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Judge can’t trump personal rep’s plan for kids’ money

Despite a circuit judge’s concerns about protecting money for young beneficiaries, the judge could not overrule the decision of a personal representative to make long term investment plans for the children’s wrongful death awards.

That was the ruling of the Supreme Court of Virginia last month in a case arising from a tragic Southampton County school bus accident that produced a $4.35 million verdict.

The case establishes the “pivotal role” of the personal representative of a deceased victim in a Virginia wrongful death action.

The opinion is In re: Woodley (VLW 015-6-082).

Fatal accident in school parking lot

Four-year-old Jameer Woodley was struck and killed by a school bus in 2009 in front of the school where he attended a pre-school program. A school employee had unwittingly directed the bus to drive forward while Woodley was crossing in front.

The school district later changed procedures for buses to drop off students.

Jameer was survived by his parents and three older brothers, all beneficiaries under Virginia’s wrongful death law.

The parents qualified as co-administrators of Jameer’s estate. When they filed suit, the school district conceded liability for gross negligence. The two sides could not agree on a damages figure, however.

The schools’ insurers offered $1 million, according to the plaintiffs’ attorneys. The lawyers thought the case was worth far more.

The jury agreed, returning a verdict of $4,357,431 last year.

Jury apportions award

When wrongful death cases settle under Virginia law, a judge is asked to review and approve the proposed settlement amount and the distribution of the money among the statutory beneficiaries.

When the case is decided by a jury, however, the jury is in charge of the apportionment. The law allows the jury to not only set a damage award, but also to set the amounts that each beneficiary will get.

Jameel’s parents and one of his brothers were adults, eligible to receive their shares directly. But two of the brothers were still minors, five and twelve years of age.

The jury awarded the five-year-old $200,000 and the twelve-year-old $750,000.

Parents had investment plan

The parents arranged for two irrevocable trusts to hold the money for the two minor sons. The trusts would be managed by an independent, professional trust company serving as trustee. The parents would have no “ongoing rights,” according to the court’s summary of the evidence.

Under the trust, the parents would be barred from controlling, altering, amending or terminating the trust agreement.

The agreements “emphasized that the trust assets were to be used exclusively for the benefit of each minor son and not to be used without court permission as a substitute for the parent’s legal duty of support.”

The trustee’s control would continue even after the boys reached adulthood. The trustee would be given discretion to spread out the distribution of the assets after the sons reached the age of majority, subject to judicial review.

The plan was backed with an affidavit from the proposed trustee who verified the credentials of the trust company and described the investment plan. It would produce a possible seven-percent annual rate of return.

The judge rejected the proposed trusts and instead ordered the funds be held by the clerk of court for payment to the brothers when each reached adulthood. The money would earn about one half of one percent each year.

Personal representative in charge

Although no statute addressed the situation, the judge concluded the General Assembly implicitly intended trial courts to supervise all wrongful death awards to minor beneficiaries as a matter of course, according to the Supreme Court opinion.

In an opinion penned by Justice D. Arthur Kelsey, the court said “the personal representative of the decedent plays a pivotal role” under the wrongful death statute.

State law presupposes that the personal representative handling an award acts “as a fiduciary representing the interests of the beneficiaries,” Kelsey wrote.

“Longstanding principles” outside the wrongful death context similarly recognize that a personal representative holds a position of “trust and confidence,” the court said.

The wrongful death act, Va. Code 8.01-54(C), directs that an award “shall be paid to the personal representative” and then specifies that the representative distributes the recovery to the beneficiaries in accord with the allocation in the verdict, the court noted.

“This statutory duty necessarily presupposes that the distribution will be made in full conformity with the personal representative’s fiduciary obligations.” For minor beneficiaries, the distribution duty requires “a multitude of judgment calls,” the court said.

“Nothing in the Death by Wrongful Act Statute authorizes a trial court presiding over a wrongful death award to dictate proactively the specific choices that a personal representative should make on these issues,” Kelsey wrote.

The judge “had no authority to disregard the statutory command directing that the award ‘shall be paid’ to the personal representative,” the court said.

The justices acknowledged concerns about risks of awards to minor beneficiaries.

“These concerns are no doubt born of experience and a commendable sense of judicial caution,” Kelsey wrote. The statutes, however, mandated payment to the personal representative, he said.

Attorney James J. Reid of Newport News, who represented Jameel’s parents, also acknowledged the judge’s apprehension about the safety of the money.

“I understand why the judge did what he did. He was trying to be protective,” Reid said.

The parents in this case were very responsible, he said. Their well-planned proposal may have given the Supreme Court some comfort with the outcome of the appeal, Reid said.

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