SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-3717-98T1
F.F., as Executrix of the
Estate of T.D., and
F.F., Individually,
Plaintiff-Respondent,
v.
G.A.D.R., L.J.D.P., and
P.A.D.S.,
Defendants-Appellants,
and
J.P.D., R.E.D., D.H.D.,
for the Estate of P.A.D.,
C.P.D. (deceased, no Estate
representative known),
J.T., and K.K.,
Defendants.
_________________________________________________
Argued March 21, 2000 - Decided May 15, 2000
Before Judges Muir, Jr., Cuff and Lesemann.
On appeal from the Superior Court of
New Jersey, Law Division, Middlesex County.
Shirley B. Whitenack argued the cause for
appellants (Schenck, Price, Smith & King,
attorneys; Ms. Whitenack, of counsel,
Ms. Whitenack and Peter A. Marra, on the brief).
Ronald Grayzel argued the cause for
respondent (Levinson Axelrod, attorneys;
Mr. Grayzel, of counsel; Laura M. Le Winn,
on the brief).
The opinion of the court was delivered by
LESEMANN, J.A.D.
Sometime before August 1994, decedent T.D., a hemophiliac,
became infected with HIV from the infusion of impure anti
hemophiliac factor blood concentrate (the Factor). The Factor is
a commercial product produced by several pharmaceutical companies,
many of whom were sued by recipients of contaminated blood.
Decedent T.D. filed such an action in the Superior Court of New
Jersey. The suit was removed to the United States District Court
in New Jersey, and thereafter transferred to the United States
District Court for the Northern District of Illinois, where it
became part of a class action suit.
On August 12, 1994, decedent died of AIDS as a result of the
HIV infection. The suit continued both as a Wrongful Death Action
under N.J.S.A. 2A:31-1 to -6, and as a survivorship suit, seeking
benefits under N.J.S.A. 2A:15-3 for damages incurred by the
decedent prior to his death.
In October 1996, the class action was settled. Under the
settlement, each living person who had been infected by the Factor
during the years 1978 through 1985, was entitled to receive
$100,000. For any infected person who had died, the $100,000 was
to be paid to that person's "claimant group," defined essentially
as those persons who would receive derivative claims through the
decedent.
Judge John F. Grady of the District Court in Northern
Illinois, who had presided over the litigation and settlement,
established a procedure for resolving disputes among claimant group
members concerning the allocation of the $100,000 payment.
Essentially, claimants could either submit their claims to a
Special Master appointed by the judge, who would hear the matter
and make his recommendation to the court; or alternatively, the
claimants could pursue an arbitration procedure to be administered
by the American Arbitration Association. While one of those
dispute resolution procedures was taking place, all claimants were
to sign releases directed to the pharmaceutical companies who were
advancing the settlement funds. Each $100,000 payment was then to
be held by the MetLife Trust Company under the supervision of the
court until disbursed pursuant to the court's order.
The suit on behalf of decedent T.D. had been maintained in
Illinois by plaintiff F.F., a sister of decedent, who had also been
named as executrix and sole beneficiary under his will. She
claimed that the $100,000 settlement proceeds were payable to
decedent's estate (and thus to her as sole beneficiary of the
estate), and she rejected competing claims by a number of
decedent's other siblings. However, instead of proceeding to
resolve that dispute via one of the procedures established by Judge
Grady, plaintiff filed the present action in Superior Court in
Middlesex County, New Jersey.
In an affidavit supporting her New Jersey complaint, plaintiff
stated that she brought this action "to establish her exclusive
rights to the proceeds" of the settlement. She sought and obtained
an order to show cause, asking the court to direct payment of the
proceeds to her as executrix of the estate.
The defendants maintain that issues relating to entitlement to
the $100,000 should be resolved in Illinois, where the action had
been prosecuted and settled, and where the court had established
procedures to resolve such disputes. They also deny plaintiff's
claim to the settlement funds, noting that at least part of the
$100,000 represents settlement of a Wrongful Death Action under
N.J.S.A. 2A:31-1 to -6, and the proceeds of such an action are not
payable to a decedent's estate.
Following oral argument, the trial court entered an order
providing that the settlement funds "are hereby awarded to the
Estate" of the decedent. The court then directed that
"distribution of the funds by the executrix" shall be stayed for
forty-five days "during which time the monies shall be held in the
trust account of plaintiff's counsel."
In their appeal, defendants note that, although plaintiff
claims the court's order represents only a determination to hold
the funds in New Jersey pending final determination as to
entitlement, the order actually embodies a determination that the
estate_-rather than the defendants_-are entitled to all of the
funds. Defendants claim that determination preempts them from
arguing their right to at least a portion of the $100,000, and they
argue further that the determination of entitlement should properly
be rendered in the Federal Court of Northern Illinois rather than
in Middlesex County. We agree with both contentions, and thus we
reverse.
The order under appeal seems premised on an assumption that
the $100,000 must necessarily belong to decedent's estate, and that
any dispute concerning the ultimate receipt of those funds must
proceed in the context of administration of that estate. If that
is the premise of the order (and we can see no other basis for the
trial court's determination), it is clearly mistaken.
The claim prosecuted in Illinois on behalf of decedent T.D.
included two distinctly different causes of action. One involved
claims for damages suffered by decedent prior to his death. Those
claims were recoverable under the so-called Survival Act, N.J.S.A.
2A:15-3, which provides for the decedent's executor or
administrator to recover such damages as the decedent would have
received had he been living.
The second claim prosecuted in Illinois was a Wrongful Death
Action maintained under N.J.S.A. 2A:31-1 to -6. That statute
applies when "the death of a person is caused by a wrongful act,"
N.J.S.A. 2A:31-1. It provides that the action is to be brought
either by an administrator ad prosequendum (if the decedent leaves
no will) or by the decedent's executor if the decedent does leave
a will. However, any proceeds recovered under the Wrongful Death
Act are not payable to the decedent's estate. Rather, N.J.S.A.
2A:31-4 directs that,
The amount recovered in proceedings under
this chapter shall be for the exclusive
benefit of the persons entitled to take any
intestate personal property of the decedent,
and in the proportions in which they are
entitled to take the same. If any of the
persons so entitled were dependent on the
decedent at his death, they shall take the
same as though they were sole persons so
entitled, in such proportions, as shall be
determined by the court without a jury, and as
will result in a fair and equitable
apportionment of the amount recovered, among
them, . . . .
Thus, as the Court noted in Schmoll v. Creecy,
54 N.J. 194, 200
(1969), "It has long been settled that the recovery under the
wrongful death statute forms no part of the estate of the
deceased." That is so because,
The cause of action for wrongful death and the
deceased's own cause of action for personal
injuries are separate and distinct claims....
The decedent's personal claim is an asset of
his estate; the death claim is not.
[Ibid., N 34.]
See also Alfone v. Sarno,
168 N.J. Super. 315, 323 (App. Div.
1979), modified,
87 N.J. 99 (1981), noting that the Wrongful Death
Act "created a separate cause of action for the loss suffered by
designated beneficiaries," and that the cause of action thus
created was "distinct from the survival action" which "gives
executors or administrators a right of action for tortious injury
or damage to the deceased or his property incurred prior to death."
In short, the court's apparent assumption that the $100,000
settlement proceeds here should be paid to decedent's executor, to
be disbursed as part of his estate, is incorrect. The $100,000
must be proportionally allocated between the claims based on the
Wrongful Death Act and the Survivor's Act. That conflict is, to
some extent at least, inherent in many post-death recoveries since,
as the court noted in Alfone v. Sarno, "in the usual case both
actions [wrongful death and survival] are joined." Id. at 323.
The incisive report to Judge Grady submitted by the Special Master
here noted:
In cases such as this in which the hemophiliac
has died, this typically means survivorship
claims of the estate compete with claims for
wrongful death. The beneficiaries of the two
claims are frequently different and the
[dispute resolution] . . . procedures adopted
by the District Court were intended to resolve
these disputes where the parties could not
agree upon a fair division among themselves.
Clearly then, the merits of the competing claims to the
$100,000 must be resolved before that sum can be paid to any such
claimant, including the executor of decedent's estate.
The remaining question to be resolved is where that resolution
should take place: in the Northern District of Illinois, or in the
Superior Court in Middlesex County. It is clear to us that the
Illinois Federal Court is the appropriate tribunal to make that
decision.
This class action suit was instituted in Illinois, processed
in Illinois, and settled in Illinois. Judge Grady, in Illinois,
has presided over the matter, has supervised the case and has
authority to direct disposition of the settlement proceeds.
The procedures established by Judge Grady are sound and
appropriate. The report of Special Master Nicholas J. Bua,
provided to Judge Brady and supplied to us on this appeal,
demonstrates a firm grasp of the issues in the case, and an
accurate knowledge of the appropriate New Jersey law. Under the
procedures established by the Illinois court, the dispute between
plaintiff and defendants can be resolved either through a report
and recommendation by Mr. Bua, submitted to the court for its
approval or modification; or by an alternative arbitration
procedure. Either makes sense and represents a rational, fair
method of resolving the claims of the respective parties.
Defendants maintain that the Superior Court in Middlesex
County had no jurisdiction to hear this case. We doubt that is so.
Our long arm jurisdictional rule is coextensive with constitutional
due process jurisdictional limits. Were there a need to do so, we
think it likely that New Jersey could be found to have sufficient
contacts with this litigation to justify its exercising
jurisdiction to hear and resolve the matter. See Pennoyer v. Neff,
95 U.S. 714, 733,
24 L. Ed. 565 (1877); International Shoe Co. v.
Washington,
326 U.S. 310, 316,
66 S. Ct. 154,
90 L. Ed. 95 (1945);
Lebel v. Everglades Marina, Inc.,
115 N.J. 317, 322 (1989).
However, assuming New Jersey has the constitutional authority
to hear this case, it does not follow that it should do so. The
matter is already pending and ripe for resolution in another
tribunal and under sound principles of comity, it is most
appropriate that this state defer to the federal court in Illinois
to complete its handling and resolution of the matter.
Comity does not rest on a lack of jurisdiction. Rather, it
rests on a voluntary recognition of pending judicial proceedings in
another forum. "Comity is not a binding obligation on the forum
state, but a courtesy voluntarily extended to another state for
reasons of 'practice, convenience and expediency.'" City of
Philadelphia v. Austin,
86 N.J. 55, 64 (1981). It is a matter of
discretion. Ibid.
Considerations of comity forbid interference
with the prosecution of a proceeding in a
foreign jurisdiction capable of affording
adequate relief and doing complete justice,
unless there be a special equity . . . . The
question is not the existence of the power but
the propriety of its exercise in the given
case. The rule of comity is grounded in the
policy of avoiding conflicts of jurisdiction,
unless upon strong grounds, and the general
principle that the court which first acquires
jurisdiction of the issue has precedence.
[O'Loughlin v. O'Loughlin,
6 N.J. 170, 179
(1951), cert. denied,
346 U.S. 824,
74 S. Ct. 42,
98 L. Ed. 350 (1953).]
See also Schulmeisters v. Schulmeisters,
281 N.J. Super. 216, 220
22 (Ch. Div. 1993), appeal dismissed,
281 N.J. Super. 1 (App. Div.
1994); Yancoskie v. Delaware River Port Auth.,
78 N.J. 321, 324
(1978).
Application of the comity principle is most appropriate here.
Until now, this entire matter has proceeded in Illinois. The court
in Illinois has procedures in place to deal with the present
dispute. That court can efficiently adjudicate the parties'
disputes and can properly attend to the disbursement of those
proceeds. There is no reason why the remaining issues in the case
should be transferred to New Jersey and there is every reason why
they should remain for final resolution in Illinois.
The order of the Law Division is reversed. Plaintiff's
complaint is dismissed so that further necessary proceedings may
take place in the United States District Court for the Northern
District of Illinois.