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State ex rel Schmidt v. Nye

Court of Appeals of Kansas

March 29, 2019

State of Kansas ex rel. Derek Schmidt, Attorney General, Appellant,
v.
Ronald Nye, Joyce Nye, Terri Hurley, and Gary McAvoy, Individually and d/b/a Vintage Memorabilia, and Empraxis, LLC d/b/a Vintage Memorabilia, Appellees.

         SYLLABUS BY THE COURT

         1. At common law, a state is immune from suit unless it consents or waives its immunity. Questions concerning sovereign immunity are jurisdictional and can be raised at any time.

         2. Litigation conduct may constitute a waiver of the doctrine of sovereign immunity.

         3. The defense of sovereign immunity is not available to the State to shield it from liability for damages, including attorney fees, incurred by Defendants in seeking dissolution of the temporary injunction affirmatively sought and granted in its favor pursuant to K.S.A. 60-905(b) but later vacated based on a finding that it was wrongfully issued.

         4. The trial court's authority to award attorney fees is a question of law over which an appellate court exercises unlimited review.

          5. A temporary injunction imposed pursuant to K.S.A. 60-905(b) is valid, regardless of whether the trial court waives the bond requirement.

         6. Damages and attorney fees incurred in defending against a wrongfully issued temporary injunction order are recoverable under K.S.A. 60-905(b), even in the absence of an injunction bond.

         7. We review a trial court's authority to award fees for an abuse of discretion. A party challenging the award must show that no reasonable person would agree with the district court's decision or that the decision was not supported by substantial competent evidence.

         8. An award of attorney fees pursuant to K.S.A. 60-905(b) is limited to those actually and proximately resulting from the effect of the temporary injunction itself, as opposed to litigation expenses independent of the temporary injunction.

         9. The eight factors set forth in Kansas Rule of Professional Conduct 1.5(a) (2019 Kan. S.Ct. R. 300) for evaluating the reasonableness of a fee award are set forth and discussed.

         10. An appellate court may award attorney fees for services on appeal in a case in which the district court had authority to award attorney fees.

          Appeal from Shawnee District Court; Larry D. Hendricks, judge.

          Bryan C. Clark, assistant solicitor general, Dwight R. Carswell, assistant solicitor general, M.J. Willoughby, assistant attorney general, and Derek Schmidt, attorney general, for appellant.

          Tai J. Vokins and Krystal Vokins, of Sloan, Eisenbarth, Glassman, McEntire & Jarboe, LLC, of Lawrence, and O. Yale Lewis Jr., pro hac vice, of Hendricks & Lewis, PLLC, of Seattle, Washington, for appellees.

          Before Standridge, P.J., Pierron and Green, JJ.

          STANDRIDGE, J.

         The State appeals from the district court's order requiring it to pay attorney fees incurred by Ronald Nye, Joyce Nye, Terri Hurley, Gary McAvoy, and Vintage Memorabilia (hereinafter Defendants) in resisting and obtaining the dissolution of a preliminary injunction that was wrongfully issued. Finding no error, we affirm.

         Facts

         On September 27, 2012, the State filed an ex parte verified petition asking the district court, among other things, to temporarily restrain and then preliminary and permanently enjoin Defendants from the sale, publication, replication, and distribution of any and all Kansas Bureau of Investigation file materials relating to the 1959 murder of members of the Clutter family in Holcomb, Kansas. That same day, the district court entered the ex parte temporary restraining order as requested. An amended ex parte temporary restraining order was filed on October 9, 2012.

         On December 17, 2012, the district court held an evidentiary hearing on the State's request to convert the ex parte temporary restraining order into a preliminary injunction. At the end of the hearing, the court granted the parties' joint request to submit legal arguments in support of their respective positions. On April 23, 2013, the district court granted the State's request and entered a preliminary injunction but left open the possibility for Defendants to request the court vacate it at a later date. Citing K.S.A. 60-905(b) as authority, the district court noted the State would not be required to post a bond in conjunction with the preliminary injunction.

         On August 22, 2013, Defendants filed a motion to vacate the preliminary injunction. After significant delay due to discovery disputes, the State filed a motion for summary judgment on January 29, 2014. Defendants supplemented their motion to vacate on March 14, 2014, March 21, 2014, and June 6, 2014. The district court heard oral argument from the parties with regard to all pending motions on June 26, 2014, and took the matters under advisement. On November 7, 2014, Defendants filed an urgent request for a ruling on their motion to vacate. On November 26, 2014, the district court granted Defendants' motion to vacate the preliminary injunction, concluding that it should not have been granted in the first place.

         On May 27, 2015, Defendants filed a motion to compel discovery that the State previously had failed to produce. Following a hearing, the district court granted that motion and ordered the State to produce the requested documents no later than July 7, 2015. Rather than produce the documents as ordered, the State filed a motion to voluntarily dismiss the case. Defendants indicated they did not object to voluntary dismissal but noted that allowing the State to do so before Defendants had an opportunity to present the court with various motions related to the litigation (including but not limited to their forthcoming motion for costs and attorney fees pursuant to K.S.A. 60-905[b]) would be highly prejudicial. Defendants subsequently filed a motion for costs and attorney fees. After further briefing and a hearing, the district court granted Defendants' motion for fees, awarding them $152, 585 in attorney fees, but denied awarding costs. The district court held that the amount of fees it awarded all stemmed from the wrongfully issued preliminary injunction that was requested by the State. The district court also granted the State's motion to dismiss.

         Analysis

         On appeal, the State argues the district court erred in awarding Defendants attorney fees. Specifically, the State claims (1) it is protected from an award of attorney fees under K.S.A. 60-905(b) based on the doctrine of sovereign immunity, (2) the district court failed to consider the "injunction-bond" rule in making its decision to award fees, and (3) the district court abused its discretion in awarding fees. We address each of the State's claims in turn.

         1. Sovereign immunity

         The State argues it is entitled to sovereign immunity with respect to the district court's award of damages and attorney fees incurred by Defendants as the result of a wrongfully issued preliminary injunction. For the reasons ...


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