Hays v. Ruther

313 P.3d 782, 298 Kan. 402
CourtSupreme Court of Kansas
DecidedNovember 22, 2013
DocketNo. 108,351
StatusPublished
Cited by11 cases

This text of 313 P.3d 782 (Hays v. Ruther) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hays v. Ruther, 313 P.3d 782, 298 Kan. 402 (kan 2013).

Opinion

[404]*404The opinion of the court was delivered by

Rosen, J.:

Before this court are two questions certified by the United States District Court for the District of Kansas. Jurisdiction over the questions is provided by K.S.A. 60-3201 et seq. The federal litigation is in the pretrial stages. It involves claims by two Kansas residents who entered into an agreement with an out-of-state limited liability company to assist them in managing their consumer debt and in dealing with their creditors. The Kansas plaintiffs brought an action against the limited liability company, its managing member, and other entities for asserted violations of the Kansas Credit Services Organization Act (KCSOA), K.S.A. 50-1116 et seq., and the Kansas Consumer Protection Act (KCPA), K.S.A. 50-623 et seq. The certified questions ask this court to clarify the application of those statutes to attorneys and law firms.

Certified questions of law turn on legal issues. Burnett v. Southwestern Bell Telephone, 283 Kan. 134, 136, 151 P.3d 837 (2007). This court will not decide questions of fact when analyzing certified questions. OMI Holdings, Inc. v. Howell, 260 Kan. 305, 346, 918 P.2d 1274 (1996). The propriety of the certifying court’s factual findings and the factual findings urged by the parties are not properly before this court. Ortega v. IBP, Inc., 255 Kan. 513, 515, 874 P.2d 1188 (1994).

Although the parties urge us to apply the consumer statutes to various posited factual scenarios, we will address the certified questions as questions of law and will leave the factual determinations and applications of the law to those facts in the capable hands of the federal district court.

1. If an attorney who is licensed to practice law in Kansas and who is acting within the course and scope of the attorney’s practice is exempt from the provisions of the Kansas Credit Services Organization Act, is the attorney’s law firm also exemptP

The interpretation and application of statutes is a matter of law over which this court exercises unlimited review. The intent of the legislature, if ascertainable, governs the interpretation of statutes. This court presumes that the legislature expressed its intent through the language of the statutory scheme, and, if a statute is [405]*405plain and unambiguous, this court will neither speculate regarding the legislative intent nor read into the statute something that is not readily found in it. When the meaning of a statute is ambiguous, this court may turn to legislative histoiy, canons of construction, and other background considerations to construe the intent of the legislature. In re Adoption of H.C.H., 297 Kan. 819, 304 P.3d 1271 (2013).

At the time the suit was filed in the case giving rise to the certified questions, K.S.A. 50-1116 read:

“(a) K.S.A. 50-1116 through 50-1135, and amendments thereto, shall be known and maybe cited as the Kansas credit services organization act [KCSOA],
“(b) Any person licensed to practice law in this state acting within the course and scope of such person’s practice as an attorney shall be exempt from the provisions of this act.”

K.S.A. 50-1117(f) defined a person as “any individual, corporation, partnership, association, unincorporated organization or other form of entity, however organized, including a nonprofit entity.”

The KCSOA requires credit service organizations to register with the State of Kansas in order to cariy on their business with any resident of the state. K.S.A. 50-1118(a). Subsequent sections of the statute set out the requirements for registration, including surety bonds, and substantive duties assumed by registrants and acts that are prohibited for registrants, such as misrepresentations to consumers.

The certified question posed by the federal court asks this court to determine whether the attorney exception to the duties, limitations, and sanctions of the 2005 version of the statute applied to an attorney only or applied also to the attorneys law firm. We conclude that the legislature intended that the exception also apply to the law firm of an attorney who was exempt under the act.

K.S.A. 50-1116(b) expressly stated that any person licensed to practice law was exempt. The legislature elected to use the word “person,” instead of “individual.” In K.S.A. 50-1117(f), the legislature then defined “person” to include corporations, partnerships, and other business organizations. Business organizations cannot be licensed to practice law, and the plain language of the two statutory [406]*406provisions leads to an impossible result when the two statutory provisions are read together.

Statutory provisions that are clear when read separately may become ambiguous when read together, invoking employment of canons of construction, legislative history, or other background considerations to divine the legislature’s intent. Martin v. Naik, 297 Kan. 241, 258, 300 P.3d 625 (2013). A conflict between two statutory provisions is an example of such ambiguity in a statutory scheme. State v. Coman, 294 Kan. 84, 93, 273 P.3d 701 (2012).

Our conclusion that the legislature intended the exception to apply to law firms as well as to individual attorneys rests on two foundations.

First, exempting attorneys without exempting law firms may produce absurd results.

For example, attorneys often employ consultants and paralegals who may engage in timekeeping for billing purposes. See, e.g., Citizens Utility Ratepayer Bd. v. Kansas Corporation Comm’n, 47 Kan. App. 2d 1112, 1120, 284 P.3d 348 (2012). To exempt attorneys from statutory requirements and penalties while subjecting their support staff to such requirements and penalties would at tire very least vastly complicate the practice of law and in many instances could render it impractical. Furthermore, attorneys frequently set up their practices as business organizations.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Stewart
Supreme Court of Kansas, 2026
Bruce v. Kelly
514 P.3d 1007 (Supreme Court of Kansas, 2022)
Bicknell v. Kansas Dept. of Revenue
Supreme Court of Kansas, 2022
In re M.F.
475 P.3d 642 (Supreme Court of Kansas, 2020)
Consumer Attorney Services, P.A. v. State of Indiana
53 N.E.3d 599 (Indiana Court of Appeals, 2016)
Persels & Associates, LLC v. Banking Commissioner
Supreme Court of Connecticut, 2015
Kansas City Power & Light Co. v. Strong
359 P.3d 33 (Supreme Court of Kansas, 2015)
Coffman, Colorado Attorney General v. Williamson, Jr
2015 CO 35 (Supreme Court of Colorado, 2015)
Golden Rule Insurance Co. v. Tomlinson
335 P.3d 1178 (Supreme Court of Kansas, 2014)
STATE v. MARCUM
2014 OK CR 1 (Court of Criminal Appeals of Oklahoma, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
313 P.3d 782, 298 Kan. 402, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hays-v-ruther-kan-2013.