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Lyons v. Holder

July 20, 2007

LOUISE LYONS, BY AND THROUGH JIM LAWING, TRUSTEE OF THE BABE LYONS TRUST, APPELLANT,
v.
ROY HOLDER, APPELLEE.



Appeal from Sedgwick District Court; KARL W. FRIEDEL, judge.

SYLLABUS BY THE COURT

1. When the district court conducts a bench trial, K.S.A. 60-252(c) governs the court's authority to render judgment prior to the conclusion of trial.

2. After a bench trial, an appellate court has the power to correct errors of law, including those that may infect a so-called mixed question of law and fact, particularly where the trial court's findings are based on a misunderstanding of the governing rule of law.

3. A negative finding that a party has not carried his burden of proof will not be disturbed on appeal absent arbitrary disregard of undisputed evidence or extrinsic considerations such a bias, passion, or prejudice.

4. Where an express trust provision as to trustee compensation fails to provide for any specific procedure or period for compensation, and there is no contention that the fee amount is unreasonable, the transaction is sufficiently authorized and fair so as to escape voidability under K.S.A. 2006 Supp. 58a-802(b).

5. By its plain terms, K.S.A. 60-511(4) does not bar the trustee's belated claim to compensation from the trust because the trustee's right to compensation does not arise from an official bond or undertaking.

6. A trustee entitled to compensation under the terms of a trust may waive such compensation.

7. Under Kansas law, waiver is ordinarily the intentional relinquishment of a known right and is a voluntary act. While waiver must be knowing and intentional, intent may be inferred from conduct, and the knowledge may be actual or constructive, but both knowledge and intent are essential elements.

8. Knowledge of a contractual right may be waived by mere failure of assertion for an unreasonable period.

9. A claim of waiver is considered an affirmative defense under Kansas law. The party raising waiver bears the burden of proof.

The opinion of the court was delivered by: Greene, J.

Reversed and remanded with directions.

Before RULON, C.J., GREENE, J., and KNUDSON, S.J.

Louise Lyren "Babe" Lyons, by and through Jim Lawing, Trustee of the Babe Lyons Trust, appeals the district court's judgment as a matter of law in favor of defendant J. Roy Holder, former trustee of the trust, on her claims of breach of fiduciary duty and conversion. Lyons argues on appeal that Holder improperly paid himself over $56,000 as a fee for nearly 12 years of service as trustee before resigning and that the district court erred in dismissing her claims after the close of her evidence at trial. We conclude that the district court erred in granting judgment against her as a matter of law, so we reverse and remand for further proceedings.

Factual and Procedural Background

Sometime in early 1992, the Babe Lyons Trust was created naming Holder as primary trustee and designating Lyons as primary beneficiary. The trust instrument provided the trustee with broad powers to manage the trust property and provided that he was entitled to reasonable compensation for his services.

"My trustee is to serve with reasonable compensation. Additionally, all expenses of any type incurred by my trustee in carrying out the duties under this ...


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