Reversed and remanded. Peterson, Judge Aitkin County District Court File No. C202240
Considered and decided by Harten, Presiding Judge, Peterson, Judge, and
1. A trustee appointed under Minn. Stat. § 573.02 (2002) to maintain a wrongful-death action has a duty to act as a fiduciary for all the next of kin and has no separate individual right to negotiate a settlement for the trustee's exclusive benefit.
2. The district court abused its discretion by failing to remove a trustee appointed under Minn. Stat. § 573.02 to maintain a wrongful-death action after the trustee breached the duty to act as a fiduciary for all the next of kin by negotiating a settlement for the trustee's exclusive benefit.
The opinion of the court was delivered by: Peterson, Judge
In this appeal from an order in a wrongful-death action affirming the settlement of respondent co-trustee's claims against the tortfeasor and his insurer, appellant co-trustee argues that under Minn. Stat. § 573.02, subd. 1 (2002), the district court may not approve a settlement that addresses the claims of a surviving spouse but does not address the claims of all of the next of kin. Appellant also argues that the district court abused its discretion when it denied her motion to remove respondent as a co-trustee. We reverse and remand.
Eugene Bodeker (Bodeker) was killed in November 2001 when the vehicle he was driving was struck by a vehicle driven by Donald A. Bjelland. At the time of his death, Bodeker was married to respondent Angeline Bodeker. Bodeker also had three adult children from a previous marriage. Appellant Jill Tuttle is one of Bodeker's adult children.
On April 18, 2002, respondent was appointed as trustee to maintain a cause of action under Minn. Stat. § 573.02 (2002), the wrongful-death statute. Shortly after respondent was appointed trustee, appellant and her siblings received an April 22, 2002, letter from respondent's attorney, which stated:
You recently received an Order Appointing [Respondent] as trustee for the heirs.*fn1 Our office has been retained and is handling the damage claim. If and when settlement is obtained, it will be a lump sum and then the Court will determine distribution of that lump sum according to the relationship and losses by the individuals. Usually that is settled and agreed upon between the parties, but when we get to that point, if there is no agreement, the Court will have a hearing at which time evidence of relationship can be given to the Judge so he can make that determination. You will be contacted in plenty of time prior to any such hearing date.
We are just entering the initial process of gathering information about the accident, loss of income and other damages to submit to the insurance company.
After several weeks passed without respondent's attorney communicating further with appellant or her siblings, appellant contacted an attorney with questions about the handling of a wrongful-death action. The attorney wrote to respondent's attorney and asked for a report on the status of any negotiations or pleadings that had been filed. Respondent's attorney replied with a letter that described the status of negotiations with Bjelland's insurer. The letter also stated:
I have sent quite a bit of material to the insurance company through the last several months. Enclosed is a copy of a settlement brochure that was submitted to them. It is my understanding that contact with [Bodeker's] own children through the last several years has been rather limited. Any information your clients could supply as to their contact with their father over the last several years which would go to monies provided or advice, comfort, assistance and protection would be something that we would include in a supplemental to the insurance company. We are advised that there is $750,000 in coverage and, as you see, our initial demand is for that amount.
Respondent's attorney also enclosed a copy of a demand letter that had been sent to the claims adjuster for Bjelland's insurer demanding the $750,000 policy limit. The letter stated that Bodeker had three children from a first marriage, but it did not identify the children by name or include any information about them. Appellant's attorney became concerned because the demand letter did not mention pecuniary damages suffered by the surviving children, and he began gathering information related to their claim for damages. He also informed respondent's attorney that he would be providing the information.
Before appellant's attorney provided respondent's attorney with any information about the surviving children's damages, respondent twice reduced the demand to Bjelland's insurer. Because he was concerned that the interests of the surviving children were being ignored, appellant's attorney petitioned to have appellant appointed as a co-trustee. Respondent consented to the appointment, and appellant was appointed as co-trustee.
Appellant's counsel sent a demand letter to Bjelland's insurer withdrawing respondent's unapproved demand and asserting a new demand for the claims of all of decedent's next of kin. The insurer did not respond to appellant's demand. On September 5, 2002, without prior notice or consultation, ...