This diversity case presents the question of when the statute of limitations for a breach of contract claim alleging the wrongful termination of a life insurance contract begins to run under Kansas law. If the limitations period began when Defendant acted to terminate Plaintiffs policies, the district court correctly dismissed Plaintiffs complaint. If the limitations period began when Plaintiffs death benefits became due, the district court erred. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the decision of the district court.
I.
In 2007, Defendant issued two life-insurance policies to Plaintiff on the lives of Elwyn Liebl and John Killeen.
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Both policies guaranteed Plaintiff, as their named beneficiary, $400,000 upon the insureds death. Between 2013 and 2014, Defendant sent Plaintiff grace notices for both policies and demanded premium payments. Plaintiff believed the demanded premium payments were too high and that the grace notices were defective and untimely under the policies. So Plaintiff did not pay the requested premiums. Because Plaintiff did not pay the requested premiums, Defendant sent cancellation notices, informing Plaintiff that both policies had lapsed.
In 2016, the insureds died. Plaintiff sought payment of benefits under both policies. Defendant declined, believing that it terminated Plaintiffs policies for nonpayment of premiums two to three years earlier. In 2020, Plaintiff sued Defendant in the District of Kansas for failure to pay the death benefits under both policies.
Defendant moved to dismiss both claims, arguing that Kansass five-year statute of limitations for breach of contract actions bars them. According to Defendant, the statute of limitations began to run in 2013 and 2014 when it informed Plaintiff that it was terminating the policies. In response, Plaintiff asserted that Defendant first breached both insurance contracts when it failed to pay the benefits upon the insureds death in 2016 because Defendant never successfully terminated the policies. The district court agreed with Defendant and dismissed Plaintiffs claims as untimely. Plaintiff appeals.
II.
We review de novo a district courts dismissal of a case as time-barred. See United States v. Johnson, 920 F.3d 639, 643 (10th Cir. 2019). Because this diversity action presents an issue of first impression under Kansas law, our task is to determine what decision the Kansas Supreme Court would make if presented with this issue. See Reeves v. Enter. Prod. Partners, LP, 17 F.4th 1008, 1012 (10th Cir. 2021) (citing Wade v. EMCASCO Ins. Co., 483 F.3d 657, 666 (10th Cir. 2007)). To do so, we look to “decisions from Kansass lower courts, appellate decisions from other states with similar legal principles, federal district court decisions interpreting Kansas law, as well as the general weight and trend of authority in the relevant area of law.” Id. (quoting Wade, 483 F.3d at 666).
III.
The lone question presented in this case is when the statute of limitations for Plaintiffs breach of contract claims began to run. The parties agree that the statute of limitations for a breach of contract action in Kansas is five years. See K.S.A. 60–511(1). Defendant agrees that if the limitations period began to run when the insureds died, Plaintiffs claims are timely. Plaintiff similarly agrees that if the limitations period began to run when Defendant purported to terminate the policies, Plaintiffs suit was too late. Because we hold the Kansas Supreme Court would conclude that the limitations period began when Defendant acted to terminate each policy, Plaintiffs claims are barred by the statute of limitations.
In Kansas, the relevant statute of limitations begins to run when the cause of action accrues. See Mashaney v. Bd. of Indigents Def. Servs., 302 Kan. 625, 355 P.3d 667, 673 (Kan. 2015) (citing Pancake House, Inc. v. Redmond By & Through Redmond, 239 Kan. 83, 716 P.2d 575, 579 (Kan. 1986)). A cause of action accrues as soon as the right to maintain a legal action arises. Id. (citing Pancake House, 716 P.2d at 579). And, for a breach of contract claim, Kansas law provides that a plaintiffs right to sue arises on the date of the alleged breach, even if the plaintiff has not yet discovered the breach or incurred damages. See In re Talbotts Est., 184 Kan. 501, 337 P.2d 986, 991 (1959); Law v. Law Co. Bldg. Assocs., 295 Kan. 551, 289 P.3d 1066, 1080 (2012). But the Kansas Supreme Court has not yet applied its accrual test to determine when the statute of limitations begins to run on claims alleging the wrongful termination of a life insurance contract.
Plaintiffs appeal hinges on the answer to that question. Plaintiff submits that Defendant first breached when the insureds died because Defendants obligation to pay death benefits under the policy did not arise until that point. In response, Defendant contends that any alleged breach occurred when Defendant purported to terminate Plaintiffs policies.
We agree with Defendant. As the district court observed, many courts have held that an insurance company breaches an insurance contract and starts the applicable limitations period when it makes a demand for payment that conflicts with the insureds understanding of the policys terms. See, e.g., Parkhill v. Minnesota Mut. Life Ins. Co., 286 F.3d 1051, 1055–56 (8th Cir. 2002); Draper v. Frontier Ins. Co., 265 Ill.App.3d 739, 203 Ill.Dec. 50, 638 N.E.2d 1176, 1179–80 (1994); Kersh v. Manulife Fin. Corp., 792 F. Supp. 2d 1111, 1117–20 (D. Haw. 2001); Spalter v. Am. Natl Ins. Co., No. 19-21304, 2019 WL 6324627, at *3 (S.D. Fla. Nov. 26, 2019) (collecting cases). And those results make sense because, at that point, the insured may freely assert a breach of contract claim seeking nominal damages, specific performance, or a refund of premiums. Talbotts Es., 337 P.2d at 991; Solomon v. N. Am. Life & Cas. Ins. Co., 151 F.3d 1132, 1138 (9th Cir. 1998). We therefore conclude that the Kansas Supreme Court would hold that a policyholders claims alleging the breach of an insurance contract accrue when the insurer fails to perform the policy as promised. See Parkhill, 286 F.3d at 1055–56.
Here, Plaintiffs complaint centers on the cancellation notices Defendant sent in 2013 and 2014. Plaintiff alleges Defendants notices failed to comply with “applicable policy terms” and “applicable law”; that Defendant violated various insurance statutes; and that Defendant breached the policies notice, grace period, and termination provisions. As a result, Plaintiff alleges that Defendants policies were still “in effect and in good standing” when the insureds died. But under Plaintiffs own theory, Plaintiff could have immediately asserted its breach of contract claims “and would have been entitled to recover nominal damages, if nothing more.” Talbotts Es., 337 P.2d at 991. Yet Plaintiff delayed six to seven years before suing. Because of that delay, Kansass five-year statute of limitations now bars Plaintiffs claims. See K.S.A. 60–511(1).
Plaintiff alternatively argues that, even if the five-year statute of limitations bars Plaintiffs claims as the policies owner, Plaintiffs claims as the policies beneficiary should still survive. The distinction between policy owner and policy beneficiary changes the result, Plaintiff reasons, because a named beneficiary has no vested interest in the proceeds of a life-insurance policy during the insureds lifetime. See Hollaway v. Selvidge, 219 Kan. 345, 548 P.2d 835, 839 (1976). And because a named beneficiary has no vested interest during the insureds lifetime, Plaintiff contends its claims as policy beneficiary could not accrue until the insureds died. See Kucera v. Metro. Life Ins. Co., 719 F.2d 678, 680 (3d Cir. 1983). Thus, Plaintiff urges us to conclude that its claims as the policies beneficiary are timely even if its claims as the policies owner are not.
In Kucera, a divided Third Circuit panel indeed held that claims by policy beneficiaries are not subject to the same time limitations as claims by policy owners. See Kucera, 719 F.2d at 680–81 (applying Pennsylvania law). The majority reasoned that if beneficiaries cannot successfully bring breach of contract claims until their rights vest upon the insureds death, their causes of action cannot accrue until that time. Id. at 681. But Judge Rosenn disagreed, because in his view, a donee beneficiary could have no greater rights to enforce the policy than those held by the contracting parties themselves. Id. at 683 (Rosenn, J., dissenting) (citing Simmons v. Western Assurance Co., 205 F.2d 815, 819 (5th Cir. 1953)). Thus, he would have held that the same limitations period applied to both the Kucera beneficiary and the Kucera owner. Id. And in the years after Kucera, courts applying similar legal principles have taken his side.
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See Draper, 203 Ill.Dec. 50, 638 N.E.2d at 1179–80 (“it is the Kucera dissent and not the majority which follows Illinois law”); Sturdevant v. Natl W. Life Ins. Co., No. CV 20-118, 2021 WL 3677722, at *4 (D. Mont. Aug. 19, 2021) (allowing a beneficiary to assert claims the original promisee could not contravenes “a basic principle of contract”).
We too agree with Judge Rosenns dissenting view. The rights of a third-party beneficiary in Kansas “are no greater than those of the promisee under the contract.” Gray v. Manhattan Med. Ctr., Inc., 28 Kan.App.2d 572, 18 P.3d 291, 299 (2001) (quoting 17A Am. Jur. 2d Contracts § 459 (1991)). And we see no reason why Kansas would carve only the statute of limitations from the well-settled rule that third-party beneficiaries remain subject to the same affirmative defenses as their promisees. See 13 Williston on Contracts § 37:25 (4th ed.) (“Third party beneficiaries must take their contracts as they find them—the good with the bad.”).
Thus, we hold that Kansass five-year statute of limitations bars Plaintiffs claims both as policy beneficiary and as policy owner. To be sure, we do not ignore the idea that a beneficiarys interest does not vest until the insureds death. See Hollaway, 548 P.2d at 839. We simply recognize that a beneficiarys mere expectancy may never vest—as the choice between paying premiums, contesting an insurers demands, or allowing a policy to lapse, properly rests with policy owners during their lifetimes. The district court correctly dismissed Plaintiffs claims.
AFFIRMED
FOOTNOTES
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. Because the district court dismissed Plaintiffs claims on the pleadings, we recite the facts as Plaintiff alleges them in its amended complaint. See Dias v. City and Cnty. of Denver, 567 F.3d 1169, 1174 (10th Cir. 2009).
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. Indeed, we know of no cases outside the Third Circuit that have embraced the Kucera majoritys analysis. And though Plaintiff argues our decision in Sanderson v. Postal Life Insurance Company of New York, 87 F.2d 58 (10th Cir. 1936), adopted a similar rule, Sanderson dealt with a policy beneficiary seeking proceeds under an “automatic paid-up” provision. See 5 Couch on Insurance § 77:45 (3rd. ed.).
CARSON, Circuit Judge.