Posts Tagged ‘wrongful death’

Murder-Suicide Case Leads to Complex Probate Claim Analysis

APRIL 25, 2016 VOLUME 23 NUMBER 16

It was a horrible, tragic story. In June, 2012, Phoenix resident James Butwin killed his wife and three children, drove the family car to a remote area in the desert, set the car on fire and killed himself. News stories soon revealed that the couple were enmeshed in a divorce, that there was a dispute about whether a prenuptial agreement was valid, and that Mr. Butwin was undergoing treatment for a brain tumor.

Mr. Butwin had an estate, but no surviving family. His mother-in-law filed a probate proceeding for Mrs. Butwin, and that estate sued Mr. Butwin’s estate for “wrongful death” — for the murder of his wife. After a trial, she won an award of over $1 million against Mr. Butwin’s estate. Then she sought to impose a “constructive trust” against his estate’s assets to satisfy that judgment.

Meanwhile, Mr. Butwin’s business associates were studying his books. They discovered that, as manager of several properties they owned, Mr. Butwin had embezzled almost $1 million. They filed a claim against his estate, seeking repayment of $965,000.

Mr. Butwin’s estate was insufficient to satisfy the two million-dollar claims. Who should be paid first? Or should the claimants have their claims reduced proportionally?

An Arizona statute (the so-called “Slayer Statute” at A.R.S. sec. 14-2803) says that a person who “feloniously and intentionally” kills another person automatically forfeits any claim they might have against the victim’s estate. Clearly, Mr. Butwin could not inherit any share of his wife’s estate. But that doesn’t change the fact that some — perhaps most — of their assets were his before the killing. In one subsection, the statute goes further: it allows imposition of a “constructive trust” on the killer’s assets:

K. The decedent’s estate may petition the court to establish a constructive trust on the property or the estate of the killer, effective from the time of the killer’s act that caused the death, in order to secure the payment of all damages and judgments from conduct that, pursuant to subsection F of this section, resulted in criminal conviction of either spouse in which the other spouse or a child was the victim.

But what is a “constructive trust”? It is a legal device employed by the courts to sequester assets that should not have belonged to the record owner in the first place. It is often used, for instance, to seize property purchased with ill-gotten proceeds — even though the property might itself not be available to satisfy debts. If, for instance, a public official were to take bribes, and use the bribe money to purchase a farm, the court might impose a “constructive trust” on the farm to allow the government, as the injured party, to seize the property to recover the bribe money. That’s not an imaginary story — that’s precisely the story behind a leading British case allowing use of a constructive trust.

Arizona’s statute on collecting wrongful death proceeds from a killer in circumstances like Mr. Butwin’s would seem to speak precisely to the claim of his wife’s estate. But there was one problem: Mr. Butwin didn’t live long enough to face criminal prosecution, much less conviction.

That was the basis on which the probate court denied the request for a constructive trust by Mrs. Butwin’s estate (and her mother). Before the Court of Appeals, Mrs. Butwin’s estate argued that requiring a criminal conviction was absurd, since the statute would only apply when the killer himself had died. Besides, the wrongful death action can be maintained even when there is no criminal conviction, since the standard of proof for civil actions is different (and easier to meet).

The Arizona Court of Appeals upheld the probate court decision. It is not absurd, ruled the appellate judges, to apply the statute only where the killer has survived long enough to be convicted and then dies. While that may not be a common circumstance, it certainly could happen — and if the legislature wanted to apply the constructive trust statute to murder-suicide cases like the Butwins’, they could certainly have written the statute in that fashion. Estate of Butwin v. Estate of Butwin, April 19, 2016.

The Court of Appeals decision doesn’t actually resolve the sequence of payments from James Butwin’s estate. It might be possible, for instance, for his business associates to argue that all — or substantially all — of his assets are traceable to the embezzled funds. If that argument is not made, or is not successful, the statutes spell out a sequence of payments to be made when an estate is insufficient. Arizona Revised Statutes section 14-3805 spells out that sequence, which starts with administrative costs (filing fees, lawyer’s fees and the like), then moves on to funeral expenses, federal tax claims, expenses of the decedent’s final illness, state taxes, and then “all other claims.”

The statute explicitly rejects payment of any creditor in a given class ahead of other creditors of that class. Since neither the embezzlement claims nor the wrongful death judgment fit into any of the other categories, they will probably both be characterized as “other claims.” That will likely mean that each will receive approximately equal shares of Mr. Butwin’s estate — and that any other claimants will also have their claims reduced to about half of the amount due.

Given the size of the estate, the size and nature of the claims, and the emotional impact of the case, it seems likely that there will be further litigation to resolve the competing claims. We’ll let you know if there is another legal footnote to this tragic, horrible story.

Nursing Home Arbitration Provision Voided in Arizona Case

FEBRUARY 1, 2016 VOLUME 23 NUMBER 5

A recent series in the New York Times chronicled the increasingly common practice of including arbitration agreements in all sorts of consumer contracts. The series noted that such provisions are often buried in the fine print of everything from job applications to car rentals to nursing home admission agreements.

Why is this important? Because limiting consumers to arbitration proceedings to resolve disputes means they are likely to recover less, they will have a harder time hiring a lawyer, and they will be unable to sue at all for the kind of small-claim injuries that frequently arise. The very prevalence of arbitration agreements shows just how valuable they are to employers, car rental agencies, nursing homes and other businesses.

One arbitration issue that comes up frequently for the elderly (and their family members and loved ones) is in the care received in nursing homes or other long-term care facilities. Very nearly every nursing home admission agreement we have seen in recent years has included a provision mandating that all disputes must be submitted to arbitration — though the provision is usually buried deep in the admission agreement’s fine print.

Nursing home patients have one advantage not available to most other consumers, however — the nursing home admission agreement usually permits the applicant to decline the arbitration provision. Sometimes that is mandated by state law, and the federal government has indicated an interest in prohibiting mandatory arbitration provisions nationwide. For the moment, though, nursing home patients can usually simply cross out the provision on admission, and breathe more easily because the nursing home can be held to task for any failures in care or management.

When the mandatory arbitration provision is signed, though, the patient and family may not be able to file lawsuits for any later breach by the nursing home. That is not always the case, however, as shown in a new Arizona Court of Appeals decision issued last week.

Arthur Edwards (not his real name) admitted his mother Marta to the Hacienda Nursing and Rehabilitation Center in Sierra Vista, Arizona, in 2010. He later explained that her admission came after he found that he was unable to care for her in his home, and Adult Protective Services let him know that if he did not place her they would initiate proceedings.

By the time Marta arrived at Hacienda, her dementia was already advanced — she could not sign the admission agreement herself. Though Arthur did not have a power of attorney signed by his mother, and was just one of her several children, he signed the admission agreements for her. He also signed a provision agreeing to submit any dispute to arbitration.

Marta died at Hacienda a year later. Arthur believed that her death was hastened by the care she received at Hacienda, and a year after her death he filed a lawsuit on behalf of her estate. Hacienda responded by asking the judge to dismiss the lawsuit and tell Arthur he had to submit the case to arbitration instead.

The trial judge agreed, and dismissed the lawsuit. Arthur appealed, arguing that he didn’t actually have any legal authority to consent to arbitration on his mother’s behalf. Hacienda argued that he was acting on her behalf, that in fact he had authority to act even if he didn’t have a signed power of attorney, and that he had acted on her behalf in other matters, as well.

The Arizona Court of Appeals reversed the dismissal of the lawsuit, and sent it back to the lower court for a trial on the merits. The appellate judges distinguished the facts in Marta’s case from an earlier Arizona case, in which a wife signed her husband into the nursing home (and agreed to a mandatory arbitration provision). Arthur’s legal relationship to his mother was not as clear as the one between spouses, ruled the court. There was insufficient evidence that any of Arthur’s custom of taking care of his mother’s finances and care arrangements amounted to authority to waive her right to have her claims tried in a court. Escareno v. Kindred Nursing, January 29, 2016.

What does Marta’s case mean for consumers in Arizona? First, and most importantly: do not sign a nursing home admission agreement without looking for and crossing out the arbitration provision. Be on the lookout for arbitration provisions on readmission after hospitalization, or in moves between facilities.

Paradoxically, Arthur prevailed partly because he had not done what he should have. He really needed to get some legal authority over his mother’s affairs — whether by a power of attorney or by court proceedings seeking appointment as her guardian and/or conservator. Instead, he basically filled out his mother’s checks and had her sign them until she was unable to, then managed to get her to consent to putting his name on her bank account. If he had gotten a durable power of attorney signed, he would probably have lost his argument that he had no authority to sign the arbitration provision on her behalf.

Is there any other way to avoid mandatory arbitration provisions? Perhaps. The Court of Appeals in Marta’s case was asked to rule that arbitration provisions amount to a “contract of adhesion” — a legal term meaning that consumers are not presented with any real choices and therefore should not be bound by the agreements. The appellate judges took pains to note that that argument might still be available, but that it was unnecessary to reach it in Marta’s case because of the way in which the agreement was signed.

Please note: we are explaining some of the practice and significance of the mandatory arbitration provisions commonly found in admission documents for nursing homes, care homes and other facilities. We have not touched on another pervasive and objectionable practice: asking family members to sign guaranteeing payment of future care costs. There are other problematic provisions in such contracts, and we urge you to seek legal counsel before signing any admission agreement.

Nursing Home Arbitration Agreement May Not Be Enforceable

NOVEMBER 17, 2014 VOLUME 21 NUMBER 42

If you have recently signed a family member (or a friend, or yourself) into a nursing home or other care facility, you probably have been presented with an agreement to submit all disputes to arbitration. Such provisions are very popular among the facilities themselves, though most individuals who sign them may not understand or appreciate what they are agreeing to. A recent Arizona appellate decision calls the scope of those provisions into question.

Martha Anderson (not her real name) was admitted to a Phoenix-area nursing home four different times in 2011, as her condition worsened and improved several times. After each of the first two admissions, her daughter Mary signed documents on Martha’s behalf. The documents included an agreement, on behalf of her mother, to submit any disputes that might arise between Martha and the nursing home to the arbitration process. For the third and fourth admissions, no one asked her to sign the arbitration agreements again.

Martha’s condition worsened, and she died in the nursing home in 2012. Mary initiated a probate proceeding and then sued the nursing facility, alleging both that the facility’s care led to her mother’s death and that the care amounted to abuse or neglect of a vulnerable adult. The nursing home moved to dismiss the lawsuits, pointing out that Mary had agreed to arbitration instead of a court trial.

The judge hearing Mary’s lawsuit agreed, and dismissed her case. That meant that Mary would have to submit to binding arbitration. Instead, she appealed the dismissal.

The Arizona Court of Appeals agreed with Mary, at least in part. The appellate court determined that the arbitration agreement was not enforceable as to either of the primary portions of Mary’s lawsuit. First, the judges noted that Mary signed the agreement on her mother’s behalf, not her own — and the wrongful death claim she had brought against the nursing home belonged not to her mother (or her mother’s estate) but to the surviving family members. If Martha had signed the agreement, she could not force her children to submit their claims to arbitration, and so Mary could not bind them when signing on her mother’s behalf.

In the particular facts of Martha’s nursing home admissions, the appellate judges also declined to apply the arbitration agreement to the remaining abuse/neglect claims. Because no new arbitration agreement was signed for the third and fourth admissions, Mary had not agreed to arbitrate her mother’s claims arising during those stays.

Mary had also argued that the arbitration agreements were unenforceable because they were simply unconscionable. The appellate judges rejected that argument, finding that she had not shown that the method of securing her signature, or the cost of arbitration would be an undue burden on her. Of particular importance in this finding: both of the agreements that Mary signed clearly indicated that they were voluntary, that her signature was optional, and that her mother’s admission and care would not be affected if she did not sign the agreements. Estate of Aspeitia v. Life Care Centers, Inc., October 21, 2014.

Why would someone in Mary’s position voluntarily sign an agreement to submit any future claims to binding arbitration? It is not clear, as there are few benefits accruing to the patient in such a situation. Benefits to the facility are much more obvious: the arbitration process is much less expensive, less likely to result in significant awards, and less prone to the strong reactions that jurors sometimes evidence.

This is not the first time Arizona courts have addressed arbitration agreements in nursing home settings. In 2013 we reported on another case, in which the Arizona Court of Appeals ruled that the arbitration agreement was unconscionable. Why was that agreement overturned, while Martha’s agreement was voided only because it was not signed for her last two admissions? Because in the 2013 case, the evidence was clear that the patient (who was still living and filing the lawsuit himself) would have to come up with over $20,000 just to initiate the arbitration proceeding.

What message does Martha’s case have for others? First, it needs to be clear that it is limited to Arizona — other states have addressed similar agreements to submit to binding arbitration, and they have been approved or rejected based on both similar and different theories. State law really does matter.

Perhaps a better question to consider, though, is what you might do when admitting a loved one to a nursing facility. Should you sign an arbitration agreement? What happens if you do not?

First, the arbitration provisions will probably be in a separate document or separately spelled out in a combined agreement (requiring your signature on that section). The arbitration provisions are likely to have language like Mary confronted, too — telling you that your signature on that section (or that separate form) is optional. Don’t sign that provision and you will not be bound by it. We think you ought to go further, in fact. Cross out the arbitration portion. Write “no” next to it. Make it clear that you didn’t just forget to sign, but that you specifically refuse the offer of binding arbitration.

Should you have a lawyer review your nursing home contract before you sign? Yes. Here’s an important benefit: it buys you time, to consider the significance and effect of your signature. Tell the facility that you’ll get the agreement back to them as quickly as you can get with your lawyer and review it.

What you really want, of course, is not to have a claim against the nursing facility at all. In other words, you want your family member’s care to be excellent, and to have no adverse outcome. To that end, keep close tabs on the care at the facility. Challenge staffing levels, care decisions, diagnoses and accommodations made by the facility. You want the caretakers (and, in fact, the facility itself) to view you as a concerned advocate, and not an angry and dissatisfied irritant — but you want to maintain your level of concern and oversight.

Good luck. It is really difficult to have a family member in the nursing facility. It is more difficult for them; help them as ably as you can.

What is the Value of a Senior’s Life?

SEPTEMBER 6, 2010 VOLUME 17 NUMBER 28
The question addressed in a ruling last month by the Arizona Court of Appeals seems provocative. In a lawsuit based on the Arizona law prohibiting abuse, neglect or exploitation of vulnerable adults, does the very life of the abused senior have any intrinsic value? The Court’s answer: perhaps, but the lawsuit can not recover damages for the loss of that life.

Mary Winn died about a month after being admitted to Plaza Healthcare, a Scottsdale, Arizona, nursing home, in 1999. Four years later her husband George Winn filed a lawsuit against Plaza, alleging that it had violated Mrs. Winn’s rights under Arizona’s Adult Protective Services Act. Under the APSA, a vulnerable adult who has been abused, neglected or exploited may recover damages suffered as a result of that abuse, neglect or exploitation. Mr. Winn argued (on behalf of his wife’s estate) that he should be able to recover on behalf of his late wife, and that she would have been entitled to actual damages for the loss of her life, as well as punitive damages.

Not so, argued the nursing home. Mrs. Winn obviously could never have collected damages for her own death, and her estate’s recovery was limited to what she could have recovered. In fact, the estate’s possible recovery was less than her damages, since any claim for pain and suffering she experienced at the end of her life ended with her death. With no actual damages to recover, her estate could not seek punitive damages.

Mrs. Winn’s estate argued that her life had some “intrinsic” value, and that it should be recoverable. The estate conceded that she was elderly and ill when she arrived at Plaza Healthcare, and that she could not be expected to earn a salary given her age and condition. But, insisted the estate’s lawyers, a human life has some inherent value.

The trial court agreed with the nursing home, and limited the estate’s proof to just actual damages. After an informal arbitration proceeding (the estate conceded that the remaining damages were less than $50,000, and therefore subject to mandatory arbitration rules) a judgment against was entered in favor of Plaza Healthcare.

The Arizona Court of Appeals reviewed the trial court’s ruling and agreed. There is no cause of action under the vulnerable adults statute, ruled the appellate judges, for the “intrinsic or inherent value” of a deceased claimant’s life. Mrs. Winn’s estate — and her husband — recovers nothing from Plaza Healthcare. Estate of Winn v. Plaza Healthcare, Inc., August 10, 2010.

To be fair, the appellate court did not rule that there is no value to the life of an elderly, disabled and vulnerable senior. All the ruling says is that there is no right to recover under the Arizona Adult Protective Services Act for the loss of life itself.

Does that mean that Mr. Winn had no claim for his wife’s alleged mistreatment? Not necessarily — he might have been able to file his lawsuit on his own behalf if he had acted more quickly. By the time he filed it had been more than four years since his wife’s death — too late for any wrongful death action but not too late for a viable lawsuit under the Adult Protective Services Act, which had a much longer statute of limitations.

There is another interesting footnote to the Winn case. Last month’s decision from the Court of Appeals is not the first time Mrs. Winn and her estate have been before Arizona appellate judges. In fact, her case had been appealed twice before — once in 2006/2007, and again a year later. The first trip through the appellate system involved the trial judge’s dismissal — ultimately reversed by the Arizona Supreme Court — on the basis that a probate proceeding filed more than two years after the decedent’s death did not permit filing of a lawsuit in the estate’s name. A year later the Court of Appeals dismissed an attempted appeal from the trial judge’s initial refusal to allow any recovery for the inherent value of Mrs. Winn’s life. That appeal had to wait for final resolution of the entire lawsuit, which was accomplished before the current (and probably final) appeal.

Wrongful Death Claim Not Available to Decedent’s Estate

DECEMBER 30, 2002 VOLUME 10, NUMBER 26

Doctors decided they needed to implant a pacemaker in Yaeko Otani, age 81. Had the surgery been successful, she would have had a life expectancy of another eight years. Tragically, surgeon David Broudy accidentally punctured her aorta during the surgery, and she died without ever regaining consciousness.

Ms. Otani’s two children and her estate filed suit against Dr. Broudy for wrongful death. After hearing the evidence Judge Sharon Armstrong entered a verdict in favor of the two children for $125,000 each, and in favor of the estate for another $450,000 for “loss of enjoyment of life.” In addition, Dr. Broudy was ordered to pay over $45,000 in medical and funeral costs.

Although he did not challenge the amounts awarded to Ms. Otani’s children, or the medical and funeral expenses, Dr. Broudy did appeal the $450,000 judgment in favor of the estate. His attorneys argued that a “wrongful death” action can not be brought on behalf of an estate.

Under the “common law” principles inherited by U.S. states from their legal predecessors, the claim of damages for wrongful death did not exist. Personal injury claims usually lapsed with the death of the injured party, and by definition the primary victim of a wrongful death could not survive the injury—so the claim was viewed as dying with the victim.

To remedy what was seen as an injustice, state legislatures individually adopted laws that allow survivors to bring a lawsuit for wrongful death of a parent, child or spouse. Most states permit the action to be brought by the estate of the victim, but make clear that the claim belongs to the survivors. Philosophically, the wrongful death action seeks compensation not for the loss of one’s life but for the loss of companionship, support and assistance of a loved one.

That, argued Dr. Broudy, was why Ms. Otani’s estate should not be entitled to receive any money for the loss of her life. While her children could bring their own claims, and the estate could seek reimbursement of medical and funeral expenses, Ms. Otani’s estate had no cause of action, argued Dr. Broudy.

The Washington State Court of Appeals agreed. Since Ms. Otani died without ever regaining consciousness, and because there was no evidence that she suffered any pain as a result of Dr. Broudy’s negligence, her estate was not entitled to any additional damages. A state law which allowed some legal actions to survive the victim’s death did not create any new cause of action, ruled the judges. Estate of Otani v. Broudy, December 16, 2002.

Probate Court Lacks Authority To Seize Lawyer’s Property

OCTOBER 8, 2001 VOLUME 9, NUMBER 15

Probate, guardianship and conservatorship proceedings can be difficult to navigate. Most people utilize lawyers to help with the process, and are well served by having legal representation. Lawyers often serve as protectors of the beneficiaries of those proceedings, and help steer individuals away from mismanagement of estate funds—or worse. Sometimes, though, lawyers can be the problem.

That was the case with Richard D. Goldberg, an Ohio attorney. Mr. Goldberg represented estates and survivors in “wrongful death” cases, in which it was alleged that someone was responsible for the death of an individual. In a number of cases Mr. Goldberg apparently took the money from lawsuits and used the proceeds for his personal living expenses.

In early 1999 the local probate judge in Mahoning County, Ohio—the Hon. Timothy P. Maloney—began his own investigation into Mr. Goldberg’s handling of the wrongful death claims. For the next year Mr. Goldberg was uncooperative with either the judge’s inquiry or the State Bar disciplinary proceedings. In June, 2000, apparently frustrated with his inability to recover money taken by Mr. Goldberg, the probate judge acted on his own initiative.

Judge Maloney first issued an order that the bailiff should search for and seize any property or financial records the bailiff could locate. The next day the bailiff and several law enforcement officers arrived at Mr. Goldberg’s residence and, over the objections of Mr. Goldberg’s wife and daughter and Mrs. Goldberg’s attorney (who arrived shortly thereafter), proceeded to videotape, photograph and catalog the contents of the house. They took four Rolex watches, two Piaget watches, three oriental rugs and a personal computer with them. They also searched and locked a separate warehouse.

Mrs. Goldberg asked the Court of Appeals to quash Judge Maloney’s order and return the impounded items. When that court agreed with her, the probate judge appealed to Ohio’s Supreme Court.

The Supreme Court acknowledged that Mr. Goldberg’s breach of duty harmed his clients and the decedents’ survivors. The Court noted, however, that wrongful death proceeds are not an asset of the decedent’s estate—they belong directly to the survivors. Furthermore, reasoned the Court, Judge Maloney’s power as probate judge did not include the ability to seize property before a final judgment was entered—his power was limited to arresting individuals like Mr. Goldberg and ordering that he be brought before the court to answer questions. While Mr. Goldberg’s actions can be challenged in a proper lawsuit, the probate court did not have power to simply seize his assets pending resolution of that lawsuit. State ex rel. Goldberg v. Mahoning County Probate Court, Sept. 5, 2001.

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