MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                               FILED
regarded as precedent or cited before any                                   Jun 16 2020, 9:02 am
court except for the purpose of establishing                                        CLERK
the defense of res judicata, collateral                                         Indiana Supreme Court
                                                                                   Court of Appeals
estoppel, or the law of the case.                                                    and Tax Court




ATTORNEY FOR APPELLANTS                                  ATTORNEYS FOR APPELLEE
Patricia L. Martin                                       John C. Theisen
Martin Law Office, P.C.                                  Nathaniel O. Hubley
Angola, Indiana                                          Theisen & Associates, LLC
                                                         Fort Wayne, Indiana
                                                         Allen R. Stout
                                                         Lisa L. Hanna
                                                         Stout Law Group, P.C.
                                                         Angola, Indiana



                                           IN THE
    COURT OF APPEALS OF INDIANA

In the Matter of the Estate of                           June 16, 2020
Thomas E. Phelps,                                        Court of Appeals Case No.
                                                         19A-ES-2375
Colby Phelps, Hailey B. Phelps,
and Kara L. Phelps,                                      Appeal from the Steuben Circuit
                                                         Court
Appellants,
                                                         The Honorable Allen N. Wheat,
        v.                                               Judge
                                                         Trial Court Cause No.
Erica K. Book,                                           76C01-1510-ES-70

Appellee.



Mathias, Judge.

Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020                           Page 1 of 12
[1]   Kara Phelps (“Kara”), Hailey Phelps (“Hailey”), and Colby Phelps (“Colby”)

      (collectively “the Phelps Children”) appeal the order of the Steuben Circuit

      Court awarding Erica K. Book (“Erica”) one-half of the net proceeds of a

      settlement agreement resolving a wrongful death claim asserted on behalf of the

      decedent, Thomas E. Phelps (“Thomas”), who was the father of the Phelps

      Children and the estranged husband of Erica at the time of his death. On

      appeal, the Phelps Children present two issues, which we restate as: (1) whether

      the trial court erred in its interpretation of the wrongful death statute with

      regard to the distribution of the proceeds of a wrongful death action, and (2)

      whether the trial court abused its discretion by awarding Erica one-half of the

      net proceeds of the wrongful death settlement. Concluding that the trial court

      did not err in either regard, we affirm.


                                  Facts and Procedural History
[2]   Kara, Hailey, and Colby are the children of the decedent Thomas with his first

      wife. Kara, born in December 1992, is the oldest child. A second daughter,

      Hailey, was born in August 1996, and a son, Colby, was born in August 2004.

      All three children had a close relationship with their father. Kara had just

      received a degree in business management at the time of her father’s death. She

      worked for her father’s sanitation company, Sanitation Solutions, after

      graduation and lived with him until his death. Hailey was attending college at

      the time of her father’s death. Thomas supported Hailey while she was in

      college by paying for her health insurance, car insurance, cell phone bill, and

      other college expenses. Colby was eleven years old at the time of his father’s

      Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020   Page 2 of 12
      death. Although Colby did not live with Thomas at the time of Thomas’s death,

      Thomas paid child support and health insurance premiums for Colby.


[3]   Erica was married to another man from 2003 until her divorce in 2012. Erica

      had two minor children from this prior marriage. Following Erica’s divorce,

      Thomas asked her to work for his business, Sanitation Solutions. In the summer

      of 2012, Thomas petitioned to dissolve his marriage with his first wife, and he

      and Erica began to live together.


[4]   Thomas and Erica were married in October 2013, and had one daughter

      together, who was born in June 2014. Prior to their marriage, Thomas and

      Erica entered into a prenuptial agreement that provided in pertinent part:


              Except as herein provided, in the event that the marriage of Tom
              and Erica is terminated other than by the death of one of them,
              or in the event of a legal separation, Erica agrees to waive and does
              hereby waive all rights to Tom’s Property (as delineated in
              Section 2.1 above and as set forth in the Asset and Liability
              Disclosure appended hereto . . . .


      Ex. Vol. p. 13 (emphasis added).


[5]   Thomas and Erica separated in August 2014, at which time Erica left the

      marital home to live with her parents. On February 17, 2015, Erica filed a

      petition to dissolve her marriage with Thomas. Although Erica and Thomas

      still saw each other periodically, and engaged in sexual intercourse at least

      once, Erica also became romantically involved with another man. After the

      separation, Erica became pregnant with this man’s child.


      Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020   Page 3 of 12
[6]   On October 19, 2015, Thomas was killed when he was struck by a vehicle while

      standing on the side of the road next to one of his sanitation trucks. Thomas

      died intestate. On November 2, 2015, Julie Maloy (“Maloy”) was appointed as

      personal representative of Thomas’s estate. On November 20, 2015, Maloy was

      appointed as special administratrix for the purposes of commencing a wrongful

      death action. Maloy filed a wrongful death suit that was ultimately settled.


[7]   On August 20, 2019, the trial court held a hearing regarding the apportionment

      of the wrongful death proceeds and the payment of estate administration fees.

      On September 13, 2019, the trial court entered findings of fact and conclusions

      of law, determining in relevant part that: (1) Erica was “living in a state of

      adultery” and therefore not entitled to one-half of Thomas’s net probate estate

      under the intestacy statutes;1 (2) Erica was entitled to a share of the proceeds of

      the wrongful death claim because such proceeds were not part of Thomas’s

      estate and because, under the terms of the prenuptial agreement, she and

      Thomas were not legally separated at the time of Thomas’s death; and (3) Erica

      was entitled to one-half of the net proceeds of the wrongful death claim, with

      Thomas’s four children each entitled to a one-eighth share. The Phelps

      Children now appeal.2




      1
        See Ind. Code § 29-1-2-14 (“If either a husband or wife shall have left the other and shall be living at the
      time of his or her death in adultery, he or she as the case may be shall take no part of the estate or trust of the
      deceased husband or wife”).
      2
        The trial court also found that Maloy played an active role in prosecuting the wrongful death suit and ran
      the day-to-day operation of Thomas’s business until it was sold. Accordingly, the trial court concluded that


      Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020                          Page 4 of 12
                                          Standard of Review
[8]   On appeal, the Phelps Children argue that the trial court erred in construing

      and applying the general wrongful death statute and the intestacy statutes. The

      construction of statutes is a matter of law that we review de novo. In re

      Supervised Estate of Kent, 99 N.E.3d 634, 637 (Ind. 2018).


                                       I. The Wrongful Death Statute

[9]   The Phelps Children first claim that the trial court erred by concluding that

      Erica was entitled to receive a share of the net proceeds of the wrongful death

      action. With regard to damages, the general wrongful death statute provides in

      relevant part:


              That part of the damages which is recovered for reasonable
              medical, hospital, funeral and burial expense shall inure to the
              exclusive benefit of the decedent’s estate for the payment thereof.
              The remainder of the damages, if any, shall, subject to the
              provisions of this article, inure to the exclusive benefit of the
              widow or widower, as the case may be, and to the dependent
              children, if any, or dependent next of kin, to be distributed in
              the same manner as the personal property of the deceased. . . .


      Ind. Code § 34-23-1-1 (emphasis added). The Phelps Children contend that the

      emphasized portion of the statute is ambiguous. We disagree.




      Maloy should be compensated in the amount of $100,000 for her services as personal representative and that
      Maloy’s counsel was entitled to $7,150 in unreimbursed out-of-pocket legal expenses.

      Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020                  Page 5 of 12
[10]   The wrongful death statute first provides that the portion of damages recovered

       for medical, hospital, funeral, and burial expenses inure to the exclusive benefit

       of the decedent’s estate for the payment of such expenses. It then provides that

       any remainder of damages shall inure to the “exclusive benefit of the widow . . .

       and to the dependent children . . . to be distributed in the same manner as the

       personal property of the deceased.” Id. (emphasis added). It is clear from this

       language that Erica, who is Thomas’s widow, and Thomas’s “dependent

       children”3 are entitled to share in the remainder of the proceeds of the wrongful

       death action, less the amount recovered for medical, hospital, funeral, and

       burial expenses, in the same manner as they would Thomas’s personal

       property. We find nothing unclear or ambiguous about this portion of the

       wrongful death statute.


[11]   We also find the Phelps Children’s citation to In re Estate of Inlow, 916 N.E.2d

       664 (Ind. 2009), to be unavailing. In that case, an agreement settling the

       wrongful death claim did not specifically allocate any amounts between

       different types of damages, i.e., funeral and burial costs. The children of the

       decedent’s first marriage argued that the wrongful death statute required the full

       payment of funeral and burial costs before distribution to any of the decedent’s

       surviving family. Our supreme court noted that the wrongful death statute

       contained “no provisions expressly applicable to the distribution of proceeds




       3
        The trial court concluded that all of Thomas’s children were “dependent children” for purposes of the
       wrongful death statute. Erica does not challenge this conclusion.

       Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020                   Page 6 of 12
       from settlements before adjudication of the amount of damages.” Id. at 666.

       The court further noted that wrongful death claims are often settled for less than

       the actual medical, funeral, and burial costs, and that to “impose upon all

       pretrial wrongful death settlements a requirement that the net proceeds must

       first be allocated to medical, hospital, funeral, and burial expenses before

       distribution for other damages could frequently . . . be inequitable and create an

       undesired counter-incentive to seek settlement.” Id. at 667. The court therefore

       declined to construe the wrongful death act to impose such a requirement. Id.

       Instead, the court held that a trial court “should direct payment from the pre-

       trial wrongful death settlement that part of the medical, hospital, funeral, and

       burial expenses that corresponds to the ratio of the total of such expenses to the

       estimated total damages sustained.” Id. This may require that a trial court hear

       evidence “to enable it to ascertain the approximate total damages and thus

       determine a proportionate equitable allocation.” Id. at 667–68.


[12]   In the present case, the question is not how to distribute the proceeds of the

       wrongful death settlement between the hospital, medical, funeral and burial

       costs on the one hand, and the survivors on the other hand. And here, the

       amount of the settlement is well in excess of the actual medical, hospital,

       funeral, and burial costs. See Appellant’s App. p. 57 (listing the total of these

       expenses as $73,559.29). Thus, the question here is how to distribute the net

       proceeds of the settlement among the survivors after such costs have been paid

       from the award. And the wrongful death statute unambiguously provides that

       such proceeds inure to the exclusive benefit of the decedent’s widow, i.e. Erica,


       Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020   Page 7 of 12
       and dependent children, “to be distributed in the same manner as the personal

       property of the deceased.” I.C. § 34-23-1-1. This leads us to the Phelps

       Children’s next argument.


                                        II. Erica’s Share of the Proceeds

[13]   The Phelps Children argue that the trial court abused its discretion by awarding

       Erica one-half of the remainder of the proceeds of the wrongful death action.

       Again, we disagree. As noted above, the wrongful death statute clearly and

       unambiguously provides that Erica, as Thomas’s widow, and Thomas’s

       dependent children are entitled to share in the remainder of the proceeds “in the

       same manner as the personal property of [Thomas].” I.C. § 34-23-1-1. Thomas

       died intestate. The relevant portion of Indiana’s intestacy statutes, Indiana

       Code section 29-1-2-1, provides:


                (a) The estate of a person dying intestate shall descend and be
                distributed as provided in this section.

                (b) Except as otherwise provided in subsection (c),[4] the
                surviving spouse shall receive the following share:

                    (1) One-half (½) of the net estate if the intestate is survived
                    by at least one (1) child or by the issue of at least one (1)
                    deceased child . . . .




       4
        Subsection (c) applies only if “the surviving spouse is a second or other subsequent spouse who did not at
       any time have children by the decedent[.]” As Erica had a child with Thomas, this subsection is not
       applicable here.

       Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020                    Page 8 of 12
       Ind. Code § 29-1-2-1 (emphasis added).


[14]   Based on the plain language of this section, Erica, as the surviving spouse,

       would generally be entitled to receive one-half of the net estate, including

       personal property, because Thomas was survived by at least one child. The

       plain language of the wrongful death statute, in conjunction with the plain

       language of the intestacy statute, supports the trial court’s conclusion that Erica

       is entitled to a one-half share of the net proceeds of the wrongful death action in

       the same manner as she would be entitled to Thomas’s personal property.


[15]   The Phelps Children insist that this is incorrect. They claim that Erica should

       not receive one-half of the net proceeds of the wrongful death action because

       Indiana Code section 29-1-2-14, part of the intestacy statutes, provides that “[i]f

       either a husband or wife shall have left the other and shall be living at the time

       of his or her death in adultery, he or she as the case may be shall take no part of

       the estate or trust of the deceased husband or wife.” 5 Since the wrongful death

       statute provides that the widow is entitled to a share of the net proceeds of the




       5
         Erica argues in her Appellee’s Brief that she did not leave Thomas or live in adultery. But the trial court
       found otherwise, and there was ample evidence to support the trial court’s finding. Erica testified that she
       “left the [marital] house,” Tr. p. 65, and that she and Thomas “did not live together after filing for divorce.”
       Id. at 69. She further testified that she had sexual intercourse with another man, with whom she later had a
       child, on a regular basis after the dissolution action was filed and before Thomas died. Still, Erica claims that
       she was not “living in adultery” because she was living with her parents, not her paramour. But the adultery
       statute does not require that the decedent’s spouse to live with his or her paramour before its provisions are
       applicable; it simply requires that the decedent’s spouse be “living in adultery.” Adultery is defined as
       “Consensual sexual intercourse between a married person and a person other than the spouse.” American
       Heritage Dictionary online, https://www.ahdictionary.com/word/search.html?q=adultery (last visited June
       4, 2020) [https://perma.cc/2A7S-ERWF]. The trial court did not clearly err by determining that the adultery
       statute applied to Erica, who left the marital residence and had voluntary sexual intercourse with someone
       other than Thomas while still legally married to Thomas.

       Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020                       Page 9 of 12
       wrongful death action “in the same manner as the personal property of the

       deceased,” and since Erica is not entitled to a share of Thomas’s intestate estate

       due to the fact that she had left Thomas and was living in a state of adultery, the

       Children argue that Erica is therefore not entitled to any share of the net

       proceeds of the wrongful death action. Although this argument has some facial

       appeal, it ultimately cannot stand.


[16]   The “adultery” section of the intestacy code provides that a spouse who has left

       the decedent and is living in a state of adultery at the time of the decedent’s

       death shall take “no part of the estate or trust” of the decedent. I.C. § 29-1-2-14

       (emphasis added). But it has long been held that the proceeds from a wrongful

       death action are not part of the decedent’s estate. See Goldman v. Cha, 704

       N.E.2d 157, 158 (Ind. Ct. App. 1999) (“Wrongful death proceeds do not

       become part of the decedent’s estate and are not subject to claims of creditors of

       the decedent.”) (citing In re Estate of Bruck, 632 N.E.2d 745, 748 (Ind. Ct. App.

       1994)); Thomas v. Eads, 400 N.E.2d 778, 783 (Ind. Ct. App. 1980)).


[17]   In Bruck, we held that wrongful death proceeds did not become part of the

       intestate estate but instead “pass through intestate distribution.” 632 N.E.2d at

       748 (emphasis added). In other words, wrongful death proceeds are not part of

       the decedent’s estate but are distributed in the same manner as if they were part

       of the intestate estate. And the adultery statute acts to bar an adulterous spouse

       only from taking part of the decedent’s estate, which does not include the

       proceeds of a wrongful death claim.



       Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020   Page 10 of 12
[18]   We therefore conclude that, even though Erica may not be entitled to share in

       Thomas’s estate, the wrongful death proceeds are not part of Thomas’s estate.

       Such proceeds, even though not part of the decedent’s estate, are to be

       distributed as set forth in the intestacy distribution statute, which provides that

       the widow of the intestate shall receive one-half of the estate if the intestate is

       survived by at least one child. Ind. Code § 29-1-2-1(b)(1). Erica is therefore, as

       the trial court concluded, entitled to one half of the net proceeds of the wrongful

       death action.


[19]   The Phelps Children claim that it is unjust for Erica to receive half of the net

       proceeds of the wrongful death action. To do so, they observe that Indiana’s

       child wrongful death statute—as compared to the adult wrongful death statute

       at issue here—specifically excludes the distribution of damages recovered in a

       wrongful death action to a “parent or grandparent who abandoned [the]

       deceased child while the child was alive[.]” Ind. Code § 34-23-2-1(i)(3). And

       they note that the adultery provision of the intestate probate code prohibits

       Erica, as the adulterous spouse, from receiving a portion of the intestate estate.

       The Phelps Children then pose the question, “If the wrongful death statutes for

       the death of a child, consider the existence of abandonment, and the probate

       codes address it, why wouldn’t the criteria for the adult wrongful death

       distribution include a similar analysis?” Appellant’s Br. at 16. This is not a

       question for a court, but for a legislative body. For whatever reason, the general

       wrongful death statute simply does not include similar language regarding

       abandoning spouses. Indeed, the absence of such abandonment language from


       Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020   Page 11 of 12
       the general wrongful death statute is all the more telling given the presence of

       such language in the child wrongful death statute. We will not read into the

       statute a provision the legislature clearly did not include. The Phelps Children’s

       arguments that the result of this case is unjust or inequitable are inapposite

       given what we consider to be the plain language of the statutes at issue.


                                                 Conclusion
[20]   The trial court did not err by concluding that the wrongful death statute

       unambiguously provides that the net proceeds of the wrongful death statute

       inure to the exclusive benefit of Thomas’s widow, Erica, and his dependent

       children, to be distributed in the same manner as Thomas’s personal property.

       And under the intestacy statutes, Erica is entitled to one-half of such property as

       Thomas’s widow. Although the adultery section of the intestacy code may

       deprive Erica of the right to receive distributions from Thomas’s estate, the

       wrongful death proceeds are not part of Thomas’s estate. Therefore, the trial

       court properly determined that Erica is entitled to one-half of the net proceeds

       of the wrongful death settlement, and we affirm the judgment of the trial court.


[21]   Affirmed.


       Riley, J., and Tavitas, J., concur.




       Court of Appeals of Indiana | Memorandum Decision 19A-ES-2375 | June 16, 2020   Page 12 of 12
