Court Opinion

ID: 9785447
Source: CourtListenerOpinion
Date Created: 2023-08-30 21:45:49.26664+00
Date Added: 2024-06-11T07:36:24.577081
License: Public Domain

Malone, J.,
dissenting: I respectfully dissent. I conclude that the indemnity provision in the separation agreement between Brenda S. Loscher and William B. Hudson should be unenforceable on public policy grounds. In my view, the majority focuses too much on upholding the intent of the parties and on the fact that Hudson knew what he was doing when he agreed to the provision. Actually the record is unclear on the intent of the parties and how much Hudson knew about Loscher’s fraudulent scheme when he signed the separation agreement. In any event, if the indemnity provision violates public policy, it should not be enforced regardless of the intent of the parties.
In my opinion, balancing the factors under Restatement (Second) of Contracts § 178 (1979) tips in favor of not enforcing the indemnity provision on public policy grounds. Ensuring that the offender is held accountable to pay the victim of a crime is one of the dual purposes of criminal restitution under the Mandatory Victims Restitution Act. 18 U.S.C. § 3663A (2000). Under Kansas law, restitution is not only intended to compensate the victim of a crime, but it also serves the functions of deterrence and rehabilitation of the guilty. State v. Applegate, 266 Kan. 1072, Syl. ¶ 2, 976 P.2d 936 (1999). Here, the end result of enforcing the indemnification provision is that Loscher will not be held financially accountable to pay the victim of her crime. By requiring Hudson to reimburse Loscher for what amounts to criminal restitution payments, the functions of deterrence and rehabilitation of the guilty will be ill-served.
Applegate is distinguishable from the present case. The ruling in Applegate was driven by the court’s desire to avoid a windfall for the victim in the form of double restitution payments. We are not faced with that consideration here.
*437Finally, Loscher negotiated a favorable plea bargain and received leniency from the federal court based on her acceptance of responsibility for her crime and on the fact that she was ordered to pay a large amount of restitution to the victim. The spirit and intent of the plea agreement and the federal sentence will be undermined if Hudson is obligated to indemnify Loscher for the payment of the second mortgage deficiency.