Briney v. U.S. Fidelity & Guar. Co., 96-CA-00903-SCT

• Decision Date: 04 June 1998
• Docket Number: No. 96-CA-00903-SCT,96-CA-00903-SCT
• Citation: 714 So.2d 962
• Parties: Betty Jane BRINEY, the Successor Administratrix of the Estate of Joy Marie Manuel, deceased v. UNITED STATES FIDELITY & GUARANTY COMPANY.
• Court: Mississippi Supreme Court

Page 962

714 So.2d 962

Betty Jane BRINEY, the Successor Administratrix of the Estate of Joy Marie Manuel, deceased v. UNITED STATES FIDELITY & GUARANTY COMPANY.

No. 96-CA-00903-SCT.

Supreme Court of Mississippi.

June 4, 1998.

John Robert White, Jackson, for Appellant.

Kimberly R. Herring, Thomas Y. Page, Ridgeland, for Appellee.

En Banc.

SULLIVAN, Presiding Justice, for the court:

¶1 The Hinds County Circuit Court denied a Motion To Vacate Order Allocating Settlement Amounts brought by Betty Briney, the Successor Administratrix of the estate of Joy Manuel, based on the finding that the motion was not made within a reasonable time. To the contrary, we find that the motion was made within a reasonable time ¶2 The Order Briney is seeking to have vacated resulted from a personal injury claim and a wrongful death action brought on behalf of Joy Manuel who died as a result of a motor vehicle accident on March 1, 1990, in Terry, Mississippi. Both Joy and Donald Manuel were residents of the State of California. The presumed husband of Joy, Donald Manuel, brought an action seeking damages for his own personal injuries and for his wife's wrongful death resulting from the accident. After discovery was conducted, a question arose about the validity of Donald and Joy's marriage and a motion for partial summary judgment was filed by both defendants raising this issue. After an estate was opened for Joy Manuel with a County Administrator appointed as Administratrix of her estate, the complaint was amended on July 2, 1992, and filed by both Donald and Joan Salter, the Administratrix of Joy's estate.

and Rule 60(b)(6) provides the authority for us to reverse and remand the denial of Briney's motion to vacate the Order in order to promote the ends of justice.

¶3 During the pendency of the litigation, United States Fidelity & Guaranty Co. (hereafter USF & G), the worker's compensation insurer of Hawkeye Refrigerated Service Corp., the employer of Donald and Joy at the time of the accident, filed a notice of lien under Iowa Code Section 85.22 for compensation and death benefits that were paid to Donald. It was established that USF & G had paid Donald $117,930.00 in compensation benefits and $38,866.34 in death benefits as Joy's surviving spouse. An Order permitting USF & G to intervene in the suit was signed on April 6, 1993, and USF & G filed its complaint on May 5, 1993, seeking to exercise its lien for workers' compensation benefits paid under Iowa law.

¶4 On the morning of trial on May 10, 1993, one of the defendants, Lavergne Transport, Inc, announced it had reached a settlement in the amount of $40,000 and on the morning of the fourth day of trial the plaintiffs, Donald and Salter, informed the court that they had agreed to settle the case with the other defendant, Geiselbreth, for the total sum of $150,000. On August 11, 1993, the Chancery Court of Hinds County, Mississippi, entered an Order approving the settlement of the doubtful claim for the wrongful death of Joy Manuel. Salter was ordered to request the circuit court to allocate an appropriate amount of settlement funds to Joy's estate. She was further ordered to receive the funds from the registry of the Circuit Court and hold funds until further order by the chancery court concerning the distribution of the funds. On November 24, 1993, the circuit court entered its Order Allocating Settlement Amount which is summarized in the following chart.

                SETTLEMENT          TO DONALD MANUEL    TO ESTATE OF JOY MANUEL
                LAVERGNE            $20,000.00           $ 20,000.00
                GEISELBRETH         $50,000.00           $100,000.00
                                    ----------          ------------
                                    $70,000.00           $120,000.00
                DISTRIBUTION        TO DONALD MANUEL    TO ESTATE OF JOY MANUEL
                                    $70,000.00           $120,000.00
                Attorneys' Fees     -28,000.00            -48,000.00
                Expenses            -11,628.59             -7,949.67
                                    ----------          ------------
                                    $30,371.41            $64,050.33
                TO: USF & G         -30,371.41            -38,866.34
                                    ----------          ------------
                                         00.00            $25,866.34
                

---------- The balance of $25,866.34 was paid into the registry of the Hinds County Chancery Court and process was issued to Donald, Joy's father, mother, sisters, and brothers for a determination of Joy's rightful heirs.

¶5 The case to determine Joy's rightful heirs for purposes of determining who is entitled to the proceeds of the wrongful death settlement was tried on May 30, 1995. The case resulted in an order that determined that the marriage between Joy and Donald was void ab initio because Joy had still been legally married to James Anderson at the time of her marriage to Donald, and that Joy Manuel's sole heirs are Joy's mother, father, and siblings. Subsequently on February 23, 1996, the Chancery Court issued an Order appointing Joy's mother, Betty Briney, as Successor Administratrix to the estate of Joy Manuel. On March 6, 1996, Briney filed her motion in the Circuit Court of Hinds County, Mississippi to vacate the Order Allocating Settlement Amounts that was entered on November 24, 1993. The motion alleged that it was unlawful under Iowa law to allow USF & G to satisfy a portion of its lien against Donald Manuel by paying USF & G the sum of $38,866.34 from the proceeds rightfully belonging to the estate of Joy Manuel when the estate never received any money from USF & G. Instead of deciding whether to vacate the Order based on the merits of the case, Judge Gibbs found that the motion was controlled by Rule 60(b) of the Mississippi Rules of Civil Procedure and entered an Order on July 16, 1996, denying Briney's motion finding that it was not timely filed. The Court specifically stated, "that the Successor Administratrix has shown no basis for a three year delay in attacking the Order of this Court." Aggrieved of that decision, Briney perfected this appeal.

STATEMENT OF THE LAW

I. MAY USF & G SATISFY ITS SUBROGATION LIEN AGAINST DONALD MANUEL BY TAKING MONEY FROM JOY MANUEL'S ESTATE, TO WHICH IT NEVER PAID ANY MONEY?

¶6 Briney argues that under Iowa law, USF & G had no right of subrogation from Joy's estate since USF & G paid no money to the estate. She argues that the effect of allowing USF & G to take $38,866.34 from the settlement proceeds allocated to Joy's estate as partial repayment of benefits it paid to Donald Manuel was to take money away from the rightful heirs who never received any money from USF & G. USF & G claimed its rights to subrogation under Iowa Code Ann. § 85.22 (West 1996). This section in relevant part states:

1. If compensation is paid the employee or dependent or the trustee of such dependent under this chapter, the employer by whom the same was paid, or the employer's insurer which paid it, shall be indemnified out of the recovery of damages to the extent of the payment so made ... and shall have a lien on the claim for such recovery and the judgment thereon for the compensation for which the employer or insurer is liable.

Iowa Code Ann. § 85.22 (West 1996) (emphasis supplied). Briney cites to two Iowa Supreme Court cases which interpret this language. The Iowa Supreme Court held "that the employer's right to withhold benefits under section 85.22(1) extends only to that portion of the wrongful death proceeds actually paid or legally available to the person entitled to receive the workers' compensation benefits." Bertrand v. Sioux City Grain Exch., 419 N.W.2d 402, 404 (Iowa 1988). The Court went on to state, "[T]he better rule is that an employer can only reach that portion of a third-party recovery which the workers' compensation dependent is entitled to receive." Id. at 405. Therefore, the Court did not allow the employer to reach the part of the recovery that was to go to the deceased's four children who never actually received any benefits under workers' compensation. The other Iowa case Briney cites in support of her contention that USF & G was unlawfully allowed to receive money out of Joy's estate is Mata v. Clarion Farmers Elevator Cooperative, 380 N.W.2d 425 (Iowa 1986). Although the Mata case interprets a different subsection of Section 85.22 of the Iowa Code, the Bertrand Court interpreted ¶7 When considering this case law of the Iowa Supreme Court, it follows that the money received by USF & G out of the proceeds allocated to Joy's estate for satisfaction of the subrogation lien for the death benefits paid to Donald was unlawful under controlling Iowa Law. As cited by Briney, 83 C.J.S. Subrogation § 14 (1953) explains that a person entitled to subrogation stands in the shoes of the one from whom his right to subrogation arose and cannot ascend to any greater right than the one for whom he is substituted.

the Mata decision to indicate that "the employer would have no right to the portion of the settlement allocable to the wife and child" on the loss of consortion claim. Bertrand, 419 N.W.2d at 405 (citing Mata v. Clarion Farmers Elevator Coop., 380 N.W.2d 425, 429 (Iowa 1986)). The Mata Court found that a workers' compensation lien is valid as to the portion of the settlement found allocable to the injured employee. Mata, 380 N.W.2d at 429.

¶8 USF & G does not challenge the contention that Iowa law may have been misapplied, but instead it argues that it was proper to have paid the death benefits to Donald based on the strong presumption of the validity of a marriage solemnized according to law citing Smith v. Weir, 387 So.2d 761 (Miss.1980) and Paschall v. Polk, 379 So.2d 316 (Miss.1980). This issue is not in dispute. However, USF & G does argue that the circuit court is the one who decided how the settlement proceeds were to be distributed and the estate was represented by a duly appointed Administratrix. It contends that all parties including the Administratrix had 30 days to appeal the court's Order if the...