March, 2019

A recent Kansas Court of Appeals case exposes the danger of failing to exhaust administrative remedies when contracting with a public entity. The court of appeals affirmed the trial court ruling dismissing all claims of the prime contractor for its failure to comply with the Kansas Judicial Review Act (“KJRA”) and its contractually negotiated administrative remedies prior to filing suit. In doing so, the court held the KJRA applies to construction contracts, just as it does to other contracts with public entities.

Kansas State University (“KSU”) and Crossland Construction Company, Inc. (“Crossland”) entered into a contract where Crossland served as the prime contractor in the construction of a new residence hall on the KSU campus. Treanor Architects, P.A. (“Treanor”) entered into a contract with KSU to serve as the project architect and engineer. Crossland entered into a subcontract with Otis Elevator Company (“Otis”) to install the elevator in the new residence hall. A dispute arose between Crossland and Otis regarding the elevator system to be installed. Crossland submitted Otis’s shop drawings that included the elevator system it wanted to use. Treanor rejected those drawings, interpreting the contract to require a different elevator system. Due to the elevator system disagreement, Crossland terminated its subcontract with Otis. Following the termination of Otis, Crossland hired a replacement subcontractor, paying a substantial markup.

Roughly one year after Treanor rejected Otis’s shop drawings, Crossland submitted a Proposed Change Order (“PCO”) requesting over $1.3 million as compensation for the additional expenses it incurred related to the elevator system disagreement. The PCO had to be approved by several parties, including Treanor and KSU. The PCO was denied.

After attempts by Crossland to settle the matter by alternative dispute resolution, Crossland filed suit against KSU, Treanor, Otis and Otis’s insurer, Liberty Mutual (Crossland and Otis along with Liberty Mutual later voluntarily dismissed their claims without prejudice). KSU, joined by Treanor, moved to dismiss Crossland’s Petition for failure to exhaust administrative remedies as required by the KJRA and the parties’ contract. The trial court granted KSU and Treanor’s Motion to Dismiss holding that Crossland was required to appeal its breach of contract claim against KSU, a state agency, pursuant to the KJRA and the administrative remedies provision in its contract. The trial court explained that because Crossland did not follow the administrative remedies provision in the contract, Crossland had failed to exhaust its administrative remedies. Crossland appealed the trial court’s ruling.

The court of appeals affirmed the trial court ruling explaining that the KJRA requires a party to exhaust all administrative remedies available within an agency in a breach of contract case against a state agency before filing a petition for judicial review. Further, parties may contractually include administrative remedies in their contract, which in turn must be exhausted before filing a petition with the trial court. Crossland did not bring its claim to the Director of the Office of Facilities and Procurement Management within 10 days of Treanor’s decision to deny the shop drawings, as required by the contract. Crossland further failed to file its petition for judicial review within 30 days of the agency action. Thus, Crossland did not exhaust its administrative remedies prior to filing its petition. Also, the court of appeals held that the agency action, which triggered the KJRA and the contractual remedies, was Treanor’s denial of the shop drawings, rather than the denial of the PCO. 

As a practical matter, if one has contracted, or intends to contract, with a Kansas public entity, one should seek counsel to determine one’s statutory and contractual obligations regarding contract disputes. Kansas courts have held that failure to comply with the KJRA and other contractual administrative remedies requirements is a waiver of all claims against the public entity. The outcome of the Crossland case may seem counterintuitive, but it stands for the principle that what you don’t know can hurt you, especially if you are doing public work in Kansas.

Case citation: Crossland Constr. Co. v. Otis Elevator Co., 2018 Kan. App. Unpub. LEXIS 1005 (Ct. App. Dec. 28, 2018).

 

Can one passenger be liable to another passenger for her injuries?[1] The Kansas Supreme Court recently answered this question in a case titled Siruta v. Siruta, which detailed a family tragedy. Though the facts are horrific, the Court answered that passengers are generally not responsible for the safety of fellow passengers.

A passenger is only liable to another passenger for a driver’s negligence where the passenger and the driver operated the vehicle as a common enterprise, or the passenger and the driver had a special relationship. A joint or common enterprise requires four elements: (1) an agreement, (2) a common purpose, (3) a community of interest, and (4) an equal right to a voice, accompanied by an equal right of control over the automobile. If all four elements are present in a relationship between a driver and a passenger, the driver’s negligence may then be imputed to the passenger.

The Sirutas are the sole heirs at law of their child, who died in the accident. The parents had periodically traded driving duties during an approximate 330 mile-journey. At the time of the crash, the mother was driving, the child was asleep in the back seat, and the child’s father was asleep in the front passenger seat. The mother could not recall what caused the accident. The father sued the mother for negligence. The mother’s attorney, (undoubtedly prompted by her insurance company), argued that if she was negligent, the father was also responsible for the mother’s negligence as a result of their joint-driving decisions. Accordingly, her negligence would be imputed to him and his recovery for the loss of his child would be reduced or completely barred by the mother’s negligence.

This theory ran afoul of the fourth prong of the joint-driving doctrine. That elements reads: “whether, under the facts and circumstances, there is an understanding between the parties that [the passenger] has the right and is possessed of equal authority to prescribe conditions of use and operation[.]” The Court clarified this element as a “right of control” test: It requires that the driver and the passenger have some advance understanding or agreement that the passenger has a right to tell the driver how to drive. The agreement must extend “equal privilege and right to direct and control [the vehicle’s] operations” to both parties.

That is not what the Sirutas had. While they may have had a vague understanding that they would divide the time behind the wheel, the Court found that agreement did not amount to an understanding that each party “has the right and is possessed of equal authority to prescribe conditions of use and operation”. For example, there was no evidence of an agreement that allowed one to tell the other “how to drive the automobile” or that such orders would be followed. In fact, the mother testified that the father did not make her drive if she did not want to or if she was too tired. The father similarly testified that neither he nor the mother could command the other “to do X, Y or Z”. The Court observed that this agreement lacked the degree of control necessary to satisfy the joint-driving doctrine’s fourth element. Instead, it was a “mere association of persons riding together in an automobile having a common purpose in making a trip and a common destination”. As a result, the driver mother’s negligence in this case could not be imputed to the passenger father.

Rarely will a passenger exert enough control over the driver to impute the driver’s negligence to that passenger. The driver’s liability is not imputed to a passenger who merely takes driving shifts under a casual driving arrangement.

[1] A passenger can be liable for negligence for injuries to themselves which can reduce damages they may recover from a driver.   For example, getting into a vehicle with a known drunk driver. This article addresses liability to fellow passengers and not their duty to use due care for their own safety.

 

Download the .pdf here:  KSSupCtAddressesPassengerLiability

 

(Kansas City, MO – November 10, 2014) – Brown & Ruprecht, PC has been named a Tier 1 Kansas City-MO “Best Law Firm” in three practice areas by U.S. News – Best Lawyers® in 2015: Construction Law, Insurance Law and Litigation – Construction.

We have also been named a Tier 3 National “Best Law Firm” in two practice areas by U.S. News – Best Lawyers® in 2015: Construction Law and Litigation – Construction.

(Kansas City, MO – January 1, 2014) – With the addition of attorney Branden A. Bell, Brown & Ruprecht, PC has established two new practice areas.

Branden Bell is an experienced trial lawyer who focuses on federal criminal litigation. He has experience in cases involving business disputes, corporate concerns, health care fraud, conspiracies, and other criminal violations. He has been lead counsel in hundreds of criminal cases and helped clients navigate charges of Medicare and Medicaid fraud, wire fraud, smuggling, mislabeling, and other serious allegations. He also advises corporations, directors, and executives about internal investigations and corporate compliance.

When the government comes knocking, you are in for the fight of your life. That’s why you will never hear about our greatest victories: when we convince the government not to prosecute our clients.

(Kansas City, MO – October 21, 2013) – The firm is pleased to announce that the following attorneys from Brown & Ruprecht, PC, have been selected for inclusion in Missouri and Kansas Super Lawyers; Top 50: 2013 Kansas City Super Lawyers; Top 50: 2013 Women Missouri & Kansas Super Lawyers and Rising Stars.

Firm members named to Super Lawyers 2013 include: Stephen Brown, William DeBauche, John Hayob, Robert Latz, Matthew Merrill, G. Steven Ruprecht (also named as Top 50: 2013 Kansas City Super Lawyers), Heather Shore (also named as Top 50: 2013 Women Missouri & Kansas Super Lawyers), Frank Wendt. Firm members named to Rising Star 2013 include Diane Lewis.

The selections for the list are made by the research team at Super Lawyers, which is a service of the Thomson Reuters Legal division based in Eagan, Minnesota. Each year, the research team at Super Lawyers undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by the attorney-led research staff, a peer review of candidates by practice area and a good standing and disciplinary check.