court may not award attorney fees absent statutory authority
or an agreement by the parties.
merger doctrine stands for the principle that a contract
merges into a judgment entered upon it, and the judgment
thereafter defines the parties' legal rights. Under the
merger doctrine, postjudgment attorney fees are generally not
recoverable unless the contract has specifically provided for
postjudgment attorney fees.
meaning of the term postjudgment is clear. It means actions
after the judgment is final. It does not mean actions that
occur postverdict but prefinal judgment, such as motions to
set aside the verdict, or other challenges to the verdict or
decision, before a final judgment is issued resolving all
Waiver is an affirmative defense under Kansas law. K.S.A.
2016 Supp. 60-208(c)(1)(Q).
affirmative defense cannot be raised sua sponte by
the court, and consideration of such defenses constitutes
Uniform Fraudulent Transfer Act (UFTA) provides remedies to
creditors when debtors engage in fraudulent transfers. K.S.A.
33-201 et seq.
UFTA does not explicitly authorize attorney fees. K.S.A.
Because Kansas has adopted what is known as the American rule
that proscribes courts from awarding attorney fees unless
specifically authorized by statute or contract, the language
of the UFTA allowing creditors to set aside fraudulent
conveyances and "any other relief the circumstances may
require" does not allow for the recovery of attorney
fees related to bringing an action against the wrongdoer.
Kansas recognizes one exception to the American rule, known
as the third-party litigation exception. When the plaintiff
has been forced to litigate against a third party because of
some tortious conduct of the defendant, the plaintiff may
recover attorney fees even if they are not explicitly allowed
by statute or contract. This is because they are viewed as a
separate measure of damages collaterally related to the
order for the third-party exception to the American rule to
apply, a plaintiff must show that (1) the defendant committed
a tort or violated a contractual duty; (2) third-party
litigation is the natural and proximate consequence of the
defendant's wrongdoing; (3) it was necessary for the
claimant to engage in the third-party litigation; and (4) the
claimant exercised good faith in the third-party litigation.
applying the third-party litigation exception to the American
rule, if the third party and wrongdoer are tried in the same
case, the claimant can only recover attorney fees that were
necessary as to the third party.
Claimants cannot raise the third-party litigation exception
when the third party is a joint tortfeasor with the
wrongdoer, or where the third party and defendant are in
UFTA provides that the common law principles "supplement
its provisions." K.S.A. 33-210. Therefore, the
third-party litigant exception to the American rule is
applicable to UFTA cases.
the absence of statutory authority in Kansas, a claim for
punitive damages does not survive the death of the wrongdoer.
from Leavenworth District Court; David J. King, judge.
Affirmed in part, reversed in part, and remanded with
S. Brack, of Overland Park, for appellant.
A. Nelson, of Leavenworth, for appellee Estate of Ronald
William E. Pray, of Leavenworth, for appellee Terrie Foster.
Arnold-Burger, C.J., Green and McAnany, JJ.
Harder bought property with a house, dam, and lake from
Ronald Foster. Shortly thereafter, Harder discovered that the
dam, which Foster had assured her did not have any problems,
was in fact illegal and would need extensive repairs. Harder
filed suit against Foster, and the jury found Foster guilty
of negligent misrepresentation, intentional
misrepresentation, and breach of contract. The parties'
Residential Real Estate Contract provided that the party who
breached the contract would pay any attorney fees the
nonbreaching party incurred "in connection with the
default, " so Harder filed a motion requesting attorney
fees incurred up through the verdict. The court granted her
motion for attorney fees, but the issue took months to
litigate. Harder filed a second motion for attorney fees
requesting compensation for the fees generated while
litigating the first motion. The district court denied her
motion, holding that the fees incurred defending the first
award of attorney fees were not generated "in connection
with the default." Foster appealed.
the trial and the first motion for attorney fees, Harder
filed a second lawsuit against Foster, three of his children,
and his son-in-law. Her petition alleged that Foster had
fraudulently transferred all of the proceeds of the property
sale to his family members for no consideration, leaving him
unable to satisfy the judgment. She asked "to have the
transfers avoided, set aside, and held for naught; for an
attachment of the assets transferred; for execution on the
transferred assets; and for injunctive relief prohibiting
further disposition of the transferred assets." She
later asked the court for leave to amend her petition to add
a claim for punitive damages. Foster died a few months later,
and his estate was substituted as a party. The estate then
paid the judgment from the first case in full and filed a
motion for summary judgment on Harder's second lawsuit.
The district court granted the motion, holding that payment
of the judgment extinguished Harder's fraudulent
conveyance claim. Foster appealed the district court's
grant of summary judgment to Foster and the denial of her
request to amend her petition. Both cases were consolidated
that the district court erred when it held that attorney fees
generated defending the verdict and first award of attorney
fees were not generated "in connection with the
default." Harder is allowed to recover attorney fees
generated in defending against attacks on the verdict and her
first award of attorney fees. We further find that the
district court erred when it granted Foster's motion for
summary judgment in the second case because, while the
judgment was satisfied, Harder still had a potential claim
against Foster's estate under the Uniform Fraudulent
Transfer Act (UFTA) for attorney fees under the third-party
litigation exception if she can prove it applies. Finally,
because a party cannot recover punitive damages from a
deceased wrongdoer, the district court decision denying the
punitive damages claim was correct and is affirmed. Both
cases are reversed solely as to the issue of attorney fees.
Both cases are remanded to the district court for
consideration of an award of attorney fees against
and Procedural History
was searching for a house to purchase when she saw an
advertisement for a property owned by Foster in Easton,
Kansas. She visited the property in 2012. A house, lake, and
dam sat on the 31.2 acre property. Harder and Foster entered
into a Residential Real Estate Sale Contract. Foster executed
a Seller's Disclosure and Condition of Property Addendum
the same day, which required Foster to disclose to Harder
"all material defects, conditions and facts [known to
Foster] which may materially affect the value of the
Property." Foster's disclosure stated that there
were no problems with the land, no environmental issues, no
legal issues, and no problems with the property in general.
The price for the property was $405, 000 and closing was
scheduled for July 6, 2012.
closing, Harder discovered a 2007 letter from the State to
Foster informing him that the dam on the property was illegal
and needed repairs. Prior to finalizing the purchase, Harder
asked for reassurance from the county that the dam was fixed
to the State's satisfaction. Foster told Harder that, to
the best of his knowledge, the dam had been fixed and did not
need further repairs. Harder purchased the property in 2012.
2013, the State informed Harder that the dam was illegal
because it lacked a permit, and obtaining a permit would
require extensive repairs to the dam. Harder filed suit
against Foster in August 2013 (the 2013 case). Harder's
petition alleged negligent misrepresentation, intentional
misrepresentation, violation of the Kansas Consumer
Protection Act, and breach of contract. The district court
dismissed the Kansas Consumer Protection Act claim before
trial on Foster's motion for summary judgment. After
trial, the jury found that Foster was guilty of negligent
misrepresentation, intentional misrepresentation, and breach
of contract. The jury awarded Harder $225, 116 in actual
damages but found that she was not entitled to punitive
damages. The journal entry of the verdict was filed on
December 10, 2014.
trial, Foster filed a motion to alter, amend, and set aside
and for judgment as a matter of law. Harder filed a motion
for attorney fees, a motion for imposition of a constructive
trust, and a motion to amend the pretrial order. The court
denied Foster's motion to alter, amend, and set aside the
judgment, and the court also denied Harder's motion for
imposition of constructive trust.
the district court addressed Harder's motion for attorney
fees. The parties' Residential Real Estate Sale Contract
required the defaulting party to reimburse the nondefaulting
party for attorney fees, court costs, and other legal
expenses incurred "in connection with the default."
Harder's claim for attorney fees was not included on the
pretrial order, which is why she also filed the motion to
amend the pretrial order. Harder's request for attorney
fees did appear on her pretrial questionnaire. Foster opposed
Harder's request for attorney fees because she did not
include the request in her petition or present evidence on
attorney fees at trial. Foster also noted that the request
was not in the pretrial order. The district judge stated that
he recalled a discussion, possibly at the pretrial
conference, that the parties agreed to decide the attorney
fees issue after the jury returned a verdict. Harder's
attorney remembered a similar discussion. The district judge
stated that he "relied upon the pretrial questionnaires
in formulation of the pretrial order" and that he did
not have an explanation for why he failed to include the
attorney fees issue from Harder's pretrial questionnaire
in the pretrial order. Based on his recollection that the
parties agreed to deal with the issue after the trial, the
judge granted Harder's request to amend the pretrial
order. The judge also granted Harder's request for
attorney fees, ordering Foster to pay Harder $51, 862 in
attorney fees and $13, 871.34 in legal expenses and court
March 2015, Foster filed a motion to alter, amend, and set
aside the district court's order amending the pretrial
order and judgment for attorney fees and costs. The district
court heard arguments on this motion on October 30, 2015.
Foster's attorney began by reminding the district judge
that his decision to allow an amendment to the pretrial order
was based on the judge's recollection of the parties'
agreement. Foster's attorney had gone back and listened
to the proceedings and did not find a record of any
conversation in which the parties agreed to deal with the
attorney fees issue after trial. The judge agreed that he had
looked through the record and had not found evidence of the
agreement that he had recollected at the previous hearing.
Instead of ruling on the motion that day, the judge continued
the hearing to give Harder's attorney an opportunity to
search the record for evidence that the parties actually
agreed to defer the attorney fees issue until after the
trial. The parties reconvened on December 1, 2015.
Harder's attorney admitted that he had not found anything
in the record to substantiate the recollection that the
parties had agreed to submit that attorney fees issue to the
judge after trial as opposed to the jury. However, the
district judge upheld his prior order amending the pretrial
order and granting Harder attorney fees, stating that he was
"persuaded that it was not error to handle the
attorney's fees as it was handled in this case . . .
filed a second motion for attorney fees on March 10, 2016.
The district court's first award of attorney fees
compensated Harder for fees generated through December 16,
2014. However, Harder continued to generate attorney fees
after that date because she had to defend against
Foster's motion to alter, amend, and set aside and for
judgment as a matter of law and Foster's challenges to
the district court's granting of Harder's first
motion for attorney fees.
district court heard the motion on May 4, 2016. Harder began
by noting that after the first award of attorney fees Foster
filed motions attempting to set aside the verdict and the
court's award of attorney fees. Then, Harder reminded the
court that the Residential Real Estate Sale Contract required
the defaulting party to reimburse the nondefaulting party for
all attorney fees and expenses incurred "in connection
with the default." Foster argued that the court should
deny the motion because Harder was attempting to collect fees
incurred postjudgment and that the fees were "not
related to the default, they're related to various and
assorted motions that were filed by both parties, and
responses." Foster argued that the default had been
finalized in the court's December 10, 2014, journal entry
reflecting the jury verdict.
district judge noted that most of the work the attorneys had
done was related to the first motion for attorney fees and
the confusion over whether or not parties intended the claim
for attorney fees to be included in the pretrial order. The
judge recalled the "comedic series of . . . errors"
that gave rise to the issues in the first motion for attorney
fees: the court's inadvertent mistake in failing to
include the attorney fees issue on the pretrial order despite
its appearance on Harder's pretrial questionnaire; the
mistaken recollection that the parties had agreed to
determine the attorney fees issue after the trial; and the
amount of time spent looking for evidence to support the
recollection. The district judge then held that "none of
this had anything to do with actions of the defendant"
and that "[t]he jury verdict had nothing to do with the
attorney's fees." Based on this, the district judge
denied Harder's second request for attorney fees. The
judge stated that "the amount of time that was devoted
really related to certain failures of [Harder]'s counsel
to present a record supporting the award of attorney's
fees." The judge characterized Foster's actions as
"legitimate and meritorious positions to advocate. And
they were not related to the default but were related to
actions in the course of the litigation."
February 2015, after the district court had awarded Harder
attorney fees but before Foster filed his motions contesting
the attorney fees award, Harder initiated a second lawsuit
against Foster (the 2015 case). This time, Harder filed a
petition to set aside fraudulent conveyances. Harder's
petition alleged that Foster had used the $405, 000 in
proceeds from selling his property to purchase a house and a
car. Foster then gave the house and car, as well as the
remaining proceeds from the property sale, to his children
for no consideration. Harder alleged that these transfers
resulted in Foster becoming insolvent. Harder ultimately
included Foster's children and son-in-law in the petition
to force them "to return funds wrongfully transferred to
them by Ronald Foster." Harder later filed a motion
requesting leave to file an amended petition to include a
claim for punitive damages.
died in September 2015 and his estate was substituted as a
March 2016, Foster's estate paid $309, 017.14 to the
district court, which ordered payment of the funds to Harder.
In July 2016, Foster filed a motion for summary judgment on
Harder's fraudulent conveyances petition. Foster argued
that Harder's case was moot because her judgment had been
district court heard Harder's motion to amend her
petition to add punitive damages and Foster's motion for
summary judgment on September 7, 2016. The district judge
asked Harder how satisfaction of the judgment had not
extinguished her claim, stating "once you lose that
status as a judgment creditor by the payment of your
judgment, you have no cause of action to set aside any
transfers that [Foster]'s made because your
judgment's been paid." Harder disputed that the
judgment had been fully paid, noting that her second motion
for attorney fees in the 2013 case was on appeal and could
result in the judgment being increased. But, even if the
judgment was satisfied, Harder argued that the UFTA
recognized her as a creditor because she was "still owed
funds in attempting to set aside these transfers."
Harder explained that Foster transferred his assets for no
consideration the day after he received the demand letter,
and that if she had not initiated suit to set aside the
transfers, she likely never would have been paid. The
district judge kept returning to the point that the judgment
for the 2013 case had been satisfied in full. Harder
explained that "the damages that are sought in this case
have nothing to do with the judgment or attorney's fees
that have been sought in the 2013 case." Harder argued
that she incurred damages because Foster took "steps to
hinder, delay, and . . . defraud" Foster by transferring
his assets-had Foster kept the money from the property sale
in his bank account Harder could have issued a simple
district judge granted Foster's motion for summary
judgment. The district court held that payment of the
judgment extinguished Harder's fraudulent conveyance
claim. The district judge ruled that, despite the fact that
Harder's second motion for attorney fees was on appeal,
there was still a final judgment in the 2013 case and it had
been paid in full. The judge also ruled that there was no
statutory basis for awarding Harder "expenses associated
with prosecuting the present action." The district court
also denied Harder's motion to amend her petition to add
a claim for punitive damages because "[w]ithout actual
damages a party cannot recover just punitive damages."
Harder's 2013 and 2015 cases were consolidated for this
appeal. Harder appeals the district court's decision to
deny her second motion for attorney fees in the 2013 case.
Harder also appeals the district court's grant of summary
judgment to Foster and the district court's denial of her