ATTORNEY FOR APPELLANTS ATTORNEYS FOR APPELLEES ATTORNEYS FOR APPELLEE
Jack G. Hittle JASON L. INLOW, JEREMY H. INLOW, HEATHER N. JOHNSON
Church, Church, Hittle & Antrim AND SARAH C. INLOW Vicki L. Anderson
Noblesville, Indiana Marvin J. Frank Joseph M. Hendel
Robert M. Hamlett Hackman Hulett & Cracraft
Frank & Kraft Indianapolis, Indiana
Indianapolis, Indiana
______________________________________________________________________________
In the
FILED
Indiana Supreme Court Nov 18 2009, 10:06 am
_________________________________
CLERK
of the supreme court,
No. 29S02-0902-CV-89 court of appeals and
tax court
IN THE MATTER OF THE SUPERVISED ADMINISTRATION OF THE
ESTATE OF LAWRENCE W. INLOW, DECEASED
ANITA INLOW AND ANITA INLOW AS GUARDIAN OF JESSE INLOW, Appellants,
v.
JASON L. INLOW, HEATHER N. JOHNSON, JEREMY H. INLOW, AND
SARAH C. INLOW, Appellees.
_________________________________
Appeal from the Hamilton Superior Court, No. 29D02-9705-ES-60
The Honorable Steven R. Nation, Special Judge
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On Transfer from the Indiana Court of Appeals, No. 29A02-0712-CV-1039
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November 18, 2009
Dickson, Justice.
When the proceeds from a pre-trial settlement of a special administrator's wrongful death
action are not specifically allocated between different types of damages, to what extent is the de-
cedent's estate entitled to payment therefrom for the decedent's funeral and burial costs? To ad-
dress this question, we granted transfer.
Lawrence W. Inlow died from injuries sustained when struck by a helicopter rotor blade.
Letters of Administration for his probate estate were issued in May 1997. After paying the dece-
dent's funeral and burial costs totaling $284,034, his widow, Anita Inlow, sought and received
full reimbursement from the Estate. In December 1998 the court appointed a Special Adminis-
trator to investigate and pursue a wrongful death action, which was thereafter filed in the United
States District Court for the Southern District of Indiana. Before coming to trial, however, a
compromise settlement was reached by the parties and approved by the court supervising the
probate estate in June 2003. The settlement proceeds were not distributed immediately and, as of
January 3, 2006, totaled $899,158.92 of which $309,569.54 was available for distribution to the
parties.1 Appellant's App'x at 210–13.
Separate from the wrongful death settlement, the heirs to the Estate and its Successor
Personal Representative, Fifth Third Bank, reached a general agreement regarding distribution of
estate assets. The details of this settlement are not presented in the record on appeal, but it was
approved by the court on March 5, 2004, and the widow describes it as providing a final fixed
payment of the remaining assets in the general estate to go to her and her son. Appellant's Br. at
9. None of the parties assert that this estate settlement addressed the undistributed wrongful
death settlement proceeds. In November 2004 the Special Administrator in the wrongful death
action, First National Bank and Trust Company, petitioned the court for distribution instructions
regarding the wrongful death settlement, in response to which Fifth Third Bank filed a claim
seeking $284,034 from the proceeds of the wrongful death settlement to reimburse the Estate for
its payment of funeral and burial expenses. The court approved the Estate's claim, the widow
appealed, and the Court of Appeals affirmed. In re Estate of Inlow, 893 N.E.2d 734 (Ind. Ct.
App. 2008). We granted transfer.
The widow has opposed the Estate's claim for reimbursement, arguing that such claim
violates the provisions of the Wrongful Death Act, Indiana Code § 34-23-1-1, the relevant lan-
guage of which provides:
1
The wrongful death settlement in the amount of $884,713.11 had accrued $14,445.81 in interest for a
grand total of $899,158.92. Disbursements totaling $589,589.38 were taken primarily for various attor-
ney fees, attorney expenses, and Special Administrator's fees. Special Administration Final Accounting,
Appellant's App'x at 213.
2
When the death of one is caused by the wrongful act or omission of another, . . . the dam-
ages shall be in such an amount as may be determined by the court or jury, including, but
not limited to, reasonable medical, hospital, funeral and burial expenses, and lost earnings
of such deceased person resulting from said wrongful act or omission. That part of the
damages which is recovered for reasonable medical, hospital, funeral and burial expense
shall inure to the exclusive benefit of the decedent's estate for the payment thereof. The
remainder of the damages, if any, shall, subject to the provisions of this article, inure to
the exclusive benefit of the widow or widower, as the case may be, and to the dependent
children, if any, or dependent next of kin, to be distributed in the same manner as the
personal property of the deceased.
Ind. Code § 34-23-1-1. Emphasizing that no part of the wrongful death settlement "was specifi-
cally recovered for funeral or burial expenses," Appellant's Br. at 8, the widow contends that
none of it falls within the statutory phrase "[t]hat part of the damages which is recovered for . . .
funeral and burial expense," and thus, none of it should be paid to the Estate to reimburse such
expenses but instead should be distributed to the widow and dependent children under the "re-
mainder of the damages" language of the Act.
The widow asserts that, if the wrongful death proceeds are transferred to the Estate, she
will realize no benefits from those funds, as her rights with respect to the Estate were previously
settled by the agreement approved in March 2004. She further states that, if distributed as part of
the wrongful death settlement, the contested funds will be distributed to the widow and the de-
pendent children, which would include both the child born of her marriage to the decedent and
also the children born of his first marriage. Id. These assertions are not disputed. The appellees,
children of the decedent's first marriage, argue that provisions of the Wrongful Death Act should
be construed to require full payment of funeral and burial costs from the wrongful death settle-
ment proceeds to the Estate.
The Wrongful Death Act contains no provisions expressly applicable to the distribution
of proceeds from settlements before adjudication of the amount of damages. The Act directs
that, in a wrongful death action, "the damages shall be in such an amount as may be determined
by the court or jury." Ind. Code § 34-23-1-1. Its directive regarding payment of "reasonable
medical, hospital, funeral and burial expense" applies only to "[t]hat part of the damages," which
refers to the damages "determined by the court or jury." Id. Such damages thus must be unders-
tood in the context of adjudicated damages. Personal injury damage claims or actions, including
3
those for wrongful death, are commonly resolved by settlement agreements before the amount of
actual damages is determined by a court or jury. Such settlements can be motivated by a wide
variety of considerations such as disputed liability, limited available insurance proceeds or col-
lectible assets, avoidance of litigation expenses, special needs for prompt access to settlement
proceeds, etc. It is not uncommon for claims or lawsuits occasionally to be compromised for
amounts substantially less than the actual medical, hospital, funeral, and burial expenses incurred
by a claimant or plaintiff—particularly in cases where there may be a remote likelihood of liabil-
ity. Pre-trial settlements are usually, as here, opaque with respect to the proportion of medical,
hospital, funeral, and burial expenses in relation to the total recovery. To impose upon all pre-
trial wrongful death settlements a requirement that the net proceeds must first be allocated to
medical, hospital, funeral, and burial expenses before distribution for other damages could fre-
quently, as here, be inequitable and create an undesired counter-incentive to seek settlement. In
light of these factors, we decline to construe expansively the Wrongful Death Act so as to im-
pose upon compromise settlements made before an adjudication of total damages a requirement
that resulting proceeds first be used to fully repay the medical, hospital, funeral, and burial ex-
penses.
We do not agree, however, with the widow's contention that none of the wrongful death
settlement proceeds can be paid to the Estate for the funeral and burial expenses. It is quite ap-
parent from the language of the Act that, in creating a statutory cause of action for wrongful
death, the legislature intended particular attention to the payment of medical, hospital, funeral,
and burial expenses. To extend this legislative objective to pre-trial settlements, a proportional
allocation appears most equitable. To guide the distribution of pre-adjudication settlements in
wrongful death cases in a manner consistent with the statutory scheme for distribution of
proceeds when damages are adjudicated, we exercise our common law supervisory authority.
We hold that, to resolve such disputes as presented in this case, a court should direct
payment from the pre-trial wrongful death settlement that part of the medical, hospital, funeral,
and burial expenses that corresponds to the ratio of the total of such expenses to the estimated
4
total damages sustained.2 We understand that in such disputes a court's allocation of a pre-trial
wrongful death settlement may require that the court receive evidence from the parties to enable
it to ascertain the approximate total damages and thus determine a proportionate equitable alloca-
tion.
We reverse the court's September 5, 2007, order to the extent that such order approves the
claim of the Successor Personal Representative for the distribution of the full amount of funeral
and burial expenses from the wrongful death settlement proceeds. This case is remanded to the
court for a determination of the portion of said expenses to be distributed to the Estate from the
wrongful death settlement in a manner consistent with this opinion.
Shepard, C.J., and Sullivan, Boehm, and Rucker, JJ., concur.
2
For the purpose of this calculation, and because the objective is to apportion fairly small pre-trial settle-
ments that likely already reflect improbable liability, comparative fault, collectability, or other similar
factors, the "estimated total damages sustained" are those that would be assessed under the Act from all
sources, but without diminution for comparative fault. The Wrongful Death Act specifies:
[T]he damages shall be in such an amount as may be determined by the court or jury, including,
but not limited to, reasonable medical, hospital, funeral and burial expenses, and
lost earnings of such deceased person resulting from said wrongful act or omission.
Ind. Code § 34-23-1-1. Damages for wrongful death may include "such a sum as will compensate the
persons on whose behalf the action is brought for the pecuniary injury which they have sustained by the
death." Consolidated Stone Co. v. Staggs, 164 Ind. 331, 337, 73 N.E. 695, 697 (1905) (quoted approving-
ly in Elmer Buchta Trucking, Inc. v. Stanley, 744 N.E.2d 939, 942 (Ind. 2001)). In addition, such damag-
es may also include loss of care, love and affection, and of training and guidance for children. Dillon v.
Glover, 597 N.E.2d 971, 974 (Ind. Ct. App. 1992).
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