In re Estate of Boyd
| Decision Date | 10 October 2001 |
| Docket Number | No. 99-1368.,99-1368. |
| Citation | 634 N.W.2d 630 |
| Parties | In re the ESTATE OF David P. BOYD, Deceased. Estate of Berta BOYD, Deceased, Appellant, v. George Norman and Old Republic Surety Co., Appellees. |
| Court | Iowa Supreme Court |
James A. Pugh of Morain, Burlingame & Pugh, P.L.C., West Des Moines, for appellant.
Benjamin B. Ullem and Richard J. Kirschman of Whitfield & Eddy, P.L.C., Des Moines, for appellees.
In this case, the district court rejected a claim made by a judgment creditor of the Estate of David Boyd against the administrator of that estate, appellee, George Norman, and his surety, appellee, Old Republic Surety Company. The judgment creditor, appellant, the Estate of Berta Boyd, alleged that the administrator had improperly depleted the estate's assets prior to payment of its claim. The district court ruling was affirmed by the Iowa Court of Appeals. Upon our review, we vacate the decision of the court of appeals, reverse the judgment of the district court, and remand for further proceedings.
On July 8, 1990, David and Berta Boyd, husband and wife, were killed in a one-car accident. Both victims died intestate, survived by a single minor child, Jazzber Boyd. David was driving the car, which was owned by Berta. He was legally intoxicated when the accident occurred.
The Boyd automobile was insured through Farm Bureau Mutual Insurance Company. The policy was issued to David, but included Berta and Jazzber as additional insureds. Although the policy included liability insurance, that coverage did not apply to injury to any insured or any member of an insured's family residing in the insured's household. Even though the Farm Bureau policy did not cover David's potential tort liability, it did provide uninsured motorist (UM) coverage to Berta and Jazzber.
Shortly after the accident, an estate was opened in Berta's name. Fort Madison Bank & Trust Company was appointed the administrator. The bank was also named Jazzber's conservator. Attorney Robert Johnson III was appointed to act as the attorney for the administrator of Berta's estate, as well as the attorney for Jazzber's conservatorship. Vera Boyd, David's mother, was appointed Jazzber's guardian.
David's estate was opened on August 6, 1990, with Vera serving as the administrator. Notice to creditors for David's estate was published on August 10, 1990, and August 17, 1990. See Iowa Code § 633.230 (1989) (). Pursuant to the limitations period established in Iowa Code section 633.410, all claims against David's estate were barred unless filed within four months after the date of the second publication of the notice to creditors, or by December 17, 1990.1
Early on Vera perceived possible conflicts in her role as the administrator of David's estate and her position as Jazzber's guardian. On October 8, 1990, she was allowed to withdraw as the administrator of David's estate and George Norman, a Keokuk attorney, was appointed in her place.
On March 29, 1991, Norman filed the probate report and inventory. According to the report, David's estate had net assets of $49,049. These assets included a $25,000 death benefit received by David's estate as a result of Berta's death. This death benefit was payable under the death indemnity coverage of the Farm Bureau policy.
During the probate of David's estate, Jazzber's conservator pursued a dramshop claim against the Tin Shed, a tavern that had sold and served David alcoholic beverages after he was intoxicated and immediately prior to the fatal accident. In July 1991, the conservator entered into a structured settlement with the Tin Shed for Jazzber's damages for loss of parental consortium. The present value of that settlement was $50,000.
Farm Bureau was first notified on August 21, 1991, that Berta's estate was considering a wrongful death claim against David's estate and a UM claim against Farm Bureau. This notification was made after the dramshop settlement and well beyond the four-month period for filing claims in David's estate.
On September 5, 1991, Fort Madison Bank, as the administrator of Berta's estate, sued David's estate for the wrongful death of Berta. The bank, as Jazzber's conservator, also filed suit for Jazzber's loss of consortium. In the same lawsuit, Berta's estate sued Farm Bureau for UM benefits. In Farm Bureau's answer, it raised several "affirmative defenses," including an assertion that it was subrogated to Berta's estate for any recovery it had from David's estate.
On May 28, 1993, during the pendency of the wrongful death and UM action, Norman, the administrator of David's estate, disbursed the bulk of David's estate, approximately $49,000, to the conservator of David's sole heir, Jazzber. Norman had not sought nor obtained authorization from the court to make this disbursement. Due to this distribution, there was approximately $1250 left in David's estate at the time the wrongful death and UM claims were tried.
Prior to trial of the wrongful death and UM claims, the parties stipulated that (1) David was legally liable for Berta's injuries, (2) David was an uninsured motorist, (3) under the terms of the Farm Bureau policy, Berta's estate was entitled to UM benefits of $100,000, (4) Berta's estate had suffered damages of $300,000 as a result of her wrongful death, (5) the four-month period for filing claims had expired on December 17, 1990, (6) Farm Bureau was first contacted on August 21, 1991 regarding Berta's estate's claim, (7) Farm Bureau did not file a claim in David's estate, (8) Farm Bureau did not file suit against David's estate asserting its subrogation claim, nor did it file a cross-claim in the pending suit, (9) the only notice of Farm Bureau's subrogation claim was its pleading of this claim in its answer, (10) on May 28, 1993, the administrator of David's estate distributed $49,000 of estate assets to Jazzber's conservatorship, and (11) the administrator made this disbursement because the estate was approaching the statutory three-year limit on the administration of estates. Although the parties agreed that Farm Bureau was liable to Berta's estate for $100,000 in UM benefits, the parties disputed whether Farm Bureau was entitled to offsets for the $50,000 dramshop settlement obtained by Jazzber's conservator and the $49,000 disbursement made from David's estate to Jazzber's conservatorship.
After trial on the stipulated facts, the district court entered judgment on the wrongful death claim in favor of Berta's estate and against David's estate for $300,000. On the contract claim, the court ruled that Farm Bureau's entire liability for UM benefits was offset by the monies received by the conservatorship from the dramshop and David's estate, and by the remaining assets in the estate. Therefore, the court dismissed the UM claim against Farm Bureau. Only Berta's estate appealed. It claimed that Farm Bureau was not entitled to any offset for sums received by Jazzber's conservator.
When Berta's estate's appeal reached our court, we framed the issues as follows:
(1) whether the district court erred by offsetting against Farm Bureau's UM liability the $50,000 Tin Shed structured settlement proceeds and the $49,000 probate disbursement Jazzber's conservator received from David's estate and the balance remaining in David's estate at the time of trial, and (2) whether Farm Bureau is entitled to an offset for any monies Berta's estate received from David's estate pursuant to the $300,000 judgment.
Fort Madison Bank & Trust Co. v. Farm Bureau Mut. Ins. Co., 543 N.W.2d 591, 594-95 (Iowa 1996). We held that the offsets allowed by the district court were not proper because the payments in question were received by Jazzber's conservatorship, not Berta's estate. Id. at 595. Because these were separate legal entities, monies received by one could not be offset against Farm Bureau's liability to the other. Id.
On the second issue, we concluded that Farm Bureau was entitled to offset its UM liability to Berta's estate by any funds recovered by Berta's estate from David's estate in satisfaction of the $300,000 wrongful death judgment awarded to Berta's estate. Id. at 596. A special concurrence foreshadowed the present lawsuit:
Id. at 596-97 (Carter, J., concurring).
On remand, a judgment for $100,000 plus interest was entered in favor of Berta's estate on its UM claim against Farm Bureau. Following additional legal wrangling with respect to the amount of interest due, Farm Bureau satisfied the judgment.
Once the UM judgment was satisfied, Farm Bureau sought to enforce its subrogation claim. Johnson, the attorney for Berta's estate, declined to pursue collection of the estate's $300,000 judgment against David's estate, claiming he had a conflict of interest. The estate did not object, however, to Farm Bureau proceeding in the name of Berta's estate to collect the judgment to offset Farm Bureau's UM payment.
On January 19, 1999, counsel employed by Farm Bureau, acting on behalf of Berta's estate, filed a motion in the probate proceeding seeking judgment against Norman, the administrator of David's estate, and his surety, Old Republic Surety Company, for the sums...
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