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Supreme Court releases for September 21, 2018

27 Sep 2018 3:10 PM | Amanda Kohlman (Administrator)

The Kansas Supreme Court released the following published decisions September 21:

Appeal No 115,126: Ed DeWitte Insurance Agency, Inc., et al. v. Financial Associates Midwest Inc., et al

Archived oral argument video

In an opinion written by Justice Caleb Stegall, the court unanimously reversed the Johnson County District Court's grant of summary judgment for Financial Associates Midwest, Inc., a health insurance brokerage, and Blue Cross and Blue Shield of Kansas City, a health insurance agency, and remanded the case for further proceedings. In the 1990s, Financial Associates entered into an oral agreement with three of its employees to pay them half of the override it received from Blue Cross in exchange for their work. In 2011, Blue Cross bought Financial Associates and stopped the override payments. The three employees left the agency and brought a breach of contract claim. 

The district court ruled the claim was precluded by the statute of frauds, which requires that any agreement that cannot be performed within one year must be reduced to writing. The Court of Appeals affirmed and held that to satisfy the full-performance exception to the statute of frauds, the former employees had to fully perform their part of the agreement and the only thing left to be done was for the former employer to pay. Because the duty to pay depended on the actions of third parties (the policyholders' decision to renew), the panel ruled in favor of Financial Associates and Blue Cross. The Supreme Court disagreed, holding that full performance by one party, standing alone, is sufficient to remove the agreement from the statute of frauds. The court further held that the former employees fulfilled their end of the bargain, the full-performance exception applied, and the alleged oral contract was removed from the statute of frauds.

Appeal Nos. 113,097 and 113,282: Alain Ellis Living Trust, et al. v. Harvey D. Ellis Living Trust, et al

Archived oral argument video

Alain Ellis and her husband Dr. Harvey Ellis Sr. both executed living trusts. While acting as trustee, Harvey improperly converted a substantial amount from Alain's trust and placed the converted assets into his own trust. These actions were not discovered until after Harvey died. Harvey's trust returned funds improperly transferred. Alain's trust and its beneficiaries sued Harvey's trust and others seeking additional damages, including punitive damages and statutory double damages allowed when a trustee embezzles or knowingly converts trust property. The Sedgwick County District Court ruled both types of damages were not recoverable against a deceased trustee. The Kansas Supreme Court reversed. The court held a trust and its beneficiaries who have brought a cause of action for a trustee's breach of trust and breach of fiduciary duty may seek punitive damages under K.S.A. 58a-1002(c) from the estate of the trustee under the procedures and requirements of K.S.A. 60-3702 and 60-3703. The court also held if a beneficiary of a trust brings a cause of action alleging a deceased trustee embezzled or knowingly converted to the trustee's own use any of the personal property of the trust, the trustee's estate shall be liable for double the value of the embezzled or converted property if those damages are greater than the damages calculated under K.S.A. 58a-1002(a). Both double damages, if the greater recovery, and punitive damages may be recovered under KS.A. 58a-1002.

Kansas Court of Appeals decisions.

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