NO. 83-142

INTHESUPREMECOURTOF THE STATEOF MONTANA 1984

INTHE MATTEROF THEESTATEOF

WALTERL. PEGG,Deceased.

Appeal from: DistrictCourtof theFou~teenth Judicial District, Inand for theCounty ofMusselshell HonorableNatAllen presiding. Counsel of Record:
ForAppellant: JockB. West argued,Billings,Montana
ForRespondent: ElmerJ. Dolveand RussellK. Fillner,Billinas,Montana RussellK. Fillnerargued, Billings, Montana

Submitted:December 8. 198g Decided:April 3, 1984

Filed: 

### $3 ( ;j&qMr. Justice L.C. Gulbrandson delivered the Opinion of the Court.

Thisappeal stems fromordersof theDistrictCourtof theFourteenthJudicialCircuit, Musselshell County, denying

amotion toremove thepersonal representativeof theestate of Walter L. Pegg and granting a motion to approve settlement of a wrongful death action pursued by the same personal representative. For the reasons stated below, we affirm inpart, reverse inpart, and remand thecasetothe District Court of the Thirteenth Judicial District, YellowstoneCounty, forfurtherproceedings. Walter L. Pegg was killed in a helicopter crash approximately twenty miles southeast of Williston, North Dakota, on May 1, 1981. According tothedeath certificate filed with the North Dakota Department of Health, the interval between the crash and Walter Pegg's death was seconds. There were no survivors among the other passengers, including thepilot. Atthetimeof hisdeath, WalterPeggwas domiciled in Montana and was married tohis third wife, Virginia Fidel Pegg In addition to Virginia, Walter was survived by children from his previous marriages: Sean and Tom, the issueof Walter and hisfirstwife, Karen Pegg Symonds, and Ian, the issue of Walter and his second wife, Carol Pegg. Tom resided with his father and Virginia briefly in 1979, but now liveswith hismother and other brother inFlorida. Ianand hismother resideinOregon. Walter died intestate. Virginia sought appointmentas thepersonal representative of his estate, and an order to that effectwas granted on April 28, 1982, by theDistrictCourt of the Fourteenth Judicial District, Musselshell County. Notice of her appointment was sent to allpotential heirs. At approximately the same time, Virginia was involved in negotiations with the insurance company of Blain Helicopters, the owner of the aircraft in which her husband

was killed. She also filed awrongful death action against Blain in April of 1982, in the District Court of the Thirteenth Judicial District,Yellowstone County. Although negotiations with the insurance company were proceeding successfully, the complaint was filed within the two-year statute of limitations to protect the interests of Walter

### 's heirs in the event negotiationsproved fruitless. By late 1982, Virginia received an offer from the company to settle the wrongful death claim for $450,000, under the conditions thata courtapprove the settlementand that thewrongful death actionbedismissed. Virginia filed

a petition with the District Court of the Fourteenth Judicial District to have the settlement approved and the other actiondismissed. In the petition, Virginia proposed that $100,000 of the settlement be distributed among the children in equal shares undiminished by attorney's fees, court costs and expenses. The remaining $350,000 would be allocated to Virginia, and shewould be responsible for her

own attorney's fees, court costs and expenses. During the negotiations, the ex-wives, asguardiansand next friends of their children, were represented by attorney Jock West. Virginia was represented by attorneys Russell Fillner and Elmer Dolve. The ex-wives were dissatisfied with the proposed distribution, and decided to contest it. Thehearing on theproposed settlementhad been set for December 28th, but one day before the hearing, the attorney for the ex-wives filed other petitions with the court requesting that Virginia be removed as personal representative. Onepetition was filed

on behalf of Karen's children, and the other on behalf of Carol's child. In the petitions, the ex-wives maintained that Virginia had intentionally misrepresented material facts and had engaged in fraudulent acts with respect to settlement of the wrongful death claim. Specifically, the ex-wives contended that Virginia (1) had never married Walter, and therefore could not serve as personal representative; (2) had assisted in a fraudulent divorce action filed by Walter against his first wife, Karen, in 1979;and (3)had deceitfully refused to filea survivorship claim against Blain Helicopters because she allegedly had

more to gain financially fromawrongful death suit. On the

same day these petitions were filed, the ex-wives' attorney filed a wrongful death action against Blain Helicopters on behalf of the children. This suit was filed in the Thirteenth JudicialDistrict,Yellowstone County. A hearing on the petitions to remove was held on December 30, 1982. Counsel for Virginia waived notice requirements, and the ex-wives' attorney was allowed to press arguments for Virginia's removal. The first contention--that Virginia had never married Walter--proved false, as Virginia's counsel produced a marriage certificate indicating that the couple had been married in Las Vegas in February of 1980. Counsel for the ex-wives then concentrated his attention on the remaining grounds. Counsel insisted that, in a 1979 divorce action filed byWalter against Karen, Walter claimed that no children had been born of the marriage. Of course, the couple had two children,and the ex-wives contended that Virginiawas aware of Walter's apparent misrepresentation to the court. The only witness to testify about these matters was Virginia. She testified that she knew that Tom and Sean were Walter's children by a former marriage, and that Tom had lived with them in Montana for a time, but that she did not know they

were the children ofKaren. In fact,she testified that she knewnothing about Karen Pegg or thedivorce action filed by Walter againstKaren in 1979. Counsel for the ex-wives also attempted to impute fraud on Virginia for failing to file a survivorship claim against the helicopter company. Any recovery from a survivorship action or related settlement would becomepart of the decedent's estate, and therefore pass toVirginia and the minor children under the intestacy statutes, with Virginia receiving one third of the settlement and the children the remainder. See Section 72-2-202(2), MCA. Because the proceeds of awrongful death recoverywould not become part of the estate, and could therefore he allocated differently, Virginia was allegedly in a position to increase unfairly her portion of any settlement from the insurance company. There was no evidence produced in support of this claim other than the coincidence that Virginia could, by law, benefit more from a wrongful death recovery. Counsel for Virginia responded that a survivorship action had been contemplated,but had not been pursued for fear that Walter's instantaneous death would prohibit recovery. Thewrongful death theory of relief wasdeemed amore effective course of action. The District Court concluded that there was no evidence to support removal of Virginia as personal representative, and denied the ex-wives' petitions. Orders to that effect were signed on the day of the hearing, December 30, 1982, and notices of entry of order were entered and served that same day. The hearing on the proposed settlement offerwas reset forJanuary 10,1983. At the January 10th hearing, the attorney for the ex-wives again filed a petition for removal of Virginia as the personal representative. This petition alleged that another pleading had been simultaneously filed in the court that had entertained Walter's divorce action in 1979. This petition alleged that service upon Karen Pegg Symonds had been improper,and that the finaldecree in that action was void. If the marriage of Karen and Walter was not dissolved, then the marriage of Virginia and Walter was void. Thus, Virginia could not serve as personal representative. The District Court orally denied the ex-wives petitions. In a memorandum issued after the hearing, the court indicated that the petitions were "frivolous [and] brought for purpose of delay and as an impermissible collateral attack on a final decree in another court." In the court's view, the ex-wives and their counsel were aware of all the facts necessary to support the latest petition during the first hearing; the doctrine of res judicata thus barred any consideration of these grounds. Moreover, the divorce decree could not be shown to be void on its face. Thus, collateralattack was impermissible.After the petition was denied, the court proceeded to hear testimony concerning the proposed settlement. Counsel for the ex-wives refused to participate in this portion of the hearing. His position was that the court, acting as a court of probate, had no jurisdiction over settlement of a wrongful death claim. To take part in the hearings would have been, in counsel's view, recognition that the courthad jurisdiction over the parties and the subjectmatter. The hearing proceeded without involvement of the ex-wives or their attorney. The court adopted the proposed distribution of the wrongful death recovery and issued an order to that effect. Counsel for the ex-wives renewed his objection to jurisdiction for the record. On February 

### 7, 1983, counsel for the ex-wives filed a notice of appeal "from the final orders entered by the

[trial court] on the 10th of January, 1983 

# . . .", including the denial of the petitions to removeVirginia as personal representative. For the purposes of this opinion, the ex-wiveswill be referred to as appellants, andVirginia

as the respondent. The issues presented for review are:

(1)Whether the District Court erred by denying the motions to remove the personal representative? (2)Whether the District Court, acting as a court of probate, lacked jurisdiction to approve settlement of a wrongful death claim filedby thepersonal representative in anotherMontana judicial district? Before proceeding to these issues,we note and dispose of another argument, first raised in appellants' reply brief, that all of the trial court's orders of January 10are void because the trial judge, who officially retired before that date, could not under Section 19-5-103, MCA, issue any final orders or judgments. This jurisdictional matter has been addressed in a recent decision, State ex rel. Wilcox and Bradley v. District Court, No. 83-391. Following that decision here, we conclude that the trial judge had authority to perform all functions of an active district judge, including the issuance of final orders and judgments. THEMOTION TOREMOVETHEPERSONAL REPRESENTATIVE Section 72-1-209, MCA, provides that appellate review of all probate matters "is governed by the statutes and rules applicable to the appeals to the supremecourt." Rule l(c), M.R.App.Civ.P. provides that a party may appeal from "a judgment or order granting or refusing to grant, revoking

or refusing to revoke, letters testamentary, or of administration

# ..

# ." In issuing the December 30th orders, the District Court effectively refused to revoke respondent's statusas administrator ofWalter Pegg's estate and letters testamentary granted to her. The orders were final and therefore appealable. This conclusion is consistentwith Inre Davis' Estate (1891),11Mont. 196, 28 P. 645, wherein this Court held that an order denying a petition to vacate an order appointing an administrator of

an estate isappealable. The conclusion that the District Court's December 30th orders were final and appealable can also be deduced from reference to the laws of sister states. The language of Rule l(c), M.R.App.Civ.P., isvirtually identical to that used in Cal.Prob.Code Section 1240(a) (West 1981), whichprovides that "[aln appeal may be taken fromanorder or the refusal to make anorder

# . . .[g]ranting or revoking letters testamentary or of administration." An order refusing to revoke letters testamentary is in effect an order denying a petition to remove an executor or personal representative. In re CuneolsEstate (1963), 214 Cal.App.2d 381, 29 Cal.Rptr. 497. Such an order isdeemed finaland conclusive and is therefore appealable. In re ExtersteinlsEstate (1934), 2 Cal.2d 13, 38 P.2d 151. Even those states like Colorado, which hold that orders of a probate court are normally interlocutory and therefore not appealable, recognize that, where the petitioner is attempting to disqualify the personal representative, an order of the court granting or denying the petition is considered final and appealable. See, e.g., OINeillv. Irwin (1966), 160 Colo. 99,414P.2d 122. Because the December 30th orders were final and appealable, appellants had thirty days from the notice of entry of the orders to file an appeal. Rule 5, P4.R.App.Civ.P. Appellants did not follow this procedure. Instead, they simply filed another petition for removal immediately before the January 10th hearing scheduled for arguments on the proposed settlement of the wrongful death claim and apportionment of the proceeds thereof. As indicated earlier, the District Court summarily denied this petition, concluding that any further consideration of appellants1arguments was barred by,among other things, the doctrine of res judicata. Appellants1 notice of appeal of all of the orders made on January loth, including the one denying the new petition, was entered on February 2, 1983,thirty-four days after theDecember 30th orders were issued,

or four days beyond the period prescribed by the rules for filing notice of appeal. Appellants apparantly believed that by raising "new grounds" for removal on January loth, i.e., that Walter's marriage toVirginia wasvoid because of an improperdivorce action involving Walter and his second wife, they could somehow perfect an appeal from an adverse ruling by the trial court regardless of any failure to file a timely appeal from the December 30th orders. As the court noted, however, appellants were in possession of all the facts which possibly would have supported the Janua,ry 10th petition at the time the earlier petitions were considered and denied. It iswell settled that a judgment or order is conclusive as to all matters which could have been litigated under the issues raised by the original pleadings. See Mondakota v. Reed (D.Mont. 1965), 244 F.Supp. 327, 330; Sherlock v. Greaves (1938), 106 Mont. 206, 214, 76 P.2d 87,90. Appellants did not even offer an argument that the failure to raise the marital status question could be excused for reasons of inadvertance, excusable neglect, or newly discovered evidence. Under these circumstances, the appellants' new petition had all the appearances of an unjustified delaying tactic. Appellants shouldhavepressed their appeal immediately after the issuance of the December 30th orders. Because they did not, we cannot, under these facts, reach themerits of appellants' arguments in support of removal of thepersonal representative. THEDISTRICTCOURT'S JURISDICTION OVERTHEWRONGFUL DEATH CLAIMThere isno question that this portion of the appeal is properly before this Court, as appellants' notice of appeal unquestionably protects review of the settlement issue. We therefore consider the merits of appellants' argument. The personal representative of the decedent clearly has a prior right to pursue a wrongful death action on behalf of the heirs, in order to avoid the diseconomies and confusion caused by a plethora of lawsuits. State ex rel. Carroll v. District Court (1961), 139 Mont. 367, 364 P.2d 739. This rule was recently reaffirmed in State ex rel. Palmer v. District Court (Mont. 1980), 619 P.2d 1201, 38 St.Rep. 1876. Thus, respondent was within her rights to pursue thewrongful death action against Blain Helicopters. At stake,however, is the disposition of the settlement of that claim. In Swanson v. Champion International Corp., (Mont. 1982), 646 P.2d 1166, 1169, 39 St.Rep. 639, 642,we emphasized that, while the proceeds of any survivorship recovery or settlement belong to the decedent's estate, the proceeds of any wrongful death recovery or settlement are personal to the heirs and are not part of the decedent's estate. From this,appellants infer that the trial court in which the claimwas filed,and not the court considering the probate of the decedent's estate, has jurisdiction over approval of any proposed distribution of the recovery or settlement. Appellant notes references in Swanson, supra, to the "trial court" allocating the money damages resulting from a wrongful death award, 646P.2d at 1171, 39 St.Rep. at 644. Carroll, supra, can also be fairly read to support appellants' inference. 139Mont. at 372, 364P.2d at 741-2(reference to district court hearing the wrongful death action and that court's duty to allocate amount of recovery). Notwithstanding the reasonableness of these observations, more is required to support appellantst position than dicta and inferences arising therefrom. A proper resolution of this portion of the appeal requires a historical analysis of the wrongful death cause of action and its subsequent construction by the courts. Most wrongful death statutes are patterned after the original English law, Lord Campbell's Act, 1846, 9 & 10 Vict., ch. 93. The Act created a claim for relief for the heirs of an individual whose death was the result of wrong£ul action or neglect, with any damages obtained being personal to those heirs. Montana adopted the Act in 1871 with onlyminor changes inwording. 1871Mont.Terr.Laws 61. A streamlined version of the Act, patterned after Cal.Civ.Proc.Code Section 377,replaced theoriginal version six years later. 1877 Mont.Terr.Laws, Code of Civil Procedure,Section 14at 42. The streamlined statute,which has remained virtually unchanged since 1877, and is now enumerated Section 27-1-513, MCA, does not specify whether the estateor theheirs directly benefit from any recovery. Any uncertainty as to whether the proceeds of any recovery or settlement are personal to the heirs has been settled by courts in other jurisdictions. In In re Riccomits Estate (1921), 185 Cal. 458, 197 P. 97, the California Supreme Court construed Cal. Civ.Proc.Code, Section 377, which then contained the same language as now appears in Section 27-1-513,MCA. The California courtheld that:"It iswell settled that the action authorized by the section isone solely for the benefit of the heirs by which theymay be compensated for thepecuniary loss suffered by them by reason of the loss of their relatives. Themoney recovered constitutes no part of the estate of the deceased, and where the action is brought or the money recovered by the personal representative of the deceased, such personal representative is acting solely as a statutory trustee for the benefit of the heirs on account of whom the recovery is had." (Emphasis added.) 185Cal. at 460-61, 197P. at 98. Furthermore, because the proceeds were not part of the estate,a lower court, sitting in its capacityasa courtof probate, had no jurisdiction over those proceeds of their distribution. 185Cal. at 463-64, 197P. at 99. Courts in other states having some version of Lord Campbell's act on their books have adhered to the same course of reasoningand have concluded that separate probate courts or district courts acting as probate courts lack jurisdiction to approve settlement of, or allocate the proceeds of, wrongful death claims. See, e.g., In re Estate (1965), 2 Ariz.App. 155, 406 P.2d 873, fii

### il' 'marl$3 reaff'd as modified, 2 Ariz.App. 338, 409 P.2d 54; In re Mayer's Estate (1909), 106 Minn. 484, 119N.W. 217; Aho v. Republic Iron & Steel Co. (1908), 104 Minn. 322, 116 N.W. 590; Ellen v. Arthur (1936),178S.C. 490,183S.E. 306. reached the opposite conclusion, but these decisions are distinguishable, as the wrongful death statutes construed in those cases containexpress provisions requiring that theproceeds of any recoveryor settlementbe allocated directly to the decedents estate, e.g., .&eeqh v.

I 

# K-& City of Bridgeport (1982), Conn. 

## , 444 A.2d 225, or according to intestacy statutes, e.g., Holmes v. Price(1960), 186Kan. 623,352P.2d 5. Washington has construed its wrongful death statute, which is essentially similar to Montana's, as requiring apportionment of proceeds by a probate court. HansRnv. StimsonMill. Co (1936),195Wash. e 621, 81 P.2d 855. This opinion, however, is of dubious value. It is not clear what authority theWashington court relies on for its holding. Strangely enough, that portion of the opinion contains a reference to Riccomi's Estate, supra,which held otherwise. See Hansen, 195Wash. 621, 81 P.2d at 856. And, the Hanson opinion has been criticized recentlyby some members of theWashington high court as an improper holding. See, e.g., Wood v. Dunlop (1974), 83 Wash.2d. 719, 521 P.2d 1177, 1180-81 (Finley, J., concurring). On the basis of the analysis above, it would appear that the district court in the immediate case exceeded the bounds of its jurisdictionand shouldbe reversed. Itwould be inappropriate, however, to draw that conclusion immediately. None of the cases which support appellants' position clearly articulate an unambiguous rationale for denying aprobate court the authority to apportion proceeds of a wrongful death recovery. Possibly, the rationalemay lie in preserving some distinct jurisdictional differences between separate courts. If so, it is unclear whether this distinction has been carried over into modern courts. Respondent makes a reasoned argument that theprovisions of theUniform Probate Code,asadopted inMontana, contemplate allowing a district court, sitting in probate, to assume jurisdictionof the settlementof awrongful death claim for

reasons of judicial economy. Specifically, respondentrelies upon Section 72-1-202(2), MCA, (Unif. Probate Code Section 1-302), which gives the court authority "to make orders, judgments, and decrees and take all other action necessary and proper to administer justice in thematters which comebefore it." (Emphasis added.) Respondent also cites Section 72-3-605, MCA (Unif. Probate Code Section 3-704), which allows the personal representative to "invoke the jurisdiction of the court, in proceedings authorized by this code,to resolve questions concerning the estate or its administration." Finally, respondent notes that Section 72-1-102, MCA (Unif.Probate Code Section 1-102) requires a liberal construction of all provisions of the probate law. From these, respondentargues that shewas actingwithinher authority to submither proposed settlement to the District Court supervisingher administration of the estate, and that the court was in turn authorized to consider the settlement offer and apportion the proceeds among theheirs. Respondent's construction of the probate laws admittedly possesses a certain logic. Yet no other state that has adopted these provisions of the Uniform Probate Code has construed them in thedirection urged by respondent and followedby thedistrict court. SeeAnnot., Unif. Prob. Code Sections 1-102, 1-302, 3-704, 8 U.L.A. 24, 38, 321

(1983) (annotations of cases construing code sections in uniform code states). Moreover, the code was not designed to replace all principles ofprobate law in effectprior to adoption of the code. Indeed, Section 72-1-104, MCA, provides that 

### "[u] nless displaced by the particular provisions of this code, the principles of law and equity supplement its provisions." There is no provision in thecode specifically authorizing a probate court to treat the proceeds of a wrongful death settlement or recovery aspart of a decedent's estate and hence authorizing the court to allocate theproceeds. Arguably, then, the traditional rule enunciated by the California court and other state courts still applies notwithstanding the provisions of Sections 72-1-202(2) and 72-3-605. Similarly, a fair readingof thepreviously cited code sections in light of the traditional rule suggests that they cannot be construed to reach a wrongful death award. Section 72-1-202(2) is preceeded by language that aprobate court has subject matter jurisdiction over estates of decedents. See Section 72-1-202(1)(a), MCA. Section 72-3-605 only authorizes the personal representative to invoke the probate court's jurisdiction to resolvematters pertaining to the decedent's estate. Because the proceeds of the wrongful death recovery or settlement are not considered part of the estate under the traditional rule, these sections of the probate code cannotbe relied upon to vest the court with jurisdiction. In summary, it is possible that the drafters of the uniform code never contemplated superseding the traditional rule in the way suggested by respondent. The law of wrongful death and the law of probate have developed separately through the years, and while the reasons for requiring separate treatment of the damages obtained in a wrongful death action have not always been clearly expressed, it is still uncertain whether this separate treatment should be abolished. Obviously, if both the probate and wrongful death actions had been filed in thesame judicial district, the court would have had no legal difficulty in asserting jurisdiction over both proceedings, although the court in Riccomi's Estate, supra, also held that, while one court could assume jurisdiction over both actions, it would have to handle them separately. 185 Cal. at 464,197P. at 99. See also 55Cal.Jur 2dWrongful Death Section 31,at 428. Here,where the two actionswere filed in different judicial districts, the district court acting in probate undoubtedly exercised jurisdiction not intended by the traditional rule when it assumed authority over the settlement offer, approved it,and then ordered dismissal of thepersonal representative's wrongful death action filed in the other judicialdistrict. In concluding that the district court exceeded its jurisdiction,we arenot ignoring the potential economies of allowing a district court acting in probate to assume the task of settling a related matter such as a wrongful death claim filed in another judicial district. Asnoted earlier, however, the decision to grant district courts that authority is one made by legislatures. See 

## , supra; Holmes, supra. We leave it to the Montana legislature to decide whether district courts, acting in their probate jurisdiction, should have some kind of authority over wrongful death claims filed in other judicialdistricts. JUDGMENT The order of the District Court denying appellants' motion to remove the personal representative is affirmed. The order of the same court, dated January 10, 1983, approving settlement of the claim and apportioning the proceeds, is vacated. The orders of the same court, datedFebruary 2,1983, authorizing thepersonal representative to dismiss appellants' wrongful death action and to sign releases on behalf of the natural mothers and/or guardians of the minor children are likewise vacated. Civil Action DV-82-858, the wrongful death action filed by the personal representative in Yellowstone County, is reinstated. Civil Action DV-82-2287, the wrongful death action filed by appellants in Yellowstone County, is dismissed. The cause now on appeal is remanded to the District Court of the Thirteenth Judicial District, Yellowstone County, for proceedings on thewrongful death settlement.

We concur:

Mr. Justice DanielJ. Sheadissents inpart andwill file

awritten dissent inpart later.