Married But Separated: Husband Not Entitled To Wrongful-Death Settlement Proceeds

The trial court in this wrongful-death case properly 1) granted the estate’s motion to approve and distribute settlement proceeds without first conducting an evidentiary hearing, and 2) excluded the husband – who was married to, but separated from, the decedent at the time of her death – from receiving any proceeds, the Michigan Court of Appeals has ruled.

“We are not left with a definite and firm conviction that the trial court made a mistake when it excluded [the appellant husband] from the award of settlement proceeds,” the Court of Appeals said in Estate of Kellogg v Landry (Docket No. 372516).

“The trial court properly identified that the issue was to determine ‘what [was] fair and equitable’ in distributing the proceeds,” the Court of Appeals said. “It then considered the ‘evidence to support the distribution of the estate on the basis of [the appellant’s] relationship[] to the decedent.’”

Judge Kirsten Frank Kelly, Judge Philip P. Mariani and Judge. Matthew S. Ackerman were on the Court of Appeals panel that issued the unpublished opinion.

Background

The decedent, Evelyn Kellogg, was killed in a motor vehicle accident in December 2022. She was survived by her husband, Nicholas Kellogg (the appellant), but had been separated from him since July 2022. Evelyn was also survived by her two sisters, Sharon (the personal representative/plaintiff) and Annette, and her father, Wilmer.

The plaintiff filed this wrongful-death lawsuit against the defendants in July 2023. The plaintiff and the defendants entered into a settlement agreement, and the plaintiff filed a motion in Grand Traverse County Circuit Court to approve the settlement and distribution of proceeds. The plaintiff proposed that two-thirds of the net proceeds be distributed to Sharon and one-third be distributed to Annette. The plaintiff asserted the appellant, Nicholas, should be excluded because he and Evelyn were undergoing divorce proceedings at the time she died.

The appellant objected to the proposed distribution, contending the divorce was not finalized and that he had hoped to reconcile with Evelyn prior to her death. He argued that he was entitled to a portion of the settlement proceeds and that “the facts supporting the couple’s potential reconciliation warranted, at minimum, an evidentiary hearing for the trial court to make a fair and equitable distribution of the award for damages.”

The trial court denied the appellant’s request for an evidentiary hearing and adopted the plaintiff’s proposed distribution, finding there was no evidence that Evelyn was “mutually seeking reconciliation with” the appellant. The trial court entered an order approving the settlement agreement and distribution of proceeds. After the trial court denied the appellant’s motion for reconsideration, he appealed.

Properly Excluded From Proceeds

On appeal, the appellant argued 1) the trial court wrongly excluded him from receiving any settlement proceeds and 2) erroneously granted the plaintiff’s motion without first holding an evidentiary hearing.

“We disagree,” the Court of Appeals said, noting the issue in the case “relate[d] to the distribution of damages reached through a settlement between plaintiff and defendants.”

The Court of Appeals pointed out that MCL 600.2922(5) and MCL 600.2922(6) establish the process for approving wrongful-death settlements and distributing proceeds. Although the statute sets forth the procedure for trial courts to follow, it “provides little guidance in deciding how to arrive at a distribution that is ‘fair and equitable,’” the appeals court said, citing In re Claim of Carr, 189 Mich App 234 (1991).

In previous cases, like Carr, the appeals court “has observed that ‘[t]here is, of course, no precise formula for determining damages for loss of a loved one’s society and companionship,’” the Court of Appeals stated. “In making this determination, this Court considers whether ‘there is evidence to support the distribution of the estate on the basis of the parties’ relationships to the decedent.’ … ‘The only reasonable measure of 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.’”

In this case, “[w]e conclude that the trial court’s award of proceeds to [Sharon] and Annette was adequately supported by the record,” the Court of Appeals said. “Appellant testified during his deposition that Evelyn, [Sharon], Annette, and Wilmer were ‘a very tight family,’ and Evelyn communicated with [them] daily by phone call or text. Accordingly, appellant’s own testimony was ‘evidence to support the distribution of the estate on the basis of the parties’ relationships to the decedent.’”

According to the Court of Appeals, one “crucially” important factor was that the appellant “conceded” Sharon and Annette were entitled to settlement proceeds. The appellant “argues that ‘if this [C]ourt were to award damages, [appellant] believes the more appropriate result would be an equal distribution of settlement proceeds … based upon [appellant’s] evidence of damages as well as the fact that [Sharon and Annette] both lost their sister.’ Based on these concessions, the appropriate inquiry is whether appellant was properly excluded from the distribution of settlement proceeds based on his relationship with Evelyn.”

The Court of Appeals said it was not “left with a definite and firm conviction” the trial court mistakenly excluded the appellant from the award of settlement proceeds. “While the [trial] court recognized that the divorce between appellant and Evelyn was not finalized, it observed, ‘[T]here is no evidence that [Evelyn] was seeking reconciliation,’ and appellant’s testimony merely reflected ‘hope on behalf of [appellant]’ that the couple would reconcile. Based on the couple’s pending divorce and the lack of evidence that Evelyn wished to reconcile with appellant before she died, the court determined that the proposed distribution was fair and equitable.”

This determination was supported by the evidence, the Court of Appeals explained. “While it is clear that appellant hoped for reconciliation, he also testified that Evelyn did not bring up the possibility of reuniting. And although appellant reached out to Evelyn daily about reconciling, her responses were ‘very brief,’ and she often did not respond, or took time to get back to him.” In addition, the appellant Appellant “point[ed] to his testimony that he and Evelyn each began individual counseling[;] however, he also stated that Evelyn had not agreed to see a joint counselor. When asked whether Evelyn requested that he take care of her while she was sick with COVID-19, appellant stated that he ‘demanded it.’”

Therefore, “the record supported the trial court’s conclusion that there was no evidence of ‘concrete overt steps’ taken by Evelyn towards reconciliation,” the Court of Appeals said. “Although [the appellant] assumed that the divorce proceedings were at a standstill and the case was not going to progress, … [he] offered no concrete evidence that the couple planned to terminate the divorce proceedings. To the extent that appellant disagrees with the trial court’s interpretation of the facts, we must give due regard ‘to the special opportunity of the trial court to judge the credibility of the witnesses who appeared before it.’”

Accordingly, the trial court correctly “’assess[ed] the type of relationship [Evelyn] had with [appellant] in terms of objective behavior as indicated by the time and activity shared and the overall characteristics of the relationship,’ when it approved the settlement and distribution of proceeds,” the Court of Appeals held. “Under MCL 600.2922(6), the trial court also properly considered what was ‘fair and equitable, under all the circumstances’ by noting that appellant already recovered proceeds outside of the wrongful-death action, namely, Evelyn’s life-insurance proceeds in the amount of $100,000. Accordingly, the trial court did not clearly err when it granted plaintiff’s motion.”

Furthermore, “[w]e also conclude that the trial court did not err by declining to hold an evidentiary hearing,” the Court of Appeals wrote. “The trial court discharged this obligation by holding a hearing on plaintiff’s motion, and the record was sufficiently furnished to support the court’s determination because the evidence ‘support[ed] the distribution of the estate on the basis of the parties’ relationships to the decedent.’”