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Drywall Systems, Inc. v. A. Arnold of Kansas City, LLC

Court of Appeals of Kansas

September 27, 2019

Drywall Systems, Inc., Appellant,
v.
A. Arnold of Kansas City, LLC, Evan Brann, BMJ Building Management, LLC, Bank of Blue Valley, and Morrill & Janes Bank and Trust Company, Appellees.

         SYLLABUS BY THE COURT

         1. The goal of the Kansas Fairness in Private Construction Contract Act, K.S.A. 16-1801 et seq., is to encourage prompt payments of undisputed amounts as they come due under the contracts of the parties.

         2. The Kansas Fairness in Private Construction Contract Act provides incentives to the three tiers of a construction contract-owners-contractors-subcontractors.

         3. In any action to enforce the rights created by the Kansas Fairness in Private Construction Contract Act, the court shall award costs and reasonable attorney fees to the prevailing party. K.S.A. 16-1806.

         4. Ownership is the bundle of rights allowing one to use, manage, and enjoy property, including the right to convey it to others. Ownership implies the right to possess a thing, regardless of any actual or constructive control. Ownership rights are general, permanent, and heritable. A tenant under a lease is not an owner as defined by the Kansas Fairness in Private Construction Contract Act.

         5. Short-term leases with options to buy are treated as leases, rather than sales contracts.

         6. When a lease contains a stipulation that the renters shall have the right to purchase the premises, if they shall so elect, there is no completed sale. Renters do not acquire any estate in the land beyond the leasehold interest until they have elected to accept the offer and have paid or tendered the purchase price stipulated in the contract.

          Appeal from Johnson District Court; Kevin P. Moriarty, judge.

          James F. Freeman III, of Swanson Bernard, LLC, of Kansas City, Missouri, for appellant.

          Frederick G. Thompson IV, of Gould, Thompson & Bucher, PC, of Kansas City, Missouri, for appellee A. Arnold of Kansas City, LLC.

          Before Hill, P.J., Leben, J., and Walker, S.J.

          Hill, J.

         Drywall Systems, Inc., appeals the district court's denial of its request for prejudgment interest and attorney fees from A. Arnold of Kansas City, LLC. Because the court found A. Arnold was not an "owner" as defined by the Kansas Fairness in Private Construction Contract Act, K.S.A. 16-1801 et seq., it denied Drywall's request. We agree with the district court-under the plain language of the Act, A. Arnold is not an "owner" and was thus not legally obliged to pay interest and attorney fees under this Act. Simply put, the Act did not apply here. We affirm.

         A company rents part of a building in Olathe.

         The moving and storage company, A. Arnold, entered into a five-year lease for a part of a building in Olathe owned by BMJ Building Management LLC. When the lease was signed there were tenants already using other parts of the building. For that reason, A. Arnold needed a partition wall built before it could move into the building. The company needed its space ...


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