Dana Witkowski v. Sandra Gennings

ca04-726

ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION

DIVISION IV

CA04-726

April 6, 2005

DANA WITKOWSKI AN APPEAL FROM PULASKI

APPELLANT COUNTY CIRCUIT COURT

[PDE2000-005]

V. HON. ALICE S. GRAY, JUDGE

SANDRA GENNINGS

APPELLEE AFFIRMED

Wendell L. Griffen, Judge

Clead Randall Gennings died testate on July 19, 1998. Appellant Dana Witkowski, his daughter, appeals from various orders of the Pulaski County Circuit Court and charges that court with multiple errors: failing to remove appellee Sandra Gennings, the decedent's spouse, as executrix1 of the estate; failing to set aside a September 24, 2002 order that found that an asbestos claim brought by the estate was a survival claim; labeling the asbestos claim as a survival claim and not a wrongful death claim; finding that an agreement between Witkowski and Gennings precluded Witkowski from recovering damages from the asbestos litigation; and error in approving the final amount of attorney fees. We hold that the trial court committed no reversible error. Thus, we affirm.

Factual and Procedural History

The relevant provisions of the decedent's will left $10,000 and other personal items to Witkowski and the remainder of his estate to Gennings. The will specifically mentioned the proceeds of a $49,000 life insurance policy as property left to Gennings; however, the policy listed Witkowski as the beneficiary. Because of legal uncertainty about who was entitled to the life insurance proceeds, Gennings and Witkowski reached a family settlement agreement to avoid litigation on the issue. Witkowski signed the agreement on March 8, 1999, and Gennings signed it on March 19, 1999. Among other things, the agreement stated:

1. Decedent was insured by a $49,000 life insurance policy with Metropolitan Life Insurance Company. . . . Rather than file an interpleader action, MetLife has encouraged the parties to agree on a distribution of the insurance proceeds. Upon advice of their respective attorneys that the outcome of litigation would be uncertain, time consuming and costly, the parties agree to divide said proceeds, half to spouse and half to daughter.

2. Decedent's last will and testament dated July 5, 1998, leaves daughter the sum of $10,000, a cluster ring and a 1981 Ford truck and the rest, residue and remainder of the estate to spouse. Spouse contends that the only cash asset of the estate is $3513.77 from his employer for vacation and sick pay. Spouse reports that there were funeral and last illness expenses which total $18,854.77. Daughter has asked for and spouse has agreed to provide an authorization for daughter to receive information from Regions Bank, formerly First Commercial Bank, about any accounts there which were solely in the name of decedent at the time of his death on July 18, 1998. In the event there are no further accounts belonging to decedent's estate, daughter agrees to accept the diamond cluster ring, the 1981 pickup truck (with tool boxes, Randy's Bear and weedeater) and negatives and copies of photographs of decedent as a full and final settlement of all claims she might have against decedent's estate.

In the event there are additional accounts belonging to the estate, said accounts shall be first applied to the aforesaid funeral and last illness expense and next to the $10,000 bequest to daughter. Any amount in said account(s) over $28,854.77 shall be the property of the spouse.

Despite an initial decision to avoid probate, Gennings filed a petition to appoint herself the executrix of her husband's estate on January 3, 2000, because of potential assets coming from asbestos litigation in Arkansas and in New York. In the petition, she listed that the estate had assets of $75,000. The trial court granted the petition. On April 12, 2001, the clerk's office issued Gennings notice that an inventory and accounting of the estate were due. This was followed by Witkowski's own motion for an inventory and accounting on June 7, 2001. Gennings filed the accounting on July 25, 2001,2 listing vacation pay as the estate's only asset. Witkowski filed an objection to the accounting.

On February 19, 2002, Witkowski filed her first motion to remove Gennings as executrix of the estate, alleging that Gennings induced her to enter the family settlement agreement and that Gennings had failed to disclose information about pending asbestos litigation in Pulaski County Circuit Court. On April 4, 2002, Gennings filed her own motion to enforce the terms of the family settlement agreement. A hearing was held on the issues on April 18, 2002.

Witkowski testified that after she received the personal property to which she was entitled under the family settlement agreement, she checked with Regions Bank to determine if her father had any accounts there. After it was determined that the decedent did not have enough money to pay the $10,000 gift, she considered the estate closed. She was surprised that Gennings listed $75,000 in assets when she had been told that the estate could not pay the funeral expenses. Witkowski also noted the inventory filed by Gennings but noted that the inventory did not list any money coming from the asbestos litigation. She later discovered that Gennings received a $6000 check, which was dated prior to the inventory being filed.

Witkowski also addressed her motion to remove Gennings as executrix. She stated that Gennings had been untruthful, citing failure to disclose the asbestos litigation as an example. She discovered a 2000 Lincoln Towncar titled in her father's name after he died. Witkowski believed that if the circuit court appointed her as personal representative of her father's estate, she could find sufficient assets so that she could receive the $10,000 gift left to her. On cross-examination, she testified that she read the family settlement agreement before she signed it. She noted the language referring to the life insurance policy and testified that she received half the proceeds. She also testified about her objection to Gennings's accounting of the estate, stating that the $18,854.77 in funeral expenses should have been itemized, that the accounting should have included payments from the asbestos litigation, that $3068.75 for settlement payments from estate assets without court approval should be disallowed, and that Alma Murphy (Witkowski's mother and the decedent's first wife) received $2000 but should have received more. Witkowski thought that the matter of her father's estate would be finished once the family settlement agreement was signed; however, she was not told about the Lincoln Town Car, about the probate being opened, or about the asbestos litigation.

Gennings testified that she did not know who drafted the family settlement agreement but that it was signed to settle disputes regarding the life insurance policy and other matters and that, when she signed the agreement, she thought there would be no need to continue the estate. Gennings testified she was unaware about her husband's claim for asbestos exposure until after she signed the family settlement agreement. She was instructed to contact attorney Ed Moody, who advised her to open the estate. The checks that the court received as a joint exhibit were the only checks she had received from Moody resulting from the asbestos litigation, and it was "strongly indicated" that there would be no more checks because most of the defendants were in bankruptcy.

Gennings testified that she owned the 2000 Lincoln Town Car, and that she paid for the funeral expenses, paid $2000 to Murphy, and paid about $6000 in attorney fees. She was told that she did not have to include money from the asbestos litigation because it was not part of the estate, and she testified that when she filed the July 9, 2001 accounting she had not received any asbestos money. On cross-examination, Gennings admitted that she would not have told Witkowski about the asbestos litigation had she not discovered it on her own.

On September 12, 2002, Witkowski filed a second motion to remove Gennings as executrix of the estate, alleging concealment of assets. She also moved that she be paid $10,000 pursuant to the family settlement agreement. In a September 24, 2002 order, the circuit court found that the asbestos litigation filed in Pulaski County was a survival action and that those proceeds were part of the estate. Specifically, she noted that the prayer for damages in the complaint did not include any language that suggested that the decedent's beneficiaries were seeking compensation for any pecuniary injuries and mental anguish caused by his death. On December 5, 2002, Witkowski filed a motion to set aside the order, alleging that she learned that the proceeds from the asbestos litigation did not come from the lawsuit filed in Pulaski County Circuit Court.

On February 27, 2003, the court requested that counsel for both parties update her on the status of the case. Witkowski asked for a continuance because she was unable to subpoena Moody. The court granted the continuance but ordered her to pay Gennings $190 in fees and costs. Issues remaining then were whether the prior order should be set aside, whether other payments from the asbestos litigation were part of the estate, a ruling to obtain information from Moody, a motion on the removal of Gennings as executrix, and a determination of whether all accountings had been filed as directed.

On March 5, 2003, Gennings filed a petition for a final distribution, discharge, and fees. Witkowski responded by noting that the trial court had yet to address the asbestos litigation pending in New York and alleging that Gennings should be removed as executrix, that attorney fees should not be charged to the estate, and that the proceeds from the asbestos litigation do not belong to the estate.

The circuit court heard testimony from Moody on May 20, 2003. He testified that he represented the estate in the asbestos litigation. His first contact with Gennings was on March 5, 1999, and he opened a file on the case on March 10, 1999. His consulting physician reported to him that the decedent had occupational exposure to asbestos and that the exposure contributed to his lung cancer. After getting the doctor's report, Moody told Gennings that she needed a personal representative for the estate. Moody later filed a complaint on November 3, 1999, and an amended complaint on June 29, 2001. He testified that the complaint involved asbestosis and wrongful death. He filed suit in Arkansas to attempt to get the cases to trial or to settlement before some of the companies could file bankruptcy; however, many of the companies had filed for bankruptcy and many more were expected to do so. Moody testified that the recoveries in the case have not come from the Arkansas litigation and that the Arkansas case was dismissed in February or March 2002. Litigation was continuing in New York. Moody expected to get more recoveries, with 75 to 80 percent of the money being recovered within five years. On cross-examination, he testified that he sent counsel for Witkowski a November 26, 2002 letter indicating that he had filed a lawsuit in New York. Had the decedent not died, he and his wife would have been plaintiffs in the New York litigation. Moody also testified that he sent an April 25, 2000 letter to Gennings which explained that he filed suit in Pulaski County to put extra pressure on the asbestos defendants to settle the case.

On December 3, 2003, the circuit court filed an order refusing to remove Gennings as executrix of the state, after finding that she did not intentionally mislead Witkowski on the need to probate the estate. The circuit court filed its final order on December 31, 2003,refusing to set aside the September 24, 2002 order on the basis that Witkowski had a full and fair opportunity to litigate the issue and conduct discovery, finding that the New York litigation was a survival action and guided by the terms of the family settlement agreement, and granting Gennings's motion for a final distribution and discharge. This appeal followed.

Standard of Review

We review traditional cases of equity, such as probate cases, de novo and affirm the circuit court's findings unless they are clearly erroneous or clearly against the preponderance of the evidence. Conner v. Donahoo, 85 Ark. App. 43, 145 S.W.3d 395 (2004). A finding of fact is clearly erroneous when the reviewing court is left with a definite and firm conviction that a mistake has been committed. Id. In reviewing the circuit court's findings, we give due deference to the circuit judge's superior position to determine the credibility of the witnesses and the weight to be accorded to their testimony. Id. Moreover, while we will not overturn the trial judge's factual determinations unless they are clearly erroneous, we are free in a de novo review to reach a different result if required by the law. Id.

Motion to Remove Executrix

First, Witkowski argues that the circuit court erred in not removing Gennings as executrix of the estate. Specifically, she argues that the trial court should have removed Gennings as executrix for her failure to completely disclose details of the asbestos litigation and her failure to file complete inventories and accountings. Arkansas Code Annotated section 28-48-105 (Repl. 2004) allows a court to remove a personal representative of an estate if that person "becomes mentally incompetent, disqualified, unsuitable, or incapable of discharging his or her trust, has mismanaged the estate, has failed to perform any duty imposed by law or by any lawful order of the court[.]" "Unsuitable" is not defined in the Arkansas probate code, but Arkansas appellate courts cite favorably to the Massachusetts Supreme Court in Quincy Trust Co. v. Taylor, 317 Mass. 195, 196-97, 57 N.E.2d 573, 574 (1944):

The statutory word "unsuitable" gives wide discretion to a probate judge . . . . Such a finding may also be based upon the existence of an interest in conflict with his duty, or a mental attitude toward his duty or toward some person interested in the estate that creates reasonable doubt whether the executor or administrator will act honorably, intelligently, efficiently, promptly, fairly, and dispassionately in his trust. It may also be based upon any other ground for believing that his continuance in office will be likely to render the execution of the will or the administration of the estate difficult, inefficient or unduly protracted. Actual dereliction in duty need not be shown.

In re Guardianship of Vesa, 319 Ark. 574, 581, 892 S.W.2d 491, 495 (1995), quoted in Robinson v. Winston, 64 Ark. App. 170, 175, 984 S.W.2d 38, 40-41 (1998); Guess v. Going, 62 Ark. App. 19, 24-25, 966 S.W.2d 930, 933 (1998). We have also stated, "An executor of an estate occupies a fiduciary position and must exercise the utmost good faith in all transactions affecting the estate and may not advance his own personal interests at the expense of the heirs." Robinson, 64 Ark. App. at 176, 984 S.W.2d at 41; Guess, 62 Ark. App. at 24, 966 S.W.2d at 932-33.

Witkowski argues that Gennings should be removed as executrix because of her actions regarding the asbestos litigation. However, the trial court found that Gennings had no intent to mislead Witkowski about the need to probate the estate. The circuit court could have found that Gennings erroneously thought the asbestos claim was a wrongful death action. If this were the case, then as personal representative of the wrongful-death beneficiaries she had no affirmative duty to consult Witkowski about the asbestos claim. See Cude v. Cude, 286 Ark. 383, 691 S.W.2d 866 (1985) (holding that a personal representative has no duty to consult a beneficiary regarding his pursuit of a wrongful-death action). Even if Gennings should have told Witkowski about the asbestos claim, there is no evidence thatGennings intended to mislead Witkowski.3 As far as Witkowski's testimony about the prospect for future recovery on the claim, Gennings's testimony that there would not be any more money coming from that claim occurred over a year before Moody's testimony that 75 to 80 percent of the money would be recovered within five years. In addition, Moody's November 2001 document entitled "Semi-Annual Update to Asbestos Claimants" indicated that several companies involved in the asbestos litigation had filed or were filing for bankruptcy. At the time of her testimony, Gennings could have reasonably believed that no more money would be coming from the asbestos litigation.

Witkowski also argues that Gennings's unfitness is evidenced by the failure to file inventories and accountings when ordered to do so. Although compliance was untimely, the record shows accountings were filed on July 25, 2001; August 15, 2003; and December 23, 2003. There is no evidence that Gennings willfully disobeyed any order of the court or that the accountings were incomplete, except for the failure to address the asbestos litigation. Our supreme court has held that where there is substantial compliance with the obligation to file an inventory and accounting and no evidence of wrongdoing, appellate courts will deny relief for a fiduciary breach. See Morris v. Cullipher, 306 Ark. 646, 816 S.W.2d 878 (1991). Although untimely, none of Gennings actions regarding the filing of accountings and inventories worked to prejudice Witkowski.

Finally, Witkowski quotes extensively from Price v. Price, 258 Ark. 363, 527 S.W.2d 322 (1975). There, the supreme court instructed the trial court to remove the appellee as personal representative because the appellee had acted to further her own interests in a manner to deprive her stepchildren of any benefits, had been recalcitrant about compliance with her responsibilities, and had failed to file a satisfactory accounting despite being admonished to do so by the probate judge thirteen years prior. Despite the animosity between Witkowski and Gennings, Gennings failings do not rise to the level in Price v. Price, supra.

Gennings could have disclosed all of the details of the asbestos litigation and should have been more prompt in executing her duties as executrix of the estate. However, the circuit court decided not to remove Gennings as personal representative of the estate, and our standard of review requires us to affirm that ruling unless it is clearly erroneous. Conner v. Donahoo, supra. We cannot say that the circuit court's decision has left "a definite and firm conviction that a mistake has been committed." Accordingly, we affirm the trial court's decision not to remove Gennings as executrix of her husband's estate.

Nature of the Asbestos Claims

Next, Witkowski argues that the trial court erred in finding that the asbestos litigation was a survival claim and not a wrongful-death claim. She alleges error in the circuit court's September 24, 2002 order, which addressed the Arkansas litigation, and the December 31, 2003 order, which addressed the New York litigation. Survival actions and wrongful-death actions are two distinct actions under the law. Survival actions are actions for wrongs done to a person prior to that person's death. See Ark. Code Ann. § 16-62-101 (Supp. 2003). Damages in such actions generally include damages occurring between the decedent's injury and his death. Durham v. Marberry, 356 Ark. 481, 156 S.W.3d 242 (2004). Alternatively, wrongful-death actions are actions for pecuniary injuries, loss of services and companionship, and mental anguish suffered by a decedent's heirs because of the decedent's death. See Ark. Code Ann. § 16-62-102 (Supp. 2003). Damages in a wrongful-death actionare not assets of the estate but are for the sole benefit of the beneficiaries. Douglas v. Holbert, 335 Ark. 305, 983 S.W.2d 392 (1998); McGuire v. Smith, 58 Ark. App. 68, 946 S.W.2d 717 (1997). Put succinctly, "a survival action is for the recovery of damages the decedent suffered prior to death, while a wrongful-death action is for the recovery of damages the heirs suffered as a result fo the decedent's death." McDonald v. Pettus, 337 Ark. 265, 277, 988 S.W.2d 9, 15 (1999).4

Regarding the Arkansas lawsuit, we affirm because Witkowski failed to show how she was prejudiced by the determination that the litigation was a survival action. The court took judicial notice of the language in the complaint, and Witkowski provided a copy of the complaint in her addendum. At the May 20, 2003 hearing, Moody testified that the Arkansas lawsuit had been dismissed and that none of the recoveries came from the Arkansas litigation.5 If the circuit court had found that the Arkansas litigation was a wrongful death action, Witkowski still would be entitled to nothing because nothing was recovered from that action. Because Witkowski cannot show prejudice, we must affirm on this point. See Taylor v. Hinkle, ___ Ark. ___, ___ S.W.3d ___ (Dec. 16, 2004).

Even if Witkowski could show prejudice, the circuit court's ruling was correct. Gennings, individually and as personal representative of the estate, was listed as one of many plaintiffs in the suit. The complaint alleges damages for medical expenses, mental and physical pain and suffering, lost wages and earning power, loss of consortium, and punitive damages. With the exception of the loss of consortium claim belonging to Gennings personally, these were damages to the decedent while he is still alive. Therefore, the claim involved in the Arkansas litigation was a survival action, and the circuit court was correct in its ruling.

As for the New York litigation, the court considered Moody's testimony and a copy of the complaint for the New York litigation. The circuit court relied on the following parts of the complaint in its ruling that the New York litigation was a survival action:

25. Plaintiff(s) repeats and reiterates the prior allegations of the NYAL Weitz & Luxenberg, P.C. Federal Standard Asbestos Complaint for Personal Injury No. 1 and NYAL Weitz & Luxenberg, P.C. Federal Standard Asbestos Complaint for Wrongful Death No. 1 as if alleged more fully below:

* * *

32. As a direct and proximate result of the sale by the Defendant(s) AMERICAN OPTICAL CORPORATION to the Plaintiff's employers and others of said defective and unreasonably dangerous dust masks, the Plaintiff(s) sustained serious and permanent asbestos related injuries and suffered a loss of enjoyment of his life.

33. By reason of the foregoing, Plaintiff(s) has been damaged as against the Defendant(s) AMERICAN OPTICAL CORPORATION in the sum of Ten Million Dollars ($10,000,000.00) in compensatory damages and Ten Million Dollars ($10,000,000.00) in punitive damages.

34. Plaintiff(s), SANDRA GENNINGS, Individually and as Executrix for the Estate of CLEAD RANDALL GENNINGS, repeats and realleges NYAL Weitz & Luxenberg, P.C. Federal Standard Asbestos Complaint for Personal Injury No. 1 and NYAL Weitz & Luxenberg, P.C. Federal Standard Asbestos Complaint for Wrongful Death No. 1 as if fully incorporated herein, except as to the extent they may be inconstant with the allegations herein.

The complaint for the New York litigation requests damages for asbestos-related injuries and loss of enjoyment of life. Both remedies are for injuries suffered by the decedent while he was still alive. Neither relate to any pecuniary injuries or mental anguish suffered by the beneficiaries. Although the complaint describes the lawsuit as one for both personal injury and wrongful death, no damages for wrongful death are alleged. Without such damages, the New York litigation was properly classified as a survival action.

We hold that the circuit court did not err in identifying the lawsuit as a survival action and in finding that any recoveries from the lawsuit belong to the estate. Because we hold that the asbestos suits were survival actions, we need not address Witkowski's arguments whether the circuit's court's decision not to set aside the September 24, 2002 order was an abuse of discretion or whether Witkowski is entitled to a hearing regarding the asbestos recoveries if they were wrongful-death claims.

The Family Settlement Agreement

Next, Witkowski argues that, if the asbestos recoveries were based on a survival action, then she should be entitled to the first $10,000 of the estate after payment of the $18,854.77 in funeral expenses. She argues that, in light of Gennings failure to reveal the details of the asbestos litigation, any recoveries from the litigation should be considered an "account" of the estate still in existence.

Even the most liberal interpretation of the family settlement agreement would not allow for the inclusion of the asbestos recoveries into the definition of "accounts." When contracting parties express their intentions in a written instrument in clear and unambiguous language, it is a court's duty to construe that instrument according to the plain meaning of the language used without enlarging or extending the terms. Southway Corp. v. Metropolitan Realty, ___ Ark. App. ___, ___ S.W.3d ___ (Feb. 23, 2005); Cranfill v. Union Planters Bank, N.A., 86 Ark. App. 1, ___ S.W.3d ___ (2004). A contract is unambiguous when its terms are not susceptible to more than one equally reasonable interpretation. Cranfill v.Union Planters Bank, N.A., supra. In addition, this court has stated that family settlement agreements are to be construed by seeking the real intent of the parties as revealed in the agreement. Green v. McAuley, 59 Ark. App. 114, 953 S.W.2d 66 (1997). However, in absence of fraud or mistake, this court must still adhere strictly to the terms of the agreement. Id.

When referring to "accounts," the family settlement agreement specifically referred to any accounts the decedent held at Regions Bank. The language used in the agreement is limiting; even if the decedent had an account at a different bank Witkowski would not be entitled to the proceeds because of the limiting language of the agreement. While it may have been the intent of the parties to only settle the issue of the life insurance policy, the trial court was obligated to enforce the agreement as written. We affirm on this point.

Attorney Fees

Finally, Witkowski argues that the attorney fees incurred were for the personal benefit of Gennings and should not be considered costs of administration of the estate. However, Witkowski failed to show how she was prejudiced by the attorney fees paid. Any attorney fees involved would either be paid by Gennings personally or out of the estate, which now belongs to Gennings under the terms of the family settlement agreement. Except for $190 that she was ordered to pay Gennings at the February 27, 2003 hearing, Witkowski has not demonstrated that money coming from the estate that should have been paid to her went to pay attorney fees or that she personally paid fees to the attorneys. Without a showing of prejudice, we will not reverse. Taylor v. Hinkle, supra; see also Brown v. Brown, 222 Ark. 832, 262 S.W.2d 896 (1953) (affirming an award of attorney fees in absence of evidence that the fees were not related to work involving the estate).

Affirmed.

Gladwin and Baker, JJ., agree.

1 While the parties use the term "administratrix," the proper term to use is "executrix," as Mr. Gennings died testate. See Black's Law Dictionary 49, 610 (8th ed. 2004).

2 The trial court ordered Gennings to file an accounting on July 27, 2001, two days after Gennings filed an accounting. The record is unclear whether the July 25 filing satisfied the court's order or whether the order was intended to instruct Gennings to file a new accounting.

3 Witkowski also claims that Gennings was dishonest in failing to disclose a 2000 Lincoln Town Car in Mr. Gennings name. However, as Gennings points out in her brief, the car is clearly not an asset of the estate. The decedent died in 1998. He could not have owned a model-year 2000 automobile prior to his death. Additionally, nothing in the record suggests that Gennings purchased the automobile with proceeds from the estate.

4 Neither party addresses the potential conflict-of-law issue that arises from identifying the nature of an out-of-state claim. However, New York law appears to be in line with Arkansas law regarding the nature of survival and wrongful-death actions. See In re Seventh Jud. Dist. Asbestos Litigation, 778 N.Y.S.2d 867, 869 (N.Y. 2004) ("Unlike a claim for personal injuries, for which any recovery, by settlement or verdict, is payable and belongs to the estate, a wrongful death action is brought on behalf of the decedent's distributees, who have suffered pecuniary damages as the result of death wrongfully caused by a defendant."); Adelman v. Adelman, 741 N.Y.S.2d 841, 847 (N.Y. 2002) ("A cause of action pursuant to EPTL 11-3.2(b) based upon personal injuries sustained by a plaintiff which survives the plaintiff's death is completely distinct from a cause of action pursuant to EPTL 5-4.3 to recover damages for wrongful death.").

5 Witkowski does not dispute this testimony, as she cites Moody's testimony in her reply brief.