In re Estate of Powell

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NOT DESIGNATED FOR PUBLICATION

No. 113,839

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

In The Matter of the Estate of EUGENA F. POWELL, Deceased.


MEMORANDUM OPINION

Appeal from Sedgwick District Court; TIMOTHY G. LAHEY, judge. Opinion filed April 29, 2016.
Affirmed.

Tamara S. Powell, appellant pro se.

Martin D. Geeding, of Geeding Law Offices, of Wichita, for appellee.

Before POWELL, P.J., ARNOLD-BURGER, J., and BURGESS, S.J.

Per Curiam: Eugena F. Powell (Eugena) died intestate. A creditor sought to
recover an outstanding judgment from the estate. Eugena's adult daughter, Tamara Powell
(Tamara) objected, arguing that the nonclaim statute barred recovery and that the
judgment included impermissible compound interest. The district court disagreed,
allowing the claim, and Tamara appealed. Finding no error, we affirm.

FACTUAL AND PROCEDURAL HISTORY

The current appeal represents the second dispute between a creditor of Eugena's
estate and Tamara.

When Eugena's heirs failed to open her estate after she died intestate, Calvin
Wiebe, the bankruptcy guardian ad litem for creditor Frederick Dean Rice II (collectively
Wiebe-Rice), petitioned the district court for letters of special administration and the
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appointment of a special administrator. Almost a decade before Eugena's death, Rice had
obtained a default judgment against her, and she still owed him around $12,600. When
the district court appointed the creditor's attorney as special administrator, Tamara
objected, which led to the first appeal in this case. This court reversed the appointment
and remanded the case for the district court to choose a new administrator in accordance
with the statutory preferences and requirements. In re Estate of Powell, No. 109,772,
2014 WL 1612502, at *3-6 (Kan. App. 2014) (unpublished opinion). On remand, the
district court appointed a new administrator.

A short time later, Tamara filed what she termed a petition, objecting to the
creditor's demand against Eugena's estate. Tamara reasoned that the nonclaim statute
barred Wiebe-Rice from collecting against the estate. After a hearing (the transcript of
which is not included in the record on appeal), the district court determined that the
nonclaim statute did not serve to bar Wiebe-Rice's claim against the estate.

In another filing, Tamara attempted to again challenge the creditor's demand, this
time arguing that the original judgment against Eugena was invalid. Specifically, Tamara
claimed that the prejudgment interest included in the total judgment ran afoul of our
Kansas statutes. She also raised issues of fraud and ambiguity in the original contract
between her mother and Rice's bail bonds business. The district court ultimately
determined that the Wiebe-Rice demand against Eugena's estate was valid in the amount
of $14,636.85. Tamara filed a premature notice of appeal.

In the meantime, and over Tamara's objections, the district court authorized sale of
the estate's real property at auction. Funds from this sale served to satisfy Wiebe-Rice's
demand against the estate.



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ANALYSIS

As a preliminary matter, Wiebe-Rice contends that because proceeds from the real
estate sale satisfied the underlying debt, Tamara's appeal is now moot. Wiebe-Rice
alleges that because Tamara never attempted to stay or otherwise stop sale of the
property, she cannot now object to the timing of the claim or the interest calculation
because Wiebe-Rice no longer has a claim against the estate.

Generally, an appellate court will not "decide moot questions or render advisory
opinions." Smith v. Martens, 279 Kan. 242, Syl. ¶ 1, 106 P.3d 28 (2005). For that reason,
the mootness doctrine "recognizes that it is the function of a judicial tribunal to determine
real controversies relative to the legal rights . . . actually involved in the particular case"
and to determine those rights in an "operative, final, and conclusive" manner. 279 Kan.
242, Syl. ¶ 1. That said, "[a]n appeal will not be dismissed for mootness unless it is
clearly and convincingly shown that the actual controversy has ended and the only
judgment that could be entered would be ineffectual for any purpose and an idle act."
Farm Bureau Mut. Ins. Co. v. Carmody, 32 Kan. App. 2d 754, 758, 88 P.3d 1250 (2004).
Our review for a claim of mootness is unlimited. State v. Hilton, 295 Kan. 845, 849, 286
P.3d 871 (2012).

A judgment rendered in a civil action in this state becomes a lien against the real
property of a judgment creditor. K.S.A. 60-2202(b). And here, Wiebe-Rice had a valid
judgment lien against Eugena's property. But after Eugena's death, Wiebe-Rice chose to
pursue recovery of the debt through probate by presenting a claim against the estate. The
sale of the property and satisfaction of the debt occurred only after the district court
determined this claim to be valid. In fact, the petition for sale of the real estate
specifically noted that there were insufficient personal funds in the estate to pay the
outstanding claims. Given that the satisfaction of the debt stemmed from the exact claim
that Tamara challenges, we are not willing to conclude, without further argument on the
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issue than provided by the parties, that Tamara's appeal is moot. Instead, we will turn to
the merits of her appeal.

The nonclaim statute does not bar Wiebe-Rice's claim.

In her first issue on appeal, Tamara contends that Wiebe-Rice's demand is barred
by our Kansas nonclaim statute. Like with jurisdiction, interpretation of a statute is a
question of law over which this court exercises unlimited review. See Neighbor v. Westar
Energy, Inc., 301 Kan. 916, 918, 349 P.3d 469 (2015). The statute at issue provides:

"All demands, including demands of the state, against a decedent's
estate . . . shall be forever barred from payment unless the demand is presented within the
later of: (a) four months from the date of first publication of notice . . . or (b) if the
identity of the creditor is known or reasonably ascertainable, 30 days after actual notice
was given." K.S.A. 59-2239(1).

In simpler terms, the time period for filing a demand against an estate expires
either 4 months after publication notice or 30 days after actual notice, whichever comes
later. K.S.A. 59-2239(1). For that reason, the nonclaim statute is essentially "a special
statute of limitations" that applies to almost all claims against an estate. In re Estate of
Reynolds, 266 Kan. 449, Syl. ¶ 3, 970 P.2d 537 (1998). However, special rules apply if
the creditor is known or reasonably ascertainable. Specifically, failure to provide one of
those creditors with notice of the 4-month time period in K.S.A. 59-2239(1)(a) "will not
bar the claim until actual notice is given" unless the creditor already had actual
knowledge of the time limit. 266 Kan. 449, Syl. ¶ 6. In other words, the 4-month time
limit is the default for all claims, but a special, second time period applies to known or
reasonably ascertainable creditors who receive no notice of that period and must instead
rely on actual notice. See 266 Kan. at 460.

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Tamara's contention is uncomplicated: because Wiebe-Rice is a known creditor
with "an intimate connection" to the judgment that originated the debt, their claim needed
to be presented within 30 days of publication and not more than 2 months after. And in
terms of her math, Tamara is correct. Here, publication occurred on December 11, 2012,
and Wiebe-Rice filed the petition for allowance of demand 76 days later, on February 25,
2013. Certainly, this period exceeds the 30-day time limit presented in K.S.A. 59-
2239(1)(b). But because the statute only expires when the later of the two stated time
frames runs, Wiebe-Rice actually had until April 11, 2013, to present the demand. See
K.S.A. 59-2239(1). In short, Tamara's argument simply misunderstands the statute.

Because Wiebe-Rice presented the demand within 4 months of publication notice,
the claim against Eugena's estate is not time barred.

The district court did not err in allowing postjudgment interest.

Tamara also argues that the demand included compound interest in violation of
our Kansas statutes. Although her brief is somewhat unclear, she appears to claim that the
district court erred in ordering postjudgment interest at the time of the initial judgment
because that amount also included prejudgment interest.

In crafting her argument, Tamara treats the interest in this case as conventional
interest, or "interest arising out of a contract between the parties." Herman v. City of
Wichita, 228 Kan. 63, 67, 612 P.2d 588 (1980). And the statute she relies on, K.S.A.
16-205(a), requires that judgments on these sorts of contracts "shall bear the same rate of
interest or charges mentioned in the contract." Additionally, the statute provides that "the
unpaid principal balance shall draw the contract rate of interest." K.S.A. 16-205(b)(1). In
other words, the conventional interest will continue to accrue on the unpaid balance just
as the parties originally agreed to. K.S.A. 16-205(a), (b)(1). However, because K.S.A.
16-205 never contemplated prejudgment interest, postjudgment interest in these types of
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cases must be applied only to the existing unpaid balance. D.A.N. Joint Venture III v.
Turk, 36 Kan. App. 2d 353, Syl. ¶ 5, 138 P.3d 1253, rev. denied 282 Kan. 788 (2006).

But in the present case, the contract that led to Eugena's debt includes no interest
provisions. As such, the interest in this case falls outside the unique requirements of
K.S.A. 16-205. And because "[p]rejudgment interest becomes a part of the judgment" and
postjudgment interest is authorized by our Kansas statutes, there is nothing improper
about the calculation of interest in the present case. Iola State Bank v. Bolan, 235 Kan.
175, 194, 679 P.2d 720 (1984). In fact, the prejudgment interest and other costs combined
at judgment to essentially create a new principal to be paid—and, as a corollary, to accrue
interest. See 235 Kan. at 194.

In short, the application of postjudgment interest in this case does not run afoul of
our Kansas statutes.

Because the district court did not err, we affirm its decision in this case.

Affirmed.