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Geraldine WILLARD and Denzil Rhodes, Co-Executors of the Estate of Alma Whited, Deceased, Plaintiffs Below, Appellants, v. Gary Eugene WHITED, Executor of the Estate of Delbert R. Whited, Deceased, Defendant Below, Appellee.
This case is before this Court upon appeal of a final order of the Circuit Court of Jackson County entered on June 29, 2000. In that order, the circuit court granted a motion to dismiss filed by the appellee and defendant below, Gary Eugene Whited, Executor of the Estate of Delbert R. Whited, deceased, in this action filed by the appellants and plaintiffs below, Geraldine Willard and Denzil Rhodes, Co-executors of the Estate of Alma Whited, deceased, seeking declaratory judgment to settle the estate of Alma Whited. In this appeal, the appellants contend that the circuit court erred by dismissing the case.
This Court has before it, the petition for appeal, the entire record, and the briefs and argument of counsel. For the reasons set forth below, the final order of the circuit court is affirmed.
I.
Delbert and Alma Whited were married on April 18, 1982. This was the second marriage for both of them and each had previously acquired numerous assets. During their marriage, Delbert and Alma Whited continued to maintain the majority of their assets separately although they did establish some joint banking accounts. On December 8, 1994, Alma Whited died at the age of 81.
Before her death, Alma Whited executed a will which bequeathed $500 to her husband and the rest and residue of her estate to her brothers and sisters. After his wife's death, Delbert Whited sought his elective share of her estate rather than taking the bequest made to him in her will. Accordingly, he brought an action in the Circuit Court of Jackson County, Whited v. Willard, et al., Civil Action No. 96-C-49, to determine his elective share of his wife's estate pursuant to W.Va.Code § 42-3-1 (1995). The matter was referred to a special commissioner who determined that Delbert Whited's statutory share was 38% of the augmented estate. See W.Va.Code § 42-3-1 (1995). The augmented estate included Alma Whited's net probate estate totaling $117,801.00 and her reclaimable estate totaling $84,923.00. Using the elective share formula, Delbert Whited's elective share was calculated to be $77,035.00.
On June 9, 1998, the special commissioner issued a written report which stated, in pertinent part:
That judgment by award of the elective share should be rendered as follows:
Based on the numbers provided at the hearing and in all other forms offered by respective counsel, and upon calculation through the elective share formula, the amount should be $77,035.00, as of the date of the hearing.
In calculating the final amount due and owing, counsel must exchange proof of all interest earned on the accounts held by the estate in order that 38% percent [sic] of that income will also be paid as part of the elective share due Plaintiff.
On August 6, 1998, the circuit court entered a final order in the action approving the June 9, 1998 report of the special commissioner and directing the parties to carry out and implement its provisions. Subsequently, Delbert Whited died.
On August 27, 1999, Geraldine Willard, et al., the appellants herein,1 filed a motion requesting the court to “fix and determine” certain matters pertaining to the special commissioner's report. The circuit court determined that it no longer had jurisdiction as the judgment had been in effect for over a year and the motion for relief from judgment was not timely within the meaning of Rule 60 of the West Virginia Rules of Civil Procedure. Thus, the motion was denied.
Thereafter, the appellants filed the complaint in the case sub judice. The complaint was brought pursuant to the Uniform Declaratory Judgments Act, W.Va.Code §§ 55-13-1 to -16 (1941), and alleged that the appellants were entitled to credits or offsets on the elective share amount of $77,035.00 for those assets over which they had no control or access, namely the joint banking accounts of Alma and Delbert Whited. In other words, the appellants claimed that Delbert Whited maintained control over certain bank accounts he held jointly with his wife and that these accounts were never a part of Alma Whited's estate. Nonetheless, these accounts were included in the special commissioner's calculations to determine the amount of Delbert Whited's elective share. The appellants asserted that because they never had control of these assets as the executors of Alma Whited's estate, the total amount of these assets should be offset or credited against Delbert Whited's elective share.
On January 7, 2000, the appellee filed a motion to dismiss asserting that the case should be dismissed under the theory of res judicata. The circuit court determined that the case had in fact already been adjudicated and granted the motion to dismiss. This appeal followed.
II.
The appellants contend that they were entitled to bring this action pursuant to the Uniform Declaratory Judgments Act, W.Va.Code § 55-13-1 to -16 (1941). In particular, the appellants rely upon W.Va.Code § 55-13-2 which provides:
Any person interested under a deed, will, written contract, or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract or franchise and obtain a declaration of rights, status or other legal relations thereunder.
The appellants maintain that this statute was designed to settle controversies like the one in the case at bar where counsel for the respective parties have been unable to carry out the terms of a court order which presumed that the parties would be able to resolve the matter.
In response, the appellee asserts that the Uniform Declaratory Judgments Act cannot be used to reopen matters that have already been concluded. We agree. The order of the circuit court entered on August 6, 1999 in the prior civil action constituted a final adjudication on the merits with regard to Delbert Whited's elective share. Any attempt to collaterally challenge the amount owed to Delbert Whited's estate is barred by the principles of res judicata. “ ‘Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action.’ ” Porter v. McPherson, 198 W.Va. 158, 166, 479 S.E.2d 668, 676 (1996), quoting Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5, 99 S.Ct. 645, 649 n. 5, 58 L.Ed.2d 552, 559 n. 5 (1979) (footnote omitted).
In Syllabus Point 4 of Blake v. Charleston Area Medical Center, Inc., 201 W.Va. 469, 498 S.E.2d 41 (1997), this Court held that:
Before the prosecution of a lawsuit may be barred on the basis of res judicata, three elements must be satisfied. First, there must have been a final adjudication on the merits in the prior action by a court having jurisdiction of the proceedings. Second, the two actions must involve either the same parties or persons in privity with those same parties. Third, the cause of action identified for resolution in the subsequent proceeding either must be identical to the cause of action determined in the prior action or must be such that it could have been resolved, had it been presented, in the prior action.
As noted above, there was a final adjudication on the merits in the previous action. In addition, this case involves the same parties who participated in the first action. Finally, the issue presented in this case could have been resolved had it been presented in the prior action.
While the appellants claim that the issue sought to be resolved in this declaratory judgment action did not arise until the previous case had been concluded, it is clear that the appellants could have litigated this matter in the prior suit. The appellants obviously knew before the final order was entered in the previous case that the joint banking accounts of Alma and Delbert Whited were never going to be made a part of Alma Whited's estate. As this Court observed in Syllabus Point 1 of State ex rel. Shrewsberry v. Hrko, 206 W.Va. 646, 527 S.E.2d 508 (1999):
“An adjudication by a court having jurisdiction of the subject-matter and the parties is final and conclusive, not only as to the matters actually determined, but as to every other matter which the parties might have litigated as incident thereto and coming within the legitimate purview of the subject-matter of the action. It is not essential that the matter should have been formally put in issue in a former suit, but it is sufficient that the status of the suit was such that the parties might have had the matter disposed of on its merits. An erroneous ruling of the court will not prevent the matter from being res judicata.” Syllabus Point 1, Sayre's Adm'r v. Harpold, 33 W.Va. 553, 11 S.E. 16 (1890).
Moreover, this Court has previously determined that a collateral attack on a final judgment in a civil action through a declaratory judgment action after the doctrine of res judicata has attached is not permissible. In Hustead on Behalf of Adkins v. Ashland Oil, Inc., 197 W.Va. 55, 475 S.E.2d 55 (1996), the guardian ad litem of infant plaintiffs in an air pollution lawsuit brought a declaratory judgment action to have a court-approved settlement agreement invalidated. The final order approving the settlement in the previous action had been entered ten months earlier and the guardian admittedly chose not to file a direct appeal from the circuit court's final order. Having determined that the guardian was attempting to use the declaratory judgment action as a substitute for a direct appeal, this Court stated:
There is, however, no law in West Virginia that permits a declaratory judgment action to be used as a collateral attack on a final civil judgment. Moreover, we agree with other jurisdictions that have expressly ruled that “[a]bsent special circumstances, an action for a declaratory judgment cannot be used as a substitute for a timely appeal․” School Comm., 482 N.E.2d at 801; accord Alabama Public Serv. Comm'n v. AAA Motor Lines, Inc., 272 Ala. 362, 131 So.2d 172, 177, cert. denied 368 U.S. 896, 82 S.Ct. 173, 7 L.Ed.2d 93 (1961) (stating that “declaratory judgment cannot be made a substitute for appeal”); see Hospital Underwriting Group, Inc. v. Summit Health Ltd., 63 F.3d 486, 495 (6th Cir.1995)(citing Shattuck v. Shattuck, 67 Ariz. 122, 192 P.2d 229, 235-36 (1948)) (stating that under Arizona law, “judgments are not set aside by collateral declaratory judgment actions”); Tri-State Generation and Transmission Co. v. City of Thornton, 647 P.2d 670, 676-77 n. 7 (Colo.1982)(stating that “a party may not seek to accomplish by a declaratory judgment what it can no longer accomplish directly․”); Fertitta v. Brown, 252 Md. 594, 251 A.2d 212, 215 (1969)(stating that “[d]eclaratory proceedings were not intended to and should not serve as a substitute for appellate review or as a belated appeal”).
Hustead, 197 W.Va. at 61, 475 S.E.2d at 61. Thus, we held in Syllabus Point 3 of Hustead that “[a] declaratory judgment action can not be used as a substitute for a direct appeal.” 2
While there may be other ways that the appellants can dispute the specific amount owed, and by whom, to Delbert Whited's estate to satisfy his elective share, a declaratory judgment action is not a viable option. Thus, for the reasons set forth above, we find that the circuit court properly dismissed this case. Accordingly, the final order of the Circuit Court of Jackson County entered on June 29, 2000 is affirmed.
Affirmed.
(Filed Dec. 10, 2001)
I dissent in this matter because this Court should either reverse the judgment of dismissal below and permit this action to proceed under West Virginia Code § 55-13-4, permitting a declaratory judgment proceeding to declare legal relations and rights in estate matters, or remand with instructions to amend the final judgment in this matter to authorize an amendment of the complaint to plead a case for equitable relief from a judgment independent of Rule 60(b), as specifically authorized by Rule 60(b).
I understand the reluctance of the majority to permit the use of the declaratory judgment statute to collaterally attack otherwise final judgments. I acknowledge that this Court and the vast majority of other jurisdictions generally observe that rule. Our adoption of that rule is set forth in syllabus point three of Hustead v. Ashland Oil, Inc., 197 W.Va. 55, 475 S.E.2d 55 (1996), as follows: “A declaratory judgment action can not be used as a substitute for a direct appeal.” I believe the reliance of the majority on this syllabus point is misplaced.
In the body of the excellent opinion in Hustead, Justice Workman cites as the basis for the rule the agreement of this Court with the holding of School Committee v. Commissioner of Education, 395 Mass. 800, 482 N.E.2d 796 (1985). The specific ruling in School Committee cited by Justice Workman in Hustead is as follows: “Absent special circumstances, an action for a declaratory judgment cannot be used as a substitute for a timely appeal ․” Hustead, 197 W.Va. at 61, 475 S.E.2d at 61 (emphasis added). It is regrettable that syllabus point three of Hustead did not pick up the exception for “special circumstances.” That does not alter the fact that this Court's opinion adopting the general rule expressly and properly recognized that it should not apply in the face of “special circumstances.” As will be discussed in the course of this opinion, the present case has highly relevant special circumstances.
One of the most readily apparent special circumstances is that the declaratory judgment act expressly recognizes the likelihood that persons involved in the settlement of estates may need the relief provided for in the act, undoubtedly in contemplation of the fact that the administration and closing of an estate often involves unforseen questions arising in the process of executing the directions of the law applicable to estates.
Another special circumstance is the novelty of the questions for which Appellant's action seeks direction and answers. The statute involved here, West Virginia Code § 42-3-1, et seq., was adopted in 1995 and introduced into our law the concept of an “augmented” estate, thereby substantially altering the meaning of a surviving spouse's elective share and, inter alia, stating special rules for determining who was liable for paying over such elective share and to what extent. It appears that the statute has not been the subject of litigation in this Court and, perhaps, not extensive litigation in the circuit courts.
Directly related to the circumstances presented by the relative novelty of the subject statute is the fact that the matters contained in the commissioner's report and confirmed and adopted as the order of the Circuit Court of Jackson County lack a level of clarity and certainty which would permit their easy and certain enforcement by any court or other officer directed to assist in that enforcement. The entire text of the portion of the commissioner's report relating to a judgment reads as follows:
k. That judgment by award of the elective share [of the estate] should be rendered as follows:
Based on the numbers provided at the hearing and in all other forms offered by the respective counsel, and upon calculation through the elective share formula, the amount should be $77,035.00, as of the date of the hearing.
In calculating the final amount due and owing, counsel must exchange proof of all interest earned on the accounts held by the estate in order that 38% percent of that income will also be paid as part of the elective share due Plaintiff.
1. Costs should be assessed to the plaintiff and defendant as incurred by each party individually in the prosecution and defense of this case. Costs of the Special Commissioner should be assessed equally between Plaintiff and Defendant.
Not only is the “judgment” facially uncertain, the fact that it does not disclose against whom the “judgment” is rendered demonstrates that the “judgment” cries out for clarification, direction and definition, especially in light of the fact that someone other than the Executor of the Last Will and Testament of the decedent spouse could be liable for some part of the elective under the “augmented estate” scheme adopted in the statute. It readily appears from the record that the amount of the elective share determined in the commissioner's report was calculated by applying a factor of 38% to $202,724.00, the sum of the value of the probate estate of $117,801.00, all or part of which may be in the hands of the fiduciary, and $84,923.00 of “reclaimable estate,” most of which was not likely in the hands of the fiduciary. While it is not crystal clear from the scanty record before us, it appears that persons holding or suspected of holding parts of the “augmented estate,” other than the fiduciary, were parties to this action, or at least the prior action in which this uncertain judgment was rendered, and would likely be amenable to the jurisdiction of the Circuit Court of Jackson County to untangle this web. I also note from the briefs filed in this matter that attempts have been made to collect this uncertain judgment, not only from the fiduciaries, but from their personal holdings and/or those of third parties. This is a mess crying for resolution, not disposition by conformity to rules rigidly and improperly applied.
Accordingly, I would reverse the judgment of the Circuit Court of Jackson County and direct that this action, with such parties added as may be necessary, proceed to completely dispose of the matter.
An alternative remedy is to remand the case with directions to allow an amendment of the complaint to state an independent action for equitable relief from a judgment whose prospective application was not contemplated by the entering court. It is regularly recognized that a dismissal should not be effected under Rule 12(b) of the Rules of Civil Procedure unless there is no set of facts under which the party praying for relief might recover that relief. “The trial court, in appraising the sufficiency of a complaint on a Rule 12(b)(6) motion, should not dismiss the complaint unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Syl. Pt. 3, Chapman v. Kane Transfer Co., 160 W.Va. 530, 236 S.E.2d 207 (1977) citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). It is likewise the policy of the rules that amendment shall be freely allowed to the end that justice may be served. Amendments are controlled by West Virginia Rule of Civil Procedure 15, which states in pertinent part:
(a) Amendments.-A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, the party may so amend it at any time within 20 days after it is served. Otherwise a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.
See Poling v. Belington Bank, Inc., 207 W.Va. 145, 529 S.E.2d 856 (1999).
Rule 60(b) expressly preserves such an independent action, where justified, apart from a showing of entitlement to relief under that rule, by providing: “[T]he procedure for obtaining any relief from a judgment shall be by motion as prescribed in these rules or by an independent action.” (Emphasis added.)
For all the reasons previously assigned as special circumstances justifying a declaratory judgment proceeding in this case, I believe that a skillful pleader could set forth a cause of action to address what Appellant believes to be the inequitable effect of the uncertain judgment confirmed, adopted and entered by the Circuit Court of Jackson County in the case underlying the case sub judice.
The majority opinion does a distinct injustice by preventing the affected parties from gaining a workable, effective and certain order under which to settle and close the affected estates. I hope our judicial system, by a rehearing in this Court, or otherwise, has and seizes the opportunity to make our system of laws work to bring about a just result on the merits in this matter-whatever that result may be after full hearing and adjudication of the issues we have thus far not allowed to be heard.
FOOTNOTES
1. It appears that Geraldine Willard, Denzil Rhodes, and other brothers and sisters of Alma Whited were parties in the first action. However, the complaint in this case was only filed by Geraldine Willard and Denzil Rhodes as the co-executors of Alma Whited's estate.
2. We note that we are disappointed that neither party cited the Hustead case in their briefs or during oral argument.
PER CURIAM.
Justice STARCHER concurs.
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Docket No: No. 29327.
Decided: November 30, 2001
Court: Supreme Court of Appeals of West Virginia.
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