Stephan v. Martin

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CORRECTED OPINION
NOT DESIGNATED FOR PUBLICATION

No. 115,003

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

MARTINE STEPHAN,
Appellant,

v.

KIMBERLY MARTIN,
Appellee.


MEMORANDUM OPINION

Appeal from Shawnee District Court; LARRY D. HENDRICKS, judge. Opinion filed June 16, 2017.
Affirmed.

Craig Stephan, of Law Office of Craig Stephan, of Scottsdale, Arizona, and Kammie Dillner, of
counsel, Clutter & Aadalen, LLP, of Topeka, for appellant.

B.J. Hickert, of Newbery, Ungerer, & Hickert, LLP, of Topeka, and Kate M. Wary, of Law Office
of Bauer & Pike, LLC, of Great Bend, for appellee.

Before BUSER, P.J., ATCHESON and POWELL, JJ.

BUSER, J.: This is an appeal of an accounting action initiated under K.S.A. 58-
662(a) of the Kansas Power of Attorney Act (KPAA). Martine Stephan contends the
district court erred in several ways during this litigation which ultimately concluded with
the district court ruling that Stephan had received a full and complete accounting of the
actions taken by her sister, Kimberly Martin, in her capacity as attorney in fact for their
now deceased mother, Norma Brooks.

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In particular, Stephan challenges the district court's determination that Martin did
not breach any of her fiduciary duties and the court's refusal to (1) permit Stephan to
depose Martin, (2) vacate the protective order issued to protect the confidentiality of
Norma's records, and (3) award Stephan attorney fees under K.S.A. 2016 Supp. 58-
657(g). After carefully reviewing the record and considering the parties' arguments, we
find no error. Accordingly, we affirm the district court's decision.

FACTUAL AND PROCEDURAL BACKGROUND

George and Norma Brooks were married and had five children: Kimberly A.
Martin, Martine C. Stephan, Rodney F. Brooks, Dudley D. Brooks, and Karen L.
Fletcher. In her later years, Norma executed a general durable power of attorney,
appointing three of her children, Martin, Rodney, and Dudley to serve "individually or
jointly" as her agents. In a supplemental general durable power of attorney, Norma
appointed Capital City Bank as an additional agent.

George died a short time later, on August 11, 2012, and 2 months later, on October
12, 2012, Norma passed away. Norma's will was filed in the Shawnee County District
Court within 6 months of her death on January 18, 2013. See K.S.A. 2016 Supp. 59-618a.
In the will, Norma designated Capital City Bank as the executor of her estate and the
George and Norma Brooks Joint Revocable Trust (Trust) as her sole beneficiary. Capital
City Bank also served as trustee of the Trust.

On April 8, 2013, Norma's daughter, Stephan, filed a petition, pursuant to K.S.A.
58-662(a), for an order directing her sister, Martin, to "prepare an accounting of all
transactions under the Durable Power of Attorney, from the time the Durable Power of
Attorney was executed to the date of Norma Brooks's death, and including any post death
transactions." The next day, the district court entered an order directing Martin to produce
a formal accounting of her actions as Norma's attorney in fact.
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In response, Martin submitted signed copies of various banking transactions
associated with a checking account held by Norma and George at Silver Lake Bank.
Shortly thereafter, Stephan filed notices to issue business records subpoenas to the
records custodians at Aldersgate Village, Capitol Federal, Bankers Life and Casualty
Company (Bankers Life), Waddell & Reed, and Silver Lake Bank.

Martin objected to the subpoenas, asserting that because they related to Norma's
medical and other personal financial information, the requests went beyond the scope of
K.S.A. 58-662 and were irrelevant to the proceeding. In response, Stephan stated that she
was not requesting medical records, and she claimed entitlement to request relevant
records with or without Martin's signature in order to provide a complete accounting.

On June 25, 2013, the district court held a hearing regarding the subpoenas and a
late-filed motion to compel accounting. In the motion, Stephan alleged that Martin had
failed to provide a complete accounting because she only had provided the district court
with copies of checks from one bank account. Stephan sought a listing of assets, a variety
of financial documents, and information related to all accounts in Norma's name.

At the hearing, Martin contended she had provided a complete accounting but she
did not object to Stephan's issuance of business records subpoenas which sought
production of documents she signed as Norma's agent. Martin also argued that Norma
valued her privacy and did not want her private information shared with others, including
Stephan and her husband, an attorney licensed to practice law in Arizona. As a result,
Martin insisted that if Stephan wished to obtain confidential records beyond an
accounting of her actions as agent, the Capital City Bank, as the executor of Norma's
estate tasked with protecting her privacy interests, should be joined as a necessary party
to the proceedings.

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Stephan, on the other hand, contended that Martin's accounting was insufficient.
As evidence of this assertion, Stephan indicated that Martin had not yet accounted for
"about $7,000 of refunds" received from a long term care policy Norma had with Bankers
Life. Stephan further contended that it was unnecessary to join the Capital City Bank
because K.S.A. 58-662(a) authorized her, as an adult member of Norma's family, to
obtain a full and complete accounting of Martin's actions.

The district court granted Stephan's request to issue business records subpoenas to
Silver Lake Bank, Waddell & Reed, Capitol Federal, Bankers Life, and Aldersgate
Village for documentation, other than medical records, relating to Norma. The district
court also determined it was appropriate to issue a protective order, which prevented
anyone other than the parties' attorneys from reviewing the documentation produced from
the subpoenas "to protect the privacy rights of the decedent." As the district court
explained, "[Norma] was a private person and maybe [she did not] want her kids to know
or anyone else to know" all the intimate details of her life. However, the district court
indicated that if one of the attorneys discovered misconduct based on a review of the
financial records, the court would conduct an in camera review prior to releasing those
documents from the protective order.

The district court also ordered Martin to prepare an accounting of her actions as
Norma's agent by producing within 21 days all of Norma's financial records in her
possession during the time period she served as an agent. The district court applied the
protective order to these documents. As directed, Martin provided the supplemental
accounting.

A few weeks later, Stephan filed a motion to vacate the protective order. Stephan
alleged that Martin failed to comply with K.S.A. 2016 Supp. 60-226(c), because she did
not show good cause that Norma desired to preclude any of her adult children, or anyone
else, from accessing her financial records. Stephan also argued there was a strong
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presumption favoring open access to courts and court records, Norma's right to privacy
terminated upon her death, and K.S.A. 58-662(e)(7) provided no legal basis for the order
because it dealt with disabled principals, not with deceased principals.

Martin opposed Stephan's motion, contending it was moot because all of the
accounting authorized by K.S.A. 58-662 had been provided, business records subpoenas
had been issued, and no evidence of wrongdoing was apparently uncovered as evidenced
by Stephan's failure to request an in camera review. Moreover, Martin asserted that
Norma's right to privacy extended beyond her death and Stephan waived any objection to
the protective order by accepting the benefits of the order—the issuance of the business
records subpoenas and receipt of discovery documents.

Finally, Martin filed a motion for entry of final judgment or, alternatively, to join
the Capital City Bank as an additional defendant under K.S.A. 2016 Supp. 60-219.
Martin urged the district court to enter a final judgment because the "entire relief
requested by [Stephan] in her [p]etition ha[d] been provided." Alternatively, Martin
argued that it was necessary to join the Capital City Bank as an additional defendant
because it was the designated executor of Norma's estate and the trustee of the Trust.

In response, Stephan contested Martin's motion for a final judgment indicating that
she had not received sufficient documentation to determine if Martin may have retained
some of Norma's assets. Stephan also opposed joining Capital City Bank as a necessary
party.

On November 13, 2013, the district court held a hearing on the parties' motions. At
the hearing, Stephan was represented by her husband, Craig Stephan, who was admitted
as an attorney of record pro hac vice. In addition to asserting his view about the purported
misdeeds of Martin, Dudley, and Rodney in the handling of the healthcare and financial
matters of George and Norma, Stephan's counsel indicated that a complete accounting
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had not yet been provided. In particular, Stephan argued the following discovery was
needed: (1) depose Martin and "ask her what happened"; (2) investigate whether
Waddell & Reed responded appropriately to its subpoena; (3) depose a representative at
Bankers Life and order the institution to comply with its subpoena; and (4) subpoena the
business records at the McCrite Plaza Retirement Community.

The district court expressed concern that the requested discovery exceeded the
limits of K.S.A. 58-662, because the statute did not authorize Stephan to "go fishing
wherever [she] would like to [go]." Similarly, Martin argued that Stephan's discovery
requests were geared towards gathering evidence for a future lawsuit rather than
obtaining an accounting. Moreover, after the district judge opined that an accounting
action was not the proper forum for pursuing complaints against Martin, the district judge
stated:

"I understand there's a remedy for accounting, which we've done, but I'm saying
to you that at the end of this, I agree with you. Whichever way this goes, all I can do is
dismiss the case and if you think there is fraud or misappropriation, that goes somewhere
else, not in this case, because there's no remedy that I have at the end of this accounting
to do anything other than to say the accounting wasn't appropriate, wasn't complete.
. . . .
". . . I think there's a point in which I can say, that's it, folks. I've given you what
you've asked for and if you want something, go somewhere else. If you want to go
somewhere else for a fishing tour or find something else about it, you can file a suit with
the trustee. . . . I don't know if [Martin has] done anything wrong, no one has presented to
me anything to show me that there's any evidence you've gotten so far in anything you've
gotten.
"She's given you an accounting to say where it all was. She's done what the
statute tells her to do, give you an accounting . . . ."

However, the district court granted Stephan's motion to compel Bankers Life to
comply with the business records subpoena and conduct a deposition. The district court
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also granted Stephan's motion to issue a business records subpoena to the McCrite Plaza
Retirement Community for any financial information regarding care Norma received at
the facility. But the district court refused to "grant any depositions or any further
discovery until someone [could] show [the court] that [there was] a problem," i.e., some
wrongdoing in the accounting or supplemental accounting. The district court also took
Martin's motion for a final judgment under advisement pending receipt of the discovery.

Finally, regarding the motion to vacate the protective order, the district court
indicated its willingness to amend the protective order to allow experts to review the
discovery documentation provided those experts understood they were also under a
protective order. The motion to vacate the protective order, however, was taken under
advisement.

One month later, Stephan sought an order authorizing the taking of Martin's
deposition to inquire into all of the documents and transactions relating to Norma and
"any misuse or abuse of [Martin's] powers." In response, Martin argued that Stephan
should be prohibited from conducting further discovery unless there was some showing
of misconduct. Martin further contended that Stephan was simply pursuing this case as a
discovery device to obtain information to determine whether certain actions could have
been taken by Norma or others to obtain additional funds for Norma or her estate.

Stephan countered:

"Based upon records available to [Stephan], which have been discussed with the Court, it
now appears that one of the following occurred: (1) [Martin] received a payment for
benefits under Norma Brooks' [long term care] policy for in-patient stays during the time
period from December 23, 2011 to April 27, 2012, but failed to deposit the funds into
Norma Brooks' account; (2) [Martin] knowingly failed to make a claim for said benefits,
but a claim can now be made for payment by Bankers Life; or (3) [Martin] is liable for
payment of the benefits, due to malfeasance for failing to make a timely claim on
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Norma's behalf. Further discovery is necessary in order to determine what exactly
happened."

Almost 1 year later, on September 5, 2014, Stephan filed a "Notice of Evidence of
Breach of Fiduciary Duty," alleging that although Martin was aware of Norma's long
term care insurance policy, Martin never filed an application for nursing home benefits or
for hospice benefits. In conjunction with this motion, Stephan sought an order to obtain
records from two health care facilities regarding Norma's health care information.
Stephan alleged that such information was necessary to determine Norma's eligibility for
nursing home and hospice benefits under the long term care policy and to obtain payment
of those benefits to the Trust.

In response, Martin argued that Stephan had no standing to bring breach of
fiduciary duty claims or to subpoena Norma's confidential medical records because
Stephan was not the real party in interest. Martin claimed that Capital City Bank, the
designated executor of Norma's estate and the trustee of the Trust, was the real party in
interest to assert breach of fiduciary duty claims, pursue any uncollected insurance
benefits, and subpoena confidential medical records. Moreover, Martin asserted there was
no evidence indicating that she breached her fiduciary duty to Norma by failing to avoid
self-dealing and/or conflicts of interest.

Martin also argued that an attorney in fact only has a fiduciary obligation to
exercise the powers conferred in the power of attorney in the best interests of the
principal and to avoid self-dealing and conflicts of interest if that attorney in fact "decides
to exercise an authority granted under [the] power of attorney." Martin explained, "The
[KPAA] does not impose a duty to act on behalf of the principal"; instead, the KPAA
merely gives the attorney in fact the ability to "exercise the authority conferred in the
power of attorney" and K.S.A. 2016 Supp. 58-652(d) provides that an attorney in fact
"'[a]cting for the principal in one or more transactions does not obligate an attorney in
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fact to act for the principal in subsequent transactions.'" While Martin exercised some of
her powers, she was not "further obligated and had no duty to act in other transactions,"
including the pursuit of benefits under Norma's long term care policy.

In reply, Stephan contended that she was the real party in interest because she was
a beneficiary under the Trust and she had standing to present evidence of Martin's breach
of fiduciary duty. Moreover, Stephan insisted that Martin signed a notarized statement
accepting the delegation of powers and, under the KPAA, Martin's acceptance of these
duties obligated her to exercise the powers conferred to her with the utmost good faith
and loyalty to Norma. According to Stephan, Martin breached her fiduciary duty because
of her failure to file for long term care benefits which wasted and depleted Norma's
assets. Stephan also claimed to have evidence of a conflict of interest and self-dealing by
Martin.

On February 20, 2015, the district court held a hearing to consider the outstanding
motions. The district court found that Stephan had failed to present any evidence which
indicated that Martin breached her fiduciary duties under the general durable power of
attorney. As a result, the district court denied Stephan's request to take Martin's
deposition because Stephan had already been given a sufficient opportunity to conduct
discovery. The district court also granted Martin's motion for entry of a final judgment
with the caveat that the case would remain open until Capital City Bank had a chance to
clarify whether it needed a court order to obtain Norma's medical records for the purpose
of pursuing long term care benefits for Norma's hospice stay. Finally, the district court
denied Martin's motion for attorney fees because the discovery in this case benefited the
Trust of which Martin is a beneficiary.




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The district judge explained:

"This matter was filed for an accounting. Accounting was provided and then a
supplemented accounting was provided. Thereafter, this Court allowed additional
discovery on request of [Stephan] for different and sundry allegations and possibilities
that might—may or may not have been present and that [Stephan] believed needed to be
more rapidly flushed out.
"As it developed, the one difficulty that kept coming before this Court and that
was brought before this Court regarded Bankers Life and Casualty, which [Martin], her
brother, one of her brothers had gotten a healthcare account . . . long-term care and care
for hospice care for all other things associated with long-term care of their mother, Ms.
Brooks, in this matter.
"That they had—then [Martin] had failed her fiduciary duty somehow by not
seeking the benefits from Bankers Life for that and through [Stephan] and some of this
discovery, it appears that those benefits now have been paid. It appears that Bankers Life
has paid that at the request, evidently, of Capital City. There [are] allegations,
assumptions, inferences of why [Martin] did not pursue those benefits but no evidence
clearly before this Court of anything, any reason other than as indicated by [Martin's]
counsel, Mr. Hickert, her folks are dying during that period of time. There may well have
been other things on her mind than applying for these benefits.
. . . .
"This Court does not find in anything that's been presented to me or any of the
arguments today that there's any self-dealing or conflict of interest that I can determine. If
there was a problem with the Bankers Life, it's been all taken care of with the exception
of the hospice stay. . . .
"The statutes and case law require that every attorney of fact carry out their
fiduciary obligations in the best interests of the principal and to avoid self-dealing and
conflicts of interest. I find that in this case, I find no self-dealing or conflict of interest to
this point. Should the power of attorney submitted the Bankers Life statements to get
payment? Yeah, probably. Yes, that would have been very good. Was that some type of
plot against her mother? I think not, and it's been cured, if it was. Bankers Life has paid
those matters. They've been taken care of.


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. . . .
"I think we've come a long ways and I've granted a lot of latitude to [Stephan] in
this case and we've come to the end of this wherein there is nothing been proved more
than was by the original accounting and accounting that was—substitute accounting that
updated some errors that might have been made in the original accounting.
"I'm going to deny the motion to take the deposition. I think that that, in effect, is
just another fishing expedition. We're on an unsubstantiated theory. I'm going to deny the
motion for orders and inspection and reproduction of medical records with a caveat. I'm
going to hold open that so that Capital City can make sure they apply for the hospice
[benefits]. If they need the records to do that that are requested, I'll give the authority to
Capital City to get those records.
. . . .
"So with that being said, once we clarify with [Capital] City what they need from
me to be done in this case, then at that time, I will grant [Martin's] motion for entry of
final judgment. I think everything that can be done in this action has been done. I think
there's no need for any further actions. I think the statutes allow me to do certain things,
but we've gone there and gone beyond that. I don't think there is anything here that's been
presented to this Court that would allow me to enter any kind of judgment against this
power of attorney for anything that has been alleged that she may or may not have done. I
only keep the case open at this point so that we can make sure that [Capital] City gets
what they need to pursue the $2,500 from hospice."

On March 31, 2015, Martin informed the district court:

"Pursuant to the Court's direction on February 24, 2015, . . . that Capital City
Bank, in its capacity as trustee of the trust established by Norma Brooks, received a
check for further long-term care insurance proceeds in the amount of $1,446.00 from
Banker's Life and Casualty Company on or about March 24, 2015[, and] Capital City
Bank ha[d] no further claims planned or pending."

On May 4, 2015, Stephan filed a motion, under K.S.A. 2016 Supp. 60-259, to alter
or amend the judgment making arguments similar to those raised earlier. In response,
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Martin stated that it was appropriate to issue a final judgment because all outstanding
matters had been previously considered and resolved.

On September 9, 2015, Capital City filed a waiver of further accounting, which
stated:

"Capital City Bank, Trustee of the George and Norma Brooks Joint Revocable
Trust, created by agreement dated November 8, 2011, which Trust is the sole beneficiary
of the Estate of Norma Brooks, hereby waives any further accounting by Kimberly
Martin in her capacity as an agent under Norma Brooks' power of attorney."

Martin moved for entry of final judgment because Capital City's waiver of further
accounting "effectively end[ed] this proceeding," because the Trust was the sole
beneficiary of Norma's estate and there were no creditors with any claim against her
estate since no probate proceeding was filed within 6 months of Norma's death. Stephan
objected to the waiver and Martin's motion.

On October 23, 2015, the district court held a hearing. At the hearing, the district
court entered a final judgment dismissing the action and denied Stephan's motion to alter
or amend because she had failed to present any new arguments. The district court also
found that because there was no evidence of any bad faith by either party, no attorney
fees would be awarded. Finally, with respect to Stephan's outstanding motion to vacate
the protective order, the district court found the protective order, by statute, would remain
in effect. The district court indicated, however, that "neither party [was] precluded from
reporting to law enforcement personnel or from including in pleadings filed with a Court
facts derived from documents produced pursuant to the Protective Order."



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Stephan filed this timely appeal.

ENTRY OF JUDGMENT ON PETITION FOR ACCOUNTING

Shortly after Norma's death, Stephan brought this lawsuit by filing a self-styled
petition for accounting. Invoking K.S.A. 58-662, she sought a judicial order directing
Martin "to prepare an accounting of all transactions under the Durable Power of
Attorney, from the time the Durable Power of Attorney was executed to the date of
Norma Brook's death, and including any post death transactions." Of note, Martin's
responsibilities as Norma's agent only spanned 15 months. The order for an accounting
was entered by the district court.

More than 2 1/2 years later, after two accounting reports, the issuance of several
subpoenas for business records, a deposition, three court hearings, and a "waiver of
further accounting" filed pursuant to K.S.A. 58-662, by the trustee of the Trust—the sole
beneficiary of Norma's estate—the district court entered a journal entry of final judgment.
In granting final judgment to Martin, the district court found, among other findings,
"[Stephan] filed this action for an accounting, which accounting has been done and
redone."

Although Stephan raises several issues on appeal, the principal consideration is
whether the district court erred in entering a final judgment in favor of Martin and
dismissing Stephan's accounting action.

At the outset, it is necessary to state our standards of review. To the extent our
analysis involves interpretation of a Kansas statute, this is a question of law over which
appellate courts have unlimited review. Neighbor v. Westar Energy, Inc., 301 Kan. 916,
918, 349 P.3d 469 (2015). The district court's entry of final judgment, however, presents
a mixed question of fact and law which requires a bifurcated standard of review. In this
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case, the district court's factual findings are generally reviewed under a substantial
competent evidence standard, and its conclusions of law based on those facts are subject
to unlimited review. Gannon v. State, 298 Kan. 1107, 1175-76, 319 P.3d 1196 (2014).

Stephan's cause of action was permitted under K.S.A. 58-662(a) which authorizes,
in circumstances where the principal is disabled or deceased, "an adult member of the
principal's family or any person interested in the welfare of the principal" to file a petition
for accounting by the principal's attorney in fact. The only relief sought by Stephan's
cause of action was an accounting, which the district court ultimately concluded was
provided during the course of this protracted litigation.

The parties have not cited anywhere in the KPAA where the term "accounting" as
referenced in K.S.A. 58-662 is defined. Black's Law Dictionary, however, provides a
useful generic definition: "A rendition of an account, either voluntarily or by court
order . . . . The term frequently refers to the report of all items of property, income, and
expenses prepared by a personal representative, trustee, or guardian and given to heirs,
beneficiaries, or the probate court." Black's Law Dictionary 23-24 (10th ed. 2014).

As detailed in the Factual and Procedural Background section, in response to the
order to produce an accounting, Martin initially provided copies of banking documents
from Norma and George's checking account at Silver Lake Bank. These documents
provided a basis for Stephan to pursue additional discovery related to the accounting by
subpoenaing business records from a nursing home facility, banking, insurance, and
investment businesses. Additionally, Martin was ordered to supplement her initial
accounting by producing within 21 days all of Norma's financial records in her
possession during the time period she served as an attorney in fact. Martin complied with
this order.

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Stephan acknowledges that "numerous documents" were obtained through
discovery. That discovery forms the basis for Stephan's assertion that Martin breached
her fiduciary duties to her mother. Regardless of Stephan's assertion, however, the
accounting showed that insurance benefits were available and uncollected as of the time
of the lawsuit. Stephan states: "As a result of the accounting action in District Court,
Martine Stephan has recovered to date $6,964.43 in unclaimed insurance benefits for
the . . . Trust." This shows that Martin's accounting resulted in documentation responsive
to the district court's order.

At the November 13, 2013, hearing, the district court commented to Stephan,
"[Martin has] given you an accounting to say where it all was. She's done what the statute
tells her to do, give you an accounting." Over 1 year later, on February 20, 2015, and
after additional discovery was conducted by Stephan, the district judge reprised his
original evaluation of the accounting action:

"I think we've come a long ways and I've granted a lot of latitude to [Stephan] in
this case and we've come to the end of this wherein there is nothing been proved more
than was by the original accounting and accounting that was—substitute accounting that
updated some errors that might have been made in the original accounting."

We are persuaded the district court did not err in concluding that Martin provided
Stephan with an accounting of her actions during the brief period she served as attorney
in fact for Norma. That accounting formed the basis for Stephan to fully develop
information explaining the financial documents and records maintained by Martin on
Norma's behalf. Importantly, the district court's entry of judgment is also supported by
Capital City's September 9, 2015, waiver of further accounting filed pursuant to K.S.A.
58-662. That waiver established that the trustee of the Trust, which is the sole beneficiary
of Norma's estate, was satisfied that Martin's accounting was proper and complete.

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Upon our review of the record on appeal, we are satisfied the district court did not
err in concluding that Martin complied with what K.S.A. 58-662(a) requires—a report of
Norma's financial status and transactions during the 15 months that Martin served as
attorney in fact. Accordingly, we find no error in the district court's entry of final
judgment for Martin and the dismissal of Stephan's cause of action for an accounting.

Stephan focuses her appeal on her assertion that the district court erred in
dismissing the accounting action without a finding that Martin breached her fiduciary
duties to Norma. But as Martin points out, in an action for an accounting, the accounting
itself is the relief sought; therefore, the delivery of a full and complete accounting by the
attorney in fact concludes the action.

At the outset, Stephan's two page petition for accounting only sought a court order
directing an accounting. It did not make any other claims, state any other causes of
action, or seek any other remedies. Moreover, Stephan never sought to amend her petition
to seek damages or other relief due to Martin's purported breach of fiduciary duties. It is
apparent the district judge's view was that Stephan's cause of action, as pleaded, was an
action for accounting and, under the circumstances, no other relief was appropriate:

"Whichever way this goes, all I can do is dismiss the case and if you think there is fraud
or misappropriation, that goes somewhere else, not in this case, because there's no
remedy that I have at the end of this accounting to do anything other than to say the
accounting wasn't appropriate, wasn't complete. . . .
. . . .
". . . If you want to . . . find something else about it, you can file a suit with the
trustee. . . .
"[Martin has] given you an accounting to say where it all was. She's done what
the statute tells her to do, give you an accounting . . . ."

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We agree with the district judge's rationale. Stephan only sought an accounting,
and one was provided by Martin. The district court provided Stephan with the only relief
she sought by filing her petition for accounting.

Moreover, as for Stephan's allegation of breach of fiduciary duty, K.S.A. 58-662 is
silent regarding the district court's authority to issue orders addressing a breach of
fiduciary duty by an attorney in fact whose principal is deceased. This silence is
noteworthy because in the case of a disabled principal, K.S.A. 58-662 grants district
courts the power to issue numerous curative orders if the attorney in fact has breached a
fiduciary duty or there is a reasonable likelihood of a breach in the immediate future. In
particular, the district court may: (1) suspend or modify some or all of the authority
delegated to the attorney in fact, (2) authorize a different attorney in fact to exercise some
or all of the powers outlined in the durable power of attorney, and (3) designate a new
attorney in fact. K.S.A. 58-662(f).

Additionally, while K.S.A. 2016 Supp. 58-657(g) permits a principal and/or the
principal's "successors in interest" to seek compensatory damages, punitive damages, and
reasonable attorney fees if the attorney in fact "acts in bad faith, fraudulently or otherwise
dishonestly, or . . . intentionally acts after receiving actual notice that the power of
attorney has been revoked or terminated, and thereby causes damage or loss," K.S.A. 58-
662 contains a limitation of actions provision, which suggests our legislature's view that a
petition for an accounting and a claim for breach of fiduciary duty are treated as separate
causes of action. Specifically, K.S.A. 58-662(i) states:

"Unless previously barred by adjudication, consent or limitation, any cause of
action against an attorney in fact or successor for breach of duty to the principal shall be
barred as to any principal who has received an account or other statement fully disclosing
the matter unless a proceeding to assert the cause of action is commenced within two
years after receipt of the account or statement by the principal or, if the principal is a
disabled person, by a guardian or conservator of the disabled person's estate. If a disabled
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person has no guardian or conservator of the disabled person's estate at the time an
account or statement is presented, then the cause of action shall not be barred until one
year after the removal of the principal's disability or incapacity, one year after the
appointment of a conservator for the principal or one year after the death of the principal.
The cause of action thus barred does not include any action to recover from an attorney in
fact or successor for fraud, misrepresentation or concealment related to the settlement of
any transaction involving the agency relationship of the attorney in fact with the
principal."

Had the legislature intended to include the litigation of breach of fiduciary duty
claims within the ambit of an accounting action as provided in K.S.A. 58-662, it would
not have crafted a statute of limitations for the filing of a "cause of action" against an
attorney in fact for breach of duty following the "receipt of the account or statement."
K.S.A. 58-662(i). Regardless, in this case, Stephan's cause of action only sought an
accounting, which the district court properly ruled was produced.

Although the district court considered and ruled adversely to Stephan's arguments
regarding Martin's purported breach of fiduciary duty, the crux of the district court's
ruling was that Martin had supplied an accounting as sought by Stephan and, as a result,
the relief requested by Stephan was provided and the petition was dismissed. As we have
discussed earlier, this ruling was not in error.

DISCOVERY RULINGS

Stephan challenges two of the district court's rulings pertaining to discovery. First,
she contends the district court abused its discretion by denying her motion to take
Martin's deposition. Second, Stephan complains the district court erred by entering a
protective order and not subsequently vacating it. We will consider each ruling
individually.

19

A brief summary of our standards of review is in order. Our Supreme Court has
stated: "The trial court is vested with broad discretion in supervising the course and
scope of discovery." Miller v. Johnson, 295 Kan. 636, Syl. ¶ 18, 289 P.3d 1098 (2012). In
particular, "the district court has broad discretion in allowing depositions." Miller v.
Glacier Development Co., 284 Kan. 476, 498, 161 P.3d 730 (2007). The party asserting
the trial court abused its discretion bears the burden of showing such abuse of discretion.
State v. Robinson, 303 Kan. 11, 90, 363 P.3d 875 (2015). Finally, a judicial action
constitutes an abuse of discretion if the action (1) is such that no reasonable person would
take the view adopted by the district court; (2) is based on an error of law; or (3) is based
on an error of fact. Wiles v. American Family Life Assurance Co., 302 Kan. 66, 74, 350
P.3d 1071 (2015).

Regarding the deposition, Stephan insists she was entitled to depose Martin under
K.S.A. 2016 Supp. 60-226, which outlines the general provisions governing discovery in
civil cases. Nevertheless, while some form of discovery may be appropriate in a cause of
action for an accounting, "[d]iscovery is used to determine the facts that are relevant to
the issues in controversy," and in this case, Stephan has failed to persuade us that Martin's
deposition was necessary to obtain a full and complete accounting. See LaPointe v. State,
42 Kan. App. 2d 522, 550-51, 214 P.3d 684 (2009).

As Martin aptly points out, the district court "allowed unprecedented and broad
discovery, arguably more than what is contemplated in this type of proceeding," and by
the time Stephan requested permission to depose Martin, she had "already obtained the
relief requested in the lawsuit, an accounting of actions taken by the agent." During the 2
1/2 years of litigation, as the district court pointed out, it "granted a lot of latitude to
[Stephan]." Indeed, in addition to receiving an accounting from Martin, this latitude
included the right to subpoena business records from numerous entities and the
opportunity to depose a representative from Bankers Life.

20

On appeal, Stephan highlights several reasons why, in her estimation, the district
court erred in denying her motion to depose Martin. For example, Stephan asserts a need
to inquire about an alleged conflict of interest in the preparation of the general durable
power of attorney and "Norma's reliance on [Martin] due to impairments" related to
Norma's mental health. But, these are matters separate and beyond the scope of
accounting which simply provides a "report of all items of property, income, and
expenses prepared by a personal representative, trustee, or guardian." Black's Law
Dictionary 24 (10th ed. 2014).

Stephan received considerable discovery from financial institutions and medical
facilities to explain and corroborate Martin's accounting. Martin's tenure as attorney in
fact for Norma was of short duration. On the record before us, after many months of
discovery permitted by the district court, Stephan has proffered much speculation but few
specific discrepancies or inadequacies with the accounting to reverse the district court's
discretion to not further extend the litigation by ordering Martin's deposition.

We agree with the district court's determination that Stephan's deposition request
qualified as a "fishing expedition" because the "accounting ha[d] been done and redone."
Stephan has failed to show an abuse of discretion and, as a result, we are unable to
conclude that no reasonable person would take the view adopted by the district court.
Wiles, 302 Kan. at 74. We find no abuse of discretion.

Regarding the protective order, Stephan contends the district court abused its
discretion by denying Stephan's motion to vacate the protective order. Stephan variously
complains that the district court's order was issued without a sufficient evidentiary basis
or good cause shown, there is a public interest in maintaining open court records,
Norma's right to privacy terminated at her death, and the district court misapplied K.S.A.
58-662(e)(7).

21

As detailed in the Factual and Procedural Background section of this opinion,
when the district court granted Stephan's request to issue numerous business records
subpoenas the court also issued a protective order to prevent any person other than the
parties' attorneys from reviewing the documents. Based on Martin's arguments, the
district court decided the protective order was appropriate to maintain the confidentiality
of Norma's health care records and financial documents. The district court indicated,
however, that if one of the attorneys discovered misconduct based on a review of the
records, the court would conduct an in camera review prior to releasing those documents
from the protective order.

Later in the litigation, Stephan filed a motion to vacate the protective order, but
Martin opposed the motion, claiming it was moot because Stephan never sought an in
camera review to release the records from the protective order. At the end of the
litigation, although the district court reaffirmed the protective order would remain in
effect, the court ordered that "neither party [was] precluded from reporting to law
enforcement personnel or from including in pleadings filed with a Court facts derived
from documents produced pursuant to the Protective Order."

K.S.A. 2016 Supp. 60-226(c) authorizes a district court to "exercise its general
supervisory powers over discovery . . . by making 'any order which justice requires to
protect a party or person from annoyance, embarrassment, oppression, or undue burden
or expense.'" Kansas Medical Mut. Ins. Co. v. Svaty, 291 Kan. 597, 622, 244 P.3d 642
(2010).

We are unable to conclude that no reasonable person would have entered this
particular protective order. The district court carefully crafted the protective order to
allow Stephan's counsel (who was also Stephan's husband) full access to all of the
documentation, including the ability to disclose any wrongdoing revealed in the
documents in court pleadings or to law enforcement authorities. Based upon Stephan's
22

husband's arguments during court hearings, it is clear that he had an intimate
understanding of the case, including prior family dynamics, which was equivalent to that
of Stephan's understanding. The bottom line: While Stephan was fully informed
regarding the discovery, Martin's concern in maintaining the confidentiality of Norma's
health care and financial records was also addressed.

Apart from the propriety of the protective order, we have carefully reviewed
Stephan's briefing and are unable to find any substantive argument that Stephan's cause of
action was prejudiced by the issuance of the protective order. On the contrary, there is
some indication that Stephan was not prejudiced because she never sought an in camera
hearing requesting to set aside the protective order with regard to any documents. Under
these circumstances, without any claim or showing of prejudice to Stephan, any decision
we could issue as to the propriety of the district court's ruling would be hypothetical in
nature and have no effect on the proceedings. We conclude this issue is moot. See Stano
v. Pryor, 52 Kan. App. 2d 679, 682-83, 372 P.3d 427 (2016) (quoting State v. Hilton, 295
Kan. 845, 849, 286 P.3d 871 [2012]).

ATTORNEY FEES

For her final issue on appeal, Stephan asserts the district court abused its discretion
by denying her request for attorney fees. Citing K.S.A. 2016 Supp. 58-657(g), Stephan
claims that because Martin acted "in bad faith," Stephan should be awarded attorney fees.

K.S.A. 2016 Supp. 58-657(g) permits the award of reasonable attorney fees in
cases wherein the attorney in fact "acts in bad faith, fraudulently or otherwise
dishonestly." In its journal entry for final judgment, the district court—consistent with its
prior ruling that there was no breach of fiduciary duties by Martin—found "no bad faith
by either party so no attorney fees are awarded to either party."

23

At the outset, as discussed in the first issue, K.S.A. 2016 Supp. 58-657(g) relates
to causes of action for breach of fiduciary duties and does not specifically mention an
award of attorney fees for causes of action for an accounting undertaken pursuant to
K.S.A. 58-662(a). Assuming K.S.A. 2016 Supp. 58-657(g) does apply to accounting
cases, however, Stephan has failed to show how the district court erred in its evaluation
that Martin's delay in obtaining $6,964.43 in insurance reimbursement for Norma's
nursing home or hospice care costs was evidence of bad faith.

Stephan has not favored us with a definition of bad faith in this context. Our
research reveals a trust case wherein our court looked to Black's Law Dictionary 159 (9th
ed. 2009), to define bad faith as "'[d]ishonesty of belief or purpose.'" Schartz v. Barker,
No. 104,812, 2013 WL 189686, at *11 (Kan. App. 2013) (unpublished opinion). We find
nothing in the record to support any claim of dishonesty in Martin's belief or purpose in
serving as an attorney in fact for her mother.

Affirmed.