Bertels v. Farm Bureau Property & Casualty Insurance Co.
No. 23-3276. 12/13/2024. D.Kan. Judge Hartz. Probate Proceedings—Settlement Agreement—Consideration—Assignment of Claims Against Insurer—Standing to Sue Insurer.
December 13, 2024
Elizabeth Bertels had a head-on collision with a car driven by Barr. Elizabeth’s granddaughter Autumn was a passenger in her car. The crash killed Elizabeth and Barr, and Autumn suffered a severe spinal-cord injury and was paralyzed from the chest down. Farm Bureau Property & Casualty Insurance Co. (Farm Bureau) provided liability coverage for Elizabeth’s car and made a preliminary determination that Barr was 100% at fault for the accident, so Elizabeth had no liability exposure. Several years later, Autumn sued Elizabeth, alleging that Elizabeth’s negligent driving caused her injuries. Autumn and Elizabeth’s estate (the estate) entered into an agreement under which (1) Autumn’s claims would be presented to a judge in a “trial,” with Autumn submitting “evidence” to consist of reports and affidavits without cross-examination or counter evidence from the estate; (2) the estate agreed to assign to Autumn any claims that it had against Farm Bureau; (3) Autumn agreed that she would not try to collect from the estate’s assets if she obtained a judgment against the estate; and (4) Autumn agreed to pay the estate’s litigation expenses. Following the “trial,” the judge awarded Autumn $15.75 million against the estate. Autumn, as assignee of the estate’s claims against its insurer, then filed suit against Farm Bureau for breach of contract, bad faith, breach of fiduciary duty, and negligence. The district court concluded that Autumn provided no consideration for the assignment because what she promised to do and refrain from doing was already required by the Kansas nonclaim statute. The court ruled that Autumn lacked standing because the assignment from the estate was invalid, and it dismissed the case for lack of jurisdiction.
The sole issue on appeal was whether Autumn had standing to sue Farm Bureau, which depends on the validity of the assignment from the estate in the agreement. Autumn initially contended that Farm Bureau waived any argument that the agreement lacked consideration. But standing concerns subject matter jurisdiction, which may be raised at any time. Further, there are no disputes of material fact, so summary judgment here was procedurally proper.
On the merits of the standing issue, Farm Bureau argued that the agreement lacked consideration because Autumn did not promise to do anything that she was not already bound to do. The Kansas nonclaim statute, K.S.A. § 59-2239, has a statute of limitations providing that demands against a decedent’s estate must be brought within four months after publication of notice to creditors of the probate proceedings (or 30 days after actual notice to a known or reasonably ascertainable creditor). The nonclaim statute also has a statute of repose providing that all unsecured claims against a decedent’s estate must be initiated within six months of the decedent’s death. The statue of repose has a limited exception for tort claims that are timely under the general statutes of limitation and that do not seek recovery from the estate’s assets and requires court costs to be taxed to the petitioner. Here, Autumn failed to file a timely claim. Second, her promises not to seek recovery from the estate’s assets and to pay the estate’s expenses and attorney fees did not constitute consideration because the nonclaim statute already barred her from executing judgment against the estate’s assets and required her to pay the estate’s expenses and legal fees. So even if her claim falls under the exception allowing her to file suit against the estate, she could not execute on the estate’s assets if she prevailed.
The order dismissing the case for lack of subject matter jurisdiction was affirmed.