Mid-South Adjustment Co. v. Estate of Harris

Robert J. Gladwin, Judge.

Appellant Mid-South Adjust-IVi ment Company appeals from an order of the Ouachita County Circuit Court that disallowed appellant’s claim against the proceeds of a wrongful-death settlement. We affirm.

Shanna Harris died as a result of injuries suffered in an automobile accident. Her mother, Francis McCoy, was appointed administratrix of the estate on April 14, 2000. Appellant timely filed a claim against the estate for $7,425 on behalf of two medical providers who had provided medical services to Shanna Harris just prior to her death.

The administratrix filed a wrongful-death and survivor action against the drivers of the two vehicles involved in the collision. The liability carriers for the two defendants offered the policy limits of $50,000 to settle the action. This offer was presented to and approved by the trial judge.

On April 2, 2002, without notice to appellant, the trial court entered an order for distribution of the settlement proceeds. On August 7, 2002, appellant filed a petition to re-open the estate, contending it had not received notice regarding the wrongful-death-settlement hearing and that it should have been allowed an opportunity to participate in the distribution of the proceeds to recover for the medical services.

Appellant argues on appeal that the trial court erred in refusing to re-open the estate. In fact, the court did re-open the estate, but held that it would not set aside or reconsider the distribution previously ordered, reasoning that, under the provisions of Ark. Code Ann. § 16-62-102 (Supp. 2001), appellant had no standing to participate in the settlement proceeds.

Arkansas Code Annotated section 16-62-102(a)(l) addresses wrongful-death actions and provides, in pertinent part, that whenever the death of a person is caused by a wrongful act, neglect, or default such as would have entitled the party injured to maintain an action and recover damages in respect thereof if death had not ensued, then the person that would have been liable had death not ensued shall be liable to an action for damages, notwithstanding the death of the person. The beneficiaries of the wrongful-death action are: (1) the surviving spouse, children, father, mother, brothers, and sisters of the deceased person; (2) persons, regardless of age, standing in loco parentis to the deceased person; (3) persons, regardless of age, to whom the deceased stood in loco parentis at any time during the life of the deceased. Ark. Code Ann. § 16-62-102(d). Of particular relevance to this case is Ark. Code Ann. § 16-62-102(e), which provides that no part of any recovery referred to in this section shall be subject to the debts of the deceased person or become, in any way, a part of the assets of the estate of the deceased person. (Emphasis added.)

In support of its argument for reversal, appellant points out that part of the complaint filed in the wrongful-death action sought to recover compensatory damages for medical expenses incurred by the decedent prior to her death. Appellant contends that these amounts were sought pursuant to Ark. Code Ann. § 16-62-101 (Supp. 2001), which provides that a decedent’s estate may recover for the decedent’s loss of life as an independent element of damages, and that these amounts were therefore part of the estate and subject to creditors’ claims rather than being exempt as proceeds of a wrongful-death action.

In Douglas v. Holbert, 335 Ark. 305, 983 S.W.2d 392 (1998), our supreme court stated that the personal representative is clearly the party to bring a wrongful-death action on behalf of the statutory beneficiaries, and that the other statutory beneficiaries have no standing to bring the lawsuit. The court also noted that once a settlement is obtained, the proceeds do not become assets of the decedent’s estate, but that the proceeds of a wrongful-death action are for the sole benefit of the statutory beneficiaries and may not be used to pay off debts of the estate. 335 Ark. at 314, 983 S.W.2d at 396.

In its letter opinion filemarked May 12, 2003, the trial court commented, “It is noteworthy that it is uncontroverted that this is in fact a wrongful-death settlement with which we are dealing.” In three other instances within this opinion, the court refers to the proceeds of the wrongful-death action or settlement. We are of the opinion that these references constitute a finding of fact that the entire amount of the proceeds was, in fact, attributable to the wrongful-death action. As such, this amount did not become a part of the estate and was exempt from the claims of the decedent’s creditors.

Probate cases are reviewed de novo on appeal, and we do not reverse the findings of the probate judge unless those findings are clearly erroneous. Arkansas Dep’t of Human Servs. v. Keeling, 73 Ark. App. 443, 43 S.W.3d 772 (2001). A probate court’s finding of fact is clearly erroneous when, although there is evidence to support it, we are left with the definite and firm conviction that a mistake has been committed. Id.

In the case now before us, a wrongful-death action was filed on behalf of the statutory beneficiaries. A settlement of $50,000 was negotiated, without reference as to how it was to be apportioned among possibly competing measures of damages. The trial court noted repeatedly that the proceeds were attributable to the wrongful-death action or settlement, and we cannot say that the court was clearly erroneous in this regard. Arkansas Code Annotated section 16-62-102(e) clearly states that no part of any wrongful-death-action recovery shall be subject to the debts of the deceased. Accordingly, we affirm.

Affirmed.

Stroud, C.J., Griffen, Crabtree, and Roaf, JJ., agree. Hart, Robbins, Bird, and Vaught, JJ., dissent.