Kansas Farm Bureau Life Insurance Company, Inc. v. Farmway Credit Union

Facts

Kansas Farm Bureau Life Insurance Company, Inc. (KFB) (plaintiff) insured the life of Keith J. Schreuder, who then disappeared. After seven years, Farmway Credit Union (Farmway) (defendant) obtained a court-ordered decree that Schreuder was presumed dead. Farmway submitted a claim to KFB for payment. KFB paid the claim, relying on the court-ordered presumption of death and agreeing that the payment to Farmway was in full settlement of all claims. Subsequently, KFB learned that Schreuder was still alive. KFB demanded that Farmway return the money paid on the claim. Farmway refused. KFB filed a petition in trial court, asserting a claim of contract implied by mutual mistake and a claim of unjust enrichment. The trial court granted summary judgment to KFB on the mutual-mistake claim and held that the unjust-enrichment claim was moot. Farmway appealed, arguing that there was no mistake of fact, but rather a compromise and settlement that bound KFB. The court of appeals affirmed, and further held that contract implied by mutual mistake and unjust enrichment were different names for the same theory of recovery that restored to a person what in equity and good conscience belonged to him. Farmway appealed to the Kansas Supreme Court, reiterating the compromise and settlement arguments, but also arguing that KFB had relied on the court-ordered presumption of death and thereby assumed the risk that Schreuder was alive.

Rule of Law

Issue

Holding and Reasoning (Allegrucci, J.)