We have blogged at length regarding the decision-making role of estate Personal Representatives with regard to the allocation of monetary proceeds recovered from at-fault parties and under/uninsured motorist insurance. Where the amount recovered is less than the full measure of damages, disputes often arise between creditors and the decedent’s survivors over the PR’s allocation decisions. When those disputes cannot be resolved by agreement, the courts must decide. While Florida’s Wrongful Death Act does not articulate preferences, our experience shows that courts tend to side with survivors in close cases.
In re Estate of Wiggins, 720 So. 2d 523 (Fla. 4th DCA 1999) is the seminal allocation case. It involved six adult surviving children and various creditors (owed a total of $26,000), including Indian River Memorial Hospital, vying over a $100,000 settlement. The matter was forced to trial, where the trial court agreed with the PR’s allocation which left creditors with nothing. The lower court’s ruling was upheld on appeal.
Allocation issues in Florida wrongful death cases are governed by §768.21 of the Wrongful Death Act and §733.707 of the Florida Probate Code. Wiggins demonstrates the interplay between the two statutes in cases involving limited funds. It also shows how creditors can recover, sometimes in full.
In Wiggins, the creditors got nothing because the entire $100,000 settlement was eaten up by survivors claims and preferential probate claims. Had the recovery been greater, the creditors might have received some of the money.
For example, in a wrongful death case recently settled by our firm for $1.150 million, the lone creditor, a hospital, claimed an unpaid medical bill in excess of $21,000. Our case involved two survivors, the decedent’s mother and father. While no amount of money could adequately compensate them for their loss, the PR concluded, with our input, that, in a dispute involving the bill, based on the Wiggins formula the court would likely order the bill to be paid from the settlement money. Rather than dispute payment, we reached out to the creditor and asked for a concession, which it graciously gave, reducing the bill by 2/3.
Interestingly, in spite of our decision to settle the medical bill claim without a fight, it remains an open question whether medical expenses incurred due to the decedent’s injury or death, must be paid by the estate in situations where the estate is not entitled to be compensated under the Wrongful Death Act. (For example, §768.21(6)(a)2 Florida Statutes precludes an estate’s recovery for the prospective loss of net accumulations where the decedent was under 25 years of age. Our decedent was under 25.)
The law is clear that the recovery of damages by the survivors is distinct and separate from the recovery of damages by an estate under §768.21. See Coon v. Cont’l Ins. Co., 511 So.2d 971, 974 (Fla. 1987). In other words, estate debts cannot be recovered from wrongful death proceeds recovered for suvivors. See Scott v. Estate of Myers, 871 So.2d 947, 948-949 (Fla. 1st DCA 2004). Hence, if the only compensation owed for the wrongful death is owed to the survivors, from where does the estate get the money to satisfy creditor claims? While, in our view, the answer is not crystal clear, from our piecing together of sometimes confusing statutes, we decided that the best approach in our example case was to address the bill to make it go away. Our view was informed by §733.707 of the Florida Probate Code, §768.21, and a strong sense of fairness and practicality. Moreover, we had the money to cover the bill and did not want to involve the parents in a protracted court battle. However, under different circumstances, like the scenario in Wiggins, we might have been forced to dispute the payment.
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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.
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