Pioneer Operations Company, Inc., (Pioneer) appeals the
district court's determination that The Fourth National Bank &
Trust Company of Wichita's security interest in Brandeberry Oil
Operations, Inc.'s fractional working interest in numerous oil
and gas leases was superior to Pioneer's mechanics' liens.
Brandeberry Oil Operations, Inc., (Brandeberry) is owned by
Norman W. Brandeberry and Sally E. Brandeberry. In 1984, Norman
Brandeberry assigned his working interests in oil and gas leases
to Brandeberry, the corporate entity. Brandeberry's primary
assets consist of working interests in oil and gas properties.
Pioneer is the operator of the property in which Brandeberry
has a working interest. Pioneer began paying Brandeberry's
working expenses in May 1984. Pioneer filed mechanics' liens on
some, but not all, of Brandeberry's property. When Pioneer filed
the liens in the spring of 1986, Brandeberry's property was
already subject to mortgages and security agreements.
On November 28, 1985, Brandeberry, Norman W. Brandeberry, and
Sally E. Brandeberry executed two promissory notes to The Fourth
National Bank & Trust Company of Wichita (Bank IV). The
indebtedness is secured, in part, by mortgages and security
agreements covering all of Brandeberry's working interest and
revenue interest. Bank IV properly filed its security agreements
on the Brandeberry property in March and May of 1985. Therefore,
Pioneer began furnishing operating expenses to Brandeberry
before Bank IV filed its security interests, but Bank IV
perfected its security interests before Pioneer filed its
Brandeberry is also indebted to Merchants National Bank of
Topeka (Merchants), but that debt and security agreement are not
relevant to this appeal as they are second in priority to Bank
On March 28, 1986, Brandeberry, Norman W. Brandeberry, and
Sally E. Brandeberry defaulted on the Bank IV notes. On May 16,
1986, Pioneer brought this action seeking to recover for
Brandeberry's proportionate share of the operating expenses due
on the liened property. On June 23, 1987, Pioneer was allowed to
amend its petition to include a quantum meruit claim against Bank
IV and Brandeberry.
Brandeberry and Norman and Sally Brandeberry have subsequently
declared bankruptcy and are judgment proof.
On January 27, 1988, the district court issued a journal entry
of partial judgment. The district court determined the priorities
of the three claimants. Bank IV was declared first in priority,
Merchants second, and Pioneer third. Brandeberry's assets are
apparently insufficient to satisfy all of the claimants. The
district court certified this judgment for appeal pursuant to
K.S.A. 1989 Supp. 60-254(b).
On July 1, 1988, the district court entered judgment against
Pioneer on its remaining claim seeking recovery from Bank IV in
quantum meruit. On July 14, 1988, Pioneer filed a notice of
appeal from both the January 27, 1988, and July 1, 1988, journal
Bank IV first contends Pioneer's failure to timely appeal from
the January 27, 1988, judgment bars this appeal and, thus, that
judgment is determinative on the issue of priorities.
Generally, this court may only review final decisions; orders
which do not dispose of all of the parties or of all claims are
interlocutory and not subject to appellate review. See Skahan v.
Powell, 8 Kan. App. 2d 204, 205, 653 P.2d 1192 (1982).
K.S.A. 1989 Supp. 60-254(b), which is identical to Fed. R. Civ.
Proc. 54(b), creates an exception to the general rule. It
"When more than one claim for relief is presented
in an action, whether as a claim, counterclaim,
cross-claim or third-party claim or, when multiple
parties are involved, the court may direct the entry
of a final judgment as to one or more but fewer than
all of the claims or parties only upon an express
determination that there is no just reason for delay
and upon an express direction for the entry of
judgment. In the absence of such determination and
direction, any order or other form of decision,
however designated, which adjudicates fewer than all
the claims or the rights and liabilities of fewer
than all the parties shall not terminate the action
as to any of the claims or parties, and the order or
other form of decision is subject to revision at any
time before the entry of judgment adjudicating all
the claims and the rights and liabilities of all the
In this case, the district court, using the proper statutory
language, certified that the journal entry of partial judgment on
January 27, 1988, was a final judgment and that there was no just
reason for delay. See City of Salina v. Star B, Inc.,
241 Kan. 692, Syl. ¶ 1, 739 P.2d 933 (1987). As with other civil appeals,
Pioneer was required to file a notice of appeal within 30 days.
K.S.A. 1989 Supp. 60-2103. However, Pioneer did not file a notice
of appeal until July 14, 1988, following the district court's
entry of partial judgment on July 1, 1988, which disposed of
Pioneer's quantum meruit claim against Bank IV. The notice of
appeal states that Pioneer is appealing both the January 27,
1988, and July 1, 1988, journal entries of partial judgment.
The issue is whether Pioneer's failure to timely appeal from
the January 27, 1988, journal entry of partial judgment bars this
appeal on the issue of priorities. Pioneer contends the district
court erroneously characterized Pioneer's suit as involving
multiple claims and that it should be allowed to attack this
error even though it did not appeal within 30 days. Bank IV
responds that the 30-day limitation is jurisdictional and acts as
a complete bar to this appeal on the issue of priorities.
We conclude that, because Pioneer filed a timely notice of
appeal following the July 1, 1988, journal entry of partial
judgment, it can now attack the propriety of the K.S.A. 1989
Supp. 60-254(b) certification. We also conclude the district
court erred in certifying the journal entry of partial summary
judgment on the priorities issue as a final judgment.
In Dennis v. Southeastern Kansas Gas Co., 227 Kan. 872,
610 P.2d 627 (1980), our Supreme Court considered 60-254(b). In
Dennis, the plaintiffs attempted to attack a cross-claim which
had been ...