*1 52,258 No. Sandstrom, Executor of the Estate of Thad M. Mitchelson,
Fred Deceased; Appellants, v. and Milda Sandstrom, J. Company, Appellee. (629 143)
Opinion filed June Merriam, McClure, Funk, Michael W. Colmery, Entz, & Letourneau Topeka, argued appellant. and was on the cause brief Philip Lewis, Eidson, Lewis, H. Haynes, Toрeka, argued Porter Baker, cause, firm, and Anne L. of the same was with him on the brief for the appellee. opinion
The of the court was delivered Mitchelson, plaintiff, Fred executor Miller, J.: Sandstrom, deceased, appeals of Thad estate M. from a declaratory judgment enterеd in his favor action. paramount is whether the estate is to more entitled than that the trial court on the principal policy. payable under the terms of an insurance M.
Thad Sandstrom the insured an accident by defendant, Company, issued Travelers Insurance under which the event of accidental Sandstrom’s wife, His Milda was the death. named J. 3,May gunshot of a wound on policy. Sandstrom died
of this accidental, within the terms of 1977. His death was *2 later and convicted charged coverage. Milda Sandstrom 717, State v. Kan. husband. See murdering her action, cert. 324, That denied U.S. therefrom, time this pending throughout most of the appeals were trial court. civil was before the action died, Milda Sandstrom a weeks after Sandstrom Within few her policy to her as assigned rights all of Hecht, attorney, gave D. and Hecht notice of then Robert payment of the assignment and made demand for to Travelers Hecht pоlicy together with from date of death. proceeds, with charged also in his that Mrs. Sandstrom stood noted letter husband, and offense the her that conviction of that murder of policy by virtue disqualify receiving her the benefits would from Also, appointed special admin- of K.S.A. 59-513. Mitchelson Sandstrom, deceаsed, and Mitchel- the estate Thad istrator of appointment, and of promptly Travelers his son notified death, proceeds, he asked Travelers to hold the Sandstrom’s and interest, charges against with until the criminal Mrs. Sandstrom were resolved. 1977, responded 9, and November
Counsel for Travelers on Hеcht, sug- attorneys the and to Mr. letters to executor voluntary into gested agreement that a entered proceeds the whereby Travelers entire due under could pending a final determination into escrow as to payee. No escrow reached. Mitchelson, executor, Milda filed this
Fred Sandstrom 1978, seeking November a determination as to on ownership directing seeking of the also $100,000 plus Travelers to Shultz, appeared by court. Milda Russell her new Sandstrom answered, attorney. conflicting Travelers that there alleging were estate, Milda Sandstrom and claims to party, D. Hecht. аsked Hecht be Robert Travelers ready stated it was the amount $100,000, custody and it volunteered to sum into pursuant providing court order for the final determi- policy proceeds. conflicting nation claims No order payment by making requiring Hecht following was taken in the case until the further action made. No August. Hecht, 6, 1979, August D. on wrote to counsel for
Robert Travelers, Mrs. Sandstrom’s inter- stating reassigned that he had her; copy was received counsel for est to summary later that month. Plaintiffs filed a motion for 22; responded on October judgment on summary that the record did opposing judgment for the reason neсessary Supreme all The United States Court not contain facts. v. Sandstrom denied certiorari State to Mrs. Sandstrom 5, 1979, her final. The November conviction thus became trial court entered this action on November plaintiffs plus against Travelers for the sum of 6, 1979, the per interest at annum from date of 6% lаter, days Trav- letter from Hecht Travelers’ counsel. Twelve *3 amend, By plaintiffs paid elers motion to alter or judgment. proof sought an award interest from the time of loss was payment; responded, furnished until time of contend- ing diligence, it due and had offered to make had used principal much earlier. The motion was over- ruled, appeals. The trial court later determined and the executor had no in the and that Milda Sandstrom interest invested, money, directed that which the interim had been paid to the executor. improperly granted The executor contends that the trial court first knеw that summary judgment because the date Travelers disputed had was a issue of fact. The executor reassigned Hecht summary judgment was on the sole contends that his motion for interest; and that the issue issue of whether Travelers should separate of when the interest begin was a issue which should however, summаry judgment, is remains for trial. The motion for limited; plaintiffs “move this Court for it states that the not so Summary against the Defendant Travel- Judgment their favor motion, Company.” granted that The trial court ers Insurance 6th, August was to commence as the date fixed the date interest response was disclosed in the of Travеl- Hecht’s letter. That date summary judgment. nothing There is plaintiffs’ motion for ers to plaintiffs objected suggest to to in the district court record response, indicate that Travelers nothing to that reference time, prior reassignment to that any knowledge copy of nothing to indicate that Travelers was furnished with a prior or was told of its existence to 6th. fact, a genuine Where the case records reflect issue of material summary judgment is warranted. State Bank Trust not Farmers Center, Hays City Co. v. Yates 229 Kan. 624 P.2d (1981). However, genuine where the records reflect no issue of court, material fact before the trial entered, cannot raise new issue first time in the Bailey appellate Enterprises, Inc., court. Frank C. Inc. v. Cargill, 1978); (5th Coleman, 582 F.2d Cir. Katsev 530 F.2d (8th 1976); Miller, Wright and see 10 Federal Practice n. Civil Here Procedure: there was no § factual before the issue and the trial court did err ground entering summary on that judgment. issue рrejudgment crucial here is not whether interest allowed; should, the trial court determined it prejudgment judg- interest from date of
ment, Travelers, November although contending that it pay any interest, obligated paid not be prejudgment judgment, allowed, including prejudgment and it appeal does not therefrоm. presented appeal in this is when the prejudgment should commence run. The executor contends liquidated held obligated it was policy, required terms of its and thus it should be death, from date from the date loss
furnished; he allowing contends that trial court erred in not Travelers, more hand, on the other сon- faith; offered, tends date, that it acted in early that it at an escrow in avoid an action *4 this, such as but the claimants would not and did not agree to such an arrangement; and that Travelers was not obligated to make until demand was made aby parties entitled to the it when could make the without рossibility being subjected liability. of to double rea- suit, sons that demand was the filing of but at that time assignee potential Hecht was an claimant and he made a party, although requested; so that it was not until 6 surfaced; and that until date, safely could not payment. make
571 applicable part that (sincе amended) provides in K.S.A. 16-201 rate six to receive interest at the shall be allowed “[creditors money it becomes any . . . after percent per annum proceeds that the appellant .” The contends . . . due insured, at or at least upon the accidental death became due death, and of his accidental Travelers was notified time argument Indiana buttress his appellant relies on an case to Farm Bureau United In K.S.A. 16-201. interest was due under Fultz,_Ind. Family Co. v. App--, Insurance Life (1978), in his home. was shot and killed N.E.2d 601 the insured acquitted her husband’s mur- charged wife was later His brought by In an action the wife to recover der. life, found that the policy on husband’s the court
insurance proper owing became due amount of died, beneficiary though even when the husband at Under be determined time. could not the date of set- making Indiana interest “[f]rom statute .”, . money any instrument . the court tlement on due on poliсy proceeds from the date found that interest was due on the of death. question on
The courts are not in
Appleman,
Law
situation. See 3
question
usually
pp.
resolved
Practice
323-325.
is
§
equitable
of each case.
examining the
and factual circumstances
Metropoli
v.
in Powers
general
length
rules
at
are discussed
(D.C.
1971),
Ins.
where the
tan
F.2d
Life
says:
where,
here,
“Generally
dispute
is a real
between
there
stakeholder,
company
the fund in
is not allowed on
insurance
is mere
period
question
during
deposit
registry
it
court.
is on
(1951).
(1969);
Interpleader
See also
Anno.
In the at case Travelers did not for the principal policy; liability, it admitted attempted negotiate an escrow would have placed avoided litigation, and would have an hands of where it have been could invested beneficiary. attempt, benefit of the ultimate an we Such believe, appropriate, arrangements such encouraged. initiаlly pro- offered escrow, ceeds filed, suit after offered to pursuant 60-222, into court to court order. K.S.A. our interpleader statute, provides safekeep- “for the ing, deposit or for the ... of the subject of the . .” . . Travelers’ answer Although order, invited such an obtained. sought no order concеrning liability rule for interest in similar situations is Murphy discussed in v. Travelers Ins. F.2d (5th 1976), Cir. where it is said: interpleader Texas, general concerning “In cases in rule accrual of interest follows; may be stated “ give up possession ‘Once stakeholder makes an unconditional offer to aof fund, disputed money it ceases to exert dominion over sufficient to justify obligation thereon, an and the rule is that once such made, unconditional tender is for interest ceases as of the date tender.’ Petroleum, “Phillips Adams, 355, 370 (5th 1975)]. Payment Co. v. F.2d [513 registry into the court or an offer do so is a sufficient tender’ right ‘unconditional following terminatе the claimant’s Id.; Jones, (S.D. Supp. 585, 1960).” tender. Oil F. Shell Co. v. Tex.
Judge Barbara had the facts discussed
before him
above
when
he
entered
judgment. He notes in his letter to counsel
dispute
Travelers does
liability;
that it volunteered to
sum;
genuine
there
conflict as to the
principal
and that
was a
*6
payee
reassign-
until
proper
that issue
resolved
ment,
in
He
August.
was received
Travelers
notice
which
order for Travelers to
in was ever
notes further
no court
circumstances,
requested or
Under all of the attendant
entered.
prejudgment
al-
judge
determined
1979,
August 6,
letter.
lowed from
date of Hecht’s
judge
awarding prejudg-
that the
in
We hold
correct
Shapiro
Employees
v. Kansas
Retirement
Public
ment
Shutts,
System,
353,
(1975);
216 Kan.
(1977), cert. denied 434 U.S. reh. a investigate The insurer time to is entitled reasonable claims, negotiate attempt and to out-of- with attempt court settlements. The to secure
entirely appropriate; attempt, as well as the insurer’s offers to faith, payment apparently make in but were not were accepted up all of During acted on or the claimants. the time aware, asserting so Hecht was until far as Travelers was confliсting claim not a and he was judge payment make action. did not order Travelers to obligated court. Travelers was make until it could duplicate chancing liability. do so without After it received word only reassigned, that Hecht had claimants were the executor parties in the plaintiff and Milda both action. prejudgment is matter to be When commence by the its sound discre- determined trial court exercise of tion, upon equities. facts consideration of all of attendant present here, all of the we conclude that Under circumstances properly fixing its discretion the date frоm trial court exercised find paid. was to We no abuse of which error. that discretion no affirmed. C.J., Company dissenting:
Schroeder, became due my opinion obligated to upon proof (proof of loss of death under the terms case). the fact that of loss challenge does not time, shortly after within a the death was made May 1977. Travelers the use of Thad Sandstrom $100,000, sum, liquidated upon paid which it no interest until period This was a months during an period economic when interest rates were astronomical in com- parison past years. only
Where the confronting concerning the liquidated of its awas deter- proper claimant, mination of the Travelers on its own initiative paid should have requested the funds into court and the court to make a determination of the claimant entitled to the funds. procedure This would relieve obligation Travelers of interest on the funds. If the contending quibbled claimants then over investment custody of the funds in the it would expense. be at their
During the period 27-month prime rate of interest charged by banks advanced from 6.75% to 12.25%. Under the court’s *7 decision, assuming Travelers per made an average of 10% annum funds, investment of the Travelers has benefited more than $20,000 аt the expense. claimant’s This is applying equity the facts confronting the court. my theory
On equity, companies insurance would not be permitted maneuver, case, as Travelers did in this to avoid proven of their liability under an policy. insurance
It is respectfully submitted judge the trial should have deter- mined when Travelers received of death in this case and awarded prejudgment from that date. JJ., join foregoing Herd, opinion.
Holmes dissenting