COA: Man has to abide by settlement

March 30, 2016

A man must abide with the agreement he settled on even though he had later second thoughts. The Indiana Court of Appeals found he breached a contract after he came to a settlement with an insurance company.

Troy Jonas and his then-wife Jennifer Jonas both had $1 million life insurance policies on each other. They eventually divorced, and then Jennifer Jonas died. Pursuant to the divorce decree, Jennifer Jonas was supposed to transfer her life insurance policy to Troy Jonas but never did.

State Farm, the insurance company, was unsure of how to distribute the funds due to Texas law, where the couple had lived when the policies were bought. Troy Jonas had moved to Indiana and was living there at the time of his ex-wife’s death, so the insurance company filed to have the federal court in the Southern District of Indiana distribute the funds. State Farm was then dismissed from the proceedings.  

Also, Troy Jonas and the guardian ad litem for his children entered into an agreement where he agreed to deposit $150,000 into an irrevocable trust for them.  After approving the agreement, the District Court entered a final judgment and ordered policy proceeds disbursed. Troy Jonas appealed to the 7th Circuit Court of Appeals.

State Farm and Jonas reached an agreement to settle Jonas’ claims for $60,000 after some negotiation, and he was supposed to withdraw his 7th Circuit action. However, shortly after accepting the settlement, he decided didn’t want his settlement and backed out. He also pursued his 7th Circuit action.

Jonas filed suit in Hamilton Superior Court saying State Farm owed him interest and attorney fees and State Farm committed bad faith. He filed a motion for summary judgment and State Farm filed a counterclaim saying Jonas breached the terms of the agreement. The company sought to enforce the terms of it and filed a cross-motion for summary judgment. The trial court granted summary judgment in favor of State Farm. Jonas appealed.

The COA found Jonas’ evidence did not counter any of the evidence that State Farm claimed. “Therefore, the evidence was undisputed that Jonas entered into a settlement agreement with State Farm and agreed to all of the terms of the Final Release Agreement,” Judge James Kirsch wrote for the panel. “Jonas’ designated evidence does not dispute that his counsel had the authority to bind Jonas to the agreement. The evidence established that Jonas agreed to all of the terms of settlement agreement, and the evidence he presented merely showed that he refused to follow through with the settlement, which is a breach of the settlement agreement. State Farm was therefore entitled to judgment as a matter of law, and the trial court did not err in granting summary judgment in its favor.”

The case is Troy Jonas v. State Farm Life Insurance Company, 29A02-1510-PL-1761.


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