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Kansas Uniform Trust Code Established Exclusive Venue For Prison Trust Fund Proceedings

by David Reutter

The Kansas Supreme Court held that a prison trust fund is an actual trust, subject to the provisions of the Kansas Uniform Trust Code (KUTC), therefore the lower courts erred in applying a general statute to establish venue instead of the specific statute that assigned exclusive venue.

Mike Matson, a Kansas Department of Corrections (KDOC) prisoner, filed a civil suit in the Leavenworth District Court alleging that KDOC's Internal Management Policies and Procedures had implemented fees against his prison trust fund in violation of state laws and the U.S.C. Fifth Amendment.

The suit was filed pursuant to the KUTC, K.S.A. 580-101, which specifies that the venue for a trust is the location where it was principally administered. However, without any hearing or opportunity to respond, Leavenworth granted the defendants' motion to transfer venue to the Norton District Court. The Norton court asserted that per K.S.A. 60-609(a), venue was authorized in its district because some portion of the suit could be heard in that county. The Norton Court granted summary judgment to KDOC.

Matson appealed in 2013. He argued that the district courts' reliance on the general statute, 60-609(a), over the specific, 58a-101, was legal error. The appellate court affirmed the trial court's holding.

In 2015, Matson appealed to the Kansas Supreme Court and asserted that the specific statute controlled over the general. The defendants moved for dismissal because K.S.A. 58a does not apply to prison trust funds since they are not actually trusts. The supreme court held that the prison trust funds are legally a trust, and they are subject to KUTC provisions.

The defendants also argued that the general statute was properly applied. The supreme court held that because the prison trust fund is a trust, it is controlled by the specific statute so it was error to apply the general statute. The court did concede that erroneous transfer of venue is subject to harmless error review, but the burden rests with the defendants the case was not decided as a matter of law on stipulated facts, the error was not harmless. The supreme court ordered the matter be reversed and remanded to the Leavenworth District Court.

In a concurring opinion Justice Biles cautioned that all aspects of the summary judgment must be vacated, and a "deeper review" of Matson's claims should follow.

The district court should address legality of implementing the Internal Management Policy and Procedure (IMPP) without notice-and-comment rulemaking. KDOC appears to be ignoring its own regulation requiring a "free-of-cost method" for placing funds into a prisoner's trust account.

Matson reported that his mother sends him $56.40 per month, but after IMPP charges and fees, only receives $45.00. KDOC asserts that notice requirements did not apply because the fees are a part of the organization's internal management. Justice Biles sees this as problematic because the policy provides that it may not bind the general public, yet the only means to place funds in prisoner' accounts is to be subjected to the possibly illegal charges.

The case was remanded.

See: Matson v. Kansas Department of Corrections, No. 108, 992, Kan P. 3d (2017).

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