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Keywords

contractstatutesummary judgmentstatute of limitations
contractstatutesummary judgmentstatute of limitations

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Kansas Farm Bureau Life Ins. Co., Inc. v. Farmway Credit Union, 256 Kan. 968, 889 P.2d 784

Facts

In 1974, KFB issued a life insurance policy for Keith J. Schreuder, who disappeared in 1982. After a seven-year absence, Farmway filed a petition to declare Schreuder presumed dead, which the district court granted. KFB subsequently paid Farmway the policy proceeds based on this presumption. However, in 1992, KFB discovered that Schreuder was alive and sought repayment from Farmway, leading to the legal dispute.

In 1974, KFB issued a life insurance policy for Keith J. Schreuder, who disappeared in 1982. After a seven-year absence, Farmway filed a petition to declare Schreuder presumed dead, which the district court granted.

Issue

Was KFB entitled to repayment based on a contract implied due to mutual mistake, and was KFB's action barred by the statute of limitations?

Was KFB entitled to repayment based on a contract implied due to mutual mistake, and was KFB's action barred by the statute of limitations?

Rule

1. The presumption made pursuant to K.S.A. 59-2704 that an absentee is dead applies only to the administration of an absentee's estate pursuant to K.S.A. 59-2705. 2. Where an insurance company pays the life insurance proceeds to a claimant based solely on a determination by the district court, pursuant to K.S.A. 59-2704, that the insured is presumed to be dead, the insurance company assumes the risk that the insured is not dead.

1. The presumption made pursuant to K.S.A. 59-2704 that an absentee is dead applies only to the administration of an absentee's estate pursuant to K.S.A. 59-2705. 2. Where an insurance company pays the life insurance proceeds to a claimant based solely on a determination by the district court, pursuant to K.S.A. 59-2704, that the insured is presumed to be dead, the insurance company assumes the risk that the insured is not dead.

Analysis

The court analyzed the application of the presumption of death and determined that KFB had directed Farmway to obtain the presumption order to process the claim. KFB chose to pay the proceeds based on this presumption rather than on the fact of death, which remained uncertain. The court concluded that KFB assumed the risk of Schreuder being alive and was therefore not entitled to repayment.

The court analyzed the application of the presumption of death and determined that KFB had directed Farmway to obtain the presumption order to process the claim. KFB chose to pay the proceeds based on this presumption rather than on the fact of death, which remained uncertain.

Conclusion

The Kansas Supreme Court reversed the judgments of the lower courts and remanded the case with directions to grant summary judgment to Farmway.

The Kansas Supreme Court reversed the judgments of the lower courts and remanded the case with directions to grant summary judgment to Farmway.

Who won?

Farmway Credit Union prevailed in the case because the court found that KFB had assumed the risk that the insured was alive when it paid the insurance proceeds.

Farmway Credit Union prevailed in the case because the court found that KFB had assumed the risk that the insured was alive when it paid the insurance proceeds.

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