Huitron v. Kaye, 20210194

CourtSupreme Court of Utah
Writing for the CourtPetersen Justice
Citation2022 UT 36
PartiesMiguel Jose Huitron, an individual, The Estate of Miguel Jose Huitron, and Stephen J. Buhler, as special administrator of The Estate of Miguel Jose Huitron; Does I-V Appellants, v. Doniel Kaye, Appellee.
Docket Number20210194
Decision Date25 August 2022

2022 UT 36

Miguel Jose Huitron, an individual, The Estate of Miguel Jose Huitron, and Stephen J. Buhler, as special administrator of The Estate of Miguel Jose Huitron; Does I-V Appellants,
v.

Doniel Kaye, Appellee.

No. 20210194

Supreme Court of Utah

August 25, 2022


Heard April 11, 2022

On Appeal of Interlocutory Order

Third District, Salt Lake The Honorable Mark Kouris No. 200900654

Joseph J. Joyce, Bryan J. Stoddard, South Jordan, for appellants

Bradley Levin, Jim Leventhal, Julia T. Thompson, Denver, CO, Robert M. Henriksen, Salt Lake City, for appellee

Justice Petersen authored the opinion of the Court, in which Chief Justice Durrant, Associate Chief Justice Pearce, Judge Mortensen, and Judge Tenney joined.

Due to their retirement, Justice Himonas and Justice Lee did not participate herein; Court of Appeals Judge David N. Mortensen and Court of Appeals Judge Ryan D. Tenney sat.

Justice Hagen became a member of the Court on May 18, 2022, after oral argument in this matter, and accordingly did not participate.

Justice Pohlman became a member of the Court on August 17, 2022, after oral argument in this matter, and accordingly did not participate.

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Petersen Justice

INTRODUCTION

¶1 Miguel Huitron was driving near Heber City, Utah, when he caused a serious traffic accident that killed multiple people. Huitron also died in the accident. Plaintiff Doniel Kaye was the only survivor of the crash, and he suffered severe injuries. About three years after the accident, Kaye filed a personal injury lawsuit against Huitron's estate (the Estate). In pretrial litigation in the district court, he disclosed over $650,000 in medical damages and claimed total damages in the millions.

¶2 The Utah Probate Code contains deadlines within which any claim to a decedent's assets, including a tort claim, must be "presented" to the decedent's estate.[1] Utah Code § 75-3-803(1). This "Nonclaim Statute" requires that all claims against a decedent's estate that arose before the decedent's death must be presented to the estate within one year after the decedent's death or they are "barred."[2] Id. § 75-3-803(1)(a). It does not, however, "affect[] or prevent[]" a plaintiff's ability to pursue insurance proceeds from the decedent's liability insurance "to the limits of the insurance protection only." Id. § 75-3-803(4)(b).

¶3 The Estate moved for partial summary judgment. It argued that because Kaye had failed to present his claim to the Estate within one year of Huitron's death, the Nonclaim Statute barred Kaye from seeking the Estate's assets and limited his recovery to the per-person limit on Huitron's automobile liability insurance policy, which was $25,000.

¶4 Kaye countered that the issue of damages was not ripe. He argued that he should be allowed to prove the full extent of his damages at trial because it could lead to an increase in the "limits of the insurance protection." Specifically, he contended that if he obtained a judgment against the Estate that was larger than the applicable insurance policy limit, the Estate would have a potential bad faith claim against its insurance company that it could assign to Kaye. And he reasoned that any such bad faith

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claim should be deemed to fall within the "limits of the insurance protection."

¶5 The district court denied the Estate's motion. And the Estate sought this interlocutory review.

¶6 We conclude that in this case, the following issues can be decided as a matter of law at the summary judgment stage. First, because it is undisputed that Kaye did not present his claim to the Estate within a year of Huitron's death, the Nonclaim Statute bars him from seeking the Estate's assets. Accordingly, the Estate faces no exposure in this lawsuit as a matter of law, and any damages that Kaye is awarded may be collected only from available insurance proceeds. Second, under Utah law, potential proceeds from a bad faith claim against the insurer do not fall within "the limits of the insurance protection." This is because a bad faith claim belongs to the insured (here, the Estate) and not an injured third-party (Kaye). And the Estate would have a bad faith claim against the insurer only if a judgment exceeding the insurance policy limit were entered against the Estate. But because an excess judgment against the Estate is a legal impossibility, so is a bad faith claim against the insurer.

¶7 Accordingly, we reverse the district court's denial of partial summary judgment to the Estate.

BACKGROUND[3]

¶8 On February 14, 2017, Miguel Huitron was driving when he allowed his car to drift over the center line into oncoming traffic and caused a serious accident. Unfortunately, Huitron and the passengers in his car all died, along with the driver of the car that Huitron hit. The only survivor of the crash was Doniel Kaye, a passenger in the other car. Although he survived, Kaye suffered severe injuries, including facial and neck lacerations, unstable spinal fractures, and a traumatic brain injury with prolonged amnesia.

¶9 Huitron's family initially did not open a probate estate. Eventually, a Special Administrator for the Estate was appointed in the district court on January 8, 2020. Later that month-which

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was almost three years after Huitron's death-Kaye brought a personal injury claim against the Estate. Over the course of discovery, Kaye disclosed medical expenses exceeding $650,000, and claimed total damages in the millions.

¶10 At the time of the accident, Huitron was driving a car insured by Casualty Underwriters Insurance Company (the insurer). The policy had a bodily injury liability limit of $25,000 per person (Utah's statutory minimum) and $65,000 per accident. Based on these policy limits, the Estate made a settlement offer of $25,000 under rule 68 of the Utah Rules of Civil Procedure.[4]

¶11 The Estate then moved for partial summary judgment, arguing that under the Probate Code, Kaye could recover no more than the $25,000 of liability insurance proceeds it had offered. It relied on the Nonclaim Statute, which provides that "[a]ll claims against a decedent's estate which arose before the death of the decedent . . . are barred against the estate" if they are not presented[5] within "one year after the decedent's death." Utah Code § 75-3-803(1)(a). But the statute does not affect or prevent, "to the limits of the insurance protection only, any proceeding to establish liability of the decedent or the personal representative for which the decedent or the personal representative is protected by liability insurance." Id. § 75-3-803(4)(b). The Estate argued that

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because Kaye "did not officially present his personal injury claim to [the] Estate within one year of Mr. Huitron's death," the Nonclaim Statute prevented him from recovering any amount beyond the automobile liability insurance policy limit. The Estate thus asked the district court to find, as a matter of law, that Kaye's recovery was limited to $25,000.

¶12 Kaye rejected the Estate's rule 68 offer and opposed the Estate's motion. He contended that the court should not limit his damages before trial through summary judgment because the issue of damages was not yet ripe. Additionally, Kaye argued that evidence of Huitron's liability insurance was both irrelevant to Kaye's claim and inadmissible at trial, and thus the district court could not consider the evidence in ruling on the Estate's motion. In the alternative, Kaye argued that there were disputes of material fact as to the amount of the "limits of the insurance protection." According to Kaye, this statutory language did not necessarily limit damages to $25,000 in his case because if he could prove at trial that his damages exceeded $25,000, the Estate might have a bad faith claim against the insurer, which it might then assign to Kaye. Kaye argued that because of this possibility, the "limits of the insurance protection" were not necessarily limited to $25,000.

¶13 The district court denied the Estate's motion. Its written order explained that

there remain issues of law and fact bearing on whether the Utah non-claim statute applies to limit Mr. Kaye's damages recovery[] on a pre-trial basis. No Utah appellate court has addressed the meaning of the 'to the limits of the insurance protection only' language in the non-claim statute, in particular in the context of a claim that a liability insurer has violated its good faith obligations towards an insured. There are issues of fact as to bad faith conduct on the part of Defendant's insurer and its application to this case. Given the unsettled law and the factual disputes regarding the Defendant's liability insurer's conduct identified in [Kaye's] Response to the Motion, summary judgment is not proper.

(Citation omitted.)

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¶14 The Estate successfully petitioned for interlocutory review. We exercise jurisdiction pursuant to Utah Code section 78A-3-102(3)(j).

STANDARD OF REVIEW

¶15 When reviewing a district court's summary judgment ruling, we review the court's "legal conclusions and ultimate grant or denial of summary judgment for correctness." Cochegrus v. Herriman City, 2020 UT 14, ¶ 14, 462 P.3d 357 (alteration in original) (citation omitted) (internal quotation marks omitted).

ANALYSIS

¶16 The Estate argues that the district court should have granted its motion for partial summary judgment and ruled that the Nonclaim Statute limits Kaye's recovery to the $25,000 limit of Huitron's automobile liability insurance policy as a matter of law. Kaye contends that the district court correctly denied the Estate's motion, asserting that the issue of damages was not ripe and there are issues of fact as to the amount of available "insurance protection."

¶17 As we will explain, we agree with the Estate. However, this case illustrates why the Nonclaim Statute can sometimes be difficult to implement in the trial...

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