Articles Posted in Kansas Supreme Court

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Defendant owned a first-priority security interest in LLC. The Cass Trust owned LLC membership interest, and the Cass Trust and Cohen Trust owned common stock shares in Corporation. The Cohen and Cass trustees later made an agreement with Company to sell the membership interests in LLC, including Defendant's first priority security interest in LLC, and Corporation's assets. A dispute arose over whether Defendant was entitled to know details of the sale agreements. Before the sale agreements were to close, Defendant sued the trusts, LLC, and Corporation in Missouri, alleging that the trustees engaged in self-dealing and financially manipulated Corporation and LLC to dilute Defendant's ownership interest. After learning of the lawsuit, Company refused to close the transaction without additional substantive requirements. After closing, the Cohen and Cass trustees filed this lawsuit against Defendant, alleging that Defendant tortiously interfered with their existing contracts and prospective business relationships by filing the lawsuit then faxing to Company a suit copy. The trial court dismissed the claims. The court of appeals affirmed, finding that Defendant could not interfere with a contractual relation by giving Company "truthful information." The Supreme Court reversed because at the time the instant suit was filed, the court of appeals was not in a position to decide the truth of the claims set out in the Missouri action. View "Cohen v. Battaglia" on Justia Law

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After allowing discovery on the issue of whether Kansas courts could exercise personal jurisdiction over some of the defendants in this case, the district court granted defendant Tel-Instrument Electronics Corp.'s (TIC) motion to dismiss for lack of personal jurisdiction. At issue on interlocutory appeal was the correct standard for judging a motion to dismiss for lack of personal jurisdiction when that motion is decided after discovery but without an evidentiary hearing. The Supreme Court reversed, holding (1) plaintiff Aeroflex Wichita, as the party with the ultimate burden of establishing jurisdiction and as the party responding to a motion to dismiss presented to the court without an evidentiary hearing, need only establish a prima facie basis for jurisdiction; (2) in determining if that prima facie burden has been met, a district court should view factual disputes in the light most favorable to the nonmoving party, and an appellate court applies the same standard de novo; and (3) in this case, the district court erred erred by weighing the evidence rather than granting all favorable inferences to Aeroflex, and Aeroflex presented a prima facie case of jurisdiction based on a conspiracy between TIC and its codefendants, over whom the court had jurisdiction. View "Aeroflex Wichita, Inc. v. Filardo" on Justia Law

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Lester Dean was the sole and managing member of Glacier Development Company, LLC, which owned property that the Kansas DOT (KDOT) took for highway purposes. KDOT's eminent domain petition did not individually name Dean as a defendant or allege that he personally owned any of the property, but certain attorneys filed an entry of appearance declaring the defendants to be Glacier and Dean. After court-appointed appraisers awarded Glacier $2.19 million for the property, a jury verdict concluded that the property's value was $800,000. The district court ordered that judgment was awarded "against the Defendants." Dean filed a motion requesting his name be removed from the judgment because he did not own the subject property in his personal capacity. The district court denied the motion. At issue on appeal was whether the district court had the authority to adjudge Dean personally liable to KDOT for the amount of the appraisers' award paid out to Glacier that exceeded the compensation finally awarded on appeal. The Supreme Court found that it did not and reversed, holding that the district court did not have jurisdiction to make the findings necessary to hold Dean personally liable for an LLC debt.

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The case involved a manufacturer of conveyor pizza ovens, Wolfe Electric, its former employee, Terry Duckworth, and the competing business Duckworth helped form, Global Cooking Systems. Wolfe Electric brought suit against Duckworth and Global Cooking for misappropriation of secrets under the Kansas Uniform Trade Secrets Act. Wolfe Electric also separately alleged Duckworth breached his fiduciary duty and his employment contract while Global allegedly tortiously interfered with Duckworth's employment contract. A jury found for Wolfe Electric on all causes of action and awarded damages in a variety of categories. Both parties appealed. The Supreme Court reversed, holding that multiple erroneous jury instructions and a verdict that failed to specify which of the innumerable acts alleged actually caused which of the particular damages awarded required reversal. Remanded.

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Progressive Products, Inc. (PPI) filed a four-count complaint in district court against Defendants, former employees of PPI, on various theories alleging Defendants misappropriated protected trade secrets. The trade secrets at issue were a formula, computerized customer lists, and a computerized pricing program. The district court entered judgment for PPI, holding that Defendants misappropriated protected trade secrets possessed by PPI. The court then imposed a royalty injunction on Defendants. The court of appeals affirmed in part and reversed in part, holding (1) PPI owned protected trade secrets relating to the formula, (2) the price lists were not trade secrets as a matter of law, (3) no evidence supported a finding the customer lists were a trade secret, and (4) the royalty injunction was not supported by the district court's factual findings and did not comport with the available statutory remedies. The Supreme Court affirmed the court of appeals' judgment regarding the protected trade secrets but reversed the court of appeals' opinion reversing the remedy the district court ordered, holding that because the district court's findings were incomplete, they did not permit meaningful appellate review. Remanded.

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At issue here was a reserved question in Koplin v. Rosel Well Perforators of whether Kansas would recognize the tort of intentional interference with a prospective civil action by spoliation of evidence if a defendant or potential defendant in an underlying case destroyed evidence to their own advantage. Plaintiff Superior Boiler Works brought suit against Defendants, a company and two individuals, for intentional and negligent interference with actual and prospective actions by destruction of evidence. Defendants had destroyed company records after Superior sought information for use in asbestos-related litigation regarding asbestos content in materials Superior supplied to Defendants. The district court granted summary judgment to Defendants, finding (1) Defendants had no duty to preserve the records, and (2) the reserved question in Koplin did not apply to spoliation claims between those who are potential codefendants in the underlying action. The Supreme Court affirmed, holding (1) simply being in the chain of distribution of a product or in the stream of commerce, without more, is not a special relationship that gives rise to a duty to preserve evidence, and (2) an independent tort of spoliation will not be recognized in Kansas for claims by a defendant against codefendants or potential codefendants.