Moore v. Gates

580 A.2d 1138, 398 Pa. Super. 211, 1990 Pa. Super. LEXIS 2892

• Court: Supreme Court of Pennsylvania
• Decided: October 3, 1990
• Docket: 319
• Status: Published

Opinions

WIEAND, Judge:

The present appeal requires that we review the steps required by statute to effect a binding settlement of wrongful death and survival claims asserted by the administrator of a minor decedent’s estate.

Douglas Moore, age 15, was killed when, on June 18, 1986, the vehicle in which he was riding as a passenger went out of control and crashed. He was survived by his parents, Larry and Donna Moore, and by an adult brother. Shortly after the accident an adjustor from Nationwide Mutual Insurance Company, the liability carrier for Joy Gates, the vehicle’s driver, arrived at the Moore home to discuss settlement. It appears that eventually the parents of the decedent agreed verbally to accept one hundred thousand ($100,000.00) dollars in settlement of their wrongful death and survival claims. There was no agreement, however, regarding the manner in which the proceeds were to be apportioned between survival and wrongful death actions. The adjustor directed appellants to an attorney employed by the insurance company, and it was he who suggested that ninety thousand ($90,000.00) dollars of the total proceeds be distributed in the wrongful death action and only ten thousand ($10,000.00) dollars to the decedent’s estate in settlement of the survival action. A petition for approval of the settlement and distribution of the proceeds, addressed to the orphans’ court, was prepared in accordance with this proposed distribution by counsel. However, the petition was not signed by appellants, and it was never presented to the orphans’ court. Instead, the appellant-parents took out letters of administration in the estate of their deceased son and filed wrongful death and survival actions against the operator of the offending vehicle.¹ After a hearing on cross-motions for summary judgment, the trial court held that the parents’ wrongful death and survival actions were barred by their verbal agreement to settle and entered judgment in favor of the defendant. The decedent’s parents appealed.

The procedure pertaining to motions for summary judgment is contained in Pa.R.C.P. 1035. “The motion for summary judgment is not a ‘pleading’ within the definition of Rule 1017____” 2 Goodrich-Amram 2d, § 1035(a):4. An adverse party need not file a formal response to a motion for summary judgment. 2 Goodrich-Amram 2d, § 1035(b):1. See also: Ritmanich v. Jonnel Enterprises, Inc., 219 Pa.Super. 198, 280 A.2d 570 (1971). “Rule 1035 contains no provisions for any action by the adverse party except the filing of affidavits in opposition if he wishes.” 2 Goodrich-Amram 2d, § 1035(b):l. Neither the failure to file an answer to a motion for summary judgment nor the failure to file an affidavit in response thereto constitutes a waiver of issues necessary to decide the motion for summary judgment.²

The need for court approval of the settlement in this case is at the heart of the dispute. It is an issue which was argued before the trial court and which has been fully preserved for appellate review.

In Pantazis v. Fidelity & Deposit Co. of Maryland, 369 Pa. 221, 85 A.2d 421 (1952), the plaintiff, individually and as administratrix of her deceased husband’s estate, brought an action alleging wrongful death and survival claims for damages arising from the death of her husband in an automobile accident. At trial, the court dismissed the wrongful death action because the wife, for a valuable consideration, had executed a release in favor of the tortfeasor. The survival action was allowed to go to the jury and resulted in a verdict in favor of the decedent’s estate. Judgment was entered on the verdict, but when the administratrix sought to enforce the judgment the defendant argued that, since the wife was the sole heir, her release had the effect of releasing not only her individual claim for the wrongful death of her husband but also any interest which she had in the damages awarded to her husband’s estate in the survival action. Although the Court noted that the doctrine of res judicata rendered the defense spurious, the Court said the following about the substantive law.

All that plaintiff released was her claim as an individual in the death action. As administratrix of her husband’s estate, she lacked authority, as fiduciary, to release her deceased husband’s estate. To do so required leave of the orphans’ court, upon proper cause shown. Furthermore, she could not effectively stipulate, as fiduciary in her husband’s estate, that there were no debts or taxes due. Only an audit and adjudication could determine that. Nor can plaintiff’s release in the death action of her individual rights be regarded in the survival action as a release and assignment of her distributive share under the intestate laws in her deceased husband’s estate. What the plaintiff receives in distribution in settlement of her husband’s estate is what the law directs shall be paid to her as her distributive share, (emphasis in original).

Id., 369 Pa. at 226, 85 A.2d at 424.

The Pantazis decision was viewed as a judicious statement of policy necessary to protect the interests of the Commonwealth, possible creditors, and other parties interested in the decedent’s estate. It was procedurally troubling, however, because it required approval of the settlement of a pending action by the orphans’ court rather than by the common pleas court in which the action was pending. See, e.g.: Pa.Bar Assoc. Quarterly, October, 1952, at 16, cited in Trigg Estate, 86 Pa.D. & C. 76, 77 (1953); Fiduciary Review, September, 1953. Because of this perceived procedural shortcoming, the legislature enacted the Act of July 28, 1953, No. 198, §§ 1-3, 20 P.S. §§ 1151-1153, which provided that any Court in which an action was pending could approve the proposed compromise and settlement of a survival action. In adopting this provision in 1953, the legislature specifically rejected a recommendation that a personal representative be permitted to compromise or settle a survival action without prior court approval. See: Fiduciary Review, supra at 4, citing Legal Intelligencer, June 9, 1953.

The 1953 statute was substantially reenacted as Section 3323 of the Probate, Estates and Fiduciaries Code, Act of June 30, 1972, P.L. 508, No. 164, 20 Pa.C.S. § 3323. This section provides in pertinent part as follows:

§ 3323. Compromise of controversies

(a) In general.—Whenever it shall be proposed to compromise or settle any claim, whether in suit or not, by or against an estate, or to compromise or settle any question or dispute concerning the validity or construction of any governing instrument, or the distribution of all or any part of any estate, or any other controversy affecting any estate, the court, on petition by the personal representative or by any party in interest setting forth all the facts and circumstances, and after such notice as the court shall direct, aided if necessary by the report of a master, may enter a decree authorizing the compromise or settlement to be made.

(b) Pending court action.—

(1) Court order. Whenever it is desired to compromise or settle an action in which damages are sought to be recovered on behalf of an estate, any court or division thereof in which such action is pending and which has jurisdiction thereof may, upon oral motion by plaintiffs counsel of record in such action, or upon petition by the personal representative of such decedent, make an order approving such compromise or settlement. Such order may approve an agreement for the payment of counsel fees and other proper expenses incident to such action.

The necessity for court approval of a survival action is not determined by the amount of the settlement. Section 3323 of the Probate, Estates and Fiduciaries Code, 20 Pa.C.S. § 3323, provides for court approval “[wjhenever it shall be proposed to compromise or settle any claim ... by or against an estate.” The requirement for court approval of survival actions is intended to protect the estate, as well as the creditors and beneficiaries thereof. Thus, a court may refuse to approve a settlement of a survival action which is inadequate. Court approval was particularly necessary here, where it was proposed to apportion a total settlement so that the major part thereof would be paid to the heirs of the decedent in settlement of the wrongful death action and only a small portion of the settlement would be paid to the decedent’s estate in settlement of the survival action.

The law is clear. Where the only heirs entitled to recover for the wrongful death of a decedent are competent adults, they may settle their claims without court approval. This is not altered because the decedent was a juvenile at the time of his or her death. Before a survival claim can be settled on behalf of a decedent’s estate, however, such a settlement must be judicially approved. Where there is no action pending, the statute requires that the settlement be approved by the Orphans’ Court having jurisdiction of the decedent’s estate. Where a survival action is pending, however, a settlement thereof may be approved by the court in which it is pending; and it is then unnecessary to obtain approval from the orphans’ court which has jurisdiction of the decedent’s estate. This is the view which has been consistently followed by the trial courts in this Commonwealth. See, e.g.: Brooks v. Philadelphia, 63 Pa.D. & C.2d 249 (1973); Wexler v. Philadelphia Transportation Co., 3 Pa.D. & C.2d 122 (1955). See also: Olson Estate, 25 Pa.D. & C.2d 622 (1961); Annotation, Power and Responsibility of Executor or Administrator to Compromise Claim Due Estate, 72 A.L.R.2d 191, 215, 296.³ It follows that where wrongful death and survival actions are settled for a single amount, the amount apportioned to the survival action must be approved by a court having jurisdiction.

In the instant case, there never was a full and complete agreement resolving all details of the proposed compromise, including the amounts to be distributed in settlement of the wrongful death and survival actions. Moreover, the settlement of the survival action and the apportionment of the proceeds between wrongful death and survival claims had not been approved by a court of competent jurisdiction. The record is clear that, no court ever undertook to determine the reasonableness of the terms of settlement proposed by the insurance company or its attorney. When the defendant-appellees raised in their answer the issue of the prior, oral agreement to settle plaintiffs’ claim and thereafter moved for summary judgment in the wrongful death and survival actions, the only issue before the trial court was whether the action was barred by a prior, binding settlement. Such a settlement, however, did not exist.

The trial court applied general principles of contract law and determined that both actions had been settled for the sum of one hundred thousand ($100,000.00) dollars. This was error. Not only had there not been a final agreement regarding the apportionment of the proceeds, but there had never been court approval of the portion thereof to be paid in settlement of the survival action. In the absence of court approval, there could be no final settlement. Because their claims are not barred by settlement and release, appellants are entitled to pursue their wrongful death and survival actions in the trial court.⁴

Reversed and remanded for further proceedings consistent with the foregoing opinion. Jurisdiction is not retained.

JOHNSON, J., concurs in the result. TAMILI A, J., files a dissenting opinion.

1 . Arva and Dorothy Gates, the parents of Joy Gates and the owners of the vehicle, were also named as defendants, but they were later removed as defendants pursuant to stipulation by the parties and are no longer parties to the action.

2 . The failure to file countervailing affidavits, however, may constitute an admission of facts under the practice set forth in Pa.R.C.P. 1035(d).

3 . A decision in Albright v. R.J. Reynolds Tobacco Co., 350 F.Supp. 341 (W.D.Pa.1972), aff'd, 485 F.2d 678 (1973), which interpreted state law to the contrary, is not binding authority.

4 . Although the author of the Dissenting Opinion advocates that the survival action alone be remanded for trial, the record does not reveal that the parties ever agreed to settle the wrongful death action independently of the survival action.