UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

_________________________________ 

RACHEL KANNADAY, 

 Plaintiff – Appellant/Cross-

 Appellee, 

v. 

CHARLES BALL, Special Administrator 

of the Estate of Stephanie Hoyt, 

 Defendant, 

v. 

GEICO INDEMNITY INSURANCE 

COMPANY, 

 Garnishee - Appellee/Cross-

 Appellant. 

No. 14-3183 & 14-3222 

(D.C. No. 2:12-CV-02742-JTM) 

(D. Kan.) 

_________________________________ 

ORDER AND JUDGMENT*

_________________________________ 

Before KELLY, BALDOCK, and HOLMES, Circuit Judges. 

_________________________________ 

This bad faith insurance action arises out of an automobile accident in which 

Genevie Gold, Sharon Wright, and Plaintiff Rachel Kannaday were seriously injured 

after the driver, Stephanie Hoyt, deceased, made an improper U-turn. Hoyt had a 

GEICO insurance policy with limits of $25,000 per person and $50,000 per accident, 

 *

 This order and judgment is not binding precedent, except under the doctrines 

of law of the case, res judicata, and collateral estoppel. It may be cited, however, for 

its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals

Tenth Circuit 

November 25, 2015

Elisabeth A. Shumaker 

Clerk of Court

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 1 
2 

which was insufficient to cover the passengers’ serious injuries. Kannaday sued 

Hoyt’s estate for negligence in Kansas state court and obtained a verdict of over 

$4 million. Kannaday then brought this garnishment action against GEICO, alleging 

that GEICO had acted in bad faith in failing to settle and defend Hoyt’s estate. After 

a three-day bench trial, the district court found that GEICO had acted in good faith 

and without negligence. In this appeal, Kannaday challenges a number of the district 

court’s factual and legal conclusions and asks us to certify two questions to the 

Kansas Supreme Court, while GEICO seeks to cross-appeal the earlier denial of its 

motion for summary judgment. Exercising jurisdiction under 28 U.S.C. § 1291, we 

affirm the district court’s factual conclusion that GEICO did not act in bad faith or 

negligently and will thus not reach the remaining issues or certify any questions to 

the Kansas Supreme Court. 

I.

On July 13, 2005, Stephanie Hoyt attempted to make an improper U-turn on 

Interstate 35 in Kansas. Charles Church, who was driving a semi-truck that Chris 

Truck Line owned, struck Hoyt’s vehicle. Hoyt died instantly, and her three 

passengers—Gold, Wright, and Kannaday—were seriously injured. Kannaday’s 

injuries were more severe than Gold’s or Wright’s. 

Hoyt’s insurance through GEICO provided a bodily injury limit of $25,000 per 

person and a maximum of $50,000 per accident. Less than a month after the 

accident, Kwirt Roarick, a GEICO claims adjuster, received the Kansas Highway 

Patrol report, which presented credible evidence that Hoyt was at fault in the 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 2 
3 

accident. Roarick advised Lanny Hamp, Hoyt’s father, that the accident liability 

would far surpass policy limits. On October 5, Gold’s attorney Doug Greenwald 

submitted a demand letter and proposed dividing the $50,000 per accident proceeds 

equally among the three passengers, so each passenger would receive about $16,667. 

GEICO already knew by that time that Kannaday’s hospital bill exceeded $140,000 

and that Wright’s hospital bill exceeded $90,000. GEICO learned two days after 

Gold’s proposal that Gold’s hospital bill exceeded $44,000, Wright’s bill exceeded 

$95,000, and Kannaday’s bill exceeded $158,000. GEICO did not respond to Gold’s 

letter or inform Hamp or the other injured passengers about the proposal. Instead, 

Roarick investigated whether the passengers had underinsured motorist (UIM) 

benefits available to supplement the benefits they would receive from Hoyt’s policy. 

GEICO made its first settlement offer on November 4, 2005. Roarick offered 

$12,500 to both Wright and Kannaday based on the mistaken belief that they would 

have UIM benefits and would ultimately receive $25,000. He offered $25,000 to 

Gold because she was the only passenger without UIM coverage. Sabrina Brantley 

took over the case from Roarick in the middle of November and reiterated GEICO’s 

settlement offers in December. 

Beginning on January 14, 2006, six months after Hoyt’s death, the Kansas 

nonclaim statute, Kan. Stat. Ann. § 59-2239, barred the enforcement of claims 

against Hoyt’s estate’s assets. Five days later, on January 19, attorney Paul Hasty, 

acting on Kannaday’s behalf, offered to settle Kannaday’s claim for $25,000, 

stressing that she was the most seriously injured passenger. GEICO asked the firm 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 3 
4 

Fleeson, Gooing, Couson & Kitch to respond to Kannaday’s demand and negotiate 

settlements that would distribute the policy limits proceeds. The Fleeson firm 

recommended that GEICO interplead the $50,000 policy limits in court, which 

GEICO authorized in the beginning of February. By February 21, Gold accepted the 

$25,000 offer, decreasing the amount available for the interpleader action to $25,000. 

On February 22, Fleeson wrote Kannaday to repeat GEICO’s prior $12,500 offer, 

explaining that Gold accepted $25,000.1

 On February 24, Hasty sent a response 

again demanding $25,000 but withdrew the demand on February 27. 

On March 23, 2006, Fleeson filed GEICO’s interpleader action in the United 

States District Court for the District of Kansas, naming as potential claimants 

Kannaday, Wright, Charles Church, Chris Truck Line, Liberty Mutual Fire Insurance 

(the workers compensation carrier for Chris Truck Line), Metropolitan Life Insurance 

Company (Kannaday’s personal injury protection (PIP) carrier), and Wesley Medical 

Center. Only Kannaday and Wesley Medical Center answered the interpleader. In 

January 2007, while the interpleader was pending, Wesley offered to accept $6,000 in 

full and complete satisfaction of Kannaday’s bill over $150,000, release the lien, and 

release Kannaday of all personal liability. Kannaday did not respond. In February 

2008, the federal district court awarded the $25,000 that GEICO had tendered to 

 1

 The federal district court, following a bench trial, found that GEICO did not 

reject Kannaday’s January 19, 2006 offer for $25,000, but rather that Kannaday 

withdrew the offer on February 27. After reviewing the record, we are left with a 

definite and firm conviction that this particular finding of fact is erroneous. GEICO 

rejected Kannaday’s January 19 offer when it counteroffered $12,500 on February 

22. GEICO did not reject Kannaday’s second offer of $25,000 because she withdrew 

it before GEICO had sufficient time to respond to it. 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 4 
5 

Wesley Medical Center for its hospital lien, which benefitted Kannaday by reducing 

the amount she owed the hospital. The federal district court also issued an injunction 

barring any of the interpleader defendants from pursuing a claim outside the 

interpleader action against the $25,000 insurance proceeds. 

On March 17, 2006, about a week before GEICO filed the interpleader action, 

Kannaday petitioned the District Court of Wyandotte County, Kansas, to appoint 

Charles Ball as a special administrator for Hoyt’s estate and then sued the estate for 

Hoyt’s negligence in the accident. GEICO retained the Fleeson firm to defend the 

estate. Fleeson sent a letter to Ball informing him that GEICO had retained it to 

defend the estate. Between April 21, 2006, and April 12, 2012, Fleeson sent dozens 

of letters to Ball regarding case developments and advising him that the nonclaim 

statute protected estate assets, but Ball responded only once with signed discovery 

responses and a copy of his appointment as the special administrator. In September 

2006, Ball signed a settlement agreement and sent the agreement to Fleeson without 

any cover letter or commentary. The settlement agreement allowed Kannaday to 

present her evidence to the District Court of Wyandotte County ex parte, and in 

exchange, Kannaday agreed not to execute judgment on Hoyt’s estate assets but to 

seek recovery only from GEICO. Fleeson told Ball that it would soon file a motion 

for summary judgment regarding the nonclaim statute to protect the estate’s assets; 

because Ball did not respond, Fleeson retained the settlement agreement and did not 

forward it to Kannaday. In December 2006, the District Court of Wyandotte County 

held that the nonclaim statute barred any claims against Hoyt’s estate’s assets, stating 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 5 
6 

Kannaday could reach only the GEICO policy. A year later, in December 2007, 

Hasty deposed Ball, during which Ball signed a nearly-identical ex parte Settlement 

Agreement, despite the District Court of Wyandotte County’s ruling regarding the 

nonclaim statute. In March 2008, in response to a request for production, Fleeson 

produced a copy of the original Settlement Agreement to Hasty. Kannaday signed 

the Settlement Agreement in March 2009. The following day, the District Court of 

Wyandotte County conducted an ex parte hearing and awarded Kannaday over $7 

million in damages. Fleeson learned of the ex parte award only after the journal 

entry of judgment was filed; it appealed the judgment. 

In June 2010, the Kansas Court of Appeals determined that because Kannaday 

filed her negligence action outside the nonclaim statute’s period, she could not 

recover any estate assets. Nonetheless, the Kansas Court of Appeals held that the 

nonclaim statute did not bar Kannaday’s negligence suit, because the GEICO policy 

was not an estate asset. Although the injunction from the federal interpleader barred 

any actions against the policy proceeds, the Kansas Court of Appeals said the federal 

court’s injunction did not prevent any possible future claims against GEICO for badfaith failure to settle Kannaday’s claim. The Kansas Court of Appeals also held that 

the settlement agreement was invalid because it was not supported by consideration. 

Because the nonclaim statute barred Kannaday from collecting from Hoyt’s estate, 

her promise to not execute judgment on the estate’s assets was illusory. The Kansas 

Supreme Court denied review of the case. Following remand and a bench trial, the 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 6 
7 

District Court of Wyandotte County granted judgment in favor of Kannaday and held 

Hoyt to be 100% liable for damages of over $4 million, plus costs. 

In November 2012, Kannaday brought this garnishment action in the District 

Court of Wyandotte County against GEICO, alleging among other things that GEICO 

acted in bad faith and breached its duty to Hoyt’s estate by failing to settle 

Kannaday’s claim within policy limits. GEICO removed the case to federal district 

court on the basis of diversity jurisdiction. The district court denied GEICO’s 

motion for summary judgment, explaining that although the nonclaim statute 

protected the estate’s assets, the estate still suffered damage through the adverse 

judgment. The district court relied on the judgment rule, which states that an action 

against an insurance company will lie regardless of whether the insured has paid or 

can pay the portion of the judgment in excess of the policy limits. Farmers Ins. 

Exch. v. Schropp, 567 P.2d 1359, 1369 (Kan. 1977). 

The case was transferred and assigned to a different district court judge for a 

bench trial. After a three-day trial, the district court entered judgment for GEICO. 

The district court concluded that because the estate had no assets and the nonclaim 

statute precluded any claim on any assets that did exist, the estate’s interests were in 

a practical sense identical to GEICO’s. Thus, the Fleeson firm did not have a conflict 

of interest in representing both GEICO and the Hoyt estate, although Fleeson still 

owed a duty to act in the estate’s best interests. The district court stated that Ball was 

essentially a name to be sued and that Fleeson owed its duty to the estate, not to Ball; 

nonetheless, it concluded that Fleeson’s communications with Ball were reasonable 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 7 
8 

and adequate in light of the circumstances of the case. It concluded GEICO never 

refused to settle the injured passengers’ claims but instead demonstrated a desire to 

settle all claims for the “per accident” policy limits. Further, it held the interpleader 

action was a reasonable and appropriate method for meeting GEICO’s obligations, 

the offer of $25,000 to Gold was reasonable considering she was the only passenger 

represented by counsel at the time GEICO made the offer, and GEICO appropriately 

considered UIM coverage when making its offers. Ultimately, the district court 

concluded settlement was not possible because Kannaday was only interested in 

creating a bad faith claim against GEICO. The district court stated GEICO acted in 

good faith, reasonably, and without negligence in its investigation, communications, 

negotiations, and settlement efforts. Although GEICO was not error-free in its 

actions, neither GEICO nor Fleeson harmed the estate by any breach of duty. 

Further, the district court found for GEICO on an affirmative defense: Ball failed to 

cooperate, which relieved GEICO of its contractual obligations. 

Kannaday appeals, arguing GEICO had a conflict of interest with the Hoyt estate 

and breached its duty of good faith and reasonable care. She contends the district court 

failed to apply the judgment rule and erroneously concluded that Ball breached the policy 

by failing to cooperate. She also requests that we certify two questions to the Kansas 

Supreme Court regarding the conflict of interest and judgment rule. GEICO asks us to 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 8 
9 

affirm the district court’s findings of fact and conclusions of law and, through a cross 

appeal, argues the district court should have awarded it summary judgment.2

 

II.

In an appeal from a bench trial, this court must view the evidence presented to the 

trial court in the light most favorable to the prevailing party. Raydon Exploration, Inc. v. 

Ladd, 902 F.2d 1496, 1499 (10th Cir. 1990). “[W]e review the district court’s factual 

findings for clear error and its legal conclusions de novo.” Keys Youth Servs., Inc. v. City 

of Olathe, 248 F.3d 1267, 1274 (10th Cir. 2001). The district court’s factual findings are 

clearly erroneous only if they are “without factual support in the record, or if the 

 2

 GEICO explained at oral argument that it filed the cross appeal to clear up a 

potential discrepancy between the initial district court judge’s opinion on summary 

judgment and the subsequent district court judge’s decision after bench trial, but it 

acknowledged the cross appeal would not alter the relief it received under the 

judgment. Instead of filing a cross-appeal, GEICO should have simply raised its 

challenge to the district court’s denial of summary judgment in its Response Brief as 

an alternative ground for affirmance. A cross-appeal is necessary when a litigant 

seeks to enlarge his rights or lessen the rights of his adversary under the original 

judgment, but a cross-appeal is not necessary when, as here, the appellee seeks to 

defend that judgment on any ground supported by the record. Compare

Breakthrough Mgmt. Grp., Inc. v. Chukchansi Gold Casino & Resort, 629 F.3d 1173, 

1198 (10th Cir. 2010) (“A cross-appeal ordinarily would be appropriate where a 

litigant seeks to enlarge his rights conferred by the original judgment or to lessen the 

rights of his adversary under that judgment.”), with Wyoming v. U.S. Dep’t of Agric., 

661 F.3d 1209, 1254 n.33 (10th Cir. 2011) (“[A]n appellee is generally permitted to 

defend the judgment won below on any ground supported by the record without filing 

a cross appeal.” (internal quotation marks omitted)). Without taking a cross-appeal, 

GEICO could “‘urge in support of a decree any matter appearing before the record, 

although his argument may involve an attack upon the reasoning of the lower court.’” 

Jennings v. Stephens, 135 S. Ct. 793, 798 (2015) (quoting United States v. Am. Ry. Exp. 

Co., 265 U.S. 425, 435 (1924)). We will therefore treat GEICO’s arguments on the 

cross-appeal as an alternative basis for affirming the district court’s judgment in its favor. 

See United Fire & Cas. Co. v. Boulder Plaza Residential, LLC, 633 F.3d 951, 958 (10th 

Cir. 2011). 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 9 
10 

appellate court, after reviewing all the evidence, is left with the definite and firm 

conviction that a mistake has been made. If there are two permissible views of the 

evidence, the fact-finder’s choice between them cannot be clearly erroneous.” Curtis v. 

Okla. City Pub. Sch. Bd. of Educ., 147 F.3d 1200, 1217 (10th Cir. 1998) (citation and 

internal quotation marks omitted). 

The federal court’s task in cases arising under diversity jurisdiction is “simply to 

‘ascertain and apply the state law.’” Wade v. EMCASCO Ins. Co., 483 F.3d 657, 665 

(10th Cir. 2007) (quoting Wankier v. Crown Equip. Corp., 353 F.3d 862, 866 (10th Cir. 

2003)). “[T]he Court’s task is to predict what the state supreme court would do.” Id. at 

666. We review de novo the district court’s interpretation of state law. Id. 

Under established Kansas law, an insurance company’s negligent or bad faith 

rejection of an injured party’s offer to settle within the policy’s limits is a breach of its 

contract with the insured and gives rise to liability for any judgment in excess of the 

policy limits. See Wade, 483 F.3d at 660 (citing Bollinger v. Nuss, 449 P.2d 502, 508 

(Kan. 1969)). The Kansas Supreme Court has described the insurer’s duty to conduct 

itself both in good faith and without negligence, but stated that the “two rules have 

tended to merge,” and emphasized that the ultimate question of liability turns on 

various factors present in the particular case. Bollinger, 449 P.2d at 511–12. Those 

factors include: 

 (1) the strength of the injured claimant’s case on the issues of liability 

and damages; (2) attempts by the insurer to induce the insured to 

contribute to a settlement; (3) failure of the insurer to properly 

investigate the circumstances so as to ascertain the evidence against the 

insured; (4) the insurer’s rejection of advice of its own attorney or 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 10 
11 

agent; (5) failure of the insurer to inform the insured of a compromise 

offer; (6) the amount of financial risk to which each party is exposed in 

the event of a refusal to settle; (7) the fault of the insured in inducing 

the insurer’s rejection of the compromise offer by misleading it as to the 

facts; and (8) any other factors tending to establish or negate bad faith 

on the part of the insurer. 

Id. at 512. Whether any of these factors has been established is a question of fact and the 

district court’s finding will not be set aside unless clearly erroneous. Ins. Co. of N. Am. v. 

Med. Protective Co., 768 F.2d 315, 321 (10th Cir. 1985). 

A. Conflict of Interest 

Although the district court concluded after the bench trial that no conflict of 

interest prevented the Fleeson firm from representing both GEICO and Hoyt’s estate, 

Kansas law describes an inherent conflict of interest arising between the insured and 

insurer when a claim for damages exceeds policy limits. Coleman v. Holecek, 542 

F.2d 532, 537 (10th Cir. 1976) (“The duty to consider the interests of the insured 

arises . . . because there has been a claim for damages in excess of the policy limits); 

see also Williams v. Am. Family Mut. Ins. Co., 6 F. App’x 756, 760 (10th Cir. 2001) 

(“The Kansas Supreme Court has recognized an inherent conflict of interest when an 

insurer is faced with a claim against its insured for an amount in excess of the policy 

limits.”). This conflict of interest does not necessarily prohibit the insurer’s attorney 

from representing both the insured and the insurer. Rather, the conflict requires the 

insurer to “give at least equal consideration to the interests of the insured” and to 

“conduct itself with that degree of care which would be used by an ordinarily prudent 

person in the management of his own business, with no policy limits applicable to the 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 11 
12 

claim.” Bollinger, 449 P.2d at 511. The insurer must evaluate the excess claim 

“without looking to the policy limits and as though it alone would be responsible for 

the payment of any judgment rendered on the claim.” Coleman v. Holecek, 542 F.2d 

532, 537 (10th Cir. 1976). Although the district court incorrectly concluded there 

was no conflict between GEICO and Hoyt’s estate, it nonetheless evaluated whether 

GEICO acted in bad faith under the Bollinger factors, which is the same analysis that 

would be required upon a finding of a conflict. The real question is thus whether the 

record supports the district court’s factual conclusion that GEICO acted in good faith 

and without negligence. 

B. Good Faith and Reasonable Care 

The district court concluded after a bench trial that GEICO did not act in bad 

faith in handling the case. After reading the voluminous record, we conclude that 

sufficient evidence supports the district court’s conclusion, even though there is some 

evidence that points to GEICO’s negligence or bad faith in handling the claims. The 

district court reached its conclusion after weighing certain Bollinger factors more 

heavily than others and considering other factors that negated bad faith, which was 

appropriate for it to do as the fact-finder. Because the evidence does not leave us with 

the definite and firm conviction that a mistake has been made, see Curtis v. Okla. City 

Pub. Sch. Bd. of Educ., 147 F.3d at 1217, we will affirm the district court’s judgment for 

GEICO. 

Some factors admittedly weigh in Kannaday’s favor. Importantly, Kannaday’s 

case for liability and damages was strong. GEICO knew early in the case that all 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 12 
13 

three passengers were seriously injured and policy limits would not adequately 

compensate them for their claims. It learned on August 5, 2005, that Hoyt was 

primarily at fault for the accident. The high damages and strong case of liability 

against Hoyt should have caused GEICO to attempt to settle within policy limits if 

possible. Additionally, GEICO failed to inform Hoyt’s father or the other injured 

claimants about Gold’s proposal to split the policy proceeds equally among the 

passengers. GEICO ignored the suggestion and instead based its settlement offer on 

an incorrect assumption about Kansas UIM law, and thus offered Gold more than she 

requested. It failed to inform Hoyt’s father about Kannaday’s two offers to settle for 

$25,000. And it interpleaded the remaining funds after Gold accepted its offer, even 

though the interpleader did not protect Hoyt’s estate from a judgment against it. 

The district court noted that GEICO was not error free in how it handled the 

claims against Hoyt’s estate, but it concluded overall the errors were relatively 

minor, largely identifiable through hindsight, and did not have a real or tangible 

impact on the insured. For example, the district court dismissed GEICO’s failure to 

respond to Gold’s offer to split the proceeds equally by noting that no evidence 

suggested Kannaday would have accepted a third of the proceeds. Twice, she made a 

demand for half the policy limits. While the interpleader was ongoing, she failed to 

respond to Wesley Medical Center’s offer to accept $6,000 in full and complete 

satisfaction for her hospital bills over $150,000, which would have left $19,000 in the 

interpleader for her since only she and Wesley Medical Center had filed answers. 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 13 
14 

Regarding GEICO’s misunderstanding of UIM coverage in Kansas and 

incorrect conclusion that only Gold lacked UIM coverage, the district court 

concluded the mistake was honest and not unreasonable. GEICO’s offer attempting 

to maximize each injured passenger’s recovery was not in itself bad faith; although 

GEICO’s duty runs to its insured rather than the claimants, GEICO presented 

evidence at the bench trial that an insurance company’s attempts to maximize a 

claimant’s recovery is a strategy to satisfy the claimants, which decreases the risk for 

lawsuits against the insured. Although GEICO interpleaded the remaining funds 

rather than settle with Kannaday for half the policy limit, the Kansas Supreme Court 

has indicated that an insurance company has wide discretion in settling multiple 

claims. In Farmers Insurance Exchange v. Schropp, the Kansas Supreme Court 

described several of an insurer’s potential alternatives: 

Farmers could well have notified all of the potential claimants involved 

that the value of the claims would doubtless exceed policy limits, and 

invite them or their attorneys to participate jointly in efforts to reach 

agreement as to the disposition of the available funds. Alternatively, 

Farmers could have attempted to settle claims within the policy limits as 

they were presented. Or, as a third alternative, Farmers could have 

promptly and in good faith commenced an interpleader action, and paid 

its policy limits into court.

Farmers Ins. Exchange v. Schropp, 567 P.2d 1359, 1367 (Kan. 1977). Kannaday is 

also correct that GEICO could have exhausted its policy proceeds by accepting 

Kannaday’s offer of $25,000. See Castoreno v. W. Indem. Co., 515 P.2d 789, 795 

(Kan. 1973) (“[A] liability insurer may in good faith settle part of multiple claims 

arising from the negligence of its insured even though such settlements deplete or 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 14 
15 

exhaust the policy limits of liability so that the remaining claimants have little or no 

recourse against the insurer.”). We could not, however, identify any time where the 

Kansas Supreme Court has required an insurance company to settle with claimants 

on a first-come, first-serve basis, or to follow any set distribution method. 

Kannaday further argues that Roarick and Brantley were inexperienced, they 

failed to follow GEICO policy, and GEICO failed to properly supervise them to 

correct their mistakes. Again, the record contains evidence to support the district 

court’s conclusion that overall these errors were minor and did not have a tangible 

effect on the insured. For example, Roarick’s failure to record Gold’s initial offer in 

the GEICO claim activity log technically violated GEICO policy, but even had he 

recorded it and made the offer, evidence supports the district court’s finding that 

Kannaday would not have accepted it. Brantley did not understand that the 

interpleader action would not release the insured from liability, but her 

misunderstanding of a method that the Kansas Supreme Court has suggested as a 

potential alternative for insurance companies to fulfill their obligation to act in good 

faith does not demonstrate bad faith. 

The remaining factors on which the district court relied further negate a 

finding of bad faith. GEICO promptly and thoroughly investigated the accident and, 

after discovering Hoyt was primarily at fault and the passengers were seriously 

injured, never sought to pay less than the policy limits to the three passengers 

collectively. GEICO followed its attorney’s advice and sought to distribute the full 

policy proceeds through an interpleader action. 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 15 
16 

 One factor that the district court apparently relied on heavily was the financial 

risk to both parties. Kannaday first demanded $25,000 on January 19, 2006, after the 

nonclaim statute barred recovery from the estate’s assets as of January 14, 2006. 

Although Kannaday contends that the district court’s reliance on the nonclaim 

statute’s protection after the bench trial ignored the initial district court judge’s 

summary judgment conclusion and the Kansas Court of Appeals’ determination, we 

disagree. The Kansas Court of Appeals held that neither the nonclaim statute nor the 

injunction from the interpleader barred Kannaday from pursuing her negligence 

claim, but confirmed she could not collect from Hoyt’s estate. The only money at 

risk was GEICO’s in a subsequent bad-faith case if she prevailed. Although we do 

not have to directly review the initial district court judge’s application of the 

judgment rule in summary judgment, we can assume the Kansas Supreme Court 

would apply the judgment rule in this case and find that Hoyt’s estate was damaged 

when there was an excess judgment against it. But again, the question of whether the 

estate was damaged is different than the question of whether it faced any financial 

risk. We do not see any support for requiring a court to ignore the effect of the 

nonclaim statute during a bad-faith action. Indeed, the Bollinger factor asks about 

the financial risk to the parties, not the risk of a judgment alone. This does not run 

afoul of the judgment rule, even assuming it applies. We think the district court after 

the bench trial correctly considered the nonclaim statute’s effect on the financial risk 

Hoyt’s estate and GEICO faced during the settlement negotiation period with 

Kannaday. The district court concluded, and we agree, that the nonclaim statute 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 16 
17 

protected the estate assets after January 14, 2006, and thus any financial risk for 

failing to settle after that time would affect GEICO, not Hoyt. Before January 14, 

2006, the estate did face financial risk if GEICO failed to settle, but the evidence 

does not require a finding of bad faith during that time. The only party to make a 

demand prior to January 14, 2006, was Gold. While the estate was at risk, GEICO 

investigated the accident and the injured passengers’ damages and attempted to settle 

with them to protect the estate. Kannaday did not respond to the offer to settle until 

after the nonclaim statute passed. GEICO actively sought to settle the claims before 

January 14, 2006, and the failure to settle was not because of its lack of effort, but 

Kannaday’s. 

III.

 The district court concluded after a bench trial that the Bollinger factors, when 

applied collectively, do not support Kannaday’s claims of negligence or bad faith. 

Evidence appears in the record to support this conclusion, and our review of the 

voluminous record does not leave us with a definite and firm conviction that the 

district court made a mistake. We affirm the district court’s entry of judgment in 

GEICO’s favor. This conclusion resolves the appeal and we do not need to reach the 

remaining issues that the parties raised. We deny Kannaday’s motion to certify 

questions of state law to the Kansas Supreme Court. 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 17 
18 

 AFFIRMED. 

Entered for the Court 

Bobby R. Baldock 

Circuit Judge 

Appellate Case: 14-3183 Document: 01019529924 Date Filed: 11/25/2015 Page: 18