In the Matter of the Estate of Kevin L. Barz ( 2022 )

IN THE COURT OF APPEALS OF IOWA
No. 21-0563
Filed June 15, 2022
IN THE MATTER OF THE ESTATE OF KEVIN L. BARZ, Deceased.
BRAD STALEY and SUSAN STALEY,
Appellants.
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Appeal from the Iowa District Court for Franklin County, Rustin Davenport,
Judge.
Creditors appeal the district court’s approval of settlements of wrongful
death claims by an estate’s co-executors. AFFIRMED.
Brian D. Miller of Miller & Miller, P.C., Hampton, for appellants.
Daniel P. Kresowik and Julie L. Vyskocil of Brick Gentry, P.C., West Des
Moines, for appellees.
Heard by Vaitheswaran, P.J., and Tabor and Badding, JJ.
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VAITHESWARAN, Presiding Judge.
Kevin Barz and his wife died in a motor vehicle accident. They were
survived by three children, who became co-executors of Barz’s estate.
The co-executors filed a wrongful death action against the tortfeasor and
his insurer. They reached a settlement with the tortfeasor for $622,264.15, “to be
paid solely as compensation for the individual loss of consortium.” They applied
for court approval of the settlement.
Brad and Susan Staley resisted the application. As creditors of Barz, they
asserted it was “not in the best interest of the estate to permit the [c]o-[e]xecutors
to compromise the estate’s wrongful death claim in such a way that almost all of
the proceeds are diverted from the estate and therefore, cannot be used to pay
creditors.” They also filed a motion to remove the co-executors and appoint a
special substitute co-executor.
Meanwhile, the co-executors reached a settlement with the insurer for the
policy limit of $250,000. They amended their application to seek approval of that
settlement. They specifically asked for “apportionment of the portion of the
proceeds of both settlements compensating [them] for their individual loss of
consortium claims.”
In a preliminary order, the district court addressed “whether or not any of
the settlement payments should be made available to claims of creditors.” The
court noted that both settlements were to be paid to the co-executors for their loss-
of-consortium claims. Citing Iowa Code section 633.336 (2019), which states
“[d]amages for wrongful death shall not be subject to debts and charges of the
decedent’s estate,” the court stated the statute was “clear and . . . the money paid
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in settlement [was] not subject to the claims of creditors, including claims of the
Staleys.”
The court separately addressed the co-executors’ request for approval of
the two settlements, expressing its understanding that they were seeking “an equal
apportionment and distribution of the proceeds of both settlements except for
amounts necessary to satisfy medical subrogation liens or to pay outstanding
medical bills for treatment of injuries suffered by [Barz] in the subject accident.”
The court approved both settlements, ordered them “apportioned and distributed
equally to each of the Applicants” subject to the designated exceptions, and
reiterated that “[n]one of the settlement amounts are available to creditors,
including the Staleys, for the reasons set forth in the previous order.” Pursuant to
the order, each co-executor was to receive approximately $207,421.38 from the
tortfeasor’s settlement and $80,000 from the insurer’s settlement. The Staleys
appealed.
Iowa Code section 633.336 states:
When a wrongful act produces death, damages recovered as
a result of the wrongful act shall be disposed of as personal property
belonging to the estate of the deceased; however, if the damages
include damages for loss of services and support of a deceased
spouse, parent, or child, the damages shall be apportioned by the
court among the surviving spouse, children, and parents of the
decedent in a manner as the court may deem equitable consistent
with the loss of services and support sustained by the surviving
spouse, children, and parents respectively. Any recovery by a parent
for the death of a child shall be subordinate to the recovery, if any, of
the spouse or a child of the decedent. If the decedent leaves a
spouse, child, or parent, damages for wrongful death shall not be
subject to debts and charges of the decedent’s estate, except for
amounts to be paid to the department of human services for
payments made for medical assistance pursuant to chapter 249A,
paid on behalf of the decedent from the time of the injury which gives
rise to the decedent’s death up until the date of the decedent’s death.
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As the Staley’s aptly put it, “the parties disagree about the meaning of Iowa Code
section 633.336.” They sum up the disagreement as follows:
The Kevin Barz Estate believes that said code section automatically,
without a hearing or evidence, removes all wrongful death proceeds
from estate administration and the reach of estate creditors if there
is a surviving spouse, child or parent. The [Staleys] believe that
some of the damages recovered as a result of Kevin Barz’s death
are estate assets, must be remitted to the estate, and administered
consistent with Iowa law.
“Our first step in a case of statutory interpretation ‘is to determine whether
the language is ambiguous.’” State v. Davison, 973 N.W.2d 276, 281 (Iowa 2022)
(citation omitted). “To determine if a statute is ambiguous, we consider its
language in context and consider whether reasonable minds differ or are uncertain
as to the meaning of the statute.” Id.The key sentence is the third one: “If the decedent leaves a spouse, child,
or parent, damages for wrongful death shall not be subject to debts and charges
of the decedent’s estate.” The Staleys assert the sentence conflicts with the first
part of the first sentence: “When a wrongful act produces death, damages
recovered as a result of the wrongful act shall be disposed of as personal property
belonging to the estate of the deceased.” To the contrary, the first sentence sets
forth the general rule for wrongful-death damages, while the third sentence sets
forth an exception when the decedent leaves a spouse, child, or parent.
Reasonable minds would not discern an ambiguity in the meaning of the third
sentence when viewed in conjunction with the first part of the first sentence.
The Staleys next assert that the third sentence must be read with the
second part of the first sentence as well as the second sentence of section
633.336. Those sentences, the Staleys assert, evince a statutory intent to exclude
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only loss-of-consortium damages rather than all wrongful-death damages from
estate administration. Again, we are not convinced reasonable minds would find
an ambiguity in the third sentence based on that language.
After setting forth the general rule in the first part of the first sentence, the
legislature used the word “however.” “However” means, “in spite of that; on the
other hand.” However, Merriam-Webster, https://www.merriam-webster.com/
dictionary/however (last visited June 8, 2022). Synonyms for “however” are “but,”
“nevertheless,” “still,” “yet,” or “although.” Id. By using “however,” the legislature
signaled that what followed would not conform to the general rule. Indeed, it does
not. The clause after “however” references “damages for loss of services and
support.” These damages are a subset of all wrongful-death damages. See
Madison v. Colby, 348 N.W.2d 202, 206 (Iowa 1984) (stating “the loss of services
element has become identified with a recovery for all of the traditional elements of
common law consortium”); see also Kulish v. West Side Unlimited Corp., 545
N.W.2d 860, 862 (Iowa 1996) (stating “the term ‘services’ includes intangible
consortium damages”).1 In other words, the second part of the first sentence is an
exception to the general rule that is triggered when a narrow subset of wrongful-
death damages is included in the recovery. The second sentence of section
633.336,2 in turn, simply prioritizes the disbursement of damages when the
exception applies.
1 The clause after “however” also refers to “damages for loss of . . . support,” which
is a “separate and independent right of the injured person to recover.” Madison,
348 N.W.2d at 209. The “support” category of damages would encompass some
of the remaining categories of wrongful death damages.
2 The sentence states, “Any recovery by a parent for the death of a child shall be
subordinate to the recovery, if any, of the spouse or a child of the decedent.”
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The reference in the second half of the first sentence to a seemingly
narrower class of damages would not lead reasonable minds to believe the third
sentence also must be read narrowly to apply only to “damages for loss of services
and support.” The third sentence is also an exception to the general rule. But that
exception is not triggered by the type of damages involved. It is triggered by the
survival of a spouse, child, or parent. When the exception is triggered, it then
extends to “damages for wrongful death” generally.
While we conclude a contextualized reading of the third sentence of section
633.366 leaves no ambiguity as to its meaning, any perceived ambiguity is
resolved by an examination of the legislative history. See Petro v. Palmer Coll. of
Chiropractic, 945 N.W.2d 763, 772 (Iowa 2020) (discussing evolution of two
statutory concepts and stating “[t]o the extent the text . . . is ambiguous, this
legislative history supports the foregoing interpretation”); Bank of America, N.A. v.
Schulte, 843 N.W.2d 876, 880 (Iowa 2014) (“We consider a statute’s legislative
history, including prior versions of the statute.” (citing State v. Romer, 832 N.W.2d
169, 176 (Iowa 2013))).
The preference for immediate family members dates back to England’s
enactment of Lord Campbell’s Act in 1846. See Cardamon v. Iowa Lutheran
Hosp., 128 N.W.2d 226, 234–35 (Iowa 1964). That Act created a wrongful death
action and stated the action would “be for the benefit of the wife, husband, parent,
and child of the” decedent and damages would be apportioned among them. See
Lord Campbell’s Act Chapter XCIII, American Law Register, vol. 7, 584–85 (1889),
available at https://archive.org/details/jstor-3305231/page/n1/mode/2up (last
visited June 8, 2022).
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Iowa enacted a wrongful-death statute shortly thereafter. Cardamon, 128
N.W.2d at 235 (“Our survival statute, section 611.20, Code of Iowa, . . . is our
alternative to the creation of a new cause of action under Lord Campbell’s Act and
comparable wrongful death statutes patterned thereon.”). Like the present statute,
the 1851 Code disallowed creditor claims on wrongful-death damages where the
decedent was survived by immediate family members. See Iowa Code § 2501(1851) (stating, “when the deceased left a wife, child, or parent surviving him, [the
sum recovered] shall not be liable for the payment of debts”).
This provision remained substantially unchanged for over 100 years. See
id. § 4111 (1860); id. § 4111 (1872); id. § 2526 (1873)3; id. § 3313 (1897)4; id.
§ 11920 (1924); id. § 635.9 (1962). The provision was repeatedly upheld. See
Armbuster v. Chicago, R.I. & P. Ry. Co., 147 N.W. 337, 341 (Iowa 1914) (noting
“the creditor of the deceased [is not] permitted to share the recovery”); In re
Williams’ Estate, 107 N.W. 608, 612 (Iowa 1906) (“By our Code (section 3313), it
is expressly provided that damages collected on account of death wrongfully
occasioned are to be treated as a part of the estate, and distributed to the heirs
and next of kin exempt from the debts of the deceased.”); Major v. Burlington, 88
N.W. 815, 816 (Iowa 1902) (“Nothing in these statutes indicates a purpose to
create a cause of action in favor of wife or children, save as they may share in the
distribution of the damages recovered, freed from any claim of creditors.” (citing
3 In 1873, the section was amended to read, “When a wrongful act produces death,
the damages shall be disposed of as personal property belonging to the estate of
the deceased, except that if the deceased leaves a husband, wife, child, or parent,
it shall not be liable for the payment of debts.” Iowa Code § 2526 (1873).
4 The 1897 code provision replaced the words “except that” with “but.” Iowa Code
§ 3313 (1897).
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Iowa Code § 3313 (1901))); Casady v. Grimmelman, 77 N.W. 1067, 1069 (Iowa
1899) (applying 1873 version of the statute and concluding, “As the amount
recovered was not subject to the debts of decedent, it descended in equal parts to
the [decedent’s] father and mother”).
In 1966, the legislature amended section 633.366 to provide for the
payment of certain limited types of debts from the wrongful-death damages. See
Iowa Code § 633.336 (1966); see also id. § 633.424 (subjecting wrongful-death
damages to payment of court costs, other costs of administration, funeral and
burial expenses, and medical expenses associated with the decedent’s final
illness”). Ten years later, the legislature removed that provision and re-enacted
language disallowing creditors from obtaining wrongful-death damages. 1976
Iowa Acts ch. 1227, § 4 (“If the decedent leaves a spouse, child or parent, damages
for wrongful death shall not be subject to debts and charges of the decedent’s
estate.”). In short, for 160 of the last 170 years, all wrongful death damages have
been excluded from the estate’s debts and charges. Even if the third sentence of
section 633.336 is ambiguous, the legislative history supports the co-executors’
interpretation.
The Staleys belatedly raise a constitutional challenge to the statute. We
decline to address the issue because it was not preserved for review. See State
v. Bynum, 937 N.W.2d 319, 324 (Iowa 2020).
The Staleys also argue, “The [d]istrict [c]ourt erred when it apportioned
damages under Iowa Code section 633.336 without an evidentiary hearing” and
“[t]he [d]istrict [c]ourt erred when it found that the [c]o-[e]xecutors in this matter did
not have a conflict of interest in this matter.” The co-executors respond, “No
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creditor, let alone an unsecured creditor, has standing to challenge a wrongful
death settlement proposed pursuant to Iowa Code sections 613.15 and 633.336.”
We agree with the co-executors. The district court did not err in concluding the co-
executors lacked standing to raise these issues. See Iowa Citizens for Cmty.
Improvement v. State, 962 N.W.2d 780, 787 (Iowa 2021) (setting forth standard of
review); see also id. at 790–91 (addressing standing principles and stating, “Think
about it this way: If the court can’t fix your problem, if the judicial action you seek
won’t redress it, then you are only asking for an advisory opinion”).
AFFIRMED.