Opinion ID: 2599852
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Heading Rank: 1

Heading: Jurisdiction to Apportion Settlement Proceeds

Text: Wrongful death actions are statutory in nature and governed by the Code of Civil Procedure. [2] Section 377.60 establishes a cause of action in favor of specified heirs of a person whose death is caused by the wrongful act or neglect of another. The damages that may be awarded in a wrongful death action are those that, under all the circumstances of the case, may be just. (§ 377.61.) While each heir designated in section 377.60 has a personal and separate wrongful death cause of action, the actions are deemed joint, single and indivisible and must be joined together in one suit. [3] ( Cross, supra, 60 Cal.2d at pp. 692-693, 36 Cal.Rptr. 321, 388 P.2d 353.) Accordingly, the court or jury must compute the damages, if any, by considering the pecuniary damage suffered by all the heirs and return a verdict for one sum.  ( Watkins v. Nutting (1941) 17 Cal.2d 490, 498,110 P.2d 384, italics added; see Richards v. Noonan (1940) 40 Cal.App.2d 266, 271, 104 P.2d 839.) In view of the lump-sum nature of wrongful death awards, section 377.61 provides: The court shall determine the respective rights in an award of the persons entitled to assert the cause of action. Wife first contends that a settlement is not an award, and that section 377.61's failure to employ the phrase an award or settlement in the above quoted sentence indicates the Legislature did not intend to confer jurisdiction upon a trial court in a wrongful death action to apportion settlement proceeds. Because section 377.61 does not confer such jurisdiction, she argues, the only way a trial court is authorized to apportion a wrongful death settlement is in an action that is independent of the wrongful death action, such as an heir's separately filed interpleader or quiet title action. Wife also suggests that construing section 377.61 as allowing judicial apportionment of settlement proceeds in a wrongful death action would defeat an heir's right to a jury determination of disputed issues of fact relevant to the competing claims to a settlement fund where such issues were not presented to or considered by the jury in the wrongful death action. Thus, Wife evidently contends that section 377.61, by implication, either reserves or confers a right to a jury apportionment of any wrongful death recovery other than an award. As a preliminary matter, we address Wife's characterization of this issue as one of jurisdiction. Generally, when the state Constitution or a statute provides a right to a jury trial, a trial court's invalid denial or curtailment of that right is considered an act in excess of jurisdiction and reversible error. (See generally 7 Witkin, Cal. Procedure (3d ed. 1985) Trial, § 85, p. 86.) Section 377.61, however, represents a 'procedural' and `not jurisdictional' statute whose procedural provisions can be waived. ( Canavin v. Pacific Southwest Airlines (1983) 148 Cal.App.3d 512, 536, 196 Cal.Rptr. 82 ( Canavin ), quoting Cross, supra, 60 Cal.2d at pp. 692-694, 36 Cal. Rptr. 321, 388 P.2d 353 [addressing former § 377 [4] ].) In light of Wife's various assertions, we must decide whether the trial court acted either in excess of jurisdiction or in contravention of section 377.61 when it resolved the competing claims between Wife and Daughter and apportioned the $1.1 million in settlement proceeds. In determining what the Legislature intended with section 377.61, we look first to the words of the statute. ( Smith v. Superior Court (2006) 39 Cal.4th 77, 83, 45 Cal.Rptr.3d 394, 137 P.3d 218.) Section 377.61 provides in full: In an action under this article, damages may be awarded that, under all the circumstances of the case, may be just, but may not include damages recoverable under Section 377.34 [pertaining to a decedent's cause of action]. The court shall determine the respective rights in an award of the persons entitled to assert the cause of action. (Italics added.) True, section 377.61 omits express reference to settlements. But given that its first sentence undertakes to describe the damages that may be awarded in a wrongful death action, the circumstance that its second sentence employs the related term an award provides no compelling basis for distinguishing between awards and settlements as far as judicial apportionment is concerned. Indeed, the statutory language does not purport to prohibit judicial apportionment in a wrongful death action that is resolved through settlement. Nor does it suggest that jury apportionment is either authorized or required when a settlement occurs. In this particular context, moreover, there appears no meaningful distinction between a lump-sum award and a lump-sum settlement. After a jury trial, the trial court must apportion an award among the heirs based on the pecuniary damages suffered by each heir. Similarly, after a settlement, the trial court must apportion the settlement proceeds based on the identical criteria  the pecuniary damages suffered by each heir. (See, e.g., Kim, supra, 139 Cal.App.4th 543, 42 Cal.Rptr.3d 841.) Additionally, where, as here, a trial court has heard evidence of damages at the wrongful death trial against nonsettling defendants, having the same court apportion the heirs' recovery of an award and/or a settlement promotes judicial economy and efficiency, even if the court takes further evidence regarding the heirs' competing interests therein. Notably, the relevant legislative history contains no suggestion the judicial apportionment provision was adopted to limit or otherwise alter existing decisional law that recognized the general equitable nature of apportionment proceedings and the specific propriety of judicial apportionment in wrongful death actions. [5] The 1949 statutory amendment to provide for judicial apportionment appears based upon legislative acknowledgement of the respective heirs' competing interests in the lump-sum award. The amendment reflects a belief it was more desirable not to add to the jury's burden the task of apportioning the damages [citation], and the practical consideration the trial judge had already heard the evidence of the pecuniary loss as to each heir and thus was the most desirable party to apportion the damages. [Citations.] ... [¶] ... [The] legislative delegation of apportionment to the court is constitutional, promoting the nature of the remedy as envisioned by its creators without substantively depriving any heir of the right to a jury trial. ( Canavin, supra, 148 Cal. App.3d at p. 533, 196 Cal.Rptr. 82.) Thus, while the statutory provision is fairly viewed as codifying early case law establishing the propriety of judicial apportionment of wrongful death awards (see ante, fn. 5), neither its text nor its history suggests a purpose to limit the type of recovery appropriate for judicial apportionment, or an aim to expand the right to a jury trial to situations where none previously existed. In view of the foregoing, we find no interpretive or other reasoned basis for construing section 377.61 as precluding a trial court in a wrongful death action from apportioning a recovery obtained through settlement. (Cf. Estate of Rogers (1972) 24 Cal.App.3d 69, 77, 100 Cal.Rptr. 735 [similarly concluding that compromise settlements fell within purview of a statute providing only that damages ... awarded were separate property].) In any case, even apart from section 377.61, judicial apportionment of a wrongful death settlement falls squarely within the contemplation of section 578, providing that when the justice of the case requires it, [the judgment may] determine the ultimate rights of the parties on each side, as between themselves. Case law is consistent with the conclusion that trial courts may complete the adjudication of all contested issues in a wrongful death by determining the appropriate allocation of settlement proceeds between competing heirs. (E.g., Kim, supra, 139 Cal.App.4th at pp. 547-548, 42 Cal. Rptr.3d 841 [determining that, in light of the statutory language and history, section 377.61 provides for judicial apportionment of settlement proceeds, whether the competing claims are between the heirs of a single' or multiple decedents]; Smith v. Premier Alliance Ins. Co. (1995) 41 Cal. App.4th 691, 698, 48 Cal.Rptr.2d 461[[w]hen the claims of all heirs are encompassed in a lump-sum settlement, the court has authority to apportion the settlement]; Estate of Kuebler v. Superior Court (1978) 81 Cal.App.3d 500, 504,146 Cal.Rptr. 481 [the court has jurisdiction to apportion the settlement proceeds]; see also Canavin, supra, 148 Cal.App.3d at p. 534, fn. 10, 196 Cal.Rptr. 82.) Although the foregoing decisions did not specifically address the issues raised here, Wife offers no authority contradicting their conclusions and statements. Instead, she relies on Changaris v. Marvel (1964) 231 Cal.App.2d 308, 41 Cal.Rptr. 774 ( Changaris ) to argue the competing claims of heirs to a settlement fund can only be resolved by a court that has subject matter jurisdiction over the dispute  subject matter jurisdiction conveyed by bringing a separate interpleader or quiet title action. Changaris involved a situation where one attorney had represented five different heirs in a wrongful death action. The heirs settled with the defendant tortfeasor for a lump-sum amount, but subsequently could not agree on its allocation. Facing a clear conflict of interest, the attorney filed an interpleader action and was discharged from further responsibility. ( Changaris, supra, 231 Cal. App.2d at p. 310, 41 Cal.Rptr. 774.) Changaris held, in the context of the interpleader action, that the trial court properly received evidence of the damage suffered by each of the parties whose rights had been compromised, and the evidence so taken supports the apportionment made. ( Id. at p. 313, 41 Cal.Rptr. 774.) Like the Court of Appeal below, we find Changaris unhelpful to Wife's position. Even assuming a separate interpleader action was appropriate for the type of situation presented in Changaris, that decision does not suggest that, where recovery in the wrongful death action is obtained by settlement and not by an award, the filing of an independent interpleader or other action is required to confer jurisdiction on a trial court to apportion the recovery. [6] Although Wife does not appear to assert a constitutional right to a jury trial on the issue of apportionment, [7] she does contend that judicial apportionment of a settlement threatens to deprive litigants of an asserted right under section 592 to have a jury determine issues of fact ..., if the judge is permitted to make a determination of the value of each heirs' [sic] claims independent of the factors used to reach the settlement. For the reasons below, we conclude section 592 does not provide an alternative statutory basis for jury apportionment of a settlement or for requiring a jury determination of all facts relevant to such an apportionment. Section 592 provides in full: In actions for the recovery of specific, real, or personal property, with or without damages, or for money claimed as due upon contract, or as damages for breach of contract, or for injuries, an issue of fact must be tried by a jury, unless a jury trial is waived, or a reference is ordered, as provided in this Code. Where in these cases there are issues both of law and fact, the issue of law must be first disposed of. In other cases, issues of fact must be tried by the Court, subject to its power to order any such issue to be tried by a jury, or to be referred to a referee, as provided in this Code. Like the constitutional provision (Cal. Const., art. I, § 16), section 592 is historically based and does not expand the jury trial right beyond its common law scope. ( Crouchman v. Superior Court (1988) 45 Cal.3d 1167, 1174, 248 Cal.Rptr. 626, 755 P.2d 1075; see generally ante, fn. 7.) Accordingly, section 592 provides no independent basis for a right to a jury in the apportionment of wrongful death settlement proceeds. Furthermore, to the extent Wife assumes a separate interpleader action or a separate quiet title action would afford the right to a jury, she is wrong. ( Union Mutual Life Ins. Co. v. Broderick (1925) 196 Cal. 497, 502, 238 P. 1034 [interpleader]; Thomson v. Thomson (1936) 7 Cal.2d 671, 681, 62 P.2d 358 [quiet title action when possession of the property not involved]; see Estate of Phelps (1990) 223 Gal.App.3d 332, 340, 273 Cal.Rptr. 2 [quiet title].) Kim, supra, 139 Cal.App.4th 543, 42 Cal. Rptr.3d 841, offers additional reasons for rejecting section 592 as a basis for jury involvement in the apportionment context. As Kim recognizes, proceedings to apportion a settlement fund among heirs are not actions for injuries within section 592's contemplation, because they typically involve no allegation of injury infliction or wrongdoing by one heir against other heirs. ( Kim, supra, 139 Cal.App.4th at p. 549, 42 Cal.Rptr.3d 841.) Such proceedings simply concern two or more heirs who, as wrongful death plaintiffs, may or may not agree on the distribution of the recovery obtained and seek a determination as to the proper apportionment. (See ibid. ) Also relevant here is Kim's rejection of the contention that heirs are entitled to a jury to decide the amount of damages each ... suffered, according to the rules applicable to wrongful death damages. ( Kim, supra, 139 Cal.App.4th at p. 549, 42 Cal.Rptr.3d 841.) As Kim explains, [t]his is an action for apportionment. The amount of damages was determined by the settlement, and no jury can now decide, as if in the first instance, the amount each plaintiff might have been entitled to recover from the alleged [settling] tortfeasors. Appellants argue that `the fact that the monies are available for disbursement does not negate [their] right to have a jury decide their damages.' They are wrong. They gave up their right to have a jury decide their damages when they settled the wrongful death case. The only issue remaining is, indeed, apportionment. The fact that the apportionment will be made according to the law on wrongful death damages does not change that. ( Ibid. ) In sum, we conclude the trial court did not act in contravention of section 377.61 or in excess of jurisdiction when it apportioned the settlement proceeds between Wife and Daughter.