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Bertels v. Farm Bureau Property and Casualty Insurance
On Oct. 15, 2010, Autumn Bertels was a passenger in a car her grandmother, Elizabeth Bertels, was driving south on a highway in Kansas. Denver Barr was driving north on the highway when his car crossed the center line and eventually collided with Elizabeth Bertels’ car who died in the accident along with Barr. Autumn Bertels, who was then 8 years old, suffered a severe spinal cord injury and paralysis from the chest down. Three of Elizabeth Bertels’ other grandchildren who were in the car weren’t seriously injured.
Farm Bureau Property insured Elizabeth Bertels’ car, including liability coverage limited to $50,000 per person and $100,000 per accident. Farm Bureau learned of the accident on Oct. 18, 2010. One of its adjusters Jim Wagoner began investigating. He spoke that day with Ron Bertels, Elizabeth Bertels’ son and the family’s spokesperson, about the passengers’ medical conditions. The next day, Wagoner made a preliminary determination that Barr was 100% at fault for the accident based on his review of several pieces of evidence, including the police crash log and accident scene.
On Oct. 20, 2010, Farm Bureau set a $22,499 reserve for Autumn Bertels, an action assigned to a claim with a potential future claim. Due to Elizabeth Bertels’ death, the seriousness of Autumn Bertels’ injury and the potential claim value, Farm Bureau placed the matter on a “watch list.” At the time, Farm Bureau was aware that Elizabeth Bertels’ estate could have up to $285,000 in assets it would have to pay out to Autumn Bertels if Elizabeth Bertels had any liability for the accident.
On Nov. 10, 2010, Farm Bureau received the police accident report, which confirmed the facts as initially reported, and it again determined Barr was 100% at fault.
Farm Bureau learned Dec. 3, 2010, that the Bertels family retained Steve Sanders as an attorney and that Elizabeth Bertels didn’t have a will. A few days later, Sanders provided Farm Bureau with a letter from Barr’s insurer stating the police report confirmed Barr was at fault. Believing Elizabeth Bertels wasn’t at fault, Farm Bureau closed its file on March 7, 2011.
On Oct. 5, 2012, Sanders filed two actions, one by Autumn Bertels against Elizabeth Bertels, Elizabeth Bertels’ estate, Barr’s estate and Ford Motor Company and one by the three other grandchildren against Elizabeth Bertels and Barr’s estate.
Sanders wrote a demand letter to Wagoner Dec. 28, 2012, asserting Elizabeth Bertels was at fault and offering to settle the claims of the other three grandchildren, and stating he represented Autumn Bertels and he would be sending a separate settlement on her behalf.
Sanders had a telephone conversation with the attorney Farm Bureau hired to represent Elizabeth Bertels’ estate, Lee Brumitt, on Feb. 20, 2013. In a note to file regarding the call Sanders said Brumitt volunteered information about Autumn Bertels’ case saying when they made a demand, Farm Bureau was prepared to pay the full $50,000 policy limit, but acknowledged Sanders might not want to take the money due to federal court diversity jurisdiction issues. Sanders wrote at no time did he accept the offer.
Farm Bureau settled the claims of the other three children, and Sanders never followed up with a separate settlement for Autumn Bertels. Brumitt sent several follow-up correspondents concerning a settlement, ultimately offering policy limits to settle. Apparently, Autumn Bertels (through Sanders) rejected the offer. After settling with Barr’s estate and Ford Motor Company, Autumn Bertels voluntarily dismissed that action without prejudice.
Sanders then opened a probate estate for Elizabeth Bertels and filed another case in Kansas state court against the estate, asserting Elizabeth Bertels’ negligent operation of her car caused or contributed to Autumn Bertels’ injuries. Following a bench trial, the court entered judgment in Autumn Bertels’ favor in the amount of $15,758,245 and allocated 60% of the fault for the accident to the estate.
Autumn Bertels, having stepped into the estate’s shoes, then brought the diversity action underlying this appeal. Autumn Bertels asserted Farm Bureau breached the contractual duties it owed to Elizabeth Bertels to perform its obligation in good faith and without negligence by failing to timely and appropriately investigate the accident and refusing to tender a policy-limits settlement offer to Autumn Bertels in a timely manner.
The parties filed cross-motions for summary judgment. The district court denied Autumn Bertels’ motion and granted Farm Bureau’s, concluding under Kansas law, Farm Bureau had no duty to engage because she never made a claim for compensation. The decision also stated Autumn Bertels assumed the burden of initiating settlement negotiations when Sanders said he would be sending a settlement offer on her behalf.
Autumn Bertels appealed the grant of summary judgment to Farm Bureau.
A 10th Circuit Court of Appeals panel out of Kansas City, Kansas, wrote during this appeal, the Kansas Supreme Court issued an opinion in Granados v. Wilson that undermined the basis of the district court’s decision. The 10th Circuit reversed and remanded the case, so the district court can determine whether genuine issues of material fact preclude summary judgment on Autumn Bertels’ claim or whether the summary judgment may be granted on the alternative groups that Farm Bureau presents.