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December 22 and 29, 2017 Digests

Posted By Administration, Tuesday, January 2, 2018

Kansas Supreme Court

Attorney Discipline

ORDER OF DISBARMENT
IN THE MATTER OF LUKE B. HARKINS
No. 12,264—DECEMBER 15, 2017

FACTS: In a letter dated December 6, 2017, Luke B. Harkins, an attorney licensed to practice law in Kansas, voluntarily surrendered his license. At the time of surrender, a complaint was pending against Harkins which alleged multiple violations of the Kansas Rules of Professional Conduct.

HELD: The court found that Harkins' surrender of his license should be accepted, and Harkins was disbarred.

ORDER OF DISBARMENT
IN THE MATTER OF RICKEY EDWARD HODGE, JR.
No. 116,542—DECEMBER 29, 2017

FACTS: A hearing panel found that Hodge violated KRPC 1.7 (concurrent conflict of interest), 1.8(a) (conflict of interest arising from entering business transaction with client), 1.8(b) (using information to the client's disadvantage), 4.2 (communication with person represented by counsel), and 8.4(g) (engaging in conduct adversely reflecting on a lawyer's fitness to practice). The violations arose after Hodge became embroiled in a business transaction involving clients.

HEARING PANEL: The panel found that Hodge continued to provide legal advice to his client even after he ostensibly withdrew from representation and even though Hodge testified that he was operating as a business person and not as an attorney. And while he was acting as an attorney, Hodge used knowledge he gained in his representative capacity to attempt to enrich his solely-owned business. After finding that Hodge behaved in a deceptive manner and refused to acknowledge his wrongdoing, the hearing panel agreed with the disciplinary administrator and recommended that Hodge be disbarred.

HELD: Hodge disputed many of the findings of fact from the hearing panel. After reviewing the parties' arguments, the court agreed with the hearing panel that Hodge was acting as an attorney during the period in question. Hodge's simultaneous representation violated the rules of professional conduct. After affirming the hearing panel's findings regarding Hodge's rules violations, the court considered that Hodge's behavior was motivated by self-dealing. The court found that any mitigating factors failed to outweigh the aggravating factors and imposed discipline of disbarment.

CIVIL

TAXATION
IN THE MATTER OF THE APPEAL OF BHCMC
BOARD OF TAX APPEALS—COURT OF APPEALS IS AFFIRMED—BOARD OF TAX APPEALS IS AFFIRMED
NO. 112,911—DECEMBER 29, 2017

FACTS: The State billed Boot Hill Casino & Resort for compensating use tax for tax years 2009 through 2011. The tax was based on the sale price for electronic gaming machines (EGM) that were on the casino floor at the casino in Dodge City. Under Kansas statutes, BHCMC owns all ancillary facilities at the resortamenities such as the restaurant. The State, through the Kansas Lottery, owns all of the lottery gaming facilities and operations. BHCMC operates all of the resort through a management agreement. This arrangement is required by both statute and the Kansas Constitution. Because the Kansas Lottery, and not BHCMC, is the actual owner of the EGM that were subject to taxation, BHCMC filed a motion for refund with the Kansas Department of Revenue. That request was denied, and BHCMC appealed to BOTA, which determined that BHCMC was not required to pay the use tax because it did not make use "incident to ownership" of the EGM. That decision was affirmed by the Court of Appeals, and the Supreme Court accepted the State's petition for review.

ISSUE: Whether BHCMC is subject to compensating use tax

HELD: Compensating use tax is tied to the use, storage, or consumption of property. For a person to exercise a right or power over property incident to the ownership of that property, the person exercising that right or power must own the property. In this case, the statutory language is ambiguous. Any statutory ambiguity must be resolved in favor of the taxpayer. Under the management agreement, BHCMC does not own the EGM and does not use them within the meaning of the statute. And because BHCMC does not own the EGM, it cannot be made to pay a compensating use tax.

STATUTES: Kansas Constitution, article 15, § 3; K.S.A. 2016 Supp. 74-8733, 77-621(c), 79-3702(c), -3703; K.S.A. 2015 Supp. 74-2426(c); K.S.A. 2007 Supp. 74-8734(h)(17); K.S.A. 79-3703a

 

Kansas Court of Appeals

CIVIL

EVIDENCE—IMMUNITY—PRIVILEGE—PUBLIC HEALTH
ROCKHILL PAIN SPECIALISTS V. HANCOCK
JOHNSON DISTRICT COURT—AFFIRMED
No. 115,620—DECEMBER 22, 2017

FACTS: Drs. Kloster and Hancock are physicians specializing in pain management. They worked closely together in their practice, Rockhill Pain Specialists, and also had a close personal relationship. For reasons that are unclear, both the business and personal relationships deteriorated beginning in 2011. Around this time, Hancock developed concerns over the quality of Kloster's patient care. Without telling Kloster, Hancock hired two outside physicians to review certain aspects of Kloster's patient care. These physicians were concerned with what they found and filed complaints with the Kansas Board of Healing Arts and the Missouri Board of Registration for the Healing Arts. Upon Hancock's urging, the reviewing physicians also contacted the attorneys general for Kansas and Missouri and the Drug Enforcement Administration. Hancock also called the local police department. Amid a dissolution of the practice, Kloster filed suit against Hancock for, among other things, fraud, breach of fiduciary duty, and defamation. Hancock responded by taking his concerns about Kloster to the press. Ultimately, Kloster was cleared by all licensing agencies. And a jury found in Kloster's favor on all charges. Hancock appealed.

ISSUES: (1) Admissibility of administrative records; (2) error in denying discovery request; (3) proof of damages; (4) applicability of statutory cap; (5) delineation between Kloster and Rockhill

HELD: K.S.A. 65-4925 does not prohibit testimony about the ultimate outcome of an administrative investigation. There is no public policy prohibition on this testimony. And Hancock's testimony regarding the administrative actions rendered harmless any error in admission of evidence. The district court erred by prohibiting Hancock from discovering Kloster's responses to the peer review committees at the Board of Healing Arts. Kloster's responses were not privileged and, even if they were, he did not own the privilege. But the error in excluding this evidence from discovery was harmless. Kloster's damages were proved by sufficient evidence of actual damages. Defamation is not a personal injury action, so the statutory $250,000 cap does not apply. The damages awarded to Kloster personally were supported by the evidence.

STATUTES: K.S.A. 2016 Supp. 60-226(c)(1)(D), 261, -19a02, 65-4915, -4915(b); K.S.A. 60-401(b), -407, -407(f), -409, -412(c), 65-2839a, -2898, -2898(a), -4923, -4924, -4925, -4925(a)(3)

EVIDENCE—PROBABLE CAUSE
FISCHER V. KANSAS DEPARTMENT OF REVENUE
ELLIS DISTRICT COURT—AFFIRMED
No. 112,243—DECEMBER 29, 2017

FACTS: After a concerned neighbor called the police, law enforcement made contact with Fischer, who was sitting in a parked car. The officer could smell alcohol and noticed that Fischer, who was under age 21, had bloodshot eyes. Fischer consented to a preliminary breath test which showed a breath alcohol content over .02. An administrative law judge ruled that the officer had reasonable grounds to request the PBT and suspended Fischer's driver's license. That ruling was upheld by the district court, and Fischer appealed.

ISSUES: (1) Constitutionality of only requiring reasonable suspicion; (2) constitutionality of coercing a driver's consent to PBT

HELD: Because Fischer was under age 21, the statute required the officer to certify that he had reasonable grounds to believe that Fischer was operating a vehicle while having alcohol in his system. There was probable cause that Fischer was under the influence which means that Fischer's first constitutional argumentabout the reasonableness of allowing only reasonable suspicionneed not be addressed. Any error in requiring the PBT was harmless because this is a civil administrative proceeding, not a criminal action, and the exclusionary rule did not apply.

STATUTE: K.S.A. 2016 Supp. 8-1012, -1012(a), -1012(b), -1567a(a), -1567a(d)(1)(A)

TAXATION
IN THE MATTER OF THE EQUALIZATION APPEAL OF TARGET CORPORATION
BOARD OF TAX APPEALS—AFFIRMED
No. 116,607—DECEMBER 29, 2017

FACTS: The properties at issue in this case are four Target stores located in Sedgwick County. All four stores sought equalization appeals for tax year 2015. During that appeal, the county provided testimony from a mass appraisal expert. Her testimony regarding valuation was predicated on computer models and 2013 settlement values. Target provided testimony from an expert appraiser who inspected the buildings and researched comparable land and sales. After finding Target's evidence more compelling than the county's, BOTA decreased the buildings' valuations and the county appealed.

ISSUE: The validity of BOTA's decision

HELD: Because the property at issue is commercial property, the county had the burden of production and persuasion before BOTA. The county's valuations were not based on actual views and inspections of the buildings. Moreover, the carryover data relied on by the county has been deemed unconstitutional, a decision that had been made at the time of the BOTA hearing. Because she did not personally appraise the subject properties, the county's expert could not offer a valid opinion of value. Conversely, Target's expert's appraisal was appropriate and complied with Kansas law. BOTA's decision was reasonable.

STATUTES: K.S.A. 2016 Supp. 74-2426(a), -2426(c), 77-603(a), -621(a), -621(c), -621(d), 79-501, -503a, -505, -506(a), -1609; K.S.A. 79-501, -1455

CRIMINAL

constiutional law—criminal procedure—fourth amendment—search and seizure
state v. hadley
sedgwick district court—affirmed
No. 115,428—December 22, 2017

FACTS: Hadley was convicted of possession of marijuana after a prior conviction. The marijuana was discovered in Hadley’s undergarment during a law enforcement search subsequent to a traffic stop. Hadley argued the warrantless search based on the odor of marijuana lacked probable cause in violation of her Fourth Amendment rights. On appeal, she claimed the district court erred in denying her motion to suppress this evidence.

ISSUE: Warrantless search based on probable cause with exigent circumstances

HELD: Court examined what constitutes probable cause when a person is searched without a warrant based, in whole or in part, on the odor of marijuana. Approach taken by other states, allowing search of a person based on odor of marijuana alone, is not adopted. State v. Fewell, 286 Kan. 370 (2008), is discussed and applied. Under totality of circumstances in this case, no error in district court’s ruling that the warrantless search of Hadley was based on probable cause with exigent circumstances.

STATUTES: K.S.A. 2013 Supp. 21-5706(b)(3), -5706(c)(2)(B); K.S.A. 8-125

constitutional law—crimes and punishment—sentencing—statutes
state v. robinson
johnson district court—reversed in part, vacated in part, remanded
No. 116,872—December 22, 2017

FACTS: Robinson was convicted in part of refusal to submit to testing in violation of K.S.A. 2016 Supp. 8-1025, and refusal to submit to a preliminary breath test (PBT) in violation of K.S.A. 2016 Supp. 8-1012. On appeal, he claimed these convictions were based on unconstitutional statutes. He also challenged the use of his prior Arizona and California DUI convictions to sentence him as a fourth or subsequent DUI offender.

ISSUES: (1) Refusal to submit to testing in violation of K.S.A. 2016 Supp. 8-1025, (2) refusal to submit to PBT in violation of K.S.A. 2016 Supp. 8-1012, (3) out-of-state DUI convictions

HELD: State concedes that Robinson’s conviction for refusal to submit to testing in violation of K.S.A. 2016 Supp. 8-1025 must be reversed pursuant to State v. Ryce, 303 Kan. 899 (2016) (Ryce I), aff’d on reh’g, 306 Kan. 682 (2017)(Ryce II). 

As issue of first impression, K.S.A. 2016 Supp. 8-1012 is unconstitutional for same reasons that K.S.A. 2016 Supp. 8-1025 was found to be unconstitutional in Ryce I and Ryce II, i.e., the statute criminalizes a person’s right to withdraw consent to a warrantless search, and the statute is not narrowly tailored to serve a compelling state interest. This conviction and sentence was reversed. Whether any evidence must be suppressed following a driver’s arrest that is based in part on the use of a PBT is not addressed.

State conceded that Robinson’s Arizona DUI convictions were based on a statute having no comparable offense in Kansas, thus cannot be used to enhance Robinson’s DUI sentence. Parties agreed that the case should be remanded for district court to determine whether the prior California DUI convictions can be used to enhance Robinson’s sentence under the Kansas DUI statute. 

STATUTES: K.S.A. 2016 Supp. 8-1001, -1001(a), -1012, -1012(a), -1012(b), -1012(c), -1012(d), -1025, 21-5102; K.S.A. 2014 Supp. 8-1025; K.S.A. 22-3504(1)

criminal procedure—jury instructions—statutes
state v. white
finney district court—reversed and remanded
No. 116,048—december 22, 2017

FACTS: Officers discovered children who were locked in a smelly unsafe room by mother when she went to bed, then released by father (White) 12-14 hours later when he woke up. White was charged with aggravated endangerment of a child. Over defense and State objections, district court instructed jury on the affirmative defense of parental discipline, citing “static force” of locking children in room to protect them from danger. White was convicted and appealed, claiming insufficient evidence supported the conviction, and claiming the parental defense instruction was error which denied him the right to control the theory of his own defense. 

ISSUES: (1) Sufficiency of the evidence, (2) jury instruction

HELD: A close call, but facts viewed in light most favorable to the State were sufficient to support the conviction.

The parental discipline instruction, which discusses use of reasonable amount of “force” upon a child was not factually appropriate where there was no evidence presented of corporal punishment and the mother locked the children in the room, nor was the instruction legally appropriate. District court’s decision to add this instruction denied White a meaningful opportunity to present his chosen theory of defense, and State failed to show that this affirmative defense instruction given over White’s objection did not affect outcome of the trial. Conviction was reversed and remanded for a new trial. 

STATUTE: K.S.A. 2016 Supp. 21-5601(b)(1)

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