Johnson v. Consolidated Freightways, Inc.

• Decision Date: 18 March 1988
• Docket Number: No. C8-87-1923,C8-87-1923
• Citation: 420 N.W.2d 608
• Parties: Arlene JOHNSON, as Trustee for the Heirs of Karen Kay Lundquist, Decedent, Plaintiff, v. CONSOLIDATED FREIGHTWAYS, INC., Defendant.
• Court: Minnesota Supreme Court

Page 608

420 N.W.2d 608

73 A.L.R.4th 429

Arlene JOHNSON, as Trustee for the Heirs of Karen Kay Lundquist, Decedent, Plaintiff, v. CONSOLIDATED FREIGHTWAYS, INC., Defendant.

No. C8-87-1923.

Supreme Court of Minnesota.

March 18, 1988.

Syllabus by the Court

1. When a decedent's surviving spouse or next of kin dies after commencement of a wrongful death action, the claim survives on behalf of the beneficiary's estate.

2. Collateral estoppel does not apply to the fault determination in a prior insurance arbitration proceeding when the defendant was not a party to that proceeding and plaintiff had no full and fair opportunity to litigate comparative fault.

3. Basic economic loss and uninsured motorist benefits received by decedent's spouse should be deducted from any wrongful death recovery allocated to the spouse's estate, under Minn.Stat. §§ 65B.51 and 548.36 (1986). No deduction is taken from wrongful death recovery assigned to decedent's other surviving next of kin where those beneficiaries received no prior insurance payments duplicating recovery under section 573.02.

William M. Schade, New Ulm, for plaintiff.

William A. Moeller, New Ulm, for defendant.

Heard, considered and decided by the court en banc.

POPOVICH, Justice.

The United States District Court, District of Minnesota, as authorized by Minn.Stat. § 480.061 (1986), certified to this court four questions:

1. When a surviving spouse or next of kin of a decedent dies after commencement of a wrongful death action pursuant to Minnesota Statutes, § 573.02, does the trustee's claim for damages for pecuniary loss sustained by decedent survive his or her death?

2. Is a determination of a driver's comparative fault in an arbitration proceeding for uninsured motorist benefits res judicata or does such determination constitute collateral estoppel in a subsequent wrongful death action?

3. To what extent are survivor economic loss benefits, funeral and burial expense benefits, and survivor's replacement services loss benefits paid to the surviving spouse pursuant to Minnesota Statutes, § 65B.44, subdivisions 4, 6, and 7, deducted from a recovery by the trustee in a wrongful death action brought pursuant to Minnesota Statutes, § 573.02, when the surviving spouse dies before resolution of the case?

4. Are uninsured motorist benefits paid to the trustee for the surviving spouse and next-of-kin deducted from a recovery by the trustee in a wrongful death action where the person to whom the proceeds were paid by the trustee pursuant to court order dies before resolution of the wrongful death action?

We find (1) a wrongful death claim survives the beneficiary's death before judgment; (2) collateral estoppel does not apply to the prior fault determination in this case; and (3) both basic economic loss and uninsured motorist benefits previously paid should be deducted from any wrongful death award payable to the spouse's estate.

This action arises out of an automobile accident that occurred near Minneola, Kansas, on September 4, 1982. Robert J. Lundquist was driving when his vehicle collided with a large wheel rim and tire lying on the highway. He lost control of the vehicle, which left the road and rolled over. His wife, Karen Kay Lundquist, was a passenger, and she sustained injuries resulting in her death.

At the time of the collision, Robert Lundquist was insured by Ohio Farmers Insurance Company (Ohio Farmers), which paid basic economic loss benefits including $760.50 in medical expense benefits, $2,500 in funeral expenses, and $20,000 in survivor's replacement service loss. Because Ohio Farmers could not identify the owner of the wheel rim and tire, Robert Lundquist claimed he was entitled to uninsured motorist benefits for his own injuries, as well as damages resulting from the death of his wife. He sued Ohio Farmers in Brown County, Minnesota, demanding among other things that Ohio Farmers arbitrate damages owed under the uninsured motorist provisions of the insurance contract. The Brown County District Court ordered summary judgment for Robert Lundquist in August, 1984.

Arlene Johnson, trustee for the heirs of Karen Lundquist, also filed an uninsured motorist claim and eventually settled with Ohio Farmers for the full policy limit of $50,000. The settling parties agreed total damages might exceed payments made and the trustee expressly reserved the balance of the cause of action which might exist against any other person or persons. Upon the trustee's petition for determination of proportionate pecuniary loss, the Brown County District Court ordered her to distribute the entire uninsured motorist benefit to Robert Lundquist, less attorney fees and disbursements.

Robert Lundquist proceeded to arbitration on his claim for personal injuries. On February 14, 1985, the arbitrators found him 20 percent at fault and awarded damages in the amount of $27,500 plus attorney fees, taxable costs, and disbursements.

On May 2, 1985, trustee Johnson filed this wrongful death action against Consolidated Freightways, Inc., claiming defendant owned the wheel rim and tire, and the collision that caused Karen Kay Lundquist's death was the direct result of defendant's negligence. On April 1, 1987, after discovery was completed but before trial was scheduled, Robert Lundquist died of natural causes wholly unrelated to the accident. Robert and Karen Lundquist had no children; Karen Lundquist's sisters, Marilyn Larson and Eileen Olson, remain as her surviving heirs. The record does not indicate who are Robert Lundquist's heirs.

I.

The federal court asks first whether, when a surviving spouse or next of kin dies after a wrongful death action has been filed, the claim for that beneficiary's pecuniary loss survives. This court has never addressed the question, perhaps surprisingly as the action has been available by statute since 1851. See Minn.Rev.Stat. (Terr.) c. 78, § 3 (1851). Other jurisdictions have reached varying conclusions, depending to some extent on the wording of their wrongful death or general survival statutes. Defendant contends Minn.Stat. § 573.02 (1986) unambiguously creates a right personal to the surviving spouse and next of kin, which therefore abates upon the beneficiary's death. The argument requires a brief historical review of the wrongful death action.

Wrongful death was a cause of action unknown at common law, in line with the general view that tort claims die with both the victim and perpetrator. See W. Prosser, Handbook of the Law of Torts § 127, at 901 (4th ed. 1971). The first statutory change came with Lord Campbell's Act of 1846, which created a new cause of action for the benefit of certain designated beneficiaries. Id. at 902; Lord Campbell's Act, 1846 (9 & 10 Vict. c. 93). Most states later enacted "death statutes" modeled after Lord Campbell's Act, including Minnesota in 1851. Prosser, § 127 at 902; Bonhiver v. Fugelso, Porter, Simich and Whiteman, Inc., 355 N.W.2d 138, 141 (Minn.1984). The Minnesota statute authorized decedent's personal representative to seek recovery "for the exclusive benefit of the widow and next of kin," distributed in the same proportions as the decedent's personal property. Minn.Rev.Stat. (Terr.) c. 78, § 3 (1851). A 1905 amendment changed "widow" to "spouse," and later amendments provided maintenance of the action by a court-appointed trustee and distribution of the recovery "proportionate to the pecuniary loss severally suffered by the death." 1905 Minn.Rev.Laws, c. 87, § 2; 1951 Minn.Laws c. 697, § 1; 1955 Minn.Laws c. 407, § 1.

Early Minnesota decisions explained the action as a right belonging exclusively to the surviving beneficiaries, with compensation for their pecuniary loss being the "sole purpose." Schwarz v. Judd, 28 Minn. 371, 372, 10 N.W. 208, 209 (1881); Foot v. Great Northern Railway Co., 81 Minn. 493, 494, 84 N.W. 342, 343 (1900). Accordingly, the action could not be maintained unless the decedent left a surviving spouse or next of kin. Moore v. Palen, 228 Minn. 148, 152, 36 N.W.2d 540, 542 (1949).

Defendant argues any claim must therefore die with the beneficiary, because the alternative benefits others never meant to recover for decedent's death. Some courts considering comparable statutes have shared this view. See Schmidt v. Menasha Wooden-Ware Co., 99 Wis. 300, 301, 74 N.W. 797, 798 (1898); Doyle v. Baltimore & O.R. Co., 81 Ohio St. 184, 90 N.E. 165 (1909).

Other courts construe the wrongful death claim to survive, and contrary to respondent's contention, that result does not seem to depend on the absence of the phrase "exclusive benefit" from the statute. The West Virginia Supreme Court of Appeals read the phrase into a statute that simply called for distribution to "dependent distributees." Adams v. Sparacio, 156 W.Va. 678, 692, 196 S.E.2d 647, 656 (1973). That court apparently saw the limitation on recovery as a reason for, rather than an obstacle to, survival of the claim. It stressed the action is not brought on behalf of decedent's estate, but rather, "being an action brought exclusively for the benefit of the dependent distributee, such action survives to such dependent distributee's estate upon her death." Id.

The New Jersey high court similarly held the claim survives under a statute that expressly directs recovery "for the exclusive benefit of the widow and next of kin." Cooper v. Shore Electric Co., 63 N.J.L. 558, 44 A. 633, 636 (1899). The action, it held, compensates persons who are next of kin "at the time of the death," and they sustain an injury from that moment on. Id. Any damages eventually awarded "would be assets of the beneficiary * * * whether the beneficiary died before or after final judgment was received." Id. This court pointed in the same direction when it held the cause of action under section 573.02 "arises at the time of the decedent's death," so damages should be determined according to circumstances at that time. Davis v. Liesenfeld, 308 Minn. 1,...