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No. 102,359 IN THE COURT OF APPEALS OF THE STATE OF KANSAS RACHEL KANNADAY, Appellee, v. CHARLES BALL, SPECIAL ADMINISTRATOR OF THE ESTATE OF STEPHANIE HOYT, DECEASED, Appellant.

SYLLABUS BY THE COURT 1. Appellate courts review summary judgment proceedings de novo. The applicable summary judgment standards can be found in Miller v. Westport Ins. Corp., 288 Kan. 27, 32, 200 P.3d 419 (2009).

2. Notwithstanding the time limitations for claims against a decedent's estate set forth in K.S.A. 59-2239(1), the Kansas nonclaim statute, K.S.A. 59-2239(2) permits a tort claimant to commence an action against the decedent's estate within the applicable statute of limitations and pursue the claim to judgment. However, a claimant who failed to assert a timely claim under K.S.A. 59-2239(1) cannot look to the assets of the decedent's estate to satisfy any resulting judgment.

3. An automobile liability insurance policy that insured the decedent is not an asset of the decedent's estate which is protected by K.S.A. 59-2239(1).
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4. The Kansas nonclaim statute, K.S.A. 59-2239, does not ban the pursuit of a cause of action against a decedent's estate commenced within the applicable statute of limitations when the ultimate object of the suit is not estate assets, which would otherwise be available for distribution to heirs or legatees, but rather the assets of the decedent's liability insurance carrier.

5. All contracts must be supported by adequate consideration. Consideration may be any legal benefit or detriment. However, forbearing to prosecute an unenforceable claim is no consideration at all.

6. Under the facts presented, the settlement agreement between the parties which authorized the plaintiff to proceed to trial ex parte and to obtain a judgment against the defendant with no further notice to, or involvement by, the defendant was invalid because it was not supported by consideration of any kind.

Appeal from Wyandotte District Court; DAVID W. BOAL and R. WAYNE LAMPSON, judges. Opinion filed June 18, 2010. Affirmed in part, reversed in part, and remanded with directions.

William L. Townsley and Lyndon W. Vix, of Fleeson, Gooing, Coulson & Kitch, L.L.C., of Wichita, for appellant.

Paul Hasty, Jr., of Schmitt, Manz, Swanson & Mulhern, P.C., of Overland Park, for appellee.

Before MCANANY, P.J., MALONE and STANDRIDGE, JJ.

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MCANANY, J.: On July 13, 2005, Genevie Gold, Sharon Wright, and Rachel Kannaday were passengers in Stephanie Hoyt's automobile when it collided with a truck on the Kansas Turnpike. Hoyt was killed, and her three passengers were severely injured.

Hoyt was insured by GEICO Indemnity Insurance Company with liability limits for bodily injury of $25,000 per person and $50,000 per accident. GEICO settled with Gold for $25,000. GEICO offered to settle with Wright and Kannaday for $12,500 each. Neither accepted the offer.

Eight months later, on March 17, 2006, Kannaday petitioned the court to appoint Charles Ball as special administrator of Hoyt's estate (Estate). That same day Kannaday filed suit against Ball as special administrator of the Estate for her personal injuries, claiming the accident and Kannaday's injuries were the result of Hoyt's negligence.

On about April 21, 2006, Ball answered the petition, asserting that while Hoyt's negligence contributed to the accident, the negligence of others contributed and must be compared pursuant to K.S.A. 60-258a.

On March 23, 2006, GEICO, Hoyt's insurer, commenced an interpleader action in the federal district court in Kansas against Wright, Kannaday, and others, seeking a disposition of the remaining $25,000 proceeds from Hoyt's policy.

On August 30, 2006, Kannaday's attorney sent a proposed settlement agreement to the Estate's attorney. The agreement provided in part:

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"1. Kannaday may present, ex parte, Kannaday's evidence to the District Court of Wyandotte County, Kansas for the Court's consideration on the judgment to be entered in favor of Kannaday and against the representative of the estate of Hoyt."

In exchange, Kannaday agreed not to execute on the judgment against any Estate assets but to seek to recover on the judgment only from GEICO. To that end, Ball would assign to Kannaday any claim he or the Estate had against GEICO for bad faith. Ball signed the agreement on September 20, 2006.

On October 16, 2006, the Estate moved for partial summary judgment in the personal injury action, seeking to limit Kannaday's recovery against Hoyt to the $25,000 on deposit in the federal court because of Kannaday's failure to present a timely claim against the Estate as required by the Kansas nonclaim statute, K.S.A. 59-2239(1).

Before the district court could rule on the Estate's partial summary judgment motion, the federal court, on November 7, 2006, enjoined Kannaday from initiating or prosecuting any other actions to recover the $25,000 which was the subject of the interpleader action. The court also disbursed the $25,000 GEICO deposited in court to Wesley Medical Center for medical services it provided to Kannaday. See GEICO Indem. Ins. Co. v. Kannaday, 2008 WL 576202 (D. Kan. 2008) (unpublished opinion).

On November 27, 2006, the Estate again moved for summary judgment, this time claiming that because the federal court had disbursed all the interpleader proceeds and Kannaday failed to comply with the Kansas nonclaim statute, K.S.A. 59-2239(1), there remained no possible claim against the Estate.

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On December 21, 2006, the court ruled on both of the Estate's summary judgment motions. The court granted partial summary judgment with respect to the first $25,000 of Kannaday's claim, which was the subject of the federal court interpleader action and the federal court's injunction. The court denied summary judgment to the Estate with respect to the balance of Kannaday's claim over $25,000. The court determined that Kannaday had the right to proceed to trial to determine her damages (though the comparative fault issue was still unresolved). However, the court ruled that Kannaday cannot attempt to satisfy any judgment obtained with assets of the Estate because of her failure to comply with K.S.A. 59-2239(1).

On December 27, 2007, Ball executed a second copy of the August 2006 settlement agreement, and on March 17, 2009, Kannaday signed the agreement.

On March 18, 2009, the court held the ex parte hearing described in the settlement agreement. Kannaday, the only witness, testified to her extensive and catastrophic injuries and damages. She testified that she was a passenger in the Hoyt vehicle at the time of the accident. However, Kannaday was asleep in the back seat at the time of the accident so she could offer nothing on the issue of liability. Nevertheless, the court found Hoyt to be at fault, did not consider the possible comparative fault of others, determined Kannaday's damages to be $7,219,064.37, and entered judgment against the Estate in that amount.

The Estate appeals, claiming (1) the district court erred in denying summary judgment in favor of the Estate on its November 27, 2006, motion and (2) the ex parte judgment against the Estate is void because it is based on an invalid agreement.

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The Summary Judgment Proceedings

Our review of summary judgment proceedings is de novo. See Cooke v. Gillespie, 285 Kan. 748, 754, 176 P.3d 144 (2008); Smith v. Kansas Gas Service Co., 285 Kan. 33, 39, 169 P.3d 1052 (2007). We apply the same summary judgment standards applicable in the district court. The parties are well familiar with those standards which can be found in Miller v. Westport Ins. Corp., 288 Kan. 27, 32, 200 P.3d 419 (2009).

Here, there is no genuine issue of material fact. The question is whether the undisputed facts entitle the Estate to judgment as a matter of law. The Estate argues as follows: Kannaday filed a claim against the Estate beyond the period set forth in K.S.A. 59-2239, the nonclaim statute. K.S.A. 59-2239 is an absolute bar to pursuit of an untimely action. Hoyt had insurance coverage with limits of $25,000 per person and $50,000 per accident. $25,000 was paid to claimant Gold, and the balance was paid into court at the time GEICO filed the federal interpleader action. The federal court has issued a permanent injunction pursuant to 28 U.S.C.

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