Hamilton v. Welsh (In re Williams)

538 P.3d 176

In the MATTER OF the ESTATE OF Katha Mae WILLIAMS,

Kimberly Hamilton, as Personal Representative of the Estate of Katha Mae Williams and as Trustee of the Williams Family Trust Dated the 28

Day of May 2014, Petitioner/Appellee/Respondent,

v.Catherine Z. Welsh, as Personal Representative of the Estate of Earl Williams, Jr., Respondent/Appellant/Petitioner.

No. 119,694

Supreme Court of Oklahoma.

Filed October 24, 2023

Catherine Z. Welsh, Jim C. McGough, Tulsa, Oklahoma, for Respondent/Appellant/Petitioner.

George M. Miles, Maureen M. Johnson, Tulsa, Oklahoma, for Petitioner/Appellee/Respondent.¹

KAUGER, J.:

¶1 The first impression question presented is whether proceeds from a wrongful death cause can be transferred into a trust before they are obtained by the trust settlor. We hold that they can, and if they are, they belong in the trust.

FACTS/PROCEDURAL HISTORY

¶2 This cause concerns a lengthy, convoluted court battle over the estate of Katha Williams (Katha/wife) and the distribution of her interest of $1,178,157.44 from a wrongful death lawsuit involving her son, Elliott Williams (Elliott). However, the facts leading up to this controversy are also interconnected with her husband Earl Williams's (Earl/husband, collectively the Williamses) probate, and the family's trust, and their son Elliott's probate and wrongful death lawsuit.

¶3 The probates have not been consolidated, but some factual information about the interconnections is helpful to set forth the facts, timeline, and procedural history of this cause. To this degree, we take judicial notice of those proceedings.² However, taking such judicial notice is not meant, in any way, to supplant the rule that the record on appeal consists of only those materials which were before the trial court at the time of the decision appealed, unless otherwise ordered by a court.³

¶4 The Williamses' son, Elliott, died on October 27, 2011, after being arrested by Owasso police for causing a disturbance. Once in jail, he became paralyzed from injuring his neck and died without receiving any mental health or medical treatment.⁴ He left behind a surviving wife, but no children as heirs. Elliott's probate (PB-2011-724) was initially filed November 7, 2011, in the Tulsa County District Court. As a result of his death, a wrongful death action was also filed the same day in the United States District Court for the Northern District of Oklahoma (No. 11-CV-720-JEDC-PJC) against the Sheriff of Tulsa County. Pursuant to Oklahoma's wrongful death statute, the wrongful death action is filed by the decedent's personal representative.⁵ Damages, when the decedent has a surviving spouse, no children, and surviving parents are distributed to the spouse and parents as provided by 84 O.S. 2021 § 213.⁶

¶5 On May 28, 2014, the Williamses, established the Williams Family Trust together, and executed individual wills. Their wills, in identical provisions, left each of their estates to the Williams Living Trust.⁷ Each will also listed their heirs to include, their spouse, eight living adult children, and their deceased son, Elliott.⁸

¶6 Katha Willaims died on July 24, 2014. On March 22, 2017, final judgment was entered in Elliott's wrongful death lawsuit in accordance with a jury verdict. The jury awarded $10 million in compensatory damages and $250,000.00 in punitive damages. Post judgment motions were all denied by March 31, 2018, and the defendants appealed to the Tenth Circuit Court of Appeals.

¶7 On March 23, 2017, the Williamses' daughter, Kimberly A. Hamilton (Hamilton) filed Katha's probate as personal representative in the District Court of Tulsa County Oklahoma (PB-2017-231), with a copy of Katha's will attached.⁹ The trial court admitted the will to probate and issued letters testamentary on June 13, 2018, and appointed Hamilton the personal representative. On August 20, 2019, the Tenth Circuit affirmed in part and reversed in part the wrongful death judgement. It affirmed the district court on all grounds, with the exception of the denial of the Sheriff's motion for a set off. On December 2, 2019, the parties settled, disclosing the settlement for $10 million plus post-judgment interest at 4.75% per annum, with an agreed judgment against the Tulsa County Sheriff.

¶8 The record is unclear, but it appears that at some point in 2017, Katha's husband, Earl Williams, was placed under a guardianship in the Tulsa County District Court (PG-2017-141).¹⁰ He died on August 31, 2019, and Hamilton, as personal representative of her father's estate, filed his probate (PB-2018-879) on October 9, 2019, in the District Court of Tulsa County. A copy of his will was attached, and it listed the same eight living children and one deceased child, as Katha's. On January 6, 2020, the trial court appointed Hamilton as the Special Administrator of her father's estate. At this point, Elliott's, Katha's, and Earl's estates were all still pending.

¶9 The last docket entry for Elliott's probate is an order dated and filed June 30, 2020, in which it appears the trial court approved a new administrator, identified Elliott's wife and parents as his only heirs, and approved payment of attorney fees. It also identified the judgment of the wrongful death action to be the sole asset of Elliott's estate.

¶10 On May 11, 2020, the trial court admitted Earl's will to probate, and appointed the petitioner/appellant, an attorney, Catherine Z. Welsh (Welsh) as administrator of his estate. No explanation is given as to why Welsh replaced Earl's daughter, Hamilton as administrator. On August 6, 2020, Welsh, in Katha's probate, filed a Certificate to Make Election by Surviving Spouse on behalf of Earl. This filing was an apparent attempt for the deceased husband's election against his wife's will, even though, 84 O.S. 2021 § 44(B)(4) expressly requires such an election to be done during the lifetime of the surviving spouse.¹¹ This statutory provision reflects the primary purpose of a spousal election, which is to provide the surviving spouse ample means for his or her care and comfort during the remainder of his or her life.¹²

¶11 On March 18, 2021, Hamilton, as trustee of the Williams Family Trust, filed a motion, seeking a determination that the proceeds of Elliott's wrongful death case were property of the Trust, rather than Katha Williams's probate estate.¹³ Hamilton attached a copy of a portion of the Trust, and a copy of an document labeled "Assignment" by the Williamses of their interest in the lawsuit judgment to their Trust. The document, dated May 28, 2014, and titled, "Assignment of Judgments" provides:

EARL WILLIAMS and KATHA M. WILLIAMS do hereby transfer and assign, without consideration and in order to change formal title only, all right, title and interest which they now have in those Judgments listed below, to EARL WILLIAMS and/or KATHA M. WILLIAMS, Trustees, or their successors in trust, under the WILLIAMS LIVING TRUST, dated May 28, 2014, and any amendments thereto:

Case Number	Court	Judgment Amount	Judgment Debtor
11-CV-720-JED-PJC	Tulsa, OK	Pending	Stanley Glanz, Tulsa County Sheriff, and City of Owasso Police Dept.
201300019896	Montgomery, AL	Pending	Talcum powder litigation

Through Goldwater Law Firm

This assignment was executed on May 28, 2014.

¶12 The trial court held a hearing on the issue on June 14, 2021. On June 30, 2021, the trial court filed an order in which it determined that the proceeds were not property of the probate estate. The trial court allocated proceeds in the amount of $1,178,057.44 be distributed to the Williams Family Trust.¹⁴

¶13 On July 6, 2021, Welsh filed an Application to Assume Original Jurisdiction and Petition for Writ of Mandamus in this Court. She sought this Court's review of the trial court's ruling. The respondent replied that Welsh was trying to circumvent the proper appeals process by requesting a writ. We agreed, and on September 13, 2021, the Court directed Welsh to file an amended petition in error within twenty days.

¶14 On October 4, 2021, Welsh filed the Court-directed amended petition in error, appealing the trial court's June 30, 2021, order. The response to the petition in error contends that the appeal is immaterial because the entirety of Katha's probate estate goes into the Williams' Family Trust pursuant to her will.

¶15 On March 2, 2022, we assigned the cause to the Court of Civil Appeals. On May 20, 2022, the Court of Civil Appeals, Division III, in an unpublished opinion, affirmed the trial court. Welsh filed a Petition for Writ of Certiorari on June 9, 2022. We granted certiorari on February 7, 2023.

PROCEEDS FROM A WRONGFUL DEATH CAUSE CAN BE TRANSFERRED INTO A TRUST BEFORE THEY ARE OBTAINED BY THE TRUST SETTLOR, AND IF THEY ARE, THEY BELONG IN THE TRUST.

¶16 The petitioner argues that because a wrongful death claim is a tort, it is not assignable to another person, and any proceeds from a wrongful death lawsuit or settlement must also be unassignable. The respondent argues that such proceeds may be transferred and, if they are, they belong in the trust. They are not a part of the probate estate.

¶17 The Williamses transferred their expected interest in any proceeds of the wrongful death lawsuit to their trust. Consequently, the term "transfer" is more apropos to what the Williamses were trying to accomplish, rather than an "assignment" to another person.¹⁵ Nevertheless, the answer to whether a transfer of such proceeds can occur requires examination of the nature of wrongful death claims juxtaposed with the nature of an estate planning mechanism such as a trust.

A.

A Wrongful Death Claim and Its Proceeds.

¶18 Because wrongful death actions were unknown at common law, any right to bring an action is granted by virtue of statute.¹⁶ In Whipple v. Phillips and Sons Trucking, LLC ., 2020 OK 75, ¶10, 474 P.3d 339, we discussed the nature of wrongful death actions when a mother sought recovery for the wrongful death of her unmarried, childless adult son. The Court...