Graham v. Herring (Court of Appeals)

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IN THE SUPREME COURT OF THE STATE OF KANSAS

No. 102,789

RICK GRAHAM and LISA GRAHAM,
Appellees,

v.

ANGELA HERRING AS ADMINISTRATOR FOR
THE ESTATE OF ELIZABETH A. JONES,
Appellant.


SYLLABUS BY THE COURT

1.
K.S.A. 2012 Supp. 60-225(a)(1) provides that, if a motion to substitute a person or
entity in a civil action for a deceased party whose claim has survived death is not made
within a reasonable time after the service of a statement noting the death, the action by or
against the decedent must be dismissed.

2.
Ordinarily, the trial court's dismissal of an action by or against a decedent under
K.S.A. 2012 Supp. 60-225(a)(1) for failing to move for substitution within a reasonable
time is reviewed for an abuse of discretion. But an abuse of discretion necessarily results
when the district court applies incorrect legal standards in the exercise of its discretion.

3.
In a civil action, the death of a party does not automatically terminate the district
court's subject matter jurisdiction. In order to protect rights and avoid time limitations,
K.S.A. 60-225(e) permits an attorney representing a party who dies during the pendency
of the matter to continue that representation in the name of the original party until there
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has been a substitution for the deceased party. The district court retains subject matter
jurisdiction of an action after the death of a party until it dismisses the action by or
against the decedent for a failure to make a motion for substitution within a reasonable
time after a properly served suggestion of death.

4.
The relevant time period to be analyzed for reasonableness under K.S.A. 2012
Supp. 60-225(a)(1) is the period between the proper service of notice of a party's death
and the filing of a motion for substitution. Absent some indicia of deception or bad faith,
any delays in the hearing, ruling upon, or effectuating the motion for substitution do not
affect the determination of whether the motion for substitution was made within a
reasonable time.

5.
The reasonable time within which a motion for substitution must be filed under
K.S.A. 2012 Supp. 60-225(a)(1) is not subject to a bright-line, fixed-period rule. In
determining whether a motion for substitution for a deceased party has been filed within a
reasonable time after the recorded suggestion of death, the court is to apply a totality of
circumstances review, analyzing all facts and circumstances that are relevant. The facts
and circumstances relevant to the reasonableness of the timing of a substitution motion
can include, if applicable, the diligence of the substituting party, the explanation for any
delay in filing the motion, and/or the prejudice that would be visited upon another party.
Such circumstances do not include the relative merits of the substituting party's claims or
defenses.

Review of the judgment of the Court of Appeals in 44 Kan. App. 2d 1131, 242 P.3d 253 (2010).
Appeal from Harper District Court; LARRY T. SOLOMON and WILLIAM F. LYLE, JR., judges. Opinion filed
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July 12, 2013. Judgment of the Court of Appeals reversing the district court is affirmed. Judgment of the
district court is reversed and remanded with directions.

Stephen M. Kerwick, of Fouston Siefkin LLP, of Wichita, argued the cause, and Amy S. Lemley
and Bradley C. Mirakian, of the same firm, were with him on the briefs for appellant.

Gregory C. Graffman, of Geisert, Wunsch, Watkins & Graffman, of Kingman, argued the cause,
and Theodore C. Geisert and Curtis E. Watkins, of the same firm, were with him on the briefs for
appellees.

The opinion of the court was delivered by

JOHNSON, J.: When she died, Elizabeth Jones was pursuing various counterclaims
against Rick and Lisa Graham, including allegations of breach of fiduciary duty, breach
of contract, fraud, and conversion. The administratrix of her estate, Angela Herring,
sought to be substituted for Jones in the Graham lawsuit. Ultimately, the district court
dismissed the action based upon its determination that substitution had been untimely
under K.S.A. 60-225(a)(1).

The district court based its ruling in part on the 7-month gap between the filing of
the motion for substitution and the hearing on that motion, and in part upon its belief that
it was not required to consider prejudice before dismissing an action under K.S.A. 60-
225. The Court of Appeals reversed the district court, finding that a determination of
whether a motion for substitution has been made within a "reasonable time" requires
consideration of the circumstances of each case, including, (1) the diligence of the party
seeking substitution; (2) whether any other party would be prejudiced by any delay; and
(3) whether the party to be substituted has shown that the action or defense has merit.
Graham v. Herring, 44 Kan. App. 2d 1131, 1133-34, 242 P.3d 253 (2010).

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We granted the Grahams' petition for review, in part to address an apparent split of
authority in the Court of Appeals regarding whether prejudice has any role in the
determination of whether substitution under K.S.A. 2012 Supp. 60-225(a)(1) was made
within a reasonable time so as to avoid dismissal of the action. We affirm the Court of
Appeals reversal of the district court's dismissal of the action, albeit we provide a
different direction on the analysis the district court should employ on remand to
determine whether the substitution motion was filed within a reasonable time under
K.S.A. 2012 Supp. 60-225(a)(1).

FACTUAL AND PROCEDURAL OVERVIEW

The seeds for the controversy between Jones and the Grahams were sown when
Jones developed severe health problems in 2000. At the time, Jones was raising cattle on
several hundred acres of land she owned in Harper County, Kansas, and Alfalfa County,
Oklahoma. She was friends with Rick Graham and made an oral agreement with him to
assist with the cattle operation in exchange for him to share in the proceeds from cattle
sales. In 2004, after being diagnosed with end-stage renal failure, Jones appointed
Graham as attorney-in-fact to manage all of her property, financial, and personal affairs,
together with the power to make health care decisions. Jones also contracted with
Graham to deed him all of her agricultural land in exchange for Graham's agreement to
assume a small mortgage on the property and to continue the cattle operation, splitting
the net proceeds equally between himself and Jones. Jones carved out a retained life
estate on a tract containing her residence.

The controversy sprouted when Jones perceived that Graham was not fulfilling his
end of the bargain and was taking advantage of her. Jones revoked the power of attorney
in 2005 and declared the contract rescinded in March 2006. Graham demanded that Jones
vacate all lands outside the boundary of land she had retained for a residence.
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The controversy matured on June 1, 2006, when Rick and Lisa Graham filed a
petition for a protection from stalking order against Jones and Jones counterclaimed for a
protection against stalking order against the Grahams, as well as pursuing causes of
action for breach of fiduciary duty, breach of contract, fraud, and conversion.

Jones died on June 27, 2007, while her counterclaims against the Grahams were
pending. On July 2, 2007, the Grahams filed a suggestion of death on the record.
Apparently, Jones' attorney took no steps to continue to pursue Jones' claims. Angela
Herring, Jones' relative, later asserted that Jones' attorney led her to believe that the
claims against the Grahams could not be pursued after Jones' death. On April 17, 2008,
the Grahams filed a motion to dismiss the lawsuit. That pleading prompted Herring to
contact another attorney, Alan C. Goering, who effected the commencement of estate
proceedings for Jones; obtained the appointment of Herring as administratrix of the Jones
estate; and filed a motion to substitute the estate as the claimant against the Grahams.

Neither the motion to dismiss nor the motion for substitution was set for hearing.
Rather, the attorneys proceeded with discovery. Goering advised Herring that the
Grahams' attorney, David M. Hall, had indicated that the motion for substitution should
resolve the motion to dismiss, albeit Hall would later advise Goering that the Grahams
would not consent to the substitution. Goering made several attempts at taking the
Grahams' deposition, until July 2008 when the Grahams demanded that Goering
withdraw as the estate's attorney because of an alleged conflict of interest. Goering
withdrew and Amy S. Lemley of Foulston Siefkin LLP entered her appearance on behalf
of Herring.

Lemley continued to attempt to depose the Grahams. When the Grahams refused
to appear at a deposition scheduled for November 10, 2008, Lemley moved for sanctions
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and set the matter for hearing on December 15, 2008. Lemley also asked that the court
resolve the motion for substitution immediately prior to the hearing on sanctions.

On November 26, 2008, Hall filed a motion to withdraw as the Grahams' counsel,
alleging that his clients' conduct indicated that the attorney/client relationship "has been
destroyed" and that his clients' actions had made it "unreasonably difficult for [Hall] to
carry out his employment effectively." At the December 3, 2008, hearing on the
withdrawal motion, Hall answered in the affirmative when asked by the district court if
he had sent the Grahams a copy of Herring's motion for sanctions and had notified them
of the December 15, 2008, hearing date on that and other motions. The district court
granted Hall leave to withdraw and recited on the record that "the burden is on [the
Grahams] to either request a continuance or have another counsel enter an appearance
and request a continuance. Absent that, we'll be here on the 15th for hearing."

The Grahams did not appear either in person or by counsel at the December 15,
2008, motion hearing. At that hearing, the district court first granted the motion to
substitute Jones' estate as the counterclaimant. Then, the district court granted the estate
default judgment against the Grahams as a sanction for "plaintiffs' failure to appear at the
video depositions, failure to cooperate in discovery, and failure to totally appear today or
defend on any of the motions pending before the Court, including their own motion for
enlargement of time and a protective order." After dismissing the petitions for protection
from stalking as moot, the district court found that the allegations in Jones' counterclaim
were true and correct, leading to findings that, inter alia, the Grahams had breached their
fiduciary duty to Jones and had materially breached their contract with Jones. The court
rescinded the contract, ordered the Grahams to return the converted property within 30
days, and left open the amount of monetary damages that would be assessed against the
Grahams.

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The Grahams, through newly retained counsel, filed a Motion to Reconsider, Set
Aside Default Judgment, Stay Execution, and Dismiss Counterclaims. The Grahams
claimed that they had no knowledge that Hall had filed motions on their behalf; or that he
had withdrawn as their counsel; or that a hearing was scheduled for December 15, 2008;
or that Jones' estate was seeking default judgment against them. They argued that the
district court had lost subject matter jurisdiction to enter a default judgment because a
proper substitution had not occurred. The district court conducted a hearing on the motion
and took the matter under advisement.

In a letter opinion, the court held that it lacked jurisdiction to enter the default
judgment because the estate was not substituted for Jones within a "reasonable time," as
required by K.S.A. 60-225(a)(1). The district court identified and appeared to rely upon
four time periods: (1) The 10 months between the July 2007 filing of the suggestion of
Jones' death and the May 2008 filing of the motion to substitute Jones' estate as the
counterclaimant; (2) the 7 months between the filing of the motion to substitute and the
December 15, 2008, order of substitution; (3) the 4-month delay between Lemley's entry
of appearance in August 2008 (replacing the conflicted Goering who had filed the motion
to substitute) and the December 15, 2008, order of substitution; and (4) the 17 months
from the July 2007 suggestion of death to the date substitution was "actually effectuated"
on December 15, 2008. Further, the district court opined that, pursuant to Court of
Appeals precedent, it was "not required to use a prejudice analysis in determining the
issues herein." Ultimately, the district court "reluctantly" concluded that the substitution
motion was not timely filed, "and, more importantly, the motion for substitution was not
heard or granted within a reasonable time thereafter." Accordingly, the court voided the
default judgment and dismissed Jones' counterclaims.

The estate responded with a motion to reconsider the dismissal of the
counterclaims. The presiding district judge recused from the case sua sponte, and Judge
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William Lyle, Jr. was appointed to hear the motion for reconsideration. In his
memorandum opinion denying the motion to reconsider, Judge Lyle opined "that the
reasonable time in the statute relates to the time from the suggestion of death being filed
to the filing of the motion to substitute." In other words, Judge Lyle did not believe that
the 7-month delay awaiting the court's order on the motion for substitution was part of the
consideration of whether the "motion for substitution [was] made within a reasonable
time after the death is suggested upon the record" under 60-225(a)(1). Nevertheless,
Judge Lyle read the district court's letter opinion as finding that there was no reasonable
explanation for any of the delays and that the substitution motion had not been filed
within a reasonable time after Jones' death, so that the fact that the district court also
found the time to get the motion heard to be unreasonable did not negate the validity of
the proper holding. In Judge Lyle's view, he was not acting as an appellate court, and,
given that there were no new facts set forth in the motion to reconsider, he could not
declare the district court's findings to be erroneous. Following Judge Lyle's denial of the
estate's motion to reconsider, the estate timely appealed to the Court of Appeals.

The Court of Appeals first analyzed how a district court should go about
determining whether a substitution motion has been made within a reasonable time and
concluded that "the court should consider all relevant circumstances, including the
diligence of the party seeking substitution, whether any other party would be prejudiced
by the delay, and whether the party to be substituted has shown that the action or defense
has merit." Graham, 44 Kan. App. 2d 1131, Syl. The panel found that two aspects of the
district court's ruling indicated that it had applied an incorrect legal standard. First, the
district court's emphasis on the time period between the filing of the substitution motion
and its being heard was misplaced because that particular delay was not a relevant factor
under the plain language of K.S.A. 60-225(a). Second, the district court's explicit refusal
to consider whether other parties would be prejudiced by the delayed filing of the
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substitution motion foreclosed consideration of a relevant factor. 44 Kan. App. 2d at
1135-36.

The Court of Appeals pointed out that when a district court applies an incorrect
legal standard, it necessarily abuses its discretion. 44 Kan. App. 2d at 1136; see O'Brien
v. Leegin Creative Leather Products, Inc., 294 Kan. 318, 331, 277 P.3d 1062 (2012)
(abuse of discretion occurs if discretion guided by erroneous legal conclusion or goes
outside framework of or fails to consider proper statutory limitations or legal standards).
Accordingly, the Court of Appeals reversed the dismissal of Jones' counterclaims and
remanded the case for the district court to apply the correct legal standards in determining
whether the request to substitute Herring as the successor to Jones was made within a
reasonable time. Graham, 44 Kan. App. 2d at 1137. We granted the Grahams' petition for
review of the Court of Appeals decision.

REASONABLE TIME TO MOVE FOR SUBSTITUTION UNDER K.S.A. 2012 SUPP. 60-225(a)(1)

In their petition for review to this court, the Grahams assert that "[t]he primary
issue before the Court is whether the district court properly applied K.S.A. 60-225(a)(1)
in determining whether [the estate] filed a motion for substitution in a reasonable time
period as required by this statute." Accordingly, we start by looking at the applicable
statute. The statutory language relating to the substitution of a party due to death
remained unchanged from 1964, when the "reasonable time" language was first
employed, until the statute was amended in 2010. See 4 Kansas Law and Practice § 60-
225 (5th ed. 2012); L. 1963, ch. 303, secs. 60-225, 60-2610. But, as the Court of Appeals
noted, the 2010 amendments to K.S.A. 60-225(a)(1) do not affect any of the issues
presented in this case. See Graham, 44 Kan. App. 2d at 1132. Accordingly, like the
panel, we will recite the current version of K.S.A. 60-225(a)(1):

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"(a) Death. (1) Substitution if the claim is not extinguished. If a party dies and the
claim is not extinguished, the court must on motion order substitution of the proper party.
A motion for substitution may be made by any party or by the decedent's successor or
representative. If the motion is not made within a reasonable time after service of a
statement noting the death, the action by or against the decedent must be dismissed."
K.S.A. 2012 Supp. 60-225(a)(1).

The Grahams' specific complaint is that the Court of Appeals failed to follow its
own precedent in Johnson v. Farm Bureau Mut. Ins. Co., Inc., No. 93,048, 2005 WL
697495 (Kan. App. 2005) (unpublished opinion), when it reversed the district court's
finding that the court was not required to consider prejudice when determining whether a
motion for substitution had been filed within a reasonable time. Additionally, the
Grahams contend that the panel did not specifically address their jurisdictional argument,
i.e., the district court lacked jurisdiction to grant any relief to any party until the court
ordered the substitution of a proper party.

Standards of Review/Rules of Statutory Construction

Ordinarily, "[i]n determining whether to dismiss under [K.S.A. 60-225(a)(1)] the
trial court has discretion to determine what is a reasonable time to move for substitution."
Livingston v. Estate of Bias, 9 Kan. App. 2d 146, 147, 673 P.2d 1197 (1984) (Livingston
II). But as noted by the Court of Appeals, an abuse of discretion necessarily results when
the district court applies incorrect legal standards in the exercise of its discretion. Leegin
Creative Leather Products, Inc., 294 Kan. at 331. In turn, the determination of the correct
legal standards to apply in the exercise of discretion involves statutory interpretation
which is a question of law over which appellate courts have unlimited review. In re
Marriage of Brown, 295 Kan. 966, 969, 291 P.3d 55 (2012). Likewise, whether
jurisdiction exists is a question of law subject to unlimited review. Associated Wholesale
Grocers, Inc. v. Americold Corporation, 293 Kan. 633, 637, 270 P.3d 1074 (2011).
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The most fundamental rule of statutory construction is that the intent of the
legislature governs if that intent can be ascertained. Bergstrom v. Spears Manufacturing
Co., 289 Kan. 605, 607, 214 P.3d 676 (2009). We first attempt to ascertain legislative
intent by reading the plain language of the statute and giving common words their
ordinary meanings. Padron v. Lopez, 289 Kan. 1089, 1097, 220 P.3d 345 (2009). When a
statute is plain and unambiguous, we do not speculate as to the legislative intent behind it
and will not read into the statute something not readily found in it. But when the statute's
language or text is unclear or ambiguous, we "employ canons of construction, legislative
history, or other background considerations to divine the legislature's intent and construe
the statute accordingly." Stewart Title of the Midwest v. Reece & Nichols Realtors, 294
Kan. 553, 564-65, 276 P.3d 188 (2012).

Analysis

We begin by briefly disposing of the Grahams' suggestion that we do not have
jurisdiction to consider the question of whether the district court erroneously dismissed
Jones' counterclaims. See Rivera v. Cimarron Dairy, 267 Kan. 865, 868, 988 P.2d 235
(1999) (objection based on lack of jurisdiction may be raised at any time including for
first time on appeal or on appellate court's own motion). "Subject matter jurisdiction
refers to the power of a court to hear and decide a particular type of action." Frazier v.
Goudschaal, 296 Kan. 730, Syl. ¶ 1, 295 P.3d 542 (2013).

In their brief to the Court of Appeals, the Grahams argued that the district court
lost jurisdiction upon the death of Jones and never regained it again, so that the only
action the district court was authorized to take was to dismiss the action. That argument is
belied by the plain language of K.S.A. 60-225(e) which was applicable at the time and
which said, in relevant part, that "[a]n attorney representing a party who dies . . . may, in
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order to protect rights and avoid time limitations, continue such representation in the
name of the original party until there has been a substitution therefor." If the action could
have been continued by the decedent's attorney until substitution had been effected, then,
by necessity, the court must have possessed the power to hear and decide matters during
that continuation period. In turn, that means, by definition, the court retained subject
matter jurisdiction after the party's death and during the continuation period described in
K.S.A. 60-225(e). Consequently, contrary to the Grahams' argument, a party's death did
not automatically terminate the district court's subject matter jurisdiction over the case.

Likewise, the language of K.S.A. 2012 Supp. 60-225(a)(1) contradicts the notion
that the death of a party actuates a loss of subject matter jurisdiction requiring dismissal.
To the contrary, the provision requires that "the court must on motion order substitution
of the proper party." (Emphasis added.) K.S.A. 2012 Supp. 60-225(a)(1). Dismissal is
directed by the statute only if there is a proper service of a suggestion of death on the
record and only if a motion for substitution is not made within a reasonable time after that
properly served suggestion of death. Obviously, then, the district court must have subject
matter jurisdiction to make those findings that are requisite to dismissal; the defendant's
allegation that the motion to substitute was untimely does not, by itself, deprive the
district court of subject matter jurisdiction. Cf. Goudschaal, 296 Kan. at 745 (court had
jurisdiction to evaluate contract's legality notwithstanding defendant's claim that contract
unenforceable). Moreover, given that the district court had the power to hear and decide
whether the motion to substitute was filed within a reasonable time of the suggestion of
death, we have subject matter jurisdiction over the appeal of that decision. Cf. Friedman
v. Kansas State Bd. of Healing Arts, 287 Kan. 749, 752, 199 P.3d 781 (2009) (if district
court lacks jurisdiction, appellate court does not acquire jurisdiction over subject matter
on appeal). We therefore reject the Grahams' subject matter jurisdiction argument and
turn to the merits.

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As noted above, the Court of Appeals found an abuse of discretion in two respects:

"[T]he district court's ruling on the substitution motion emphasized the delay in the
court's own consideration of that motion without any finding that this delay was due in
any way to bad faith by Herring, and its ruling was made without considering whether the
Grahams were prejudiced by the timing of the motion's filing." 44 Kan. App. 2d at 1136.

Both Judge Lyle and the Court of Appeals found that the time period subject to the
reasonableness analysis of K.S.A. 2012 Supp. 60-225(a)(1) does not extend past the date
on which the motion to substitute is filed. That position is supported by the plain
language of the statute, which refers to the time that the motion is "made"; it does not
refer to the time that the motion is heard, ruled upon, or effectuated. K.S.A. 2012 Supp.
60-225(a)(1). As the Court of Appeals suggested, a movant might act deceptively or in
bad faith so as to influence the trial court's discretionary decision to grant the substitution
motion. But the court's delay in exercising its authority to rule on the motion is not part
of the "reasonable time" calculus. See Supreme Court Rule 133(c)(2) (2012 Kan. Ct. R.
Annot. 238) (if no party requests oral argument, court may set matter for hearing or rule
on motion immediately and communicate ruling to parties).

In their supplemental brief to this court, the Grahams concede that "the time
periods after the motion's filing are not germane to the actual determination required
under the statute." But they contend that the district court's consideration of other periods
of delay does not "change or disturb the fact that the district court . . . found that the
substitution was not done in a reasonable time after the suggestion of death was placed on
the record, which is what is statutorily required." In other words, the Grahams ascribe to
Judge Lyle's rationale that the district court's mention of other time periods was merely
cumulative to the correct finding and, therefore, the error was harmless. We cannot agree.

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The district court's emphasis on the superfluous time periods belies the notion that
they did not impact the ultimate decision to deny the substitution motion. Even the court's
letter opinion, in "reluctantly conclud[ing]" that the substitution motion was not made
within a reasonable time after Jones' death, recited that "more importantly, the motion for
substitution was not heard or granted within a reasonable time thereafter." If the district
court deemed the 7-month postfiling delay to be more important to its decision than the
10-month prefiling delay, we cannot declare the erroneous consideration of the postfiling
delay to be harmless error. In other words, the district court's reliance on that incorrect
legal standard—the irrelevant postfiling time period—was an abuse of discretion that
would warrant reversal, standing alone.

Before moving on, we pause to clarify or rectify the language employed in Long v.
Riggs, 5 Kan. App. 2d 416, 419, 617 P.2d 1270 (1980), upon which the district court
relied to consider the 17-month period between the suggestion of death and order of
substitution. The Riggs opinion recited that "no substitution of parties was effectuated."
(Emphasis added.) 5 Kan. App. 2d at 418. The trial court interpreted this to mean that the
relevant time period to charge against the substituting party does not end until
substitution has been ordered. We disavow that notion today. To the extent that Riggs
intended the term "effectuated" to mean anything other than the time when the motion for
substitution is filed, it is overruled and disapproved.

Next, we move to a consideration of the Grahams' principal argument that
prejudice should not be a factor in assessing the reasonable time within which to make a
motion for substitution. Citing to several other Court of Appeals cases finding shorter
time periods to be unreasonable, the Grahams suggest that the analysis is purely temporal
and that any substitution delay over 6 months is always unreasonable. In both Riggs, and
Livingston v. Bias, 7 Kan. App. 2d 287, 290, 640 P.2d 362 (1982) (Livingston I), the
Court of Appeals found that a "reasonable time" implies a requirement of due diligence.
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Riggs found that a delay of 7 months from the plaintiff's death was unreasonable. 5 Kan.
App. 2d at 418-19. Livingston I found a delay of 6 months from the time the defendant's
death was noted on the record was unreasonable. Livingston I, 7 Kan. App. at 290.
Likewise, in Ellison v. Mano Industries, Inc., No. 94,977, 2006 WL 1237270 (Kan. App.
2006) (unpublished opinion), rev. denied 282 Kan. 788 (2006), an unjustified delay of 8
months between the suggestion of death and the motion to substitute was found to be
unreasonable. 2006 WL 1237270, at *5-6; see also Bigler v. State ex rel. Kansas Health
Policy Authority, No. 106,534, 2012 WL 1920802, at *3 (Kan. App. 2012) (unpublished
opinion) (when motion for substitution not made within 24 months after death,
"reasonable time" period under K.S.A. 60-225[a] had clearly expired); Davis v. Davis,
No. 94,941, 2006 WL 2716057, at *2 (Kan. App. 2006) (unpublished opinion) (finding
that more than 1 year from time counsel provided notice of death was unreasonable time).

But the fact that our statute does not use a fixed time period contradicts the
argument that the statutory "reasonable time" was intended to establish any bright-line
rule. Before the adoption of K.S.A. 60-225 in 1963 established the reasonable time
standard, Kansas had a fixed period of 1 year within which to substitute for a deceased
party. Compare G.S. 1949, 60-3214 and G.S. 1949, 60-3215 with K.S.A. 60-225 and
K.S.A. 2012 Supp. 60-225; see L. 1963, ch. 303, secs. 60-225, 60-2609, 60-2610
(repealing Chapter 60 of General Statutes of 1949 effective January 1, 1964, and adding
K.S.A. 60-225). Interestingly, the House Judiciary Committee minutes reflect that the
Kansas code was rewritten to follow the federal rules. House Judiciary Committee
Minutes, Tuesday, January 15, 1963. But the legislature did not draft K.S.A. 60-225(a) in
conformance with the corresponding Federal Rules of Civil Procedure 25(a). The 1963
amendment to Fed. R. Civ. Proc. 25(a) reduced the time period for substitution in federal
courts from 2 years after death to 90 days after service of a statement noting the death.
The Kansas Legislature's elimination of the prior 1-year fixed period and rejection of the
federal 90-day fixed period certainly suggests a legislative intent to create a more flexible
16



standard in this state. See Brennan v. Kansas Insurance Guaranty Ass'n, 293 Kan. 446,
458, 264 P.3d 102 (2011) (legislature's revision of existing law creates presumption that
legislature intended to change preamendment law).

The Court of Appeals panel interpreted K.S.A. 2012 Supp. 60-225(a)(1)'s
"reasonable time" requirement as requiring the district court to consider all the
circumstances that might be relevant but noted that specific consideration should be given
to three factors: (1) the diligence of the party seeking substitution; (2) whether any other
party would be prejudiced by any delay; and (3) whether the party to be substituted has
shown that the action or defense has merit. 44 Kan. App. 2d at 1133-34. The panel drew
the specific factors from the caselaw in New York, one of the few states with a
"reasonable time" standard, rather than a fixed time period. McDonnell v. Draizin, 24
App. Div. 3d 628, 629, 808 N.Y.S.2d 398 (2005) (New York requires courts to consider
all circumstances, including diligence of party seeking substitution, prejudice to other
parties, and whether party to be substituted has shown action or defense has merit).

The Grahams complain that, by including prejudice as a factor, this panel of the
Court of Appeals rejected the holding in a prior, unpublished Court of Appeals opinion,
Johnson, 2005 WL 697495, upon which the district court specifically relied. They point
to the following recitation from the Johnson panel:

"There is simply no requirement in K.S.A. 60-225(a)(1) that a party must prove
prejudice. In fact, once the trial court determines that a 'reasonable time' has passed, it has
no choice but to dismiss the action. There is no language that even implies that prejudice
should be a consideration for the trial court, and we are unwilling to read something into
the statute when it was clearly not intended by the legislature." 2005 WL 697495, at *2.

The Grahams point to a prior decision of this court for the holding that there is "no
authority for one panel of the Court of Appeals to disapprove or overrule a decision of
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another panel of the same court." In re Marriage of Cray, 254 Kan. 376, 382, 867 P.2d
291 (1994). But in State v. Urban, 291 Kan. 214, 223, 239 P.3d 837 (2010), we held that
a Court of Appeals panel had the right to disagree with a previous panel of the same
court. Moreover, pursuant to our Supreme Court Rule 7.04(g)(2)(A) (2012 Kan. Ct. R.
Annot. 58), an unpublished memorandum opinion is not binding precedent, except as
may occur through the doctrines of law of the case, res judicata, or collateral estoppel.
Here, the Grahams do not assert, and we do not discern, the existence of one of the
excepted doctrines. Therefore, Johnson was not binding precedent upon the Court of
Appeals panel in this case, and it was free to reach its own conclusions about the role
prejudice should play in a K.S.A. 2012 Supp. 60-225(a)(1) substitution.

Nevertheless, Johnson presented the prejudice issue in a slightly different context.
Johnson involved Lawrence Johnson's May 2003 action for breach of an insurance
contract, in which his daughter and caretaker, Connie June Johnson, participated as
Lawrence's attorney-in-fact under a durable power of attorney. Lawrence died in July
2003, and Connie's attorney filed a suggestion of death in September 2003. In October
2003, the trial court ordered that an executor or administrator of Lawrence's estate be
substituted as the plaintiff in the lawsuit within 60 days. When Connie failed to comply
with the court order for substitution by April 2004, some 4 months beyond the court's
deadline, the insurance company filed a motion to dismiss with prejudice, citing to
K.S.A. 60-225. After oral argument, the district court held that, because no party had
been substituted for Lawrence and because Connie's status as attorney-in-fact had
terminated with Lawrence's death, the action should be dismissed.

In the appeal to the Court of Appeals, the panel opined that Connie had been
afforded plenty of time to make the substitution motion, especially given that the trial
court had essentially told her what to do to create the proper party to substitute and had
ordered a time frame within which to do it. But Connie argued that, notwithstanding an
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unreasonable delay in her moving for substitution, the court could not dismiss the case
without specifically finding that the insurance company had been prejudiced by the delay.
In other words, she argued that a prejudice analysis was required, independent of and in
addition to the reasonable time analysis. The panel rejected that notion, finding that "once
the trial court determines that a 'reasonable time' has passed, it has no choice but to
dismiss the action." 2005 WL 697495, at *2.

Unfortunately, the Johnson opinion painted with too broad a brush when it said
that the statute did not permit even an implication that the district court could consider
prejudice. The panel here refuted that broad prohibition against considering prejudice and
supported its totality of the circumstances approach by analogizing to the manner in
which other, similar statutory provisions had been interpreted. It looked to In re Marriage
of Leedy, 279 Kan. 311, 109 P.3d 1130 (2005), where we interpreted K.S.A. 60-260,
dealing with relief from judgment. There, we found that "'[w]hat constitutes a "reasonable
time" for seeking relief from a judgment depends on the facts of each case; relevant
considerations include whether parties have been prejudiced by the delay and whether
good cause has been shown for failing to take action sooner.'" 279 Kan. at 324. Likewise,
the panel compared K.S.A. 2012 Supp. 60-225(a)(1) to K.S.A. 2012 Supp. 60-217(a)(3),
the statute providing that an action may not be dismissed for failure to include the real
party in interest "until, after an objection, a reasonable time has been allowed for the real
party in interest to . . . be substituted into the action." K.S.A. 2012 Supp. 60-217(a)(3).
The panel pointed out that in Esposito v. United States, 368 F.3d 1271, 1276-77 (10th
Cir. 2004), the Tenth Circuit recognized that the party opposing substitution of the real
party in interest could argue it had been prejudiced by the delay.

Herring points out that in Don Conroy Contractor, Inc. v. Jensen, 192 Kan. 300,
302, 387 P.2d 187 (1963), we applied a totality of the circumstances approach in
determining a "reasonable time" under Kansas' mechanic's lien statute in place at the
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time. There, the statute did not fix a time in which notice must be served; therefore we
found the statute allowed for a "reasonable time." 192 Kan. at 302. Although we
recognized that mechanic's liens are created by statute and could only arise under the
circumstances prescribed by the statute, we found that "[w]hat constitutes a reasonable
time is a matter to be determined by the trier of facts under the circumstances in each
particular case." 192 Kan. at 302, 304. Similarly, here, even though the substitution
statute demands strict compliance, because the statute specifically provides for a
"reasonable time," the "reasonable time" should depend upon the totality of the
circumstances.

A review of other jurisdictions' statutes on substitution at death reveals that a
majority of states, like the federal rule, have a fixed time period for substitution and are
unhelpful in our analysis. Four states, in addition to Kansas, have a "reasonable time"
requirement in their substitution at death provisions: Idaho, New York, South Carolina,
and Texas. See Idaho R. Civ. Proc. 25; N.Y. C.P.L.R. § 1021 (McKinney 2012); S.C. R.
Civ. Proc. 25; Texas R. Civ. Proc. 151 (discussing death of plaintiff). As noted above, the
Court of Appeals was persuaded by New York's totality of the circumstances with
specific factors approach.

But we are not so enamored with the idea of singling out any specific factors,
preferring to direct the district court to conduct the familiar totality of circumstances
review, whereby all of the relevant facts present in the particular case are analyzed.
Certainly, in most cases, the diligence of the substituting party or the explanation for any
dilatory conduct will be part of the total circumstances. Likewise, we agree with the panel
that prejudice can be a consideration in the determination of whether the motion for
substitution has been filed within the requisite "reasonable time." Nevertheless, once the
court has determined that the substitution motion was not made within a reasonable time,
a separate finding of prejudice is not a condition precedent to dismissal. In other words,
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an absence of prejudice will not save an action from dismissal if the court deems the
unexplained delay in filing the motion for substitution to have been unreasonable.

Further, we disagree with the panel's suggestion that the reasonable time analysis
requires an assessment of the relative merits of the substituting party's claims or defenses.
Of course, an unexplained delay on an obviously frivolous claim or defense can give rise
to an inference that the substituting party is attempting to unfairly gain some advantage
from extending the litigation, i.e., is being unreasonable. But we reject the notion that an
unreasonably timed substitution motion can be redeemed based upon the relative merits
of the substituting party's claims or defenses. Those parties possessing winning claims
should be subject to the same procedural rules and constraints as those parties whose
claims may be viewed as being weaker.

In conclusion, we hold that the relevant time period for determining the
reasonableness of a delay in substituting a party begins with the statement noting the
death and ends with the filing of the motion for substitution. Further, the standard for
determining whether a substitution motion has been made within a reasonable time is to
consider the totality of the circumstances, which can include the fact of whether another
party will be prejudiced by the substitution. Here, the district court applied the incorrect
legal standards, both in the time period analyzed and in identifying the facts that could be
considered in the analysis. Therefore, the district court abused its discretion, and we
cannot be confident that such errors did not affect the decision to void the prior
substitution order and dismiss the case. Accordingly, we affirm the Court of Appeals'
reversal of the district court's judgment, but remand with directions for the district court
to consider the totality of the circumstances to determine whether the motion for
substitution was filed within a reasonable time of the suggestion of death on the record.