– Williams v. Geico General Ins. Co. –

IN THE SUPREME COURT OF THE STATE OF KANSAS
No. 117,149
ROYCE WILLIAMS,
Appellee,
v.
GEICO GENERAL INSURANCE COMPANY,
Appellant.
SYLLABUS BY THE COURT
1.
Personal injury protection "substitution benefits" as defined by K.S.A. 40-3103(w)
are allowances for appropriate and reasonable expenses incurred in obtaining other
ordinary and necessary services in lieu of those that, but for the injury, an injured person
would have performed for the benefit of such person or such person's family. They are
subject to a maximum of $25 per day for not longer than 365 days after the date such
expenses are incurred.
2.
K.S.A. 40-3103(w) does not exclude reimbursement for substitution benefits when
the injured person's spouse provides services subject to reimbursement.
3.
To recover substitution benefits, an injured person must prove genuine economic
loss or liability for the expenses incurred. Determining whether the injured person
establishes genuine economic loss or liability is a case-by-case analysis.
1
Review of the judgment of the Court of Appeals in an unpublished opinion filed February 2,
2018. Appeal from Sedgwick District Court; CHRISTOPHER M. MAGANA, judge. Opinion filed January
21, 2020. Judgment of the Court of Appeals reversing the district court is reversed. Judgment of the
district court is affirmed.
Lyndon W. Vix, of Fleeson, Gooing, Coulson & Kitch, L.L.C., of Wichita, argued the cause, and
Nathaniel T. Martens, of the same firm, was with him on the briefs for appellant.
Theodore C. Davis, of DeVaughn James Injury Lawyers, of Wichita, argued the cause, and
Kathryn A. Wright and Richard W. James, of the same firm, were with him on the brief for appellee.
The opinion of the court was delivered by
BILES, J.: The issue here is whether an insurance company owes personal injury
protection "substitution benefits" to a person injured in a motor vehicle accident for
ordinary and necessary services—such as household-related help or personal care—when
furnished by the injured person's spouse. The parties concede reimbursement would be
required had the same services been provided by anyone else. A Court of Appeals panel
held the insurance company did not have to pay because the wife's obligation to help her
husband "was incurred as a result of the marital relationship itself." Williams v. GEICO
General Ins. Co., No. 117,149, 2018 WL 683730, at *4 (Kan. App. 2018) (unpublished
opinion). We reverse the panel because the statutory definition of substitution benefits
makes no such distinction. The district court's award is reinstated.
FACTUAL AND PROCEDURAL BACKGROUND
GEICO General Insurance Company insured Royce Williams when he was injured
in an automobile collision. Williams went through surgery and required physical
rehabilitation. His physician determined he was "disabled and unable to perform his
regular duties at home and needed to have a caregiver provide such duties." The doctor
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specified that Williams could not do yard work, shovel snow, wash dishes, clean the
bathroom, dust, take out the trash, or clean his vehicle and that he could only prepare
meals if sitting down.
All agree that before the automobile collision, Williams and his wife, Mary, lived
together but maintained separate finances and work schedules. Williams generally
cooked his own meals, did his own laundry, drove himself, took care of his personal
hygiene, did his own shopping, and administered his medication himself.
When Williams returned from the rehabilitation hospital, he and Mary agreed she
would provide regular caregiver duties for $25 per day. These services included
assistance with meal preparation, personal hygiene and bathing, laundry, administering
medication, and driving. From December 18, 2015, through March 31, 2016, Mary spent
up to five hours a day doing this. She kept detailed itemizations of her services. She
indicated she often had to be absent from work during this time.
Williams sought payment for all personal injury protection (PIP) substitution
benefits available to him under his policy. GEICO refused and litigation ensued. Their
dispute needs some brief background about automobile insurance coverage for a better
understanding.
Among other provisions, the Kansas Automobile Injury Reparations Act, K.S.A.
40-3101 et seq., commonly called the no-fault insurance law, requires every Kansas
automobile liability insurance policy to include statutorily specified PIP benefits to the
insured and certain other persons. K.S.A. 40-3107(f); see K.S.A. 40-3103(q) (defining
PIP benefits). This coverage includes "substitution benefits," defined as
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"allowances for appropriate and reasonable expenses incurred in obtaining other ordinary
and necessary services in lieu of those that, but for the injury, the injured person would
have performed for the benefit of such person or such person's family, subject to a
maximum of $25 per day for not longer than 365 days after the date such expenses are
incurred." K.S.A. 40-3103(w).
In the district court, Williams sought $2,625 in substitution benefits for Mary's
services, plus attorney fees and expenses related to the litigation. GEICO denied liability,
arguing Mary had a legal obligation imbued from the marital relationship to provide
replacement services to her husband. Each party moved for summary judgment based on
what they claimed was K.S.A. 40-3103(w)'s proper interpretation from the undisputed
facts.
The district court granted judgment for Williams, reasoning the statute does not
exclude an injured person's spouse from providing substitution services. It denied his
request for attorney fees and expenses. GEICO appealed from the judgment against it
awarding Williams substitution benefits. Williams did not cross-appeal the remaining
rulings adverse to him, so they are no longer issues. See Lumry v. State, 305 Kan. 545,
553-54, 385 P.3d 479 (2016) (appellee abandons opportunity to challenge district court's
adverse ruling on the issue by failing to cross-appeal); K.S.A. 2018 Supp. 60-2103(h)
(appellate procedure; cross-appeal).
A Court of Appeals panel held the district court erred when interpreting the
statute. It agreed with GEICO that married persons, unlike other family members, cannot
be a provider or recipient of substitution services to each other. Williams, 2018 WL
683730, at *3. The panel relied on Hephner v. Traders Ins. Co., 254 Kan. 226, 864 P.2d
674 (1993), as well as Kansas probate law, criminal law, and the common-law doctrine of
necessaries. 2018 WL 683730, at *3-4.
4
The panel reasoned that Mary's duty to assist Williams arose from their marital
relationship, so he incurred no economic obligation to reimburse his wife for her care and
support arising from his automobile accident. And although the panel acknowledged
K.S.A. 40-3103(w) does not expressly exclude a spouse from being an eligible service
performer, it believed the Legislature did not intend to "implement a fundamental
modification of the concept of mutual marital support obligations in the context of the
omission of any such reference in an automobile insurance statute." 2018 WL 683730, at
*4. In explaining this rationale, the panel stated:
"[C]ommon law and societal mores have traditionally considered the marital relationship
as a distinct and special category apart from the generic 'family' relationship. Marriage
has traditionally and legally been determined to create a partnership of mutual benefits
and obligations, not the least of which is the mutual obligation to provide support for
each other. The thread of this mutual support obligation is woven through our statutory
and common-law jurisprudence. The continuing support obligation lies at the heart of our
civil laws governing domestic relations. Our Supreme Court has recognized that under
Kansas probate law, a spouse's right to an elective share of a deceased spouse's estate is
premised in part on the mutual duties of support which spouses owe, which survives even
after death. The criminal laws set forth yet another reflection of this mutual duty—it is
undisputed that a person may be charged under K.S.A. 2016 Supp. 21-5606(a) for
criminal nonsupport of a child or spouse in necessitous circumstances. [Citations
omitted.]" 2018 WL 683730, at *3.
In a separate concurrence, Judge Kim Schroeder agreed the statute and Kansas
caselaw required denying payment, but he wrote to emphasize the inequity this creates.
He called on the Legislature to amend the statute specifically to allow services rendered
by a spouse. 2018 WL 683730, at *4-5 (Schroeder, J., concurring). He pointed out:
5
"After the accident, Mary provided these services and had Royce and Mary merely been
cohabitating, Royce would have been entitled to substitution benefits for the services
Mary provided. Since Royce and Mary are married, however, he is not entitled to
substitution benefits. This creates an inequitable situation which actually punishes a
couple for marrying instead of merely cohabitating. If the Legislature amended K.S.A.
40-3103(w) to allow substitution benefits for services rendered by a spouse, this inequity
would disappear.
"Further, I note amending K.S.A. 40-3103(w) to specifically allow substitution
benefits for services rendered by a spouse would ease the financial burden on poorer
Kansans whose spouse is injured in an automobile accident. As the law now stands,
poorer Kansans may not be able to hire someone to provide ordinary and necessary
services for an injured spouse and, as a result, the healthy spouse is hit with a double-
whammy of financial hardship: being forced to take time off of work to care for their
spouse and not being compensated for their care." 2018 WL 683730, at *5 (Schroeder, J.,
concurring).
This court granted Williams' petition for review. Jurisdiction is proper. K.S.A. 20-
3018(b) (petitions for review of Court of Appeals decision); K.S.A. 60-2101(b) (Supreme
Court has jurisdiction to review Court of Appeals decisions upon petition for review).
ANALYSIS
Our focus is on the statutory term "incurred" as used in K.S.A. 40-3103(w), which
declares "'[s]ubstitution benefits' means allowances for appropriate and reasonable
expense incurred in obtaining other ordinary and necessary services in lieu of those that,
but for the injury, the injured person would have performed for the benefit of such person
or such person's family . . . ." (Emphasis added.) The parties agree no material facts are in
dispute, so we apply a de novo standard of review to this question of statutory
interpretation. See Nauheim v. City of Topeka, 309 Kan. 145, 149-50, 432 P.3d 647
(2019); Polson v. Farmers Ins. Co., 288 Kan. 165, 168, 200 P.3d 1266 (2009).
6
The panel mainly relied on Hephner—the sole case from this court dealing with
substitution services provided by family members—and held the requirement for the
expense to be "incurred" inevitably precludes a spouse from being a paid service
performer. Williams, 2018 WL 683730, at *2, 4. Hephner involved a claim for services
by grandparents for their disabled granddaughter, whose mother died in an automobile
accident. Two points the court discussed are relevant to Williams' case: (1) Whether
reimbursement may be had for services provided by family members, and (2) whether the
granddaughter had shown the "genuine economic loss" necessary to obtain substitution
benefits. Hephner, 254 Kan. at 227-28, 230.
As to the first point, the Hephner court held compensation for substitution services
provided by family members was available because the no-fault insurance law places "no
limitation on recovery merely because the services were provided by a relative of the
insured or survivor," so the reimbursement would be available as long as the
granddaughter "actually incurred expenses or liability for expenses in obtaining the
services." 254 Kan. at 231-32.
As to whether the granddaughter had made that required showing, the Hephner
court noted substitution benefits are only recoverable when there has been proof of
"genuine economic loss." 254 Kan. at 229-30; cf. ZCD Transp. v. State Farm Ins., 299
Mich. App. 336, 342, 830 N.W.2d 428 (2012) ("An expense is incurred when the insured
becomes liable to pay. . . . There must at least be evidence that the service provider
expected compensation for its services."). The court expressly held that even though the
grandfather admitted he would not try to collect from his granddaughter unless she
recovered benefits under the policy, there was sufficient evidence establishing genuine
economic loss. 254 Kan. at 234.
7
The Williams panel read Hephner to exclude recovery for Mary's services. It
reasoned the Hephner court placed "repeated emphasis on the lack of legal duty or
obligation on the part of the family members" in holding the granddaughter incurred
expenses for the grandparents' services. In the panel's view, that factor's absence in
Williams' case was a dispositive distinction. Williams, 2018 WL 683730, at *3. But,
while the grandparents' lack of legal duty to act as "a primary child-care provider" was
part of its analysis, Hephner made clear that whether the person seeking reimbursement
proves liability for expenses incurred and the existence of genuine economic loss is a
case-by-case determination. See 254 Kan. at 232-34.
The Williams panel overemphasized what was just one factor in the Hephner
court's analysis. The Williams panel identified various authorities sketching out a general
obligation existing between spouses to support one another: the common-law doctrine of
necessaries, a criminal nonsupport statute, and policy rationale underlying portions of the
probate law. Williams, 2018 WL 683730, at *3-4; see also K.S.A. 2018 Supp. 21-
5606(a)(2) ("Criminal nonsupport is . . . a person's failure, without just cause, to provide
for the support of such person's spouse in necessitous circumstances."); St. Francis
Regional Med. Center, Inc. v. Bowles, 251 Kan. 334, 340-41, 836 P.2d 1123 (1992)
(doctrine of necessaries); In re Estate of Antonopoulos, 268 Kan. 178, 182-83, 993 P.2d
637 (1999) (discussing purposes of probate code's elective-share provisions, including
implementing "support theory," which "recognizes that during their joint lives, spouses
owe each other mutual duties of support"]). In the panel's view, these reflected "[t]he
thread of [a] mutual support obligation . . . woven through our statutory and common-law
jurisprudence," based on which "the obligation of Mary to provide assistance for her
husband was incurred as a result of the marital relationship itself." Williams, 2018 WL
683730, at *3-4.
8
For its part, GEICO relies on Dempster v. Bundy, 64 Kan. 444, 67 P. 816 (1902),
in its effort to bolster the panel's holding. In Dempster, a creditor tried to collect a debt
owed by a husband by executing on his crop. The husband insisted the crop was not his
and belonged to his wife under a contract the pair entered into, under which he farmed as
his wife's employee. In payment, he contended, his wife agreed to provide work,
consisting of "carr[ying] the mail for him" and doing "his housework . . . and [taking]
care of his children." 64 Kan. at 446. The narrow question addressed in Dempster was
whether a valid contract sprang from "an agreement between husband and wife that the
husband shall work for the wife, and in payment for such services the wife shall work for
the husband, each engaged in the usual and ordinary affairs of life." 64 Kan. at 447. The
court held this type of contract was void for lack of consideration and contrary to public
policy. 64 Kan. at 450.
But Dempster does not describe the contract before us. Williams does not try to
cast his spouse's ordinary performance of her household role in their marriage as
consideration for a contract. And the undisputed facts show otherwise. One specific
passage in Dempster highlights our distinction and deserves mention:
"In In the Matter of Callister, 153 N.Y. 294, 47 N.E. 269, 60 Am. St. 620, it was held that
though a woman is serving a man in the capacity of clerk, upon an agreement to pay her
annual compensation of $500, such employment to continue as long as he practices law,
and such payment not to be made until he retires from business, he, upon their subsequent
marriage, becomes entitled to her services without payment. She need not continue
serving him as a clerk, but if she does she cannot enforce a promise to pay therefor,
however solemnly made.
"'The legislation of the state of New York upon the subject of the rights of
married women has only resulted in abrogating their common-law status to the extent set
forth in the various statutes. They have not, by express provision nor by implication,
9
deprived him of his common-law right to avail himself of a profit or benefit from her
services.' [Citation omitted.]" 64 Kan. at 449.
We do not see this passage as accurately reflecting the law of this state. In Kansas,
"Any married person may carry on any trade or business, and perform any labor
or services, on his or her sole and separate account; and the earnings of any married
person from his or her trade, business, labor or services shall be his or her sole and
separate property, and may be used and invested by him or her in his or her own name."
K.S.A. 2018 Supp. 23-2604.
At least one other jurisdiction has construed a similar statute as permitting spouses
to contract with one another as to their separate estates. See, e.g., Perkins v. Blethen, 107
Me. 443, 78 A. 574, 575 (1911) ("Rev. St. c. 63, § 1, gives to a married woman certain
powers over her separate estate which cannot be reconciled with the common-law status
of husband and wife."). And another has judicially abrogated its common-law rule
declaring contracts-for-hire between spouses unenforceable. In Romeo v. Romeo, 84 N.J.
289, 298, 418 A.2d 258 (1980), the New Jersey Supreme Court noted the rule against
interspousal contracts was "'artificial and technical'" and eroded by modern judicial
decisions, e.g., abolishing interspousal immunity in personal injury actions, and New
Jersey statutes much like K.S.A. 2018 Supp. 23-2604 conferring upon spouses the right
to own property and contract independently.
To determine whether Williams is entitled to substitution benefits for the amount
he promised to pay Mary for what she did for him, our inquiry is whether he has incurred
an obligation to pay her. And as noted previously, K.S.A. 40-3103(w) does not expressly
preclude Mary from providing substitution services simply because of her marital
relationship with Williams, so we must turn to the undisputed facts presented by
Williams that his obligation to pay was incurred.
10
Here, the facts establish Williams incurred an obligation to pay Mary by entering
into a contract with her to perform specific services for him that she would not have
otherwise performed, while he convalesced. And as the district court noted, the
underlying facts were uncontroverted: (1) before the accident, Williams prepared his
own meals, did his own laundry, drove himself, took care of his own hygiene needs, did
his own shopping, and administered his own medication; (2) those were the services
rendered by Mary in return for Williams' promise to pay her $25 per day; (3) had he not
suffered bodily harm, he would have performed those services for himself, but his
physician ordered him to have a caregiver to do them for him; and (4) from December 18,
2015, through March 31, 2016, Mary spent up to five hours a day providing these
services and kept detailed itemizations documenting the services furnished. Adding to
those facts is the undisputed recognition that payment would be owed under K.S.A. 40-
3103(w) if someone other than Mary had rendered the same services.
Under different facts, the spouses' mutual support obligations might prevent
claiming the existence of an obligation to pay a spouse for substitution services. Hephner
teaches that the analysis must be fact-driven and turns on the circumstances—including
the nature of the services alleged to have been provided in exchange for payment—in any
given case. See Dempster, 64 Kan. at 448 (indicating not all interspousal contracts are
void but some are, such as the one at issue).
We hold Williams is entitled to PIP substitution benefits for what Mary did, which
unquestionably resulted from the automobile accident, because he proved genuine
economic loss or liability for expenses incurred. The district court correctly entered
judgment in Williams' favor for $2,625 in PIP substitution benefits.
11
The judgment of the Court of Appeals is reversed; the judgment of the district
court is affirmed.
LUCKERT, C.J., not participating.
BARBARA KAY HUFF, District Judge, assigned.1
1
REPORTER'S NOTE: District Judge Huff was appointed to hear case No. 117,149
under the authority vested in the Supreme Court by art. 3, § 6(f) of the Kansas
Constitution to fill the vacancy on the court by the retirement of Justice Lee A. Johnson.
12