Court Denies Unjust Enrichment Claim When Wrongful Death Proceeds Paid to Wrong Plaintiff

Tennessee law provides very clear instruction and directives on who may bring a wrongful death claim on behalf of a loved one. Generally, such claims are limited to spouses or children unless neither such relationship exists. While this may seem straightforward, complicated questions can arise when individuals are in estranged relationships, separated, or no longer living together but have yet to formalize their decision through divorce. A recent case before the Tennessee Court of Appeals illustrates how this can add significant complications and even, in some cases, lead to the wrong individual being awarded wrongful death proceeds.

In this wrongful death case, R.B. was killed in an accident. Shortly thereafter her estranged husband, L.B. brought a wrongful death claim on her behalf and on behalf of the couple’s minor children. A guardian ad litem was appointed to represent the children in the proceedings. During the pendency of the claims, J.D. attempted to intervene to argue that L.B. did not have standing to bring a wrongful death claim on his wife’s behalf because he was estranged from her. J.D. stated that he was the biological father of R.B.’s children and he was the one with standing to bring a claim on her behalf. The court denied the motion and allowed L.B.’s claims to continue. J.D. appealed these rulings but while they were pending, a settlement in the wrongful death action was reached. The guardian ad litem agreed with the settlement and recommended that it be approved by the court. Under the settlement, L.B. received 40% of the proceeds and the children received the other 60%. The court approved the settlement and the funds were dispersed.

Not long after the settlement was reached, the appeals court considered J.D.’s appeal and determined that the lower court had erred and that an evidentiary hearing on L.B.’s standing needed to occur. It remanded the case for further proceedings. During the evidentiary proceedings, R.B.’s oldest child, who was no longer a minor, argued that L.B. had been estranged from R.B. and that he did not have standing. The court agreed. The court issued an order prohibiting L.B. from transferring the funds he had received, ordered an accounting of those funds and that they would be returned to the court.

Unfortunately for R.B.’s children, L.B. had already spent the majority of the funds on a new home and other toys, which could not be returned to the kids. After several efforts to recover the money, R.B.’s children eventually sued the guardian ad litem for failing to challenge L.B.’s standing during the settlement process. The guardian ad litem settled with R.B.’s children in exchange for assignment of their claims against L.B. The estate of the guardian ad litem them sued L.B. for unjust enrichment because L.B. had received the proceeds of the wrongful death claim when he was not the correct plaintiff.

The courts, although sympathetic to the complexity of the case and the money the kids had lost, determined that the unjust enrichment claims could not succeed, and this was affirmed by the appeals court. Specifically, the court held that under Tennessee law, unjust enrichment claims cannot proceed where a valid contract governs the transaction. Here, L.B. was under a valid contract, the settlement agreement, when he received the proceeds of the settlement. Although the settlement was later undone by another court ruling, this did not change the fact that he had operated pursuant to the contract initially.

Moreover, the Court of Appeals noted that the parties were aware of the possibility of the settlement agreement coming undone because L.B.’s standing had already been challenged, and J.D.’s appeals were still in process. Thus, the court concluded, the children and their guardian ad litem had taken the risk that this might happen when they proceeded with the settlement agreement and could not now recover from a settlement agreement that they knowingly agreed to. Accordingly, the claim for unjust enrichment was denied.

If you are involved in a wrongful death proceeding, or considering bringing a wrongful death claim, be very careful to evaluate whether you and your co-plaintiffs have standing to bring your claims, and make sure to have any settlement agreements in wrongful death lawsuits carefully vetted. Veteran wrongful death attorney Eric Beasley has worked with countless plaintiffs in wrongful death actions and help you evaluate any potential standing claim. For more information or to discuss the circumstances of your case, contact the Law Office of Eric Beasley today at 615-859-2223.

Related Blog Posts:

Tennessee Court Denies Additur In Wrongful Death Case, Tennessee Personal Injury Blog, June 18, 2018.

Tennessee Supreme Court Addresses Who Is Entitled to Wrongful Death Settlement, Tennessee Personal Injury Blog, December 22, 2017.

Tennessee Court Reverses Summary Judgment Based on Comparative Fault, Tennessee Personal Injury Blog, October 13, 2017.