevant testimony. None
testified at trial. Kevin McMaster's witness list was just made to create extra work for
opposing counsel.
Kevin McMaster argues the 13 witnesses he listed on the pretrial conference
questionnaire had firsthand knowledge about the case.
A reasonable person could agree with the trial court's decision to sanction Kevin
McMaster for this witness list that included the presiding judge, court reporter, and
attorneys from opposing counsel's firm. The trial court was in the best position to judge
27
Kevin McMaster's intent to harass, cause unnecessary delay, and needlessly increase the
cost of litigation.
Because the court abused its discretion in granting the motion to dismiss, we set
aside that portion of the sanction caused by its inclusion in the award for sanctions. All
other sanctions mentioned above are affirmed.
CROSS-APPEAL
The court did not err in granting Linda McMaster's motion for judgment as a matter of
law.
Auto Auction cross-appeals the trial court's decision to grant judgment as a matter
of law in favor of Linda McMaster. It argues the question of malice should have been left
for the jury. The jury could have inferred malice from the absence of probable cause.
Linda could not have acted on advice of counsel because she received no legal advice
from Kevin McMaster before or during the pendency of the underlying suit.
In reply, Linda contends she had probable cause to initiate and continue the
underlying suit, she properly relied on Kevin McMaster's counsel to handle the suit, the
underlying suit did not terminate wholly in favor of Auto Auction, and no evidence
showed Linda had acted with malice.
Caselaw compels our ruling here. The advice of counsel is a complete defense to
malicious prosecution. The defense is conditioned on the client acting in good faith and
having fully disclosed to the attorney all material facts within their knowledge and which
could have been learned with diligent effort. Bartal, 268 Kan. at 197; Nelson, 227 Kan. at
279-80.
28
The evidence showed Linda did the investigation that a reasonable person would
have done. She testified she talked to Parker the night of the car repossession and the next
morning. She also spoke with the repossession agent on the phone. She relayed the
information she had learned to Kevin McMaster who assured her he would handle the
matter. She relied on her husband and attorney to further investigate and to act to get their
garage door opener back. There was no contrary testimony. Linda was not present when
Kevin McMaster spoke to Rivas in a threatening manner at Auto Auction. She had a
complete defense. The district court did not err by granting her motion for judgment as a
matter of law.
We affirm all aspects of the district court's ruling, except we reverse the judgment
for payment of the two deposition costs and vacate the sanction for filing the motion to
dismiss.
The cross-appeal is denied.
Affirmed in part, reversed in part, and vacated in part.
29