Opinion
No. 109,629.
2013-12-6
Martin A. ASHFORD, Lark A. Ashford, and Jay E. Ashford, Appellants, v. The ANN K. FAUVOR KANSAS TRUST, Teal E. Terry as Co–Trustee of the Ann K. Fauvor Kansas Trust, Jay D. Terry, Jr., as Co–Trustee of the Ann K. Fauvor Kansas Trust, and Robin K. Ashford n/k/a Robin K. Aoks, Appellees.
Appeal from Rice District Court; HANNELORE KITTS, Judge. Remington S. Dalke, of Lyons, for appellants. Patrick G. Hoffman, of Sherman, Hoffman & Hipp, LC, of Ellsworth, for appellees.
Appeal from Rice District Court; HANNELORE KITTS, Judge.
Remington S. Dalke, of Lyons, for appellants. Patrick G. Hoffman, of Sherman, Hoffman & Hipp, LC, of Ellsworth, for appellees.
Before MALONE, C.J., GREEN and BRUNS, JJ.
MEMORANDUM OPINION
PER CURIAM.
Martin A. Ashford, Lark A. Ashford, and Jay E. Ashford (the Ashfords) appeal the district court's dismissal of their action against the Ann K. Fauvor Kansas Trust, its trustees, and its delegated agent. The district court dismissed the action for lack of jurisdiction. Because none of the parties reside in Kansas and all of the claims relate to the administration of the trust in Arkansas, we conclude that there is no personal jurisdiction over the defendants. Furthermore, we find that the plain language of the trust document contemplates that the trust is to be administered in Arkansas pursuant to Arkansas law. Thus, we affirm the district court's dismissal of this case.
Facts
All of the individual parties in this case are the children of Ann K. Fauvor, who died on December 13, 2008. At the time of her death, Ann lived in Arkansas, and there is no evidence in the record to suggest that she ever resided in Kansas. More than 3 years prior to her death, Ann executed two revocable trusts in Montgomery County, Arkansas-the Ann K, Fauvor Arkansas Trust (Arkansas Trust) and the Ann K. Fauvor Kansas Trust (Kansas Trust). The terms of the two trusts are nearly identical, with both providing that administration of the trusts is to occur in Arkansas and that Arkansas law is controlling.
Moreover, the individual parties to this case—none of whom is a resident of Kansas—are each named beneficiaries under both the Arkansas Trust and the Kansas Trust. Prior to her death, Ann was the sole trustee. Upon her death, however, Teal E. Terry and Jay D. Terry, Jr., became the co-trustees of both trusts. The co-trustees then delegated their duties to administer the trusts to their sister, Robin K. Aoks, in 2010. Evidently, Aoks took care of her mother during her final years and continues to live in her mother's former residence in Arkansas.
The assets of the Arkansas Trust consist of real property located in Arkansas, including Ann's former residence and certain rental property. Similarly, the assets of the Kansas Trust consist of real property located in Kansas, including 640 acres of farmland in Rice County, Kansas. It appears that the Kansas land was inherited by Ann from her father. The land in Rice County has allegedly generated income for the Kansas Trust through various farm leases. According to the terms of the Kansas Trust, the trust “will comply with the laws of the State of Kansas insofar as real property owned by a Trust.”
On August 3, 2010, the Ashfords filed a lawsuit in Rice County naming the Kansas Trust, Teal Terry, Jay Terry, Jr., and Robin Aoks as defendants. In the petition, the Ashfords assert five causes of action for improper administration of the Kansas Trust based on various provisions of Arkansas law. Specifically, the Ashfords seek an accounting and appraisal of the Kansas Trust under Ark.Code Ann. § 28–73–810 (2012); a tracing and recovery of assets of the Kansas Trust under Ark.Code Ann. § 28–73–1001(b)(9) (2012); removal of and redress by trustees under Ark.Code Ann. § 28–73–1001(b)(3) and (7) and Ark.Code Ann. § 28–73–706 (2012); enjoinment of the trustees and/or their delegate under Ark.Code Ann. § 28–73–1001(b)(2); and termination of the duties and powers delegated to Robin Aoks under Ark.Code Ann. § 28–73–807 (2012). In their answer, the Terrys and Aoks asserted—among other things—that the district court lacked personal jurisdiction over the defendants.
An evidentiary hearing was held on April 18, 2011. Evidently, the district judge retired prior to rendering a decision. But the Chief Judge of the Rice County District Court appointed the district judge to finish the case. Finally, on March 4, 2013, the district court entered a decision and order in which it dismissed the case. Specifically, the district court found that all of the parties are residents of other states and that the claims arising out of the administration of the trusts must be adjudicated in Arkansas.
Analysis
Issue Presented
Unfortunately, the district court's decision and order uses the generic term “jurisdiction” rather than distinguishing between subject matter jurisdiction and personal jurisdiction. Nevertheless, a district court must maintain both types of jurisdiction to issue orders or judgments upon a claim. Pieren–Abbott v. Kansas Dept. of Revenue, 279 Kan. 83, 92, 106 P.3d 492 (2005). Subject matter jurisdiction “establishes the court's authority to hear and decide a particular type of action.” Kingsley v. Kansas Dept. of Revenue, 288 Kan. 390, 395, 204 P.3d 562 (2009). Personal jurisdiction, on the other hand, gives a court authority to enter a judgment against a person or entity. Pieren–Abbott, 279 Kan. at 92.
Clearly, district courts in Kansas have subject matter jurisdiction to resolve disputes over the administration of trusts. See K.S.A. 58a–203 (“The district court has exclusive jurisdiction of proceedings in this state brought by a trustee or beneficiary concerning the administration of a trust.”). Accordingly, we do not find subject matter jurisdiction to be in dispute. Rather, we find the issue presented to be whether the district court erred in dismissing this case for lack of personal jurisdiction over the defendants—a challenge the defendants raised in their answer. Personal Jurisdiction over the Defendants
“Generally, a two-step analysis is required to determine if a Kansas court has personal jurisdiction. First, the court must determine if Kansas statutes or caselaw provide a basis for the exercise of jurisdiction over a particular defendant. Second, if statutory and other requirements are satisfied, ‘the court inquires if the exercise of personal jurisdiction complies with the due process requirements of the Fourteenth Amendment to the United States Constitution.’ “ Merriman v. Crompton Corp., 282 Kan. 433, 440, 146 P.3d 162 (2006) (citing Kluin v. American Suzuki Motor Corp., 274 Kan. 888, 894, 56 P.3d 829 [2002] ).
We have unlimited review over a district court's decision to dismiss a case based on personal jurisdiction, Merriman, 282 Kan. at 439.
The statutory requirements for personal jurisdiction in cases involving trusts are contained in K.S.A. 58a–202. “By accepting the trusteeship of a trust having its principal place of administration in this state or by moving the principal place of administration to this state, the trustee submits personally to the jurisdiction of the courts of this state regarding any matter involving the trust.” K.S.A. 58a–202(a). Likewise, “the beneficiaries of a trust having its principal place of administration in this state are subject to the jurisdiction of the courts of this state regarding any matter involving the trust.” K.S.A. 58a–202(b).
Here, a review of the record reveals that the principal place of administration of the Kansas Trust—notwithstanding its name—is in Arkansas. As such, because the principal place of administration of the trust is not in Kansas, the trustees do not live in Kansas, and the beneficiaries do not live in Kansas, neither K.S.A. 58a–202(a) or (b) provided the district court with personal jurisdiction over the defendants in this case. Thus, we must look to K.S.A. 58a–202(c), which provides that “other methods of obtaining jurisdiction over a trustee, beneficiary, or other person receiving property from the trust” are not precluded.
In particular, the Ashfords contend that K.S.A.2012 Supp. 60–308(b)—our long-arm jurisdiction statute—confers personal jurisdiction over the defendants. Nonresidents may personally submit to the jurisdiction of Kansas courts for claims “arising from” certain acts, including (1) transacting business in Kansas; (2) committing tortious acts in Kansas; (3) owning, using, or possessing real estate in Kansas; (4) entering into a contract with a resident of Kansas to be performed in whole or in part in this state; or (5) having other contact with Kansas sufficient to support jurisdiction under the Kansas and United States Constitutions. K.S.A.2012 Supp. 60–308(b)(l).
We are to construe the terms of K.S.A.2012 Supp. 60–308(b) liberally to the fullest extent constitutionally permissible. See Kluin, 274 Kan. at 894. But there must at least be a “nexus” between a transaction occurring within this state and the claim asserted in order to establish personal jurisdiction in Kansas. 274 Kan. at 896. Without such a nexus, there can be no personal jurisdiction over a nonresident.
Here, the record reflects that the co-trustees live in Colorado. The record also reflects that the Kansas Trust is primarily administered by Aoks—as the delegate of the co-trustees. Moreover, the record reflects that Aoks continues to live in Arkansas in the residence formerly owned by her late mother. Although the nature and extent of such visits are unclear from the record, it appears that Aoks has been to Kansas to deal with Kansas farmers on behalf of the Kansas Trust. But it does not appear that any of the claims asserted by the Ashfords arise out of Aoks' contacts with Kansas residents.
It is undisputed that the Kansas Trust owns farmland in Kansas and that the trust receives income from leasing out this land. Nevertheless, the claims asserted in this case do not arise out of the real property located in Kansas. Rather, as the district court found, the claims asserted by the Ashfords in this case arise from specific actions of Aoks in administering the trust in Arkansas.
Although the Kansas Trust owns real property in this state, the basis for personal jurisdiction under K.S.A.2012 Supp. 60–308(b)(l)(C) requires a connection between the property and the claim asserted against the nonresident. See Shaffer v. Heitner, 433 U.S. 186, 207–08, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977) (recognizing that ownership likely establishes sufficient minimum contacts for jurisdiction when “claims to the property itself are the source of the underlying controversy”). Again, the claims asserted by the Ashfords concern the administration of the trust in Arkansas and do not involve any claims arising from the Kansas property.
Likewise, although there appears to be contracts between Kansas farming corporations and the Kansas Trust, the claims asserted by the Ashfords do not arise from those contracts. See K.S.A.2012 Supp. 60–308(b)(l)(E); Kansas Turnpike Authority v. Wheeler, 243 Kan. 602, 602–03, 615–18, 760 P.2d 1213 (1988); Caring Hearts Personal Home Services v. Hobley, 35 Kan.App.2d 345, 348, 130 P.3d 1215 (2006) (where contract gave rise to the plaintiff's claims and established sufficient minimum contact). Instead, the claims arise from administration of the Kansas Trust itself, which was executed in Arkansas, is controlled by Arkansas law, and continues to be administered in Arkansas. If the Ashfords had raised a claim related to a contract between the Kansas Trust and a Kansas farmer, then personal jurisdiction might arise from that particular contact. But that is not the basis of the Ashfords' challenge.
The Ashfords point to no other contact with Kansas that would confer personal jurisdiction over the defendants in this case. Although there may be acts in this case that fall within the descriptions of K.SA.2012 Supp. 60–308(b), the Ashfords* claims did not arise from any of those acts, as is required by statute. Accordingly, we conclude that the district court did not have personal jurisdiction in this case.
Finally, the Ashfords contend that Robin Aoks exceeded the scope of her delegated authority to administer the Kansas Trust while conducting business in Kansas. As such, they argue that the district court has personal jurisdiction over her as an individual. But again, the record reveals that Aoks' contacts with Kansas are not the acts that gave rise to the claims asserted by the Ashfords in this case. Accordingly, we conclude that the district court lacked personal jurisdiction over Aoks in her individual capacity.
We, therefore, affirm the district court's dismissal of this case.
Affirmed.