Balmer Fund, Inc., The et al v. Harper, Kansas, City of
Filing
35
MEMORANDUM AND ORDER granting in part and denying in part 20 Motion for Summary Judgment; denying 29 Motion to Strike. Signed by District Judge Eric F. Melgren on 2/16/2018. (cm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
THE BALMER FUND, INC. A KANSAS
NOT-FOR-PROFIT CORPORATION, AND,
ROSALEA HOSTETLER,
Plaintiffs,
vs.
Case No. 17-1046-EFM
CITY OF HARPER, KANSAS,
Defendant.
MEMORANDUM AND ORDER
This case involves a dispute regarding the demolition of a hotel and the personal property
contained within the hotel. Plaintiffs, The Balmer Fund, Inc. and Rosalea Hostetler, allege that
Defendant, the City of Harper, Kansas, violated their due process rights, converted their
property, committed a trespass upon their property, intentionally inflicted emotional distress on
Hostetler, negligently inflicted emotional distress on Hostetler, intentionally interfered with
Plaintiffs’ prospective business expectancy and advantage, and acted negligently when it
demolished Plaintiffs’ hotel and personal property contained within the hotel.
This matter comes before the Court on Defendant’s motion for summary judgment and/or
motion to dismiss (Doc. 20) and Plaintiffs’ motion to strike (Doc. 29). For the reasons stated
below, Defendant’s motion is granted in part and denied in part, and Plaintiffs’ motion is denied.
I.
Factual and Procedural Background1
In 1999, Rosalea Hostetler quitclaimed a hotel located at 121 West Main Street, Harper,
Kansas, to The Balmer Fund, Inc., while reserving a life estate in the property. In 2013,
Plaintiffs hired Engineering Consultants, P.A., to evaluate the structural integrity of the hotel.
Plaintiffs’ consultants confirmed that the hotel was deteriorating, found that saving the hotel
would require significant money and effort, recommended various repairs, and recommended
that the public not be allowed in the building or along the sidewalk near one corner of the
building until repairs are completed. In 2014, the City hired D&B Engineering, LLC, to inspect
the property, and on May 22, 2014, D&B performed an inspection of the exterior of the hotel.
D&B determined that none of the repair work recommended in the 2013 evaluation had been
started, and that protective measures for the public were needed right away.
On June 2, 2014, a special City Council meeting was held to discuss the hotel. Plaintiffs
attended the meeting. The City Council passed a resolution declaring the hotel an immediate
hazard, and the City immediately padlocked the hotel and restricted access to it. On July 14,
2014, the City Council began advertising for bids to demolish the hotel, and on August 25, 2014,
the City Council began opening bids for the hotel’s demolition.
Defendant sent Plaintiffs a letter on August 27, 2014, requesting that Plaintiffs provide
proof of their financial ability to pay for repairs to make the hotel safe. Plaintiffs did not provide
a statement documenting their ability to pay for the necessary repairs by the City Council’s
meeting held on September 8, 2014, and the City Council voted to accept a bid to demolish the
hotel for $148,000.
1
The Court has set forth the uncontroverted facts in the light most favorable to Plaintiffs.
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The next day, Plaintiffs filed a Petition in the Thirtieth Judicial District, District Court,
Harper County, Kansas, requesting an order temporarily restraining Defendant from taking steps
to demolish the hotel. Approximately one week later, the state court issued an Agreed Journal
Entry. The order included the following excerpts:
1. Plaintiffs represent that they have secured a plan from Richard B. Kraybill . . .
to make the building and premises at 121 West Main Street, . . . safe . . .
2. Plaintiffs shall have until January 15, 2015 to secure $110,000 cash to pay for
the improvements and repairs needed to complete the Kraybill plan, . . .
3. Should Plaintiffs secure and document possession of the $110,000 cash on or
before January 15, 2015 then Plaintiffs will have until July 1, 2015 to complete
the Kraybill plan . . . .
4. Should Plaintiffs fail to secure and document possession of the $110,000 cash
by January 15, 2015 or having successfully secured the funds fail to complete and
document completion of the Kraybill plan by July 1, 2015 then the Defendant
may proceed with demolition of the building at 121 West Main.
....
7. Should the Plaintiffs successfully complete the Kraybill plan then this Court
case will be dismissed, the planned demolition will not take place and possession
to the building and property will be relinquished to Plaintiffs, otherwise
Defendants shall remain in the exclusive possession of the building and premises
at 121 West Main, Harper, Kansas.
Plaintiffs did not provide notice that they had secured $110,000 by January 15, 2015, and
on January 20, 2015, the City signed a demolition contract and notice to proceed with the
demolition. The City Council scheduled the demolition work to begin on February 26, 2015.
On March 5, 2015, the City Council convened a special meeting at Plaintiffs’ request. At
the meeting Plaintiffs revealed that they had secured $21,000 for repairs, but the City Council
did not vote to breach the demolition contract. The City Council asked Plaintiffs if they had
plans to remove property from the hotel before demolition, and Plaintiffs responded that there
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were no plans. The parties disagree as to when demolition actually began, but Plaintiffs allege
that the hotel and all of its contents were demolished on March 6, 2015.
On February 24, 2017, Plaintiffs filed this action alleging violations of Plaintiffs’ due
process rights, conversion, trespass, intentional infliction of emotional distress, negligent
infliction of emotional distress, intentional interference with prospective business advantage, and
negligence.
II.
A.
Legal Standards
Motion for Summary Judgment
Summary judgment is proper if the moving party demonstrates that there is no genuine
issue as to any material fact, and the movant is entitled to judgment as a matter of law.2 A fact is
“material” when it is essential to the claim, and issues of fact are “genuine” if the proffered
evidence permits a reasonable jury to decide the issue in either party’s favor.3 The movant bears
the initial burden of proof and must show the lack of evidence on an essential element of the
claim.4 If the movant carries its initial burden, the nonmovant may not simply rest on its
pleading, but must instead “set forth specific facts” that would be admissible in evidence in the
event of trial from which a rational trier of fact could find for the nonmovant.5 These facts must
be clearly identified through affidavits, deposition transcripts, or incorporated exhibits—
2
Fed. R. Civ. P. 56(a).
3
Haynes v. Level 3 Commc’ns, LLC, 456 F.3d 1215, 1219 (10th Cir. 2006).
4
Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2003) (citation omitted).
5
Id. (citing Fed. R. Civ. P. 56(e)).
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conclusory allegations alone cannot survive a motion for summary judgment.6 The Court views
all evidence and reasonable inferences in the light most favorable to the non-moving party.7
B.
Motion to Dismiss
Under Rule 12(b)(6), Defendant may move for dismissal of any claim where Plaintiffs
have failed to state a claim upon which relief can be granted. Upon such motion, the Court must
decide “whether the compliant contains ‘enough facts to state a claim to relief that is plausible on
its face.’ ”8 “[T]he mere metaphysical possibility that some plaintiff could prove some set of
facts in support of the pleaded claims is insufficient; the complaint must give the court reason to
believe that this plaintiff has a reasonable likelihood of mustering factual support for these
claims.”9 The Court does not “weigh potential evidence that the parties might present at trial,”
but “assess[es] whether the plaintiff’s complaint alone is legally sufficient to state a claim for
which relief may be granted.”10 In determining whether a claim is facially plausible, the Court
must draw on its judicial experience and common sense.11
All well-pleaded facts in the
complaint are assumed to be true and are construed in the light most favorable to Plaintiffs.12
Allegations that merely state legal conclusions, however, need not be accepted as true.13
6
Mitchell v. City of Moore, 218 F.3d 1190, 1197 (10th Cir. 2000) (citation omitted).
7
LifeWise Master Funding v. Telebank, 374 F.3d 917, 927 (10th Cir. 2004).
8
Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). See also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
9
Ridge at Red Hawk, 493 F.3d at 1177 (emphases in original).
10
Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003).
11
Iqbal, 556 U.S. at 679.
12
Albers v. Bd. of Cty. Comm’rs of Jefferson Cty., 771 F.3d 697, 700 (10th Cir. 2014).
13
See Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991).
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III.
Analysis
Defendant argues that Plaintiffs’ claims are barred by the Rooker-Feldman doctrine, res
judicata, accord and satisfaction, the statute of limitations, and equitable estoppel, and that
Plaintiffs’ damages should be limited as a matter of law. Further, Defendant argues that even if
Plaintiffs’ action survives these doctrines, several of Plaintiffs’ claims fail to state a claim for
which relief can be granted. Plaintiffs respond by arguing that none of the doctrines identified
by Defendant bar their claims. Instead of substantively responding to Defendant’s arguments
that several of their claims fail to state a claim, however, Plaintiffs move to strike this portion of
Defendant’s motion. The Court will begin its analysis by addressing the doctrines Defendant
argues bar Plaintiffs’ claims, as well as its argument in favor of limiting damages. The Court
will then address Defendant’s assertion that several claims in the Complaint fail to state a claim
for which relief can be granted, and Plaintiffs’ motion to strike those arguments.
A.
Motion for Summary Judgment
1.
The Rooker-Feldman doctrine
“Federal courts are courts of limited jurisdiction,” and “possess only that power
authorized by Constitution and statute.”14 The Rooker-Feldman doctrine precludes lower courts
from “exercising appellate jurisdiction over final state-court judgments.”15 Application of the
doctrine extends only to “cases brought by state-court losers complaining of injuries caused by
state-court judgments rendered before the district court proceedings commenced and inviting
14
Kline v. Biles, 861 F.3d 1177, 1180 (10th Cir. 2017) (quoting Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994)).
15
Id. (quoting Lance v. Dennis, 546 U.S. 459, 463 (2006)).
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district court review and rejection of those judgments.”16 In addition to claims actually decided
by a state court, the doctrine also applies to “claims inextricably intertwined with a prior statecourt judgment.”17
“ ‘[T]he type of judicial action barred by Rooker-Feldman consists of a review of the
proceedings already conducted by the [state] tribunal to determine whether it reached its result in
accordance with law.’ ”18 The doctrine prohibits a “federal action that tries to modify or set aside
a state-court judgment because the state proceedings should not have led to that judgment,”19
and only applies “if ‘an element of the claim is that [a prior state-court] judgment was
wrongful.’ ”20 Accordingly, for the doctrine to apply, the injury alleged in the federal suit must
have been caused by the state-court judgment.21 “Seeking relief that is inconsistent with the
state-court judgment is a different matter.”22 Indeed, attempts to relitigate an issue previously
determined by a state court should be analyzed under principles of issue or claim preclusion.23
The Tenth Circuit has previously addressed a case involving similar facts as those
presented here, and held that the Rooker-Feldman doctrine did not deprive the district court of
16
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005)).
17
Kline, 861 F.3d at 1180 (10th Cir. 2017) (quoting Tal v. Hogan, 453 F.3d 1244, 1256 (10th Cir. 2006)).
18
Farris v. Burton, 686 F. App’x 590, 592 (10th Cir. 2017) (quoting PJ ex. rel. Jensen v. Wagner, 603 F.3d
1182, 1193 (10th Cir. 2010)) (second alteration in original).
19
Mayotte v. U.S. Bank Nat’l Assn., __ F.3d __, 2018 WL 504312, at *4 (10th Cir. 2018) (citing Exxon
Mobil, 544 U.S. at 291) (first emphasis in original, second emphasis added).
20
Id. (quoting Campbell v. City of Spencer, 682 F.3d 1278, 1284 (10th Cir. 2012)) (alteration in original).
21
Id.
22
Id. (emphasis in original).
23
Id.
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jurisdiction to hear the plaintiff’s claims.24 In Bolden, the plaintiff had purchased two houses at a
sheriff’s sale that, unbeknownst to him, were set to be demolished because they were unfit for
human habitation and beyond repair. When Bolden learned of the planned demolition he sought
injunctions in state court to prevent the demolition of the properties.25 The state court denied his
requests for injunctions, and ordered that the city could proceed with the planned demolitions.
Bolden later filed suit in federal court pursuing various actions against the city, and, under the
Rooker-Feldman doctrine, the district court dismissed Bolden’s claims that arose out of the city’s
demolition of his properties. The Tenth Circuit reversed.
In its decision, the Tenth Circuit reasoned that “Bolden’s federal suit did not seek to
overturn the state-court judgment,” and that his claims did not rest “on allegations that the statecourt proceedings or judgment violated federal law, or that the judgment itself inflicted an
injury.”26 Further, the state-court judgment did not cause Bolden’s injury because “all the statecourt judgment did was permit the City to demolish Mr. Bolden’s buildings—it did not require
their demolition.”27 Thus, even if a judgment in Bolden’s favor would be inconsistent with the
state-court judgment or deny a legal conclusion of the state court, because Bolden did not seek to
overturn the state-court judgment, the Tenth Circuit found Rooker-Feldman inapplicable.28
Defendant’s attempt to distinguish Bolden mischaracterizes its holding by suggesting that
the Tenth Circuit’s decision relied on the term “inextricably intertwined,” which Defendant
24
See Bolden v. City of Topeka, 441 F.3d 1129 (10th Cir. 2006).
25
Bolden filed two separate suits and the state court consolidated the actions.
26
Id. at 1138.
27
Id. at 1145 (emphases in original).
28
See id.
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asserts “had no real meaning at the time the Bolden decision was reached.” The Tenth Circuit,
however, did not rest its holding on any definition, or lack thereof, of the term “inextricably
intertwined.” Rather, it found that Bolden did not ask the district court to overturn the state-court
judgment, allege that the state-court proceedings or judgment violated federal law, or allege that
the judgment itself inflicted an injury.29
Like the defendant in Bolden, Defendant argues that to the extent Plaintiffs seek relief
from this Court for the demolition of the hotel, this Court lacks jurisdiction under the RookerFeldman doctrine. And, like the plaintiff in Bolden, Plaintiffs do not seek to undo the state-court
judgment issued here, allege that the state-court proceedings violated federal law, or allege that
the state-court judgment caused the injuries alleged here.
The facts of this case are not
materially different than those before the Court in Bolden. Accordingly, following the Tenth
Circuit’s decision in Bolden, the Court rejects Defendant’s argument that the Rooker-Feldman
doctrine deprives this Court of jurisdiction to hear Plaintiffs’ claims.
2.
Res judicata
Federal courts must afford a “state-court judgment the same preclusive effect as would be
given that judgment under the law of the State in which the judgment was rendered.”30 Because
the City seeks to impute preclusive effect to a Kansas state court’s decision, Kansas preclusion
principles govern the Court’s analysis. Under Kansas law, the doctrine of res judicata has two
aspects—claim preclusion and issue preclusion.
Claim preclusion prevents parties from
relitigating a cause of action that has been finally adjudicated, whereas issue preclusion prevents
29
Id. at 1138.
30
Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984).
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parties from relitigating issues conclusively determined in a prior action.31 Defendant argues that
claim preclusion applies here.
“Kansas law is explicit and harsh in invoking claim preclusion to bar splitting a cause of
action.”32 Claim preclusion bars a party from pursing claims in a second lawsuit and has four
elements: “(a) the same claim; (b) the same parties; (c) claims that were or could have been
raised; and (d) a final judgment on the merits.”33 “‘[A] judgment which is not final and does not
adjudicate the rights in litigation in a conclusive and definitive manner cannot’ ” support the
application of claim preclusion to bar a subsequent action.34 Plaintiffs challenge the first and
fourth elements. Because the Court is without sufficient information to determine whether the
Agreed Journal Entry constitutes a final judgment, it need not address the first element.
Relying on a Kansas Supreme Court decision,35 Defendant argues that settlement
agreements approved and journalized by a state court constitute final judgments on the merits.
But Honeycutt does not command the result Defendant desires. Rather, it states that “[a]
voluntary dismissal of a case with prejudice, based on a settlement agreement that is approved by
the court and journalized, is a final judgment on the merits.”36 Thus, Honeycutt simply informs
the Court that an agreement between the parties that is encompassed in a court order can serve as
a final judgment on the merits—it does not require that every agreement between parties and
31
Jackson Trak Grp., Inc. v. Mid States Port Auth., 242 Kan. 683, 751 P.2d 122, 128 (1988).
32
Carter v. City of Emporia, 815 F.2d 617, 622 (10th Cir. 1987).
33
Cain v. Jacox, 302 Kan. 431, 354 P.3d 1196, 1199 (2015) (quoting In re Tax Appeal of Fleet, 293 Kan.
768, 272 P.3d 584, Syl. ¶ 2 (2012)).
34
Kester v. Shawnee Mission U.S.D. No. 512, 252 F. Supp. 2d 1180, 1186 (D. Kan. 2003) (quoting Fed.
Land Bank of Wichita v. Vann, 20 Kan. App. 2d 635, 890 P.2d 1242, 1245 (1995)).
35
Honeycutt v. City of Wichita, 251 Kan. 451, 836 P.2d 1128 (1992).
36
Id. at 1133 (citation omitted).
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journalized by the Court constitutes a final judgment. Here, unlike Honeycutt, the Agreed
Journal Entry did not voluntarily dismiss the case with prejudice. Rather, it plainly contemplated
future dismissal by stating that if “Plaintiffs successfully complete the Kraybill plan then this
Court case will be dismissed.”
Defendant has not presented any evidence to suggest that
Plaintiffs’ claims were dismissed or that the state-court case has terminated.
Plaintiffs allege that the state-court case has not terminated.37
Plaintiffs quote the
following language from the Tenth Circuit to explain when state-court proceedings have ended:
“state proceedings have not ended when (1) the state court issues only an interlocutory order (as
opposed to a judgment) and (2) the state-court litigation is still ongoing when a party challenges
that interlocutory order in federal court.”38
Plaintiffs argue that the Journal Entry is an
interlocutory order, and that the state-court case never terminated.39 Defendant responds by
suggesting that the state-court case ended because it reached the point where neither party sought
further action. Defendant, however, has provided no evidence to support its argument.
The parties disagree as to the status of the state-court action, and neither party has offered
evidence regarding the status of the case. Accordingly, there is a factual dispute as to the finality
of the state-court proceedings, and summary judgment is not proper.
37
Plaintiffs analyze whether the Journal Entry is a “final judgment on the merits” in their response
regarding the Rooker-Feldman argument—they do not provide any analysis of this requirement in response to the
res judicata argument, but simply state that the journal entry is not a final judgment. Accordingly, the Court’s
references to Plaintiffs arguments are to those arguments asserted in the context of Rooker-Feldman.
38
Doc. 30, p. 5 (quoting Brown v. Chappelle, 659 F. App’x 458, 459 n.1 (10th Cir. 2016)).
39
Plaintiffs also argue that no “final judgment” exists because K.S.A. §§ 60-901 et seq. required the state
court to conduct an evidentiary hearing before entering a final judgment. Plaintiffs do not cite any specific language
requiring this result. A review of the statutes at K.S.A. §§ 60-901 et seq. reveals that the language closest to
supporting this claim states that “[n]o temporary injunction shall be granted until after reasonable notice to the party
to be enjoined and an opportunity to be heard.” K.S.A. § 60-905(a). Here, after Plaintiffs filed their Petition, the
parties agreed to specific terms to govern their dispute going forward and the Court issued an order adopting those
terms. Defendant was not denied an opportunity to be heard. Accordingly, the Court rejects Plaintiffs’ argument
that the Journal Entry cannot be a “final judgment” simply because no evidentiary hearing occurred.
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3.
Accord and satisfaction
Under Kansas law, “to constitute an accord and satisfaction there must be an offer in full
satisfaction of the obligation accompanied by such acts and declarations or under such
circumstances that the party to whom the offer is made is bound to understand that if he accepts
it, it is in full satisfaction of and discharges the original obligation.”40 Defendant bears the
burden of proof on its accord and satisfaction defense.41
Defendant’s motion barely even attempts to demonstrate how the doctrine of accord and
satisfaction applies to the facts of this case—its analysis consists of two conclusory sentences.
Its reply brief improperly focuses on Plaintiffs’ failure to deny the existence of the elements of
accord and satisfaction identified in a Tenth Circuit case. First, the Tenth Circuit case cited by
Defendant applied Utah law—not Kansas law—and is not controlling here.42 Second, Defendant
first argued that the elements of accord and satisfaction are satisfied in its reply—it is not
Plaintiffs’ responsibility to anticipate and respond to arguments that Defendant first asserts in its
reply. Third, Defendant has not identified uncontroverted facts that satisfy the requirements for
accord and satisfaction. Defendant has failed to demonstrate how accord and satisfaction applies
here, and has failed to meet its burden to show that the doctrine bars Plaintiffs’ claims.
4.
Statute of limitations
Defendant argues that although Plaintiffs assert claims based on actions taken in March
2015, the applicable two-year statute of limitations43 for Plaintiffs’ claims really began to run
40
Sanders v. Birmingham, 214 Kan. 769, 522 P.2d 959, 964-65 (1974).
41
Id. at 965.
42
See Nev. Half Moon Mining Co. v. Combined Metals Reduction Co., 176 F.2d 73 (10th Cir. 1949).
43
Plaintiffs do not contest that the applicable statute of limitations is two years.
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either in June 2014 (when Defendant originally decided to demolish the hotel), in September
2014 (when Defendant accepted a bid for demolition), or on January 20, 2015 (when Defendant
signed a notice to proceed with the demolition). It argues that “[t]he nut of Plaintiff’s [sic]
complaint is that they have been deprived of their property,” and that this occurred in June 2014,
when Defendant took control of the building by padlocking it and excluding Plaintiffs, and that it
was reasonably ascertainable that the hotel would be destroyed in June 2014, September 2014,
or, at the latest, January 2015.
Plaintiffs’ response consists of three arguments: (1) “[t]he injury in this case was the
destruction of the hotel and the loss of thousands of historic artifacts, memorabilia, museum
pieces and personal items belonging to Plaintiffs,” (2) Defendant did not finally decide to
demolish the hotel and personal property until the City Council meeting on March 5, 2015, and
(3) K.S.A. § 60-519 tolls the running of the statute of limitations from September 16, 2004, to
July 1, 2015.44
a.
State law claims
K.S.A. § 60-513(b) instructs that a cause of action for trespass upon real property, for
taking, detaining, or injuring personal property, and for an injury to the rights of another (not
arising on contract or otherwise specifically enumerated) “shall not be deemed to have accrued
until the act giving rise to the cause of action first causes substantial injury, or, if the fact of
injury is not reasonably ascertainable until some time after the initial act, then . . . [when] the fact
of injury becomes reasonably ascertainable to the injured party.”
44
Plaintiffs’ argument that the entry of the Agreed Journal Entry effectively imposed a stay on the running
of the statute of limitations, ignores the plain and unambiguous language allowing Defendant to proceed with
demolition if Plaintiffs failed to secure $110,000 for repairs by January 15, 2015. Plaintiffs undisputedly failed to
do so. Assuming, without deciding, that K.S.A. § 60-519 operates as argued, it would have at most stayed the
running of the statute of limitations to January 15, 2015.
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“In construing the statute of limitations for tort actions,” the Kansas Supreme Court has
consistently “interpreted the phrase ‘substantial injury’ to mean ‘actionable injury.’ ”45
Consistent with this phrase, Kansas courts have held that when determining when an action
accrues, the “true test . . . is that point in time at which plaintiff could have first filed and
prosecuted an action to a successful conclusion.”46 “[A] cause of action does not accrue until all
of the essential elements are satisfied.”47 Thus, where a defendant’s actions allegedly cause an
injury, those actions do “not become actionable until the plaintiff sustains damages as a result.”48
Defendant has failed to identify any caselaw supporting its argument that the decision to
commit a tortious act, as opposed to the actual commission of the tortious act, starts the running
of the statute of limitations. Likewise, Defendant has made no attempt to show that all of the
elements of any of Plaintiffs claims had been established prior to the actual demolition of the
hotel and its contents, such that Plaintiffs could have pursued their claims prior to March 2015.
Although Plaintiffs could and did file an action seeking to enjoin Defendant’s actions, they could
not have filed an action for damages resulting from the demolition of their property because the
demolition had not yet occurred.49
45
LCL, LLC v. Falen, 53 Kan. App. 2d 651, 390 P.3d 571, 577 (2017) (citations omitted).
46
Id.
47
Id.
48
Id.
49
Further, with regard to Plaintiffs’ personal property, Defendant has not presented evidence suggesting
that it decided to destroy the personal property before March 5, 2015. Rather, Defendant alleges that the City
Council asked Plaintiffs if they had plans to remove personal property from the hotel before demolition—this can
reasonably be interpreted to suggest that Defendant had not decided to demolish the property inside the hotel before
March 5, 2015. See Def.’s Ex. O, Meeting Minutes (Mar. 5, 2015) (discussing whether there were plans to remove
any further personal items from the structure before demolition).
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b.
Federal claims
Although Kansas law governs the length of the statute of limitations for Plaintiffs § 1983
action, federal law governs when the statute of limitations begins to run.50 Under federal law,
“[a] civil rights action accrues when the plaintiff knows or has reason to know of the injury
which is the basis of the action.”51 Since the injury alleged here is a violation of Plaintiffs’
constitutional rights, such claims accrued when Plaintiffs knew or should have known that their
rights were violated.52 Here, Plaintiffs’ allege that their due process rights were violated when
Defendant demolished their hotel and personal property after the March 5, 2015, meeting.
Citing Gragg v. McKune,53 Defendant argues that “[a] substantive violation of due
process is complete when an alleged wrongful action is taken,” and that “the alleged wrongful
action that the Defendant took, deciding to demolish the Hotel, and taking possession of the hotel
to the exclusion of Plaintiffs[,] occurred more than two years before the filing of this action.”54
This argument ignores Plaintiffs’ claims for damages and attempts to recharacterize Plaintiffs’
claims. Plaintiffs do not argue that Defendant did not have authority to padlock the hotel in June
2014, or to keep the public and Plaintiffs out of the hotel. Rather, Plaintiffs argue that Defendant
violated their rights when it had the hotel and its contents demolished in March 2015, instead of
allowing Plaintiffs to repair the hotel.
50
Romero v. Lander, 461 F. App’x 661, 666 (10th Cir. 2012).
51
Smith v. City of Enid, 149 F.3d 1151, 1154 (10th Cir. 1998).
52
Id.
53
28 Kan. App. 2d 256, 16 P.3d 311 (2000)
54
Doc. 21, p. 13.
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Plaintiffs’ Complaint seeks damages for the destruction of the hotel and Plaintiffs’
personal property contained therein. It is undisputed that the demolition of the hotel had not
begun as of March 5, 2015.55 Plaintiffs filed this case on February 24, 2017. Defendant has
failed to demonstrate that the statute of limitations bars Plaintiffs’ claims.
5.
Equitable estoppel
“Equitable estoppel is the effect of the voluntary conduct of a person whereby he is
precluded, both at law and in equity, from asserting rights against another person relying on such
conduct.”56 A party asserting equitable estoppel has the burden of establishing (1) “that another
party, by acts, representations, admissions, or silence when that other party had a duty to speak,
induced the party asserting estoppel to believe certain facts existed,” (2) that the party asserting
estoppel “reasonably relied and acted upon such belief,” and (3) that the party asserting estoppel
would “now be prejudiced if the other party were permitted to deny the existence of such
facts.”57 If the facts “are ambiguous or subject to more than one construction” the Court will not
invoke the doctrine of equitable estoppel.58 Whether to apply equitable estoppel “rests within the
sound discretion of the district court,” and this discretion is abused only “when no reasonable
person would take the view adopted by the district court.”59
55
Defendant’s statement of facts alleges that at the March 5, 2015, special meeting the City Council “asked
the Plaintiffs if they had plans to remove property from the hotel before demolition.” Doc. 21, p. 5 (emphasis
added).
56
Steckline Commncs., Inc. v. Journal Broad. Grp. of Kan., Inc., 305 Kan. 761, 388 P.3d 84, 91 (2017)
(quoting United Am. State Bank & Trust Co. v. Wild W. Chrysler Plymouth, Inc., 221 Kan. 523, 561 P.2d 792, 795
(1977)).
57
Id. at 91-92 (quoting Owen Lumber Co. v. Chartrand, 283 Kan. 911, 157 P.3d 1109, 1120 (2007)).
58
Id. at 92 (quoting Rockers v. Kan. Turnpike Auth., 268 Kan. 110, 991 P.2d 889, 894 (1999)).
59
Shaffer v. City of Topeka, 30 Kan. App. 2d 1232, 57 P.3d 35, 38 (2002) (citations omitted).
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Defendant argues that Plaintiffs voluntarily agreed that if they did not raise the funds
necessary to repair the hotel by January 15, 2015, that Plaintiffs would not oppose the demolition
of the hotel. Reasonably relying on these actions and representations, Defendant argues, it
ceased efforts to demolish the hotel and agreed to allow Plaintiffs additional time to secure
financing for repairs.
Defendant’s argument is conclusory and unsupported, and although Plaintiffs’ opposition
also lacks substantive legal analysis, it is Defendant’s burden to demonstrate that it is entitled to
summary judgment, and Defendant has failed to do so. Defendant has not demonstrated how the
elements of equitable estoppel are satisfied. For example, Defendant wholly fails to demonstrate
how it has been or would be prejudiced by Plaintiffs’ actions. Defendant appears to argue that
prejudice exists because Defendant ceased demolition efforts. Defendant, however, does not
show how temporarily ceasing demolition efforts caused it prejudice, and it has not identified
any other alleged prejudice. Instead, Defendant focuses on the fact that Plaintiffs have taken an
inconsistent position—even so, however, Defendant must still show prejudice as a result.
Defendant has failed to show that equitable estoppel bars Plaintiffs’ claims as a matter of law.
6.
Real property damages
Defendant argues that “this Court should rule as a matter of law that the damages for
Plaintiffs’ property claims are limited to the difference in the before and after value of the
property.”60 Defendant’s argument involves the resolution of factual matters that have not yet
been developed in the record. For example, Defendant claims that the Hotel had “next to no
commercial value,” but has not established this as an uncontested fact. Further, Defendant’s
60
Doc. 21, p. 20. Plaintiff has not substantively responded to this argument, but instead filed a motion to
strike this argument.
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brief, as well as the only case cited in support of its argument, recognizes that the calculation of
damages sought by Defendant is only one method of calculating damages.
Indeed, other
measures of damages may be appropriate, depending upon the circumstances.61 The factual
record has not yet been developed to allow the Court to rule as a matter of law as to what
measure of damages is proper under the circumstances presented here. Accordingly, the Court
finds that Defendant has failed to meet its burden to establish that it is entitled to judgment as a
matter of law on this issue.
B.
Motion to Dismiss
Defendant argues that Plaintiffs failed to adequately plead a cause of action for
intentional infliction of emotional distress and for due process violations, and that these claims
should be dismissed for failing to state a claim for which relief can be granted or because the
uncontroverted facts entitle Defendant to summary judgment.
Defendant also argues that
Plaintiff cannot pursue both a claim for both intentional and negligent infliction of emotional
distress, and that Plaintiffs’ negligent infliction of emotional distress claim should be dismissed.
Plaintiffs did not substantively respond to these arguments, but instead, filed a motion to strike
Defendant’s arguments. The Court will first analyze the merits of Plaintiffs’ motion to strike,
and if appropriate, will proceed to Defendant’s arguments.
1.
Plaintiffs’ motion to strike
Plaintiffs take a perplexing position in their motion to strike. Defendant filed a motion,
titled as a motion for summary judgment, asserting arguments under a summary judgment
61
See, e.g., Evenson v. Lilley, 295 Kan. 43, 282 P.3d 610, 616 (2012) (recognizing loss of income
production, replacement costs, and aesthetic loss as considerations); Anderson v. Rexroad, 180 Kan. 505, 306 P.2d
137, 144 (1957) (recognizing potential recovery for the loss of use of property, including loss of rental).
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standard and arguments under a motion to dismiss standard.
Plaintiff complains that the
Defendant turned what the Scheduling Order anticipated would be a motion to dismiss into a
motion for summary judgment. Plaintiffs then substantively respond to most of the arguments
asserted under the summary judgment standard while at the same time moving to strike
Defendant’s only arguments brought under a motion to dismiss standard.62 Plaintiffs argue that
Defendant pursues grounds not contemplated by the Scheduling Order, and that Defendant
expanded its argument for failure to state a claim to include fact-based issues.63
First, the Scheduling Order clearly contemplates the filing of a motion to dismiss based
on failure to state a claim. It states:
A motion to dismiss is expected to be filed in this case, based on jurisdiction,
Rooker-Feldman doctrine, res judicata, collateral estoppel, statute of limitation,
and failure to state a claim. Provided such defenses have been timely preserved,
any motions to dismiss asserting . . . failure to state a claim upon which relief can
be granted . . . must be filed by June 30, 2017.64
Defendant timely filed its motion, and its argument that three of Plaintiffs’ claims fail to
state a claim for which relief can be granted clearly fall within the Scheduling Order’s language.
Second, Defendant clearly and unambiguously seeks dismissal under a motion to dismiss
standard. Defendant begins Section V of its memorandum by reciting the standard applicable to
motions to dismiss, and continues to argue that Plaintiffs failed “to plead key elements of a claim
for intentional infliction of emotional distress,” failed to allege facts in their Complaint sufficient
62
Plaintiffs motion to strike states that they are filing a “Response to Defendant’s Motion for Summary
Judgment addressing all grounds contemplated by the Scheduling Order for what was to be a motion to dismiss.”
63
Plaintiffs also contest Defendant’s request for a legal determination of the proper measure of damages.
Because the Court has denied that request, Plaintiffs’ motion is moot on this issue. Accordingly, the Court addresses
Plaintiffs’ request to strike Defendant’s argument that Plaintiffs failed adequately plead certain causes of action.
64
Doc. 16, p. 9. Defendant timely filed its motion on June 21, 2017.
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to satisfy the required elements for intentional infliction of emotional distress, and failed to state
in their Complaint “how the process provided to them was deficient” or “lacking in due process.”
Although Defendant alternatively requests summary judgment on these claims, it clearly
and unambiguously asserts that dismissal is proper under a motion to dismiss standard. Plaintiffs
strategically chose not to substantively respond to Defendant’s arguments that the Complaint
fails to state a claim for which relief can be granted and have waived their ability to do so.
Plaintiffs’ motion to strike is denied and the Court will consider Defendant’s arguments that
three of Plaintiff’s claims fails to state a claim for which relief can be granted.
2.
Failure to state a claim for which relief can be granted65
a.
Intentional infliction of emotional distress
Under Kansas law, the tort of intentional infliction of emotional distress requires the
proof of four elements: “(1) [t]he conduct of defendant must be intentional or in reckless
disregard of plaintiff; (2) the conduct must be extreme and outrageous; (3) there must be a causal
connection between defendant’s conduct and plaintiff’s mental distress; and (4) plaintiff’s mental
distress must be extreme and severe.”66 The absence of any element destroys Plaintiffs’ claim.
Courts must determine as a matter of law (1) whether “the defendant’s conduct may
reasonably be regarded as so extreme and outrageous as to permit recovery,” and (2) whether
“the emotional distress suffered by plaintiff is in such extreme degree the law must intervene
because the distress inflicted is so severe that no reasonable person should be expected to endure
65
Although the Court considered facts not contained in Plaintiffs’ Complaint in prior sections of this
Memorandum and Order analyzed under a motion for summary judgment standard, the Court’s analysis in this
section is governed by the standard applicable to motions to dismiss. Thus, the Court considers only those facts and
allegations contained in Plaintiffs’ Complaint, and all well-pleaded facts in the Complaint are assumed to be true
and are viewed in the light most favorable to Plaintiffs.
66
Roberts v. Saylor, 230 Kan. 289, 637 P.2d 1175, 1179 (1981).
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it.”67 Defendant argues that Plaintiffs have failed to plead facts sufficient to satisfy either of
these requirements. Because the Court concludes that Plaintiffs have failed to plead facts
sufficient to satisfy the requirement that the distress must be extreme and severe, it is
unnecessary to address whether Plaintiffs have properly plead the remaining elements.
“Emotional distress passes under various names such as mental suffering, mental
anguish, [and] nervous shock, and includes all highly unpleasant mental reactions, such as fright,
horror, grief, shame, embarrassment, anger, chagrin, disappointment, and worry.”68 Liability for
intentional infliction of emotional distress, however, may only attach when emotional distress is
extreme.69 Thus, while “no laundry list of what qualifies as the requisite level of severity” exists,
“headaches, sleeplessness, irritability, anxiety, depression, listlessness, lethargy, intermittent
nightmares, and the like would probably not suffice.”70
Plaintiffs’ Complaint includes only a conclusory recitation of the elements of intentional
infliction of emotional distress, including that “Hostetler suffered extreme emotional distress,
injuries and damages as a direct result of Defendant’s conduct.” This blanket statement merely
reflects a legal conclusion that Plaintiff suffered extreme emotional distress. Plaintiffs do not
support this conclusion with any factual allegations that, when viewed in the light most favorably
to Plaintiffs, sufficiently support a claim for intentional inflection of emotional distress.71
67
Id.
68
Id. at 1180.
69
Id.
70
Dana v. Heartland Mgmt. Co., Inc., 48 Kan. App. 2d 1048, 301 P.3d 772, 781 (2013) (quoting Valadez v.
Emmis Cmmc’ns., 290 Kan. 472, 229 P.3d 389, 395 (2010)).
71
See, e.g., Lee v. Reed, 221 F. Supp. 3d 1263, 1274 (D. Kan. 2016) (dismissing complaint that alleged
plaintiff “suffered extreme emotional distress, embarrassment, shame, humiliation and severe depression”); S. Star
Cent. Gas Pipeline, Inc. v. Cline, 754 F. Supp. 2d 1257, 1265 (D. Kan. 2010) (recognizing factual allegations that
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Accordingly, because Plaintiffs failed to adequately plead a cause of action for intentional
infliction of emotional distress, the Court grants Defendant’s motion to dismiss this claim.
b.
Negligent infliction of emotional distress
Defendant argues that because Plaintiffs have asserted a claim for intentional infliction of
emotional distress and have pleaded intentional conduct on the part of Defendant, that Plaintiffs
cannot also pursue a claim for negligent infliction of emotional distress. Defendant’s citation to
Curts v. Dillard’s72 does not support its argument, and the Federal Rules of Civil Procedure
explicitly authorize litigants to plead alternative theories of recovery, even when those theories
are inconsistent.73
Although the Court rejects Defendant’s reasoning for why Plaintiffs’ claim should be
dismissed, it nevertheless concludes that dismissal is proper. Plaintiffs have merely provided a
conclusory recitation of the elements of this claim and have failed to plead facts sufficient to
support their conclusory assertions—specifically with regard to the physical injury requirement.
Accordingly, because negligent infliction of emotional distress requires that the defendant’s
conduct resulted in immediate physical injury to the plaintiff, and Plaintiffs fail to identify a
plaintiff experienced helplessness, vulnerability, and stress, without more, as insufficient as a matter of law to state a
claim for intentional infliction of emotional distress); McIlrath v. City of Kingman, 324 P.3d 343 (Kan. Ct. App.
2014) (unpublished) (holding that, without more, allegations that defendants caused “physical and emotional
damage and caused [plaintiffs] to be extremely anxious, fearful, extremely agitated, extremely upset, and extremely
fearful,” were insufficient to state a claim for intentional infliction of emotional distress).
72
30 Kan. App. 2d 814, 48 P.3d 681, 682 (2002) (disapproved on other grounds by Hallam v. Mercy
Health Ctr. of Manhattan, Inc., 278 Kan. 339, 97 P.3d 492 (2004)). The Curts court explained that negligent
infliction of emotional distress requires that the defendant’s conduct resulted in immediate physical injury to the
plaintiff. Id. The court analyzed an “exception” to the physical injury requirement recognized in some Kansas cases
that allows a plaintiff to pursue a claim for negligent infliction of emotional distress without alleging the presence of
a physical injury if the “plaintiff charges the defendant with acting in a willful or wanton manner, or with the intent
to injure.” Id. The court concluded that this “exception” essentially converts the claim into “nothing more than the
tort of outrage.” Id. The court did not hold that a plaintiff may not plead torts for both intentional and negligent
infliction of emotional distress.
73
Fed. R. Civ. P. 8(d).
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physical injury allegedly suffered, the Court dismisses Plaintiffs’ claim for negligent infliction of
emotional distress for failure to state a claim.74
c.
Due process
Under “Count I – Violations of Plaintiffs’ Due Process Rights,” Plaintiffs allege that
Defendant violated Plaintiffs “substantive and procedural due process rights” and “rights to equal
protection of the laws.” Plaintiffs assert that Defendant deprived them of their property and
liberty interests, failed to provide proper notice to Plaintiffs of each step Defendant took with
respect to its actions which culminated in the demolition of their real and personal property, and
denied Plaintiffs notice and an opportunity to be heard with respect to “each of the
aforementioned actions Defendant took in violation of Plaintiffs’ rights.” Defendant argues that
Plaintiffs’ Complaint does not state how the process provided by Defendant was deficient.75
Courts assessing whether a procedural due process violation occurred, “must engage in a
two-step inquiry: (1) did the individual possess a protected interest such that the due process
protections were applicable; and if so, then (2) was the individual afforded an appropriate level
of process.”76 Defendant does not argue that Plaintiffs have not identified a protected interest
entitled to due process protections, but rather, argues that Plaintiffs have failed to sufficiently
plead that they were not afforded an appropriate level of process.
74
See Curts, 48 P.3d at 682.
75
Defendant’s argument that Plaintiffs fail to state a claim for violation of due process is one paragraph and
includes one legal citation regarding when a procedural due process claim is actionable. Defendant ignores
Plaintiffs’ allegations that it violated Plaintiffs’ substantive due process and equal protections rights. Accordingly,
the Court only addresses Plaintiffs’ purported claim for violations of procedural due process.
76
Guttman v. Khalsa, 669 F.3d 1101, 1113-14 (10th Cir. 2012) (quoting Hatfield v. Bd. of Cty. Comm’rs,
52 F.3d 858, 862 (10th Cir. 1995)).
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While Plaintiffs’ Complaint “does not need detailed factual allegations,” Plaintiffs’
“obligation to provide the grounds of [their] entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”77
Plaintiffs have failed to provide more than a formulaic recitation of the elements of a procedural
due process claim and the Complaint does not present facts that, when accepted as true and
viewed in the light most favorable to Plaintiffs, would state a claim for relief for violations of
Plaintiffs’ procedural due process rights.
While Plaintiffs’ Complaint concludes that they were denied notice and an opportunity to
be heard, none of the facts asserted by Plaintiff support these conclusory statements. Plaintiffs
do not allege that the City Council failed to provide them notice of the March 5, 2015, meeting,
nor do they allege that they were denied an opportunity to be heard at this meeting. To the
contrary, Plaintiff states that Hostetler appeared with legal counsel and a construction
representative at the March 5, 2015, meeting, that Hostetler, her legal counsel, and a
representative from a construction company presented arguments and evidence in support of
restoring and renovating the hotel, and that after the presentation of such arguments and evidence
the City Council voted to demolish the hotel.78 Plaintiffs do not identify any actions Defendant
allegedly took without providing notice or an opportunity to be heard. Plaintiffs have failed to
provide any factual support for their conclusory assertions that they were denied procedural due
process, and their Complaint fails to state a claim for procedural due process for which relief can
be granted. Accordingly, Plaintiffs’ procedural due process claim is dismissed.
77
Brokers’ Choice of Am., Inc. v. NBC Universal, Inc., 757 F.3d 1125, 1136 (10th Cir. 2014) (quoting
Twombly, 550 U.S. at 550).
78
See Doc. 1.
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IV.
Conclusion
For the reasons stated above, the Court denies Plaintiffs’ motion to strike, and grants in
part and denies in part Defendant’s motion for summary judgment/motion to dismiss.
Defendant’s arguments in favor of summary judgment involve either a genuine issue of material
fact or lack merit. Plaintiffs, however, have failed to adequately plead claims for intentional
infliction of emotional distress, negligent infliction of emotional distress, and violations of
procedural due process; accordingly, the Court dismisses these claims for failure to state a claim
upon which relief can be granted.
IT IS THEREFORE ORDERED that Defendant’s Motion for Summary Judgment
(Doc. 20) is GRANTED IN PART and DENIED IN PART, and Plaintiffs’ claims for
intentional infliction of emotional distress, for negligent infliction of emotional distress, and for
violations of procedural due process are DISMISSED.
IT IS FURTHER ORDERED that Plaintiffs’ Motion to Strike Portions of Defendant’s
Motion for Summary Judgment (Doc. 29) is DENIED.
IT IS SO ORDERED.
Dated this 16th day of February, 2018.
ERIC F. MELGREN
UNITED STATES DISTRICT JUDGE
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