Orr v. Heiman

• Decision Date: 27 October 2000
• Docket Number: No. 83,835.,83,835.
• Citation: 12 P.3d 387,270 Kan. 109
• Parties: DAISY ORR, INDIVIDUALLY and as EXECUTOR OF THE ESTATE OF CURTIS L. ORR, DECEASED, Appellant/Cross-appellee, v. TOM HEIMAN, SUPERINTENDENT OF U.S.D. 281, GRAHAM COUNTY, KANSAS, et al., Appellees/Cross-appellants.
• Court: Kansas Supreme Court

270 Kan. 109

12 P.3d 387

DAISY ORR, INDIVIDUALLY and as EXECUTOR OF THE ESTATE OF CURTIS L. ORR, DECEASED, Appellant/Cross-appellee, v. TOM HEIMAN, SUPERINTENDENT OF U.S.D. 281, GRAHAM COUNTY, KANSAS, et al., Appellees/Cross-appellants.

No. 83,835.

Supreme Court of Kansas.

Opinion filed October 27, 2000.

Randall W. Weller, of Jones & Weller, P.A., of Hill City, argued the cause and was on the brief for appellant/cross-appellee.

Allen G. Glendenning, of Watkins, Calcara, Rondeau, Friedeman, Bleeker, Glendenning & McVay, Chtd., of Great Bend, argued the cause and was on the brief for appellees/cross-appellants.

The opinion of the court was delivered by

LARSON, J.:

The cross-appeal in this case raises a jurisdictional issue as to whether Daisy Orr, individually and as executor of the Estate of Curtis L. Orr, deceased, has substantially complied with the notice of claim requirements of K.S.A. 1999 Supp. 12-105b. If we hold that Mrs. Orr has done so, we then consider her appeal as to the duty or lack thereof of an employer/group life insurance policyholder to provide an employee/insured with notice of conversion rights beyond that which is statutorily required at the time employment terminates. Our jurisdiction is pursuant to K.S.A. 20-3018(c).

Statement of facts:

Curtis L. Orr had been employed by U.S.D. 281 in Hill City for 23 years when he retired because of ill health on July 1, 1995. Mr. Orr had been diagnosed with cancer and given a life expectancy of 3 to 5 years in the fall of 1993. At the time of his retirement he had been told by his doctors that he had less than a year to live.

As an employee of the school district, Mr. Orr was a member of the Kansas Public Employees Retirement System (KPERS). This coverage included a $15,000 life insurance benefit, which was issued through Security Benefit Life Insurance Company.

An additional employment benefit was health insurance through Blue Cross and Blue Shield of Kansas that included a life insurance benefit rider for $15,000 with its subsidiary, Advance Insurance Company.

At the time of Mr. Orr's retirement, he had the right to convert to individual life insurance policies both of the group life insurance policies. This right was specifically noted in riders, clearly marked "conversion privilege," on the policies of insurance that had been furnished to Mr. Orr. Both parties agree and the record does not contradict that no written notice of conversion rights beyond the statements included in the insurance policy was provided to Mr. and Mrs. Orr at the time of his retirement. Mr. Orr did convert a separate health insurance policy which he held but did not convert either of the life insurance policies within the allotted time period.

Mr. Orr died on October 2, 1996. After being denied coverage from both life insurance companies, with at least one suggesting that his employer was obligated to provide notice of conversion rights, Mrs. Orr's legal counsel on November 8, 1996, and November 22, 1996, sent demand letters setting forth her claims to the superintendent of U.S.D. 281, Tom Heiman. On July 31, 1997, Mrs. Orr, individually, and as executor of her husband's estate, filed suit against the superintendent, the clerk, and the members of the school board of U.S.D. 281. After the defendants answered and discovery was completed, the trial court granted defendants' motion for summary judgment, finding (1) the notice of claim was sufficient under K.S.A. 1999 Supp. 12-105b, and (2) the employer/group policyholder was not required by K.S.A. 1999 Supp. 40-435 to give any additional notice of conversion rights at the time of retirement beyond that contained in riders to the insurance policies previously furnished to the employee.

Mrs. Orr appeals the decision that held the notice of conversion rights was legally sufficient and the defendants had satisfied their notification duty under the law. The defendants cross-appealed the trial court's decision that held the notice of the claim delivered to the superintendent was legally sufficient under 12-105b.

Standard of review

Our standard of review of motions for summary judgment is well known. See Bergstrom v. Noah, 266 Kan. 847, 871-72, 974 P.2d 531 (1999). However, the issues raised on both the appeal and cross-appeal are questions of law involving the interpretation of statutes upon which our review is unlimited. See Hamilton v. State Farm Fire & Cas. Co., 263 Kan. 875, 879, 953 P.2d 1027 (1998). "`In construing statutes, ... [e]ffect must be given, if possible, to the entire act and every part thereof. To this end, it is the duty of the court, as far as practicable, to reconcile the different provisions so as to make them consistent, harmonious, and sensible.' [Citation omitted.]" KPERS v. Reimer & Koger Assocs., Inc., 262 Kan. 635, 643, 941 P.2d 1321 (1997).

Does a notice of claim delivered to a superintendent of schools constitute substantial compliance with the requirement of K.S.A. 1999 Supp. 12-105b(d) specifying that notice be "filed with the clerk or governing body" of a school district?

We first consider the cross-appeal of U.S.D. 281 which, if sustained, is fatal to Mrs. Orr's claim of relief because the filing of a proper notice of claim under 12-105b is a condition precedent to the filing of an action against a municipality. See Zeferjohn v. Shawnee County Sheriff's Dept., 26 Kan. App.2d 379, 381, 988 P.2d 263 (1999).

The specific provision of K.S.A. 1999 Supp. 12-105b(d) involved in this question states:

"Any person having a claim against a municipality which could give rise to an action brought under the Kansas tort claims act shall file a written notice as provided in this subsection before commencing such action. The notice shall be filed with the clerk or governing body of the municipality .... In the filing of a notice of claim, substantial compliance with the provisions and requirements of this subsection shall constitute valid filing of a claim."

School districts are included in the definition of a "municipality," K.S.A. 12-105a(a). K.S.A. 12-105a(b) specifically states: "`Governing body'" means and includes ... board of education or other governing body of a school district...."

U.S.D. 281's argument is simply stated: because the notice sent by Mrs. Orr's counsel was mailed to the superintendent and not the school board, it failed to meet the requirements of 12-105b(d).

The trial court in its opinion set forth the last of the two letters sent by Mrs. Orr's counsel to Tom Heiman and the provision of 12-105b(d), and then held:

"This requirement is a condition precedent which must be both satisfied and pled in order for a complaint asserting a claim against [a] municipality to state a cause of action. Johnson v. Board of Pratt County Comm'rs, 259 Kan. 305 (1996); Sage v. Williams, 23 Kan. App.2d 624 (1997); Tucking v. Board of Jefferson County Comm'rs, 14 Kan. App.2d 442, 796 P.2d 1055 (1990), review denied 246 Kan. 770 (1990); K.S.A. 60-209. If a plaintiff fails to meet the requirements set forth under K.S.A. 12-105b, the court is without jurisdiction. Sage v. Williams, supra, Tucking v. Board of Jefferson County Comm'rs, supra. This requirement not only applies to claims against the municipality itself but to claims against municipal employees arising out of the course and scope of their employment. King v. Pimental, 20 Kan. App.2d 579 (1995). The notice sent is sufficient to meet the test as set out above."

Although U.S.D. 281 makes reference to the content of the letters, it centers its argument on appeal upon the improper service of the notice of claim on the superintendent; we will limit our analysis to that contention.

It is clear that under a strict reading of the provisions of 12-105b(d), notice of a claim delivered to a superintendent is not notice on the "clerk or governing body." However, the legislature in 1987 enacted the "substantial compliance" wording within the statute, and earlier decisions such as Howell v. City of Hutchinson, 177 Kan. 722, 728, 282 P.2d 373 (1955), and Dechant v. City of Hays, 112 Kan. 729, 212 Pac. 682 (1923), which have required strict compliance with the statutory requirements, appear to have their authority diminished. However, an argument can be made that the "substantial compliance" standard was already being read into the statute prior to the adoption of the 1987 amendment as the Court of Appeals did in Tucking v. Board of Jefferson County Comm'rs, 14 Kan. App.2d 442, 446, 796 P.2d 1055,rev. denied 246 Kan. 770 (1990), when it stated: "In interpreting the prior statutes, courts have always found a plaintiff need not do more than substantially comply with the elements." (Emphasis added.) Despite this apparent contradiction, the test we are obligated to apply is whether "substantial compliance" exists.

While "substantial compliance" is not defined in the notice statute, our case law has, beginning with City of Kansas City v. Board of County Commissioners, 213 Kan. 777, Syl. ¶ 2, 518 P.2d 403 (1974), and extending down to the City of Lenexa v. City of Olathe, 233 Kan. 159, 164, 660 P.2d 1368 (1983), stated that "substantial compliance" refers to "`compliance in respect to the essential matters necessary to assure every reasonable objective of the statute.'"

A recent case from the Court of Appeals, Smith v. Kennedy, 26 Kan. App.2d 351, 358, 985 P.2d 715 (1999), discussed the 1987 amendment adding the "substantial compliance" language and stated: "Significantly, there are no Kansas cases addressing the impact of the substantial compliance language upon the requirement that a municipality's governing body be served with a notice of claim."

While this statement may have been accurate at the time the opinion was written, the Smith case, along with the Zeferjohn opinion filed 1 week after Smith, and Bell v. Kansas City, Kansas, Housing Authority, 268 Kan. 208, 992 P.2d 1233 (1999), decided 90 days later, are each "substantial compliance" c...