Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-03327/USCOURTS-ca10-94-03327-0/pdf.json

Parties Involved:
Jerry D. Fairbanks
Appellee
Charles Lester Newland
Appellant
Clifford A. Newland
Not Party
The First National Bank in Goodland
Appellee

Document Text:

FJLr;.~ Ua~ State ~ 1.) 

Tenths Cco!"'t or App-.~·~ lrcuit ...... _. 

APR 1 9 1995 

PUBLISH 

UNITED STATES COURT OF APPEALS PATR!Cl{ FIS . ,., Cler~; 1lE1 .. 

TENTH CIRCUIT 

CHARLES LESTER NEWLAND, 

a/k/a Charles L. Newland, 

Plaintiff-Appellant, 

v. 

CLIFFORD A. NEWLAND, 

Defendant-Cross Claimant, 

v. 

THE FIRST NATIONAL BANK IN 

GOODLAND, Goodland, Kansas; JERRY 

D. FAIRBANKS, 

Defendants-Cross Claim 

Defendants-Appellees. 

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No. 94-3327 

Appeal from the United States District Court 

for the District of Kansas 

(D.C. No. 91-1443-PFK) 

Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 1 
Roger M. Theis of Hinkle, Eberhart & Elkouri, Wichita, Kansas, (John Terry Moore, with 

him on the brief) for Plaintiff/ Appellant. 

Donald F. Hoffinan ofDreiling, Bieker & Hoffinan, Hays, Kansas, for Defendant/Cross 

Claim Defendant/ Appellee The First National Bank in Goodland. 

Steven C. Day of Woodard, Blaylock, Hernandez, Roth & Day, Wichita, Kansas, for 

Defendant/Cross Claim Defendant/Appellee Jerry D. Fairbanks. 

Before EBEL, McKAY, and HENRY, Circuit Judges. 

EBEL, Circuit Judge. 

Appellant Charles L. Newland filed this diversity action against the former 

administrator of his deceased father's estate and the administrator's attorney 

("Appellees"), asserting claims for breach of trust, gross negligence, conversion, fraud, 

waste, negligence, breach of fiduciary duty, and unjust enrichment. The district court 

granted summary judgment in favor of the Appellees on the ground, inter alia, that 

Appellant's claims were barred by the applicable statutes of limitations. Alternatively, the 

district court granted summary judgment in favor of the Appellees on the merits. Because 

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Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 2 
we agree that Appellant's claims are barred by the statute of limitations, we affirm the 

judgment of the district court on that ground without reaching the merits of Appellant's 

claims. 

I. 

Lester Newland ("Lester") died intestate in Kansas on November 8, 1982, without 

a surviving spouse but with four surviving sisters and one surviving brother. After 

Lester's death, his sisters filed an answer in the probate proceeding stating that Lester's 

only son, Charles L. Newland ("Charles"), who had not been in touch with his father or 

family for 20 years, could not be found. The court appointed Appellee The First 

National Bank in Goodland ("Bank") as administrator ofthe estate. Appellee Jerry D. 

Fairbanks ("Fairbanks") represented the Bank as attorney to the administrator. The Bank 

was removed as administrator of the estate on May 12, 1992 and at that time Fairbanks 

was permitted to withdraw as attorney of record for the Bank. 

Appellees contend they made diligent efforts to find Charles before distributing the 

estate. Fairbanks at one point wrote to the judge administering the probate estate that 

Appellees could not determine whether Charles had survived a car accident, and that 

Appellees had hired private investigators to investigate the matter through the Social 

Security Administration. Having failed to locate the missing son, Appellees concluded 

that Charles was presumed dead under a specific provision of the Kansas probate code, 

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Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 3 
Kan. Stat. Ann. § 59-2704,1 because they considered this provision to be self-executing. 

Appellees thus prepared a petition for final settlement stating that Lester's siblings were 

the only surviving heirs who were known or could be ascertained with reasonable 

diligence, and requesting distribution to the siblings. On March 23, 1984, Lay Judge 

Logan Dobbs approved the journal entry of final settlement, which gave 100 percent of 

the estate after the payment of fees and costs to Lester's siblings. 

As it turned out, however, the reports of Charles' death were greatly exaggerated. 

On May 22, 1984, after learning of his father's death and the distribution of the estate, 

Charles filed a motion in the state district court to set aside the final settlement. 

Appellees, however, did not seek recovery of the disbursed assets. The state district and 

appellate courts denied Charles' petition, but the Kansas Supreme Court granted the 

petition in In re Estate ofNewland, 730 P.2d 351 (Kan. 1986) ("Newland I"). 

Specifically, the court ruled that the presumption of death statute was not self-executing, 

and that the district court's decision "amounted to an unlawful taking of Charles 

This statute reads in relevant part as follows: 

An absentee shall be presumed to be dead for the purposes of this act if: (1) the 

absentee shall remain unheard from by those persons most likely to hear from such 

absentee for a period of not less that five years, and (2) one or more persons who 

had a bona fide motive for locating the absentee have conducted a diligent search 

for the absentee in all places where such absentee's presence could reasonably be 

expected. 

Kan. Stat. Ann. § 59-2704(a). 

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Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 4 
Newland's property" absent a finding that Charles had predeceased his father without 

issue. Newland I, 730 P.2d at 359. Accordingly, the supreme court on December 5, 1986 

directed the state district court to set aside the journal entry of final settlement and to find 

Charles to be Lester's sole heir. Id. at 360. 

Following the supreme court's decision, Appellees made no efforts toward 

redistributing the estate to Charles. Slightly more than three years later, on March 19, 

1990, Charles filed a petition in state district court to compel the Bank to hold a final 

settlement hearing. The state district court granted Charles' petition and a hearing was 

scheduled for October 4, 1990. At the hearing, Appellees denied they had any obligation 

to redistribute the estate to Charles. The state district court later held that Charles was 

the sole heir of the estate, but refused to order the repayment of any funds which had been 

distributed. The Kansas Court of Appeals set aside this decision on August 23, 1991 and 

ordered the district court to conduct a hearing to restore Charles to the position he would 

have been in absent the erroneous order of final settlement. In re Estate ofNewland, No. 

65,838 (Kan. Ct. App. Aug. 23, 1991) ("Newland II"). So far as the record reveals, that 

matter is still unresolved in the state court. 

Charles filed the present action on October 2, 1991 in the United States District 

Court for the District of Kansas, charging Appellees with breach of trust, gross 

negligence, conversion, fraud, waste, negligence, breach of fiduciary duty, and unjust 

enrichment. The district court, on August 24, 1994, held that "all claims advanced herein 

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Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 5 
fail on the merits, are barred by the statute of limitations, or both" and granted summary 

judgment to Appellees. Charles now appeals. 

II. 

We review the grant or denial of summary judgment~ llQ.YQ, applying the same 

legal standard used by the district court pursuant to Fed. R. Civ. P. 56( c). Universal 

Money Ctrs .• Inc. v. AT&T, 22 F.3d 1527, 1529 (lOth Cir.), cert. denied, 115 S. Ct. 655 

(1994); Applied Genetics Int'L Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 

(lOth Cir. 1990). "Summary judgment is appropriate 'if the pleadings, depositions, 

answers to interrogatories, and admissions on file, together with the affidavits, if any, 

show that there is no genuine issue as to any material fact and that the moving party is 

entitled to a judgment as a matter oflaw.'" Universal, 22 F.3d at 1529 (quoting Fed. R. 

Civ. P. 56(c)). 

The district court held that because Charles' complaint was filed on October 2, 

1991--more than seven years after both the final settlement of the estate on March 23, 

1984, and Charles' entry into the probate proceedings by filing the petition to set aside the 

final settlement on May 22, 1984--the present action was barred by the various Kansas 

statute of limitations, including Kan. Stat. Ann. § 60-514( c) (one-year statute of 

limitations for actions upon statutory penalties), Kan. Stat. Ann. § 60-513(a) (two-year 

statute of limitations for taking or detaining personal property), and Kan. Stat. Ann. § 60-

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Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 6 
512 (three-year statute of limitations for claims based on a liability created by statute 

other than statutory penalties). On appeal, Charles alleges two defects in the district 

court's statute of limitations analysis. First, he contends the district court's ruling violates 

the law of the case doctrine; second, he argues that the statute of limitations had not 

expired on his tort claims because Kansas law provides that the limitations period for 

certain tort actions is tolled during the pendency of any underlying legal proceedings. We 

find both of these contentions lacking in merit? 

A. 

Charles first argues that the federal district court disregarded the law of the case by 

refusing to obey the Kansas Court of Appeals' decision in Newland II, which ordered the 

2 The Bank makes a brief argument that considerations of comity deprive the federal 

courts of jurisdiction to entertain Charles' claims. Relying on Youn2"er v. Harris, 401 

U.S. 37 (1971), the Bank argues that state courts should be permitted to try estate cases 

without federal court interference. As a general proposition, we agree that federal courts 

must tread lightly to avoid '"interfer[ing] with the probate proceedings or assum[ing] 

general jurisdiction of the probate or control of the property in the custody of the state 

court."' Beren v. Ropfo~el, 24 F.3d 1226, 1228 (lOth Cir. 1994) (quoting Markham v. 

Allen, 326 U.S. 490,494 (1946)); see also Younger, 401 U.S. at 44 (directing federal 

courts to exercise their jurisdiction "in ways that will not unduly interfere with the 

legitimate activities of the States."). Yet we see no potential interference, and thus no 

impediment to federal jurisdiction, where an independent tort claim which is otherwise 

cognizable in a state court of general jurisdiction is brought against the former 

administrator of an estate and its attorney. The Supreme Court has repeatedly 

emphasized that the federal courts are under a "virtually unflagging obligation ... to 

exercise the jurisdiction given them." Colorado River Water Conservation Dist. v. United 

States, 424 U.S. 800, 817 (1976). Thus, we reject the Bank's argument that the district 

court lacked jurisdiction to entertain Charles' action. 

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Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 7 
state district court to conduct a hearing to take whatever steps are necessary to recover as 

much of Charles' inheritance as remains recoverable. Under Kansas law, matters decided 

on appeal constitute the law of the case governing future proceedings. Flemin~ v. 

Campbell, 83 P.2d 708, 709 (Kan. 1938). When a case has been reversed and remanded, 

a Kansas trial court must proceed to carry out the mandate of the appellate court and has 

no authority to consider other matters. Wheeler Kelly Haw Trust Co. v. Ellis Sin~leton 

Bldi. Co., 164 P.2d 143, 146 (Kan. 1945). Thus, in Charles' view, a Kansas trial court 

would have been precluded from considering the timeliness of this action because it was 

required to honor the Court of Appeals' judgment "by limiting its focus in further 

proceedings to the issue of responsibility for the taking so that plaintiff would receive 

'full and complete relief."' Br. of Appellant at 22. Charles takes this analysis one step 

further by arguing that the federal district court was also precluded from deciding the 

statute of limitations issue because a federal court sitting in diversity is "in effect, only 

another court of the State," Guaranty Trust Co. ofNew York v. York, 326 U.S. 99, 108 

(1945), and thus must apply state law so as to obtain the same result that would be 

reached in state court, Perlmutter v. United States Gypsum Co., 4 F.3d 864, 869 (lOth Cir. 

1993). 

We conclude that the law of the case doctrine has no application here because the 

present action is a separate lawsuit involving separate issues and an additional defendant. 

The Kansas Supreme Court has held that the law of the case doctrine applies only within 

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Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 8 
the same proceeding and only with regard to questions involved and decided in the first 

appeal. Miller v. Ze,p Mf~. Co., 815 P .2d 506, 519 (Kan. 1991 ). Here, the federal tort 

action is not the same case as the state probate proceeding. Moreover, the issues are not 

the same. The state cause of action before the court of appeals in Newland II involved a 

probate proceeding and issues concerning the proper administration and distribution of an 

intestate estate. 3 By contrast, the present federal action raises tort claims involving new 

claims of recovery not presented in the state probate proceeding. 

Finally, the Kansas Court of Appeals decision in Newland II did not address the 

applicability of the statute of limitations to Charles' present tort action. Thus, even if the 

law of the case doctrine were applicable, it would not control the application of the statute 

of limitations to this tort action. See Guidry v. Sheet Metal Workers. Int'l Ass'n Local9, 

10 F.3d 700, 705 (lOth Cir. 1993) (holding that the law ofthe case doctrine applies only 

to those issues which have been decided explicitly or by necessary implication in the 

earlier appeal), modified on reh'~ en bane, 39 F.3d 1078 (lOth Cir. 1994), cert. denied, 

115 S. Ct 1691 (1995). We therefore conclude the district court did not violate the law of 

the case by granting Appellees summary judgment on the statute of limitations question. 

3 The issue in Newland II was whether the district court had erroneously refused to 

order redistribution of estate funds, despite finding Charles to be the sole heir. ~ 

Newland II, slip op. at 1 (stating the question on appeal to be "the proper interpretation of 

the [Newland I] decision. . . . The appellant contends that the trial court failed to fully 

implement the opinion and mandate ofthe Supreme Court."). 

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Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 9 
B. 

The district court ruled that Charles' action was essentially a tort cause of action 

and was untimely under Kansas' various statutes of limitations for tort actions.4 Kan. 

Stat. Ann. § 60-513(b) provides that certain tort actions 

shall not be deemed to have accrued until the act giving rise to the cause of action 

first causes substantial injury, or, if the fact of injury is not reasonably 

ascertainable until some time after the initial act, then the period of limitation shall 

not commence until the fact of injury becomes reasonably ascertainable to the 

injured party .... 

The district court found that Charles' action accrued when he first appeared in the state 

probate proceedings in 1984: 

[I]t is uncontroverted that [Charles] actively contemplated a negligence action 

against the defendants from the time of his first appearance in the probate 

proceedings, when the estate had been distributed to his father's siblings. Any 

alleged wrongful conduct, and any injury to the plaintiff, was reasonably apparent 

by that time. 

Appellant App. at 1167. 

Charles argues, however, that the statute of limitations for claims arising out of 

Appellees' failure to locate him and from Appellees' distribution of the estate to Lester's 

siblings was tolled during the underlying probate proceedings in Newland I and Newland 

II. To support his position, Charles directs our attention to Kansas law which provides 

4 See Kan. Stat. Ann.§ 60-514(c) (one-year statute of limitations for actions upon 

statutory penalties); Kan. Stat. Ann.§ 60-513(a) (two-year statute oflimitations for taking 

or detaining personal property); Kan. Stat. Ann.§ 60-512 (three-year statute of limitations 

for claims based on a liability created by statute other than statutory penalties). 

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Appellate Case: 94-3327 Document: 01019279314 Date Filed: 04/19/1996 Page: 10 
that the statute of limitations in legal malpractice claims is tolled during the pendency of 

the underlying legal proceedings. ~ Pjzel v. Zuspann, 795 P.2d 42, 55 (Kan.), 

modified, 803 P .2d 205 (Kan. 1990). Under Charles' theory, therefore, the statute of 

limitations was tolled during both the Newland I and Newland II proceedings. 

Appellees contend, however, that an exception to the tolling rule applies in the 

present case: under Kansas law, the statute of limitations does not toll during underlying 

litigation when "it is clear that the plaintiff ... has incurred injury and ... it is reasonably 

ascertainable that such injury was the result" of the defendant's actions. Dearborn Animal 

Clinic. P .A. v. Wilson, 806 P .2d 997, 1006 (Kan. 1991 ). In Dearborn, plaintiffs argued 

that their former attorney was negligent in drafting an asset purchase agreement which 

created only an option for a third-party to purchase stock rather than an outright 

obligation to purchase the stock. The court held that despite ongoing litigation attempting 

to force the third-party to purchase the stock, the statute of limitations for the malpractice 

action ceased tolling when the plaintiffs stated in interrogatories that they knew the 

agreement created only an option for the stock, rather than a legal obligation to purchase 

the stock. ld.. at 1006-07. The court held that these interrogatories indicated that "the 

injury [suffered] as a result of [the] alleged malpractice ... was not only reasonably 

ascertainable but, in fact, had been ascertained by plaintiffs" at the time the interrogatory 

answers were signed. ld... at 1007. 

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Appellees contend a similar result should obtain here. Specifically, Appellees 

argue that the Kansas Supreme Court's holding in Newland I on December 5, 1986--that 

the "determination of heirship violated Kansas law of intestate succession," 730 P.2d at 

359--ceased the tolling of the statute of limitations because as of that time it was 

reasonably clear to Charles that his injuries resulted from Appellees' wrongful actions. 

We agree. Charles acknowledges that after the Kansas Supreme Court issued its mandate 

in Newland I, Appellees "took no action to implement the Supreme Court's directives." 

Br. of Appellant at 10. Indeed, Charles contends that "the Bank did not wish to pursue 

the siblings and indeed had never wanted to do so," and that "the Bank's inaction was 

motivated by its own self-interest since pursuit ofthe siblings could catalyze a deficiency 

judgment against it." Br. of Appellant at 11. Thus, immediately following the Newland I 

decision in December 1986, it was "reasonably ascertainable" that Charles' injury was a 

result of Appellees'negligence, and Charles therefore could have brought suit against 

Appellees for wrongfully distributing the estate to the siblings in the first place. .c.f. 

Dearborn, 806 P.2d at 1006-07. Charles, however, did not file the present suit against 

Appellees until October 2, 1991, almost five years after Newland I. Accordingly, we hold 

that any claims by Charles that Fairbanks and the Bank acted negligently or fraudulently 

in attempting to locate Charles or in distributing the estate to Lester's siblings are barred 

by the two-year statute oflimitations. See Kan. Stat. Ann. § 60-513(a). For 

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' 

, 

the same reasons, Charles' claims for statutory damages and penalties are also barred by 

the applicable Kansas statutes oflimitations. ~ Kan. Stat. Ann.§§ 60-512, -514(c)_5 

III. 

For the foregoing reasons, we AFFIRM the judgment of the district court. 

5 By its terms, the accrual rule in section 513(b) applies only to the specific causes 

of action listed in section 513(a). ~ Kan. Stat. Ann. § 513(b ). We need not decide 

whether a similar accrual rule would also govern the causes of action listed in sections 

512 and 514( c), because under any reasonable accrual rule that might apply to the statutes 

oflimitations set forth in sections 512 and 514( c), Charles' action was filed beyond the 

permissible time period. 

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