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Dunlap v. Nielsen

United States District Court, D. Kansas

January 3, 2018

ANDREW W. DUNLAP, Plaintiff,
KARIN NIELSEN, ET AL., Defendants.



         Plaintiff filed this breach of contract and promissory estoppel action, alleging Defendants Karin Nielsen, the Estate of Tyghe Nielsen (the “Estate”), and Nielsen Capital Finance, LLC (“NCF”) refused to pay amounts due on two promissory notes signed by Tyghe and Karen Nielsen, in their individual capacities, and/or as members of NCF. Before the Court is Defendants' Motion for Partial Summary Judgment (Doc. 40). The motion is fully briefed and the Court is prepared to rule. For the reasons stated below, the Court grants Defendants summary judgment as to the promissory estoppel claim, but denies the same as to the breach of contract claims.


         Summary judgment is appropriate if the moving party demonstrates “that there is no genuine dispute as to any material fact” and that it is “entitled to judgment as a matter of law.”[1]In applying this standard, the Court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party.[2] “There is no genuine [dispute] of material fact unless the evidence, construed in the light most favorable to the non-moving party, is such that a reasonable jury could return a verdict for the non-moving party.”[3] A fact is “material” if, under the applicable substantive law, it is “essential to the proper disposition of the claim.”[4] A dispute of fact is “genuine” if “there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way.”[5]

         The moving party initially must show the absence of a genuine dispute of material fact and entitlement to judgment as a matter of law.[6] In attempting to meet this standard, a movant who does not bear the ultimate burden of persuasion at trial need not negate the nonmovant's claim; rather, the movant need simply point out to the court a lack of evidence for the nonmovant on an essential element of the nonmovant's claim.[7]

         Once the movant has met the initial burden of showing the absence of a genuine dispute of material fact, the burden shifts to the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial.”[8] The nonmoving party may not simply rest upon its pleadings to satisfy its burden.[9] Rather, the nonmoving party must “set forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant.”[10] In setting forth these specific facts, the nonmovant must identify the facts “by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein.”[11] To successfully oppose summary judgment, the nonmovant must bring forward more than a mere scintilla of evidence in support of his position.[12] A nonmovant may not create a genuine issue of material fact with unsupported, conclusory allegations.”[13]

         Finally, summary judgment is not a “disfavored procedural shortcut”; on the contrary, it is an important procedure “designed to secure the just, speedy and inexpensive determination of every action.”[14]


         As an initial matter, Plaintiff has failed to comply with several local rules. First, she failed to properly controvert Defendants' statement of uncontroverted facts as required by D. Kan. Rule 56.1. In this district, the general practice is for the nonmovant to state for each numbered statement whether the fact is controverted or uncontroverted. Plaintiff ignored Defendants' statement of uncontroverted facts and asserted her own. As a result, Plaintiff has failed to comply with the portion of the local rule that requires identifying the number of movant's fact that is disputed.[16] Additionally, many of Plaintiff's statements of uncontroverted facts were inconcise or incorrect, contrary to D. Kan. Rule 56.1(b)(2).[17] For example, in paragraphs 4, 5, 11, and 12, Plaintiff stated that Karin did not deny signing and executing the loan documents until she asserted her First Affirmative Defense, but she did specifically deny signing any of those documents in her Answer.[18] Plaintiff has also improperly filed a surreply.[19]Surreplies are not contemplated by D. Kan. Rule 7.1(c), they are rare, and only allowed with leave of court.[20] Plaintiff did not seek leave before filing her surreply.

         For these rule violations, Defendants request the Court deem their statement of uncontroverted facts as admitted pursuant to D. Kan. R. 56.1(a).[21] They also filed a motion to strike the surreply.[22] Plaintiff filed no response to the motion to strike and the time for doing so has expired. Because the Court concludes partial summary judgment should be granted even after considering the surreply, the Court denies the motion to strike as moot.

         Although burdensome, the Court will not deem all of movants' facts uncontroverted and will keep in mind the applicable summary judgment standards in determining the facts for purposes of this motion. The following material facts are either uncontroverted or, if controverted, are construed in the light most favorable to Plaintiff.

         Tyghe and Karin Nielsen were married for over nine years preceding his death. Around 2009, Tyghe was diagnosed with cancer. By 2012, Tyghe was unable to work at his occupation as a physician. Around September 17, 2013, Tyghe formed NCF, with him as its sole member.

         On or about October 28, 2014, Plaintiff Alex Dunlap loaned $150, 000 to NCF. Plaintiff produced four documents memorializing this loan: 1) the Promissory Note - On Demand (the “Promissory Note”), 2) the Loan Agreement, 3) the Loan Summary, and 4) the canceled check made payable to NCF. The Promissory Note stated in pertinent part:

FOR VALUE RECEIVED, the undersigned, Tyghe and Karin Nielsen and Nielsen Capital Finance, LLC (Borrowers) . . . promises to pay to the order of Alex Dunlap (Lender), the principal sum of $150, 000 (Principal). The borrower also promises to pay 20 percentage points per annum pro rated over a term of up to one year unless agreed upon otherwise by both parties. Contract is renewable every 60 days from 10/28/2014. The entire unpaid Principal and any accrued interest shall be immediately payable UPON DEMAND of any holder of this note, but not sooner than thirty (30) days from execution of this note.[23]

         The second page of the Promissory Note contained two signatures, one was Tyghe's and the other appeared to be Karin's:[24]

         (Image Omitted)

         The Loan Agreement stated it was “made and entered into . . . by and between Nielsen Finance Company (“Borrower”) and Alex Dunlap (“Lender”).”[25] On page 9 of the Loan Agreement, the signature block was as follows:

         (Image Omitted)

         Attached to the Loan Agreement was a document entitled “Loan Summary.” It indicated Tyghe and Karin Nielsen guaranteed the loan and contained the following signatures, one was Tyghe's and the other appeared to be Karin's:

         (Image Omitted)

         On or about November 27, 2014, Plaintiff made a $50, 000 loan to NCF.[26] This second loan was memorialized in a loan agreement back-dated October 28, 2014, with an incorrect stated loan amount of $150, 000 (the “Second Loan Agreement).[27] The loan summary attached to this agreement, however, indicated that the maximum loan amount was $50, 000, the default rate was 20% per annum, and the loan was guaranteed by Tyghe and Karen Nielson (the “Second Loan Summary”).[28] The Second Loan Agreement was signed by Tyghe as President of NCF. The Second Loan Summary contained the following signatures, one was Tyghe's and the other appeared to be Karin's:

         (Image Omitted)

         Tyghe died on December 3, 2015. On May 24, 2016, Dustin Wiemers, a resident of Dallas County, Iowa, filed a Petition for Appointment of Special Administrator for the Estate of Tyghe Nielsen in the District Court of Miami County, Kansas, Probate Section under case number 2016-PR-000046 (the “Probate Case”). On the same day, the Probate Court appointed Karla Kerschen Shepard as the Special Administrator.[29]

         Notice of the May 24, 2016 Petition was published in the Kansas City Star beginning June 2, 2016 and ending June 16, 2016, and in the Miami County Republic beginning June 8, 2016 and ending June 22, 2016. Both notices to creditors stated:

You are hereby notified that on May 24, 2016, a Petition for Issuance of Letters of Administration was filed in this Court by Dustin Wiemers, one of the plaintiffs in a civil case against Tyghe Nielsen, deceased, who has a claim against Tyghe Nielsen and, therefore, has an interest in the estate as a creditor, praying for issuance of Letters of Administration to Karla Kerschen Shepard as Special Administrator.
All creditors of the decedent are notified to exhibit their demands against the Estate within the later of four months from the date of first publication of notice under K.S.A. 59-2236 and amendments thereto, or if the identity of the creditor is known or reasonably ascertainable, 30 days after actual notice was given as provided by law, and if their demands are not thus exhibited, they shall be forever barred.[30]

         On June 3, 2016, Karin recorded the Last Will and Testament of Tyghe Lindberg Nielsen (“Tyghe's Will”) in the Probate Case. On July 14, 2016, the Probate Court admitted Tyghe's Will and appointed Karin as substitute Executor. Tyghe's Will expressly states that it “shall not extend the statute of limitations for payments of debts, or enlarge upon my legal obligation or any statutory duty to pay debts.”[31]

         III. Analysis

         Defendants seek partial summary judgment on three grounds: 1) Karin is entitled to judgment on the breach of contract claim because she was not a party to any contract with Plaintiff; 2) the claims against the Estate are barred by K.S.A. § 59-2239; and 3) the promissory estoppel claim fails for lack of reasonable reliance. Plaintiff argues that summary judgment is inappropriate because genuine issues of material fact exist regarding: 1) whether Karin's signatures were forged or unauthorized; 2) whether Kansas's nonclaim period was ever triggered; and 3) whether Plaintiff reasonably relied upon Tyghe's promises. The Court addresses each issue in turn.

         A. Breach of Contract Claim Against Karin

         Karin argues that she is entitled to summary judgment on the breach of contract claim because she was not a party to any contract with Plaintiff. In support, Karin submitted an affidavit, declaring that: 1) the signatures on the Note and the loan agreements were not made by her or with her knowledge or consent; and 2) she had no knowledge of these documents at the time they were purportedly made and did not approve or consent to them.[32] Plaintiff counters that signatures are presumed valid in Kansas pursuant to K.S.A. § 84-3-308 and that Karin's self-serving affidavit, alone, does not overcome this presumption nor shift the burden of authenticating her signature to Plaintiff.

         K.S.A. § 84-3-308 (West) states:

(a) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature. If an action to enforce the instrument is brought against a person as the undisclosed principal of a person who signed the instrument as a party to the instrument, the plaintiff has the burden of establishing that the defendant is liable on the instrument as a represented person under K.S.A. 84-3-402(a).

         In her answer, Karin specifically denied signing any of the loan documents or knowledge of them.[33] Accordingly, the burden of establishing the validity of Karin's purported signatures is on Plaintiff. Nonetheless, the signature is presumed authentic and authorized unless the action is to enforce the liability against a dead or incompetent signor. Karin is alive and the action is to enforce the validity of her signature, so the presumption applies.

         The Court finds Karin's argument that her affidavit overcomes the presumption unpersuasive. While Karin's testimony as to her own signature is competent and admissible, “whether the presumption of validity actually is rebutted is an issue for the fact finder at trial.”[34] A reasonable fact finder could find the presumption outweighs Karin's testimony if they found Karin unbelievable.[35] Under these circumstances, the Court concludes that summary judgment on the breach of contract claim against ...

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