Title: Hamilton v. Welsh
Citation: 2023 OK 103
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: October 24, 2023

Hamilton v. Welsh Annotate this Case Justia Opinion Summary The parents of Elliott Williams created their individual wills and joint trust after Elliott died. A wrongful death lawsuit was filed on Elliott's behalf, and the Williamses were statutory beneficiaries to proceeds from the lawsuit. Before they received any such proceeds, they attempted to transfer them into their trust for estate planning purposes. Both parents subsequently died before the proceeds were determined or distributed. The petitioner, the personal representative of Elliott's mother's estate, then sought to have Elliott's mother's share judicially determined to belong in the trust. The trial court determined they belonged in the trust. The personal representative of the father's estate appealed, and the Court of Civil Appeals affirmed. In an issue of first impression, the Oklahoma Supreme Court considered whether proceeds from a wrongful death case could be transferred into a trust before they are obtained by the trust settlor. The Court held that they can, and if they were, they belonged in the trust. Read more Want to stay in the know about new opinions from the Oklahoma Supreme Court? Sign up for free summaries delivered directly to your inbox. Learn More › You already receive new opinion summaries from Oklahoma Supreme Court. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here . HAMILTON v. WELSH 2023 OK 103 Case Number: 119694 Decided: 10/24/2023 THE SUPREME COURT OF THE STATE OF OKLAHOMA NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. IN THE MATTER OF THE ESTATE OF KATHA MAE WILLIAMS, KIMBERLY HAMILTON, as Personal Representative of the ESTATE OF KATHA MAE WILLIAMS and as Trustee of THE WILLIAMS FAMILY TRUST DATED THE 28TH DAY OF MAY 2014, Petitioner/Appellee/Respondent, v. CATHERINE Z. WELSH, as Personal Representative of the ESTATE OF EARL WILLIAMS, JR., Respondent/Appellant/Petitioner. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION III HONORABLE KURT G. GLASSCO, TRIAL JUDGE ¶0 The parents of Elliott Williams created their individual wills and joint trust after Elliott died. A wrongful death lawsuit was filed on Elliott's behalf, and the Williamses were statutory beneficiaries to proceeds from the lawsuit. Before they received any such proceeds, they attempted to transfer them into their trust for estate planning purposes. Both parents subsequently died before the proceeds were determined or distributed. The petitioner, the personal representative of Elliott's mother's estate, then sought to have Elliott's mother's share judicially determined to belong in the trust. The trial court determined they belonged in the trust. The personal representative of the father's estate appealed, and the Court of Civil Appeals affirmed. We hold that the proceeds from a wrongful death lawsuit can be transferred into a trust before they are obtained by the trust settlor, and if they are, they belong in the trust. COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT AFFIRMED. Catherine Z. Welsh, Jim C. McGough, Tulsa, Oklahoma, for Respondent/Appellant/Petitioner. George M. Miles, Maureen M. Johnson, Tulsa, Oklahoma, for Petitioner/Appellee/Respondent.1 KAUGER, J.: ¶1 The first impression question presented is whether proceeds from a wrongful death cause can be transferred into a trust before they are obtained by the trust settlor. We hold that they can, and if they are, they belong in the trust. FACTS/PROCEDURAL HISTORY ¶2 This cause concerns a lengthy, convoluted court battle over the estate of Katha Williams (Katha/wife) and the distribution of her interest of $1,178,157.44 from a wrongful death lawsuit involving her son, Elliott Williams (Elliott). However, the facts leading up to this controversy are also interconnected with her husband Earl Williams's (Earl/husband, collectively the Williamses) probate, and the family's trust, and their son Elliott's probate and wrongful death lawsuit. ¶3 The probates have not been consolidated, but some factual information about the interconnections is helpful to set forth the facts, timeline, and procedural history of this cause. To this degree, we take judicial notice of those proceedings.2 However, taking such judicial notice is not meant, in any way, to supplant the rule that the record on appeal consists of only those materials which were before the trial court at the time of the decision appealed, unless otherwise ordered by a court.3 ¶4 The Williamses' son, Elliott, died on October 27, 2011, after being arrested by Owasso police for causing a disturbance. Once in jail, he became paralyzed from injuring his neck and died without receiving any mental health or medical treatment.4 He left behind a surviving wife, but no children as heirs. Elliott's probate (PB-2011-724) was initially filed November 7, 2011, in the Tulsa County District Court. As a result of his death, a wrongful death action was also filed the same day in the United States District Court for the Northern District of Oklahoma (No. 11-CV-720-JEDC-PJC) against the Sheriff of Tulsa County. Pursuant to Oklahoma's wrongful death statute, the wrongful death action is filed by the decedent's personal representative.5 Damages, when the decedent has a surviving spouse, no children, and surviving parents are distributed to the spouse and parents as provided by 84 O.S. 2021 §213.6 ¶5 On May 28, 2014, the Williamses, established the Williams Family Trust together, and executed individual wills. Their wills, in identical provisions, left each of their estates to the Williams Living Trust.7 Each will also listed their heirs to include, their spouse, eight living adult children, and their deceased son, Elliott.8 ¶6 Katha Willaims died on July 24, 2014. On March 22, 2017, final judgment was entered in Elliott's wrongful death lawsuit in accordance with a jury verdict. The jury awarded $10 million in compensatory damages and $250,000.00 in punitive damages. Post judgment motions were all denied by March 31, 2018, and the defendants appealed to the Tenth Circuit Court of Appeals. ¶7 On March 23, 2017, the Williamses' daughter, Kimberly A. Hamilton (Hamilton) filed Katha's probate as personal representative in the District Court of Tulsa County Oklahoma (PB-2017-231), with a copy of Katha's will attached.9 The trial court admitted the will to probate and issued letters testamentary on June 13, 2018, and appointed Hamilton the personal representative. On August 20, 2019, the Tenth Circuit affirmed in part and reversed in part the wrongful death judgement. It affirmed the district court on all grounds, with the exception of the denial of the Sheriff's motion for a set off. On December 2, 2019, the parties settled, disclosing the settlement for $10 million plus post-judgment interest at 4.75% per annum, with an agreed judgment against the Tulsa County Sheriff. ¶8 The record is unclear, but it appears that at some point in 2017, Katha's husband, Earl Williams, was placed under a guardianship in the Tulsa County District Court (PG-2017-141).10 He died on August 31, 2019, and Hamilton, as personal representative of her father's estate, filed his probate (PB-2018-879) on October 9, 2019, in the District Court of Tulsa County. A copy of his will was attached, and it listed the same eight living children and one deceased child, as Katha's. On January 6, 2020, the trial court appointed Hamilton as the Special Administrator of her father's estate. At this point, Elliott's, Katha's, and Earl's estates were all still pending. ¶9 The last docket entry for Elliottt's probate is an order dated and filed June 30, 2020, in which it appears the trial court approved a new administrator, identified Elliott's wife and parents as his only heirs, and approved payment of attorney fees. It also identified the judgment of the wrongful death action to be the sole asset of Elliott's estate. ¶10 On May 11, 2020, the trial court admitted Earl's will to probate, and appointed the petitioner/appellant, an attorney, Catherine Z. Welsh (Welsh) as administrator of his estate. No explanation is given as to why Welsh replaced Earl's daughter, Hamilton as administrator. On August 6, 2020, Welsh, in Katha's probate, filed a Certificate to Make Election by Surviving Spouse on behalf of Earl. This filing was an apparent attempt for the deceased husband's election against his wife's will, even though, 84 O.S. 2021 §44(B)(4) expressly requires such an election to be done during the lifetime of the surviving spouse.11 This statutory provision reflects the primary purpose of a spousal election, which is to provide the surviving spouse ample means for his or her care and comfort during the remainder of his or her life.12 ¶11 On March 18, 2021, Hamilton, as trustee of the Williams Family Trust, filed a motion, seeking a determination that the proceeds of Elliott's wrongful death case were property of the Trust, rather than Katha Williams's probate estate.13 Hamilton attached a copy of a portion of the Trust, and a copy of an document labeled "Assignment" by the Williamses of their interest in the lawsuit judgment to their Trust. The document, dated May 28, 2014, and titled, "Assignment of Judgments" provides: EARL WILLIAMS and KATHA M. WILLIAMS do hereby transfer and assign, without consideration and in order to change formal title only, all right, title and interest which they now have in those Judgments listed below, to EARL WILLIAMS and/or KATHA M. WILLIAMS, Trustees, or their successors in trust, under the WILLIAMS LIVING TRUST, dated May 28, 2014, and any amendments thereto: Case Number Court Judgment Amount Judgment Debtor 11-CV-720-JED-PJC Tulsa, OK Pending Stanley Glanz, Tulsa County Sheriff, and City of Owasso Police Dept. 201300019896 Montgomery, AL Pending Talcum powder litigation Through Goldwater Law Firm This assignment was executed on May 28, 2014. ¶12 The trial court held a hearing on the issue on June 14, 2021. On June 30, 2021, the trial court filed an order in which it determined that the proceeds were not property of the probate estate. The trial court allocated proceeds in the amount of $1,178,057.44 be distributed to the Williams Family Trust.14 ¶13 On July 6, 2021, Welsh filed an Application to Assume Original Jurisdiction and Petition for Writ of Mandamus in this Court. She sought this Court's review of the trial court's ruling. The respondent replied that Welsh was trying to circumvent the proper appeals process by requesting a writ. We agreed, and on September 13, 2021, the Court directed Welsh to file an amended petition in error within twenty days. ¶14 On October 4, 2021, Welsh filed the Court-directed amended petition in error, appealing the trial court's June 30, 2021, order. The response to the petition in error contends that the appeal is immaterial because the entirety of Katha's probate estate goes into the Williams' Family Trust pursuant to her will. ¶15 On March 2, 2022, we assigned the cause to the Court of Civil Appeals. On May 20, 2022, the Court of Civil Appeals, Division III, in an unpublished opinion, affirmed the trial court. Welsh filed a Petition for Writ of Certiorari on June 9, 2022. We granted certiorari on February 7, 2023. PROCEEDS FROM A WRONGFUL DEATH CAUSE CAN BE TRANSFERRED INTO A TRUST BEFORE THEY ARE OBTAINED BY THE TRUST SETTLOR, AND IF THEY ARE, THEY BELONG IN THE TRUST. ¶16 The petitioner argues that because a wrongful death claim is a tort, it is not assignable to another person, and any proceeds from a wrongful death lawsuit or settlement must also be unassignable. The respondent argues that such proceeds may be transferred and, if they are, they belong in the trust. They are not a part of the probate estate. ¶17 The Williamses transferred their expected interest in any proceeds of the wrongful death lawsuit to their trust. Consequently, the term "transfer" is more apropos to what the Williamses were trying to accomplish, rather than an "assignment" to another person.15 Nevertheless, the answer to whether a transfer of such proceeds can occur requires examination of the nature of wrongful death claims juxtaposed with the nature of an estate planning mechanism such as a trust. A. A Wrongful Death Claim and Its Proceeds. ¶18 Because wrongful death actions were unknown at common law, any right to bring an action is granted by virtue of statute.16 In Whipple v. Phillips and Sons Trucking, LLC., 2020 OK 75, ¶10, 474 P.3d 339, we discussed the nature of wrongful death actions when a mother sought recovery for the wrongful death of her unmarried, childless adult son. The Court held that the action for wrongful death is not a separate and distinct tort, but is an action which derives from the rights of the decedent. Whatever rights the decedent might have had in his life accrue to the personal representative at death. ¶19 We also determined because the cause of action for wrongful death is purely statutory, suit may only be brought by a person expressly authorized by statute to do so. Under the applicable statute, if no personal representative had been appointed, the action may be brought by a surviving spouse or in their absence, next of kin. Implicit in this rationale is that the right to bring the cause of action for wrongful death cannot be either assigned or transferred.17 ¶20 Furthermore, 12 O.S. 2021 §2017 expressly prohibits the assignment of claims not arising out of contract.18 However, this cause does not concern the assignment or transfer of a wrongful death claim. Rather, it concerns the transfer of any expected proceeds of such action into a trust.19 Elliott's wrongful death lawsuit had been filed before his parents created their wills or trust. They both died before the any wrongful death proceeds were determined or distributed.20 Thus, the question here is whether the proceeds from the pending wrongful death action are transferable, not just from anyone to just anyone, but by the statutory entitled beneficiaries into their trust for estate planning. Our prior wrongful death cases shed light on this distinction. B. Prior Wrongful Death Cases ¶21 Although this Court has decided many cases concerning wrongful death actions, two in particular stand out for their discussion of the nature of the action, and its expected proceeds. In City of Shawnee v. Cheek, 1913 OK 739, ¶¶18-23, 137 P. 724, the Court discussed the nature of a wrongful death action when a child died because of the alleged negligence of a landowner. At the time, the father was the statutory beneficiary under the wrongful death statute. The father sued the landowner, but the father died ten months after the child, before the lawsuit went to trial. The lawsuit was then revived by the child's mother, as administratrix of the father's estate. ¶22 The Court explained that when a wrongful death occurs, the nature of a wrongful death action is similar to the nature of property, and it is a right created or granted by statute. As such, when the father died, it did not extinguish his statutory right to bring a wrongful death action. The action was properly revived by the administratrix of the father's estate. The Court quoted a New York case which explained that the Legislature has chosen to regard wrongful death as a pecuniary right, a right having the essential attributes of property, so that when it is taken away, compensation is due. ¶23 The Court also relied on a New Jersey case which stated that the death of the beneficiary of a wrongful death suit (i.e., the father) cannot be made to abrogate the liability of the wrongdoer because the pecuniary injury was already sustained. The right to compensation vested in the father immediately upon the death of the child. Recovery is not precluded just because the wrongful death statute does not provide for what happens if he died before the wrongful death action was finally determined. However, the injury sustained would be limited to the duration and extent of the father's lifetime. ¶24 As we previously stated, wrongful death actions are strictly governed by the statutes creating and governing them. As such, the statutory beneficiary may not have the ability to assign or transfer a wrongful death cause of action to another person. Nevertheless, such actions are similar to a property right, already vested in the beneficiaries upon the wrongful death.21 ¶25 Under the rationale of Cheek, Katha's rights as a statutory beneficiary of her son's wrongful death action vested on the death of her son. Such a right was the equivalent of a property right belonging to her. She never transferred, or attempted to transfer, her right. Consequently she did not violate the statutory prohibition relating to the assignment of claims not arising out of contracts.22 ¶26 In Aetna Casualty & Surety Co. v. Young, 1924 OK 394, ¶9, 231 P. 261, a case concerning the distribution of wrongful death proceeds, the Court described monies recovered by the administrator of the estate of the deceased. The Court found such monies do not belong to the estate of the deceased, but rather they are held in trust, for the benefit of next of kin of the deceased. It is the duty, then of the trustee, to properly distribute the money proportionately to the beneficiaries of the funds. ¶27 Under the rationale of Young, the proceeds from the wrongful death action were akin to trust funds held for statutory beneficiaries such as Katha, for her benefit. 25A C.J.S. Death §118, (August 2023 Update) provides: The trust under which the personal representative or other statutory wrongful death plaintiff holds the damages recovered in a wrongful death action may be enforced by the beneficiaries. A beneficiary may recover a share by an action against the personal representative, or other statutory trustee of the recovery, and as such proceedings, as trust proceedings, are not subject to a bar of time limitations. However, a beneficiary cannot maintain such an action until the net amount for distribution and the respective shares of the beneficiaries have been determined.23 The wrongful death statute gives survivors a beneficial interest in the recovery,24 and recovery inures to the exclusive benefit of the wrongful death statutory beneficiaries.25 Nevertheless, nothing about the nature of the anticipated funds from the lawsuit prevented Katha from transferring her interest in them to the family trust for estate planning purposes. Nor has the Legislature prohibited such a transfer in the either the wrongful death or wills and trusts statutes. C. Trusts ¶28 A trust, in relation to realty or personalty, may be created for any purpose for which a contract may be made.26 It requires a declaration by the owner of the property that he or she holds it as trustee for another person or for him or herself. The transfer can be inter vivos and/or by will.27 And the principal of the trust can be set aside for an eventual conveyance to another person.28 ¶29 In other words, the Williamses employed a common estate planning device of creating a revocable inter vivos trust, and simultaneously executing pour over wills to provide for their heirs at the time of their death.29 They sought to transfer their expected proceeds from their son's wrongful death lawsuit into their estate planning regime. ¶30 Although there are conflicting cases, the weight of authority is that such transfers are valid.30 One explanation is that a wrongful death beneficiary's interest in the lawsuit's proceeds is not akin to assignment of the right of the action for personal tort.31 Another is that it amounts to a pecuniary right, akin to property right, where when taken away, compensation is due.32 ¶31 The Utah Supreme Court in, In re Behm's Estate v. Gee, 213 P.2d 657 (Utah 1950), succinctly explains why proceeds for a wrongful death lawsuit are assignable. It said in pertinent part: . . . We conclude that respondent's portion of the death claim is assignable. Respondent's contention is that such a holding would overrule those cases in which this court had held that a cause of action for wrongful death is non-assignable. Had respondent attempted to assign a cause of action for death then the cases cited would have been controlling. However, appellant assigned not the cause of action, but rather, assigned any interest he might have in the recovery. While at first blush this may appear to be a distinction without a difference, upon closer examination it becomes apparent that there is a real and substantial difference. The cause of action cannot be split up between the heirs but the amount recovered can be and is. The problem thus presented is this. Can an heir, after a cause of action has arisen in which he has an interest make an assignment of his interest?Much has been said by courts in the past regarding the assignability and non-assignability of contingent interests at law and in equity. Law courts originally refused to recognize assignments of contingent interests of any kind. Later, because of the Chancellor's liberal enforcement of such assignments, the judges presiding in courts of law agreed to uphold assignments of contingent interests having a potential realization at the time of the assignment.Modern courts, however, have adopted the more liberal equitable rule enforcing assignments of things not in esse but mere future possibilities so long as the assignments are fairly made for an adequate consideration without offending against public policy. Thus assignments of future contractual interests, anticipated interests in real or personal property, future wages or the expectancy of an heir in the estate of an ancestor have all been repeatedly upheld by modern decisions.Courts have adopted the same rule where one who has sustained personal injuries assigns such proceeds as may possibly be recovered by him in an action brought against the tort-feasor. Moreover, a court of equity will enforce the assignment even though the cause of action is not assignable.. . . The counter views are that they are not transferable because they either do not survive the death of the beneficiary who is entitled to the proceeds, or that the wrongful death statutes make no provision for recovery for "others," including transfers.33 ¶32 Here, nothing more than a transfer into a revocable inter vivos trust occurred for purposes of estate planning. The transfer was Katha's personal interest in the proceeds of the wrongful death suit to Katha, as the settlor, trustee, and beneficiary of the trust. The petitioner has not shown that consideration is necessary for this type of transfer. Prohibiting such a transfer is counterintuitive to the nature of a trust, general estate planning altogether. It is also contradictory to this Court's prior treatment of wrongful death proceeds. ¶33 Furthermore, Katha's unambiguous expressed intent as evidenced on the face of her will, the trust, and the assignment of the wrongful death proceeds was that: 1) the funds be placed in the trust when received; but 2) if they were not placed into the trust, her pour-over will would place them into the trust. Under the facts of this cause, it appears equity would recognize the transfer.34 Regardless, we affirm the trial court and hold that proceeds from a wrongful death cause can be transferred into a trust before they are obtained by the trust settlor. We hold that they can, and if they are, they belong in the trust. CONCLUSION ¶34 This cause concerns the transfer of expected proceeds of a wrongful death action into a trust for estate planning. Wrongful death actions, insofar as the statutory beneficiaries are concerned, are vested upon the wrongful death.35 The proceeds of such lawsuits are akin to trust funds held for the statutory beneficiaries.36 Nothing in the will and trust statutes prohibits the transfer of expected proceeds into a trust. Prohibiting such a transfer would be counterintuitive to the nature of an estate trust, and our prior treatment of wrongful death proceeds. Consequently, we hold that proceeds from a wrongful death cause can be transferred into a trust before they are obtained by the trust settlor, and if they are, they belong in the trust. The trial court's determination that Katha's interest in her son's wrongful death suit belongs in the Williams Family Trust is affirmed. COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT AFFIRMED. ALL JUSTICES CONCUR. FOOT