Alain Ellis Living Trust v. Harvey D. Ellis Living Trust , 427 P.3d 9 ( 2018 )

IN THE SUPREME COURT OF THE STATE OF KANSAS
Nos. 113,097
113,282
THE ALAIN ELLIS LIVING TRUST;
HARVEY D. ELLIS, JR. and NADIA M. ELLIS,
Individually and as Natural Parents,
Guardians, and Next Friends of Minor, S.E.;
and ROGER K. ELLIS,
Appellants,
v.
THE HARVEY D. ELLIS LIVING TRUST;
THE ESTATE OF HARVEY D. ELLIS;
EMPRISE BANK,
a Kansas Banking Corporation;
and CATHLEEN A. GULLEDGE,
Appellees,
KANSAS UNIVERSITY ENDOWMENT ASSN., et al.,
Intervenors/Appellees.
SYLLABUS BY THE COURT
1.
A trust and its beneficiaries who have brought a cause of action for a trustee's
breach of trust and breach of fiduciary duty may seek punitive damages under K.S.A.
58a-1002(c) from the estate of the trustee under the procedures and requirements of
K.S.A. 60-3702 and 60-3703.
2.
Under K.S.A. 58a-1002(a)(3), if a beneficiary of a trust brings a cause of action
alleging a deceased trustee embezzled or knowingly converted to the trustee's own use
any of the personal property of the trust, the trustee's estate shall be liable for double the
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value of the embezzled or converted property if those damages are greater than the
damages calculated under K.S.A. 58a-1002(a)(1) or (a)(2).
Review of the judgment of the Court of Appeals in 53 Kan. App. 2d 131, 385 P.3d 533 (2016).
Appeal from Sedgwick District Court; MARK A. VINING, judge. Opinion filed September 21, 2018.
Judgment of the Court of Appeals affirming the district court is reversed. Judgment of the district court is
reversed, and the case is remanded.
Sarah E. Warner, of Thompson Warner, P.A., of Lawrence, argued the cause, and, Stephen R.
McAllister, of the same firm, was with her on the briefs for appellants.
Lee Thompson, of Thompson Law Firm, LLC, of Wichita, argued the cause and was on the briefs
for appellees The Harvey D. Ellis Living Trust and The Estate of Harvey D. Ellis.
Curtis L. Tideman and Emily R. Davis, of Lathrop & Gage LLP, of Overland Park, were on the
briefs for intervenors/appellees Kansas University Endowment Association, et al.
The opinion of the court was delivered by
LUCKERT, J.: In this case, a trust and its beneficiaries assert separate damage
claims against a deceased trustee for (1) punitive and (2) double damages under K.S.A.
58a-1002 of the Kansas Uniform Trust Code (KUTC) and under the common law relating
to a breach of trust and a breach of fiduciary duty. This appeal asks us to determine as a
matter of first impression whether those damages may be recovered after the death of a
trustee. The short answer is, "Yes."
K.S.A. 58a-1002, the punitive damages provisions in K.S.A. 60-3702 and 60-
3703, and the Kansas survival statute, K.S.A. 60-1801, do not directly answer this
question, leaving an ambiguity. But our statutory construction leads us to the conclusion
that these statutes, when read together and in conjunction with Kansas common law,
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reveal a legislative intent to preserve the right to damages—even those that are penal in
nature—after a tortfeasor's death. Thus, we conclude the death of a trustee does not
prevent a trial court from allowing a trier of fact to determine whether the estate of a
deceased trustee who committed a breach of fiduciary duty and knowingly committed a
breach of trust should be liable for (1) punitive damages and (2) statutory damages equal
to twice the amount of the property converted when those provide the greater recovery
under K.S.A. 58a-1002(a).
FACTS AND PROCEDURAL HISTORY
Alain Ellis and her husband Dr. Harvey Ellis, Sr., both executed living trusts.
After Alain's death, Harvey served as the trustee of her trust. Under the trust agreement,
Harvey was entitled to all income from the trust during his life. Upon his death, the trust
was to be divided equally between the Ellises' two sons, and each was to receive income
from the principal. When either son died, the principal was to go to that son's children or,
if he had no children, it was to be combined with the other son's trust. Neither Alain nor
Harvey told their sons or their sole grandchild of the trust.
While acting as trustee, Harvey improperly converted a substantial amount from
Alain's trust and placed the converted assets into his own trust. His trust beneficiaries
were several charitable and educational organizations. After his death, the improper
transfers were discovered and investigated, resulting in $1,431,143.45 being returned to
Alain's trust.
Alain's trust and her trust's beneficiaries (cumulatively, Alain's Trust) sought
additional damages by suing several parties, including The Harvey D. Ellis Living Trust,
Harvey's estate, Cathleen Gulledge (an attorney who had advised Harvey and the
successor trustee of Alain's trust), and Emprise Bank (a successor trustee for both Alain's
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and Harvey's trust). Some beneficiaries of The Harvey D. Ellis Living Trust—
specifically, The Kansas University Endowment Association, Dallas Theological
Seminary, and a Christian ministry group known as The Navigators—intervened to
protect their interests as beneficiaries of Harvey's trust. (Harvey's trust, Harvey's estate,
and the intervening beneficiaries of Harvey's trust will be cumulatively called Harvey's
Estate.)
Before trial, the trial court made two rulings that are now at issue. One relates to a
motion to amend the petition to add a claim for punitive damages and the second to a
ruling on a motion for partial summary judgment.
In the first ruling, the trial court partially granted a motion to amend the petition
by allowing Alain's Trust to make a claim for punitive damages against Gulledge and
Emprise Bank. But it denied the request to seek punitive damages from Harvey's Estate.
The trial court found that the facts established Harvey had engaged in willful and wanton
misconduct, but it concluded Alain's Trust could not bring a punitive damages claim
because he had passed away.
In the second ruling, the trial court granted partial summary judgment after
concluding Alain's Trust was not entitled to recover double damages under K.S.A. 58a-
1002 against the assets of Harvey's Estate. The trial court held the facts did not fit K.S.A.
58a-1002(a)(3)—the provision of the KUTC that allows double damages. Alternatively,
the trial court reasoned the provision, even if factually applicable, was not legally
applicable because it was penal and claims for penal damages, such as punitive damages,
do not survive the death of a malfeasant trustee.
At trial, the trial court made some rulings as a matter of law. These resulted in the
court instructing the jury that the court had ruled that Harvey's trust and estate were liable
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for any damages that resulted when Harvey "converted and embezzled principal in the
amount of $1,541,827.59 from the Alain Ellis Living Trust and placed it in the Harvey D.
Ellis Living Trust."
The jury entered a verdict partially in favor of Alain's Trust. It found Harvey
committed a breach of trust and a breach of fiduciary duty and that Gulledge had
committed a breach of fiduciary duty. But the jury found that Emprise Bank was free of
wrongdoing. The jury also determined the damages to be $1,557,973.48 and also found
all "of those damages are a direct result of a breach by: Harvey D. Ellis, Sr." Despite
finding wrongdoing by Gulledge, the jury declined to find her liable for any damages.
The jury further found the damages should be offset with a credit in the amount of
$1,431,143.45 because of the assets returned to Alain's Trust.
On appeal to the Court of Appeals, Alain's Trust challenged the trial court's two
rulings that prevented the jury from considering whether Alain's Trust should receive
double or punitive damages against Harvey's Estate. One of the beneficiaries of Alain's
trust also asserted the trial court erred in refusing to require Harvey's Estate to pay his
attorney fees. The Court of Appeals affirmed the trial court's decision. Alain Ellis Living
Trust v. Harvey D. Ellis Living Trust, 53 Kan. App. 2d 131, 385 P.3d 533 (2016).
Alain's Trust petitioned for review of only the two issues about double and
punitive damages. We granted review. The Court of Appeals' decision about payment of
attorney fees is not before us. Nor is its conclusion that Harvey converted the property to
his own use. See Supreme Court Rule 8.03(h)(1) (2018 Kan. S. Ct. R. 56) ("[I]ssues
before the Supreme Court include all issues properly before the Court of Appeals which
the petition for review or cross-petition allege were decided erroneously by the Court of
Appeals.").
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ANALYSIS
We must decide: First, did the trial court err in ruling that Alain's trust could not
seek punitive damages from a deceased settlor's revocable trust or estate even though the
trustee has committed a breach of trust? Second, did the trial court err in ruling that the
double damage penalty of K.S.A. 58a-1002(a)(3) does not survive the death of a
malfeasant trustee? Both issues share the common question of whether Kansas law allows
an injured party to recover all the various types of damages provided for in the KUTC or
allowed at common law even if the trustee has died before judgment.
As the Court of Appeals noted: "There is no doubt in this case that [Harvey] acted
toward [Alain's Trust] with willful conduct and fraud that would have supported a claim
against him for punitive damages had he still been alive at the time of the litigation."
Alain Ellis Living Trust, 53 Kan. App. 2d at 137. Similarly, in addressing the double
damages provision, the Court of Appeals held that Harvey's "actions would have
subjected him to the double damages of K.S.A. 58a-1002(a)(3) had he been alive during
this litigation." 53 Kan. App. 2d at 143.
Nevertheless, the Court of Appeals determined Alain's Trust could not ask the jury
to award the damages because: (1) K.S.A. 58a-1002 and other Kansas statutes do not
specifically provide for recovery against an estate and there must be express statutory
language that allows an injured party to seek to have punitive damages paid by anyone
other than the actual wrongdoer, including the wrongdoer's estate; (2) as found by a
majority of other courts, awarding punitive damages against an estate would not further
the purposes of punitive damages, and (3) the double damage award, like the punitive
damage provision, is penal and trust beneficiaries cannot seek double damages from the
trustee's estate for the same reasons a court cannot award punitive damages against a
deceased trustee's estate. 53 Kan. App. 2d at 141-45.
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We first address whether a trust beneficiary can seek punitive damages—whether
sought under K.S.A. 58a-1002(c) or under common law—from the estate of a deceased
tortfeasor.
1. Does Kansas law allow a trust and its beneficiaries to seek punitive damages from
a deceased trustee?
During pretrial proceedings, the trial court denied a motion filed by Alain's Trust
seeking to amend its petition to add a claim for punitive damages against Harvey's Estate.
Both Alain's Trust and Harvey's Estate recognize this court has not decided whether a
wrongdoer's death means an injured party cannot make a claim for punitive damages
against the estate of a deceased wrongdoer. And the Court of Appeals has considered this
question only in the decision we now review and in the more recent decision of Harder v.
Foster, 54 Kan. App. 2d 444, 475, 401 P.3d 1032 (2017). Harder applied the reasoning
of the Alain Ellis Living Trust Court of Appeals' panel to the general question of whether
punitive damages can be applied against a deceased tortfeasor in a common-law cause of
action—in that case, fraudulent conveyance.
Even though this issue is one of first impression for our court, we review it as we
would any other trial court ruling on a motion to amend—for an abuse of discretion.
Adamson v. Bicknell, 295 Kan. 879, 887, 287 P.3d 274 (2012). A trial court can abuse its
discretion in several ways, including when it bases a decision on an error of law. State v.
Ward, 292 Kan. 541, 550, 256 P.3d 801 (2011). And that is what Alain's Trust alleges
happened here—the trial court made an erroneous ruling about the availability of punitive
damages under Kansas law. The issue before us thus involves an "abstract question of
law," which we review de novo. See In re Care and Treatment of Girard, 296 Kan. 372,
376, 294 P.3d 236 (2013).
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Harvey's Estate presented this issue of law to the trial court when it opposed the
motion to amend filed by Alain's Trust. It argued that neither Kansas common law nor
statutes allowed recovery of punitive damages against the estate of a deceased trustee. In
response, Alain's Trust contends that legislative silence means the damages are available
because the Legislature provided for the damages and then created no exception if a
tortfeasor died. Alain's Trust points out that courts do not generally add words to a
statute. See State v. Gray, 306 Kan. 1287, 1294, 403 P.3d 1220 (2017). And she suggests
we would have to do so to create an exception not currently in the statutes.
The proposed punitive damages claim offered by Alain's Trust does not rest solely
on K.S.A. 58a-1002(c), however. Alain's Trust also alleged a common-law claim for
breach of a fiduciary duty. See Newton v. Hornblower, Inc., 224 Kan. 506, Syl. ¶ 13, 582
P.2d 1136 (1978) ("Punitive damages, as well as actual damages, are proper where a
breach of fiduciary duty is involved."). And both parties focus on the caselaw of other
jurisdictions to argue about whether punitive damages are generally available against a
deceased tortfeasor. The outcome of many of these cases is based on statutory
interpretation, at least in part. For example, at least 14 of the cases adopting the position
that an injured party cannot recover punitive damages from the estate of a tortfeasor—the
majority rule—reached that conclusion because their respective state legislatures had
passed a statute stating that position. And two other courts took the opposite position by
applying a statute that adopted the minority position. Still other courts had no clear
statutory language to rely upon, but these courts applied rules of statutory construction
and discerned their respective state legislature's intent about whether a punitive damage
claim survives the death of a trustee. See, e.g., Estate of Farrell ex rel. Bennett v.
Gordon, 770 A.2d 517, 522 (Del. 2001); see also Note, Invading the Realm of the Dead:
Exploring the (Im)Propriety of Punitive Damage Awards Against Estates, 47 U. Mich.
J.L. Reform 827, 831-35 (2014).
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The Kansas statutes most relevant to our inquiry include those generally providing
for punitive damages, K.S.A. 60-3702 and 60-3703; K.S.A. 58a-1002, the applicable
damage provision from the KUTC; and the Kansas survival statute, K.S.A. 60-1801. We
consider these statutes de novo and apply the fundamental principle of statutory
interpretation: The intent of the Legislature governs. State v. Spencer Gifts, 304 Kan.
755, 761-62, 374 P.3d 680 (2016). "And the best and only safe rule for ascertaining the
intention of the makers of any written law, is to abide by the language they have
used." Wright v. Noell, 16 Kan. 601, 607, 1876 WL 1081 (1876); see Spencer Gifts, 304
Kan. at 761.
Kansas statutes, like the statutes in several states, do not directly address the effect
of a death on punitive damages. In other situations in which statutes displace the common
law, we have recognized that ambiguity about the scope of the displacement may arise
from legislative silence. See State v. Quested, 302 Kan. 262, 268, 352 P.3d 553 (2015).
The same type of ambiguity exists here. "When faced with an ambiguity, courts must
attempt to ascertain legislative intent and in doing so may look to canons of construction,
legislative history, the circumstances attending the statute's passage, the purpose to be
accomplished, and the effect the statute may have under the various constructions
suggested." 302 Kan. at 268.
We consider those principles as applied to punitive damages in Kansas caselaw
and statutes.
1.1. Kansas Caselaw and Statutes
As early as 1864, this court recognized that punitive damages had "been long
established, recognized and acted upon by enlightened Courts." Malone v. Murphy,
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2 Kan. 250, 262, 1864 WL 425 (1864). Following this decision and during much of our
state's history, Kansas law about punitive damages was based on common law.
Eventually, however, the Kansas Legislature passed a punitive damages statute. And in
1988, the Kansas Legislature adopted the statutes now codified, with some later
amendments, at K.S.A. 60-3702 and 60-3703. See L. 1997, ch. 173, § 33 (amendment);
L. 1992, ch. 307, §§ 3, 4 (amendment); L. 1988, ch. 209, §§ 3, 4 (adopting K.S.A. 60-
3702 and 60-3703). After the adoption of these statutes, this court recognized that the
Kansas Legislature has "the power to abolish punitive damages altogether" and "certainly
has the right to modify the method by which those damages are determined." Smith v.
Printup, 254 Kan. 315, 331, 866 P.2d 985 (1993). Thus, as the Court of Appeals
concluded, "the recovery of punitive damages is governed by statute." The Alain Ellis
Trust, 53 Kan. App. 2d at 140.
K.S.A. 60-3702 begins by stating: "In any civil action in which exemplary or
punitive damages are recoverable, the trier of fact shall determine, concurrent with all
other issues presented, whether such damages shall be allowed." K.S.A. 60-3702(a).
K.S.A. 60-3703 specifies a procedure for seeking those damages. The party seeking
punitive damages must file a motion to amend its pleading to state a claim for punitive
damages and must support the motion with affidavits. The party must establish a
probability of success on the punitive damage claim before the amendment will be
allowed. At trial, a plaintiff seeking punitive damages "shall have the burden of proving,
by clear and convincing evidence, . . . that the defendant acted toward the plaintiff with
willful conduct, wanton conduct, fraud or malice." K.S.A. 60-3702(c).
Applying that provision, this court has cautioned trial courts "not to usurp the role
of the jury" but to look at the evidence "in a light most favorable to the party moving for
the amendment, and [consider] if the evidence is of sufficient caliber and quality to allow
a rational factfinder to find that the defendant acted towards the plaintiff with willful
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conduct, wanton conduct, fraud, or malice." Fusaro v. First Family Mtg. Corp., 257 Kan.
794, 802, 897 P.2d 123 (1995). But this standard does not speak to the threshold
determination of whether a party who can meet this evidentiary standard always has a
right to punitive damages. The only guidance comes from the opening words of the
statute: "In any civil action in which exemplary or punitive damages are recoverable."
Punitive damages are generally allowed in breach of trust and breach of fiduciary
actions if a plaintiff can meet the burden of proof requirement of K.S.A. 60-3702(c). See
Capitol Fed'l Sav. & Loan Ass'n v. Hohman, 235 Kan. 815, 816-17, 682 P.2d 1309
(1984) (breach of trust); Newton, 224 Kan. 506, Syl. ¶ 13 (breach of fiduciary duty). The
KUTC also recognizes and preserves the potential availability of punitive damages when
a trust beneficiary brings an action for breach of trust. It first addresses three methods for
calculating damages and then discusses punitive damages:
"(a) A trustee who commits a breach of trust is liable to the beneficiaries affected
for the greater of:
(1) The amount required to restore the value of the trust property and trust
distributions to what they would have been had the breach not occurred;
(2) the profit the trustee made by reason of the breach; or
(3) if the trustee embezzles or knowingly converts to the trustee's own use any of
the personal property of the trust, the trustee shall be liable for double the value of the
property so embezzled or converted.
....
"(c) The provisions of this section shall not exclude an award of punitive
damages." K.S.A. 58a-1002.
Even though K.S.A. 60-3702 and K.S.A. 58a-1002 do not explicitly discuss the
effect of a party's death, Alain's Trust argues that one reading these statutes would
understand that the trust beneficiaries could bring a cause of action against Harvey's
Estate and may seek punitive damages. Harvey's Estate counters with several arguments.
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First, Harvey's Estate points out that the Kansas survival statute preserves "causes
of action" and says nothing about preserving remedies or specific types of damages. His
argument arises because a cause of action for tort did not generally survive the death of
either a plaintiff or a defendant at common law. See generally Seamans v. Brown, 109
Kan. 448, 199 P. 473 (1921). K.S.A. 60-1801, commonly called the Kansas survival
statute, displaces this common law rule, however. It states:
"In addition to the causes of action which survive at common law, causes of
action for mesne profits, or for an injury to the person, or to real or personal estate, or for
any deceit or fraud, or for death by wrongful act or omission, shall also survive; and the
action may be brought notwithstanding the death of the person entitled or liable to the
same." K.S.A. 60-1801.
Even so, Harvey's Estate points out that K.S.A. 60-1801 merely provides that the
cause of action against Harvey survived; it does not inform us of what remedies are
available under any specific cause of action after the death of either party. See Printup,
254 Kan. at 322-23 (holding that no cause of action arises just because of an injury,
punitive damages are "incidental" to actual damages, and punitive damages do not by
themselves create a cause of action); see generally Black's Law Dictionary 266 (10th ed.
2014) ("cause of action" means the theory or grounds for bringing a lawsuit).
Printup is instructive, however. There, this court considered whether punitive
damages could be claimed (1) in a wrongful death action and (2) in a survival action
under K.S.A. 60-1801. The Printup court held those who had brought a wrongful death
action could not seek punitive damages. The court explained that the wrongful death
cause of action had been created by statute and, because it was a statutory cause of action,
the Legislature had to provide for punitive damages in order for them to be recoverable.
And the Legislature had not done so. 254 Kan. at 333; see Folks v. Kansas Power &
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Light Co., 243 Kan. 57, 755 P.2d 1319 (1988). But the Printup court allowed
representatives of the injured party who had died shortly after a vehicle accident to
recover punitive damages in the survival action. 254 Kan. at 323.
We understand there are reasons to differentiate between the injured party
receiving punitive damages and a deceased wrongdoer's estate paying the damages—the
policy reasons that drive court decisions in Kansas and other jurisdictions, as we will
discuss in more detail. Still, according to Printup, the Legislature intended to ensure the
survival of both the cause of action and the remedies incidental to that cause of action.
Thus, we do not find the first argument presented by Harvey's Estate—that the survival
statute merely addresses a "cause of action"—determinative.
Second, Harvey's Estate argues neither K.S.A. 60-3702 nor K.S.A. 58a-1002
specifically state that an injured party can recover punitive damages even if a tortfeasor
has died. It specifically points out that K.S.A. 58a-1002 uses only the term "trustee" and
not "a trustee's estate." But an estate generally stands in the shoes of the deceased, and
one reason an estate exists is to meet the financial obligations of a decedent, including
damages that may result from legal claims against the decedent. See Nelson v. Nelson,
288 Kan. 570, 591, 205 P.3d 715 (2009) ("The nonclaim statute recognizes that a
decedent no longer has the individual capacity to respond in damages to torts, to pay
debts, to carry out contracts, or to administer his or her estate; therefore, the estate must
meet the decedent's financial obligations."). And in some cases, a trust may also be liable
for claims against a creditor. Commerce Bank, N.A. v. Bolander, 44 Kan. App. 2d 1, 13,
239 P.3d 83 (2007) (holding that even after a settlor's death the "clear unambiguous intent
of the legislature [expressed] in K.S.A. 58a-505[a][3] [is to] mak[e] the assets of a
revocable trust 'subject to the claims of the settlor's creditors.'"). But see Taliaferro v.
Taliaferro, 252 Kan. 192, 843 P.2d 240 (1992) (in an action by a surviving spouse
seeking to invalidate two revocable inter vivos trusts created by her husband, holding that
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[1] the district court erred in ordering all the corporate stock held by a husband's trust be
transferred to the estate, [2] the district court erred in failing to require the surviving
spouse to file an election, and [3] if, upon remand, the surviving spouse elects to take
against the will, the court should order a transfer to the estate of only that portion of the
corporate stock held by the trust which is necessary to give the surviving spouse her one-
half share of the decedent's assets under K.S.A. 59-602[2]).
The lack of any reference to the trustee's estate is not an obstacle to Alain's Trust
making a claim for punitive damages because statutes other than K.S.A. 58a-1002 make
clear that the estate can stand in the shoes of a deceased tortfeasor.
Third, Harvey's Estate asks us to adopt the reasoning of the Court of Appeals'
panel about the import of various provisions of K.S.A. 60-3702(d). These provisions, the
Court of Appeals concluded, expressed the Legislature's intent to impose punitive
damages on only the wrongdoer. Alain Ellis Living Trust, 53 Kan. App. 2d at 137, 139.
For example, K.S.A. 60-3702(d)(1) limits the circumstances in which courts may assess
exemplary or punitive damages against a principal or employer for the acts of an agent or
employee to those acts authorized or ratified by the principal or employer. And K.S.A.
60-3702(d)(2) prohibits assessing punitive or exemplary damages against a partnership or
corporation for the acts of a partner or a shareholder unless the partnership or corporation
authorizes or ratifies the acts. Because of the intent expressed in these statutes, the Court
of Appeals refused to recognize that an estate could be liable for punitive damages.
This point finds some support in our caselaw as well, notably in this court's
determination that courts cannot impose joint and several liability for punitive damages:
"Punitive damages are awarded to punish the wrongdoer. Each wrongdoer is liable to pay
the punitive damages assessed against him or her. The amount of the award is to be
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calculated with the individual defendant's financial status and conduct in mind. . . . Joint
and several liability undermines these considerations and therefore is unavailable."
Printup, 254 Kan. at 356.
Also, in Koch v. Merchants Mutual Bonding Co., 211 Kan. 397, 507 P.2d 189
(1973), this court held a court could not require a surety company to pay punitive or
exemplary damages without express statutory authority for doing so, explaining:
"Where exemplary damages are awarded for purposes of punishment and deterrence, as is
true in this state, public policy should require that payment rest ultimately as well as
nominally on the party who committed the wrong; otherwise they would often serve no
useful purpose. The objective to be attained in imposing punitive damages is to make the
culprit feel the pecuniary punch, not his guiltless guarantor." 211 Kan. at 405.
While these holdings and statutory provisions support a conclusion that punitive
damages are limited to the wrongdoer unless a statutory exception applies, this does not
fully answer the question. Here, the estate—consisting of the tortfeasor's assets—would
pay the judgment. And as we have discussed, one reason an estate exists is to meet the
financial obligations of a decedent, including damages that may result from legal claims
against the decedent. See Nelson, 288 Kan. at 591. Further, until the wrongdoer's estate,
including claims against it, is settled, heirs and third-party beneficiaries have only an
inchoate—and perhaps unknown—interest.
We agree with the Pennsylvania Supreme Court's analysis of this argument in
G.J.D. by G.J.D. v. Johnson, 552 Pa. 169, 713 A.2d 1127 (1998). That court rejected the
proposition that allowing punitive damages would punish innocent beneficiaries of the
estate. The court observed that "[t]he heirs of the decedent tortfeasor are in essentially the
same financial position as if the tortfeasor were living at the time damages were
awarded." 552 Pa. at 176. And perhaps more significantly, "To allow a tortfeasor's estate
15
to escape payment of punitive damages would be comparable to the injustice of allowing
a defendant to transfer his wealth to his prospective heirs and beneficiaries prior to the
trial of a case in which punitive damages are sought against him." 552 Pa. at 177.
In summary, we do not find any of the arguments asserted by Harvey's Estate to be
determinative. And, our review of Kansas law—both as found in statutes and in
caselaw—provides no clear resolution of the question of whether an injured party may
seek punitive damages from a tortfeasor's estate. We therefore consider the two different
approaches adopted in other jurisdictions. See Annot., Claim for Punitive Damages in
Tort Action as Surviving Death of Tortfeasor or Person Wronged, 30 A.L.R. 4th 707.
1.2. Cases from Other Jurisdictions
As we have noted, the first approach, sometimes identified as the majority
approach, precludes recovery of punitive damages from a deceased tortfeasor's estate. By
one count, when you remove the jurisdictions that have legislatively adopted the majority
rule, 14 courts (13 states and the District of Columbia) have adopted this view. This
count includes Kansas because a federal court had predicted Kansas would adopt the
majority view. See Fehrenbacher v. Quackenbush, 759 F. Supp. 1516 (D. Kan. 1991). In
contrast, nine states adopted the minority position by judicial decision. See Comment,
Adding Insult to Death: Why Punitive Damages Should Not Be Imposed Against a
Deceased Tortfeasor’s Estate in Ohio, 49 Akron L. Rev. 553, 564-65 (2016); see also
Note, 47 U. Mich. J.L. Reform at 849-51.
Virtually all the cases consider the purposes of punitive damages and discuss
whether imposing punitive damages on a deceased tortfeasor's estate will further the
purposes of punishment and deterrence. See Whetstone v. Binner, 146 Ohio St. 3d 395,
16
397-98, 57 N.E.3d 1111 (2016) (discussing the different views). So, before discussing
those cases, we will review the purposes recognized in Kansas.
In an early punitive damages decision, Chief Justice Samuel Kingman, writing for
the court, declared punitive damages to "be not only good law, but founded on sound
principles, and beneficial in its application. It often furnishes the only restraint upon a bad
man, who cares little for his neighbor's character, his person, or his property." Albert
Wiley v. Keokuk, 6 Kan. 94, 107, 1870 WL 463 (1870). Thus, from the beginning of
statehood, this court has recognized deterrence or restraint as a justification for the
imposition of punitive damages. And we find it significant that this court emphasized this
purpose so early in our state's history. But this court also recognized that punitive
damages can be a form of punishment. E.g., Schippel v. Norton, 38 Kan. 567, 572, 16 P.
804 (1888).
More recent cases clarified that the purpose of deterring bad conduct applied to
both the tortfeasor (often called a specific deterrence) and others (called a general
deterrence): "The express purpose of punitive damages is and has been to punish the
tortfeasor and to deter it and others from committing similar wrongs in the future."
(Emphases added.) Printup, 254 Kan. at 325; see Koch, 211 Kan. 397, Syl. ¶ 4
("Exemplary or punitive damages go beyond actual or compensatory damages in that
they are imposed, not because of any special merit in the plaintiff's case, but to punish the
wrongdoer for his willful, malicious, oppressive or unlawful acts and to deter and
restrain others from similar wrongdoings." [Emphases added.]). At times, this court has
even said "the ultimate purpose" of punitive damages is "to restrain and deter others from
the commission of similar wrongs." Cerretti v. Flint Hills Rural Electric Co-op Ass'n,
251 Kan. 347, 366, 837 P.2d 330 (1992); see Hayes Sight & Sound, Inc. v. ONEOK, Inc.,
281 Kan. 1287, 1324, 136 P.3d 428 (2006).
17
The current statute reflects the continuation of the common-law policies
supporting punitive damages as expressed in Kansas cases, including:
"(1) The likelihood at the time of the alleged misconduct that serious harm would
arise from the defendant's misconduct;
"(2) the degree of the defendant's awareness of that likelihood;
"(3) the profitability of the defendant's misconduct;
"(4) the duration of the misconduct and any intentional concealment of it;
"(5) the attitude and conduct of the defendant upon discovery of the misconduct;
"(6) the financial condition of the defendant; and
"(7) the total deterrent effect of other damages and punishment imposed upon the
defendant as a result of the misconduct, including, but not limited to, compensatory,
exemplary and punitive damage awards to persons in situations similar to those of the
claimant and the severity of the criminal penalties to which the defendant has been or
may be subjected." (Emphasis added.) K.S.A. 60-3702(b).
The first six factors focus on the individual and his or her actions and relate to
punishment as a basis for imposing punitive damages. But the seventh factor requires
consideration of the deterrent effect by considering several factors. These reasons are
consistent with the justifications provided in other jurisdictions. See Note, 47 U. Mich.
J.L. Reform at 831-35. With that in mind, we turn to the decisions of the other courts.
The Iowa Supreme Court's decision in In re Vajgrt, 801 N.W.2d 570 (Iowa 2011),
reflects the majority view. There, Bill Ernst, Inc. (Ernst) authorized Johnny Vajgrt to
remove a fallen tree from its property. Vajgrt exceeded his authority, uprooting around 40
live trees. Vajgrt died before Ernst filed a claim, so Ernst pursued a claim against Vajgrt's
estate.
Unlike Kansas, Iowa had decisions dating to 1884 in which the court had barred
recovery of punitive damages when a tortfeasor died before judgment. The court
18
explained the rationale underlying the earliest case and reiterated it over time:
"[B]ecause the role of punitive damages is punitive, rather than compensatory, such
damages should not be awarded when the person to be punished has died." 801 N.W.2d
at 573. As we have noted, in contrast, this court had recognized the deterrent effect of
punitive damages in its early caselaw. Ernst also argued the court should overrule earlier
cases based on the Iowa survival statute. The court found Ernst's position flawed. Among
other things, the court noted—as this court stated in Printup, 254 Kan. at 323—that the
survival statute allowed causes of action to survive death, but punitive damages are not a
separate cause of action. But unlike Kansas, Iowa had a similar survival statute in place
when the court had decided its earlier cases.
The Iowa court also found the Iowa punitive damage statute's silence on whether
such damages survive a tortfeasor's death supported its conclusion—the earlier precedent
existed when the Iowa Legislature enacted the statute, yet the Legislature did not overturn
the court's holding. 801 N.W.2d at 574-75. The Iowa court then turned to the purposes for
punitive damages: "(1) punishment, (2) specific deterrence, and (3) general deterrence."
801 N.W.2d at 575. The court rejected Ernst's argument that general deterrence warranted
reversing earlier cases and applied Iowa's existing rule. 801 N.W.2d at 575.
Other cases following this approach have applied similar reasoning. E.g., Doe v.
Colligan, 753 P.2d 144, 145-46 (Alaska 1988) (following rule of no recovery against
estate because central purpose of punishment cannot be served and "general deterrent
effect becomes speculative at best"); Crabtree v. Estate of Crabtree, 837 N.E.2d 135,
137-40 (Ind. 2005) (acknowledging central purpose is to punish and deter the wrongdoer,
holding open the possibility of a different result if a tortfeasor appears to consider death
as an escape from punitive damages); Jaramillo v. Providence Washington Ins. Co., 117
N.M. 337, 345-46, 871 P.2d 1343 (1994) (holding punishment and deterrence not
accomplished by allowing recovery against estate of tortfeasor). The Restatement
19
(Second) of Torts agrees. See Restatement (Second) of Torts §§ 908, comment a, 926
(1979). And, as we have noted, a federal court, focusing on the purpose of punishing the
wrongdoer, has predicted that Kansas will follow the majority rule and not allow punitive
damages if a tortfeasor has died. Fehrenbacher, 759 F. Supp. 1516. And the trial court
and Court of Appeals agreed with that conclusion. Alain Ellis Living Trust, 53 Kan. App.
2d at 140-41.
For the counterpoint, Alain's Trust relies on the Pennsylvania decision in G.J.D.,
552 Pa. 169. There, G.J.D. sued Darwin Thebes who distributed sexually explicit
photographs of her, including her name, phone number, and language suggesting she was
a prostitute, after she ended their relationship. G.J.D. asserted various tort claims and
sought punitive damages. Thebes committed suicide before trial, and the executrix of his
estate was substituted as a defendant. The jury awarded compensatory and punitive
damages to G.J.D. and her children. The Pennsylvania Supreme Court held the trier of
fact should determine whether punitive damages are appropriate in a particular case. The
court identified three reasons for its conclusion.
First, the court noted an important purpose for imposing punitive damages is to
deter the tortious behavior—both on the part of the wrongdoer and on the part of others.
The decedent's behavior was "egregious" and "[t]o the extent that it may reasonably be
done, the law should be applied so as to have a deterrent effect on such conduct." 552 Pa.
at 176. Thus, while the decedent would "not be punished or deterred from committing
further perverse and egregious acts, the imposition of punitive damages upon his estate
may serve to deter others from engaging in like conduct." 552 Pa. at 176. And while the
court recognized the deterring impact of its decision was speculative, it concluded it was
not more so "than in cases where the tortfeasor is alive." 552 Pa. at 176.
20
Second, the court rejected the proposition that allowing punitive damages would
punish innocent beneficiaries of the estate. The court observed that "[t]he heirs of the
decedent tortfeasor are in essentially the same financial position as if the tortfeasor were
living at the time damages were awarded." 552 Pa. at 176. And perhaps more
significantly (and thus warranting our repeating the point), "To allow a tortfeasor's estate
to escape payment of punitive damages would be comparable to the injustice of allowing
a defendant to transfer his wealth to his prospective heirs and beneficiaries prior to the
trial of a case in which punitive damages are sought against him." 552 Pa. at 177.
Finally, the Pennsylvania Supreme Court noted that "safeguards exist to protect
against the arbitrary imposition of punitive damages." 552 Pa. at 177. These safeguards
include jury instructions that allow the jury to consider the reasons for imposing punitive
damages, thus giving the jury the opportunity to determine whether its verdict would
further the purposes of punitive damages. And "[t]he jury can then consider the value of
the deceased tortfeasor's estate in arriving at a proper assessment of punitive damages. In
the event the award shocks the conscience of the court, the trial court may grant a
remittitur." 552 Pa. at 176-77.
Other jurisdictions cite G.J.D in reaching the same conclusion. E.g., Haralson v.
Fisher Surveying, Inc., 201 Ariz. 1, 3-6, 31 P.3d 114 (2001); Estate of Farrell v. Gordon,
770 A.2d 517, 521-22 (Del. 2001); Kaopuiki v. Kealoha, 104 Hawai'i 241, 260, 87 P.3d
910 (2003). Others independently reached the same result. E.g., Tillett v. Lippert,
275 Mont. 1, 909 P.2d 1158 (1996) (concluding that whether to assess punitive damages
against tortfeasor's estate to set an example is a question for the trier of fact).
The Ohio Supreme Court recently addressed the different approaches in
Whetstone, 146 Ohio St. 3d 395. Whetstone presented a different wrinkle because the
defendant was still alive when the case was filed. In Kansas, this situation would fall
21
under K.S.A. 60-1802 ("No action pending in any court shall abate by the death of either
or both the parties thereto, except an action for libel, slander, malicious prosecution, or
for a nuisance."). But the Ohio court's reasoning is still applicable because it points out
the injustice that results when a wrongdoer can put off or avoid the payment of damages.
In Whetstone, a mother sued her grandaunt who injured her five-year-old child
while babysitting. The mother found the grandaunt with one hand on the child's neck and
her other hand holding a pillow over the child's face. The grandaunt, who had cancer,
failed to respond to the complaint. The court entered a default judgment and set an
evidentiary hearing on damages, including punitive damages. The grandaunt then
requested to reschedule the hearing because it conflicted with her scheduled treatment.
The grandaunt died before the hearing. The trial court determined punitive damages
could not be awarded against an estate, and the mother appealed.
The Ohio Supreme Court reversed this conclusion, holding the grandaunt's estate
could be held liable for punitive damages because "[t]o hold otherwise would send a
message that by delaying a damages hearing, a defendant or his or her estate might avoid
the award of punitive damages." 57 N.E.3d at 1115-16.
Still other courts focus on statutory language the courts read as expressing
legislative intent, even though the language may not directly address the effect of a death
on a punitive damages claim. For example, the Delaware Supreme Court in Gordon, 770
A.2d at 521, approvingly quoted the reasoning of the Pennsylvania Supreme Court's
decision in G.J.D., 552 Pa. 169. But it also noted that, unlike Pennsylvania's survival
statute, Delaware's statute contained specific limitations on recovery. "Had the General
Assembly intended to exclude claims for punitive damages from recovery against the
estate of a deceased tortfeasor, it could easily have done so. The omission is significant
22
and we are not inclined to engraft a further restriction by embracing the Restatement
provision." Gordon, 770 A.2d at 522.
Ultimately, as this review of other jurisdictions shows, how we resolve our case
hinges on how we view the purpose or purposes of punitive damages and what we can
discern about legislative intent relating to the Kansas statutes. Some jurisdictions, like
Iowa, have concluded imposing punitive damages against an estate does not serve the
purpose of punishment. We agree with this concept. But we part company with those
courts that conclude punitive damages do not serve the purpose of deterring unlawful
conduct. The facts of this case suggest the opposite conclusion is warranted.
A trustee who believes the malfeasance can go undiscovered indefinitely, or at
least until he or she is no longer alive, would not be restrained if courts could not impose
postdeath punitive damages. And a trustee like Harvey, whose wife had recently died,
may have viewed his death as only a matter of time and not some amorphous future
inevitability. And the incentive may be even higher if the converted property is of the
nature that makes it difficult to calculate actual damages—one of the reasons Alain's
Trust argues the double damage provision relates to compensatory, not punitive,
damages. But knowing the trustee will have to pay back embezzled or converted assets
and face additional, punitive damages may dissuade trustees from engaging in illegal
conduct. See Whetstone, 57 N.E.3d at 1115-16; see also Crabtree, 837 N.E.2d at 137-40.
We understand that some courts have concluded this deterrence is speculative. See
Fehrenbacher, 759 F. Supp. at 1551-52 (citing a Minnesota case rejecting a similar
argument as speculative). But like the Pennsylvania Supreme Court, we fail to see how
the prospect is any more speculative when a defendant has died than when the defendant
is still alive. We also find no basis to say that punitive damages deter the conduct of
others when a tortfeasor is alive but that punitive damages do not deter another's conduct
23
if the tortfeasor has died. Instead, the knowledge that a trustee's estate will possibly have
to pay punitive damages may restrain a trustee.
We also conclude that a trial court can weigh these considerations when deciding
whether to allow a motion under K.S.A. 60-3703, and a jury can do so when considering
the K.S.A. 60-3702(b) factors. The jury will know the trustee has died and that the party
in the suit is his or her estate. Often, that will decrease—if not eliminate—the weight of
many of the first six considerations. And that will leave for the jury the consideration of
the overall deterrence effect. Weighing all the factors, the jury may determine that
punitive damages are not appropriate—just as it did in this case with regard to Gulledge.
Most significantly, however, we discern an intent by the Legislature to allow an
injured party to recover the same damages when a tortfeasor is dead as the injured party
would recover if the tortfeasor were alive. The intent of the survival statute is best served
when an injured party can bring the same cause of action and pursue the same remedies
regardless of whether the tortfeasor is alive or dead. In addition, we agree with the
reasoning of the Delaware Supreme Court in Gordon, 770 A.2d 522. It considered
determinative the fact its Legislature had stated some exceptions to damage recovery in
its survival statute but had not made an exception for deceased tortfeasors. We find it
significant the Kansas Legislature created some exceptions to the availability of punitive
damages in K.S.A. 60-3702. Like Delaware and other states, we would have to graft
another exception onto the statute. The same is true with K.S.A. 58a-1002, which allows
punitive damages without exception. In this context, the question is not whether to allow
punitive damages but whether to extinguish damages the Legislature has authorized. And
it is not an appropriate role for a court to add those words to any of the Kansas statutes
without an indication of legislative intent, especially when doing so would limit a remedy
the Kansas Legislature has allowed. See Gray, 306 Kan. 1294 (courts do not generally
add words to statutes).
24
We hold that a trust and its beneficiaries with a cause of action for a trustee's
breach of trust and breach of fiduciary duties may seek punitive damages from the estate
of a deceased trustee under the procedures and requirements of K.S.A. 60-3702 and 60-
3703. Here, we know the jury found a breach of trust and breach of fiduciary duty by the
trustee. We do not know, however, whether a jury would have awarded Alain's Trust
punitive damages. We, thus, remand for further proceedings.
2. The plain language of the KUTC does not address whether a malfeasant trustee's
estate can be made to pay double damages.
We next consider the trial court's order granting the motion for partial summary
judgment. In granting that motion, the trial court ruled that Alain's Trust could not
recover double damages under the KUTC because of Harvey's death. The trial court and
the Court of Appeals' panel relied on the rule adopted in other jurisdictions that penal
damages do not survive the death of the tortfeasor. Because the issue on which partial
summary judgment was granted was one of law and the material facts are undisputed, we
review the decision de novo. See Hockett v. The Trees Oil Co., 292 Kan. 213, 219, 251
P.3d 65 (2011).
Alain's Trust argues the trial court failed to apply the plain language of K.S.A.
58a-1002 and, instead, read into the statute a common-law rule that punitive damages do
not apply to deceased defendants. Again, subsection (a) of that statute, provides that the
trustee is liable for the greater of three measures of damages: (1) the amount necessary to
restore the lost value; (2) the trustee's profits, or (3) "if the trustee embezzles or
knowingly converts to the trustee's own use any of the personal property of the trust, the
trustee shall be liable for double the value of the property so embezzled or converted."
25
And subsection (c) states that the allowance of those damages "shall not exclude an
award of punitive damages."
Alain's Trust argues K.S.A. 58a-1002(a) sets minimum damage floors and allows
accumulative damages—that is, "[s]tatutory damages allowed in addition to amounts
available under the common law." Black's Law Dictionary 471 (10th ed. 2014). And no
one disputes that (a)(3) provides the greatest damages here. Nor does Harvey's Trust
argue before us that (a)(3) does not factually apply. Harvey's Trust did make this
argument before the trial court. And the trial court, in ruling on summary judgment, held
Harvey had not used any of the property he converted for his personal use, which meant
that the criteria for awarding damages under (a)(3) had not been established. But the
Court of Appeals disagreed, and Harvey's Estate did not cross-petition seeking our review
of this ruling. See Supreme Court Rule 8.03(h)(1) (2018 Kan. S. Ct. R. 53); Gray, 306
Kan. at 1292-93 (noting this court would not consider a ruling adverse to the appellee
without cross-petition for review). Thus, for our consideration, the factual applicability of
(a)(3) is not disputed. The issue before us is one of the legal applicability and the
meaning of (a)(3) and (c). Can they be applied when a trustee died?
Alain's Trust contends that K.S.A. 58a-1002(a)(3) is clear: The statute provides a
trustee is liable for the greater of three damages and may be liable for punitive damages.
The three provisions apply without qualification—it does not distinguish between trustees
who are alive or those who are dead. Alain's Trust asks us to read the silence as
authorizing both double and punitive damages against the trustee's estate, which in this
case means Harvey's trust.
Harvey's Estate notes the lack of a reference to the trustee's estate, a point we have
already determined we do not find persuasive. The Estate also argues it cannot be held
responsible for penal damages.
26
We have addressed many of these arguments in the context of the punitive
damages claim. And as we have stated before, we do not find the lack of a reference to
the "trustee's estate" or the silence on the subject to be determinative. What may be
determinative, however, is our ruling on the availability of punitive damages even after a
tortfeasor has died. The parties vigorously argue about whether K.S.A. 58a-1002(a)(3)
provides for remedial or penal damages, citing legislative history and cases in which they
argue this court has found similar provisions penal and others where this court has found
a similar damage provision remedial. Harvey's Estate points us to a very apt quotation
from the United States Supreme Court decision in PacificCare Health Systems, Inc. v.
Book, 538 U.S. 401, 123 S. Ct. 1531, 155 L. Ed. 2d 578 (2003). There, Justice Antonin
Scalia, writing for a unanimous Court, observed: "Our cases have placed different
statutory treble-damages provisions on different points along the spectrum between
purely compensatory and strictly punitive awards." 538 U.S. at 405. The same statement
applies to Kansas cases.
We need not sort through the implications of these various decisions here,
however, if our decision that trust beneficiaries may seek punitive damages after a
trustee's death applies to the double damage provision. As we have discussed, that
decision rests, in part, on the purposes of punitive damages, including the dual penal and
deterrence effects. Harvey's Estate presents us with no argument regarding why the penal
nature of a double damage award would present reasons we would depart from our
analysis of the punitive damage issue.
We have said that double damages—when they are penal in nature—serve the
same purposes as do punitive damages. As with punitive damages, this court has
observed a long history exists, "'dating back over 700 years and going forward to today,
providing for sanctions of double, treble, or quadruple damages to deter and punish.'"
27
(Emphasis added.) Hayes Sight & Sound, Inc., 281 Kan. at 1315-16 (quoting State Farm
Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408, 425, 123 S. Ct. 1513, 155 L. Ed. 2d
585 [2003], and citing BMW of North America, Inc. v. Gore, 517 U.S. 559, 581 and n.33,
116 S. Ct. 1589, 134 L. Ed. 2d 809 [1996]).
Thus, assuming the double damage provision of K.S.A. 58a-1002(a)(3) is penal
rather than remedial, its penal nature would also serve the purpose of deterring
malfeasance. As a result, there is no basis for concluding a different result should apply
to the double damage provision than we have reached for punitive damages, especially
given that our other reasons for reaching that decision, including our statutory
construction, would apply.
We thus hold that the trial court should have allowed Alain's Trust to pursue
double damages under K.S.A. 58a-1002 even though the trustee had died. Thus, the trial
court erred in granting the partial summary judgment.
Alain's Trust argues we can enter judgment and declare the amount of damages
that should be awarded. But Harvey's Estate presented issues to the trial court and the
Court of Appeals that neither court addressed—issues those courts did not need to reach
because of the ruling that Alain's Trust could not recover double damages against
Harvey's Estate. In these issues, Harvey's Estate argued Alain's Trust could not recover
these damages because of K.S.A. 58a-505 and 58a-507. It also argued that questions
remained about what amount would be doubled—the difference between the amount the
judgment exceeded the amount returned to Alain's Trust or some other number. The rules
relating to petitions for review applicable when Alain's Trust sought review provided:
"In civil cases, the Supreme Court may, but need not, consider other issues that were
presented to the Court of Appeals and that the parties have preserved for review."
Supreme Court Rule 8.03(h)(1) (2018 Kan. S. Ct. R. 56); Troutman v. Curtis, 286 Kan.
28
452, 452-53, 185 P.3d 930 (2008). Here, we decline to address the issues not considered
by the lower court. The parties have presented minimal appellate arguments on these
issues, merely seeming to seek to preserve them for further consideration. And we must
remand for further proceedings because of our ruling on the punitive damages issue. Plus,
Harvey's Estate asserts that factual issues remain, and appellate courts do not make
factual determinations. Hence, we remand for consideration of any remaining issues and
the calculation of the damages.
CONCLUSION
Because we determine the district court and the Court of Appeals' panel erred in
concluding Kansas law did not allow consideration of punitive and double damages
because of Harvey's death, we remand to the district court for further consideration of its
two rulings based on this decision.
Judgment of the Court of Appeals affirming the district court is reversed.
Judgment of the district court is reversed, and the case is remanded to the district court
for further proceedings.
BEIER, J., not participating.
MICHAEL J. MALONE, Senior Judge, assigned.1
1
REPORTER'S NOTE: Senior Judge Malone was appointed to hear case Nos. 113,097,
113,282 vice Justice Beier under the authority vested in the Supreme Court by K.S.A. 20-
2616.
29