Filed: Jul. 21, 2003
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 02-3803 _ Administrative Committee of the * Wal-Mart Stores, Inc., Associates' * Health and Welfare Plan, * * Appellant, * * Appeal from the United States v. * District Court for the * Western District of Arkansas. Evelyn Soles, as personal representative * for the estate of Patrick J. Hollander; * William Diggs, as stakeholder, * * Appellees. * _ Submitted: May 15, 2003 Filed: July 21, 2003 _ Before WOLLMAN, MAGILL, and BEAM, Circuit J
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 02-3803 _ Administrative Committee of the * Wal-Mart Stores, Inc., Associates' * Health and Welfare Plan, * * Appellant, * * Appeal from the United States v. * District Court for the * Western District of Arkansas. Evelyn Soles, as personal representative * for the estate of Patrick J. Hollander; * William Diggs, as stakeholder, * * Appellees. * _ Submitted: May 15, 2003 Filed: July 21, 2003 _ Before WOLLMAN, MAGILL, and BEAM, Circuit Ju..
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 02-3803
___________
Administrative Committee of the *
Wal-Mart Stores, Inc., Associates' *
Health and Welfare Plan, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Western District of Arkansas.
Evelyn Soles, as personal representative *
for the estate of Patrick J. Hollander; *
William Diggs, as stakeholder, *
*
Appellees. *
___________
Submitted: May 15, 2003
Filed: July 21, 2003
___________
Before WOLLMAN, MAGILL, and BEAM, Circuit Judges.
___________
MAGILL, Circuit Judge.
The Administrative Committee of the Wal-Mart Stores, Inc., Associates' Health
and Welfare Plan (the "Committee") appeals the district court's1 grant of summary
1
The Honorable Robert T. Dawson, United States District Judge for the
Western District of Arkansas.
judgment for defendant William Diggs.2 The Committee sought to enforce the
reimbursement provision of the Wal-Mart Employee Benefit Plan (the "Plan")
pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29
U.S.C. §§ 1001-1461 (2000). The district court found that the Committee's claims
were time barred, and, in the alternative, meritless. We agree that the Committee's
claims are barred and affirm.
I.
The facts are undisputed. The Plan is an employer sponsored, self-funded
health and welfare employee benefit plan, which is governed by ERISA and contains
a reimbursement provision.3 The Plan is administered by the Committee in Rogers,
2
Separate named defendant Evelyn Soles was never served with a summons or
complaint in this matter.
3
The 1996 "RIGHT TO REDUCTION AND REIMBURSEMENT
(SUBROGATION)" Plan provision provides, in relevant part:
The Plan has the right to . . . recover (subrogate) 100% of the benefits
previously paid by the Plan to the extent of any and all of the following
payments:
• Any judgment, settlement, or any payment, made or to be made
by a person considered responsible for the condition giving rise
to the medical expense or by their insurers.
• Any auto or recreational vehicle insurance coverages or
benefits including, but not limited to, uninsured motorist
coverage.
• Business and homeowners medical liability insurance coverage
or payments.
• Attorney's fees.
....
The Plan requires that you or your covered dependent cooperate to
guarantee reimbursement to the Plan from third party benefits. Failure
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Arkansas. The Committee appoints individuals to assist in the day-to-day
administration of the Plan (collectively "Plan Administrator").
Patrick Hollander was a Wal-Mart employee in Myrtle Beach, South Carolina;
he was covered by the Plan. On April 25, 1996, Hollander was struck by a car driven
by J.W. Todd and then by a second car driven by Jamie Lee Hucks. Hollander died
to comply with this request will entitle the Plan to withhold benefits due
you under the Plan Document. You or your covered dependents may not
do anything to hinder reimbursement of overpayment to the Plan after
you have accepted benefits.
....
These rights apply regardless of whether such payments are designated
as payment for, but not limited to:
• Pain and suffering
• Medical benefits
• Other specified damages
• Whether the participant has been made whole (i.e., fully
compensated for his/her injuries):
....
To aid the Plan in its enforcement of its right of recovery,
reimbursement, and subrogation, the participant must, at the Plan's
request and at its discretion:
• Take any action
• Give information
• Execute documents so required by the Plan
Failure to aid the Plan and to comply with such requests may result in
the Plan withholding benefits, services, payments, or credits due under
the plan.
Subrogation is when Wal-Mart pays your medical charges relating to
your accident while waiting for the responsible party to settle.
Repayment to the Plan of 100% will be made at the time the settlement
is received by the associate, dependent, or their attorney.
J.A. at 71-72 (emphasis added).
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on April 29, 1996. Hollander's hospitalization and medical treatment resulted in
charges of $48,837.99, which the Plan paid.
Hollander had one daughter, Kristen Hollander. Kristen now resides in South
Carolina with Hollander's mother, Evelyn Soles, the duly appointed personal
representative for Hollander's estate (the "Personal Representative"). William Diggs
is an attorney representing the estate of Hollander, including Kristen's interests.
The Personal Representative filed a tort action in South Carolina state court
("tort action") alleging (1) a dram shop violation against numerous defendants on
behalf of Hollander under the South Carolina survival statute4; (2) a dram shop
violation against numerous defendants on behalf of Hollander's beneficiary, Kristen,
pursuant to the South Carolina wrongful death statute5; and (3) a claim for negligence
4
South Carolina Code section 15-5-90 entitled "Survival of right of action"
provides: "Causes of action for and in respect to . . . all injuries to the person . . . shall
survive both to and against the personal or real representative, as the case may be, of
a deceased person . . . any law or rule to the contrary notwithstanding." S.C. Code
Ann. § 15-5-90 (2002).
5
South Carolina Code section 15-51-10 entitled "Civil action for wrongful act
causing death" provides:
Whenever the death of a person shall be caused by the wrongful act,
neglect or default of another and the act, neglect or default is such as
would, if death had not ensued, have entitled the party injured to
maintain an action and recover damages in respect thereof, the person
who would have been liable, if death had not ensued, shall be liable to
an action for damages, notwithstanding the death of the person injured,
although the death shall have been caused under such circumstances as
make the killing in law a felony. In the event of the death of the
wrongdoer, such cause of action shall survive against this personal
representative.
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against Todd and Hucks under both the survival and wrongful death statutes of South
Carolina.6 Damages were alleged at $1,000,000 on the survival claims and
$10,000,000 on the wrongful death claims.
On January 15, 1997, Todd's automobile insurer offered to pay $100,000, the
limit of Todd's liability policy. The Personal Representative accepted this amount in
complete settlement and compromise of both the wrongful death and survival claims
against Todd and his family ("Settlement I"). The probate court approved Settlement
I and ordered the proceeds apportioned as follows: $90,000 to the wrongful death
action, $10,000 to any claim for survival, and $25,000 in attorney's fees to be paid
from the wrongful death proceeds. On the same day, Todd's attorney faxed a letter
to the Plan Administrator explaining Settlement I.
The following day Diggs faxed a letter to the Plan Administrator informing him
of the settlement with Todd as well as the nature of the South Carolina wrongful
death and survival statutes. The letter stated, in part,
S.C. Code Ann. § 15-51-10.
South Carolina Code section 15-51-20 entitled "Beneficiaries of action for
wrongful death; by whom brought" provides:
Every such action shall be for the benefit of the wife or husband and
child or children of the person whose death shall have been so caused,
and, if there be no such wife, husband, child or children, then for the
benefit of the parent or parents, and if there be none such, then for the
benefit of the heirs of the person whose death shall have been so caused.
Every such action shall be brought by or in the name of the executor or
administrator of such person.
S.C. Code Ann. § 15-51-20.
6
See supra notes 4 and 5.
-5-
We would ask that you agree that Wal-Mart has no subrogation claim
against any monies which are allocated for receipt by Mr. Hollander's
statutory beneficiaries as a result of their wrongful death claim, and that
Wal-Mart's rightful interest in this case lies against the assets of the
estate of Patrick Hollander which include the $10,000.00 fund allocated
as a result of the survival action which we have maintained on his
behalf.
J.A. at 57-58.
On January 23, 1997, in a letter addressed to Todd's attorney and carbon copied
to Diggs, the Plan agreed to accept the $10,000 from Settlement I, but stated that
"[t]he Plan will pursue the remainder of its subrogation interest from future
settlements received by the Hollander Estate." J.A. at 44.
On March 25, 1997, Diggs sent the Plan Administrator a check from his trust
account in the amount of $10,000. The check was accepted and the funds applied
toward reimbursement, leaving an outstanding balance of $38,837.99.
Thereafter, Diggs continued his efforts to obtain settlements or judgments
against the other defendants to the tort action. The Plan Administrator requested and
received periodic updates from Diggs as to the status of the proceedings to collect
from third parties.
On March 2, 2000, Diggs wrote the Plan Administrator and explained that
because Hollander "never regained consciousness . . . we were not able to develop
any evidence to warrant payment to him in a survival action for pain and suffering.
The settlement the estate has agreed to is structured and will pay Mr. Hollander's
daughter payments throughout her life" ("Settlement II"). J.A. at 66. Diggs offered
to pay the Plan $10,000 from Settlement II toward the outstanding medical expenses.
-6-
On April 6, 2000, the Plan Administrator responded and refused the $10,000:
Please be advised the additional $10,000.00 making a total of
$20,000.00 settlement you offered in your letter is not acceptable. The
Plan requires 100% reimbursement from any settlement. . . .
Referring to the previous telephone conversations and letters [between
the Plan Administrator and Diggs,] I see that the Plan agreed not to
pursue 100% reimbursement from [Settlement I]. It was agreed that
reimbursement would be made once settlement was obtained from the
other parties involved in this tragic accident.
Please forward a check for the full amount due the Plan as previously
agreed. Please be advised the Plan requires reimbursement from any
settlement, including whether or not the settlement was designated as a
wrongful death settlement or otherwise.
J.A. at 67.
On April 8, 2000, Diggs replied, informing the Plan Administrator that
Settlement II had not yet been approved by the court and stating:
[i]n order to obtain court approval of the settlement, and thus the
payment of $38,837.99 to your plan, please provide me with the
language in your plan which requires 100% reimbursement to you under
the circumstances of the instant case. I will need this language in order
to present it to the court for approval. Please understand that we
acknowledge that the law of this Circuit supports the position you have
taken in your letter of April 6, 2000. See United McGill Corp. v.
Stinnett, 154 F.3d 168 (4th Cir. 1998).
J.A. at 69.
-7-
On April 11, 2000, the Plan Administrator faxed a written response and
attached a copy of the relevant language from the Plan in effect in 1996 and the
version that became effective on January 1, 2000.7 The letter stated that the Plan
specifically requires "100% reimbursement from any settlement and no reduction for
attorneys' fees." J.A. at 70.
The Plan Administrator received no response from Diggs. On October 11,
2000, the Plan Administrator sent Diggs a request for a status update:
It has just come to my attention that I have not heard from you since
your letter dated April 8, 2000, at which time you requested a copy of
our Plan language in order to obtain court approval of the settlement and
payment of the Plan's $38,837.99 reimbursement interest. Please advise
what is the status of settlement and/or settlement disbursement.
J.A. at 80.
On October 19, 2000, Diggs answered the inquiry, indicating that as a result
of Plan Administrator assertions and reliance on United McGill Corp., which did not
involve a wrongful death claim, Diggs was led to believe that case law required 100%
reimbursement to the Plan. However, Diggs stated,
[a] more complete review of the case law from the United States Court
of Appeals for the Fourth Circuit . . . shows that Wal-Mart has
misrepresented the legality and breadth of its subrogation interest, at
least in its scope, as applicable to this case, which is a wrongful death
case.
J.A. at 81. Diggs also requested an explanation as to why Wal-Mart was entitled to
the previous $10,000 received from Settlement I: "Wal-Mart was never entitled to
7
See supra note 3.
-8-
claim an interest in wrongful death proceeds generated in favor of Mr. Hollander's
daughter, including the $10,000.00 previously paid to you." J.A. at 82.
Diggs and the Plan Administrator exchanged a few more letters, requests for
information, and requests for status updates. On November 3, 2000, Diggs indicated
by letter that "[w]e have entered into a structured settlement for Mr. Hollander's
daughter. A sufficient amount of funds were held in trust to satisfy Wal-Mart's
subrogation claim." J.A. at 84. The Plan Administrator's response letter cited
McInnis v. Provident Life & Accident Ins. Co., 21 F.3d 586 (4th Cir. 1994), which
held that North Carolina's wrongful death statute was preempted by ERISA, and
indicated "I trust you will be forwarding reimbursement to my attention in the very
near future." J.A. at 97.
On May 17, 2000, the state court entered an order approving Settlement II. The
court authorized the Personal Representative to accept $130,000 "now and future
periodic payments in the name of Kristen Hollander with a . . . guaranteed value" of
$769,584.20, with "expected benefits" totaling $1,153,757.00 "as settlement in full
of any and all liability for any claims, liens, causes of action, settlements, judgments
or the like that said Personal Representative of the Estate of Patrick Hollander has or
might have" against the defendants to the tort action. J.A. at 110-11.
On November 21, 2000, Diggs notified the Plan Administrator that he felt
misled as to the law applicable to the Committee's claim for reimbursement. Diggs
claimed that "in Mr. Hollander's case, there was no evidence of any conscious pain
and suffering and therefore, no evidence to support a survival claim." J.A. at 99.
Furthermore, Diggs stated,
[i]n Mr. Hollander's case, the damage claim at issue was the wrongful
death settlement proceeds belonging to Mr. Hollander's daughter, not
Mr. Hollander or his estate. Under such circumstances, the law in this
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Circuit provides that we are not responsible for the payment of Wal-
Mart's subrogation claim.
Moreover, consistent with the foregoing, it appears that the $10,000.00
previously paid to Wal-Mart should be refunded. Please make plans to
do so.
J.A. at 99.
On November 30, 2000, the Plan Administrator responded that it would
continue to insist on 100% reimbursement "based on the clear, plain reimbursement
provision of the Plan and in accordance" with Fourth Circuit case law. J.A. at 100.
Furthermore, the Plan Administrator indicated that failure to forward the amount due
would result in legal action.
On February 17, 2001, the Plan Administrator, by letter, informed Diggs that
the Committee had decided to pursue the 100% reimbursement from Settlement II
in accordance with the Plan's language. This letter indicated that the file was turned
over to the legal department.
On March 18, 2002, the Plan filed a complaint in the district court, alleging a
claim for equitable relief under ERISA, 29 U.S.C. § 1132(a)(3)(B). Specifically, the
Plan, as a fiduciary, sought restitution and imposition of a constructive trust on the
proceeds of Settlement II. The district court held: (1) the Plan's claims were barred
by the applicable statute of limitations; and (2) even assuming, arguendo, the claims
were not barred, the claims were meritless. This appeal follows.
II.
We review a district court's grant of summary judgment de novo, using the
same standards as the district court. Ecklekamp v. Beste, 315 F.3d 863, 867 (8th Cir.
2002) (citation omitted). Summary judgment is only appropriate when, viewing the
-10-
facts and inferences in the light most favorable to the nonmoving party, there is no
genuine issue of material fact and the moving party is entitled to judgment as a matter
of law. Fed. R. Civ. P. 56(c) (2003); Bennett v. Federated Mut. Ins. Co., 141 F.3d
837, 838 (8th Cir. 1998) (citations omitted).
Despite the Committee's many arguments on appeal, the dispositive issue is
whether the Committee's claim is time barred. We answer this question in the
affirmative and, therefore, do not address the Committee's other arguments.
Because ERISA does not contain a statute of limitations, the court "borrow[s]
the most analogous state statute of limitations." Duchek v. Blue Cross & Blue Shield
of Dist. of Neb., 153 F.3d 648, 649 (8th Cir. 1998) (citation omitted). "[T]he
characterization of plaintiff's claim for statute of limitations purposes is a question of
federal law." Johnson v. State Mut. Life Assurance Co. of Am.,
942 F.2d 1260, 1262
(8th Cir. 1991) (citations omitted). Federal law also determines when the cause of
action accrues.
Bennett, 141 F.3d at 838 (citations omitted).
The Committee argues that the district court erred in applying Arkansas Code
Annotated section 16-56-105,8 a three-year statute of limitations, because this action
is most properly characterized as a breach of written contract action to which
Arkansas Code Annotated section 16-56-111,9 a five-year statute of limitations,
8
Arkansas Code Annotated section 16-56-105 states, in relevant part, that "[t]he
following actions shall be commenced within three (3) years after the cause of action
accrues: (1) All actions founded upon any contract, obligation, or liability not under
seal and not in writing . . .; (3) All actions founded on any contract or liability,
express or implied." Ark. Code Ann. § 16-56-105 (2002).
9
Arkansas Code Annotated section 16-56-111 states, in relevant part, that
"[a]ctions to enforce written obligations, duties, or rights . . . shall be commenced
within five (5) years after the cause of action shall accrue." Ark. Code Ann. § 16-56-
111.
-11-
should apply. We need not decide which statute of limitations applies because under
either the three- or five-year statute of limitations, the Committee's claim is barred
because more than five years have passed since this cause of action accrued.
This action was filed on March 18, 2002; thus, the Committee's claim is barred
under either statute if it accrued prior to March 18, 1997. The Committee argues that
the date on which the claim accrued was April 8, 2000: the date it became aware of
Settlement II. We disagree.
Generally, this court applies the discovery rule to determine when a claim
accrues. Union Pacific R.R. v. Beckham, 138 F.3d 325, 330 (8th Cir. 1998) (holding
that absent a contrary mandate from Congress, the discovery rule determines when
a cause of action accrues in a federal question case). The discovery rule provides that
"a plaintiff's cause of action accrues when he discovers, or with due diligence should
have discovered, the injury that is the basis of the litigation."
Id. (citations omitted).
Diggs notified the Plan Administrator in writing, on January 16, 1997, that the
Personal Representative had entered into Settlement I for $100,000 and that "Wal-
Mart has no subrogation claim against any monies which are allocated for receipt by
Mr. Hollander's statutory beneficiaries as a result of their wrongful death claim, and
that Wal-Mart's rightful interest in this case lies against the assets of the estate of
Patrick Hollander. . . ." J.A. at 58. The district court found that this statement was
"a clear and unequivocal repudiation of the Committee's claimed right to 100%
reimbursement from the proceeds of any settlement related to the accident." J.A. at
129. We agree and, accordingly, find that the claim accrued on January 16, 1997.
The Committee fails to offer any legal support for its contention that the
statement "[t]he Plan will pursue the remainder of its subrogation interest from future
settlements received by the Hollander Estate," J.A. at 44, somehow tolled the statute
-12-
of limitations. As such, we agree with the district court that summary judgment was
appropriate because the Committee's cause of action was time barred.
III.
For the aforementioned reasons, we affirm the judgment of the district court.
BEAM, Circuit Judge, dissenting.
I suggest that the court's opinion may be appropriately morphologized by the
expression "no good deed goes unpunished."10 Believing this should not be true, I
respectfully dissent.
At the request of Evelyn Soles, personal representative of the Estate of Patrick
J. Hollander, made through her attorney, William I. Diggs, now the stakeholder of
part of the proceeds of a substantial tort settlement, the employees of Wal-Mart acting
through an administrator of their ERISA benefit plan, performed a good deed by
agreeing to accept partial payment of a subrogation claim from a portion of the
monies derived through a modest settlement with one of several potential tortfeasors.
Quoting only a part of the letter of request from attorney Diggs to Wal-Mart, dated
January 16, 1997, the court now holds that the letter and Wal-Mart's act of acceptance
triggered the running of the five-year statute of limitation that clearly applies in this
action. With this result, I disagree. And, in my view, the portion of the above-
mentioned letter not quoted or discussed in the court's opinion illustrates the error.
Two separate settlements occurred in this case. The first settlement, set forth
in the January 16 letter, involved James Todd, II, the driver of the first vehicle that
10
Clare Booth Luce, in H. Faber, The Book of Laws, 1980.
-13-
struck Mr. Hollander. The second settlement, consummated on May 17, 2000,
involved the operator of the second car that struck Mr. Hollander and two liquor-
dispensing establishments.
The January 16, 1997, letter stated in greater part as follows:
Survival action proceeds are typically generated when a deceased is not
killed instantly but rather experiences conscious pain and suffering prior
to death. While we have no evidence that indicates Mr. Hollander
suffered conscious pain and suffering, we have nevertheless agreed to
allocate Ten Thousand and No/100s ($10,000.00) Dollars [of the
$100,000 settlement] to the survival claim. This is in keeping with our
view of South Carolina case law with respect to the issue of fund
allocation. We did this to insure that there was some fund which could
begin to satisfy claims against Mr. Hollander's estate including the
subrogation interest of Wal-Mart.
As an employee of Wal-Mart in Myrtle Beach, South Carolina, Mr.
Hollander received the generous benefits from the plans which have
been established by Wal-Mart and which are governed by the provisions
of ERISA. We would ask that you agree that Wal-Mart has no
subrogation claim against any monies which are allocated for receipt by
Mr. Hollander's statutory beneficiaries as a result of their wrongful death
claim, and that Wal-Mart's rightful interest in this case lies against the
assets of the estate of Patrick Hollander which include the $10,000.00
fund allocated as a result of the survival action which we have
maintained on his behalf.
Your acknowledgment in this regard will enable us to conclude this
portion of the case and allow for the distribution of proceeds to Mr.
Hollander's daughter. Of course, a Conservator or Guardian will be
appointed on behalf of the minor child to receive these monies for her.
This is a position which is required and regulated by South Carolina law
and which must be bonded.
-14-
Joint Appendix at 57-58 (emphasis added). It is obvious that this letter and the
resultant agreement by Wal-Mart directed itself only to "this portion of the case."
In other words, this particular settlement arrangement involved only Mr. Todd's
liability and the apportionment requested by personal representative Soles (who
asserted both a wrongful death and survival claim) and approved by the South
Carolina court. While it is possible that Mr. Diggs' analysis of the availability of the
"wrongful death" proceeds to the satisfaction of the subrogation claim was wrong,
Wal-Mart had no immediate duty to institute litigation against these wrongful death
funds from this particular tortfeasor and was certainly not precluded from voluntarily
accepting the $10,000 payment and proceeding against monies later generated from
other, unrelated (and perhaps unknown at the time) tortfeasors. Indeed, Mr. Diggs'
letter referred only to Wal-Mart's ERISA plan (contract) rights in the Todd money not
the later negotiated funds from the additional parties.
It is highly probable, however, that attorney Diggs was correct that under South
Carolina and Fourth Circuit precedent, the $90,000 in wrongful death proceeds, as
approved by the court, were properly allocable only to the statutory beneficiaries and
were not available to satisfy the ERISA claim, Liberty Corp. v. NCNB National Bank
of South Carolina, 984 F.2d 1383, 1388-89 (4th Cir. 1993), although the court's
decision implies a contrary conclusion without any discussion of the matter. Unless
Wal-Mart had the right and, thus, the duty to proceed to collect its subrogation claim
against the $90,000 allocated by the court to the wrongful death claim in January of
1997,which right and duty Wal-Mart did not have under the holding in Liberty
Corp.,11 the letter of January 16 could have triggered nothing by way of
commencement of the running of a statute of limitations.
11
Although Liberty Corp. involved North Carolina law, I find no material
difference between the applicable North Carolina and South Carolina statutes.
-15-
The settlement of May 17, 2000, is a different story. The court order approving
this settlement states, in part:
. . . Kristen Hollander, is the decedent's only surviving heir, that
she is the statutory beneficiary under S.C. Code Ann. § 15-51-20 (Supp.
1998), and that she is entitled to any damages recovered thereunder for
the wrongful death of Decedent. It appears further that S.C. Code Ann.
§ 15-51-40 (Supp. 1998) provides that any damages recovered for the
wrongful death of a decedent would be distributed to surviving issue
according to the laws of intestacy of this State as set forth in S.C. Code
Ann. § 62-2-102 (1987) and § 62-2-103 (1987).
It appears further that Decedent died intestate and that any
damages recovered for any conscious pain and suffering of Decedent,
pursuant to S.C. Code Ann. § 15-5-90 (1976), would likewise be
distributed according to the laws of intestacy. Said damages are a
probate asset of the Decedent's estate, must be administered as such by
the personal representative and cannot be disbursed without bond being
posted or prior written authorization of this Court.
....
After proper and necessary inquiry, the results of which are set
forth herein above, and examination of Petitioner's Petition, this Court
is of the opinion that the proposed settlement agreement set forth in the
Petition for Approval of Wrongful Death and Survival Claim Settlement
should be approved and that this Court has the authority to approve said
settlement pursuant to the provisions of S.C. Code Ann. § 15-51-42
(Supp. 1998).
Now, therefore, it is hereby ORDERED that Evelyn Soles, as
Personal Representative of the Estate of Patrick Hollander, be and
hereby is authorized to accept from Jamie Lee Hucks Burroughs, Myrtle
Beach Food Systems, Inc., and NYP Corp., or other entities on their
behalf, the sum of One Hundred Thirty Thousand and No/100
($130,000.00) Dollars now and future periodic payments in the name of
-16-
Kristen Hollander with an expected value guaranteed value of Seven
Hundred Sixty-nine Thousand Five Hundred Eighty-four and 02/100
($769,584.20) [sic] Dollars and expected benefits total One Million One
Hundred Fifty-three Thousand Seven Hundred Fifty-seven and No/100
($1,153,757.00) Dollars as settlement in full of any and all liability for
any claims, liens, causes of action, settlements, judgments or the like
that said Personal Representative of the Estate of Patrick Hollander has
or might have at some time . . . arising out of the motor vehicle collision
that occurred on April 25, 1996, including, but not limited to, all claims,
liens, actions, causes of action, judgments or the like for the wrongful
death and any conscious pain and suffering of Decedent and that
Petitioner was, is and shall be responsible for the proper distribution of
the aforementioned proceeds among the wrongful death and survival
claim beneficiaries in accordance with law and those persons and
entities protected by the contemplated covenant not to sue and policy
release are relieved and discharged from liability with respect to the
proper distribution of the aforementioned proceeds. The proceeds that
are recovered for conscious pain and suffering are a probate asset of the
Decedent's estate, must be administered as such by the personal
representative and cannot be disbursed without bond being posted or
prior written authorization of this Court. Furthermore, no disbursement
of either the wrongful death or conscious pain and suffering proceeds
shall be made by Evelyn Soles, as Personal Representative of the Estate
of Patrick Hollander, to or for the benefit of Kristen Hollander without
first complying with S.C. Code Ann. §§ 62-5-431 and -432 (1987).
Joint Appendix at 109-112 (emphasis added). Thus, this settlement, but not the first
settlement, provided funds to fully satisfy the balance of Wal-Mart's subrogation
interest. The South Carolina court's apportionment of the proceeds of this second
settlement brings the Wal-Mart claim squarely within McInnis v. Provident Life &
Accident Insurance Co., 21 F.3d 586 (4th Cir. 1994). Under McInnis, the ERISA
rights inquiry is directed at "whose damage claim is at issue" in the settlement.
Id.
at 589. Here, as in McInnis, "the damages recovered as settlement [as noted in the
court order] clearly included those belonging to [the wrongful death beneficiary] and
[the estate]."
Id. at 590. Accordingly, under McInnis, Wal-Mart is entitled to recover
-17-
its subrogation claim from the fruits of the second settlement and if this result
conflicts with South Carolina wrongful death law, state law is pre-empted by ERISA.
Id. Thus, Ms. Soles and Mr. Diggs' refusal to pay Wal-Mart's claim after the second
settlement gives Wal-Mart a cause of action commencing on May 17, 2000, providing
a time frame well within the applicable statute of limitations. The dismissal of the
action on limitations grounds is error.
Accordingly, I dissent.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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