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Docket Number

Docket No. 136480.

Attorney(S)

Paul D. Sherr, for Richard McTaggart. Harvey, Kruse, Westen Milan, P.C. (by Dennis M. Goebel and Mary Rourke Benedetto), for Kelly Lindsey.

Judges

Mark J. Cavanagh

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Smart Summary

McTAGGART v. LINDSEY, Docket No. 136480 — Michigan Court of Appeals (Dec. 6, 1993)

Factual and Procedural Background

On February 11, 1989, two-year-old April Lindsey died in a motel fire. Kelly Lindsey was appointed personal representative of April's estate and commenced a wrongful death action against the motel owners; the parties settled. Kelly Lindsey moved for authority to distribute the settlement proceeds and proposed that she receive the entire amount. Richard McTaggart, April's father, intervened asserting (1) a personal claim for loss of society and companionship under the wrongful death act, MCL 600.2922, and (2) as an heir a claim to share in any award to the estate for the decedent's conscious pain and suffering under MCL 600.2922(6)(d). An evidentiary hearing on distribution was held November 20, 1990. The trial court awarded the entire settlement to Kelly Lindsey, concluding McTaggart had "almost completely shirked the duties of parenthood." McTaggart appealed. The Court of Appeals affirmed the trial court's distribution as to McTaggart's personal wrongful-death claim but remanded for determination of the estate's claim under §2922(6).

Legal Issues Presented

Whether the trial court erred in denying appellant Richard McTaggart recovery for loss of society and companionship under the wrongful death act.
Whether the trial court erred by excluding proposed evidence concerning the cause of the fire.
Whether a conflict of interest existed (and was prejudicial) because the same attorney represented Kelly Lindsey individually (as claimant) and as personal representative (fiduciary) of the estate, affecting distribution of wrongful death proceeds and the estate's potential claim under MCL 600.2922(6).

Arguments of the Parties

Appellant's Arguments

The trial court erred in finding he was not entitled to damages for loss of society/companionship.
The trial court improperly excluded evidence regarding the cause of the fire.
A conflict of interest arose when the same attorney represented the appellee both individually and as personal representative, and this conflict prejudiced his rights by preventing proceeds from being awarded to the estate.

Appellee's Arguments

The appellee sought the entire settlement amount, asserting she provided April's care, support, and companionship.
She presented testimony describing appellant's lack of financial support, failure to acknowledge paternity, and lack of visits or interest in the child.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
In re Claim of Carr, 189 Mich. App. 234, 238; 471 N.W.2d 637 (1991).	That a trial court's decision concerning distribution of settlement proceeds is reviewed under the clearly erroneous standard; and for guidance on assessing relationships by objective behavior.	The court applied the clearly erroneous standard to review the trial court's distribution and relied on the objective-behavior approach in assessing appellant's relationship with the decedent.
Radloff v Michigan (On Remand), 136 Mich. App. 457, 459; 356 N.W.2d 31 (1984).	That if a reviewing court finds the trial court erred it may substitute its appraisal, reduce damages, or conditionally affirm the award.	Provided authority for appellate remedial options if the trial court's distribution were found clearly erroneous; the court nonetheless affirmed on the appellant's personal claim.
Crystal v Hubbard, 414 Mich. 297, 326; 324 N.W.2d 869 (1982).	Defines a claim for loss of society and companionship as compensation for the destruction of family relationships caused by a death.	The court used this definition to evaluate whether appellant had developed a family relationship with the decedent that would support damages.
Rodriguez v Solar of Michigan, Inc, 191 Mich. App. 483, 487; 478 N.W.2d 914 (1991).	Supports excluding evidence that is not relevant.	The court held the trial court did not abuse its discretion in excluding evidence relating to the cause of the fire as irrelevant to distribution.
Steinway v Bolden, 185 Mich. App. 234, 237; 460 N.W.2d 306 (1990).	That a personal representative is a fiduciary charged with settling and distributing the estate and must act in beneficiaries' interests.	The court relied on this fiduciary principle to find a conflict between the appellee's interests as claimant and her duties as personal representative.

Court's Reasoning and Analysis

The court applied the clearly erroneous standard to the trial court's distribution decision. It reviewed the evidentiary record concerning the parties' relationships with April: appellee's testimony described continuous care and support and the appellant's absence and failure to assert paternity; appellant's rebuttal testimony claimed occasional support and visits. Using the objective-behavior measure (time and activity shared), the court concluded the trial court's factual findings that appellant "almost completely shirked the duties of parenthood" were supported by the evidence, and thus appellant failed to establish a compensable family relationship for loss of society and companionship.

On the exclusion of fire-cause evidence, the court agreed the evidence was not relevant to distribution and found no abuse of discretion.

Regarding conflict of interest, the court explained that the personal representative is a fiduciary obligated to protect heirs' interests. Because the appellee sought the entire settlement for her own loss of society—thereby precluding any distribution to the estate for the decedent's conscious pain and suffering under §2922(6)—the appellee's interests as claimant conflicted with her fiduciary duties. The court concluded dual representation (the same lawyer for appellee individually and as personal representative) could not permit required counseling about fiduciary obligations without breaching duties of loyalty and confidentiality; therefore, the conflict may have prejudiced parties and necessitated remand for an evidentiary hearing on the estate's §2922(6) claim.

Holding and Implications

Affirmed in part and remanded for further proceedings.

Holding: The Court of Appeals affirmed the trial court's denial of damages to appellant for loss of society and companionship and affirmed exclusion of the cause-of-fire evidence. The court remanded for an evidentiary hearing to determine whether the decedent's estate is entitled to compensation for the decedent's pain and suffering under MCL 600.2922(6), because the dual representation presented a conflict of interest that may have prejudiced the distribution.

Implications: On remand the trial court must consider the estate's claim under §2922(6); if the estate is awarded damages, the appellee's award must be adjusted and intestate heirs may assert claims under the laws of intestacy. The opinion directs that dual representation by the same attorney of the personal representative as fiduciary and as claimant would be improper under these facts.

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McTAGGART v LINDSEY

CAVANAGH, J.

In this wrongful death case, Richard McTaggart, the father of the decedent, appeals as of right the trial court's distribution of all of the wrongful death proceeds to appellee Kelly Lindsey, the decedent's mother. We affirm the trial court's decision regarding the appellant's claim under the wrongful death act, MCL 600.2922(3); MSA 27A.2922(3), but remand for a determination of the estate's entitlement under § 2922(6).

On February 11, 1989, April Lindsey perished in a tragic fire. The appellee was appointed the personal representative of April's estate and she brought a wrongful death action against Has and Shrilekha Patel, the owners of the motel where the fire occurred. The parties settled, and the appellee moved for authority to distribute the proceeds.

In her motion, the appellee proposed that she be awarded the entire amount of the settlement. The appellant intervened and claimed that as the decedent's father he suffered a loss of society and companionship that was compensable under the wrongful death act. MCL 600.2922; MSA 27A.2922. Appellant also claimed that as an heir under the laws of intestacy he was entitled to share in the proceeds distributed to the estate for the "pain and suffering, while conscious, undergone by" his daughter between the time of her injuries and her death. MCL 600.2922(6)(d); MSA 27A.2922(6)(d).

On November 20, 1990, an evidentiary hearing for authority to distribute was conducted. The appellee testified that she was with her two-year-old daughter when a fire broke out in their motel room. When awakened by the flames, the appellee held her daughter in her arms as she tried to open the motel room door. Because of the heat, she put her daughter on the floor to avoid getting her burned. When the appellee forced the door open, the dense smoke made it impossible for her to find her daughter. She ran into the courtyard for help and stood by helplessly as another guest and fire fighters unsuccessfully tried to rescue April.

Regarding the issue of damages, the appellee testified that April had always lived with her and that she had provided her daughter's food and clothing. She also testified that the appellant was not present at April's birth, provided no financial support during the pregnancy or thereafter, never took any legal steps to acknowledge paternity, and never visited his daughter or expressed any interest to do so.

In rebuttal, the appellant testified that he occasionally contributed a few dollars, visited his daughter between twenty-five and fifty times in the first two years of her life, and would have visited more often were it not for the appellee's resistance. The appellant also testified that he was trying to build a father-daughter relationship and that he loved April.

After hearing the testimony, the trial court awarded the entire amount of the settlement to the appellee. The court concluded that the appellant had "almost completely shirked the duties of parenthood." Consequently, the court determined that he had no right to recover for loss of society or companionship.

In this appeal, the appellant argues that the trial court erred in determining that he was not entitled to recover any amount for the loss of his daughter's society and companionship and in disallowing proposed evidence of the cause of the fire. The appellant also argues that a conflict of interest arose when the same attorney represented the appellee in her individual capacity and in her capacity as the personal representative of the estate. According to the appellant, the conflict of interest was prejudicial because it prevented any of the proceeds of his daughter's wrongful death from being awarded to her estate. While we disagree with the appellant's first two arguments, we are concerned with the conflict of interest presented under these facts and believe that a remand for further proceedings is in order.

Michigan's wrongful death act, MCL 600.2922; MSA 27A.2922, provides for the distribution of proceeds to claimants who have suffered damages and also to the estate of the decedent for pain and suffering in an amount the court deems fair and equitable after considering the relative damages sustained by each of the persons and the estate. A trial court's decision concerning the distribution of settlement proceeds is reviewed under the clearly erroneous standard. In re Claim of Carr, 189 Mich. App. 234, 238; 471 N.W.2d 637 (1991). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been made. If the reviewing court determines that the trial court made a mistake, it will then substitute its own appraisal of the record and reduce damages or conditionally affirm the award. Radloff v Michigan (On Remand), 136 Mich. App. 457, 459; 356 N.W.2d 31 (1984).

A claim for loss of society and companionship under the wrongful death act addresses compensation for the destruction of family relationships that results when one family member dies. Crystal v Hubbard, 414 Mich. 297, 326; 324 N.W.2d 869 (1982). The only reasonable means of measuring the actual destruction caused is to assess the type of relationship the decedent had with the claimant in terms of objective behavior as indicated by the time and activity shared and the overall characteristics of the relationship. Carr, supra at 239.

After reviewing the evidence, we believe that the trial court's award and its findings of fact were supported by the evidence. Although disputed, there was evidence that the appellant never contributed to the financial needs of his daughter, never visited his daughter or expressed any interest to do so, and never took any steps to assert his parental rights. In terms of objective behavior, as indicated by the time and activity shared, there is evidence in support of the trial court's conclusion that the appellant almost completely shirked his parental duties. Consequently, we have to agree with the trial court that the appellant failed to develop a family relationship from which damages for the loss of his daughter's society and companionship could result.

With respect to the trial court's decision concerning the admissibility of evidence relating to the cause of the fire, we agree that the evidence was not relevant. Consequently, we find no abuse of discretion in the trial court's decision to exclude this evidence. Rodriguez v Solar of Michigan, Inc, 191 Mich. App. 483, 487; 478 N.W.2d 914 (1991).

In the appellant's final argument, he complains about a conflict of interest that arises when one attorney represents a person who serves as personal representative of an estate and has a claim against the estate. We agree that under the facts of this case a conflict of interest did arise and that that conflict may have prejudiced the appellant.

The personal representative is a fiduciary of the estate who is charged with settling and distributing the estate. The personal representative must use his authority in the best interest of the estate and in the interests of the parties. Steinway v Bolden, 185 Mich. App. 234, 237; 460 N.W.2d 306 (1990). A fiduciary stands in a position of confidence and trust with respect to the heirs. MCL 700.501; MSA 27.5501.

Under a provision of the wrongful death act, a personal representative is authorized to retain an attorney, MCL 700.543; MSA 27.5543, and the personal representative can be considered the lawyer's client for the purposes of ethical duties of loyalty, confidentiality, and conflicts. Ethics Committee for the State of Michigan, Opinion R-10. MRPC 1.2(a) and MRPC 1.4(b) require the lawyer to counsel the personal representative regarding specific fiduciary obligations owed to the beneficiaries of the estate. According to Opinion R-10, if the interests of the personal representative as claimant and as fiduciary are the same, the lawyer is not prohibited from representing the personal representative in both capacities. However, under MRPC 1.7(a)(1) and 1.7(b)(2), dual representation is improper if representation of the claimant would adversely affect representation of the fiduciary.

In this case, the appellee, as the personal representative of her daughter's estate, had a fiduciary obligation to protect the best interests of the heirs who would be entitled to inherit under our laws of descent and distribution. This obligation included protection of the appellant's interest in the decedent's estate and was clearly at odds with the appellee's proposed distribution of the wrongful death proceeds, under which she would receive the entire amount to compensate her for the loss of society and companionship she suffered. Given these facts, a lawyer representing the personal representative as fiduciary and as claimant could not counsel the personal representative regarding specific fiduciary obligations owed to the beneficiaries of the estate without affecting the duties of loyalty and confidentiality owed to the personal representative as claimant.

Acceptance of the proposal for distribution submitted by the personal representative would prevent the distribution of any of the proceeds from the wrongful death settlement to the estate, provided of course that the estate has a claim for compensation on the basis of the pain and suffering endured by the decedent before her death, a claim that was not resolved at the distribution hearing. For this reason, we believe that a remand for an evidentiary hearing regarding the issue of the estate's claim under the wrongful death act is required. Up to this point, there has never been any decision regarding the pain and suffering experienced by the decedent just before her death and the relative damages sustained by each of the claimants and the estate. We, of course, leave this determination to the trial court.

On remand, if an award is made to the decedent's estate, the amount of damages awarded to the appellee would have to be adjusted. The intestate heirs would then be entitled to assert their claims under the laws of intestacy. At this hearing, because we are convinced that the interests of the personal representative as claimant and as fiduciary would be adverse, dual representation would not be proper.

Affirmed in part and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

WHITE, P.J. I concur in the result only.

McTAGGART v. LINDSEY