NO. 83-142
IN THE SUPREME COURT OF THE STATE OF MONTANA
1984
IN THE MATTER OF THE ESTATE OF
WALTER L. PEGG, Deceased.
Appeal from: District Court of the Fou~teenthJudicial District,
In and for the County of Musselshell
Honorable Nat Allen presiding.
Counsel of Record:
For Appellant:
Jock B. West argued, Billings, Montana
For Respondent:
Elmer J. Dolve and Russell K. Fillner, Billinas, Montana
Russell K. Fillner argued, Billings, Montana
Submitted: December 8. 1 8
9g
Decided: April 3 , 1984
Filed: $ 3 ( ;j&q
Mr. J u s t i c e L . C . Gulbrandson d e l i v e r e d t h e Opinion of the
Court.
T h i s a p p e a l stems f r o m o r d e r s o f t h e D i s t r i c t C o u r t o f
t h e F o u r t e e n t h J u d i c i a l C i r c u i t , M u s s e l s h e l l County, d e n y i ng
a m o t i o n t o remove t h e p e r s o n a l r e p r e s e n t a t i v e o f t h e e s t a t e
of Walter L. Pegg and granting a motion to approve
s e t t l e m e n t o f a w r o n g f u l d e a t h a c t i o n p u r s u e d by t h e same
personal representative. For t h e r e a s o n s s t a t e d b e l o w , w e
a f f i r m i n p a r t , r e v e r s e i n p a r t , a n d remand t h e c a s e t o t h e
District Court of the Thirteenth Judicial District,
Yellowstone County, f o r f u r t h e r proceedings.
Walter L. Pegg was killed in a helicopter crash
approximately twenty miles southeast of Williston, North
Dakota, on May 1, 1981. According t o t h e d e a t h c e r t i f i c a t e
filed with the North Dakota Department of Health, the
interval between the crash and Walter Pegg's death was
seconds. There were no survivors among the other
passengers, including the p i l o t .
A t t h e t i m e o f h i s d e a t h , W a l t e r Pegg was d o m i c i l e d i n
Montana and was m a r r i e d t o h i s t h i r d w i f e , Virginia Fidel
Pegg In addition to Virginia, Walter was survived by
children from h i s p r e v i o u s m a r r i a g e s : S e a n and Tom, the
i s s u e o f W a l t e r and h i s f i r s t w i f e , K a r e n Pegg Symonds, a n d
Ian, t h e i s s u e o f W a l t e r and h i s s e c o n d w i f e , C a r o l Pegg.
Tom r e s i d e d w i t h h i s f a t h e r a n d V i r g i n i a b r i e f l y i n 1 9 7 9 ,
b u t now l i v e s w i t h h i s m o t h e r a n d o t h e r b r o t h e r i n F l o r i d a .
I a n and h i s m o t h e r r e s i d e i n Oregon.
Walter died i n t e s t a t e . V i r g i n i a sought appointment a s
t h e p e r s o n a l r e p r e s e n t a t i v e of h i s e s t a t e , and a n o r d e r t o
t h a t e f f e c t was g r a n t e d on A p r i l 2 8 , 1 9 8 2 , by t h e D i s t r i c t
Court of the Fourteenth Judicial District, Musselshell
County. Notice of her appointment was sent to all potential
heirs. At approximately the same time, Virginia was
involved in negotiations with the insurance company of Blain
Helicopters, the owner of the aircraft in which her husband
was killed. She also filed a wrongful death action against
Blain in April of 1982, in the District Court of the
Thirteenth Judicial District, Yellowstone County. Although
negotiations with the insurance company were proceeding
successfully, the complaint was filed within the two-year
statute of limitations to protect the interests of Walter ' s
heirs in the event negotiations proved fruitless.
By late 1982, Virginia received an offer from the
company to settle the wrongful death claim for $450,000,
under the conditions that a court approve the settlement and
that the wrongful death action be dismissed. Virginia filed
a petition with the District Court of the Fourteenth
Judicial District to have the settlement approved and the
other action dismissed. In the petition, Virginia proposed
that $100,000 of the settlement be distributed among the
children in equal shares undiminished by attorney's fees,
court costs and expenses. The remaining $350,000 would be
allocated to Virginia, and she would be responsible for her
own attorney's fees, court costs and expenses. During the
negotiations, the ex-wives, as guardians and next friends of
their children, were represented by attorney Jock West.
Virginia was represented by attorneys Russell Fillner and
Elmer Dolve.
The ex-wives were dissatisfied with the proposed
distribution, and decided to contest it. The hearing on the
proposed settlement had been set for December 28th, but one
day before the hearing, the attorney for the ex-wives filed
other petitions with the court requesting that Virginia be
removed as personal representative. One petition was filed
on behalf of Karen's children, and the other on behalf of
Carol's child. In the petitions, the ex-wives maintained
that Virginia had intentionally misrepresented material
facts and had engaged in fraudulent acts with respect to
settlement of the wrongful death claim. Specifically, the
ex-wives contended that Virginia (1) had never married
Walter, and therefore could not serve as personal
representative; (2) had assisted in a fraudulent divorce
action filed by Walter against his first wife, Karen, in
1979; and (3) had deceitfully refused to file a survivorship
claim against Blain Helicopters because she allegedly had
more to gain financially from a wrongful death suit. On the
same day these petitions were filed, the ex-wives' attorney
filed a wrongful death action against Blain Helicopters on
behalf of the children. This suit was filed in the
Thirteenth Judicial District, Yellowstone County.
A hearing on the petitions to remove was held on
December 30, 1982. Counsel for Virginia waived notice
requirements, and the ex-wives' attorney was allowed to
press arguments for Virginia's removal. The first
contention--that Virginia had never married Walter--proved
false, as Virginia's counsel produced a marriage
certificate indicating that the couple had been married in
Las Vegas in February of 1980. Counsel for the ex-wives
then concentrated his attention on the remaining grounds.
Counsel insisted that, in a 1979 divorce action filed by
Walter against Karen, Walter claimed that no children had
been born of the marriage. Of course, the couple had two
children, and the ex-wives contended that Virginia was aware
of Walter's apparent misrepresentation to the court. The
only witness to testify about these matters was Virginia.
She testified that she knew that Tom and Sean were Walter's
children by a former marriage, and that Tom had lived with
them in Montana for a time, but that she did not know they
were the children of Karen. In fact, she testified that she
knew nothing about Karen Pegg or the divorce action filed by
Walter against Karen in 1979.
Counsel for the ex-wives also attempted to impute
fraud on Virginia for failing to file a survivorship claim
against the helicopter company. Any recovery from a
survivorship action or related settlement would become part
of the decedent's estate, and therefore pass to Virginia and
the minor children under the intestacy statutes, with
Virginia receiving one third of the settlement and the
children the remainder. See Section 72-2-202(2), MCA.
Because the proceeds of a wrongful death recovery would not
become part of the estate, and could therefore he allocated
differently, Virginia was allegedly in a position to
increase unfairly her portion of any settlement from the
insurance company. There was no evidence produced in
support of this claim other than the coincidence that
Virginia could, by law, benefit more from a wrongful death
recovery. Counsel for Virginia responded that a
survivorship action had been contemplated, but had not been
pursued for fear that Walter's instantaneous death would
prohibit recovery. The wrongful death theory of relief was
deemed a more effective course of action.
The District Court concluded that there was no
evidence to support removal of Virginia as personal
representative, and denied the ex-wives' petitions. Orders
to that effect were signed on the day of the hearing,
December 30, 1982, and notices of entry of order were
entered and served that same day. The hearing on the
proposed settlement offer was reset for January 10, 1983.
At the January 10th hearing, the attorney for the
ex-wives again filed a petition for removal of Virginia as
the personal representative. This petition alleged that
another pleading had been simultaneously filed in the court
that had entertained Walter's divorce action in 1979. This
petition alleged that service upon Karen Pegg Symonds had
been improper, and that the final decree in that action was
void. If the marriage of Karen and Walter was not
dissolved, then the marriage of Virginia and Walter was
void. Thus, Virginia could not serve as personal
representative.
The District Court orally denied the ex-wives
petitions. In a memorandum issued after the hearing, the
court indicated that the petitions were "frivolous [and]
brought for purpose of delay and as an impermissible
collateral attack on a final decree in another court." In
the court's view, the ex-wives and their counsel were aware
of all the facts necessary to support the latest petition
during the first hearing; the doctrine of res judicata thus
barred any consideration of these grounds. Moreover, the
divorce decree could not be shown to be void on its face.
Thus, collateral attack was impermissible.
After the petition was denied, the court proceeded to
hear testimony concerning the proposed settlement. Counsel
for the ex-wives refused to participate in this portion of
the hearing. His position was that the court, acting as a
court of probate, had no jurisdiction over settlement of a
wrongful death claim. To take part in the hearings would
have been, in counsel's view, recognition that the court had
jurisdiction over the parties and the subject matter. The
hearing proceeded without involvement of the ex-wives or
their attorney. The court adopted the proposed distribution
of the wrongful death recovery and issued an order to that
effect. Counsel for the ex-wives renewed his objection to
jurisdiction for the record.
On February 7, 1983, counsel for the ex-wives filed a
notice of appeal "from the final orders entered by the
[trial court] on the 10th of January, 1983 . . .",
including the denial of the petitions to remove Virginia as
personal representative. For the purposes of this opinion,
the ex-wives will be referred to as appellants, and Virginia
as the respondent.
The issues presented for review are:
(1) Whether the District Court erred by denying the
motions to remove the personal representative?
(2) Whether the District Court, acting as a court of
probate, lacked jurisdiction to approve settlement of a
wrongful death claim filed by the personal representative in
another Montana judicial district?
Before proceeding to these issues, we note and dispose
of another argument, first raised in appellants' reply
brief, that all of the trial court's orders of January 10
are void because the trial judge, who officially retired
before that date, could not under Section 19-5-103, MCA,
issue any final orders or judgments. This jurisdictional
matter has been addressed in a recent decision, State ex
rel. Wilcox and Bradley v. District Court, No. 83-391.
Following that decision here, we conclude that the trial
judge had authority to perform all functions of an active
district judge, including the issuance of final orders and
judgments.
THE MOTION TO REMOVE THE PERSONAL REPRESENTATIVE
Section 72-1-209, MCA, provides that appellate review
of all probate matters "is governed by the statutes and
rules applicable to the appeals to the supreme court." Rule
l(c), M.R.App.Civ.P. provides that a party may appeal from
"a judgment or order granting or refusing to grant, revoking
or refusing to revoke, letters testamentary, or of
administration . . ." In issuing the December 30th orders,
the District Court effectively refused to revoke
respondent's status as administrator of Walter Pegg's estate
and letters testamentary granted to her. The orders were
final and therefore appealable. This conclusion is
consistent with In re Davis' Estate (1891), 11 Mont. 196, 28
P. 645, wherein this Court held that an order denying a
petition to vacate an order appointing an administrator of
an estate is appealable.
The conclusion that the District Court 's December
30th orders were final and appealable can also be deduced
from reference to the laws of sister states. The language
of Rule l(c), M.R.App.Civ.P., is virtually identical to that
used in Cal.Prob.Code Section 1240(a) (West 1981), which
provides that "[aln appeal may be taken from an order or the
refusal to make an order .. .[g]ranting or revoking letters
testamentary or of administration." An order refusing to
revoke letters testamentary is in effect an order denying a
petition to remove an executor or personal representative.
In re C u n e o l s Estate (1963), 214 Cal.App.2d 381, 29
Cal.Rptr. 497. Such an order is deemed final and conclusive
and is therefore appealable. In re Extersteinls Estate
(1934), 2 Cal.2d 13, 38 P.2d 151. Even those states like
Colorado, which hold that orders of a probate court are
normally interlocutory and therefore not appealable,
recognize that, where the petitioner is attempting to
disqualify the personal representative, an order of the
court granting or denying the petition is considered final
and appealable. See, e.g., OINeill v. Irwin (1966), 160
Colo. 99, 414 P.2d 122.
Because the December 30th orders were final and
appealable, appellants had thirty days from the notice of
entry of the orders to file an appeal. Rule 5,
P4.R.App.Civ.P. Appellants did not follow this procedure.
Instead, they simply filed another petition for removal
immediately before the January 10th hearing scheduled for
arguments on the proposed settlement of the wrongful death
claim and apportionment of the proceeds thereof. As
indicated earlier, the District Court summarily denied this
petition, concluding that any further consideration of
appellants1 arguments was barred by, among other things, the
doctrine of res judicata. Appellants1 notice of appeal of
all of the orders made on January loth, including the one
denying the new petition, was entered on February 2, 1983,
thirty-four days after the December 30th orders were issued,
or four days beyond the period prescribed by the rules for
filing notice of appeal.
Appellants apparantly believed that by raising "new
grounds" for removal on January loth, i.e., that Walter's
marriage to Virginia was void because of an improper divorce
action involving Walter and his second wife, they could
somehow perfect an appeal from an adverse ruling by the
trial court regardless of any failure to file a timely
appeal from the December 30th orders. As the court noted,
however, appellants were in possession of all the facts
which possibly would have supported the Janua,ry 10th
petition at the time the earlier petitions were considered
and denied. It is well settled that a judgment or order is
conclusive as to all matters which could have been litigated
under the issues raised by the original pleadings. See
Mondakota v. Reed (D.Mont. 1965), 244 F.Supp. 327, 330;
Sherlock v. Greaves (1938), 106 Mont. 206, 214, 76 P.2d
87,90. Appellants did not even offer an argument that the
failure to raise the marital status question could be
excused for reasons of inadvertance, excusable neglect, or
newly discovered evidence. Under these circumstances, the
appellants' new petition had all the appearances of an
unjustified delaying tactic. Appellants should have pressed
their appeal immediately after the issuance of the December
30th orders. Because they did not, we cannot, under these
facts, reach the merits of appellants' arguments in support
of removal of the personal representative.
THE DISTRICT COURT'S JURISDICTION OVER THE WRONGFUL DEATH
CLAIM
There is no question that this portion of the appeal
is properly before this Court, as appellants' notice of
appeal unquestionably protects review of the settlement
issue. We therefore consider the merits of appellants'
argument.
The personal representative of the decedent clearly
has a prior right to pursue a wrongful death action on
behalf of the heirs, in order to avoid the diseconomies and
confusion caused by a plethora of lawsuits. State ex rel.
Carroll v. District Court (1961), 139 Mont. 367, 364 P.2d
739. This rule was recently reaffirmed in State ex rel.
Palmer v. District Court (Mont. 1980), 619 P.2d 1201, 38
St.Rep. 1876. Thus, respondent was within her rights to
pursue the wrongful death action against Blain Helicopters.
At stake, however, is the disposition of the settlement of
that claim. In Swanson v. Champion International Corp.,
(Mont. 1982), 646 P.2d 1166, 1169, 39 St.Rep. 639, 642, we
emphasized that, while the proceeds of any survivorship
recovery or settlement belong to the decedent's estate, the
proceeds of any wrongful death recovery or settlement are
personal to the heirs and are not part of the decedent's
estate. From this, appellants infer that the trial court in
which the claim was filed, and not the court considering the
probate of the decedent's estate, has jurisdiction over
approval of any proposed distribution of the recovery or
settlement. Appellant notes references in Swanson, supra,
to the "trial court" allocating the money damages resulting
from a wrongful death award, 646 P.2d at 1171, 39 St.Rep. at
644. Carroll, supra, can also be fairly read to support
appellants' inference. 139 Mont. at 372, 364 P.2d at 741-2
(reference to district court hearing the wrongful death
action and that court's duty to allocate amount of
recovery). Notwithstanding the reasonableness of these
observations, more is required to support appellantst
position than dicta and inferences arising therefrom.
A proper resolution of this portion of the appeal
requires a historical analysis of the wrongful death cause
of action and its subsequent construction by the courts.
Most wrongful death statutes are patterned after the
original English law, Lord Campbell's Act, 1846, 9 & 10
Vict., ch. 93. The Act created a claim for relief for the
heirs of an individual whose death was the result of
wrong£ul action or neglect, with any damages obtained being
personal to those heirs. Montana adopted the Act in 1871
with only minor changes in wording. 1871 Mont.Terr.Laws 61.
A streamlined version of the Act, patterned after
Cal.Civ.Proc.Code Section 377, replaced the original version
six years later. 1877 Mont.Terr.Laws, Code of Civil
Procedure, Section 14 at 42. The streamlined statute, which
has remained virtually unchanged since 1877, and is now
enumerated Section 27-1-513, MCA, does not specify whether
the estate or the heirs directly benefit from any recovery.
Any uncertainty as to whether the proceeds of any
recovery or settlement are personal to the heirs has been
settled by courts in other jurisdictions. In In re
Riccomits Estate (1921), 185 Cal. 458, 197 P. 97, the
California Supreme Court construed Cal. Civ.Proc.Code,
Section 377, which then contained the same language as now
appears in Section 27-1-513, MCA. The California court held
that:
"It is well settled that the action
authorized by the section is one solely
for the benefit of the heirs by which
they may be compensated for the pecuniary
loss suffered by them by reason of the
loss of their relatives. The money
recovered constitutes n o part of the
estate of the deceased, and where the
action is brought or the money recovered
by the personal representative of the
deceased, such personal representative is
acting solely as a statutory trustee for
the benefit of the heirs on account of
whom the recovery is had." (Emphasis
added.) 185 Cal. at 460-61, 197 P. at 98.
Furthermore, because the proceeds were not part of the
estate, a lower court, sitting in its capacity as a court of
probate, had no jurisdiction over those proceeds of their
distribution. 185 Cal. at 463-64, 197 P. at 99.
Courts in other states having some version of Lord
Campbell's act on their books have adhered to the same
course of reasoning and have concluded that separate probate
courts or district courts acting as probate courts lack
jurisdiction to approve settlement of, or allocate the
proceeds of, wrongful death claims. See, e.g., In re
Estate (1965), 2 Ariz.App. 155, 406 P.2d 873,
fii i l 'marl $ 3
'
reaff'd as modified, 2 Ariz.App. 338, 409 P.2d 54; In re
Mayer's Estate (1909), 106 Minn. 484, 119 N.W. 217; Aho v.
Republic Iron & Steel Co. (1908), 104 Minn. 322, 116 N.W.
590; Ellen v. Arthur (1936), 178 S.C. 490, 183 S.E. 306.
reached the opposite conclusion, but these
decisions are distinguishable, as the wrongful death
statutes construed in those cases contain express provisions
requiring that the proceeds of any recovery or settlement be
allocated directly to the decedents estate, e.g., .&eeqh v.
I K&
-
City of Bridgeport (1982), Conn. , 444 A.2d 225, or
according to intestacy statutes, e.g., Holmes v. Price
(1960), 186 Kan. 623, 352 P.2d 5. Washington has construed
its wrongful death statute, which is essentially similar to
Montana's, as requiring apportionment of proceeds by a
probate court. HansRn v. Stimson Mill. Co (1936), 195 Wash.
e
621, 81 P.2d 855. This opinion, however, is of dubious
value. It is not clear what authority the Washington court
relies on for its holding. Strangely enough, that portion
of the opinion contains a reference to Riccomi's Estate,
supra, which held otherwise. See Hansen, 195 Wash. 621, 81
P.2d at 856. And, the Hanson opinion has been criticized
recently by some members of the Washington high court as an
improper holding. See, e.g., Wood v. Dunlop (1974), 83
Wash.2d. 719, 521 P.2d 1177, 1180-81 (Finley, J.,
concurring).
On the basis of the analysis above, it would appear
that the district court in the immediate case exceeded the
bounds of its jurisdiction and should be reversed. It would
be inappropriate, however, to draw that conclusion
immediately. None of the cases which support appellants'
position clearly articulate an unambiguous rationale for
denying a probate court the authority to apportion proceeds
of a wrongful death recovery. Possibly, the rationale may
lie in preserving some distinct jurisdictional differences
between separate courts. If so, it is unclear whether this
distinction has been carried over into modern courts.
Respondent makes a reasoned argument that the provisions of
the Uniform Probate Code, as adopted in Montana, contemplate
allowing a district court, sitting in probate, to assume
jurisdiction of the settlement of a wrongful death claim for
reasons of judicial economy. Specifically, respondent
relies upon Section 72-1-202(2), MCA, (Unif. Probate Code
Section 1-302), which gives the court authority "to make
orders, judgments, and decrees and take all other action
necessary and proper to administer justice in the matters
which come before it." (Emphasis added.) Respondent also
cites Section 72-3-605, MCA (Unif. Probate Code Section
3-704), which allows the personal representative to "invoke
the jurisdiction of the court, in proceedings authorized by
this code, to resolve questions concerning the estate or its
administration." Finally, respondent notes that Section
72-1-102, MCA (Unif. Probate Code Section 1-102) requires a
liberal construction of all provisions of the probate law.
From these, respondent argues that she was acting within her
authority to submit her proposed settlement to the District
Court supervising her administration of the estate, and that
the court was in turn authorized to consider the settlement
offer and apportion the proceeds among the heirs.
Respondent's construction of the probate laws
admittedly possesses a certain logic. Yet no other state
that has adopted these provisions of the Uniform Probate
Code has construed them in the direction urged by respondent
and followed by the district court. See Annot., Unif. Prob.
Code Sections 1-102, 1-302, 3-704, 8 U.L.A. 24, 38, 321
(1983) (annotations of cases construing code sections in
uniform code states). Moreover, the code was not designed
to replace all principles of probate law in effect prior to
adoption of the code. Indeed, Section 72-1-104, MCA,
provides that " [u]nless displaced by the particular
provisions of this code, the principles of law and equity
supplement its provisions." There is no provision in the
code specifically authorizing a probate court to treat the
proceeds of a wrongful death settlement or recovery as part
of a decedent's estate and hence authorizing the court to
allocate the proceeds. Arguably, then, the traditional rule
enunciated by the California court and other state courts
still applies notwithstanding the provisions of Sections
72-1-202(2) and 72-3-605.
Similarly, a fair reading of the previously cited code
sections in light of the traditional rule suggests that they
cannot be construed to reach a wrongful death award.
Section 72-1-202(2) is preceeded by language that a probate
court has subject matter jurisdiction over estates of
decedents. See Section 72-1-202(1)(a), MCA. Section
72-3-605 only authorizes the personal representative to
invoke the probate court's jurisdiction to resolve matters
pertaining to the decedent's estate. Because the proceeds
of the wrongful death recovery or settlement are not
considered part of the estate under the traditional rule,
these sections of the probate code cannot be relied upon to
vest the court with jurisdiction.
In summary, it is possible that the drafters of the
uniform code never contemplated superseding the traditional
rule in the way suggested by respondent. The law of
wrongful death and the law of probate have developed
separately through the years, and while the reasons for
requiring separate treatment of the damages obtained in a
wrongful death action have not always been clearly
expressed, it is still uncertain whether this separate
treatment should be abolished. Obviously, if both the
probate and wrongful death actions had been filed in the
same judicial district, the court would have had no legal
difficulty in asserting jurisdiction over both proceedings,
although the court in Riccomi's Estate, supra, also held
that, while one court could assume jurisdiction over both
actions, it would have to handle them separately. 185 Cal.
at 464, 197 P. at 99. See also 55 Cal.Jur 2d Wrongful Death
Section 31, at 428. Here, where the two actions were filed
in different judicial districts, the district court acting
in probate undoubtedly exercised jurisdiction not intended
by the traditional rule when it assumed authority over the
settlement offer, approved it, and then ordered dismissal of
the personal representative's wrongful death action filed in
the other judicial district.
In concluding that the district court exceeded its
jurisdiction, we are not ignoring the potential economies of
allowing a district court acting in probate to assume the
task of settling a related matter such as a wrongful death
claim filed in another judicial district. As noted earlier,
however, the decision to grant district courts that
authority is one made by legislatures. See , supra;
Holmes, supra. We leave it to the Montana legislature to
decide whether district courts, acting in their probate
jurisdiction, should have some kind of authority over
wrongful death claims filed in other judicial districts.
JUDGMENT
The order of the District Court denying appellants'
motion to remove the personal representative is affirmed.
The order of the same court, dated January 10, 1983,
approving settlement of the claim and apportioning the
proceeds, is vacated. The orders of the same court, dated
February 2, 1983, authorizing the personal representative to
dismiss appellants' wrongful death action and to sign
releases on behalf of the natural mothers and/or guardians
of the minor children are likewise vacated. Civil Action
DV-82-858, the wrongful death action filed by the personal
representative in Yellowstone County, is reinstated. Civil
Action DV-82-2287, the wrongful death action filed by
appellants in Yellowstone County, is dismissed. The cause
now on appeal is remanded to the District Court of the
Thirteenth Judicial District, Yellowstone County, for
proceedings on the wrongful death settlement.
We concur:
Mr. Justice Daniel J. Shea dissents in part and will file
a written dissent in part later.