Foxfield Villa Assocs., LLC v. Robben

57 Kan.App.2d 122

449 P.3d 1210

FOXFIELD VILLA ASSOCIATES, LLC, et al., Appellants,

v.Lori D. ROBBEN, et al., Appellees.

No. 119,611

Court of Appeals of Kansas.

Opinion filed August 2, 2019.

John M. Duggan and Deron A. Anliker, of Duggan Shadwick Doerr & Kurlbaum LLC, of Overland Park, for appellants.

Melissa Hoag Sherman, of Spencer Fane LLP, of Overland Park, for appellees.

Before Schroeder, P.J., Green and Powell, JJ.

Schroeder, J.:

Foxfield Villa Associates, LLC; Bartlett Family Real Estate Fund, LLC; PRES, LLC; Ernest J. Straub III; and Richard A. Bartlett (collectively FVA) appeal the district court's summary judgment order denying FVA's various claims of negligence, fraudulent transfers, conspiracy to commit fraudulent transfers, and aiding and abetting fraudulent transfers. First, FVA alleges its negligence claims survive summary judgment because it could not have reasonably ascertained it was injured within the two-year statute of limitations and this entitles FVA to equitable estoppel. Next, FVA argues its fraudulent transfer claims survive summary judgment because FVA could not have reasonably discovered the transfers until after it filed suit in this case. Finally, FVA asks this court to recognize two causes of actions never previously recognized in Kansas—conspiracy to commit fraudulent transfers and aiding and abetting fraudulent transfers. Upon review of the record, including the parties' briefs, we find no errors by the district court. We affirm.

FACTS

The parties to this action were involved in a complex and unsuccessful real estate project that resulted in the loss of millions of dollars, two federal lawsuits, a bankruptcy, and two lawsuits in Johnson County District Court, one of which resulted in this appeal.

Lori D. Robben is a realtor who owns Prestige Real Estate Services, LLC, and she is trustee of the "First Amended and Restated Lori D. Robben Trust Agreement Dated November 15, 2010."

Lori's husband is Paul Robben. Paul had ownership interests in Foxfield Associates, LLC (FA) and owned RDC Holdings, LLC (RDC). RDC and Ernest J. Straub III formed PRES, LLC (PRES). Richard and Dena Bartlett own Bartlett Family Real Estate Fund, LLC. In 2007, PRES, which included RDC, and the Bartlett Family Real Estate Fund, LLC formed Foxfield Villa Associates, LLC (Foxfield). Later RDC withdrew from PRES and FVA.

Foxfield closed two real estate transactions with FA on March 24, 2008, in Olathe, Kansas. Foxfield purchased 38 vacant lots. They also bought 9.1 acres to develop 40 additional lots. Bank of Blue Valley (BBV) loaned Foxfield $1,440,000 for the purchase and future development of the 9.1 acres. Foxfield defaulted on the loan in 2010.

FVA first sued BBV in Johnson County District Court on September 1, 2011. BBV brought counterclaims for FVA's default. In August 2012, FVA sued BBV in the United States District Court for the District of Kansas. In both lawsuits, FVA alleged BBV failed to disclose information about Paul's financial condition. In February 2013, FVA amended its federal complaint, brought claims against Paul, and alleged he made numerous misrepresentations or omissions during the real estate purchase, including misrepresentations about his license as a real estate broker.

In July 2013, Paul testified he was the transaction broker for the agreement between FVA's members and BBV.

In 2015, FVA amended its federal complaint again, alleging their relationship with Paul and RDC began in 2007, and his alleged misconduct occurred before the real estate transaction in March 2008. Meanwhile, Paul filed for bankruptcy, and the United States Bankruptcy Court for the District of Kansas eventually entered a discharge of debtor in Paul's favor. Paul later moved to dismiss the federal complaint against him based on this bankruptcy discharge.

The district court in the first lawsuit eventually ruled against FVA's claims and in favor of BBV's counterclaims, awarding $2,351,713.36 against Foxfield for the BBV loan and $360,000 and $720,000 against Straub and Bartlett, respectively, for their personal guaranties.

On August 31, 2016, FVA filed this second lawsuit in district court naming Lori D. Robben, her company Prestige, and her trust as defendants (Lori). FVA alleged in July 2013, Paul told them he was a Kansas real estate agent and broker, but he was acting as the transaction broker under Lori's supervising authority during the 2008 transaction. FVA alleged Lori was liable for negligent supervision, vicarious liability, aiding and abetting negligence, common-law negligent supervision, fraudulent transfer of three properties, conspiracy to commit fraudulent transfer, and aiding and abetting fraudulent transfer.

Lori moved for summary judgment and the district court granted Lori's motion, denying all of FVA's claims. Where needed, we have provided additional facts below.

ANALYSIS

Lori was entitled to summary judgment against FVA's negligence claims.

The district court granted Lori summary judgment because it found the two-year statute of limitations barred FVA's claims of negligence, negligent supervision, vicarious liability, aiding and abetting negligence, and common-law negligent supervision. FVA argues the district court erred in granting summary judgment.

To review the district court's decision, we apply the summary judgment standards:

" ‘ "Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. The trial court is required to resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the ruling is sought. When opposing a motion for summary judgment, an adverse party must come forward with evidence to establish a dispute as to a material fact. In order to preclude summary judgment, the facts subject to the dispute must be material to the conclusive issues in the case. On appeal, we apply the same rules and when we find reasonable minds could differ as to the conclusions drawn from the evidence, summary judgment must be denied." ’ [Citation omitted.]" Patterson v. Cowley County, Kansas , 307 Kan. 616, 621, 413 P.3d 432 (2018).

An issue of fact is not genuine unless it has legal controlling force as to the controlling issue. A disputed question of fact which is immaterial to the issue does not preclude summary judgment. In other words, if the disputed fact, however resolved, could not affect the judgment, it does not present a "genuine issue" for purposes of summary judgment. Northern Natural Gas Co. v. ONEOK Field Services Co. , 296 Kan. 906, 934, 296 P.3d 1106 (2013). If a district court reaches the correct result, its decision will be upheld even though it relied upon the wrong ground or assigned erroneous reasons for its decision. Gannon v. State , 302 Kan. 739, 744, 357 P.3d 873 (2015).

FVA's claims also require statutory interpretation, a question of law subject to unlimited appellate review. See Neighbor v. Westar Energy, Inc. , 301 Kan. 916, 918, 349 P.3d 469 (2015). The most fundamental rule of statutory construction is that the intent of the Legislature governs if that intent can be ascertained. State ex rel. Schmidt v. City of Wichita , 303 Kan. 650, 659, 367 P.3d 282 (2016). An appellate court must first attempt to ascertain legislative intent through the statutory language enacted, giving common words their ordinary meanings. Ullery v. Othick , 304 Kan. 405, 409, 372 P.3d 1135 (2016). When a statute is plain and unambiguous, an appellate court should not speculate about the legislative intent behind that clear language, and it should refrain from reading something into the statute that is not readily found in its words. 304 Kan. at 409, 372 P.3d 1135. Where there is no ambiguity, the court need not resort to statutory construction. 304 Kan. at 409, 372 P.3d 1135.

FVA's negligence claims are barred.

FVA argues the district court erred in applying the two-year statute of limitations to its various negligence claims because FVA could not reasonably ascertain Lori acted negligently until August 2016. Although we need not apply the same analysis the district court used, the district court correctly found FVA failed to timely raise its negligence claims. See Gannon , 302 Kan. at 744, 357 P.3d 873 (upholding the district court's decision when the decision reaches the correct result, even if based on the wrong grounds).

Under K.S.A. 60-513(a)(4), a plaintiff must commence his or her negligence claims within two years from the date of the negligent act. However, a plaintiff's negligence claims

"shall not be deemed to have accrued until the act giving rise to the cause of action first causes substantial injury, or, if the fact of injury is not reasonably ascertainable until some time after the initial act, then the period of limitation shall not commence until the fact of injury becomes reasonably ascertainable to the injured party." K.S.A. 60-513(b).

The phrase "reasonably ascertainable" presents the injured party with a duty to reasonably investigate available sources containing facts relevant to the party's claim. Davidson v. Denning , 259 Kan. 659, 675, 914 P.2d 936 (1996). This is an objective standard based on examining the surrounding circumstances. P.W.P. v. L.S. , 266 Kan. 417, 425, 969 P.2d 896 (1998).

In Dumler v. Conway , 49 Kan. App. 2d 567, 576, 312 P.3d 385 (2013), a panel of this court analyzed the plain language of K.S.A. 60-513(b) and found the limitation period commences when the party was injured and when the party was aware he or she was injured. 49 Kan. App. 2d at 576, 312 P.3d 385. There, Dumler lost control of her car and sustained serious injuries when her car encountered mud and debris on a rural highway.

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