TROY P. ALSTON AND MAGGIE ALSTON, ADMINISTRATORS OF THE ESTATE OF DEVORA YVONNE ALSTON JACKSON, AND MINOR CHILDREN OF DEVORA YVONNE ALSTON JACKSON v. ALVIN JACKSON
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RENDERED: JUNE 15, 2001; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1999-CA-002844-MR
TROY P. ALSTON AND MAGGIE ALSTON,
ADMINISTRATORS OF THE ESTATE OF
DEVORA YVONNE ALSTON JACKSON, AND
AS GUARDIANS FOR D.A. AND L.A.,
MINOR CHILDREN OF DEVORA YVONNE
ALSTON JACKSON
APPELLANTS
APPEAL FROM HARDIN CIRCUIT COURT
HONORABLE HUGH ROARK, JUDGE
ACTION NOS. 97-CI-01100 & 97-CI-01716
ALVIN JACKSON
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BARBER, JOHNSON AND SCHRODER, JUDGES.
JOHNSON, JUDGE:
Troy P. Alston and Maggie Alston, administrators
of the estate of Devora Yvonne Alston Jackson and guardians for
D.A. and L.A., minor children of Jackson, have appealed from an
order entered by the Hardin Circuit Court on November 16, 1999.
The trial court ruled that the award from a personal injury and
wrongful death action should be divided in equal thirds between
Jackson’s two surviving minor children and her widower, the
appellee, Alvin Jackson.
Having concluded that the trial court
did not err in its interpretation of the parties’ agreement, we
affirm.
On May 10, 1997, Devora Jackson suffered the eruption
of an undiagnosed ectopic pregnancy and she went into a coma.
Devora was taken off life support on May 26, 1997, and died.
Devora was the mother of two minor children, D.A. and L.A., and
had recently married Alvin Jackson; Alvin was not the father of
either child.
Following Devora’s death, the Alstons, her
parents, were named as guardians for the children and as
administrators of her estate.
The Alstons had not met Alvin
before Devora underwent an unsuccessful emergency surgery at
Hardin Memorial Hospital in Elizabethtown, Kentucky.
Initially, the Alstons and Alvin refused to cooperate
with each other in pursuing personal injury and wrongful death
litigation, and separate civil actions were filed against the
hospital, nurses, and the treating physician.
The Alstons were
represented by Lawrence F. Smith, while Alvin retained the
services of the Becker Law Office.
During the course of the
litigation, the Alstons and Alvin wanted to settle their claims
against Hardin Memorial Hospital and nurse Sharon Bland; and the
parties entered into the following written agreement concerning
the division of past and future settlement proceeds:
This Agreement, made and entered into
this____day of June, 1999, by and between
Attorney Rhoda Grossberg Faller, of Jefferson
County, Kentucky, individually and on behalf
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of Alvin K. Jackson, of Florida and Becker
Law Office of Jefferson County, Kentucky,
hereinafter referred to as First Party, and
Attorney Lawrence F. Smith, of Hardin County,
Kentucky, individually and on behalf of Troy
P. Alston and Maggie Alston of Hardin County,
Kentucky, administrators of the estate of
Devora Yvonne Alston Jackson, deceased, and
as guardians of Devora Yvonne Alston
Jackson’s two minor children, hereinafter
referred to as Second Party;
WHEREAS the parties herein are involved
in the prosecution of a wrongful death action
and loss of consortium claim against Hardin
Memorial Hospital, Nurse Sharon Bland, Dr.
Lynn Keith and Bluegrass Emergency Physicians
[emphasis added]; and
WHEREAS the parties have become
embroiled in certain disagreements over the
prosecution of said action [emphasis added];
and
WHEREAS the parties are desirous of
effecting an agreement to facilitate a
successful prosecution of said action
[emphasis added]; and
WHEREAS the parties believe it in the
best interests of the estate of Devora Yvonne
Alston Jackson, her surviving children and
widower to set aside any and all
disagreements and to agree on the strategy to
be employed in prosecuting the litigation
[emphasis added]:
WHEREFORE THE PARTIES AGREE AS FOLLOWS:
1. That the parties immediately accept,
in settlement of all claims prosecuted
against Sharon Bland and Hardin Memorial
Hospital, an amount equal to or in excess of
$170,000.00.
2. The settlement proceeds realized
from Bland and the hospital shall be
apportioned as follows: $20,000.00 to Alvin
Jackson, as loss of consortium, $20,000.00 to
[L.A.] for loss of consortium, $20,000.00 to
[D.A.] for loss of consortium and $110,000.00
to the estate for wrongful death.
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3. That said settlement proceeds shall
be distributed to Mrs. Jackson’s children and
widower in equal one-third portions, less
attorney fees and expenses. Alvin Jackson
waives his spousal exemption and Troy and
Maggie Alston waive administrators’ fee.
4. It is recognized that all expenses
thus far expended by either party has
benefitted the estate and should be recouped
from this initial settlement. It is further
recognized that certain costs are recoverable
from the defense. As such, any and all
nonreimburseable expenses thus far expended
by either party in the prosecution of this
claim, including expert fees, transportation,
deposition and other out of pocket expenses
of the parties shall be reimbursed by the
estate [emphasis added].
5. That in the event that defendants
resist paying reimbursable expenses and
further court action is required to
effectuate recovery thereof, the parties
shall jointly pursue available remedies.
6. That the attorney fees earned in the
settlement or trial1 set forth in paragraph 1
shall be as follows: Rhoda Grossberg Faller
and Becker Law Office shall receive 33 1/3%
of the gross attorney fees and Lawrence F.
Smith shall receive 66 2/3% of the gross
attorney fees [emphasis added].
7. That the parties agree that further
settlement negotiations will be engaged in
regarding the remaining defendants and
further agree that in the event that
settlement negotiations are successful, the
formula for the division of the proceeds to
the beneficiaries as set forth in paragraphs
2 and 3 above and the division of attorney
fees as set forth in paragraph 6 above shall
be followed.
8. Becker Law Office will pay
disbursements for expert witnesses, trial
exhibits and other costs, including Attorney
1
The phrase “or trial” was a handwritten addition to the
contract which was initialed by the attorneys.
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Faller’s necessary expenses in finalizing
discovery and trial preparation which will be
reimbursed by the estate upon conclusion of
this matter by settlement or verdict and upon
receipt of said proceeds. Smith Law Office
will pay for the disbursements for Attorney
Smith’s necessary expenses in attending to
discovery and trial which will be reimbursed
by the estate upon conclusion of this matter
by settlement or verdict and upon receipt of
said proceeds [emphasis added].
9. In the event that settlement with
the remaining defendants is unsuccessful, it
is agreed that Attorney Faller shall be the
lead attorney at trial on the medical
malpractice portion and Mr. Jackson’s
consortium claim. It is further agreed that
Attorney Smith shall be lead attorney at
trial on Devora’s life, the impact of her
death, valuation and other issues agreed upon
between counsel. Attorneys Faller and Smith
further shall agree on any remaining
litigation decisions prior to trial [emphasis
added].
10. That each party to this agreement,
including any person associated with the
respective law firms, including any attorney
who has participated on behalf of plaintiffs
in this action, is prohibited from making any
disparaging remark concerning any party or
other attorney participating in this action.
11. That attorneys Greg Bubalo and H.D.
Callicotte shall immediately file an [sic]
motion in Hardin District Court in case 97-P00394 remanding any and all motions
previously filed on behalf of Alvin K.
Jackson.
12. That attorneys Greg Bubalo and H.D.
Callicotte shall immediate [sic] submit a
letter of apology to the administrators of
the subject estate and Attorney Lawrence F.
Smith for their allegations of conflict of
interest and breach of fiduciary obligations.
13. That attorneys Wes Durham and H.D.
Callicotte shall immediately cease any
involvement in the prosecution of this
litigation after the obligations contained in
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paragraphs 11-12 are completed. Attorney
Greg Bubalo may be involved in all trial
preparations in this action, including
depositions and settlement negotiations but
it is specifically understood and agreed by
the parties that Attorney Rhoda Faller shall
remain the only counsel of record on behalf
of Becker Law Office and Attorney Faller
shall be the only attorney from Becker Law
Office sitting at counsel table during any
trial phase of this action and Attorney
Bubalo will do nothing during any trial phase
of this action which would demonstrate to any
juror or plaintiff that he is participating
in the prosecution of this action.
14. Alvin Jackson, of his own desire,
voluntarily reduces his statutory right to
one-half of the estate of Devora Jackson to
one-third of said estate in order that [L.A.]
receives one-third of the estate and [D.A.]
receives one-third of the estate.
15. That the parties hereby ratify all
actions taken on behalf of the prosecution of
this litigation taken by Attorney Smith and
the administrators of this estate and by
Attorney Faller and Alvin K. Jackson.
16. This agreement is in conformity
with SCR 3.130 rule 1.5[e][1][b] and [e][2]
as the Becker Law Office and Smith Law Office
are not members of the same firm and the
division of fees agreement, as set forth
above, is in writing and authorized by the
clients represented by the two firms. Rhoda
Faller, on behalf of Becker Law Office and
Lawrence Smith, on behalf of Smith Law
Office, assume joint responsibility for the
representation. The clients, acknowledge
their knowledge of this agreement and declare
they have no objection to the participation
of all the lawyers involved as indicated in
the agreement.
The Alstons’ and Alvin’s claims against the treating
physician and her professional corporation did not settle; and
the case was tried.
On October 4, 1999, a jury returned the
following verdict in favor of the plaintiffs:
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(1) Troy P. Alston and Maggie Alston,
Administrators of the Estate of Devora Yvonne
Alston Jackson;
a.
Permanent impairment of her power to
labor and earn money.
$350,000
b.
Mental and physical pain and
suffering.
$100,000
c.
Funeral Expenses.
$5,800
(2) [D.A.], infant through his guardians Troy
P. Alston and Maggie Alston for loss of
parental consortium until reaching the age of
18;
$1,000,000
(3) [L.A], infant through her guardians Troy
P. Alston and Maggie Alston for loss of
parental consortium until reaching the age of
18:
$1,000,000
(4) Alvin Jackson, as husband of Devora
Yvonne Jackson, for loss of consortium from
the time of her injury until her death:
$100,000
Percentage of the total fault was
attributable to each of the parties found to
be at fault.
Dr. Lynn Keith
Hardin Memorial Hospital Employees
40%
60%
As can be seen from the jury’s verdict, the bulk of the
jury’s award was allocated to the two children for their loss of
consortium claims.
On October 13, 1999, Lawrence Smith, attorney
for the Alstons, sent the following letter to Rhoda G. Faller,
attorney for Alvin, outlining his interpretation of the agreement
and the jury’s verdict:
Dear Rhoda,
First of all let me extend once again my
congratulations to you for a very successful
prosecution of the Alston/Jackson vs Keith
matter. Over the last two and one half years
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it has been a joy working with you and I am
glad that I had the opportunity to join
forces for the common good of all the
plaintiffs.
I want to review the distribution of attorney
fees and the proceeds mandated by our
contract of July 7, 1999. First of all we
agreed that the attorneys fees between the
lawyers will be split 1/3 to the Becker Law
office 2/3 to Lawrence F. Smith pursuant to
paragraph six. It is also my understanding
that the same division applies to all
attorney fees generated by the combined
cases. It is also my understanding that the
estate will pay the total cost in the matter
pursuant to paragraph 4. We have asked you
[sic] office to provide your list of costs to
us as soon as possible so that we can begin
preparing the necessary paperwork to
accomplish that reimbursement.
Because there was a trial, it appears that
the provisions of paragraph number 7 no
longer apply. Had there been a settlement,
the provisions of paragraph number 7 would
have required that the proceeds be divided in
the same manner as the Bland proceeds were
divided as outlined in paragraph number 2.
In this case, settlement negotiations were
not successful and the parties were forced to
trial. The jury has now decided distribution
of proceeds by their verdict. While we all
agree that this does not effect the division
of attorney fees in paragraph 6 it does
effect, in my opinion, the distribution of
verdict proceeds. It looks to me now like
the children get 40% of $2 million and their
percentage of the estate and Alvin gets 40%
of $100,000.00 in his percentage of the
estate. It also appears that the provisions
of paragraph number 14 apply. That is that
each beneficiary of the estate receives an
equal share.
Please review the contract to see whether you
can agree with my interpretation. I am
concerned that any other interpretation would
leave both firms open to a challenge by the
children any time between now and 2009 when
the youngest child reached nineteen years of
age. If there is a dispute at this juncture,
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it would be best for the provisions of the
contract to be placed for review at a hearing
with Judge Roark so that we could get a
judicial interpretation. I want to be sure
that whatever our joint decision is that it,
is ratified by the court after a full and
free disclosure at a hearing.
What I am afraid that if we do something
other than what the contract specifically
states, a lawyer reviewing this five or six
years from now can hold me as the attorney
for the estate directly responsible. That
person could also seek return of those assets
from your firm and from Alvin. It is the
potential of this litigation that we need to
work to avoid.
I am confident that a mutually agreeable
compromise will be able to be achieved and I
am now reviewing all possibilities that I can
think of in reaching a position acceptable by
all parties. Among the items in
consideration is to amend the contract to
eliminate Mr. Jackson’s giving up a portion
of his estate to the children. Additionally
it would appear that the waiver of Mr.
Jackson’s spousal exemption could be reversed
along with the waiver of the Alstons of their
administrators’ fee. Any ideas or
suggestions that you have in avoiding any
conflict, bearing in mind the four corners of
the contract are actively solicited.
The parties have not been able to agree on a
distribution of the jury’s award.
Alvin’s contention has been
that the parties were working together to maximize the proceeds
received, whether by settlement or jury verdict.
Alvin claims it
was the parties’ intention to distribute the proceeds in equal
one-third shares among Devora’s two minor children and himself.
On October 26, 1999, the Alstons filed a motion with
the trial court asking the court to review the agreement and to
issue an order resolving the conflict.
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On that same day, the
trial court entered an order that placed all of the funds in an
interest bearing account until it could resolve the dispute.
On
November 16, 1999, the trial court entered an order which
provided:
IT IS HEREBY ORDERED that the sum total
of the monies received, for whatever claim,
be divided with one-third to Alvin Jackson,
one-third to [L.A.] and one-third to [D.A][.]
This appeal followed.
Since this case involves the legal interpretation of
the agreement between the Alstons and Alvin, we are not required
to give deference to the trial court’s decision on that issue,
and our review is de novo.2
The Alstons frame the issue for our
review as follows, “CAN PAROL EVIDENCE MODIFY THE TERMS OF A
WRITTEN AGREEMENT PREPARED BY ATTORNEYS AFTER SERIOUS
NEGOTIATIONS[?]”
While we agree with the statements of law
expounded by the Alstons relating to the parol evidence rule and
modification of a contract, we do not believe these rules are
applicable to the case sub judice.
It should be noted that the trial court made its
decision without making any findings of fact.
Therefore, while
it is not totally clear, it would appear that the trial court did
not rely upon parol evidence in making its determination.
Alvin
argues that there was no need for the trial court to consider
parol evidence.
He contends the agreement contemplated a jury
2
First Commonwealth Bank of Prestonsburg v. West, Ky.App.,
27 S.W.3d 472, 479 (2000) (quoting Calomiris v. Woods, 353 Md.
425, 727 A.2d 358, 362 (1999)).
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trial, as well as a possible settlement; and the parties intended
to divide any recovery into equal thirds.
We agree.
We must first determine what effect, if any, paragraph
7 has on the disbursement of the jury award:
7. That the parties agree that further
settlement negotiations will be engaged in
regarding the remaining defendants and
further agree that in the event that
settlement negotiations are successful, the
formula for the division of the proceeds to
the beneficiaries as set forth in paragraphs
2 and 3 above and the division of attorney
fees as set forth in paragraph 6 above shall
be followed.
Paragraph 7 clearly provides that if the parties reach a
settlement, the settlement proceeds would be divided into equal
thirds as set forth in paragraphs 2 and 3.
But, this paragraph
does not directly address the division of a jury award.
In interpreting a contract, the intention of the
parties must be ascertained from the writing as a whole.
The
main objective in every case involving the construction of a
contract is to ascertain and effectuate the intentions of the
parties.
To do so, the language used in the contract, the
contract’s subject matter, and the purpose of the contract may be
considered.3
If the contract is susceptible to two meanings, it
should be construed most strongly against the party preparing or
drafting it.4
It is elementary that a contract is to be
3
D.L. Walker & Co. v. Lewis, 267 Ky. 107, 101 S.W.2d 685,
687 (1937)(citing, Bullock v. Young, 252 Ky. 640, 641, 67 S.W.2d
941 (1933)).
4
Id.
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interpreted as a whole and its meaning shall be gathered from the
entire context and not from particular clauses or words.
Particular clauses and words must be construed in harmony with
the whole content of the contract and in a way that will be
consistent with the general intent and purpose of the
instrument.5
In the case sub judice, the Alstons emphasize the fact
that paragraph 7 only mentions “settlement” and that it is silent
as to a trial.
They contend that this agreement did not cover an
award from a trial, and that the trial court should have
distributed the award according to the jury’s verdict.
From our reading of the contract as a whole, we hold
that the only reasonable interpretation of paragraph 7 is that
its silence as to the consequences of a trial is due to a
drafting oversight rather than from any intention of the parties
to omit reference to a trial.
As a basis for this conclusion, we
look at the language and the structure of the entire agreement.
As we emphasized earlier, the agreement, which was drafted by the
Alstons’ attorney, refers to the “prosecution of a wrongful death
action and loss of consortium claim,” “an agreement to facilitate
a successful prosecution of said action,” and “prosecuting the
litigation.”
We further believe the intention of the parties to
divide the trial proceeds as well as any settlement proceeds into
equal one-third shares is evidenced by the careful measures the
5
Wright v. Bethlehem Minerals Co., Ky., 368 S.W.2d 179, 181
(1963).
-12-
attorneys took to make sure there was clarity in the agreement as
to how they would be paid, by amending paragraph 6 to cover
trials as well as settlements.
Obviously, the parties and their
attorneys contemplated the possibility of a trial.
Alvin argues that to maximize the total recovery, the
parties entered into an oral agreement that it was in their
mutual interest to follow a trial strategy focusing on the loss
that the children suffered, which they would in turn share as a
part of the total recovery.6
6
In support of this argument, Alvin’s attorney submitted an
affidavit to the trial court, which stated in part:
Throughout the remaining months until
trial, Mr. Smith, Mr. Salansky and I worked
together to prepare the case for trial.
During the trial of the action, all of the
attorneys were in very frequent communication
with each other. We did indeed work as team
for the mutual benefit of all the Plaintiffs,
and planned trial strategy to increase the
award by the jury to [sic].
I e-mailed a copy of my closing argument
to Mr. Smith the weekend prior to the
closing. Mr. Smith read it and thought it
was a “fantastic” closing. The strategy
employed was clearly known by Mr. Smith, and
was agreed to by him.
The Alstons were informed by Mr. Smith
as to the trial tactics and strategy to
enhance the award for all of the parties.
Neither the Alstons nor Attorney Smith did
anything but agree to those tactics and
indeed stood silently by knowing how the case
was to be presented.
On the morning of the closing, I spoke
with Mr. Smith and confirmed that the
strategy was chosen since all of the
Plaintiffs were to share equally in a jury
(continued...)
-13-
The Alstons are unable to offer any logical reason as to why they
would share the original settlement in equal thirds and agree to
share later settlements in equal thirds, but an award from a
trial would be shared in some other manner.
“It is the rule of
law that all writings, whether they be contracts or statutes,
shall not be presumed to have been entered into or enacted in
vain; and no statute will be construed or applied so as to result
in an absurdity.”7
We believe it would be an absurd result to allow the
attorney’s fees to be divided in equal thirds and the plaintiffs
to divide in equal thirds settlement proceeds, but to give the
agreement an interpretation where the plaintiffs would not share
a jury award in equal thirds, when a jury verdict was obviously
contemplated by the parties and their attorneys.
The purpose of
the agreement was to promote and to help facilitate a successful
(...continued)
award. Mr. Smith confirmed that this was his
understanding.
Mr. Smith, and the Alstons, know that
the jury did not “choose” to award the
children the lion’s share but were asked to
do so on the understanding that all the
Plaintiffs would share all awards equally.
The conversations referred to in Faller’s affidavit are
outside of the record and we are without a videotape or
transcript of the trial to review to see if this strategy was in
fact implemented. However, we conclude that the agreement itself
reflects the parties’ desire to divide the award in equal onethird shares.
7
Nuetzel v. Travelers’ Protective Ass’n, 168 Ky. 734, 183
S.W. 499(1916)(citing Sutherland on Statutory Construction, §
479; 36 Cyc. pp. 1106-1108).
-14-
prosecution of the actions against the defendants.
While the
parties hoped to reach a settlement, the fact that they
contemplated the possibility of a trial is reflected in the
language the attorneys inserted into the agreement.
We believe
the parties’ intention, as shown by the agreement, was that any
recovery, whether through a settlement or a jury award, would be
shared in equal, one-third amounts.
Accordingly, the order of the Hardin Circuit Court is
affirmed.
ALL CONCUR.
BRIEF AND ORAL ARGUMENT FOR
APPELLANT:
BRIEF AND ORAL ARGUMENT FOR
APPELLEE:
Lawrence F. Smith
Radcliff, KY
Timothy J. Salansky
Louisville, KY
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