Pub. 11 2022 Issue 1 9 limitations had run. The Buehnes argued that the statute of limitations had started to run when FSB declared the loan to be in default back in 2006, and that it was now too late to sue. The district court rejected the Buehnes motion for summary judgment and found in favor of FSB. The Court of Appeals concurred with the district court in an unpublished decision, thereby upholding the ruling. The Court of Appeals stated that the Buehnes had waived their right to raise the statute of limitations by signing the note, which had the waiver provision. The Court of Appeals also held that the waiver was not void against public policy. Supreme Court Ruling: On Dec. 30, 2021, the Supreme Court of Kansas affirmed the decision of the Court of Appeals. Relying on the importance of the freedom to contract, the Court held that a contract between parties is presumed legal and that the freedom to enter into contracts should not be interfered with lightly. Nevertheless, the Court also held that any contract violates public policy if it is injurious to the interests of the public, contravenes some established interest of society, violates some public statute, or tends to interfere with the public welfare or safety. In this case, the Court found that the waiver in a commercial contract did not violate public policy because it did not cause the Buehnes to suffer any prejudice as it did not take away the ability of the Buehnes to try other legal remedies (e.g., laches or unconscionability) and that the inclusion of the phrase “ to the full extent permitted by law” constituted a sufficient safety valve to dispel other undue pressures on public policy. Kathy Taylor, KBA EVP — General Counsel ... the Court held that a contract betw een p arties is p resumed leg al and that the f reed om to enter into contracts should not be interf ered w ith lig htly. In finding waivers are not void as a matter of law in a commercial contract, the Supreme Court put the burden squarely on the shoulders of the borrowers to show prejudice. The KBA was represented in writing its amicus brief by Kersten Holzhueter with Spencer Fane LLP — a KBA Associate Member. Many thanks to Kersten for helping to argue for the parties’ freedom to contract in a commercial transaction.
RkJQdWJsaXNoZXIy MTIyNDg2OA==