November 16, 2012
IN THE MATTER OF APPROVAL OF A SETTLEMENT REACHED IN THE MATTER OF KEVIN J. DAUL, INDIVIDUALLY AND AS ADMINISTRATOR OF THE ESTATE OF CHRISTOPHER J. DAUL, DECEASED, PLAINTIFFS-RESPONDENTS,
EAST COAST JETS, INC., DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-7535-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 10, 2012
Before Judges Lihotz and Kennedy.
This appeal involves claims asserted by appellant Loribeth Pierson against the estate of Christopher J. Daul (decedent).
Decedent was killed on July 31, 2008, when his charter flight crashed at the Owatonna Degner Regional Airport in Minnesota. Following decedent's tragic death, Pierson pursued various efforts to establish her interest in decedent's estate arising from what she characterized as "a marriage-type relationship" with decedent. "[O]n behalf of all person[s] who are entitled to recover damages under any Survival or Wrongful Death law," the administrator of decedent's estate, Kevin J. Daul, settled an action filed in the Court of Common Pleas, Philadelphia County, Pennsylvania, against defendant East Coast Jets, Inc., and four other corporate entities (the ECJ defendants). The Pennsylvania court allocated 100% of the settlement proceeds as compensation for the wrongful death claim, and 0% as compensation for the survival claim.
As we will explain in more detail later in this opinion, the Pennsylvania court directed the estate administrator to obtain approval of the allocation from the Law Division in New Jersey. The estate administrator filed an action for approval of the allocation. In that action, Pierson claimed an equitable interest in decedent's estate based upon her palimony claim, and therefore challenged the proposed allocation of the settlement proceeds paid by the ECJ defendants. Pierson maintained a portion of the settlement proceeds must be allocated as damages for the survivor action, payable to decedent's estate, to which she claimed entitlement. On December 22, 2010, the Law Division judge approved the proposed allocation, effectively rejecting Pierson's challenge.
The current matter involves Pierson's motion to vacate the December 22, 2010 order. She argued it is unjust to allow the ordered allocation to stand. The judge denied her application and Pierson appealed. We affirm.
To provide context to the issues presented on appeal, we review the various legal actions initiated by Pierson, which ultimately led to the order under review.
Pierson and decedent cohabited for more than four years prior to decedent's death. Pierson asserted she and decedent "discussed marriage" and "planned to set a date for a wedding" during an upcoming vacation scheduled for August 8, 2008. The couple last resided in Northfield.
On January 13, 2010, Pierson filed an action against decedent's estate in the Atlantic County Chancery Division, asserting her palimony claim and an equitable interest in the assets and income acquired during the course of her relationship with decedent, as well as those that accrued subsequent to his death, including proceeds from "wrongful death, survivorship or other type" actions.
Pierson's palimony complaint was dismissed for failure to state a claim upon which relief could be granted. R. 4:6-2(e). The judge concluded the amendment to New Jersey's statute of frauds, adopted on July 18, 2009, and effective January 18, 2010, applied retroactively and, therefore, precluded Pierson's requested relief absent a written palimony agreement. See N.J.S.A. 25:1-5(h) (requiring palimony agreements to be in writing to be enforceable). Pierson appealed following denial of her motion for reconsideration. We reversed, concluding the statutory amendment did not apply to actions pending prior to the effective date of the statutory enactment. Pierson v. Estate of Daul, No. A-5997-09 (App. Div. Oct. 24, 2011) (slip op. at 3). Pierson's Chancery Division complaint was reinstated and trial was held on August 17, 2012. Final disposition has not been entered.
Decedent's estate initiated suit against the ECJ defendants in March 2010. Soon thereafter, Pierson filed a complaint against the ECJ defendants in the Court of Common Pleas, Philadelphia County, and moved to consolidate her action with that initiated by decedent's estate. The request was denied on July 30, 2010. Thereafter, the ECJ defendants and the estate filed preliminary objections challenging Pierson's capacity to present her filed action. The court dismissed Pierson's complaint on August 25, 2010, concluding she lacked standing to sue. Pierson did not appeal this order. Pierson also sought to intervene in decedent's estate's litigation against the ECJ defendants. This motion was denied on August 17, 2010. No appeal was taken from the denial of this application.
On December 3, 2010, the Court of Common Pleas issued an order reflecting an agreement to settle all claims between decedent's estate and the ECJ defendants. The proposed settlement apportioned 100% of the agreed damage award to the resolution of the wrongful death claims, and no monies were allocated to the survivor action. The order, which was sealed, included the following pre-condition to distribution:
[N]o payment shall be made under this Order until such time as the appropriate court in the State of New Jersey has entered an order approving the proposed settlement.*fn1
And it is further ordered and decreed that . . . all documents relating to the settlement including this Order shall be placed under seal and remain under seal.
Decedent's estate filed an order to show cause and Judge Valerie
H. Armstrong scheduled the matter for a hearing in the Law Division in Atlantic County.
Pierson appeared before Judge Armstrong and opposed the proposed allocation of the settlement award. Pierson argued monies attributed to a survivor claim must be escrowed by the estate. The distinction between a wrongful death and survivor action is necessary to understanding Pierson's argument.
Under Pennsylvania law, wrongful death and survivor claims are distinct and compensate different classes of beneficiaries for separate types of losses. Kiser v. Schulte, 648 A.2d 1, 5 (Pa. 1994). Damages for wrongful death, as permitted under 42 Pa. Cons. Stat. § 8301(b), are awarded "for the purpose of compensating the spouse, children, or parents of a deceased for pecuniary loss they have sustained as a result of the death of the decedent." Kiser, supra, 648 A.2d at 4 (citations omitted). The measure of damages includes "the present value of the services the deceased would have rendered to the family, had [he] lived, as well as funeral and medical expenses." Ibid. (citations omitted). On the other hand, survivor claims, pursuant to 42 Pa. Cons. Stat. § 8302, permit a decedent's personal representative to recover damages for the decedent's pain and suffering resulting from the tort, along with "the loss of gross earning power from the date of injury until death, and the loss of his earning power--less personal maintenance expenses, from the time of death through [the decedent's] estimated working life span." Kiser, supra, 648 A.2d at 4 (citations omitted). Consequently, under Pennsylvania law, a "survival . . . action finds primary justification in the protection it affords creditors." Foster v. Maldonado, 315 F. Supp. 1179, 1183 (D.N.J. 1970) (quoting Fisher v. Dye, 125 A.2d 472, 475 (Pa. 1956)).*fn2
Pierson sought allocation of a portion of the settlement proceeds to represent decedent's prospective net earning capacity, reasoning she, as a potential creditor of the estate, was entitled to recovery. An allocation of the settlement proceeds solely to a wrongful death claim would preclude her from sharing in this asset, as the settlement would bypass the estate and be paid to decedent's surviving family members.
After consideration of the arguments advanced by Pierson and the decedent's estate, Judge Armstrong rejected Pierson's request to adjust the proposed allocation. Judge Armstrong concluded previous orders issued by the Pennsylvania courts, which essentially precluded Pierson from joining in the Pennsylvania litigation, "should have been pursued to the fullest extent, if they were to be pursued, in the Pennsylvania court[.]" After determining decedent's estate was solvent, Judge Armstrong approved the settlement as proposed and entered a conforming order on December 22, 2010. Pierson did not appeal this order.
Approximately one year later, Pierson filed a motion to vacate the December 22, 2010 order. See R. 4:50-1. Pierson asserted Judge Armstrong denied her allocation request because her palimony complaint had been dismissed. Now that the palimony complaint was reinstated, Pierson sought to vacate the December 22, 2010 order and reallocate the settlement proceeds.
Without entertaining oral argument, the Law Division judge assigned to review Pierson's motion found no justification to vacate the order. The judge denied Pierson's motion on January 20, 2012, reasoning:
[E]ven if Ms. Pierson's palimony claim had been active at the time of the hearing, it appears to this [c]court that Judge Armstrong would have ruled that Ms. Pierson's involvement in the case would have had to be addressed in Pennsylvania first. Separate and apart from the Order to Show Cause, it is evident to this [c]court that the jurisdiction of this case lies in Pennsylvania, the case was litigated in Pennsylvania, the settlement was reached in Pennsylvania and approved by a Pennsylvania [c]court, and final approval was given by Judge Armstrong. Judge Armstrong indicated that she should not revisit the allocation which had already been approved by the Pennsylvania [c]court. Ms. Pierson should have, as Judge Armstrong indicated, fully pursued all of her claims in [a] Pennsylvania [c]court.
Pierson appeals from that order. On appeal she maintains relief from the judgment should have been granted under Rule 4:50-1(e) or (f), which provides:
[T]he court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: . . . (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.
Pierson argues Judge Armstrong improperly based her decision on the dismissed status of her palimony complaint. Pierson reasons once the palimony claim was restored, the decision underpinning the December 22, 2010 order falls and the order must be vacated. Pierson suggests she could not advance this argument until her palimony complaint was reinstated. Alternatively, Pierson argues the catchall provision of subsection (f) should have been applied to this unusual and complicated matter to avoid an unjust result. Thus, the Law Division judge's denial represents a clear abuse of discretion. We are not persuaded.
Rule 4:50-1 "provides a mechanism for direct attack on a judgment or order entered by a court of this state." Pressler & Verniero, Current N.J. Court Rules, comment 1 on R. 4:50-1 (2013). Relief under Rule 4:50-1 "is addressed to the sound discretion of the trial court, which should be guided by equitable principles[,]" Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994), and is "'granted sparingly.'" DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 261 (2009) (quoting F.B. v. A.L.G., 176 N.J. 201, 207 (2003)). "On appellate review, the trial judge's determination 'will be left undisturbed unless it represents a clear abuse of discretion.'" Ibid. (quoting Little, supra, 135 N.J. at 283). See also Piscitelli v. Classic Residence by Hyatt, 408 N.J. Super. 83, 102 (App. Div. 2009). In our review, we decide "only whether the trial judge pursued a manifestly unjust course." Gittleman v. Cent. Jersey Bank & Trust Co., 103 N.J. Super. 175, 179 (App. Div. 1967), rev'd on other grounds, 52 N.J. 503 (1968).
Pierson's claims of error focus on an assertion that the wrongful dismissal of her palimony claim created "an impossible procedural situation[,]" which affected her standing to object to the settlement allocation and assert her legally enforceable interests. We disagree.
In reviewing Pierson's application to vacate the December 22, 2010 order, the Law Division judge's written memorandum of decision explained Judge Armstrong's approval of the Pennsylvania settlement did not turn on Ms. Pierson's rights. The record of the December 22, 2010 hearing reflects Pierson presented this argument, which Judge Armstrong acknowledged. However, Judge Armstrong's remarks support a finding that the approval of the settlement was not impacted by whether Pierson's palimony claim was viable. In entering her determination, Judge Armstrong stated:
There has been some suggestion . . . that the approval language in the Pennsylvania judge's order . . . that the settlement must be approved by the New Jersey court . . . because of the uniqueness of the situation here, that is because of the palimony claim and the possible estate implications of that palimony claim. However, I think it's important to point out that at least four other settlements from this same plane crash, settlements from the Pennsylvania court, have been brought here and all had the identical language and none of the other matters which were brought here for approval involved the unusual issue of the palimony claim. So I am not persuaded . . . there was something unique about the language in the Christopher Daul matter as opposed to the other matters. . . . [T]his [o]rder, and the other [o]rders that I . . . reviewed personally, . . . set the apportionment as a hundred percent toward wrongful death and zero percent for the survival claim. I do not read the Pennsylvania [o]rder . . . as suggesting that in determining whether to approve the settlement that I should reallocate the allocation set forth in the Pennsylvania order.
These comments make clear the uncertainty of Pierson's status did not affect the approval of the settlement allocation.
Similarly unfounded is Pierson's argument that error resulted because the Law Division judge "failed to appropriately consider the purpose of the order by [the judge] of the Pennsylvania Orphans Court for requiring the approval of New Jersey courts for the apportionment of settlement proceeds." In this regard she maintains Judge Armstrong never seriously considered her interests as a purported claimant against the estate. We reject these arguments.
Importantly, Pierson did not appeal Judge Armstrong's determination and cannot now attempt to do so by boot-strapping that issue in this appeal. "It is well established that [a Rule] 4:50 motion may not be used as a substitute for a timely appeal." Wausau Ins. Co. v. Prudential Prop. & Cas. Ins. Co. of N.J., 312 N.J. Super. 516, 519 (App. Div. 1998) (citing Di Pietro v. Di Pietro, 193 N.J. Super. 533, 539 (App. Div. 1984)). Moreover, [t]he very purpose of a Rule 4:50 motion is not, as in appellate review, to advance a collateral attack on the correctness of an earlier judgment. Rather, it is to explain why it would no longer be just to enforce that judgment. The issue is not the rightness or wrongness of the original determination at the time it was made but what has since transpired or been learned to render its enforcement inequitable. [In re Guardianship of J.N.H., 172 N.J. 440, 476 (2002).]
Pierson also is incorrect in asserting an appeal was "not feasible due to the . . . 'dismissed' status of her palimony matter in New Jersey." Admittedly, pursuit of legal recourse was cumbersome, but certainly it was available. If Pierson desired to challenge Judge Armstrong's finding that the decedent's estate was solvent, her recourse was to file an appeal. Further, if Pierson's status as a creditor of the estate entitled her to standing to challenge the proposed allocation determination in the Pennsylvania action against the ECJ defendants, she could and should have appealed the denial of her request to intervene in Pennsylvania.
Following our review and considering the totality of the circumstances, we find no abuse of discretion in the denial of Pierson's application to set aside the December 22, 2010 order. The Law Division judge considered Pierson's arguments and all relevant factors, finding them unavailing. If Pierson believed that determination was wrong, an appeal should have been filed. We conclude the denial of Pierson's motion did not amount to "a clear error in judgment" warranting reversal. See Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005) (citations omitted).