Mog v. St. Francis Episcopal Boys' Home of Salina

63 Kan.App.2d 579

534 P.3d 604

Craig M. MOG and Debbie A. Mog, TRUSTEEs OF the CRAIG M. MOG LIVING TRUST DATED OCTOBER 23, 2015, and the Debbie A. Mog Living Trust Dated October 23, 2015, Appellees,

v. ST. FRANCIS EPISCOPAL BOYS' HOME OF SALINA, Kansas, et al., Appellees,andKelsey Alexander, Trustee of the Anne Stodder Mcewen Kansas Trust Dated February 20, 1987, Appellant.

No. 125,456

Court of Appeals of Kansas.

Opinion filed July 14, 2023.

Keith A. Brock and Daniel J. Keating, of Anderson & Byrd, LLP, of Ottawa, for appellant Kelsey Alexander.

William W. Jeter, Tyler K. Turner, Ashley D. Comeau, and Christopher W. Sook, of Jeter Turner Sook Baxter LLP, of Hays, for appellees Craig Mog and Debbie Mog.

Before Warner, P.J., Coble and Pickering, JJ.

Warner, J.:

To participate as a party in a civil case, a defendant named in a petition must respond to the lawsuit. Most often, that means the defendant must file an answer—the procedural gateway that informs all other parties and the court that the answering party is entitled to notice of all case filings, to file motions and participate in discovery, and to contest court rulings. By filing an answer, a defendant indicates an intent to participate in the case. When a party chooses not to file an answer or otherwise respond to the petition, it foregoes this opportunity.

This rule governs the outcome of this appeal. The Craig M. Mog Living Trust and the Debbie A. Mog Living Trust sought to partition the property rights to oil, gas, and other minerals in Ellsworth County. The petition indicated that the Anne Stodder McEwen Kansas Trust had ownership interests in the mineral rights, and the McEwen Trust was served with notice of the lawsuit. But the McEwen Trust never filed an answer to the petition. Instead, its trustee-beneficiary—who could not represent the trust because she was not licensed to practice law—appeared at a hearing. After a lengthy discussion, she informed the district court that she declined to continue the proceedings to obtain an attorney to challenge the partition or otherwise participate in the case. The district court found that the McEwen Trust had defaulted, and the case progressed without the McEwen Trust's involvement.

Months later, after the mineral rights were partitioned and sold, the McEwen Trust retained an attorney and unsuccessfully tried to set the partition aside. It now appeals, challenging the sufficiency of the notice it received regarding proceedings after the district court found it to be in default. But by not filing an answer, the McEwen Trust gave up its right to participate in the partition action and thus had no right to receive notice of ongoing developments in the case. We affirm the district court's judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Several parties owned undivided interests in oil, gas, and other minerals in and under four tracts of land in Ellsworth County. The Mog Trusts owned most of these mineral rights—together, about 60% of the rights in each tract. In January 2021, Craig and Debbie Mog, as trustees of the Mog Trusts, sued to quiet title to and partition the minerals, seeking to simplify the ability to explore for and extract oil and gas. As the case proceeded, some parties with mineral interests elected to participate, while others quitclaimed their interests to the Mog Trusts. One of the interested parties was the McEwen Trust, which owned about 2% of the mineral rights in each tract.

The McEwen Trust did not file an answer or other responsive motion to the partition petition. But Kelsey McEwen Alexander—the McEwen Trust's trustee and only beneficiary—sent a letter to the district court in March 2021, copying the Mog Trusts. The letter stated that Alexander understood the nature of the partition request and indicated that she "d[id] not dispute the legal descriptions nor the percent interests stated" for the McEwen Trust. But Alexander did not believe partition was necessary and would prefer that no partition take place, as the trust's interests had belonged to her mother.

The court held a hearing on the Mog Trusts' request for partition in October 2021. Alexander appeared in person, purporting to represent the McEwen Trust. The district court and Alexander spoke at length on the record about Alexander's involvement in the case. Ultimately, the court explained that Alexander—who was not a lawyer or licensed to practice law in Kansas—could not represent an entity like the McEwen Trust in legal proceedings. And the court noted that it was the trust, not Alexander individually, that owned the mineral rights.

The district court asked Alexander whether she wanted to hire an attorney to represent the McEwen Trust, offering to continue the proceedings to allow her time to do so and making clear that it did not want to pressure Alexander into a decision. The court explained that because Alexander could not represent the McEwen Trust, if she did not hire an attorney to do so, the trust would be in default and lose the ability to challenge the proposed partition. Alexander confirmed that she understood.

After an extensive discussion between Alexander, the district court, and the attorneys representing the Mog Trusts, Alexander stated that she would not seek extra time to hire an attorney and challenge the partition. The court thus found the McEwen Trust to be in default. Later at the hearing—after this exchange and ruling—one of the Mog Trusts' attorneys stated that they would continue to notify Alexander of future proceedings and keep her aware of how the case unfolded.

The court filed a journal entry confirming that Alexander had "decline[d] the suggestion by the District Court to allow additional time to hire counsel," and thus "the Trust failed to appear and is in default." The court then quieted title to the property in the manner described in the petition, finding that the McEwen Trust owned about 2% of the mineral rights in question. And the court ordered a partition, appointing commissioners to appraise the mineral interests for a sale.

In January 2022, the court-appointed commissioners completed a report valuing the total mineral interests at roughly $45,000, which the district court later approved. One of the Mog Trusts' attorneys emailed the report to Alexander. The Mog Trusts were the only parties that elected to retain their mineral rights and to purchase the property (including the McEwen Trust's and other parties' interests in the mineral rights) at the commissioners' appraised value. After deducting applicable taxes, expenses, and attorney fees, the McEwen Trust's portion of the sale proceeds—reflecting its proportional interest in the mineral rights—was $227.86.

In May 2022, the Mog Trusts moved to confirm the sale and distribute the proceeds. The McEwen Trust, which had since hired an attorney, opposed this motion and moved to set aside the sale so it could file an election out of time. After a hearing, the district court granted the Mog Trusts' motion and denied the McEwen Trust's request, ultimately confirming the sale and distributing the proceeds to the affected parties. The McEwen Trust now appeals the district court's decision not to set aside the sale.

DISCUSSION

Partition proceedings have their origins in equity. Broadly speaking, partition actions seek to fairly determine and divide ownership interests in property. This can be motivated by any number of reasons. For example, property owners may "wish to terminate their relationship or avoid the discord that so often comes with shared possession." Einsel v. Einsel , 304 Kan. 567, 576, 374 P.3d 612 (2016). Or the sheer number of shared owners of the property may render the administrative costs associated with maintaining the separate property interests unworkable. The partition in this case falls into the latter category—more than a dozen owners shared interests in mineral rights, most with ownership shares involving 2% or less of the property in question.

Sometimes partition can occur by dividing land into separate parcels. But the district court here found after the October 2021 hearing that a physical partition—or partition in kind—was impracticable. Thus, the court appointed commissioners to determine the value of each interest in the property and the property as a whole. See K.S.A. 60-1003(c)(2). When the court approved the appraisal, any of the interested parties participating in the partition lawsuit could have elected to purchase all or part of property at the appraised value. K.S.A. 60-1003(c)(4). The Mog Trusts were the only parties who elected to purchase the mineral rights.

The McEwen Trust argues that the Mog Trusts failed to properly serve it with notice regarding the developments in the partition case after the October 2021 hearing. More specifically, the McEwen Trust challenges the sufficiency of the email Alexander received of the commissioners' report appraising the mineral rights and of the right to elect to purchase the property. According to the McEwen Trust, because it believes the trust did not receive proper notice of these developments, it could not meaningfully contest the appraised value or seek to purchase the mineral rights. Given these alleged notice defects, it asserts the partition was unjust and inequitable. The McEwen Trust also asserts that it relied on the Mog Trusts' commitment at the hearing to notify Alexander of later developments in the case.

The Mog Trusts respond that the McEwen Trust had no right to notice after Alexander stated that she did not intend to hire counsel for the trust and allowed a default judgment to be entered. And they note that Alexander made this decision before they offered to notify her as the case progressed. We agree with the Mog Trusts and affirm the district court's judgment.

1. The McEwen Trust had no right to notice after it defaulted (and thus ceased participating in the lawsuit).

We begin our analysis with the McEwen Trust's assertion that it was entitled to notice of all...