LCL, LLC v. Falen
390 P.3d 571
Kan. Ct. App.2017Background
- In 2008 Rice County Abstract & Title Co. (RCAT) prepared, filed, and recorded a deed conveying surface land but omitted language reserving an undivided 1/2 mineral interest that the seller (MLF Trust) intended to retain.
- The MLF Trust (and successors, the Falens) continued to receive royalty payments and transfer mineral interests among themselves after the 2008 recording; they only first lost royalties when LCL asserted title to the minerals on August 1, 2014.
- The Falens sued RCAT (third-party) for negligence, breach of implied contract, and breach of fiduciary duty; RCAT moved for summary judgment asserting statutes of limitations barred the claims.
- The district court granted summary judgment on all claims as time‑barred; the appellate court reviewed accrual and reasonably ascertainable rules for tolling and accrual under Kansas law.
- The appellate court held the breach of implied contract claim was time‑barred but reversed as to negligence and breach of fiduciary duty, finding those claims accrued on August 1, 2014 (when royalties ceased), not on the 2008 recording.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Negligence (2‑yr statute) | Accrual began when royalties stopped (Aug 1, 2014); claim timely. | Accrual began on filing/recording of 2008 deed; constructive notice under K.S.A. 58‑2222 made injury reasonably ascertainable in 2008. | Accrued Aug 1, 2014 (loss of royalties is the substantial/actionable injury); negligence claim not time‑barred. |
| Breach of implied contract (3‑yr statute) | Not argued on appeal (implied reservation claim). | Statute ran within 3 years of 2008 deed; claim untimely. | Claim barred by K.S.A. 60‑512; summary judgment affirmed as to contract. |
| Breach of fiduciary duty (2‑yr statute) | Fiduciary breach occurred in 2014 when RCAT closed 2014 sale despite knowledge of earlier error. | Claim arises from same 2008 facts; accrual in 2008 so time‑barred. | Accrued Aug 1, 2014 like negligence; fiduciary claim not time‑barred. Court declined to decide whether a fiduciary relationship existed because parties did not brief it. |
Key Cases Cited
- Moon v. City of Lawrence, 267 Kan. 720 (interpretation of "substantial injury" as actionable injury)
- KPERS v. Reimer & Koger Assocs., Inc., 262 Kan. 110 (statute‑of‑limitations accrual principles)
- Roe v. Diefendorf, 236 Kan. 218 (accrual requires actionable injury)
- Knight v. Myers, 12 Kan. App. 2d 469 (action accrues when plaintiff could first have successfully prosecuted the claim)
- Michaelis v. Farrell, 48 Kan. App. 2d 624 (breach alone does not start limitations where damages not yet sustained)
- Bi‑State Dev. Co. v. Shafer, Kline & Warren, 26 Kan. App. 2d 515 (constructive notice via recording can make an injury reasonably ascertainable; distinguished on facts here)