Wrongful Death and Chancery Court
March 6, 2014 § 3 Comments
If you are going to do any wrongful death practice at all, you must familiarize yourself with the MSSC’s decision in the seminal case of Long v. McKinney, 897 So.2d 160 (Miss. 2004), reh den. April 7, 2005.
The decision clarifies many important concepts involved in wrongful death claims, including priority of jurisdiction, the distinction between heirs and wrongful death beneficiaries, allocation of attorneys fees, costs and expenses, representation, conflicts of interest, and control of litigation.
What is important in this case to the chancery practitioner, however, is Justice Dickinson’s exposition on the role of chancery court.
There is much confusion in the bar, and perhaps the bench as well, about exactly what is the proper role of chancery court in wrongful death. Justice Dickinson expounds:
¶59. Perhaps no aspect of wrongful death litigation is more misunderstood and misapplied than the role of the chancery court.[Fn 13] With respect to a wrongful death suit to be pursued in circuit court, chancery jurisdiction should be invoked for the following purposes:
Fn 13. The misunderstanding can be partly attributed to the Uniform Chancery Court Rules, which address petitions for authority to compromise, and petitions for allowance of attorney fees, in wrongful death suits. U.C.C.R. 6.10, 6.12. These rules apply only to wrongful death suits which require chancery jurisdiction. See discussion infra.
Estate.
¶60. In the event the litigants wish to pursue a claim on behalf of the estate of the deceased, [Fn 14] such estate must, of course, be opened and administered through the chancery court. As is true in all estates administered through the chancery court, chancery approval is required for the appointment of the personal representative of the estate, whether executor, executrix, administrator or administratrix.
Fn 14. We recognize that, because of the limited recovery available to the estate in many cases, litigants may choose, with advice of counsel, to proceed without including a claim on behalf of the personal representative or the estate. As discussed infra, such decision should be made only after full disclosure to all who might benefit from the estate.
¶61. There is no general requirement under law that the personal representative obtain chancery approval to pursue the claims of the estate in the litigation. Nor is there a general requirement that counsel representing the personal representative and the estate in the litigation obtain prior chancery approval of such representation or the agreement for compensation of counsel. However, obtaining such prior approval is a widely accepted and wise practice.[Fn15] Such prior approval will, in most instances, avoid difficulty when the chancellor is approached for an order approving the accountings and the final distribution of estate proceeds, where such payments include compensation to counsel.
Fn 15. This is especially true where counsel representing the estate in the wrongful death litigation has not agreed, and does not intend, to represent the estate generally.
¶62. Where a recovery is had by the estate in the litigation, the proceeds must be administered and distributed though the chancery court in the same manner as other assets of the estate, and counsel for the estate must be paid from estate proceeds or assets, upon approval of the chancery court in the same manner as other debts and obligations of the estate. * * *
Minors.
¶66. Frequently, wrongful death litigation will involve a minor, either as an heir of the estate, a wrongful death beneficiary, or both. In such cases, the representation of the minor’s interests, and any agreement for the payment of attorney fees from the minor’s share of proceeds, must be approved by a chancellor, as in other cases. [BCP Note: settlement of the minor’s claim must also be approved by the chncellor, in the same manner as any other minor’s settlement.]
Determination of wrongful death beneficiaries.
¶67. Section 11-7-13 provides that wrongful death litigation may be brought by the personal representative of the deceased or by any one or more of several statutory beneficiaries, for the benefit of all entitled to recover. Unless all persons entitled to recover join in the suit, those who do have a fiduciary obligation to those do not. Miss. Code Ann § 91-1-27 (Rev. 2004) provides for a chancery determination of the heirs at law of a decedent; that is, those who inherit in the absence of a will. Although our statutes mandate no specific procedure for the identification of wrongful death beneficiaries, a chancery court may make such determinations. Those bringing the action, together with their counsel, have a duty to identify the beneficiaries, and they should do so early in the proceedings. [Fn 16]
Fn 16. Recognizing that the lack of a specific procedural framework for determining wrongful death beneficiaries is a handicap for practitioners, this Court – in its continuing review of procedural rules – will address this need.
One of the biggest sources of confusion, in my experience, is the disconnect between the status of persons as heirs and as wrongful death beneficiaries. The categories overlap, but they are not the same. A person may be a wrongful death beneficiary, and yet not be an heir. You need to read and stidy the statutes to learn the difference and to be able to identify all of the individuals who must be included. Merely filing an action to determine and discover unknown heirs at law will not identify all the wrongful death beneficiaries.
From a chancellor’s perspective, I think the most important aspect of all is that of the minor’s settlement. You can make any agreement in circuit court about how to settle the wrongful death action, but you can not tie the hands of the chancellor as to whether the settlement is reasonable or adequate for the child(ren), or as the amount of fees to which it is subject, or to its amount.
The Fog of Contempt
January 15, 2014 § Leave a comment
In the press of courtroom battle, it sometimes happens that things get obscured, as in war, by the fog of all that is transpiring, so that it becomes difficult to appreciate things in their proper capacity.
I touched on this concept recently in a post dealing with contempt in its various, somwhat fluid incarnations.
On January 7, 2013, a panel of the COA had occasion to address the fog of contempt in the case of Zebert v. Guardianship of Baker.
Mr. Zebert, a lawyer, was appointed in 2000 to serve as guardian of the person and estate of a minor. Accountings were filed in each year from 2000 through 2007, but no accounting was filed in 2008 for the period from October, 2007, through September 30, 2008. The court issued a show-cause order and subsequently granted several continuances until Zebert himself asked to be relieved as guardian a year after the accounting had been due. The substitution, however, did not relieve Zebert of the duty to account for his period of responsibility.
Zebert filed an incomplete accounting, and the court held three more show-cause hearings, culminating in an adjudication of contempt and order for Zebert’s incarceration that the court suspended to allow the attorney time to get the accountings together. Zebert then filed a partial accounting disclosing at long last that he had made unapproved disbursements from the guardianship account, including unsecured loans to third parties, totalling more than $130,000, and reducing the assets of the estate to around $6,500.
The chancellor found Zebert in contempt and ordered him to be jailed until he purges himself of contempt. The adjudication was one of civil contempt.
Zebert appealed, complaining that his incarceration was criminal in nature, not civil, and that it was error for the court not to charge him formally, issue a summons, and have the matter heard by another judge.
The COA’s decision is of interest for the contrasting views between the majority, which held that Zebert’s contempt was civil because he was being required to provide a proper accounting, and which affirmed the chancellor, and the dissent by Judge Griffis, which agreed with Zebert that he is being punished criminally, and not being subjected to the coercive power of the court. I commend it to your reading because it illustrates how the same set of contempt facts can be seen by different people in a different light. The fog of contempt, if you will.
Another reason to read this decision is that it once again underscores why chancellors are getting increasingly intolerant of delinquent accountings, excuses, clueless lawyers, and malfunctioning and misfunctioning fiduciaries.
It will be interesting to see what becomes of this case on a request for rehearing or cert.
A Curveball for Minor’s Settlements
October 9, 2013 § 5 Comments
For those of you who handle minor’s settlements, here is what should be a familiar scenario:
Minor’s arm broken in a car wreck. Insurance company is to pay policy limits of $25,000. Medical bills to the local hospital in amount of $17,500 are to be paid from the proceeds. Minor is to receive balance of $7,500.
Not much to it, right?
Well, there just might be quite a lot to think about after you read Memorial Hospital at Gulfport vs. Guardianship of Proulx, decided by the MSSC on September 12, 2013.
In that case, the minor was injured in a car wreck and the parents were appointed his guardians. They petitioned the court to approve a policy-limits settlement of $50,000. They also petitioned the court to disapprove claims against the proceeds asserted by several medical providers, including Memorial, that totalled more than $80,000. Memorial’s claims alone were $71,000. The chancellor disapproved the claims, and Memorial appealed.
Justice Chandler wrote for a unanimous court, beginning in ¶ 7:
… Memorial has no lien against the funds. Unlike some other states, Mississippi has no statutory hospital lien, nor has this Court recognized a common-law lien under these facts. Indeed, Memorial does not argue that it has a lien, or does it assert a right to recovery through a contract or under an implied-contract theory. It does not assert that it is the beneficiary of an assignment of the settlement proceeds. Memorial cited no authority for its argument at the hearing that it has a right to a pro rata share of the settlement proceeds.
¶8. Memorial’s position in this case is comparable to that of the hospitals that sought payment of medical bills in McCoy v. Preferred Risk Ins. Co., 471 So. 2d 396 (Miss. 1985), and Methodist Hospital of Memphis v. Guardianship of Marsh, 518 So. 2d 1227 (Miss. 1988). In McCoy, a minor, David James McCoy, was hospitalized after a car accident, and his parents executed an assignment of all liability insurance benefits in favor of the hospital. Id. at 397. Later, the parents disputed the validity of the assignment, and the insurer interpleaded the benefits, which consisted of $20,000 in uninsured-motorist liability benefits and $4,000 in medical benefits. Id. The Court held that the parents had lacked authority to assign the uninsured-motorist benefits due to David. Id. at 397-98. However, because the medical-expense benefits under the policy authorized Preferred to pay all reasonable medical expenses to the entity rendering medical services, the Court permitted the hospital’s recovery of the $4,000 in medical benefits. Id. at 397.
¶9. In Methodist, another minor, Stephen B. Marsh, was injured in a car accident. Methodist, 518 So. 2d at 1228. At the hospital, his mother signed a document entitled “Hospital Lien” in which she agreed to pay Stephen’s medical expenses from any insurance settlement or judgment she recovered. Id. The insurer settled for the policy limits of $25,000 in liability coverage and $2,000 in medical-payments coverage, and the hospital claimed a lien on those funds. Id. This Court rejected the claimed lien on the liability coverage because the mother had no legal authority to execute any document binding Stephen’s estate without prior chancery court approval. Id. (citing McCoy, 471 So. 2d at 396). The Court remanded for a determination of whether the hospital was a direct beneficiary under the medicalpayments coverage and “due these benefits irrespective of any lien or assignment.” Methodist, 518 So. 2d at 1228.
¶10. In McCoy and Methodist, once the assignment or lien was found to be invalid, the hospitals had no further rights against the liability insurance proceeds due the minor, and the claims were denied. McCoy, 471 So. 2d at 399; Methodist, 518 So. 2d at 1228. Memorial does not claim that it has a right to recovery under a lien, an assignment, or a contractual theory. Memorial’s sole argument supporting its claim of a right to the settlement proceeds is that it has a legal duty to seek recovery from any legally liable third party prior to billing Medicaid. This argument does not avail Memorial. The third-party insurers were not legally liable to pay Memorial for the medical bills. McCoy, 471 So. 2d at 397-98; Methodist, 518 So. 2d at 1228. The third-party coverage at issue here was general liability coverage, not medical-pay coverage that reimburses the hospital for medical bills. See McCoy, 471 So. 2d at 397; Methodist, 518 So. 2d at 1228. Memorial does not dispute this basic fact. Because no law entitled Memorial to payment from the settlement proceeds, we affirm the chancery court’s dismissal of Memorial’s claim.
If your minor’s settlements don’t look like what happened in Proulx, you might read it carefully several times and start trying to figure out whether you need to do anything differently.
There are lots of ramifications flowing from this opinion. A few you might want to consider:
- Shouldn’t you open a guardianship and publish notice to creditors before presenting the final settlement proposal to the chancellor? I sent some lawyers back to the drawing board several weeks ago to do that very thing in a case remarkably close to what happened in Proulx. Why? Well, it just didn’t seem right to me that the parents could negotiate away their children’s money like that.
- If you represent the insurance company in a case where the settlement amount is under the statutory amount required to present to a chancellor, how are you going to advise the parents about all of this when (a) you don’t represent them, and (b) you have an insurmountable conflict of interest that precludes you from advising them?
- Why should children be required to pay their own medical bills? And if they should not, don’t the parents have a built-in conflict of interest in serviing as guardians, since they will likely be held responsible via guaranty?
- Would Memorial have been successful in its argument if the third-party coverage in this case was med-pay (¶ 10)?
You need to read this case and be ready to discuss it with the next chancellor you go before on a minor’s settlement. That chancellor will likely be ready to discuss it, too.
An Attorney Gets What He Deserves
September 12, 2013 § 3 Comments
I posted here before about the reprehensible conduct of attorney — that’s former attorney — Michael J. Brown, who was jailed for embezzling money — a lot of money — from a guardianship account. Now Brown has been sentenced to prison for his misdeeds. Here’s how the Clarion-Ledger reported it:
A former Flowood attorney has been sentenced to 40 years in prison for embezzling more than $1.2 million from the guardianship account of the grandson of the late civil rights leader Aaron Henry.
Michael J. Brown, 56, was convicted of two counts of embezzlement in Rankin County Circuit Court. He was sentenced to 40 years in prison, with 10 of those years suspended.
A Rankin County grand jury indicted Brown after Hinds County Chancery Judge Dewayne Thomas asked the district attorney’s office to look into the case. Last year, Thomas ordered Brown jailed for contempt for allegedly mishandling the $3 million inheritance of De Mon McClinton.
McClinton couldn’t be reached for comment Thursday.
Thomas said Brown used McClinton’s inheritance money as his own. “He misappropriated $1.2 million, and it looks like he embezzled at least $240,000,” Thomas said.
Thomas ordered Brown to repay the $1.2 million and to repay $398,000 in attorney fees he received from the account.
“There is no greater trust than that between a lawyer and his client,” said Michael Guest, district attorney for Madison and Rankin counties. “Brown was an officer of the court, whose sole purpose was to protect the interest of the minor child.”
Brown, who practiced law since 1994, has been disbarred. He testified he cashed some of the checks, but said the money was given to McClinton’s guardian or to benefit the then-minor. But Brown admitted he had no court order to take money out of the account. No money was supposed to be taken from the account other than $3,000 a month for the guardianship of McClinton at the time.
The McClinton case began on June 16, 2000, when a petition was filed in Chancery Court for Thomas McClinton Jr. of Jackson to become guardian of his son, then-16-year-old De Mon McClinton. De Mon McClinton had lived with his mother, Rebecca Henry, who was Aaron Henry’s daughter, in Clarksdale until her death. Once she died, more than $6 million was split between her two sons.
The guardianship case was closed in 2005, but in 2009 De Mon McClinton, then an adult, asked that the case be reopened.
No further comment necessary other than to point out as I have before that it is cases like this that have chancellors across the state being quite vigilant over accountings,
IF ADULT DISABLED CHILDREN ARE TO RECEIVE POST-MAJORITY SUPPORT, THE LEGISLATURE WILL HAVE TO DO IT
June 7, 2013 § 6 Comments
The MSSC yesterday ruled in Hays v. Alexander that there is nothing in the common law that would empower the court to create a duty in parents to support adult disabled children. The court said at ¶ 15: “The power to grant the authority to require parents in Mississippi to support their adult children is confided to a separate magistry: the Legislature. Our courts are without the constitutional power to declare otherwise.”
A wrinkle in this case was that the case was brought as a modification action in chancery court by the mother acting as conservator of the child. The chancellor ruled that a modification action was not the proper vehicle, but he went beyond that and ruled that he had no authority to impose a post-majority obligation on the father. The supreme court affirmed on both points.
This is an issue that lawyers and judges have encountered and speculated about for many years, as long as I have been practicing. For a while the speculation was that the supreme court, given just the right set of facts, would impose that duty.
Yesterday’s decision would appear to lay that speculation to rest. If there is no common-law authority to draw on, and the court holds that there is a separation-of-powers impediment, that would be conclusive, in my opinion.
Justice King dissented, taking the position that the legislature has, indeed, given the courts all the authority they need in existing legislation. You can read his dissent and form your own conclusions. Dickinson, Kitchens, and Chandler joined his dissent.
There is an interesting footnote, number 5, on the eighth page of the opinion (¶ 13). Here’s the text:
The Legislature has created two exceptions to the common law. Post-majority maintenance is statutorily provided for in Mississippi Code Section 43-31-28. It provides that a county board of supervisors may require certain family members to provide care for a pauper who is unable to work, as follows, in relevant part:
The father and grandfather, the mother and grandmother, and brothers and sisters, and the descendants of any pauper not able to work, as the board of supervisors shall direct, shall, at their own charge, relieve and maintain such pauper; and, in case of refusal, shall forfeit and pay the county the sum of One Hundred Fifty Dollars ($150.00) per month, for each month they may so refuse, to be recovered in the name of the county; and shall be liable to any governmental entity who supplies such poor relative, if abandoned, with necessaries, not exceeding said sum per month . . . .
Miss. Code Ann. § 43-31-28 (Rev. 2004) (emphasis added). We have held that “this statutory liability can only be enforced in the manner provided by statute.” Wright[et al. v. Coleman], [137 Miss. 699,] 102 So. [774] at 777 [(1925)].
Post-majority support also is statutorily provided for in a Department of Human Services paternity case. A putative father who has acknowledged paternity and is responsible for making support payments for a minor child is required to continue making support payments if the child has a disability that continues into adulthood. Miss. Code Ann. § 43-19-33(3) (Rev. 2004) (“in the case of a child who, upon reaching the age of twenty-one (21) years, is mentally or physically incapable of self-support, the putative father shall not be relieved of the duty of support unless said child is a long-term patient in a facility owned or operated by the State of Mississippi.).
You might have known about those two provisions. I did not.
The issue of parental support for adult disabled children has many facets and ramifications. If it is to be addressed at all, it appears that the Mississippi Legislature, with all of its institutional wisdom and foresight, will be the body to do it.
MAKING SCHOOL GUARDIANSHIPS LESS BURDENSOME
May 20, 2013 § Leave a comment
Guardianships of the person are a pretty common phenomenon in these parts, as they are, I am sure, wherever you might be. I call them “school guadianships,” because that’s what they traditionally were used for — to get children into particular schools, ordinarily via grandparents — within the tolerance of the school district involved.
As it stands now, MCA 93-13-38 requires a guardianship of the person to observe all of the same formalities as an estate, including notice to creditors, probate of claims, accountings, and so on, even though there is no estate whatsoever.
That’s going to change, effective July 1, 2013. HB 725, sheparded through by Rep. Greg Snowden, changed the statute to provide that:
“The requirements in a guardianship of the person are modified to the extent that notice to creditors is not required, reports will be made only as often as the court requires, and the guardianship may be closed without the need for any accounting unless otherwise determined by the court. Any assets that are received shall be reported immediately and at that point the guardianship shall be deemed to be a guardianship of the personand estate and all requirements for guardianship of the person and estate shall be followed.”
This is a welcome clarification and simplification. In this district we have been requiring reports every other year. The report is a simple, two-sentence statement that: (1) the guardianship is still necessary; and (2) no assets have come into the guardianship. We have found that eventually the ward reaches majority, and the lawyer files a report asking to close as no longer necessary. When I took office I found guardianships of the person that were as much as 25 years old that had never been closed. There’s no good reason for that. I asked Rep. Snowden to address this, and he did an effective job.
We have significant number of these, some of which should probably be converted to Special General Guardianships after those become effective July 1, 2013. Despite my “school guardianship” label, most nowadays involve grandparents taking grandchildren to raise, and needing a guardianship to obtain medical care, enroll in school, etc.
WHOSE ACCOUNT IS IT, ANYWAY?
April 15, 2013 § 2 Comments
Remember that every pleading in an estate, guardianship and conservatorship must be signed by the fiduciary, and not the attorney or anyone else. And that includes “accounts and reports.” That’s what UCCR 6.13 expressly states.
In your mad frenzy to avoid a show-cause order, it sometimes seems expedient to bypass that sluggish fiduciary altogether and just do it yourself, but if you sign that motion, or that account, or that inventory, you have really accomplished nothing. It’s the fiduciary who is on the line, and her name needs to be on the dotted line.
And, although it is the fiduciary’s account, strictly speaking, you stand to suffer the slings and arrows of outrageous fortune yourself if the case is delinquent. UCCR 6.17 says, “If, without cause, an attorney fails to file accountings or other matters in probate cases … after being so directed in writing by the Court, the Court may consider such misconduct as contempt.”
WHAT IS YOUR DUTY WHEN YOUR FIDUCIARY-CLIENT IS DERELICT IN HIS DUTIES?
April 11, 2013 § 2 Comments
It seems to be a more and more frequent problem that when we issue orders in delinquent estates, an attorney pops up and says something like, “Well, judge, the reason we haven’t filed an inventory, or any accountings since 1997 is that I lost contact with the fiduciary.”
Who’s got the problem in that situation?
Well, UCCR 6.02 says this about that:
In guardianships and conservatorships an attorney must be faithful to both fiduciary and the ward and if it appears to the attorney that the fiduciary is not properly performing duties required by the law then he shall promptly notify the Court in which the estate is being administered. Failure to observe this rule without just cause shall constitute contempt for which the Chancellor will impose appropriate penalties.
And what exactly are those “duties required by law?” Here’s what UCCR 6.02 says:
Every fiduciary and his attorney must be diligent in the performance of his duties. They must see to it that publication for creditors is promptly made, that inventories, appraisements, accounts and all other reports and proceedings are made, done, filed and presented within the time required by law, and that the estates of decedents are completed and assets distributed as speedily as may be reasonably possible.
It’s pretty clear from the language of the rule that your neck is in the noose along with your fiduciary. If the requirements are not met, you are as responsible for the lapse as is your fiduciary. Oh, and explaining to the chancellor that you had no idea that the Uniform Chancery Court Rules had this provision will in all likelihood only make things worse.
Here are some helpful posts from the past … Five Mistakes that Fiduciaries Make … Five More Mistakes that Fiduciaries Make … Approaching Zero Tolerance … and … Essential Procedures in Guardianships and Conservatorships.
If the landscape of your probate practice is littered with failures to file accountings, inventories and other reports, and you have estates that due to sheer neglect are languishing unclosed far beyond what is reasonable, look no farther than yourself for a place to lay the blame. That’s where the judge will look.
The Better Chancery Practice Blog 