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November 20, 2015, Appellate Court Digests
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Kansas Supreme Court – Attorney Discipline

INDEFINITE PROHIBITION FROM APPEARING PRO HAC VICE BEFORE ANY KANSAS COURT, ADMINISTRATIVE TRIBUNAL, OR AGENCY
IN RE GARY RIEBSCHLAGER
ORIGINAL PROCEEDINGIN DISCIPLINE
NO. 114,098 – NOVEMBER 20, 2015

FACTS: This is an attorney discipline proceeding against Riebschlager, of Houston, Texas. Respondent is not licensed to practice law in Kansas. Through local counsel, respondent filed a verified application for admission pro hac vice in the District Court of Wyandotte County. However, he had been sanctioned by the State Bar of Texas by a partially probated suspension. In denying the application, the district court concluded that the respondent's attorney disciplinary record was contrary to the information he included in the verified petition for admission pro hac vice.

DISCIPLINARY ADMINISTRATOR: On January 14, 2015, the disciplinary administrator's office filed a formal complaint against respondent alleging violations of the Kansas Rules of Professional Conduct (KRPC). Respondent filed an answer on March 2, 2015. The parties entered into a joint factual stipulation and agreed to a suggested disposition on March 30, 2015.

HEARING PANEL: A panel of the Kansas Board for Discipline of Attorneys held a hearing on April 1, 2015, at which the respondent appeared personally and was represented by counsel. The hearing panel concluded that the evidence was not presented to establish that he knowingly made false statement of material fact. Rather, the hearing panel concluded that the evidence supported a conclusion that the respondent failed to disclose a fact necessary to correct a misapprehension known by the respondent in violation of KRPC 8.1(b) (2014 Kan. Ct. R. Annot. 670).

HELD: The disciplinary administrator and the respondent jointly recommended (and hearing panel unanimously recommended) that the respondent be indefinitely prohibited from appearing in any Kansas court, administrative tribunal, or agency of the state, pro hac vice. Court, after careful consideration, agreeed with the recommendations and held that respondent be indefinitely prohibited from appearing pro hac vice before any Kansas court, administrative tribunal, or agency. See In re Franco, 275 Kan. 571, 579, 66 P.3d 805 (2003) (Missouri attorney indefinitely prohibited from appearing in Kansas pro hac vice).

Kansas Supreme Court – Civil

STATUTES – EQUAL PROTECTION – WORKERS COMPENSATION
HOESLI V. TRIPLETT INC.
WORKERS COMPENSATION BOARD – AFFIRMED ON ISSUE SUBJECT TO REVIEW
COURT OF APPEALS –REVERSED ON ISSUE SUBJECT TO REVIEW
NO. 109,448 – NOVEMBER 20, 2015

FACTS: Hoesli injured in workplace accident for which he was entitled to workers compensation. Prior to that injury he was receiving social security retirement benefits and earning additional employment income without reduction in social security because he had reached full retirement age. Based on K.S.A. 2010 Supp. 44-510(h), the ALJ used Hoesli’s social security benefits to offset workers compensation award. Workers Compensation Board affirmed. Hoesli appealed, based on Dickens v. Pizza Co. Inc., 266 Kan. 1066 (1999), which limited statutory offset and permitted already-retried claimants, working simply to supplement social security at time of injury, full workers compensation. Hoesli also argued the offset violated the Equal Protection Clause. Relying on Dickens, Court of Appeals in part reversed the Board’s offset. 49 Kan. App. 2d 1011 (2014). Review granted on offset issue.

ISSUES: (1) Statutory offset of workers compensation benefits and (2) Equal Protection Clause

HELD: Dickens and subsequent cases which carved out exceptions to plain and unambiguous statutory language in K.S.A. 2010 Supp. 44-501(h) are overruled. Dickens erroneously engaged maxims of statutory construction without discerning any uncertainty in the text, thereby giving effect to a perceived legislative purpose underlying K.S.A. 2010 Supp. 44-501(h) that is contrary to statutory text’s clearly expressed meaning. Doctrine of stare decisis must yield to maintain consistency with statutory interpretation case law.

K.S.A. 2010 Supp. 44-501(h) does not violate Equal Protection Clause. Social Security retirement benefits did not lose essential character as benefits to protect recipients from loss of wages due to advanced age simply because 2000 amendments permit those who qualify for benefits on account of age to receive them in full while still earning wage income. Statute’s purpose is to avoid duplication of wage-loss benefits and its provisions satisfy the applicable rational basis test. Court of Appeals judgment following Dickens and progeny is reversed. Board’s decision is affirmed.

STATUTES: 42 U.S.C. § 403(f)(8)(E) (2012); K.S.A. 2014 Supp. 44-556(a); K.S.A. 2014 Supp. 77-621(c)(4); K.S.A. 2010 Supp. 44-501, -501(h); K.S.A. 44-501 et seq.; K.S.A.60-2101(b); K.S.A. 77-602 et seq.; and K.S.A. 1998 Supp. 44-501(h)

Kansas Court of Appeals – Civil

AD VALOREM TAX – PROPERTY VALUATION
IN RE KANSAS STAR CASINO
COURT OF TAX APPEALS – AFFIRMED
NO. 111,650 – NOVEMBER 20, 2015

FACTS: Kansas Court of Tax Appeals (COTA) appraised 195.5-acre property in Sumner County used for casino operation at $80,510,000, including $16,931,250 in land value based on actual price the Kansas Star Casino LLC (Kansas Star) parent company paid for the land. Kansas Star appealed, arguing COTA’s appraisal of the land was erroneously inflated, and should have been valued based on sales of surrounding agricultural property. Kansas Star also claimed appraisal of county’s litigation appraiser (Jortburg) was unsupported by the record and did not conform to Uniform Standards of Professional Appraisal Practice (USPAP). County cross-appealed, arguing COTA erroneously undervalued the property by treating marquee sign as personal property, and by not including the cost of Kansas Racing and Gaming Commission (KRGC) rental trailers, $1.6 million in organizational costs, and $3.1 million in financing costs as soft costs in determining replacement cost of improvements.

ISSUES: (1) Value of subject property, (2) COTA’s reliance on Jortburg’s appraisal, and (3) undervalue of subject property

HELD: Kansas Star argument, that value attributable to the casino management contract should be subtracted from property value of the subject property for purposes of ad valorem taxation, is rejected. COTA correctly determined the highest and best use of the subject property was operation as a casino because operating a casino was legally permissible for Kansas Star in addition to other highest-and-best-use requirements. Land value total included purchase price of one tract, and price paid to acquire property and to purchase option on another tract. State ex rel. Stephan v. Martin, 227 Kan. 456 (1980), is distinguished. COTA correctly found Kansas Star was not acting under undue compulsion when it purchased the subject property, and found tract used for ingress and egress and for proper drainage was not excess land. Any error in valuing both tracts together was harmless in this case.

No violation of USPAP in Jortburg’s conclusion that $16,931,259 paid for subject property was for land only and not consideration for management contract. COTA’s rejection of portions of Jortburg’s appraisal did not require invalidation of entire appraisal report. Even if non-USPAP compliance portions are assumed, any error was harmless in this case.

COTA correctly concluded that County did not meet burden of proving the marquee sign was real property. COTA also correctly found no soft costs in the cost of rental trailers for KRGC, the $1.6 million in organization, administrative, and legal costs, and the $3.1 million in financing costs.

STATUTES: K.S.A. 2014 Supp. 74-8702(f), -8734(a), -8734(d), -8734(h)(1), -8734(h)(6), -8734(h)(12), -8734(h)(13), -8734(h)(16), -8734(h)(17), -8735(a), -8735(h), -8736(e), -8751; K.S.A. 2014 Supp. 77-601 et seq., -621, -621(a)(1), -621(c), -621(d), -621(e); K.S.A. 2014 Supp. 79-503a, -503a(k), -505, -506; K.S.A. 74-8733 et seq.; K.S.A. 77-601 et seq.; K.S.A. 79-501, -504, -1456; and K.S.A. 1979 Supp. 79-342

ESTATE AND PETITION FOR ADMINISTRATION
IN RE ESTATE OF BRENNER
SHERMAN DISTRICT COURT – REVERSED AND REMANDED WITH DIRECTIONS
NO. 113,228 – NOVEMBER 20, 2015

FACTS: As heir-at-law of Earlene F. Brenner, Beverly Goodman petitioned for administration of her mother's estate more than 6 months after the date of her death, alleging there were assets to be marshaled and administered. Beverly's brother, Danny Brenner, objected to the petition claiming there were no assets in the estate and that Beverly's petition was really a claim against the estate barred by the six-month nonclaims statute, K.S.A. 59-2239. The district court granted Danny's motion to dismiss finding there were no substantial assets subject to administration.

ISSUES: (1) Estates and (2) petition for administration

HELD: Court treated Danny's motion to dismiss as a motion for summary judgment and found there are material facts at issue—whether there are assets owned by Brenner subject to administration. Court stated Beverly's petition is seeking the right to administer the estate, not file a claim against the estate. Court stated whether there are assets or not, without an administrator appointed and acting under the supervision and guidance of the district court, Danny's claim of no assets cannot be verified. An administrator duly appointed would have authority to search for any assets owned by Brenner at the time of her death. If there are assets, then the estate can administer the assets in accordance with the law. If it is found there are no assets, then the estate can be closed and no harm is done. Who pays for the cost of administration would be an issue for the district court to decide at the appropriate time. Court reversed and remanded with directions for the district court to allow the appointment of an administrator pursuant to K.S.A. 59-2232.

DISSENT: Judge Pierron dissented and would affirmed the district court. Judge Pierron stated that the issuance of letters of administration is rarely a challenged issue. However, the district court did not err in finding Brenner's estate lacked substantial assets to administer. Judge Pierron would find Beverly's petition was untimely and involved yet to be determined claims against Brenner's estate.

STATUTES: K.S.A. 59-506, -617, -618, -2221, -2239; and K.S.A. 60-212
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