71 J. Kan. Bar Assn. 8, 21-32b (2002). Conflict of Laws in Kansas: A Guide to Navigating the Dismal Swamp.

AuthorBy Terri Savely Bezek[1]

Kansas Bar Journals

Volume 71.

71 J. Kan. Bar Assn. 8, 21-32b (2002).

Conflict of Laws in Kansas: A Guide to Navigating the Dismal Swamp

Kansas Bar Journal71 J. Kan. Bar Ass'n, September 2002, 21-32 (2002)Conflict of Laws in Kansas: A Guide to Navigating the Dismal SwampTerri Savely Bezek, Conflict of Laws in Kansas: A Guide to Navigating the Dismal Swamp, J. Kan. Bar Ass'n, September 2002, 21-32By Terri Savely Bezek[1]As an area of law, conflict of laws truly is a dismal swamp[2] posing a variety of challenges to litigants, attorneys and judges alike. A potential for a conflict of laws (often called choice-of-law) problem can arise in any case where the parties, property or transaction are connected to more than one state or country. With an increasingly mobile society and the ever-continuing expansion of interstate and international commerce, the potential for conflicts issues has increased exponentially.

Some multi-state transactions pose few problems. If the laws of the jurisdictions are the same, the parties are faced only with the substantive issues of their rights and liabilities under the laws shared by the states.[3] However, when the substantive or procedural laws of those states differ significantly, the decision of which jurisdiction's law applies may well determine the outcome of the dispute. Likewise, if a lawsuit could be brought in different states, the choice-of-law rules used by each state could affect the final result.[4] Therefore, it is imperative for attorneys to understand choice-of-law principles in order to make better decisions and recommendations in litigation, estate planning and contract drafting.

By necessity, the scope of this article is limited; it will focus on how Kansas appellate courts make choice-of-law decisions. The approach taken by the State appellate courts impacts not only litigation filed in state courts, but also cases filed in Kansas federal district courts based on diversity jurisdiction.[5] This article is intended to provide a general framework to use in order to anticipate and avoid potential conflicts problems and to analyze how to resolve those issues when they arise.

  1. Introduction

    In looking at case law, the general overriding conclusion is that Kansas courts tend to use traditional choice-of-law methodology largely reflected in the original Restatement of Conflict of Laws.[6] This places Kansas among a minority of states[7] still adhering to rules which select the law of a jurisdiction based on the location of a key event. A majority of states have adopted all or part of the principles of the Second Restatement of Conflicts[8] while several other states have adopted other methodologies to analyze choice-of-law problems.[9]

    With this general conclusion stated, however, a Kansas attorney should approach a conflicts problem with a degree of caution. Kansas appellate courts have not blindly followed traditional rules. Occasionally, the Kansas courts have cited to the Second Restatement,[10] which usually requires weighing and balancing of various broad interests and policies when making choice-of-law decisions.[11] Despite these occasional references, however, there is no clear indication the Kansas courts intend to abandon the more rigid rules reflected in the First Restatement.[12] On other occasions, the courts also have shown a lex fori[13] leaning, opting to apply Kansas law absent a clear showing that another state's law should be applied[14] or by relying on public policy to justify its decision to apply Kansas law rather than the law of the state otherwise indicated under traditional rules.[15]

    When you find you are handling a case or transaction with a choice-of-law issue, how do you begin? The first step is to determine if there is a statutory provision that identifies which state's law applies. If there is no applicable statute, then Kansas courts will generally characterize the case based upon broad legal categories - procedural law or substantive areas such as tort, contract, property, etc. The characterization process is important as there are different rules applicable to different characterizations.[16] These rules generally require the court to determine where a key event occurred to ascertain which law will apply. When the place of the key event is ascertained, the court generally will apply the law of that state.

  2. Statutory Choice-of-Law Provisions

    The first step in a choice-of-law analysis is to ascertain whether there are any statutory provisions, which direct which state's law applies in a given case. Kansas, like most states, has only a few statutory choice-of-law provisions scattered throughout the statute books.[17] Various types of choice-of-law provisions can be found in the Kansas automobile insurance statutes,[18] the Workers' Compensation Act,[19] the Limited Liability Company Act,[20] the Uniform Commercial Code (UCC),[21] the Code of Civil Procedure,[22] the Probate Code[23] and the Uniform Child-Custody Jurisdiction and Enforcement Act (UCCJEA),[24] to name a few.

    These statutory provisions control choice-of-law determinations through different mechanisms. Some statutes, such as the UCCJEA, place limits on the jurisdiction of Kansas courts to hear particular cases. The automobile insurance and workers' compensation statutes require application of Kansas law in specified circumstances. Still other statutes define which law a Kansas court should apply to resolve certain types of issues.

    Regrettably, the availability of statutes do not necessarily simplify the choice-of-law process. Statutory provisions simply raise different kinds of issues. Does the statute, by its terms, apply? [25] Which law does the statute require to be applied? If another state's laws apply, how much of that state's laws apply? To answer these questions, attorneys and judges must apply principles of statutory interpretation.

    A recent example of this statutory interpretation process is Matjasich v. Kansas Dept. of Human Resources.[26] In Matjasich, employees brought an action for unpaid wages against the managers of a Kansas nursing home under the Kansas Wage Payment Act (KWPA).[27] The home was owned by a Utah LLC and the individual defendants were LLC members. The Kansas Supreme Court noted the KWPA did not apply to LLCs or their owners.[28] This finding did not end the analysis, however; the Court then turned to a choice-of-law statute, K.S.A. 17-7636,[29] within the Kansas LLC code. Under this statute, the law of the state where the LLC was organized determines the liability of the company's members. Utah's LLC laws, like Kansas' statutory provisions, shielded the members from the company's liabilities.[30] However the Court concluded it must look at all of Utah's laws, not just the LLC provisions. After concluding member/managers would be liable for wage payment claims under Utah's wage payment law, the Court held K.S.A. 17-7636 required the members to be liable for wages due in Kansas as well.[31]

    Another example is Wilds v. Mid-Century Ins. Co.[32] In Wilds, the Supreme Court agreed that Kansas law would apply in defining the minimum motor vehicle liability insurance limits for an automobile accident in Kansas, even if the insurance policy was issued elsewhere.[33] The Court held, however, that the same rule did not apply to uninsured motorist (UIM) limits because the UIM statute only applied to vehicles registered or principally garaged in Kansas.[34]

    As Matjasich and Wilds indicate, a conflicts question, which is controlled by statute requires careful review of all potentially applicable statutes. If it appears a statute controls the conflicts decision, statutory interpretation principles must be considered and applied to resolve the choice-of-law issue.

  3. Choice-of-Law Rules in Tort Cases

    Kansas has long followed the traditional rule of lex loci delecti[35] when determining what law to apply in a tort case. Under this rule, the court will determine the "place of the wrong" and apply the substantive law of that state. Generally, the "wrong" occurs, not where the tortious act or negligence occurred, but where the injury was sustained.[36] Thus, even though a liquor retailer negligently sells alcohol to an underage driver in Missouri, Kansas law would control the question of whether the retailer was liable for the damages caused when the drunk teenager struck and injured a person in Kansas.[37]

    Moreover, the Kansas courts have consistently applied the law of the place of the wrong, even when all the parties are Kansas residents. In Kokenge v. Holthaus, the Supreme Court held Iowa's guest statute would apply in a negligence action brought by Kansas residents against a Kansas driver when the automobile accident causing the injuries occurred in Iowa.[38] Similarly, in McDaniel v. Sinn, all the parties to a wrongful death action were Kansas residents. Because the accident leading to the suit occurred in Missouri, however, the Court held the Missouri wrongful death statutes applied, even though it did not allow for recovery of the same type of damages that Kansas law allowed.[39]

    The place of the wrong is generally a straight forward rule to apply. It's usually simple to determine where the injury occurred. Kansas courts, however, have yet to face choice-of-law issues in tort cases that do not fall within these usual forms. For example, defamation cases can be problematic when the alleged defamatory remarks are made in a publication with broad circulation or on a radio or...

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