Real Estate Update By Matthew S. Gough
Barber Emerson LC, Lawrence
Kansas Supreme Court FIRST SECURITY BANK V. BUEHNE COURT OF APPEALS – AFFIRMED MEADE DISTRICT COURT – AFFIRMED NO. 121,765 – DECEMBER 30, 2021 501 P.3D 362; 2021 KAN. LEXIS 132 Statute of Limitations; Waiver Attorneys: Zachary D. Schultz, of Schultz Law Office PA, Garden City, for appellants; James C. Dodge, of Sharp McQueen PA, Liberal, for appellee; and Kersten L. Holzhueter, of Spencer Fane LLP, Kansas City, Missouri, amicus curiae for the Kansas Bankers Association. Facts: First Security Bank (Bank) made a loan to the Buehnes in 2005, secured by a mortgage. The Buehnes never made a payment. Bank demanded payment of the full principal balance and unpaid interest in 2009, but did not file a foreclosure action until 2014. The Buehnes asserted the statute of limitations as an affirmative defense. The note, however, contained a waiver of “any applicable statute of limitations to the full extent permitted by law.” The District Court granted the Bank’s motion for summary judgment. On appeal, the Court of Appeals affirmed. Issue: Whether a note containing a waiver of “any applicable statute of limitations, to the full extent permitted by law,” is enforceable as a matter of public policy. Holding: The Kansas Supreme Court affirmed the decision of the lower courts, noting that the caveat “to the full extent permitted by law” would have permitted the Buehnes to raise any number of common-law-based challenges to Bank’s attempts to enforce the Note (critically, laches and unconscionability), but the Buehnes failed to do so and could show no prejudice by Bank’s delay in enforcing its rights under the note.
Kansas Court of Appeals WHEATLAND ELEC. COOPERATIVE INC. V. CITY OF GARDEN CITY FINNEY DISTRICT COURT – REVERSED AND REMANDED NO. 123,061 – DECEMBER 3, 2021 2021 KAN. APP. LEXIS 58 Public Utilities Attorneys: James M. McVay, of Wheatland Electric Cooperative Inc. and Allen G. Glendenning, Watkins Calcara Chartered, Great Bend, for appellant; Timothy J. Sear, Frank Caro Jr. and Andrew O. Schulte, of Polsinelli PC,Kansas City, Missouri, and Randall D. Grisell, of Doering, Grisell & Cunningham PA, Garden City, for appellee.
Facts: The Kansas Corporation Commission (KCC) assigned to Wheatland Electric Cooperative Inc. (Wheatland) the service area surrounding Garden City, Kansas, in 1977. Pursuant to the Retail Electric Suppliers Act, K.S.A. 66-1,170 et seq. (the Act), the KCC decides what entity is responsible for providing electricity to Kansas consumers located outside any incorporated city. Garden City’s former city manager arranged a handshake deal with Wheatland for Garden City to supply electricity to a proposed ethanol plant located outside city limits, without KCC approval. After a new general manager took over at Wheatland, Wheatland rejected the prior informal agreement. Garden City annexed the properties at issue, which ended Wheatland’s right to service the territory under the Act, but Wheatland filed suit for fair and reasonable compensation – in this case $7 million – pursuant to K.S.A. 66-1,176. Each party submitted motions for summary judgment. The District Court granted Garden City’s motions, and Wheatland appealed. Issues: First, can an oral agreement between a city manager and the general manager of an electric cooperative allowing the city to provide electricity to a territory outside that city be enforceable, even though that agreement has not been approved by the KCC as required by the Act? Second, can the equitable doctrines of laches, estoppel, and waiver render such a contract valid, even though that contract is void according to the statutes? Third, may a supplier of electricity receive compensation under the Act after a city annexes part of that supplier’s territory, even if the supplier had not been serving customers in the area because of an informal agreement between the parties? Holdings: The oral agreement is not enforceable. Equitable doctrines cannot render such an agreement valid. Heartland was entitled to compensation. The Court reversed the District Court’s grant of summary judgment to Garden City, reversed the denial of summary judgment to Wheatland, and remanded the case to the District Court with directions to enter summary judgment to Wheatland over Garden City. IN RE WALMART STORES INC. KANSAS BOARD OF TAX APPEALS – AFFIRMED NO. 122,162 – OCTOBER 8, 2021 500 P.3D 553; 2021 KAN. APP. LEXIS 49; 2021 WL 4699199 Tax Appeal Attorneys: Ryan L. Carpenter, assistant county counselor, for appellant Board of Johnson County Commissioners; Linda A. Terrill, of Property Tax Law Group LLC, Overland Park, for appellees Walmart Stores Inc. et al. Facts: This case represents a continuation of an ongoing dispute in the appraisal industry over the appropriate methodology to use in valuing real property associated with
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