Commercial Union Ins. Co. v. Pelchat

• Decision Date: 24 March 1999
• Docket Number: No. 97-622-Appeal.,97-622-Appeal.
• Citation: 727 A.2d 676
• Parties: COMMERCIAL UNION INSURANCE COMPANY v. Raymond A. PELCHAT and Bruce N. Goodsell, in his Capacity as the Administrator of the Estate of Bonnie Lynn Pelchat.
• Court: Rhode Island Supreme Court

727 A.2d 676

COMMERCIAL UNION INSURANCE COMPANY v. Raymond A. PELCHAT and Bruce N. Goodsell, in his Capacity as the Administrator of the Estate of Bonnie Lynn Pelchat.

No. 97-622-Appeal.

Supreme Court of Rhode Island.

March 24, 1999.

John F. Kelleher, Providence, for Plaintiff.

Donna M. DiDonato, Providence, for Defendants.

Before WEISBERGER, C.J., and LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.

OPINION

LEDERBERG, Justice.

This case requires us to determine who, if anyone, is entitled to recover benefits in a wrongful death action in which a husband was the proximate cause of his new wife's death. The wrongful death act provides that a decedent's next of kin become beneficiaries in the event there are no spouse and children. Guided by our canons of statutory construction and our prior case law, we hold that the wrongful death act permits recovery of benefits by a decedent's next of kin where, as here, the spouse is not legally entitled to recover.

Facts and Procedural History

Raymond Pelchat (Raymond) and Bonnie Lynn Dumas Pelchat (Bonnie Lynn) were married on May 13, 1989. Raymond drove the car in which they left their wedding reception in the early morning hours of May 14, 1989. Tragically, the car was involved in an accident in which Bonnie Lynn was killed. The car was owned by Bonnie Lynn and insured by Commercial Union Insurance Company (Commercial Union), plaintiff in this case. On January 3, 1991, Raymond pleaded nolo contendere to the charge of Driving Under the Influence—Death Resulting¹ On the basis of this plea, Philip M. Sloan, Jr.,² administrator of the estate of Bonnie Lynn Pelchat (estate), filed a wrongful death action in the Superior Court³ naming Raymond and others as defendants and seeking damages pursuant to G.L.1956 § 10-7-1.1 of the wrongful death act. Under the terms of Bonnie Lynn's auto insurance policy, Commercial Union was required to—and did— defend Raymond in the suit. In addressing the distribution of Bonnie Lynn's estate,⁴ the Probate Court of the Town of Richmond, in 1991, had entered a miscellaneous petition applying the slayer's act and thereby prohibited Raymond from inheriting from the estate.

In November of 1992, Commercial Union filed a declaratory judgment action seeking relief from any further obligation to defend or indemnify Raymond in the wrongful death suit. Both parties filed motions for summary judgment. After hearing arguments, a justice of the Superior Court denied both motions without prejudice. With regard to plaintiff's motion, the trial justice explained that O'Leary v. Bingham 90 R.I. 441, 159 A.2d 619 (1960), mandated that a trial court could "not make a determination as to the identity of beneficiaries until a judgment has been entered awarding damages."

On July 7, 1997, following a hearing in the Superior Court on the wrongful death action, a settlement between Raymond and the estate was filed. As part of this settlement, Raymond admitted liability in Bonnie Lynn's death and submitted to judgment. A consent order was entered and sealed by the Superior Court. The judgment was stayed, however, pending a determination in a declaratory judgment action of the proper beneficiaries of the wrongful death proceeds.

Subsequent to the settlement in the wrongful death suit, Commercial Union renewed its motion for summary judgment in a declaratory judgment action before a different justice. The trial justice found that Raymond and Bonnie Lynn were legally married at the time of the accident, and he rejected Commercial Union's argument that Bonnie Lynn's parents "ceased being possible beneficiaries of any recovery of wrongful death damages" at the moment of Bonnie Lynn's marriage. In addition, the trial justice denied Commercial Union's motion for summary judgment and ruled in favor of the administrator of the estate. The court explained, "[p]ublic policy mandates that there should be recovery in cases of wrongful death. Section 10-7-2 merely establishes a priority ladder to whom such damages should go. Although Raymond Pelchat is `on the top rung,' he cannot recover based on the reasons discussed in [Aetna Casualty and Surety Co. v.] Curley[, 585 A.2d 640 (R.I. 1991)

]. Removing him from the list of possible beneficiaries does not extinguish the list, as was the case in Curley."

The administrator also argued that this case was controlled by the slayer's act, G.L. 1956 chapter 1.1 of title 33, which prohibits "slayers" from benefiting from their wrongful conduct. Section 33-1.1-15. The trial justice accepted this argument as an alternative ground for his holding and explained that Raymond's conduct "was an act of such reckless disregard as to rise to the level of wilful conduct as a matter of law. As such, * * * the slayers act applies to this case, and Raymond Pelchat shall be deemed to have predeceased the decedent. Accordingly, the beneficiaries of the damages in the wrongful death action are Bonnie Lynn's next of kin, Richard and Esther Dumas."

Collateral Estoppel

The administrator argued that the Probate Court's determination that the slayer's act prohibited Raymond from inheriting from the estate collaterally estopped Commercial Union from litigating that issue in the declaratory judgment action. The administrator contended that "[t]he identical issue raised by [Commercial Union] in the instant case [the declaratory judgment action] has already been addressed, adjudicated and decided upon [in 1991] in a prior [probate] court case. The final judgment of the Richmond Probate Court bars the claim presented by [Commercial Union]."

It is axiomatic that in order for collateral estoppel to apply, "there must be an identity of issues; the prior proceeding must have resulted in a final judgment on the merits; and the party against whom collateral estoppel is sought must be the same as or in privity with the party in the prior proceeding." State v. Chase, 588 A.2d 120, 122 (R.I. 1991). The doctrine of collateral estoppel directs that an issue of ultimate fact that has been actually litigated and determined cannot be re-litigated between the same parties or their privies in future proceedings. Mulholland Construction Co. v. Lee Pare & Associates, Inc., 576 A.2d 1236, 1238 (R.I.1990).

The administrator advanced this argument before the first trial justice, who concluded that collateral estoppel was not applicable. The justice explained: "Even assuming the issue of applicability of the Slayer's Act was fully litigated and finally determined in the Probate Court [in 1991], this Court is of the opinion that the Probate Court's decree cannot estop Commercial Union from litigating the issue in this action. This is because Commercial Union was not a party to the proceedings in the Probate Court, nor was it in privity with Mr. Pelchat in that decision."

Under the concept of privity, a non-party may be bound by a prior judgment if that party substantially controlled or was represented by a party to the original action. Restatement (Second) Judgments §§ 39, 41 (1982). "Parties are in privity when `there is a commonality of interest between the two entities' and when they `sufficiently represent' each other's interests." Studio Art Theatre of Evansville, Inc. v. City of Evansville, Indiana, 76 F.3d 128, 131 (7th Cir.), cert. denied, 519 U.S. 866, 117 S.Ct. 177, 136 L.Ed.2d 117 (1996) (quoting Tofany v. NBS Imaging Sys., Inc., 597 N.E.2d 23, 29 (Ind. Ct.App.1992)); see also Providence Teachers Union, Local 958, American Federation of Teachers, AFL-CIO v. McGovern, 113 R.I. 169, 172, 319 A.2d 358, 361 (1974)

(holding that collateral estoppel was not applicable because the treasurer was neither a party to, nor in privity with a party to the prior litigation). It is clear that Commercial Union and Raymond did not share a commonality of interests. In the declaratory judgment action, for example, Commercial Union argued that it should be relieved of defending Raymond in the wrongful death suit. Commercial Union's interest, therefore, conflicted with Raymond's interests. In fact, in its complaint, Commercial Union explained that it was bringing a separate declaratory judgment action because it was "precluded from raising the issues underlying the present action within the wrongful death act because of a potential conflict of interest and due to the constraints of the Rules of Professional Conduct * * *." Therefore, Commercial Union was not bound by the prior judgment to which it was neither a party nor in privity with a party to the Probate Court action. Accordingly, we affirm the trial justice's ruling that Commercial Union was not barred by collateral estoppel from litigating the issue of the applicability of the slayer's act in this case.

Wrongful Death Act

The wrongful death act, G.L.1956 chapter 7 of title 10, confers a right of action on certain enumerated individuals to recover damages for the death of a family member. Presley v. Newport Hospital, 117 R.I. 177, 180, 365 A.2d 748, 749-50 (1976). Its purpose is expressed in § 10-7-1 of the act:

"Whenever the death of a person shall be caused by the wrongful act, neglect, or default of another, and the act, neglect, or default is such as would, if death had not ensued, have entitled the party injured to maintain an action and recover damages in respect thereof, the person who, or the corporation which, would have been liable if death had not ensued shall be liable to an action for damages, notwithstanding the death of the person injured, and although the death shall have been caused under such circumstances as amount in law to a felony."

Section 10-7-2 continues by enumerating those individuals entitled to recover in a wrongful death action:

"Every action under this chapter * * * shall be brought by and in the name of the executor or administrator of the deceased person * * * and of the amount recovered in every action under this chapter one-half ½ shall go to the husband or widow, and one-half ½...