Jordan v. Allstate Ins. Co.

• Decision Date: 14 March 1991
• Docket Number: No. 19669,19669
• Court: West Virginia Supreme Court
• Parties: Casey JORDAN v. ALLSTATE INSURANCE CO., et al.

Page 421

403 S.E.2d 421

184 W.Va. 678

Casey JORDAN v. ALLSTATE INSURANCE CO., et al.

No. 19669.

Supreme Court of Appeals of West Virginia.

March 14, 1991.

Rehearing Denied April 24, 1991.

Syllabus by the Court

1. Under W.Va.Code, 55-7-7 [1982] the claim of a minor sibling of a victim of a wrongful death cannot be compromised without court approval.

2. When the administrator of an estate of a wrongful death victim settles a claim under W.Va.Code, 55-7-7 [1982] with the tortfeasor's insurance carrier, but fails to seek court approval for the compromise of a minor's claim, the minor's primary cause of action is against the administrator and not the insurance carrier; but, if the administrator is insolvent, then the carrier is secondarily liable.

Vincent J. King, Charleston, for Casey Jordan.

Christopher P. Bastien, Steptoe & Johnson, Charleston, for Allstate Ins. Co.

B. Karleton Kesner, Goodwin & Goodwin, Charleston, for Richard Alan Tyree and Rita J. Tyree.

NEELY, Justice:

The plaintiff, Casey Jordan, is the minor brother and only sibling of Travis Lee Jordan who was killed in an automobile accident in 1987. Shortly after Travis was killed, his father, Joey Lee Jordan, qualified as administrator of the estate and hired counsel to represent him.

Travis Lee Jordan was killed when an automobile owned by Rita Tyree and operated by Richard Alan Tyree overturned on Martins Branch Road near Charleston, West Virginia. Travis Jordan was a passenger in the Tyree vehicle. Early on, it was determined that the per person liability insurance limit for the Tyree car was $50,000, and Allstate Insurance Company, the insurance carrier, claimed a setoff for $2,000 in medical benefits. Ultimately it was agreed that the case would be settled for $50,000, and Allstate tendered a check in the amount of $48,000 and an additional cashier's check in the amount of $2,000. Allstate was unwilling to concede that it owed the full $50,000 in addition to its previous medical payments, so Mrs. Tyree contributed $2,000 to get the case settled. Although counsel for the estate was aware that the $2,000 payment was being supplied by the Tyrees and not by Allstate, no further objection to the settlement amount was made on behalf of the estate.

On 8 March 1988, Joey L. Jordan, acting as administrator of the estate of Travis Jordan, executed a Release of All Claims. By its express terms, the release discharged Rita J. Tyree, Richard Alan Tyree and Richard Tyree from all claims or causes of action arising from the 6 October 1987 car accident. The release was granted for the sole consideration of $50,000, the receipt of which was duly acknowledged. Unfortunately, Joey L. Jordan did not petition for a summary proceeding pursuant to W.Va.Code, 55-7-7 [1982]. ¹

On 5 October 1990, the present action was begun below, ostensibly on behalf of Casey Jordan, the younger brother of the victim. The complaint was filed by Sherry Breeden, an aunt of Casey Jordan, as next friend, and it alleged, inter alia, that Allstate had engaged in misrepresentations and fraud in connection with the 1988 settlement executed by Joey Jordan. The complaint further alleged that the improper activity by Allstate deprived Casey Jordan of his share of the original damages resulting from the settlement of his brother's wrongful death claim. After this action was brought, Sherry Breeden was appointed substitute administrator of the estate of Travis Lee Jordan.

Following preliminary discovery, the Tyrees moved for summary judgment on the grounds that the wrongful death claims asserted by plaintiff were barred by the unequivocal release executed by Joey Jordan. Allstate moved to dismiss plaintiff's complaint under Rule 12(b)(6), W.Va.R.C.P. because this litigation was essentially a renewed wrongful death action brought by a party lacking statutory standing to file such action. The trial court then proceeded to dismiss the action with prejudice and the court wrote:

... Allstate's motion [to dismiss] should be granted because no one other than the administrator of the estate of Travis Lee Jordan may maintain this cause of action.

We granted this appeal to determine whether any of the rights of Casey Jordan were prejudiced by the actions of Allstate and Joey Jordan, the original administrator of the estate, in settling this case without court approval.

I.

Under W.Va.Code, 55-7-7 [1982] a wrongful death action in which a minor is a potential beneficiary can be settled only with leave of court. Thus, a summary proceeding should have been initiated to determine that the compromise of the claim by the personal representative was fair and reasonable pursuant to W.Va.Code, 55-7-6 [1985], and to determine what share of the award should have been paid to Casey Jordan.

However, we find that if Casey Jordan has been damaged, he has been damaged primarily by Joey Jordan, who was responsible for initiating a summary proceeding and determining what part of the $50,000 that he received as administrator should have gone to Casey. Therefore, if Casey has been injured, it is the obligation of Joey Jordan, in the first instance, to make him whole.

However, Allstate Insurance Company was not entirely blameless in...