Opinion ID: 1102315
Heading Depth: 1
Heading Rank: 2

Heading: may usf & g satisfy its subrogation lien against donald manuel by taking money from joy manuel's estate, to which it never paid any money?

Text: ¶ 6. Briney argues that under Iowa law, USF & G had no right of subrogation from Joy's estate since USF & G paid no money to the estate. She argues that the effect of allowing USF & G to take $38,866.34 from the settlement proceeds allocated to Joy's estate as partial repayment of benefits it paid to Donald Manuel was to take money away from the rightful heirs who never received any money from USF & G. USF & G claimed its rights to subrogation under Iowa Code Ann. § 85.22 (West 1996). This section in relevant part states: 1. If compensation is paid the employee or dependent or the trustee of such dependent under this chapter, the employer by whom the same was paid, or the employer's insurer which paid it, shall be indemnified out of the recovery of damages to the extent of the payment so made ... and shall have a lien on the claim for such recovery and the judgment thereon for the compensation for which the employer or insurer is liable. Iowa Code Ann. § 85.22 (West 1996) (emphasis supplied). Briney cites to two Iowa Supreme Court cases which interpret this language. The Iowa Supreme Court held that the employer's right to withhold benefits under section 85.22(1) extends only to that portion of the wrongful death proceeds actually paid or legally available to the person entitled to receive the workers' compensation benefits. Bertrand v. Sioux City Grain Exch., 419 N.W.2d 402, 404 (Iowa 1988). The Court went on to state, [T]he better rule is that an employer can only reach that portion of a third-party recovery which the workers' compensation dependent is entitled to receive. Id. at 405. Therefore, the Court did not allow the employer to reach the part of the recovery that was to go to the deceased's four children who never actually received any benefits under workers' compensation. The other Iowa case Briney cites in support of her contention that USF & G was unlawfully allowed to receive money out of Joy's estate is Mata v. Clarion Farmers Elevator Cooperative, 380 N.W.2d 425 (Iowa 1986). Although the Mata case interprets a different subsection of Section 85.22 of the Iowa Code, the Bertrand Court interpreted the Mata decision to indicate that the employer would have no right to the portion of the settlement allocable to the wife and child on the loss of consortion claim. Bertrand, 419 N.W.2d at 405 ( citing Mata v. Clarion Farmers Elevator Coop., 380 N.W.2d 425, 429 (Iowa 1986)). The Mata Court found that a workers' compensation lien is valid as to the portion of the settlement found allocable to the injured employee. Mata, 380 N.W.2d at 429. ¶ 7. When considering this case law of the Iowa Supreme Court, it follows that the money received by USF & G out of the proceeds allocated to Joy's estate for satisfaction of the subrogation lien for the death benefits paid to Donald was unlawful under controlling Iowa Law. As cited by Briney, 83 C.J.S. Subrogation § 14 (1953) explains that a person entitled to subrogation stands in the shoes of the one from whom his right to subrogation arose and cannot ascend to any greater right than the one for whom he is substituted. ¶ 8. USF & G does not challenge the contention that Iowa law may have been misapplied, but instead it argues that it was proper to have paid the death benefits to Donald based on the strong presumption of the validity of a marriage solemnized according to law citing Smith v. Weir, 387 So.2d 761 (Miss. 1980) and Paschall v. Polk, 379 So.2d 316 (Miss. 1980). This issue is not in dispute. However, USF & G does argue that the circuit court is the one who decided how the settlement proceeds were to be distributed and the estate was represented by a duly appointed Administratrix. It contends that all parties including the Administratrix had 30 days to appeal the court's Order if they believed the court's Order was in error but no parties appealed the Order and Joy's heirs cannot argue that the estate was not represented at the time of the Order. Neither Betty nor Joy's other rightful heirs were parties to the Circuit Court action, and therefore had no right to appeal. They were entitled to rely upon the Circuit Court to properly apply the law with regard to the settlement proceeds allocable to Joy's estate. ¶ 9. In Briney's reply brief, she argues that at the time the Order was entered, there was no reason for the Administratrix to appeal because Donald was presumed to be the surviving spouse and sole heir of Joy's estate. It is also important to note that neither Briney nor any other potential heirs to Joy's estate were notified by the Court, Donald's attorney or USF & G. According to Briney's affidavit, the only knowledge Briney had about the pending wrongful death claim was obtained by an insurance investigator and that Donald told the investigator that he did not know how to contact Joy's family. Briney also argues that USF & G knew if it did not take the $38,866.34 before the rightful heirs were adjudicated, it might get nothing from the estate funds once the rightful heirs were determined. Another important fact this Court considers is that the same counsel who represented Donald also represented the estate of Joy Manuel, deceased, and could have influenced the decision of the Administratrix not to appeal. This is especially true when considering the strong presumption that Donald was Joy's husband, and under Mississippi's wrongful death statute, Section 11-7-13 of the Mississippi Code of 1972, Donald would be the only person entitled to the estate's proceeds. ¶ 10. Another concern this Court has is the fact that Joy Manuel had a daughter who was adopted. This child was in no way informed of the pending litigation nor were her rights protected in any manner by any party. There is no indication in the record that anyone, including the heirs determined in the chancery court proceedings, tried to locate this child. In Briney's affidavit she explains that Donald Manuel knew that Joy had given up a daughter in adoption. Other family members of my family know where the child lives, and the address could have been found. However when Salters, appointed Administratrix, filed the petition seeking adjudication of the Heirs-at-Law of Joy Manuel the minor child was listed as adopted at birth, name and address unknown. Also at the time that Salters was appointed Administratrix, she failed to make the court aware of other potential heirs. Although this child was adopted, it does not cut off her right of inheritance unless the provisions of the adoption clearly so state or the law of another state controls this particular issue. Estate of Jones v. Howell, 687 So.2d 1171 (Miss. 1996) (right to bring wrongful death action for natural father's death was not terminated at time of adoption). This Court has held that, an administratrix is under an affirmative duty to disclose to this Court the existence of known potential heirs and claimants. Smith v. Estate of King, 501 So.2d 1120, 1123 (Miss. 1987). ¶ 11. As pointed out by Briney, simply because the time for appeal has expired, Rule 60 recognizes that relief may be sought after the time for appeal has expired given the right circumstances citing Accredited Surety & Casualty Company v. Bolles, 535 So.2d 56, 58-59 (Miss. 1988).