D.A.N. Joint Venture III, L.P. v. Turk

138 P.3d 1253, 36 Kan. App. 2d 353, 2006 Kan. App. LEXIS 740
CourtCourt of Appeals of Kansas
DecidedJuly 28, 2006
DocketNo. 94,697
StatusPublished
Cited by3 cases

This text of 138 P.3d 1253 (D.A.N. Joint Venture III, L.P. v. Turk) is published on Counsel Stack Legal Research, covering Court of Appeals of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
D.A.N. Joint Venture III, L.P. v. Turk, 138 P.3d 1253, 36 Kan. App. 2d 353, 2006 Kan. App. LEXIS 740 (kanctapp 2006).

Opinion

Malone, J.:

D.A.N. Joint Venture III, L.P. (DAN) appeals the district court’s order awarding attorney fees to Brad and Peggy Turk for a violation of the Uniform Consumer Credit Code (UCCC), K.S.A. 16a-2-101 et seq. Specifically, the district court found DAN was in violation of the UCCC for charging interest on the interest portion of a judgment against the Turks. We affirm.

On November 30, 2000, DAN sued Brad and Peggy Turk for failure to make monthly payments under a promissory note. Peggy accepted service of process for herself and Brad, even though they had been divorced since 1998. According to the petition, the outstanding principal balance on the loan was $4,526.76 and the annual percentage rate was 21.50%.

On April 30, 2001, a default judgment was entered in favor of DAN against both Brad and Peggy. The judgment stated, “As of April 25, 2001, the amount of principal, interest, and late charges due is $7,695.98.” The judgment also included court costs and attorney fees in the amount of $701, for a total judgment of $8,396.98. The judgment further stated DAN was entitled to receive postjudgment interest at the applicable contract rate of 21.50%.

DAN proceeded to collect its judgment by garnishing Brad and Peggy Turk’s wages. On December 4, 2003, Brad’s attorney wrote to DAN’s legal counsel to convey his concern that, in collecting the judgment against the Turks, DAN was calculating interest on both the unpaid principal balance and on the past due interest. In other words, DAN was assessing postjudgment interest at the rate of 21.50% on the entire amount of the judgment of $8,396.98, rather [355]*355than assessing postjudgment interest on only the outstanding principal balance of $4,526.76. This amounted to charging “interest on interest” since the original judgment already included an assessment of prejudgment interest. DAN’s legal counsel responded that the judgment was being collected legally and refused to recalculate the amount owed.

On July 6, 2004, Brad filed a motion to set aside the judgment, alleging lack of proper service. The hearing was originally scheduled for August 23, 2004, but the hearing was continued to a later date. However, the district court ordered that all collection efforts were to be suspended pending the hearing. Despite this order, Brad’s employer, Cessna Aircraft Co., continued to withhold his wages, based upon a continuing garnishment order. DAN filed a release of garnishment on October 12, 2004, and subsequently refunded $794.22 to Brad. In die meantime, Brad filed a motion for recovery of money and sanctions, alleging DAN had continued to garnish his wages despite the court order and had charged interest on the interest portion of the original judgment in violation of the UCCC.

On November 8, 2004, a hearing was held. Brad and Peggy both appeared at the hearing and were represented by separate counsel. Brad withdrew his motion to set aside the default judgment. However, he continued to assert his motion for sanctions including attorney fees based upon the alleged UCCC violation. Peggy also asked the district court for the recovery of attorney fees. The district court took the matter under advisement.

The district court subsequently ruled that the original judgment did not separate the unpaid principal balance and the prejudgment interest, and that DAN had collected interest on interest in violation of the UCCC. The district court awarded Brad $8.05, representing the overgamishment that DAN had collected and had not already refunded. The district court also awarded attorney fees in the amount of $1,133.76 to Brad and $150 to Peggy. DAN timely appeals.

On appeal, DAN advances several arguments that the district court erred in awarding attorney fees to the Turks. Most of DAN’s arguments involve interpretation of statutes. Interpretation of a [356]*356statute is a question of law, and an appellate court’s review is unlimited. An appellate court is not bound by the district court’s interpretation of a statute. Cooper v. Werholtz, 277 Kan. 250, 252, 83 P.3d 1212 (2004).

The issue of whether the district court has the authority to impose attorney fees under a particular statute is a question of law over which appellate review is plenary. See Hamilton v. State Farm Fire & Cas. Co., 263 Kan. 875, 879, 953 P.2d 1027 (1998). Where the district court has authority to grant attorney fees, the amount of attorney fees to be awarded is reviewed under the abuse of discretion standard. Davis v. Miller, 269 Kan. 732, 750-51, 7 P.3d 1223 (2000).

First, DAN claims K.S.A. 16a-5-201(l) provides a 1-year statute of limitations for asserting a UCCC violation that does not involve an open end credit agreement. DAN argues the Turks’ claim for recovery of attorney fees under the UCCC is barred by the statute of limitations. However, DAN did not raise a statute of limitations defense in district court. Generally, issues not raised before the district court cannot be raised on appeal. Board of Lincoln County Comm'rs v. Nielander, 275 Kan. 257, 268, 62 P.3d 247 (2003).

The closest DAN came to raising a statute of limitations defense in district court was contained in its written opposition to Brad’s motion for recovery of money and sanctions. DAN stated, “Since the alleged violation (which plaintiff does not admit, and strongly disputes) was merged with tire judgment, even if tire Court were now to conclude that it would have ruled differently, the time to challenge die judgment through appeal has long passed.” However, this statement related to DAN’s argument, to be discussed herein, that Brad failed to timely appeal the original judgment. This statement did not raise a statute of limitations defense to the alleged UCCC violation.

DAN also argues it was not required to raise a statute of limitations defense in district court because tire alleged UCCC violation was asserted by Brad in the form of a motion for recovery of money and sanctions. According to DAN, the statute of limitations is an affirmative defense which must only be raised in response to a pleading such as a petition or counterclaim, not a motion. This [357]*357argument is without merit. An issue must be raised by a party in district court before it can be considered on appeal. DAN has failed to preserve tire statute of hmitations issue for appeal.

Next, DAN asserts Brad’s claim for attorney fees was barred by the doctrine of acquiescence because Brad voluntarily agreed to payroll withholding from his employer to be credited towards the judgment. DAN raised this argument in its written opposition to Brad’s motion to set aside the default judgment. Brad ultimately withdrew this motion, and DAN did not assert acquiescence in response to the motion for sanctions. Even if this issue was properly raised in district court, we conclude it has no merit.

A party acquiesces in the judgment when he or she voluntarily accepts the benefits or assumes fire burdens of the judgment. Varner v. Gulf Ins.

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Bluebook (online)
138 P.3d 1253, 36 Kan. App. 2d 353, 2006 Kan. App. LEXIS 740, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dan-joint-venture-iii-lp-v-turk-kanctapp-2006.