West v. Wyoming State Treasurer
Annotate this Case
West v. Wyoming State Treasurer
1991 WY 166
822 P.2d 1269
Case Number: 90-159
Decided: 12/20/1991
Supreme Court of Wyoming
GLO C. WEST, INDIVIDUALLY, AND GLO C. WEST AS THE PERSONAL REPRESENTATIVE OF THE ESTATE OF ELBERT LEROY WEST, APPELLANT (PLAINTIFF),
v.
WYOMING STATE TREASURER,
APPELLEE (DEFENDANT).
Appeal from the District Court, LaramieCounty, Arthur T. Hanscum,
J.
Jack Gage,
argued of Gage & Moxley, Cheyenne, and
Carolina A. Papa, Laramie, for appellant.
Joseph
B. Meyer, Atty. Gen., and Ron Arnold, Sr. Asst. Atty. Gen., argued, for appellee.
Before THOMAS, CARDINE, MACY and GOLDEN,
JJ., and LEIMBACK, District Judge.
CARDINE,
Justice.
[¶1.] Appellant sought a
declaratory judgment that she was not required to reimburse, out of a third
party $399,000 wrongful death recovery, two-thirds of the $72,316.51 worker's
compensation benefits paid to decedent's survivor beneficiaries. The trial court
held that the third party wrongful death recovery was subject to a statutory
lien requiring reimbursement of worker's compensation benefits and further that
the State was not obligated to file a creditor's claim in the decedent worker's
estate.
[¶2.] We
affirm.
[¶3.] Appellant states the
issues as follows:
"1. The
lien provisions of Wyoming's Worker's Compensation Statute
conflict with the Provision of Wyoming's Wrongful Death Statute that no debts of
the decedent may be satisfied from proceeds in a wrongful death action. The
issue is, which statute language will prevail?
"2.
Extant Wyoming case law requires a claimant,
including the State of Wyoming, to file a claim against an estate in
order to collect from an estate. The Worker's Compensation Division failed to
file a claim. Is the Division therefore foreclosed from enforcing its
lien?"
[¶4.] On July 8, 1986, Elbert
Leroy West was hauling lumber from FoxPark to Casper, when the eighteen-wheel semi tractor/trailer he was
driving rolled over near Casper. Mr. West was crushed in the cab of the
truck and received serious injuries. He was taken to the hospital in NatronaCounty, where he died on July 17, 1986.
Mr. West was survived by his widow, Glo Christie West, two sons who were
emancipated and no longer lived in the home, and an unmarried minor daughter who
still resided in the family home.
[¶5.] At the time of the
accident, Mr. West was employed by Jem Supply and Equipment Company (Jem). Jem
contested an award of worker's compensation benefits to Mr. West arguing that he
was an independent subcontractor. The question of worker's compensation coverage
was then litigated in the Albany County District Court. The court determined
that Mr. West had suffered a compensable, work-related injury while employed by
Jem. It awarded worker's compensation benefits to Mr. West and to his estate as
follows:
Total Medical
$15,687.69
Total Temporary Disability
226.46
Total Court Costs
1,529.92
Total Death Award
54,872.44
Total Benefits Awarded
$72,316.51
[¶6.] Glo West, as personal representative of Mr. West's estate, filed a wrongful death action against third party Brent & Wicklund Forest Products, Inc. (Brent & Wicklund). The suit alleged that Brent & Wicklund was liable for damages for Mr. West's death. Mrs. West negotiated a structured settlement with Brent & Wicklund, having a present value of $399,009.00.
[¶7.] Based on the
settlement, the Wyoming State Treasurer requested reimbursement of $48,211.01,
or two-thirds of the worker's compensation benefits paid on account of Mr.
West's injuries and death. Although Mrs. West had published notice to creditors
in the probate proceedings, the Treasurer did not file statutory notice of claim
against Mr. West's estate for reimbursement.
[¶8.] On May 23, 1989, Mrs.
West filed this action for declaratory judgment in which she argued that the
Treasurer did not have a right to reimbursement. After receiving memoranda from
both parties, the trial court on May 11, 1990, issued findings of fact,
conclusions of law and order finding that the wrongful death statute, when read
in pari materia with the worker's
compensation statutes, did not prohibit a lien for reimbursement of worker's
compensation benefits on the proceeds of third party wrongful death recovery. It
ruled that the Treasurer had a valid lien against the settlement proceeds in the
amount of $48,211.00. Mrs. West filed timely appeal from this
order.
[¶9.] The State's lien and
right to reimbursement in this case were obtained under the former W.S.
27-12-104 (June 1983 Repl.), which provided as follows:
"(a) If
an employee covered by this act [§§ 27-12-101 through 27-12-804] receives an
injury under circumstances creating a legal liability in some person other than
the employer to pay damages, the employee if engaged in extrahazardous work for
his employer at the time of the injury is not deprived of any compensation to
which he is entitled under this act. He may also pursue his remedy at law
against the third person. If the employee recovers from the third person in any
manner including judgment, compromise, settlement or release, the total
proceeds, without regard to the types of damages alleged in the third-party
action, of the recovery shall be divided as follows:
"(i)
After deducting the reasonable cost of recovery or collection not to exceed
one-third (1/3) of the recovery, one-half (1/2) of the remainder shall be
immediately paid to the injured employee, his personal representative or other
person granted the recovery and up to one-half (1/2) shall be paid to the state
treasurer in reimbursement for the total amount of all awards received or in
absence of a disclaimer of any unpaid balances to be received by the injured
employee under this act including all monies paid to him or in his behalf, less
the state's pro rata share of costs of recovery or collection. The state
treasurer shall credit and apportion the reimbursement to the accounts from
which the awards were paid, pro rata if necessary. Any balance remaining shall
be paid to the employee, his personal representative or other person granted the
recovery.
"(b) If
an injured employee has received compensation under this act, the state through
the state treasurer has a right and interest in all actions for damages brought
by any injured employee against a person other than his employer, and shall be
served by registered or certified mail with a copy of the complaint filed in the
suit.
"(c) If
there is a settlement, compromise or release entered into by the parties in
claims against a person, other than the employer, the attorney general
representing the state treasurer shall be made a party in all such negotiations
for settlement, compromise or release. The attorney general and the director,
for purposes of facilitating compromise and settlement, may in a proper case
authorize acceptance by the state of less than the state treasurer's claim for
reimbursement. The proceeds of any judgment, settlement, compromise or release
are encumbered by a lien in favor of the state to the extent of the total amount
of the state treasurer's claim for reimbursement under this act. The lien shall
remain in effect until the proceeds have been distributed to the parties
entitled thereto in accordance with these provisions.
"(d) If
the injury causes the death of the employee, the rights and remedies in this
section inure to and the obligations are binding upon the personal
representative of the deceased employee for the benefit of his or her
dependents."
[¶10.] Appellant attacks the State's right to
recover worker's compensation under this statute on several grounds. First, she
argues that this statute, as applied to her case, conflicts with the Wrongful
Death Act provision shielding recovery from creditors when the deceased is
survived by a widow. Wyoming Statute 1-38-102 (June 1988 Repl.), dealing with
wrongful death actions, provides:
"(b) If
the deceased left a husband, wife, child, father or mother, no debt of the
deceased may be satisfied out of the proceeds of any judgment obtained in any
action brought under the provisions of this section."
Appellant
contends that since Mr. West left a wife when he died, no "debt" of his may be
satisfied out of the proceeds of her wrongful death settlement with Brent &
Wicklund. The Wyoming State Treasurer's claim for reimbursement of worker's
compensation benefits, she argues, represents such a "debt" of the
deceased.
[¶11.] The State responds that there is no
conflict because monies paid to the injured worker do not constitute "debts of
the decedent." We agree with the State that these two statutes can be harmonized
and that the reimbursement claim and lien are not barred by the Wrongful Death
Act.
[¶12.] Our rules for construing statutes are
well established.
"`If
the language of a statute is clear and unambiguous, we must abide by the plain
meaning of the statute, but where a statute is ambiguous, the court will resort
to general principles of statutory construction in an attempt to ascertain
legislative intent. Furthermore, it is a fundamental rule of statutory
interpretation that all portions of an act must be read in pari materia, and every word, clause,
and sentence must be construed so that no part is inoperative or superfluous.'"
Matter of Paternity of JRW, 814 P.2d 1256, 1262-63 (Wyo. 1991), quoting Deloges v. State ex rel. Worker's Comp.
Div., 750 P.2d 1329, 1331 (Wyo. 1988) (citations
omitted).
Furthermore,
"[l]egislative intent should be ascertained, as nearly as possible, from the
language of the statute viewed in the light of its object and purpose." Moncrief v. Harvey, 816 P.2d 97, 105 (Wyo. 1991). See also Allied-Signal, Inc. v. State Bd. of
Equalization, 813 P.2d 214, 219 (Wyo. 1991). Statutes relating to the same
subject are read together to ascertain legislative intent. Longfellow v. State, 803 P.2d 1383, 1387
(Wyo.
1991).
[¶13.] At issue is whether the claim and lien
for reimbursement can be included in the meaning of the phrase "no debt of the
deceased may be satisfied out of the proceeds of any judgment obtained [under
the Wrongful Death Act]." The Wrongful Death Act does not contain a definition
of "debt of the deceased," and we have located no case law defining that term.
However, we find the definition of "debt" contained in the probate code useful
because it deals with debts of a decedent under similar
circumstances.
[¶14.] Wyoming Statute 2-1-301(a)(ix) (July 1980
Repl.) defines "debt" for purposes of the probate code as follows: "`[d]ebts'
include liabilities of the decedent which
survive, whether arising in contract, tort or otherwise." (emphasis added)
As the State points out, the obligation for reimbursement of wrongful death
proceeds is not a liability of the decedent since it only comes into existence
after the decedent is dead and others
receive an award from a third party on account of his death. Furthermore, the
lien attaches only to the wrongful death recovery and not to other assets of the
decedent's estate. Thus, the State's claim for reimbursement cannot be
considered a "liabilit[y] [or debt] of
the decedent" under either the language of W.S. 1-38-102 or the probate code
definition. Neither the decedent nor his estate in general are liable for
repaying worker's compensation, and so it is not "his" debt. We therefore hold
that the wrongful death proceeds in this instance are not protected by the
wrongful death provision which shields them from "debts of the
decedent."
[¶15.] Appellant next argues that W.S. 27-12-104
does not apply to the "death benefit" portion of worker's compensation benefits
paid to Mr. West's estate because it was not "received by" the employee, Mr.
West, or paid "in his behalf." See
W.S. 27-12-104(a)(i). We agree with the State that the death benefit was paid on
Mr. West's behalf. When a covered worker dies, worker's compensation replaces
his salary by paying his dependents. This benefit is obviously designed to
replace income which the worker would have earned for his dependents had he been
alive.
[¶16.] Furthermore, the plain language of W.S.
27-12-104 shows a legislative intent to include the death benefit in the
reimbursement and lien provisions. Wyoming Statute 27-12-104(c) states that
"[t]he proceeds of any judgment, settlement, compromise or release are
encumbered by a lien in favor of the state to the extent of the total amount of
the state treasurer's claim for reimbursement under this act." (emphasis added)
Wyoming Statute 27-12-104(d), quoted above, clearly contemplates recovery in
cases where the worker has died:
"If the
injury causes the death of the employee, the rights and remedies in this section
inure to and the obligations are binding upon the personal representative of the
deceased employee for the benefit of his or her
dependents."
Reading
these statutes together, we reject appellant's contention that W.S. 27-12-104
does not apply to the death benefit.
[¶17.] Finally, appellant argues, since evidence
of the decedent's medical bills is not admissible into evidence in a wrongful
death suit, a jury will be unaware that these expenses will be deducted from its
verdict by worker's compensation recovery. Appellant argues this has the effect
of burdening a widow, who is limited to recovery for damages for "care, comfort
and society," with her deceased husband's medical bills, since their cost will
be deducted from her recovery. While this may be true, if there were no worker's
compensation, appellant would still be liable for her husband's medical bills,
or at least for the reasonable value of the services provided him. The Family
Expenses Doctrine, codified in our statutes at W.S. 20-1-201 (June 1987 Repl.),
states that
"[t]he
necessary expenses of the family and the education of the children are
chargeable upon the property of both husband and wife, or either of them, for
which they may be sued jointly or separately."
The
State merely seeks recoupment of what it has already paid out. Our
interpretation of the plain language of W.S. 27-12-104, allowing the State to
seek recoupment under these circumstances, is correct even though the surviving
spouse may not recover these expenses from a third party. Nor can we, in the
absence of unconstitutionality, simply disregard what the legislature has
provided in order to achieve a sought-after result.
[¶18.] What appellant really asks in this case
is for a double recovery. She wants compensation benefits from the State and a
third party tort recovery for the same loss. Appellant argues that the two
recoveries are not for the same loss, because W.S. 1-38-102(c) specifically
provides wrongful death damages for the survivor's loss of "probable future
companionship, society and comfort." Appellant thus attempts to distinguish
non-economic damages under the Wrongful Death Act from economic "damages" under
the Worker's Compensation Act. However, such a distinction is unjustified, since
the Wrongful Death Act allows recovery for both economic and non-economic
damages: "The court or jury, as the case may be, in every such action may award
such damages, pecuniary and exemplary, as shall be deemed fair and just." W.S.
1-38-102(c).
[¶19.] As we said in a slightly different
context in Stephenson v. Mitchell ex rel.
Workmen's Comp. Dep't, 569 P.2d 95, 99 (Wyo. 1977):
"`It is
equally elementary that the claimant should not be allowed to keep the entire
amount both of his compensation award and of his common-law damage recovery. The
obvious disposition of the matter is to give the employer [here, the State] so
much of the negligence recovery as is necessary to reimburse him for his
compensation outlay, and to give the employee the excess. This is fair to
everyone concerned: the employer [the State], who, in a fault sense, is neutral,
comes out even; the third person pays exactly the damages he would normally pay,
which is correct, since to reduce his burden because of the relation between the
employer and the employee would be a windfall to him which he has done nothing
to deserve; and the employee gets a fuller reimbursement for actual damages
sustained than is possible under the compensation system alone.'" (quoting A.
Larson, Workmen's Compensation Law §
71.20 at 14-2, 14-3 (1976).)
[¶20.] Interpreting a previous version of W.S.
27-12-104, we also said in Jackson v.
Wyoming State Treasurer ex rel. Workmen's Comp. Dep't, 521 P.2d 571, 573
(Wyo. 1974), that it.
"makes
clear the lawmakers' intent that an employee is not entitled to a double
recovery for injuries and provides that the industrial accident fund shall be
reimbursed for the total amount of all awards received by an employee * *
*."
[¶21.] Industrial accidents are a tragedy,
particularly those leading to loss of life. We are aware that no amount of money
can ever truly reimburse Mrs. West and her children for the loss of their
husband and father. However, our statute requires that the State be reimbursed
from wrongful death proceeds for worker's compensation it has paid. This
reimbursement is not a "debt of the decedent" so as to immunize the wrongful
death recovery from reimbursement. Although we are not unmindful of the loss
suffered by Mrs. West and her children, any change in our statutory arrangements
must come from the legislature.
[¶22.] As was said in Martinez v. Ashland Oil, Inc., 132
Wis.2d 11, 390 N.W.2d 72 (1986), in which the court interpreted a third party
reimbursement provision similar to our own:
"The
Worker's Compensation Act is a legislatively created substitute for the common
law rather than a supplement thereto. Moreover, worker's compensation is wholly
statutory and questions regarding public policy should be determined by the
legislature, not the courts. In addition, `worker's compensation laws constitute
an all-pervasive legislative scheme which attempts to effect a compromise
between the employer and the employee's competing interests. Worker's
compensation laws are economic regulations whereby the legislature has balanced
competing societal interests.'" Martinez 390 N.W.2d at 74 (citations omitted).
[¶23.] We now turn to appellant's second issue.
It concerns whether the State was required to file a creditor's claim with Mr.
West's estate. Wyoming Statute 2-7-201 (July 1980 Repl.) requires the personal
representative of a decedent's estate to publish notice to creditors.1 This notice informs creditors that
they must file notice of any claim against the estate with the clerk of court
within three months of the first date of publication or unless otherwise allowed
or paid the claim will be forever barred. Wyoming Statute 2-7-703(a) (July 1980
Repl.) similarly provides that "all claims whether due, not due or contingent,
shall be filed in duplicate with the clerk within the time limited in the notice
to creditors and any claim not so filed is barred forever." Wyoming Statute
2-7-703 is a "nonclaim statute." Such statutes bar creditors' claims for failure
to file within a time period fixed by notice in the probate proceeding. See Kuntz v. Kinne, 395 P.2d 286, 288
(Wyo. 1964).
There is no dispute that Mrs. West, as personal representative of her husband's
estate, properly published notice to creditors, or that the State failed to file
notice of claim.
[¶24.] Appellant argues that the State's claim
for reimbursement is a "claim" within the meaning of these statutes. Therefore,
appellant reasons, the State's failure to file a creditor's claim within the
stated time period means the State is "forever barred" from asserting its claim
for reimbursement against the wrongful death proceeds, now a part of the
decedent's estate. Proper resolution of appellant's contention requires that we
consider two sub-issues: (1) whether wrongful death proceeds are part of the
decedent's estate, so as to require creditors seeking recovery against them to
file a claim against the estate; and, if so, (2) whether the State's claim for
reimbursement constitutes a "claim" within the meaning of the probate
statutes.
[¶25.] We begin with a determination of whether
wrongful death proceeds are part of the decedent's estate. If they are not, then
the procedural bar of W.S. 2-7-703(a) cannot apply to an action for a debt
brought against them. Wyoming Statutes 2-7-703(a) and 2-7-201 deal only with
creditor claims against the decedent's
estate.
[¶26.] The State cites DeHerrera v. Herrera, 565 P.2d 479
(Wyo. 1977)
for the proposition that wrongful death recoveries do not become part of the
decedent's estate. DeHerrera
concerned the survival of an action for personal injuries brought by the
decedent prior to his death. The decedent had died from causes unrelated to the
injury complained of. We held that under the survival statute the decedent's
action for personal injuries could survive his death and be carried on by the
administrator of his estate. To explain our holding, we discussed the difference
between a wrongful death action and an action carried on under the survival
statute.
"The
amount recovered [in a wrongful death action] does not become a part of the
decedent's estate and is not liable for debts of the estate or subject to estate
administration. Jordan v. Delta Drilling Company, Wyo. 1975, 541 P.2d 39,
42.
"* * *
[T]he wrongful death statute creates a new cause of action for the benefit of
designated persons who have suffered the loss of a loved one and provider." DeHerrera, at 482.
[¶27.] The Jordan
case, alluded to in DeHerrera,
concerned the question of whether a decedent's illegitimate child could recover
damages for the wrongful death of his or her parent. In the course of answering
this question, we explained why wrongful death proceeds do not become a part of
the decedent's estate:
"The
Wyoming
statute authorizing wrongful death actions is part of the civil code of this
state and not a part of the probate code. The designation of an administrator is
no more than a statutory device to provide a party for a civil action to collect
damages and pay them over to the persons entitled. * * * The amount of recovery
does not become a part of the decedent's estate. Tuttle v. Short, 1930, 42
Wyo. 1, 18,
288 P. 524, 529, 70 A.L.R. 106, 112. This is true even though the administrator
or executor must bring the action. Bircher v. Foster, Wyo. 1963, 378 P.2d 901,
902." Jordan,
541 P.2d at 42.
[¶28.] DeHerrera and Jordan, were followed by Wetering v. Eisele, 682 P.2d 1055
(Wyo. 1984).
In Wetering, the issue was whether
the surviving brothers and sisters of the decedent could bring an action for
wrongful death. The 1973 amendment to what is now W.S. 1-38-102 did not identify
those persons for whose benefit a wrongful death action could be brought. We
concluded that those persons were identified in the statute on intestate
distribution.
[¶29.] There follows the court's pronouncement
that wrongful death recovery, although "treated" as part of the probate estate,
would be subject to "special rules as to distribution." Wetering, at 1061. Although these
"special rules" were not defined, it is clear from the context that they were
those provided in the intestacy statute as well as exemption from creditors'
claims as provided in the wrongful death statute. Thus, the nonclaim bar of W.S.
2-7-703 does not apply to the State's right to recovery of moneys which are not
a "debt of the decedent." Therefore, there is no requirement that the State file
a claim with the estate.
[¶30.] Since we have decided that the nonclaim
statute does not apply, it is unnecessary to consider the second subissue in
order to affirm judgment for the State on the "filing of claim" issue. However,
we do note that the chief case cited by appellant concerning the government's
obligation to conform to the nonclaim statute, State ex rel. State Board of Charities &
Reform v. Bower, 362 P.2d 814 (Wyo. 1961), reh. denied 363 P.2d 791 (1961), holds
that a governmental reimbursement claim made against the deceased's estate is subject
to the nonclaim statute. Since as discussed above in this case the claim was
against the wrongful death proceeds in particular rather than against the
decedent's estate in general, Bower
cannot be considered controlling precedent.
[¶31.] The order of the trial court is
affirmed.
FOOTNOTES
1 The version of this statute cited
here was declared unconstitutional by this court in Hanesworth v. Johnke, 783 P.2d 173
(Wyo. 1989),
because it failed to require adequate notice to claimants. Neither party raises
unconstitutionality as an issue in this case, and the record does not disclose
whether the State should have received or did receive notice beyond publication.
We stated in Hanesworth that our
determination of unconstitutionality would not apply retroactively to probate
proceedings finalized under the old publication system prior to April 19, 1988.
We do not have information in the record as to when probate of Mr. West's estate
was finalized. We do know that first publication was made on December 3, 1987,
and that the three-month period thus expired on March 3, 1988. Since
unconstitutionality is not raised and there is not an adequate record to pass on
it, we will not consider the question of whether the State's failure to file a
claim could be excused because of constitutionally-inadequate
notice.
Wyoming
Statute 2-7-205(a), effective February 24, 1989, has cured the unconstitutional
infirmity of 2-7-201. Hanesworth, at
176, n. 4.
LEIMBACK,
District Judge, dissenting.
[¶32.] I disagree with the majority on the issue
of whether wrongful death proceeds are part of the estate, so as to require
creditors to file a claim with the estate. The majority relies on DeHerrera v. Herrera, 565 P.2d 479
(Wyo. 1977)
for the proposition that wrongful death proceeds are not part of the decedent's
estate. This approach disregards Wetering
v. Eisele, 682 P.2d 1055 (Wyo. 1984)
(modified on other grounds Butler v.
Halstead by and through Colley, 770 P.2d 698 (Wyo. 1989)), in which we
said that under the current wrongful death statute:
The
only proper way to effectuate [the intent of the legislature] is to treat the
proceeds of the judgment [in a wrongful death action] as being subject to
administration as part of the probate estate, but with special rules as to
distribution.
This is
clearly a different result than that which pertained prior to 1973 [when the
wrongful death statute was amended] in which the judgment in a wrongful death
action did not become a part of the decedent's estate and was not subject to
debts or administration. DeHerrera v.
Herrera, supra. * * * We further must assume that the legislature did not
intend futile acts and that its amendment of the statute indicated some change
in the existing law was intended. DeHerrera v. Herrera,
supra.
Wetering, 682 P.2d at 1061 (citations
omitted).
[¶33.] The majority attempts to distinguish Wetering by emphasizing the language
that wrongful death recovery is subject to "`special rules as to distribution.'"
(Majority at 1275, quoting Wetering,
682 P.2d at 1061). It writes that "it is clear from the context [in Wetering] that they were those provided
in the intestacy statute as well as exemption from creditors' claims as provided
in the wrongful death statute." (Majority at 1275). The majority completely
ignores the language in Wetering to
the effect that the legislature intended to change the law regarding whether
wrongful death judgments should be subject to debts or administration. I read Wetering to mean simply that the
"special rules as to distribution" are these:
1. The
statute providing for intestate descent and distribution defines the class of
persons on whose behalf a wrongful death action may be brought. See W.S. 2-4-101
(Supp. 1991).
2. As
each person benefitted by the wrongful death action may prove his respective
damages, W.S. 1-38-102(c), the distribution of wrongful death proceeds will be
in accord with the amount of each beneficiary's proven damages rather than with
the intestate distribution formula prescribed by W.S.
2-4-101.
Unlike
the majority, I do not believe it is at all "clear from the context" that the
"special rules" in Wetering extend to
exemption from creditors' claims in the wrongful death
statute.
[¶34.] If one combines the majority's conclusion
that a lien for reimbursement of death benefits is not a "debt" of the decedent
with the language in Wetering
indicating that wrongful death judgments are part of the probate estate, the
logical conclusion is that the Worker's Compensation Division may assert a lien
for reimbursement against a wrongful death judgment. The remaining issue is
whether the Division is foreclosed from enforcing its lien because it failed to
file a claim against the estate. I submit that the Division is foreclosed from
collecting the debt from assets in the hands of decedent's personal
representative.
[¶35.] W.S. 2-7-703(a) (Supp. 1991) (as amended
to provide for notice to creditors as mandated by Tulsa Professional Collection Services, Inc.
v. Pope, 485 U.S. 478, 108 S. Ct. 1340, 99 L. Ed. 2d 565 (1988)) states in
part, "all claims whether due, not due or contingent, shall be filed in
duplicate with the clerk within the time limited in the notice to creditors and
any claim not so filed is barred forever." The legislature has mandatorily
barred creditors' claims against the estate of a decedent probated in this
state, unless such claims are presented and filed within the definitely limited
time prescribed by the statutes. Matter
of Estate of Peterson, 75 Wyo. 416, 296 P.2d 504, 505 (1956). Thus, a
probate court's order decreeing that the personal representative pay the claim
out of the funds of the estate is an order made in excess of its jurisdiction.
Id.
[¶36.] The case of State ex rel. State Board of Charities &
Reform v. Bower, 362 P.2d 814, reh'g
denied, 363 P.2d 791 (Wyo. 1961), is particularly relevant. In Bower, the state filed a claim against
the decedent's estate to recover costs for her care in the WyomingStateHospital. The state filed its claim well
after the time limit specified in the statute for filing of creditors' claims.
We held that, regardless whether the estate was required to reimburse the state
for the decedent's care, the state's claim was time-barred. We
noted:
The
question presented here * * * is whether the liability for [the cost of care at
the State Hospital] may be satisfied from the assets of the deceased without the
State's observing the procedural conditions precedent which have been imposed by
the State's own legislature. Had it been the legislative purpose to exempt the
State from compliance with those precedent procedures, it might easily have done
so. The failure to except the State from the barring provision of the statute
makes necessary the plain implication that the law-making arm of the State's
government did not intend that the State should be relieved of the requirement.
* * * If the legislature did not see fit to say the door should be left open
indefinitely for the State to come forward with its legitimate claim against the
estate, it would be highly improper for this court to read into its statute an
exception which the enactment did not see fit to incorporate within
it.
Id. at 822-23.
The majority attempts to avoid the clear import of Bower by holding that a wrongful death
judgment is not part of the decedent's estate. But once we accept the
proposition in Wetering that such a
judgment is part of the estate, Bower
teaches that the state, like all other creditors of the estate, must honor the
requirements of the Wyoming Statutes.
[¶37.] "[T]he object of probate proceedings in
connection with estates of deceased persons is to wind up the affairs of a
decedent in an orderly manner and to make distribution of assets remaining to
persons entitled as speedily as is practicable." Lo Sasso v. Braun, 386 P.2d 630, 632
(Wyo. 1963).
Permitting creditors to file claims years after the decedent's death frustrates
this object. See Bower, 362 P.2d at
822. Thus, Wyoming has imposed the limitation on the time
within which a creditor may assert claims against an estate. The majority's
result would contravene both the object of winding up a decedent's affairs
rapidly and the clear intent of the legislature.
[¶38.] The Worker's Compensation Division may
not be entirely foreclosed from collecting on its lien. It is unclear from the
record whether the Division received proper notice of the probate of decedent's
estate. The Division has conceded that it had notice. Yet if it was not given
proper notice, the failure of notice would constitute a denial of due process.
See Tulsa Professional Collection
Services, Inc., 485 U.S. 478, 108 S. Ct. 1340. "[S]tate
action affecting property must generally be accompanied by notification of that
action[.]" Id. at 484, 108 S. Ct. at 1344 (citing Mullane v. Central Hanover Bank & Trust
Co., 339 U.S. 306, 70 S. Ct. 652, 94 L. Ed. 865
(1950)). Probate of an estate is state action for purposes of the Fourteenth
Amendment Due Process Clause. Tulsa
Professional Collection Services, Inc., 485 U.S. at 487, 108 S. Ct. at 1345-46. A statute which bars untimely-filed claims affects property.
Id. at 488, 108 S. Ct. at 1346. Thus, a creditor must be given notice by mail or other means to
ensure actual notice. Id. at 489-91,
108 S. Ct. at 1346-48.
[¶39.] Wyoming has recognized the need for notice
articulated in Tulsa Professional
Collection Services, Inc. The legislature has amended the Probate Code to
provide for the type of notice Tulsa
Professional Collection Services, Inc. requires. W.S. 2-7-205 and 2-7-703
(Supp. 1991). We have held that Tulsa
Professional Collection Services, Inc. does not apply retroactively to
probate proceedings rendered final before that case was decided on April 19,
1988. Hanesworth v. Johnke, 783 P.2d 173, 177 (Wyo.
1989). A probate proceeding becomes final when the court issues the decree of
distribution. Id. at 177-78.
However, the probate of West's estate was not yet final as of April 19, 1988.
Our concern in Hanesworth was that
retroactive application would disturb many longsettled property rights. Since
the rights arising out of the probate of decedent's estate in this case were
still unsettled at the time Tulsa
Professional Collection Services, Inc. was decided, our fears in Hanesworth would not arise here. Thus,
if the Worker's Compensation Division did not receive "actual notice" within the
meaning of Tulsa Professional Collection
Services, Inc. and Mullane, then
termination of its claim would violate due process, and failure to file in a
timely manner would not foreclose the Division's claim.
[¶40.] Even if the Division received proper
notice, it may still have recourse. Statutes providing that creditors timely
file claims against a decedent's estate or be forever barred do not invalidate
debts which are otherwise valid and subsisting. Estate of Peterson, 296 P.2d at 505.
Such statutes merely bar the collection or payment of the debt from assets
subject to the probate estate. Id. A claim
which has been forever barred for failure to timely file may be required to be
paid out of other assets not within the decedent's estate, such as out-of-state
assets. Id. Thus, the
Division may still recover the death benefits paid to decedent's family if
decedent had assets outside of Wyoming, and the policy against double
recovery may still be effectuated. However, the Division must look elsewhere
than to the judgment for wrongful death.
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