Phillips v. Phillips

1

NOT DESIGNATED FOR PUBLICATION

No. 116,894

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

ELIZABETH PHILLIPS, CONNOR PHILLIPS, HALEE KENNETT, and MARLEAH PHILLIPS, for
the Wrongful Death of DOUGLAS DWAYNE PHILLIPS, Deceased, and ELIZABETH PHILLIPS,
as Special Administrator for the Estate of DOUGLAS DWAYNE PHILLIPS,
Appellants,

v.

TERRY PHILLIPS,
Appellee.


MEMORANDUM OPINION

Appeal from Labette District Court; DARYL D. AHLQUIST, judge. Opinion filed October 20, 2017.
Affirmed.

Fred Spigarelli and Kala Spigarelli, of The Spigarelli Law Firm, of Pittsburg, for appellants.

Kevin L. Bennett, of Bennett, Bodine & Waters, P.A., of Shawnee, for appellee.

Before ARNOLD-BURGER, C.J., PIERRON and GREEN, JJ.

PER CURIAM: Doug Phillips was crushed and killed by a skid steer operated by his
father, Terry Phillips. Doug's family (Plaintiffs) obtained a consent judgment against
Terry for $1.5 million. Plaintiffs agreed not to execute the judgment in exchange for
Terry assigning his rights to them to pursue his insurer, Farm Bureau. Terry's liability
insurance limit was $1 million. The district court approved the consent judgment, but the
Court of Appeals reversed because of the failure of the Plaintiffs to make an adequate
record to enable the district court to give a full, complete, and independent consideration
of all relevant factors supporting the consent judgment. Phillips v. Phillips, No. 105,349,
2

2013 WL 1444259, at *12 (Kan. App. 2013) (unpublished opinion). On remand, the
district court refused to hold another consent judgment hearing because the one-action
rule prohibits Plaintiffs from relitigating Terry's liability, and if Plaintiffs cannot prove
that Terry is liable they cannot obtain a valid consent judgment. Plaintiffs appealed,
arguing that an exception to the one-action rule applies in their case because it was not
feasible for them to join Terry to the litigation against the manufacturer. We disagree. It
was feasible for Plaintiffs to join Terry to the suit against the manufacturer, but they
made the strategic choice to pursue a consent judgment. Plaintiffs are not entitled to a
second opportunity because their strategy failed.

FACTUAL AND PROCEDURAL HISTORY

This is the second time these parties have appealed to this court. The underlying
facts of this case were set forth in Phillips. The court briefly summarized the facts as
follows:

"This case arises out of a farm accident which occurred on May 7, 2005.
Douglas Phillips (Doug) was working with his father, Defendant Terry Phillips, building
a pasture fence. Terry was operating a John Deere 250 skid steer with a tree shear
attachment. The skid steer unexpectedly tipped forward, striking Doug and trapping him
under the tree shear. Doug died shortly after the accident from the injuries sustained.

"Terry carried liability insurance with Farm Bureau Mutual Insurance Company
(Farm Bureau). An initial settlement offer from Farm Bureau was rejected by Doug's
wife, Elizabeth Phillips. She contacted legal counsel, and in July 2006, she and her
children (Connor Phillips and Halee Phillips Kennett) filed suit against Terry and Deere
& Company, Inc. After a protracted period of settlement negotiation and an unsuccessful
mediation, Terry and the Plaintiffs entered into an agreement in December 2007 for a
consent judgment accompanied by an assignment to Plaintiffs of Terry's rights against
Farm Bureau in exchange for a covenant not to execute the judgment against Terry
personally. In January 2008, Plaintiffs sought and obtained approval of the consent
judgment by the district court, which entered judgment against Terry.
3

"Plaintiffs reserved and separately pursued their wrongful death action against
Deere, which resulted in a jury verdict finding no fault on the part of Deere, and no
comparative fault on the part of Terry or Doug.

"On July 31, 2008, Plaintiffs brought a garnishment action against Farm Bureau
seeking to enforce the consent judgment. After another protracted period of negotiation
and litigation, the district court filed a memorandum opinion on October 25, 2010,
enforcing the judgment against Farm Bureau. In a subsequent memorandum opinion filed
on February 11, 2011, the court assessed interest and attorney fees against Farm Bureau.
Farm Bureau timely appealed these judgments, which are consolidated herein." 2013 WL
1444259, at *1.

The Court of Appeals reversed the district court's approval of the consent judgment. 2013
WL 1444259, at *1. Plaintiffs argued that the consent judgment adhered to the rule in
Glenn v. Fleming, 247 Kan. 296, 799 P.2d 79 (1990). Glenn provided that a consent
judgment in excess of insurance policy limits can only be enforced against the insurer if
the judgment is reasonable and entered into in good faith. 247 Kan. at 318. In order to
make a prima facie case of reasonableness of a consent judgment, the plaintiff must
establish the defendant's fault and liability. Phillips, 2013 WL 1444259, at *9.

For the district court to make a finding that a consent judgment is reasonable, "'the
proof requires, at a minimum, enough information for the district court to make an
independent evaluation of the reasonableness of the settlement.' (Emphasis added.)" 2013
WL 1444259, at *9 (quoting Associated Wholesale Grocers, Inc. v. Americold Corp., 261
Kan. 806, 841, 934 P.2d 65 [1997]). In this case, Plaintiffs gained the district court's
approval of their consent judgment at a nonadversarial hearing at which Farm Bureau
was not represented. At this hearing, there were no findings or discussions of Terry's
liability. The Court of Appeals was concerned with "the brevity of the expedited hearing
and the summary nature of the court's ruling from the bench." 2013 WL 1444259, at *12.
It appeared "that the district court did not address in any depth the strengths or
4

weaknesses of the Plaintiffs' claims and the defendant's defenses or make an independent
determination as to the reasonableness of the settlement." 2013 WL 1444259, at *12. The
court held that

"[t]he failure of Plaintiffs to make an adequate record to enable the district court
to give a full, complete, and independent consideration of all relevant factors leads us to
the conclusion that the Plaintiffs have not met the Glenn threshold of establishing a prima
facie case that the consent agreement was entered in good faith and is fair and
reasonable." 2013 WL 1444259, at *12.

The court concluded:

"Since a consent judgment must be fair and reasonable and entered into in good
faith as a prerequisite to enforceability against an insurer, it follows that the judgments of
the district court filed on October 25, 2010, finding Farm Bureau responsible for paying
the judgment and on February 11, 2011, determining interest and attorney fees are
without basis in law and are, accordingly, reversed. We remand to the district court to
enter appropriate orders vacating any such judgments against Farm Bureau and
dismissing the garnishment proceedings." 2013 WL 1444259, at *12.

Following the Court of Appeals' mandate, the district court entered an order
vacating its prior judgments. The district court also dismissed a garnishment action by
Plaintiffs against Farm Bureau. Plaintiffs then filed a motion to vacate or set aside the
consent judgment. The district court granted this motion.

In May 2016, Plaintiffs filed a motion to schedule a consent judgment hearing.
Plaintiffs noted that while the district court set aside the consent judgment, "[t]he
settlement between Plaintiffs and Defendant Terry Phillips, the covenant not to execute,
and the assignment of Defendant Terry Phillips' rights against Farm Bureau entered into
by the Parties is still in effect." Plaintiffs also noted that the Court of Appeals never
exonerated Terry "from his negligent acts that caused the death of his son as a matter of
5

law." They argued that "[t]he Court of Appeals had the option to reverse the judgment of
the District Court and grant a judgment in favor of Farm Bureau and Defendant Terry
Phillips. That did not happen! Therefore the Plaintiffs are entitled to their day in Court
against Defendant Terry Phillips." Plaintiffs then asked the district court to schedule
another consent judgment hearing.

Terry objected to Plaintiffs' request. He argued that "Kansas law is quite clear that
this litigation has been concluded and that Plaintiffs are not entitled to any relief
whatsoever, including a new consent judgment hearing." He characterized Plaintiffs'
strategy as taking "a gamble that they would be able to 'set up' Farm Bureau for a bad
faith claim, obtain more than his policy limits and then proceed to trial against the
separate Defendant Deere seeking additional funds. Unfortunately for the Plaintiffs, this
plan backfired." Terry also noted that Plaintiffs would need to prove his liability before
obtaining an enforceable consent judgment. In Plaintiffs' 2008 case against John Deere, a
jury found that Terry was not at fault. Because he had already been cleared of liability,
Terry argued that the one-action rule prevented Plaintiffs from relitigating the issue in
order to obtain an enforceable consent judgment.

Plaintiffs responded, arguing that an exception to the one-action rule applied in
their case. They argued that the one-action rule only applies when it is feasible to join all
relevant parties to a lawsuit. Plaintiffs argued that it was not feasible for them to join
Terry in the case against Deere because they had already obtained a consent judgment
against Terry. Because the consent judgment was a final judgment, they argued that res
judicata prevented them from asserting further claims against Terry.

The district court scheduled a hearing for the motion.

The court noted that "[a]t no time did Terry Phillips make any agreement that the
settlement was conditional upon its collection and/or enforcement." The court also said:
6

"Assuming for argument purposes that this Court ordered a consent judgment hearing, the
Court would have to find a basis to establish liability on the part of Terry Phillips to find
that the settlement and consent judgment was reasonable under the circumstances
pursuant to Kansas case law." The court could only make this finding if Plaintiffs evaded
the one-action rule. The court also rejected the Plaintiffs' argument that an exception to
the one-action rule applied because it was not feasible for them to join Terry to the case
against Deere. The court felt that this was a strategic move by Plaintiffs and that they
should have been aware of the risk of the strategy.

Plaintiffs appealed.

ANALYSIS

Plaintiffs frame this appeal as having two issues: (1) Did the district court err in
not allowing the case to be set for a second consent judgment hearing? and (2) did the
district court err in finding that a trial against Terry to determine his liability for Doug's
death would violate the one-action rule? The second issue is determinative of the first. As
this court stated in the first appeal of this case, "[t]he liability of an insurer is premised
upon some consideration and determination of liability on the part of the insured."
Phillips, 2013 WL 1444259, at *9. If Plaintiffs cannot prove Terry's liability, then
another consent judgment hearing would be useless. Thus, that issue will be discussed
first.

Neither party provides a standard of review. The parties do not dispute the facts
relevant to this appeal—they only dispute the application of the one-action rule. This
court exercises de novo review over issues of law. See Cain v. Jacox, 302 Kan. 431, 434,
354 P.3d 1196 (2015) (exercising plenary review over an issue of res judicata).

7

The one-action rule derives from K.S.A. 2016 Supp. 60-258a(b). This statute
provides:

"Special verdicts or findings required. When the comparative negligence of the
parties is an issue, the jury must return special verdicts, or in the absence of a jury, the
court must make special findings, determining the percentage of negligence attributable
to each party and the total amount of damages sustained by each claimant. The court must
determine the appropriate judgment."

The Kansas Supreme Court has previously stated that the intent of the legislature
was "to fully and finally litigate all causes of action and claims for damage arising out of
any act of negligence subject to K.S.A. 60-258a." Eurich v. Alkire, 224 Kan. 236, 237-38,
579 P.2d 1207 (1978). The court added that "[t]he provision for determining the
percentage of causal negligence against each person involved in a negligence action
contemplates that the rights and liabilities of each person should be determined in one
action." 224 Kan. at 238. In a later case, the Kansas Supreme Court said that "[a]fter an
adjudication of comparative fault, no party should be afforded a second opportunity to
litigate percentages of causal negligence. K.S.A. 60-258a certainly contemplates one
action in which comparative fault is determined." Mathis v. TG&Y, 242 Kan. 789, 794,
751 P.2d 136 (1988). This principle has become known as the one-action rule. But see
Mick v. Mani, 244 Kan. 81, 93, 766 P.2d 147 (1988) ("[T]he one-action rule should,
perhaps, more accurately be described as the one-trial rule.").

Here, the parties' liabilities were determined in Plaintiffs' case against Deere,
"which resulted in a jury verdict finding no fault on the part of Deere, and no comparative
fault on the part of Terry or Doug." Phillips, 2013 WL 1444259, at *1. The one-action
rule prevents Plaintiffs from relitigating liability. See Mathis, 242 Kan. at 794. However,
Plaintiffs argue that an exception to the one-action rule applies to their case because it
was not feasible to join Terry to the litigation against Deere.

8

Plaintiffs cite Anderson v. Scheffler, 242 Kan. 857, 864, 752 P.2d 667 (1988), for
the proposition that the one-action rule "is based on the feasibility, under Kansas law, of
joining all parties." There, Jacob Anderson's leg was severed by an auger at a plant
owned and operated by Badger By-Products. He sued Badger in Wyandotte County,
Kansas, and Badger removed the case to federal court on the basis of diversity
jurisdiction. Anderson then attempted to add four more defendants and remand the case
to state court. One of these defendants, Industrial Bearing and Transmission Company
(IBT), would have destroyed diversity jurisdiction. The federal court allowed Anderson
to add the three diverse defendants but not IBT. The court also denied Anderson's motion
to remand to state court. Anderson initiated a second suit against IBT and Randy
Scheffler (an IBT employee) in Kansas. Anderson entered a settlement agreement with
all defendants except IBT and Scheffler and dismissed his federal case. The district court
then entered summary judgment for IBT and Scheffler on the basis that "all comparative
negligence must be determined in one action." 242 Kan. at 862. Anderson appealed.

On appeal, the Kansas Supreme Court framed the issue as "whether, under the
principles of comparative fault, a plaintiff may settle and dismiss with prejudice a
negligence action in federal district court and then pursue a second action in state court
against additional parties for damages arising out of a single occurrence." 242 Kan. at
861-62. The court discussed Greenwood v. McDonough Power Equipment, Inc., 437 F.
Supp. 707 (D. Kan. 1977). There, a plaintiff sued a manufacturer of a lawn mower in
federal court. The manufacturer attempted to join additional defendants to the action but
was refused because those defendants would have destroyed federal diversity jurisdiction.
The federal court was still able to determine the nonparties' comparative negligence. It
"held the plaintiff, by choosing to file in federal court, bore the risk that nonparties from
which he could collect would be found to have caused a large percentage of the total
damage." 242 Kan. at 864. The Anderson court distinguished Greenwood by noting that
Anderson "did not voluntarily accept the risk of nonjoinder by selecting the federal
9

forum." 242 Kan. at 864. Anderson actually fought to have the case remanded back to
state court.

The court then noted that the one-action rule is premised on the idea that "'the
statute contemplates that each party has a right to cross-claim against any or all other
parties to a lawsuit.'" Anderson, 242 Kan. at 864 (quoting Eurich, 224 Kan. at 238). The
court held that "[t]he Eurich holding is based on the feasibility, under Kansas law, of
joining all parties." 242 Kan. at 864. The court held that it was not feasible for Anderson
to join all parties to his suit: "In the instant case it was the defendants who removed the
action to federal court for strategic reasons. Appellant tried to remand the case to state
court." 242 Kan. at 864-65.

Finally, the Anderson court held that the case was also controlled by Mathis.
Anderson, 242 Kan. at 865. In Mathis, the plaintiff filed two separate lawsuits against
defendants he alleged were responsible for his injuries. The second action settled. The
district court dismissed the first action on the basis of the one-action rule. The Kansas
Supreme Court reversed the dismissal because there had been no judicial determination
of comparative fault in the second action. 242 Kan. at 794. It held:

"After an adjudication of comparative fault, no party should be afforded a second
opportunity to litigate percentages of causal negligence. K.S.A. 60-258a certainly
contemplates one action in which comparative fault is determined. However, it was never
the intent of the legislature or this court to place form over substance and preclude a
plaintiff from proceeding against a tortfeasor when there has been no judicial
determination of comparative fault." 242 Kan. at 794.

In Anderson, as in Mathis, there had never been a comparison of the defendants' fault at
trial. Anderson, 242 Kan. at 866.

10

Anderson does not support Plaintiffs' argument. Nothing in the Anderson holding
gives Plaintiffs the power to relitigate Terry's fault. Furthermore, even if there had not
been a judicial determination of comparative fault at the Deere trial it is incorrect to
suggest that it was not feasible for Plaintiffs to sue Terry in the same action as Deere.
Plaintiffs made a strategic move in choosing to settle with Terry. It is not a case like
Anderson where the defendants prevented the plaintiff from suing all tortfeasors in the
same action. Anderson's discussion of Greenwood shows that the courts will not give
plaintiffs a second chance to litigate fault if plaintiffs' own strategic choices expose them
to the risk of not recovering from a liable tortfeasor. Anderson, 242 Kan. at 863-65.

A similar situation arose in Albertson v. Volkswagenwerk Aktiengesellschaft, 230
Kan. 368, 634 P.2d 1127 (1981). There, Glynn Albertson was driving a Volkswagen van
and collided with a vehicle operated by Vernon Travis. Albertson sued Travis in state
court, and a jury determined that Travis was 60% liable and Albertson was 40% liable.
Then, Albertson tried to sue Volkswagen in federal court. The federal court asked the
Kansas Supreme Court to decide whether the suit could proceed. The Kansas Supreme
Court held:

"The action is over. Volkswagen could have been sued in state court but plaintiff chose
not to join the corporation for strategic reasons. Albertson is bound by that decision.
Under the doctrine of comparative fault all parties to an occurrence must have their fault
determined in one action, even though some parties cannot be formally joined or held
legally responsible. Those not joined as parties or for determination of fault escape
liability." 230 Kan. at 374.

Here, as in Albertson, Plaintiffs made a strategic choice when they settled with
Terry. They cannot use their strategic choice as a reason to evade application of the one-
action rule.

11

Plaintiffs also rely on Childs v. Williams, 243 Kan. 441, 757 P.2d 302 (1988).
There, 12-year-old Rachelle Childs was a passenger in a car driven by Michael Wesson.
The car collided with a car driven by Kristine Williams. Childs' mother negotiated a
settlement with Wesson. Because Childs was a minor, her mother had to file suit against
Wesson to complete the settlement. The district court approved the settlement. The
district court did not make a determination of comparative fault. The following week,
Childs' mother filed suit against Williams. The district court dismissed the suit on the
basis of the one-action rule. The Kansas Supreme Court reversed. 243 Kan. at 443. It
framed the issue as determining "what rights a plaintiff retains where all tortfeasors are
not joined in a friendly suit approving a settlement but making no determination of fault."
243 Kan. at 442. The court relied on Mathis in making its holding, explaining:

"We held in Mathis that each plaintiff must be allowed a trial judicially determining
comparative fault, regardless of whether the plaintiff had the opportunity to do so earlier
in one action. In Anderson v. Scheffler, 242 Kan. 857, 866, 752 P.2d 667 (1988), we
acknowledged that, under Mathis, a plaintiff is not barred from bringing further suits
against additional defendants concerning the same cause of action until it has actually
received a comparison of fault at trial." 243 Kan. at 443.

Plaintiffs argue that what happened in Williams is "exactly what happened in the Phillips
case." But, there is a major distinguishing factor. In Williams, there was not a
determination of fault before Childs brought the second action. Childs was entitled to a
"trial judicially determining comparative fault, regardless of whether the plaintiff had the
opportunity to do so earlier in one action." 243 Kan. at 443. Here, Plaintiffs have already
received their trial judicially determining comparative fault, and the one-action rule
prevents them from getting another.

This case is more akin to Mick, 244 Kan. 81. Douglas Mick was injured while
working on a drilling rig. He filed two lawsuits on the same day. One was a products
liability action filed in Rooks County against Bethlehem Steel Corporation and others for
12

causing the oilfield accident. The other was against Dr. Mani M. Mani, who performed
reconstructive surgery on Mick. Eventually, all defendants other than Bethlehem Steel
were dismissed from the Rooks County action. A jury found no fault on the part of
Bethlehem Steel. It did not compare Dr. Mani's fault. Following the Rooks County trial,
Dr. Mani filed a motion for summary judgment on the basis of the one-action rule. The
district court granted summary judgment to Dr. Mani, and the Kansas Supreme Court
affirmed. 244 Kan. at 95. The court concluded that "under the most recent comparative
fault cases, namely Mathis, Anderson, and Childs, a plaintiff may pursue separate actions
against tortfeasors where there has been no judicial determination of comparative fault.
Thus, the exceptions to the one-action rule arise when there has been no prior judicial
determination of fault." 244 Kan. at 93. In response to Mick's characterization of "Mani's
action as lying in wait for the unwary," the court said that "[p]laintiff's counsel should
have been alert to the risk he was taking as a part of his strategy to separate the
defendants." 244 Kan. at 94. Here, Plaintiffs' counsel should have also been aware of the
risks of obtaining a consent judgment against Terry.

The district court did not err in refusing to grant Plaintiffs a second consent
judgment hearing. A jury in Plaintiffs' case against Deere found that Terry was not liable
for Doug's death. The one-action rule prohibits Plaintiffs from relitigating Terry's liability
because there has already been a judicial determination of comparative fault. As this
court stated in Plaintiffs' first appeal, Plaintiffs must be able to establish Terry's fault and
liability in order to make a prima facie case that their consent judgment is reasonable.
Phillips, 2013 WL 1444259, at *9. Plaintiffs cannot show that Terry is liable, so their
consent judgment cannot be approved. Thus, the district court did not err by refusing to
grant Plaintiffs the opportunity to execute a second consent judgment.

Affirmed.