Moulden v. Hundley ( 2017 )


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  •                                         No. 116,415
    IN THE COURT OF APPEALS OF THE STATE OF KANSAS
    DAVIS T. MOULDEN,
    Appellant/Cross-appellee,
    v.
    DUSTIN HUNDLEY,
    Appellee/Cross-appellant,
    and
    KANSAS DEPARTMENT OF REVENUE, ET AL.,
    Defendants.
    SYLLABUS BY THE COURT
    1.
    Under K.S.A. 59-2239, a party making a claim against a decedent's estate
    generally must file a petition within six months of the person's death for the court to
    validate the decedent's will or for the estate to be administered, otherwise the claim will
    be barred.
    2.
    K.S.A. 59-2239 applies to a claim made against a motor vehicle titled in the
    decedent's name.
    3.
    In this case, because the claimant failed to file a petition against the decedent's
    estate within six months of the decedent's death, claimant is barred from making his
    claim against the motor vehicles titled solely in the decedent's name.
    4.
    Kansas has a two-year time limit on claims for the taking, detaining, or damaging
    of personal property. See K.S.A. 60-513(a). The two-year time limit begins to run when
    the claim accrues, either (1) when the act giving rise to the claim first causes substantial
    injury or (2) if the injury isn't reasonably ascertainable until some later time, when a
    person could reasonably ascertain the injury.
    5.
    A bailment arises when one party (the bailor) leaves personal property with
    another party (the bailee) on deposit or for some particular purpose under a contractual
    agreement, either express or implied, that the property will one day be returned to the
    bailor.
    6.
    A constructive bailment is created when a person comes into lawful possession of
    personal property of another and when considerations of fairness support imposition of
    the bailment.
    7.
    After a bailee's death, when the bailee's heir keeps bailed property that was in the
    bailee's possession, a constructive bailment is imposed by law unless the bailee acts in a
    manner inconsistent with a bailment.
    8.
    In the case of a bailment for an indefinite period, the cause of action does not
    accrue until the bailor makes a demand for the property.
    2
    9.
    In this case, because the bailee's heir kept the bailed property after the bailee's
    death, a constructive trust was imposed by law. Accordingly, the cause of action did not
    accrue until the bailor made a demand on the heir for return of the property. The suit,
    which was filed within two years of that demand, was timely.
    Appeal from Leavenworth District Court; DAVID J. KING, judge. Opinion filed October 27, 2017.
    Affirmed.
    Jeffery A. Sutton, of Sutton Law Office, L.L.C., of Basehor, for appellant/cross-appellee.
    John W. Fresh, of Farris & Fresh Law Office, of Atchison, for appellee/cross-appellant.
    Before GREEN, P.J., BUSER and LEBEN, JJ.
    LEBEN, J.: After Hope Hundley's death, her husband, Dustin Hundley, and her
    father, Davis Moulden, got into disputes over who owned two cars and some household
    furniture that Davis had transferred to Hope during her lifetime. The district court
    concluded that the cars belonged to Dustin, as Hope's heir, because Hope had obtained
    title to the cars—and because Davis didn't make a claim for the cars against her estate
    within six months as required by a statute, K.S.A. 59-2239. The court concluded that the
    furniture belonged to Davis and that he had merely loaned the furniture to Hope. Both
    Davis and Dustin appealed.
    On appeal, Davis argues that he should keep the cars because they were stored in
    his garage. But he had fully transferred title to Hope long before her death, and he didn't
    make a claim for the cars against her estate during the time provided under Kansas law.
    So the district court correctly ruled that Dustin, as Hope's heir, owned the cars.
    3
    Dustin argues on appeal that Davis waited too long to recover the furniture. A
    person must sue to recover property left by agreement with another within two years.
    Dustin emphasizes that Davis sued more than two years after Hope's death. But our
    analysis of the time limit is different for the furniture than for the cars because, unlike a
    car, there's no title to show furniture ownership and Davis claimed he had merely loaned
    the furniture to Hope. The statute of limitation in these circumstances doesn't begin to run
    until the owner of the property asks for it back. See Schoenholz v. Hinzman, 
    295 Kan. 786
    , 791-92, 
    289 P.3d 1155
    (2012). Davis brought suit less than two years after he asked
    for the property back, so his claim wasn't barred by the statute of limitations.
    With that overview, let's briefly survey the facts that led to this appeal.
    The cars at issue are classics—a 1963 Ford Thunderbird and a 1954 Ford Crestline
    Crown Victoria. Davis transferred title of both cars to Hope in 2005.
    Davis said that Hope stored the cars in his garage when she wasn't using them, and
    they were in his garage when Hope died in January 2012. They remained in his garage
    after her death too, even when Dustin transferred the car titles to his name in 2013.
    Two years later, in the summer of 2015, Dustin told Davis he was coming to get
    the cars. Davis then filed a lawsuit asking that the court determine him the rightful owner.
    Davis contended that he had transferred title to Hope only so that she could obtain
    insurance on them and that he had never intended to fully give the cars away.
    When Davis filed suit, he also sought return of the furniture and household items
    that he had loaned to Hope. Dustin filed a counterclaim asking that he be named the
    rightful owner of the cars and contended that Davis had waited too long to make any of
    his claims.
    4
    After hearing evidence at trial, the district court concluded that Hope had been the
    presumptive owner of the cars because Davis had transferred title to her. The court found
    that Davis should have filed a petition within six months of Hope's death to have Hope's
    estate administered and to contest Hope's ownership of the cars, a deadline set out in a
    Kansas statute, K.S.A. 59-2239. Since Davis didn't file a claim to the cars within six
    months of Hope's death, he could not pursue his claim. The court found that Dustin was
    the legal owner of the cars.
    The court also found that, although Dustin had long had possession of the furniture
    and household items, Davis had merely loaned them to Hope and was entitled to their
    return. The court said that the two-year statute of limitations hadn't run because the
    continued possession of the items was a continuing wrong, which continually restarted
    the two-year limitation period. So the court awarded the furniture and household items to
    Davis.
    We should note that the district court had an alternative finding about the statute of
    limitations—that because there's no title registration system for furniture and household
    items, there wouldn't be a need to make a claim under K.S.A. 59-2239. We won't be
    addressing that argument in our decision because (1) Dustin didn't raise a claim that
    K.S.A. 59-2239 barred Davis' claim to these items and (2) neither party argues this basis
    on appeal. We do note, though, that in some circumstances the six-month claim period of
    K.S.A. 59-2239 does apply even to property for which there is no title or registration
    system. E.g., In re Del Paronto's Estate, 
    172 Kan. 7
    , 9-10, 
    238 P.2d 464
    (1951) (applying
    time limit of K.S.A. 59-2239 to ring worn by decedent when she died). Whether K.S.A.
    59-2239 might have applied to claims to the furniture and other household items isn't an
    issue in this appeal, and we make no determination about that question.
    The appeal comes to us following a trial in the district court. We review its factual
    findings to see whether they are supported by substantial evidence. If so, we must accept
    5
    them. We then look to see whether the supported factual findings are sufficient to support
    the district court's legal conclusions. At that stage, in reviewing the legal conclusions, we
    consider them independently, with no required deference to the district court. Owen
    Lumber Co. v. Chartrand, 
    283 Kan. 911
    , 915-16, 
    157 P.3d 1109
    (2007); Taylor v.
    Kansas Dept. of Health and Environment, 
    49 Kan. App. 2d 233
    , 237-38, 
    305 P.3d 729
    (2013).
    I. The District Court Did Not Err in Finding that Dustin Owned the Cars.
    Resolution of ownership of the cars rests upon the application of K.S.A. 59-
    2239(1)(b): "No creditor shall have any claim against . . . the property of a decedent
    other than liens existing at the date of the decedent's death, unless a petition is filed for
    the probate of the decedent's will . . . or for the administration of the decedent's estate . . .
    within six months after the death of the decedent . . . ." Essentially, K.S.A. 59-2239 is a
    special statute of limitations for claims against a deceased person's estate and "it operates
    as a complete bar to all demands against a decedent's estate that are not timely filed."
    Nelson v. Nelson, 
    288 Kan. 570
    , 591, 
    205 P.3d 715
    (2009). Unless some exception in the
    statute applies, a party seeking to claim property from the deceased person's estate must
    comply with the statute. In re Estate of Reynolds, 
    266 Kan. 449
    , 455, 
    970 P.2d 537
    (1998).
    Davis concedes that he didn't file a petition seeking to have Hope's estate
    administered within six months of her death. So if K.S.A. 59-2239 applies, his claim to
    the cars is barred.
    Davis argues that it doesn't apply because he had physical possession of the cars.
    In support, he cites our Supreme Court's 1974 decision in Oswald v. Weigel, 
    215 Kan. 928
    , 
    529 P.2d 117
    (1974). In Oswald, the defendant claimed she was the rightful owner
    of cattle and other property that her parents had transferred to her before their deaths.
    6
    Another party challenged her claim, arguing that the property belonged to her parents'
    estate and that K.S.A. 59-2239 barred her from making a claim. As Davis notes, the court
    ruled in favor of the daughter—the party in possession of the cattle—even though she had
    not made the timely filings under K.S.A. 59-2239.
    But there is a critical factual difference between Oswalt and this case. In Oswalt,
    the parents had not only transferred possession of the cattle, but had also given her a
    signed bill of sale. By giving their daughter both possession and a signed bill of sale, the
    parents had accomplished "a present conveyance of legal title to the property." Our
    Supreme Court's holding that the daughter didn't have to comply with K.S.A. 59-2239
    rested not upon mere possession, but on the combination of possession and a signed bill
    of sale, which in combination conveyed legal title:
    "Under these circumstances, where a claimant is in possession of tangible personal
    property pursuant to a bill of sale executed by a decedent, there is no effort to take
    anything out of an estate; hence there is no necessity for making claim for the property
    in the probate court administering the decedent's 
    estate." 215 Kan. at 933
    .
    Here, by contrast, Davis had given Hope legal title to the cars. Davis possessed the
    cars at the time of her death but possessed neither a bill of sale nor car titles. By all
    outward indications, he had fully transferred ownership to Hope. Mere possession of the
    cars at Hope's death doesn't allow Davis to avoid the requirements of K.S.A. 59-2239.
    Had Davis made a timely claim, he could have attempted to rebut the presumption
    of ownership given by the vehicle title. See generally K.S.A. 8-126(cc); State ex rel. Love
    v. One 1967 Chevrolet, 
    247 Kan. 469
    , 475, 
    799 P.2d 1043
    (1990). But since Davis did
    not comply with K.S.A. 59-2239, his claim was barred.
    7
    II. The District Court Did Not Err in Finding that Davis Still Owned the Furniture and
    Household Property.
    Resolution of the next issue (ownership of the furniture and household items)
    comes down to a different sort of time limit. All states have statutes of limitations, which
    provide that lawsuits must be brought within a limited time after a claim arises. These
    statutes of limitations ensure that court proceedings take place while evidence is still
    available and relatively fresh, and they also provide finality and predictability in legal
    affairs. See Campbell v. Hubbard, 
    41 Kan. App. 2d 1
    , 2, 
    201 P.3d 702
    (2008).
    Kansas has a two-year time limit on claims for the taking, detaining, or damaging
    of personal property. See K.S.A. 60-513(a). The two-year time limit begins to run when
    the claim accrues, either (1) when the act giving rise to the claim first causes substantial
    injury or (2) if the injury isn't reasonably ascertainable until some later time, when a
    person could reasonably ascertain the injury. See K.S.A. 60-513(b); LCL, LLC v. Falen,
    
    53 Kan. App. 2d 651
    , 658-64, 
    390 P.3d 571
    (2017), rev. granted September 29, 2017.
    Dustin argues that Davis could tell he had been injured (here, through loss of the
    property) when Hope died with the property in Dustin's possession. Dustin argues that
    Davis' claim is barred because he didn't sue within two years of Hope's death.
    The question we must determine is when Davis' claim accrued. If it accrued at the
    time of Hope's death, then his claim is barred.
    Davis contends that his claim didn't start to run until he asked for the property
    back and Dustin refused to return it. In support, Davis cites our Supreme Court's 2012
    decision in Schoenholz. Before we discuss Schoenholz, though, we need to introduce the
    legal concept called bailment.
    8
    A bailment arises when one party (the bailor) leaves personal property with
    another party (the bailee) on deposit or for some particular purpose under a contract,
    either express or implied, that the property will one day be returned to the bailor. See M.
    Bruenger & Co., Inc. v. Dodge City Truck Stop, Inc., 
    234 Kan. 682
    , 685, 
    675 P.2d 864
    (1984); Schoonover v. Igleheart Brothers, 
    163 Kan. 689
    , 693, 
    186 P.2d 109
    (1947); 8
    C.J.S., Bailments § 1. In our case, when Davis loaned the furniture to Hope, he lent it for
    a particular purpose—for her use—under the agreement that one day it would be returned
    to him. So Davis, the bailor, and Hope, the bailee, created a typical bailment.
    Schoenholz discussed several rules about bailments, including when a legal claim
    for return of bailed property accrues, thus starting the clock on the two-year statute of
    limitations. In Schoenholz, a brother, Rodney Schoenholz, left some horses on the farm of
    his sister, Janine Hinzman, initially as part of a joint plan to breed horses. But after the
    parties agreed to stop that joint effort, Schoenholz left the horses—even though he had
    agreed to remove them—and Hinzman had to care for them. Three years later, Hinzman
    sold the farm and the horses. Schoenholz sued for damages because Hinzman didn't
    return the horses to him.
    Since the parties were no longer trying to breed horses and Schoenholz had simply
    left the horses on Hinzman's farm, forcing her to care for them, the bailment worked only
    to Schoenholz' benefit. Such a bailment is called a gratuitous bailment, and the court said
    it was an "open-ended" one that "would last until Schoenholz claimed his property" or
    until Hinzman chose to sell the horses under a statute that covered the bailment of horses
    or 
    livestock. 295 Kan. at 792
    . Then the court made the point most applicable in our
    case—that a bailment for an indefinite period normally doesn't end until the bailor asks
    for the property back:
    "In the case of a bailment for an indefinite period, the cause of action does not accrue
    until the bailor makes a demand for the property. [Citation omitted.] The statute of
    9
    limitations did not begin to run until Schoenholz approached Hinzman and told her he
    wanted his property back. Until that time, she was a gratuitous bailee of all of
    Schoenholz' 
    property." 295 Kan. at 792
    .
    Under that rule, the statute of limitations wouldn't have begun to run until Davis
    asked for his furniture and household items back. He didn't ask for the property back until
    close to the time Davis filed suit (certainly within two years of the time he filed suit).
    That would seem to answer the question before us about when Davis' claim
    accrued—but there's another significant wrinkle we must discuss, even though the parties
    have not. As we've already noted, this was a bailment for the exclusive benefit of Hope,
    the bailee. And there's a general rule that "[a] bailment for the sole benefit of the bailee
    terminates immediately upon the death of the bailee." 8 C.J.S., Bailments § 118. See also
    Salter v. Sutherland, 
    123 Mich. 225
    , 230, 
    81 N.W. 1070
    (1900) (stating that the death of
    the bailee in a gratuitous bailment terminated the bailment). Accordingly, one might
    argue that Davis' claim accrued when the bailment terminated—on Hope's death. If so,
    the statute of limitations would bar his claim.
    The effect of the bailee's death on accrual of a claim for the return of bailed
    property was not an issue addressed in Schoenholz since neither party to the bailment had
    died. No Kansas appellate decision addresses such a situation. We have therefore looked
    for caselaw elsewhere to guide us.
    We have found a line of cases suggesting that when Hope died and the property
    remained in Dustin's possession, a new constructive bailment with Dustin as the bailee
    began. Sometimes, when a party takes possession of property lawfully but doesn't have
    ownership of it, a constructive bailment is created. As an example, when police impound
    a car, there is a constructive bailment and the police ultimately must return the car to its
    10
    rightful owner. See Black's Law Dictionary 169 (10th ed. 2014). A New York court
    found a constructive bailment in a case similar to ours.
    In that case, Martin v. Briggs, 
    235 A.D.2d 192
    , 
    663 N.Y.S.2d 184
    (1997), artist
    Agnes Martin left some of her paintings in the care of a married couple, Kim and Lois
    Blood. The Bloods' children took the paintings when their parents died. When Martin
    sued for return of the paintings, the children argued that the statute of limitations had long
    expired, the last of their parents having died 23 years before suit was filed. But the court
    held that the original bailment was one of "indefinite duration," no party had given notice
    of termination, and the children had not acted in a manner inconsistent with a
    continuation of the 
    bailment. 235 A.D.2d at 197-98
    . The court cited the same rule
    provided in the Kansas case, Schoenholz: That the statute of limitations "does not begin
    to run against a bailee in lawful possession until the bailor makes a demand for the
    chattel's return and the demand is 
    refused." 235 A.D.2d at 198
    . Martin had sued within
    months of the children's refusal of her demand to return the paintings, so the court held
    her suit was not barred by the statute of 
    limitations. 235 A.D.2d at 198
    .
    The Martin case is very similar to our case. In both, when the bailee died, the
    bailee's heir retained the property but did nothing to indicate that the heir was claiming
    ownership, not merely keeping the property for eventual return to the bailor. When, after
    a bailee's death, bailed property that was in the bailee's possession is kept by the bailee's
    heir, a constructive bailment is imposed by law unless the bailee acts in a manner
    inconsistent with a bailment. See 
    Martin, 235 A.D.2d at 198
    (noting that bailee's conduct
    ordinarily must be "wholly inconsistent with the contract of bailment" to end the
    relationship); In re Silver Sands R.V. Resort, 636 Fed. Appx. 950, 952 (9th Cir. 2016)
    (unpublished opinion) (stating that a constructive bailment may be imposed "when a
    person comes into lawful possession of personal property of another and when justice so
    requires"); 8 C.J.S., Bailments § 14. Dustin came into possession of these personal-
    property items lawfully; he shared the use of them before Hope's death. Dustin never
    11
    contested Davis' actual ownership of the items, and he didn't act in a manner inconsistent
    with Davis' ownership until shortly before Davis filed suit. In these circumstances, Dustin
    held the property as the bailee in a constructive bailment.
    We are aware of one somewhat dated precedent from Tennessee that's contrary to
    our holding, the 1896 Tennessee Supreme Court decision in Morris v. Lowe, 
    97 Tenn. 243
    , 
    36 S.W. 1098
    (1896). In that case, some personal property was given to a man
    before his marriage. As in our case, the property was loaned, not given. The man later
    married and then died, still in possession of the property. His widow kept it and asserted a
    statute of limitations defense when the original owners sued for the property's return. But
    the court held that the gratuitous bailment in favor of her husband had terminated on his
    death "and no trust followed it into the hands of the 
    widow." 97 Tenn. at 245
    .
    We find the Morris case unpersuasive. It came about in an era in which a married
    woman's right to hold property was itself quite limited; the State of Tennessee didn't
    adopt a Married Woman's Property Act, giving married women the right to hold property
    in their own names, until 1913. See McCrary v. Harrell, 
    166 Tenn. 431
    , 439, 
    62 S.W.2d 566
    (1933). More importantly, when an heir or cotenant or other party has taken
    possession of property in a lawful manner, imposition of a constructive bailment is a
    reasonable step to protect the bailor, who may not even know that the transfer of
    possession has taken place. And even if the bailor is aware of the transfer, we see no
    reason that the time clock of a statute of limitations to file suit should begin to run if the
    substituted bailee has not acted in any way that's inconsistent with the bailor's ownership.
    We conclude that Dustin was the bailee of a constructive bailment that began on
    Hope's death. Davis' claim did not accrue, starting the statute-of-limitations clock, until
    Dustin refused Davis' request for return of the property. Accordingly, Davis' suit wasn't
    barred.
    12
    Dustin raises two other points regarding the return of these property items, but
    neither is persuasive. First, he contends that Davis failed to prove his case because he
    didn't introduce the list of the items into evidence at trial. But as the district court noted,
    the items were listed in an attachment to the petition, Davis testified that he owned the
    items in that list, and Dustin never contested ownership of them. In these circumstances,
    we agree with the district court that Davis presented sufficient proof of his ownership
    claim.
    Second, he argues from the evidence that Davis knew for more than two years
    before filing suit that Dustin wouldn't return the property. But that's not a fair reading of
    the evidentiary record given the district court's factual findings. The only testimony on
    this point came from Davis. At one point, he said there was "[n]ever . . . a time that
    [Dustin] informed [him] that he didn't intend to return those items of personal property."
    Later, he said there was a point at which Davis tried to arrange to have a moving
    company come to get the property but that Dustin "just didn't allow it to happen." But
    there was no testimony this came long before the suit was filed, and the district court
    concluded the only thing that occurred "shortly after the death of Hope" was that Davis'
    wife retrieved "a couple of items of personal property."
    The district court didn't make a specific, detailed finding stating when Davis first
    demanded return of the personal property, but Dustin didn't ask the district court to make
    any additional or more detailed factual findings on this point. In these circumstances, we
    presume that the district court made the necessary factual findings to support its decision.
    Dragon v. Vanguard Industries, Inc., 
    282 Kan. 349
    , 356, 
    144 P.3d 1279
    (2006). The
    evidence is consistent with the conclusion that except for "a couple of items," not at issue
    in this lawsuit, Davis didn't demand return of the personal property until shortly before
    filing suit.
    We affirm the district court's judgment.
    13