Petition for Writ of Certiorari — Marchand v. Marchand (No. 08-1124)
Supreme Court brief2009
Ask Donna
What actually matters in this document.
Text
. 9 2 C\) Supreme Court, U.S.
NO. 081124 DEC 9 - 2008
OFFICE OF THE CLE
In The Supreme Court Of The United States
REBECCA L MARCHAND, INDIVIDUALLY AND AS
PERSONAL REPRESENTATIVE OF THE ESTATE
OF ALFRED G. MARCHAND, DECEASED,
Petitioner,
JOSHUA MARCHAND,
Respondent.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE SUPREME COURT OF THE STATE OF
NEW MEXICO
PETITION FOR A WRIT OF CERTIORARI
STEVAN J. SCHOEN, ESQ.
COUNSEL FOR PETITIONER
4 HILLSIDE DRIVE
PLACITAS, NEW MEXICO 87043
(505)867-2802
(505)771-0984 (FAX)
schoenlaw@comcast.net
Counsel for Petitioner
LEGAL PRINTERS LLC, Washington DC e 202-747-2400 @ icgalprinters.com
QUESTIONS PRESENTED
1. What is the proper distribution of the
September 11‘ Victim Compensation Fund Award?
Whether the conflict in legal authority between the
Final Report of the Special Master of the September
11 Victims Compensation Fund of 2001 containing
the record of his consistent administrate law
decisions based upon federal regulations and his
administrative law policy and precedent that no
surviving spouse is to receive less then one-half of
the award for economic Joss, and whose authority
was confirmed in Schneider v. Feinberg, 345 F.3"4
135 (24 Cir. 2003) should be given Chevron
deference to uphold the rulings of the Special Master
of the September 11th Victzms Compensation Fund:
thereby, reversing the New Mexico Supreme Court’s
decision in Marchand v. Marchand, 2008-NMSC-065,
199 P.3d 281 (N.M. 2008) which eliminated the Fund
award to the surviving spouse.
e ? Whether under the Chevron deference
doctrine, a New Mexico State Court should give
deference to the regulations and rulings of a Federal
agency such as the United States Department of
Justice, as administered by the Special Master
appointed by the Attorney General of the United
States, made in connection with the administration
of the September 11th Victims Compensation Fund,
and do these federal regulations have the force and
effect of law Chevron U.S.A. Inc. v. Natural
Resources Defense Counsel, 467 U.S. 837, 104 S. Ct.
2778, 81 L. Ed 2d 694, (1984).
3. Mass injury places tremendous strain
on judicial resources. Where congress enacts special
legislation, such as the Title IV of the Act, the
September 11 Victims Compensation Fund, in
response to a national tragedy, to avoid multiplicity
of litigation, with inconsistent results, and gives
special legal authority to a Special Master; can a
State Court ignore the rulings of the Special Master
in his administrative law decisions which would
guarantee a surviving spouse one-half of the
economic award.
TABLE OF CONTENTS PAGES
QUESTIONS PRESENTED... .......ccccessscccssevevcsnsees i
pe aa gr liye, @) yy ~. i e er naee iv
eT occas sou ethees soeesssvncnsteseseguntenaveus 1
NN ah ksi nic panieet:tenkessta'piesqasunenneriveeser dens 1
CONSTITUTIONAL AND STATUTORY
EAP PRINS BIN Y FEY Baloo viv csnscecesccenescoeseccsa see cih
STATEMENT OF THE CASE. ...........0:-cccccsecsoseee 3
REASONS FOR GRANTING PETITION............... 9
ai iis nin vckinnnnenyedabeinsiennsinssenndabadann 33
APPENDIX A DECISION OF THE NEW MEXICO
oe ES ee
APPENDIX B ORDER OF THE NEW MEXICO
Fe IE hiss vinsivedbencha nnnnne danicvnnwannesss A-20
APPENDIX C DECISION OF NEW MEXICO
COURT OF APPEALG......... Le ancaiaes idebusinewnxs A-22
APPENDIX D SUMMARY JUDGMENT FROM
NEW MEXICO DISTRICT COURT.................. A-43
lil
TABLE OF AUTHORITIES CiTED
CASES PAGE NUMBER
Federal Cases
Chevron USA, Inc. v. National Resource Defense
Counsel, 467 U.S. 837, 1048S. Ct. 2778, 81 L.Ed. 2d
I ee ee ei 1, 21. 2
Christensen v. Harris County, 529 U.S. 576, 120 S.
Ct. 1666, 146 L. Ed 2d 521 (2000)... ......cccsessceesees. 22
Graybill v. City of New York, 247 F.Supp. 2d 345
ee I Siiinkc da sains kacicnvasckecptinasuseisaxsaueass 10
Nationsbank of North Carolina v. Variable Annuity
Life Insurance Comp., 513 U.S. 251, 115 S. Ct. 810,
DO Ee. Be Fe i vac ain iex oes siceeoenansersatvns 23
Schneider et al v. Feinberg, 345 F.3d 135 (2d Cir.
RRR ce erm e tre Ante i, 4, 5, 20, 22, 23, 24, 33
Skidmore v. Swift & Co., 323 U.S. 134, 65 S. Ct. 161,
I a 23
United States v. Mead Corp., 533 U.S. 231, 1215S.
Ct. S166, 250 L. Bd BOR ROOD), ..... sac scscsesscsevecees: 22
State Cases
Gumore v. Gilmore, 124 N.M. 119, 946 P.2d 1130
ee ee acta yikes nc ened ea oeeceeauts 30
In re Kaiser Estate, 100 N.Y.S. 2d 218
RISER ERNE REE it Ay Anco bc. 9 lO 16, 17, 21, 25, 30
Marchand v. Marchand, 142 N.M. 795, 171 P.3d 309
oi ctcrcs cpa ccndvascdccaciatexencds 1, 8,19
Marchand v. Marchand, 2008- MEG: 065, 199 P.3d
281 (N.M. 2008)... a Se ROE MC i, 1,9
Federal Statutes and Rules
AIR TRANSPORTATION SAFETY AND SYSTEM
STABLIZATION ACT of 2001 Pub. L. No. 107-42,
115 Stat 230 (2001), (codified as amended at 49
U.S.C. § 40101) (West Supp. 2008)............cec0cee. 2,9
September 114 Victim Compensation Fund of 2001,
66 FR 66274 (December 21, 2001) (to be codified at
28 C.F.R. 104) (“Interim Rules”)..................0c0e00s. 24
September 11 Victims Compensation Fund of 2001,
67 Federal Reg. 11,234 (March 13, 2002) (codified at
; bok et Be ae) 8”) yd Snare 25
28 C.F.R. § 104.2 (a) 66 FR 66282, Dec 21, 2001, as
amended at 67 FR 11246, March 13, 2002.............. 5
28 C.F.R. § 104.33 (g) 66 FR 66282, Dec 21, 2001, as’
amended at 67 FR 11246, March 13, 2002.............. 17
28 C.F.R. § 104.43 66 FR 66282, Dec 21, 2001, as
amended at 67 FR 11246, March 138, 2002....7, 20, 33
28 C.F.R. § 104.52 66 FR 66282, Dec 21, 2001, as
amended at 67 FR 11246, March 13, 2002.............. 5
United States Department of Justice, Kenneth R.
Feinberg, Esq. Final Report for the September 11th
Victim Compensation Fund of 2001, Volume I
dds Saiedind dnknine ¥andie bin knasandenss 11
New Mexico Statutes Annotated
Section 41-2-3 NMSA 1978 (2006) (Wrongful Death
EGR EERE Eee ee ee ea a 8
Feinberg, K.F. “What is Life Worth, The
Unpredented Effort to Compensate the Victims of
Ee , Be I, Bi viv cennccccccvccncccecssccoccsices 26
Marshall S. Shapo, “Compensation for Victims of
Terrorism Oceana Publications 2005............. 26, 28
Law Review Articles
J.C. Alexander and R.A. Fein: “The History and
Structure of the September 11* Victim
Compensation Fund,” 53 DePaul Law Review 692
a Buisson cancnginosadtisassuvaxiavesessesxes 26
John G. Culhane, “Tort Compensation and Two
Kinds of Justice,” 55 Rutgers L. Rev. 1027, (2003)..26
Kenneth L. Feinberg, Speech “Negotiating the
September 11' Victim Compensation Fund of 2001:
Mass Tort Resolution Without Litigation,” 19
Washington University School of Law, Journal of
Law and Policy, page 21, September 14,
Gillian K. Hadfield, “The September 11 Victim
Compensation Fund, An Unprecedented Experiment
in American Democracy,” (May, 2005) University of
Southern California Legal Studies Working Paper
SOTIOS, WHOPMITIE FODOE Bos cscces svsccecescovaceccrcascsescs 27
James C. Harris, “Why the September 11> Victims
Compensation Fund Proves the Case for a New
Zealand-Style Compensate Social Insurance Plan in
the United States,” Northwestern University Laws
Review, Vol. 100, No. 3 (2006)..........cccsccscesseccsscee 27
Erin G. Holt, “The September 11* Victim
Compensation Fund: Legislative Justice Sui
Genesis’, 59 N.Y.U. Annual Survey, Am, Law 513
James P. Kriendler and Brian Alexander,
“September 11th Aftermath: A Perspective of the
VCF and Litigation”, 18 Air & Space Law 7
shea hea ccs nay age Madu ada aa adsecede cannes 27
Jonathan D. Melber, Note, “Act of Discretion:
Rebutting Cantor Fitzgerald’s Critique of the Victim
Conipensation Fund”, 78 N.Y.U. Lt. Rev. 749
eer cies sy asc cacc io vanaisaan eed ptenlcss 27
Linda S. Mullinex, “The Future of Tort Reform:
Possible Lesson from the World Trade Center Victim
Compensation Fund”. 53 Emory L.J. 1315
Linda S. Mullinex & Kristen B. Stewart, “The
September 11 Victim Compensation Fund; Fund
Vil
approaches to Mass Tort Litgation”, 9 Conn. Ins. L.J.
nh aes cinbensnaxt venacnbis gel elasebiinn: 27
Kenneth P. Nolan and Jeanne M. O’Grady, “The
Victim Compensation Fund-Looking a Gift Horse in
the Mouth,” 53 DePaul L. Rev. 231 (2003)............ 28
Robert L. Rabin, “The Quest for Fairness in
Compensating Victims of September 11*’, 49 Clev.
ees Bic Me Rs eiivnsicinsncnsntsnserrennsenaiceesbansen' 28
Robert L. Rabin, “The September 11‘) Victims
Compensation Fund”, A Circumscribed Response to
an Auspicious Model” 53 DePaul Law Review, 769
NN iceiigi oasis cc ccesniartelasuneidestdncinedevenasanevane 28
Robert L. Rabin, “September 11t Through the Prism
of Victim Compensation” 101 Columbia L.R. 473
RARER Oe ar RR Are a sad pulnbnagses beashaaab rue 28
J. Romero, “A Victim’s Eye View of the September
11th Victim Compensation Fund”, 71 Def. Counsel J.
alesis ss ania pcppacss cas ai casaereneiuie amass 28
Marshall S. Shapo, “Compensation for Terrorism,
What Are We Learning”, 53 De Paul Rev 805 (2003).
iii oo nnsces ain nucanndacndensestoecinesesetinancad 28
Marshall S. Shapo, “Compensation for Victims of
Terror: Specialized Jurisprudece of Injury” 36 Ind
L.R. 237 (2003) and 30 Hofsha L. Rev. 1245
oho ad hes Spee tb bine cuax cov enntataaSpces scenes ..28
Frank Tinari “Did the 9/11 Victim Compensation
Fund Accurately Assess Economic Losses” Vol. 6
Topics in Economic Policy and Analysis, Page 1438,
BOTKOley TWiGCHPORIG FIRB B ecco sccsccccccccocscccveccecesvecce 28
ix
PETITION FOR WRIT OF CERTIORARI
Petitioner respectfully prays that a Writ of
Certiorari issue to review the judgment below.
OPINIONS BELOW
The Opinion of the highest state court to
review the merits appears at Appendix A to the
Petition and is reported at, Marchand v. Marchand,
2008-NMSC-065, 199 P.3d 281 (N.M. 2008).
The opinion of the New Mexico Court of
Appeals to review the merits appears at Appendix C
to the Petition and it is reported at Marchand v.
Marchand, 142 N.M. 795, 171 P.3d 309 (Ct. App.
N.M. 2007)
JURISDICTION
This case originated in state court.
The date on which the highest state court
decided the case was October 14, 2008. A copy of the
decision of the Supreme Court of New Mexico
appears at Appendix A.
A timely petition for rehearing was thereafter
denied on the following date: December 8, 2008, and
a copy of the order denying rehearing by the New
Mexico Supreme Court appears at Appendix B.
The jurisdiction of this Court is invoked under
28 U.S.C. § 1257 {a).
LIST OF PARTIES
All the parties appear in the caption of the
case on the cover page.
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
Title IV of the 4ir Transportation Safety and
System Stabilization Act of 2001, Public Law 107-42,
115 Stat 230 (2001), “The September 11 Victim
Compensation Fund” (codified as amended at 49
U.S.C. § 40101 (West Supp. 2003).
STATEMENT OF THE CASE
September 11. The events of that day have
tragically altered and illuminated our times.
Why is this case important enough to be
considered by the Supreme Court of the United
States? It is important for the same reasons that
justify the existence of the September 11% Victim
Compensation Fund. Title [V, Pub. L. No. 107-42,
115 Stat. 230. This case must be viewed not only
from the perspective of the victim, a 37 year old
widow but rather from the perspective of the natron,
a unified community response to a unique and
unprecedented national historical tragedy. The
Congressional response was the creation of the
September 11‘ Victim Compensation Fund, a public
compensation scheme that not only provided
financial relief to the victims, but also expressed a
shared national grief, horror, and revulsion in
response to terrorist atrocities. The September 11th
Victim Compensation Fund is truly different because
the response to the attacks was so universal and
profound nationwide.
In the days following September 11*,
Congress enacted special legislation to stabilize the
American airline industry and compensate the
victims of these tragic events:The Air Transportation
and Safety and System Stabilization Act of 2001
(“The Act”). Pub. L. No. 107-42, 115 Stat 230
(codified at 49 U.S.C. § 40101). It is uniquely
American experiment and described by many as an
unprecedented experiment in American Democracy.
See Hatfield G. “The September 11 Victim
Compensation Fund: A Unprecedent Experiment in
3
America Democracy”, University of Southern
California Legal Studies Working Papers, Working
Paper 3, (May, 2005).
Title IV of the Act created the September 11th
Victim Compensation Fund. The stated purpose of
Title IV of the Act is “to provide compensation to any
individual (or relative of a deceased individual) who
was physically injured or killed as a result of the
terrorist related aircraft crashes of September 11,
2001”, Schneider v. Feinberg, 345 F. 3d 135 (2d Cir.
2003). When the Victim’s Compensation Fund was
established, it set off a series of debates on the logic
of compensation for the victims of terrorist acts;
whether federal compensation for injuries is
appropriate, and how do injuries or deaths caused by
acts of terrorists against us as a nation differ from
those caused in other situations? Also, what criteria
should we consider when determining victim
compensation, and the distribution of victim
compensation? See Culhane, J, “Tort Compensation
and Two Kinds of Justice” 55 Rutgers L. Rev. 1027
(2003), and Mullinex, L. “The September 11‘ Victim
Compensation Fund: Fund Approaches to Mass Tort
Litigation” 9 Conn. Ins. L.J. 121 (2002), and Rabin,
R. L., “The Quest for Fairness in Compensating
Victims of September 11th, 49 Clev. St. L. R. 573
(2001). Shapo, M., Compensation for Victims of
Terrorism, Oceana Publications, 2005.
Alfred G. Marchand was a flight attendant on
United Airlines Flight 175, that terrorists caused to
crash into the World Trade Center in New York City
on September 11, 2001. He was the sole New Mexico
resident to die in the tragic events of that day. He
died intestate, survived by his wife, Rebecca
+
Marchand, his dependent stepson Trae Hale, his
adult non-dependent son by a previous marriage,
Joshua Marchand. The surviving spouse, Rebecca
Marchand, filed for probate in September cf 2001
and she was duly appointed and qualified as the
Personal Representative of the Estate of Alfred G.
Marchand, Deceased. As Personal Representative,
Rebecca Marchand applied to the September 11*
Victim Compensation Fund (“the Fund”) for victim
compensation.
In a case involving a claim on behalf of a
person who was killed in the attacks of September
11*h, the Act designated the Personal Representative
of the Estate as the sole eligible claimant. 28 C.F.R
§§ 104.2(a)(2)-(3), (2002). The claimant was required
to file a complicated claim form and to provide
written notice of the claim to beneficiaries and
interested parties to the Estate. 28 C.F.R. § 104.4(b)
(2002). Upon receipt of a Fund award, the Personal
Representative was legally obligated to distribute
the award according to the law, 28 C.F.R. § 104.52
(2002).
The Act authorized the Attorney General of
the United States, John Ashcroft to designate a
“Special Master”, and in consultation with him,
promulgate a series of regulations to guide and
expedite the award of compensation”. See Schneider
v. Feinberg, 345, F. 32d 145 (2d Cir. 2003). Kenneth
Feinberg, Esq., the duly appointed Special Master,
was specially authorized to oversee’ the
implementation of the Fund and determine the
amounts to be awarded to claimants based upon the
harm to the claimant, the facts of the claim, and the
individual circumstances of the claimant. Act, 115
Stat. 230 § 404(a) (2001); § 405 (b)(1)(B)@-Gi).
Rebecca Marchand filed a timely claim with
the Fund as the Personal Representative of the
Estate. Her efforts in pursuing the award included
retaining a New York law firm, Kriendler and
Kriendler, traveling to New York City for testimony
at an administrative law hearing held on April 29,
2004, and preparing an economic loss analysis of
Alfred’s anticipated income. See Kriendler, J.P.
“September 11th Aftermath; A perspective of the
VCF and Litigation” 18 Air and Space Law (2004).
Although repeatedly requested to help, Joshua
Marchand did not participate in presenting his claim
to the Fund. Rebecca Marchand submitted a list of
all individuals entitled to a Fund award and agreed
to distribute any award according to law. The
individuals included Rebecca Marchand, as the
_ surviving spouse, Trae Hale as the dependent child
and Joshua Marchand, the non-dependent adult son.
Rebecca submitted a proposed distribution plan for
the award, as required by federal regulations.
The Special Master detailed the final award
determination in a letter to Rebecca Marchand dated
June 24, 2004. The total award after collateral
source offsets was $769,971.66 comprised of an
economic loss component of $319,971.88, and non-
economic loss awards of $100,000.00 each for
Rebecca Marchand and Trae Hale, as spouse and
dependent child of the decedent, and $250,000.00
non-economic loss for the Estate of Alfred G.
Marchand, Deceased. Joshua Marchand received no
award from the Special Master because he was an
adult, non-dependent child who has suffered no
compensable “economic” loss.
“Economic loss” is defined in the Act as “any
pecuniary loss resulting from harm,” Act, Section
402 (7), and economic loss was calculated through a
methodology that took into account anticipated lost
future benefits, including future income See 28
C.F.R. § 104.43(a).Compensation awards for
economic loss were intended to be distributed to the
dependents of the decedent. “In no event shall an
award ... be less than $500,000.00 in any case
brought on behalf of a deceased victim with a spouse
or dependent.” (before collateral source
compensation) 28 C.FR. § 104.41 (200
Noneconomic damages were defined as “losses for
physical and emotional pain, suffering,
inconvenience, physical impairment, mental
anguish, disfigurement, loss of enjoyment of life, loss
of society and companionship, loss of consortium . .
.and all other nonpecuniary losses of any kind or
nature.” Act, § 402(9) (2002). Because of the
inherent difficulty in determining noneconomic
losses for individual claimants, the regulations
designated a uniform noneconomic loss award in the
sum of $250,000.00 for a deceased and $100,000.00
for the surviving spouse and each decedent of the
victim. 28 C.F.R. § 104.44, Sec. 67 Fed. Reg. 11,233.
11,239 (Mar. 13, 2002); (2001). Shortly after the
distribution of the Fund award to Rebecca
Marchand, as_ surviving spouse and Personal
Representative, Joshua Marchand filed suit against
her claiming that he is entitled to the distribution of
all of the September 11 Victim Compensation Fund
Award.
The District Court of Otero County, New
Mexico granted Summary Judgment in favor of
Rebecca Marchand, (Appendix D), the surviving
spouse by awarding her all of the economic loss
compensation of $319,971.88 and one-quarter of the
noneconomic loss Estate compensation in the sum of
$62,500.00, as provided by the intestate succession
laws contained in the New Mexico Probate Code,
concerning spousal inheritance rights and
community property rights. (Section 45-2-102
NMSA 1978), together with the $100,000.00
noneconomic loss award. Joshua Marchand received
judgment from the District Court for $187,500.00 as
three-quarters of the noneconomic loss from the
Estate, as his intestate share of the Estate under the
New Mexico Probate Code, Section 45-2-102 NMSA
1978.
Joshua Marchand appealed the decision of the
District Court to the New Mexico Court of Appeals.
Upon review of the Summary Judgment, Joshua
Marchand was awarded his intestate share of the
Estate in the sum of $187,500.00, and one-half of the
economic loss pursuant to New Mexico Wrongful
Death statute, Section 41-2-°3 NMSA 1978 in the
sum of $159,985.94. (Appendix C). Marchand v.
Marchand, 142 N.M. 795, 171 P.3d 309 (2007).
Joshua Marchand was dissatisfied with the
decision of the New Mexico Court of Appeals, and he
appealed again to the New Mexico Supreme Court.
The New Mexico Supreme Court reversed the
Summary Judgment and ruled that Joshua
Marchand was entitled to all of the economic award
from the Victims Compensation Fund in the sum of
$319,971.88 and all of the noneconomic award in the
8
sum of $250,000.00 belonging to the Marchand
Estate. Rebecca Marchand, as surviving spouse was
left with a fund award of $100,000.00 as the
presumed noneconomic loss for the spouse of the
deceased victim. 28 C.F.R. 104.44 (2002). (Appendix
A). Marchand v. Marchand, 2008-NMSC-065. 199
P.3d 281 (N.M. 2008). The rationale given by the
New Mexico Supreme Court for the decision
premised that collateral offsets potentially available
to Rebecca Marchand, eliminated any award share of
“the economic loss component of the award”.
Rebecca contended that the Special Master
‘had already reduced the award to the Marchand
Estate by the total amount of collateral offsets
potentially available to her. The result would be a
double reduction of collateral offsets from any
distribution of the Fund Award by the Estate to the
surviving spouse, Rebecca Marchand, as required by
the law of intestate distribution; Section 42-2-102
NMSA 1978. The New Mexico Supreme Court gave
no other reason than equitable considerations for the
elimination of the spousal award. (See Appendix A).
Marchand v. Marchand, 2008- NMSC-065 199 P.3d
281 (N.M. 2008).
REASONS FOR GRANTING THE PETITION
September 11th. Within days of these horrific
events which caused in the untimely deaths of more
than 3000 persons in New York, Pennsylvania and
Washington, D.C., Congress’ enacted _ special
legislation to deal with their economic and social
consequences, The “Air Transportation Safety and
System Stabilization Act of 2001 Pub. Law. No. 107-
42, 115 Stat. 230 (2001) (the “Act”).
9
The Act was passed in relative haste,
Just eleven days after September 11%,
and its legislative history 1s scant. The
totality of Congressionai discussions
on the Act can be found at 147 Cong.
Rec. S 9589-6606 (Sept 21, 200L) and
147 Cong. Rec. H 5884-5917 (Sept. 21,
2001). Most discussion concerned how
best to deal with the economic crises
facing the airline industry following
September 11 ... Discussion of Title
LV focused on providing Victims of
September Il the opportunity to
forgo litigation in favor of a faster,
easier and more definite remedy”.
Graybill v. City of New York, 247
F.Supp. 2d 345 (S.D.N.Y. 2002).
The Act was intended to prevent the collapse
of the airline industry by allocating almost 15 billion
dollars as a bailout for the airlines. It also created a
federally funded scheme to compensate victims of
the September 11 terrorist attacks. The Act has
been described as a unique experiment in American
Democracy”, Hatfield, G. “The September 11
Victims Compensation Fund; and Unprecedented
Experiment in America Democracy” U.S.C. Legal
Studies, Working Paper 3, (May, 2005). The Act was
designed to deal with the likely tremendous strain
on our judicial system resulting from the mass
injury. Mullinex, L. “The September 11‘) Victims
Compensation Fund: Fund Approaches to Mass Tort
Litigation”. 9 Conn. Ins. L.J. 121 (2002). The Fund
was enacted by Congress, and it is entirely a
creature of federal design, funding, administration
and implementation. A/exander, J.C. “The History
10
and Structure of the September 11> Victims
Compensation Fund”. 53 DePaul L. Rev. 692
(2003).The administration of the Fund was placed in
the hands of a Special Master, Kenneth Feinberg,
Esq., appointed by the Attorney General of the
United States Department of Justice.
The purpose of this Petition before the
Supreme Court of the United States is to seek justice
for the widow, Rebecca Marchand, the thirty-seven
(37) year old surviving spouse of the person killed on
September 11tt. Somehow the New Mexico high
court ignored the Final Report of the Special Master
and all other sources which confirmed that no
surviving spouse should be awarded less than one-
half (1/2) of the economic loss portion of the
September 11 Victim Compensation Fund Award.
See U.S. Department of Justice, Kenneth R.
Feinberg, Esq., Special Master ”Final Report of the
Special Master for the September 11” Victim
Compensation Fund of 2001, Vol. 1 (2004) (“Final
Report”).
THE EXPERTISE OF THE SPECIAL MASTER.
The Special Master went to great lengths in
his Final Report to explain his rulings concerning
the administration of the Fund and the distribution
of the Fund awards. The Special Master Wrote:
Distributi
The Act's silence regarding the
distribution of awards for decedents
claims created a huge vacuum in the
administration of the Fund. While the
11
Act was intended to benefit the
families of deceased victims, questions
regarding which familv members
should be included in a plan of
distribution and how the award should
be allocated were Tleft to _ the
Department (of Justice) and _ the
Special Master to resolve. The
Regulations and _ the _ procedures
developed by the Fund attempted to
create a mechanism for the allocation
of awards that would be consistent
among similarly situated families,
efficient, and easy to administer, but
would also allow for the consideration
of the individual needs of the families.
The Department and the Special
Master determined -that these goals
would be best served by distributing
the award in a manner consistent with
the law of the decedent's domicile.
Consistency would be assured by
authorizing the Special Master to
approve or disapprove the plan
depending on whether it compled
with state law. Efficiency would be
served by requiring the Personal
Representative to submit a plan of
distribution to the Fund for the
Special Master's approval thereby
eliminating the involvement of the
state courts, where the Special Master
determined that the plan followed
state law. Fairness and the valuation
of uindividual factors would be
accomplished by allowing the Special
12
Master to direct distribution to specific
family members if the Personal
Representative's proposed plan did not
appropriately compensate these
relatives.
I. Distribution Plan Guidelines
At the outset, claimants required
substantially more guidance than that
provided by the Regulations in order
to submit a plan that the Fund would
consider consistent with state law and
would ultimately approve. Attorneys
also were in need of guidance since
even those expert in the applicable
state trusts and estates law were often
uncertain as to which particular state
Jaw rules applied to various portions
of the award. In order to clarify the
components of an appropriate plan,
the Fund provided guidelines on its
website, at town meetings, im
mailings, and by telephone. Claimants
were told that the Personal
Representative must provide a
proposed distribution plan to the Fund
for review prior to payment and that
the distribution plan would need to
address three components of the
award: (l) a non-economic award on
behalf of the victim, (2 a non-
economic award for a spouse and each
dependent, (3) and an _ economic
award. As to these three components,
the following = guidelines were
provided. First, the $250,000 non:
13
economic presumed award on behalf of
the victim was to be distirtbuted in
accordance with the victim's will ou, in
the absence of a will, according to the
intestacy law of the state where the
victim had been domiciled. The Fund's
website provided claimants and their
attorneys a chart summarizing the
intestacy law for most states where
decedents had been domiciled. Second,
the $100,000 additional non-economic
award for a spouse and each
dependent was to be distributed to
each qualifying person. Third, the
economic Joss portion of the award (in
most cases the bulk of the award)
would be governed by the wrongful
death law of the state of the victim's
domicile. A chart summazizing the
wrongful death Jaw (for most
applicable states was also posted on
the Fund's website.
The review of distribution plans and
the process required for approval of a
plan proved to be extremely time-
consuming for the Fund attorneys.
Many claimants found the
requirement that the plan account for
three different components of the
award complex and _ confusing.
Likewise, trusts and estates attorneys
accustomed to distributions of estate
property and physical injury lawyers
familiar with wrongtul death awards
initially found the hybrid nature of the
14
Fund's award perplexing. However, as
the Program proceeded, the
management of the distribution plan
process by claimants and attorneys
significantly improved. Nevertheless,
the process of education of claimants
and attorneys in conjunction with
evaluating plans and working to
achieve approvable plans was
ultimately one of the more labor-
intensive tasks in administering the
Fund. From the claimant's
perspective, however, the process was
significantly more efficient than that
of seeking approval for _ the
distribution of an award from a court
of competent jurisdiction.
While claimants and attorneys found
the appropriate allocation of the non-
economic award to be comparatively
simple, the allocation of the economic
portion of the award posed greater
challenges. Unlike wills and state
intestacy laws, which delineate the
identity of the distributee as well as
the portion of the estate the
distributee should _ receive, the
wrongful death law of most states
provides that damages should be
distributed to those eligible to recover
under a state's intestacy law, "in
proportion to their pecuniary loss. "A
finding of proportionate "pecuniary
loss" often requires a court to engage
in time consuming fact-finding.
15
However, the goal of efficient and
speedy resolution of claims obviously
would not have been served had the
Fund regularly engaged in
distribution plan hearings to
determine the "pecuniary harm" of
significant numbers of beneficiaries.
In order to avoid this result and
provide Personal Representatives and
ther attorneys with guidance
regarding "pecuniary loss,” the Fund
adopted criteria considered by state
courts. Generally, the Fund
determined that the economic portion
of a plan of distribution would be
approved if the allocation either
followed the intestate law of the state
of domicile or, in the case of
distribution between a spouse and
children, a formula developed by the
New York Surrogate’s Courts in Ja re
Kaiser Estate that based pecuniary
loss on remaining years’. of
dependency. These criteria provided
the Personal Representative with
some flexibility while still protecting
the interests of beneficiaries. For
example, the option of relying upon
the Kaiser formula was particularly
helpful to a spouse with older minor
children, since under those
circumstances the Kaiser formula
would provide a larger portion of the
economic award to a spouse with
many years of remaining dependency
than an allocation based on the
16
intestate laws, which usually split the
estate equally between a spouse and
children.
In some situations, the Fund
concluded that certain state laws
created potential hardships for
claimants by limiting a spouse's share
to less than half of the economic
recovery. To address these
circumstances, the Special Master
determined that, in the interest of
both uniformity and fairness, it would
be appropriate to allow every Personal
Representative the option of utilizing
the Kaiser formula for allocation of
the economic portion of the award...
Special Master, Final Report, pages
56-58 (emphasis mine).
The Special Master has publicly stated that “.
.. there is law that has been tested to see who takes
the money. That is what we did .. . half to the
spouse and the other half to the children”. Feinberg,
K. Speech; “Negotiating the September 11" Victim
Compensation Fund of 2001: Mass Tort Resolution
without Litigation”.19 Wash. U. Journal of Law of
Policy 21, 25 (2005). The Special Master was
authorized by the regulations to provide “adequate
guidance for a court of competent jurisdiction and a
personal representative in the distribution of the
award” 28 C.F.R. § 104.33 (9) (2002). Certainly, to
eliminate the spousal award altogether is wrong.
The experience of the Special Master who decided
more than 2880 cases involving the Fund Awards to
decedents should be given deference as compared or
17
the New Mexico Supreme Court with its “one case”
approach.
Thus, the Special Master created an
administrative law precedent which he followed in
every case to permit a spouse’s share of the Fund
Award to be at least one-half (1/2) of the economic
loss award which he had authority to do under
federal regulations and the authority which
Congress had given the Special Master.
When asked about his opinion of the New
Mexico Supreme Court decision in Marchand v.
Marchand, the Special Master, Kenneth Feinberg
commented:
I read the Opinion with great care.
My personal view is somewhat
. different from the conclusion reached
by the Court. ... the Federal 9/11
Fund was designed to compensate
those who were deprived of the
economic benefit of the victim, and the
New Mexico Court is wrong in stating
that the only way the Fund awards
could be distributed was pursuant to
State law. ... dn fact, the W1I fund
regulations and claim forms made it
clear that the award was to be
distributed ... or “as directed by the
Special Master”. The point was to
ensure as much as possible that the
people who relied on the income of the
victim received the benefits;
otherwise, they were deprived of the
economic benefit of the victim. As a
18
result of the New Mexico Court
opinion, the non-dependent adult son
received excessive compensation; he
had no economic Joss resulting from
the death, vet he received $569, 971.88.
The minor child received zero
economic loss and only obtained the
$100,000.00 non-economic benefit.
The New Mexico Court took the non-
economic awards off the top and then
divided the remainder as economic
loss, half to the spouse and half to the
adult child. .. .if the Fund were still
in existence, we probably would have
relocated and provided the entire
amount to the spouse, consistent with
the concepts underlying the 911
Fund..
KK. Feinberg@feinbergrozer.com,
February 23, 2009.
Even the other New Mexico Courts are at odds
with the Marchand decision of the New Mexico
Supreme Court. There are three different decisions
by three different New Mexico Courts. (See Appendix
C, the New Mexico Court of Appeals Marchand v.
Marchand, 142 N.M. 795, 171 P. 3d 309 (Ct. App.
2007) and Appendix D, State District Court,
Summary Judgment in favor of Spouse). In New
Mexico, the Courts have disagreed about what to do
in this situation because they have no experience
with the September 11 Victim Compensation Fund
Award, and no other cases as precedent on which to
rely. Only the Special Master by virtue of his
experience, dedication and wisdom has the relevant
authority to create a decisional precedent concerning
19
the distribution of no less than one-half of the Fund
award to the surviving spouse.
CHEVRON DEFERENCE
The Air Transportation and Safety and
System Stabilization Act vests administration of the
Fund in the “Attorney General, acting through a
Special Master appointed by the Attorney General”
and authorizes them to “promulgate all procedural
as substantive rules for [its] administration” Act
§404(a){2). Furthermore, “... the Attorney General,
in consultation with the Special Master” was
required to “promulgate [procedural] regulations”
and regulations governing” other matters
determined appropriate by the attorney general” Act
§407 (5) (2002).
Following a period of notice and comment, the
Attorney General and Special Master timely
promulgated regulations relevant to this case which
defined statutory terms and establish a “presumed
award” scheme. See Schneider v. Feinberg, 345 F.
3d 135, 137 (2d Cir. 2003), The Act, § 407 (2001). A
particular regulation allowed the Special Master
unlimited flexibility to “develop a methodology,
schedules, tables or charts” which will permit
prospective claimants to estimate determinations of
loss of earnings or other benefits 28 C.F.R. § 104.43
(a) (2002).
The purpose of the “Final Report”, of the
Special Master is to “provide an _ extensive
accounting of the operation and admunistration of
the Fund and of the final resolution of all claims”
“Final Report’, p. 1. The Final Report “outlined the
20
substantive guidelines adopted by the Fund to
evaluate and pay claims, as well as_ the
administrative process established to accomplish
these tasks” Final Report, p. 2. The Special Master
made a point of stating that when: “... the Fund
concluded that certain state laws created potential
hardships for claumants by limiting a spouse’s share
to less than half of the economic recovery”, that “in
the interest of both uniformity and fairness”, it
would be appropriate to allow every Personal
Representative the option of utilizing the Aarser
formula for allocation of one-half the economic
portion of the award to the surviving spouse. “Fina/
Report p. 58-59). The Special Master reasoned that
each distributee should be entitled to receive a
percentage of the award in proportion to the number
of years of dependency for which the distributee
would have looked to the deceased for support”.
Final Report, page 93, n. 170.
The Special Master and the Department of
Justice should be accorded deference by Federal and
State Courts in favor of their interpretations of the
regulations, presumptive award tables and the
consistent, uniform rulings made and reported under
the Act. An analysis of whether the Department of
Justice's construction of the Act for deference
purposes comports with the statute’s meaning may
be undertaken by utilizing the two-step test set forth
in Chevion US.A., Inc. v. Natural Resources
Defense Council, 467 U.S. 837, 1045 Ct. 2778, 81
L.Ed. 2d 694843 n. 9 (1984)
The judiciary is the final authority on
issues of statutory construction, and
must reject administrative
21
constructions which are contrary to
clear congressional intent.” Courts
therefore look first to “whether
Congress has spoke to the precise
question at issue” and if so, give effect
to the unambiguously expressed intent
of congress. Chevron U.S_A., Inc. v.
Natural Resources Defense Council,
467 U.S. 837, 843 1984). ‘If the statute
is silent, or ambiguous with respect to
the specific issue’, a court may
consider only “whether the agency's
answer is based upon a permissible
constructive of the statute Id. 844.
And it so, the Court must defer to the
agency’s construction if the statute”.
Schneider v. Feinberg, 345 F.3d 139,
140 (2d Cir. 2003).
Not all agency interpretations of the
agency's organic statute are entitled to
Chevron deference. Chevron
deference 1s clearly owed _ to
regulations adopted by formal rule-
making after notice and comment, See
Christensen v. Harris Countv, 529,
U.S. 576, 586-587 (2000). All of the
regulations promulgated by the
Department of Justice and by the
Special Master were adopted by
formal rule making after notice and
comment.
“The touchstone is whether the agency
interpretation 1s intended to carry the
force of law” (not whether it has been
22
subjected to formal notice and
comment procedures under the APA),
United States v. Mead Corp. 533 U.S.
218, 231-232 (2001); See Also
Nationsbank of North Carolina v.
Variable Annuity Life Ins. Co. 513
U.S. 218 (1995) (Chevron deterence
given to interpretive letter issued by
Comptroller of the currency). Thus,
Chevron deference apples where the
interpretation is ‘the type of
legislative ruling that would naturally
bind more than the parties to the
ruling. Schneider v. Feinberg, 345 F-
3d 135, 139 (2d Cir. 2003).
Even interpretive guidelines that lack
the force of law but nevertheless
‘bring the benefit of lan agency's]
specialized experience to bear” on the
meaning of a statute, are still entitled
to “some deference.” United States v.
Mead, 533 U.S.218 at 234°35, 121 S.
Ct. 2164; see Skidmore v. Switt & Co.,
3828 U.S. 184, 140, 65 S. Ct. 161, 89
L.Ed. 124 (1944) (‘We consider that
the rulings, interpretations and
opinions of the Administrator under
this Act, while not controlling upon
the courts by reason of their authority,
do constitute a body of experience and
informed judgment to which courts
and litigants may properly resort for
guidance.
23
The court in Schneider v. Feinberg, found that,
“the challenged regulations” were adopted after a
period of notice and comment, and are evidently
intended to carry the force of law as to all claims
submitted to the Fund. Furthermore, the court also
found that:
. accompanying tables were not
subject to formal rule-making
procedures, but they also exert force of
law over all claims because the tables
are “the type of legislative ruling that
would naturally bind more than the
parties to the ruling. Mead, 533 U.S.
at 282, 131 S. Ct. 2164. They are
meant to guide compensation, and
they apply equally to all claimants
seeking compensation from the Fund.
The district court properly held that-to
the extent that they do not contradict
Title IVs clear and unambigueus
meaning Chevron deference 1s owed to
the regulations adopted by formal
notice-and-comment procedures and to
the presumed-award tables adopted to
mmplement the statute and
regulations”. Schneider v. Feinberg,
345 F.3d 135, 139 (2d Cir. 2003).
Interestingly, the Fund’s J/nterim Rules,
released on December 21, 2001 came _ with
instructions that they would have “the force and
effect of law immediately upon publication”. See
September 11 Victims Compensation Fund of 2001,
66 FR 66274, 66275 (December 21, 2001) (to be
codified of 28 C.F.R. 104, “Interim Rules”). Following
24
an additional comment period, the Department of
Justice Released the Fina/ Rules governing the Fund
on March 13, 2002. These rules altered the Jnterzm
Rules in only few minor respects. 67 F.R. 11, 233
(March 13, 2002), codified at 28 C.F.R. § 104 (“Final
Rules”) The Act also give unusual authority to the
Special Master when it provided that the Special
Master’s “... determinations shall be final and not
subject to judicial review”. Act, Section 405-(b)(3) 49
U.S.C.A. 40101. The Law of the Fund was
established by the Special Master after careful
deliberation, based upon congressional intent. His
determinations are worthy of our respect.
In the Special Master’s own words, in a law
review article entitled “Negotiating the September
11t* Victim’s Compensation Fund”, on the issue of
the distribution of a fund award to a decedent's
spouse “... there is law that has been tested to see
who takes the money. That is what we did .. -half to
the spouse and the other half to the children”.
Feinberg, K. “Negotiating the September 11h
Victims Compensation Fund: Mass Tort Resolution
without Litigation” 19 Washington Univ. L.R. 21, 25
(2004).
Rebecca Marchand was just 37 years old when
she became a widow. She and her husband, Alfred
Marchand were raising her son, Trae. Under the
Kaiser formula adopted by rule of the Special
Master, the Personal Representative would provide a
larger portion of the economic award to Rebecca
Marchand as a spouse with many years of remaining
dependency”, as compensation for their economic
losses. On the other hand, Joshua Marchand was an
adult child with whose remaining years of
25
dependency had ended. Therefore, the entire
economic award, under the Act were pecuniary
damages owed to Mrs. Marchand as a dependent
spouse for her economic losses resulting from the
death of her husband. The New Mexico Supreme
Court cited no federal court precedent or Special
Master Fund decision in consideration of their
decision. The New Mexico Supreme Court appears
to have only the blue sky behind its decision. When
the New Mexico Supreme Court decided to give the
entire economic award and noneconomic award to an
adult non-dependent child, there was no precedent
for this decision even under New Mexico law.
This case cannot exist in a complete vacuum.
The Special Master of the Fund wrestled with the
same issues as the New Mexico Supreme Court.
There are two books and at least seventeen law
review articles dealing with the jurisprudence, legal
ethics and philosophy concerning the propriety of
compensation awards made by the September 11
Victim Compensation Fund of 2001. They are:
Feinberg, K.F. “What is Life Worth, The
Unpredented Effort to Compensate the Victims of
W111", Public Affiars, 2005.
Marshall S. Shapo, “Compensation for Victims of
Terrozism’ Oceana Publications 2005.
Law Review Articles:
J.C. Alexander and R.A. Fein: “The History and
Structure of the September 11 # Victim
Compensation Fund,” 53 DePaul Law Review 692
(2003);
26
John G. Culhane, “Tort Compensation and Two
Kinds of Justice,” 55 Rutgers L. Rev. 1027, (2003);
Kenneth L. Feinberg, “Negotiating the September
11th Victim Compensation Fund of 2001: Mass Tort
Resolution Without Litigation,” Washington:
University School of Law, Journal of Law and Policy,
Vol. 19, page 21, September 14, 2004;
Gillian K. Hadfield, “The September 11 Victim
Compensation Fund, An Unprecedented Experiment
in American Democracy,” (May, 2005) University of
Southern California Legal Studies Working Paper
Series, Working Paper 3;
James C. Harris, “Why the September 11' Victims
Compensation Fund Proves the Case for a New
Zealand-Style Compensate Social Insurance Plan in
the United States,” Northwestern University Law
Review, Vol. 100, No. 3 (2006);
Erin G. Holt, “The September 11 Victim
Compensation Fund: Legislative Justice Sui
Genesis”, 59 N.Y.U. Annual Survey, Am, Law 5138
(2004);
James P. Kriendler and _ Brian Alexander,
“September 11th Aftermath: A Perspective of the
VCF and Litigation”, 18 Air & Space Law 7 (2004);
Jonathan D. Melber, Note, “Act of Discretion:
Rebutting Cantor Fitzgerald’s Critique of the Victim
Compensation Fund”, 78 N.Y.U. Lt. Rev. 749 (2003);
27
Linda S. Mullinex, “The Future of Tort Reform:
Possible Lesson from the World Trade Center Victim
Compensation Fund”. 53 Emory L.J. 1315 (2004);
Linda S. Mullinex & Kristen B. Stewart, “The
September 11 Victim Compensation Fund; Fund
approaches to Mass Tort Litgation”, 9 Conn. Ins. L.J.
121 (2002):
' Kenneth P. Nolan and Jeanne M. O’Grady, “The
Victim Compensation Fund-Looking a Gift Horse in
the Mouth,” 53 DePaul L. Rev. 231 (2003);
Robert L. Rabin, “The Quest for Fairness in
Compensating Victims of September 11’, 49 Clev.
St. L. Rev. 573 (2001);
Robert L. Rabin, “The September 11'* Victims
Compensation Fund”, A Circumscribed Response to
an Auspicious Model” 53 DePaul Law Review, 769
(2003);
Robert L. Rabin, “September 11% Through the Prism
of Victim Compensation” 106 Columbia L. Rev. 473
(2006);
J. Romero, “A Victim’s Eye View of the September
11% Victim Compensation Fund”, 71 Def. Counsel J.
64 (2004);
Marshall S. Shapo, “Compensation for Terrorism,
What Are We Learning”, 53 De Paul Rev 805 (2003).
March 2002;
28
Marshall S. Shapo, “Compensation for Victims of
Terror: Specialized Jurisprudence of Injury’ 36 Ind
L.R. 237 (2003) and 30 Hofsha L. Rev. 1245 (2002);
Frank Tinari “Did the 9/11 Victim Compensation
Fund Accurately Assess Economic Losses” Vol. 6
Topics in Economic Policy and Analysis, Page 1438,
Berkeley Electronic Press.
All of the books and law review articles
congratulate the Special Master, Kenneth R.
Feinberg, on the soundness of his decisions and his
expertise, See R. Rabin, “September 11" Through
the Prism of Victim Compensation”, 106 Columbia L.
R. 464, 473 (2006). Kenneth Feinberg was the
Special Master in the Agent Orange proceedings as
well as the Powerhouse asbestos consolidations and
DES suits in the late 1990’s. E. Holt “The
September 11% Victim Compensation Funds,
Legislative Justice Sui Genesis” 59 N.Y.U. Annual
Survey of American Law 6513, (2004). After
personally presiding over more than 900 Fund
hearings, there is no person whose experience,
compassion, and understanding is more relevant in
this case. Kenneth Feinberg believes that Rebecca
Marchand, the surviving spouse should be entitled to
share in the Fund Award.
Summary
The Special Master together with the
Attorney General promulgated federal regulations,
to administer the September 11'* Victims
Compensation Fund based upon fairness, equity, and
uniformity in considering the same thread of
economic loss running through all cases involving
29
decedents leaving a _ surviving spouse and
dependents. The Special Master consistently
provided that the share of a surviving spouse of the
economic recovery should be no less than one-half of
the economic portion of the Fund award. There can
be no doubt that if the Fund were still in existence,
the Special Master would probably have reallocated
and provided the entire amount of economic loss
award to the spouse, consistent with the concepts
underlying the September 11 Fund”.
It is obvious that the person who suffered the
greatest economic loss in this case has to be Rebecca
Marchand, the surviving spouse. The Special
Master delivered the Fund Award to Rebecca
Marchand in her capacity as the Personal
Representative. Using the Aaiser formula authorized
by the Special Master, consistent with the
appropriate federal regulations and in reliance
Gilmore v. Gilmore., 124 N.M. 119, 946 P.2d 1130
(Ct. App. 1997) (“which stated that the law
governing distribution of proceeds in a wrongful
death claim as the state where the tort and death
occurred”) {In this case, New York State, The Kaiser
formula) she attempted to properly distribute the
Fund Award. However, the New Mexico Supreme
Court took away the Fund award from the surviving
spouse, Rebecca, and reallocated it to a non
dependent heir and it did not allow her even one-half
of the recovery of economic damages, favored by the
Special Master.
The New Mexico decision in the Marchand
case is the only case in the entire United States to
allow a deduction of collateral offsets to reduce the
share of the surviving spouse to less than one-half of
30
the economic recovery, and to allow collateral offsets
to be deducted twice from the share of federal
economic damages and noneconomic damages
awarded to the surviving spouse: so as to eliminate
any fund award to the surviving spouse for economic
losses.
The New Mexico Court of Appeals in its
Marchand opinion, by Judge Kennedy (Appendix C)
got it right.
The Special Master's final award
letter to Rebecca’ states that
‘Iglenerally, collateral offsets should
first be applied to the share of the
individual who received the benefits.”
It further states that pursuant to
court order or an arrangement by the
parties, a reallocation of collateral
offsets may be appropriate under
certain circumstances. We do not read
this language as directing the trial
court to reallocate the offsets, but
rather the danguage provides
information as to the origin of the
offsets and how thev were calculated
in coming to the final award amount,
in this case, the district court found
that collateral offsets deducted from
the total damages by the Special
Master to arrive at the final award are
not subject to veview or reallocation,
and the district court found that the
deduction was consistent with the
apparent Congressional intent that
deductions be offset against general
31
economic damages. Based on the
discretion given to the Special Master
and the state courts by the federal
government, we cannot say that the
district court erred as a matter of law
with regard to collateral offsets.
Marchand v. Marchand 142 N.M. 795,
801-802 171 P.3d 309, 315-316 (Ct.
App. 2007).
The New Mexico Court of Appeals did not reduce the
Fund Award a second time by deducting collateral
offsets, and the surviving spouse received one-half of
the economic award. It is the fair result! It is
consistent with the Special Master’s approach. See
Keinberg, K.L., “Negotiating the September 11*
Victim Compensation Fund of 2001: Mass Tort
Resolution Without Litigation”, Washing University,
School of Law 19 Journal of Law and Policy 21, 25.
(2004). See also R. Rabin “September 11‘. Through
the Prism of Victim Compensation” 106 Columbia L.
Rev. 464, 473 (2006). Even the Special Master
determined that no beneficiary should have thei.
award of damages reduced to zero. It should be
remembered that the Special Master of the
September 11“ Victims Compensation Fund carried
the burden of determining all of the awards. It is
abundantly clear that the Special Master went to
great lengths to fairly resolve the issue of a Fund
award to a surviving spouse, the person who suffered
the greatest loss because she was directly deprived
of the economic benefits of the husband. “ In the
interest of both uniformity and fairness” and, as a
matter of public policy, a spouse should receive at
least one-half of the economic recovery, as the legal
minimum compensation for her remaining years of
32
dependency, is the policy of the Special Master. The
Federal Regulations, interpretative methodologies
and policies of the Special Master must be
considered by the Supreme Court of United States to
avoid a grave injustice.
‘In short, Congress has not spoken on the
issues addressed by the challenged regulations, as
the Special Master has adopted a _ permissible
interpretation of the Act that is entitled to
deference”. Schneider v. Feinberg, 345, F. 3d 135,
145 (2d cir. 2003). All surviving spouses should
receive at least one-half of the economic award for
the September 11 Victims Compensation Fund. 28
C.F.R. § 104.43 [66 FR 66282, Dec. 21, 2001, as
amended at 67 FR 11246, March 13, 2002].
CONCLUSION
I respectfully request that the Supreme Court
of the United States of America act in partnership
with the Special Master of the September Lith
Victim Compensation Fund, Kenneth Feinberg, Esq.
to provide equal justice to all surviving spouses of
the September 11 tragedy.
In Mr. Feinberg’s own words, “What I am
asked all the time is what were the most difficult
aspects of administering the Fund? I conducted
personally over 900 hearings with these families,
and the anguish and terror and tragedy were
overbearing’. Feinberg, K. G., “Negotiating the
Victims Compensation Fund”: Mass Tort Resolution
Without Litigation” 19 Washington University
Journal of Law and Policy 21 at 25 (2005).
33
Congress gave the Special Master the legal
authority to support the September 11" surviving
spouses through their grief and heartaches. In his
own words “...there is law that has been tested to see
who takes the money. That is what we did... half to
the [surviving] spouse and the other half to the
children”. Feinberg, K. G., “Negotiating the Victims
Compensation Fund”: Mass Tort Resolution Without
Litigation” 19 Washington University Journal of
Law and Policy 21 at 25 (2005).
For the foregoing reasons the Petition for a
Writ of Certiorari should be granted.
Respectfully submitted,
Stevan J. Schocn, Esq.
Attorney at Law
Counsel for Petitioner,
Rebecca Marchand, Individually and as the
Personal Representative of the Estate
Alfred G. Marchand, Deceased
4 Hillside Drive
Placitas, N.M. 87043
(505) 867-2802
34
Appendix A
Caution: These electronic slip opinions may contain
computer-generated errors or other deviations from
the official opinion. Moreover, a slip opinion is
replaced within a few months when it is formally
released by the Clerk of the Supreme Court for
publication. In case of discrepancies between a slip
opinion and the opinion published on the Supreme
Court web site, www.supremecourt.nm.org under
"Current Year Opinions", the opinion posted under
the "Current Year Opinions" link controls. The
Current Year Opinions" is regularly updated to
include ail revisions.
‘IN THE SUPREME COURT OF THE STATE OF
NEW MEXICO
Opinion Number:
Filing Date: October 14, 2008
NO. 30,608
JOSHUA MARCHAND,
Petitioner-Petitioner,
Vv.
REBECCA L. MARCHAND, individually and as
personal representative of the Estate of ALFRED G.
MARCHAND,
Respondent- Respondent.
ORIGINAL PROCEEDING ON CERTIORARI
Frank K. Wilson, District Judge
A-l
Steven K. Sanders & Associates, L.L.C.
Steven K. Sanders
Albuquerque, NM
for Petitioner
Stevan J. Schoen
Placitas, NM
for Respondent
OPINION
BOSSON, Justice.{1}Alfred G. Marchand (Alfred)
was a flight attendant on United Airlines Flight 175,
one of the two airplanes that terrorists caused to
crash into the World Trade Center in New York City
on September 11, 2001. He was the sole New Mexico
resident to die in the tragic events of that day. Alfred
died intestate, survived by his wife Rebecca
Marchand (Rebecca), his adult son by a previous
marriage Joshua Marchand (Joshua), and his
dependent stepson Trae Hale (Trae), Rebecca’s son
by a previous marriage. Rebecca filed for probate of
Alfred’s estate (the Estate) in September of 2001 and
was appointed Personal Representative. The probate
of the Estate was closed, and Rebecca discharged as
Personal Representative, on December 5, 2003.
Joshua received a distribution from the Estate in the
amount of $16,553.25, along with a 1989 Chevy
Blazer and other personal property. The remainder
of the Estate was distributed to Rebecca as Alfred’s
surviving spouse.
{2} Rebecca applied to the September 11th Victim
Compensation Fund (“the Fund”) for victim’s relief
and federal aid on November 28, 2003. The dispute
A-2
in question involves the proper distribution of the
award from that Fund. Before we discuss the specific
award in this case, we first set forth a brief
background of the Fund and the federal legislation
that created it.
September 11th Victim Compensation Fund
{3} The Fund was created as part of the Air
Transportation Safety and System Stabilization Act
(Air Stabilization Act), 49 U.S.C. § 40101 (2001),
enacted by Congress to provide compensation for
those injured or killed in the terrorist attacks of
September 11, 2001. Individual claimants were
afforded an opportunity to receive an award from the
Fund, thereby waiving their right to file civil actions
for damages related to the events of September 11,
2001, except to recover collateral source obligations,
such as insurance, or to pursue actions against the
terrorists responsible for the attacks. Air
Stabilization Act, 115 Stat. 240 § 405(c)(3)(B)@
(2001).
{4} In the case of a person who was killed in the
attacks, the Air Stabilization Act designated the
Personal Representative of the Estate as the sole
eligible claimant. 28 C.F.R. §§ 104.2(a)(2)-(3), 104.4
(2008). After appointment as Personal
Representative by a court of competent jurisdiction,
the claimant had to provide written notice of the
claim to beneficiaries and interested parties to the
Estate. 28 C.F_R. § 104.4(b). Upon receipt of a Fund
award, and absent an agreed upon distribution plan
between the beneficiaries of the award, the Personal
Representative was legally obligated to distribute
the award according to the law of the decedent’s
A-3
domicile or any applicable state court rulings. 28
C.F.R. § 104.52 (2008).
{5} A Special Master appointed by the United
States Attorney General oversaw the
implementation of the Fund and determined the
amounts to be awarded to claimants based upon the
harm to the claimant, the facts of the claim, and the
individual circumstances of the claimant. Air
Stabilization Act, 115 Stat. 237-38 § 404(a) (2001); §
405 (b)(1)(B)@-Gi). Fund awards included damages
for both economic and non-economic losses. Id., 115
Stat. 238 § 405(b)(1)(B)(@.
{6} | Economic loss, defined as “any pecuniary loss
resulting from harm,” id. § 402(5), was calculated
through a methodology that took into account
anticipated lost benefits such as income and
earnings. 28 C.F.R. § 104.43(a) (2008). Non-economic
damages were defined as “losses for physical and
emotional pain, suffering, inconvenience, physical
impairment, mental anguish, disfigurement, loss of
enjoyment of life, loss of society and companionship,
loss of consortium ... and all other nonpecuniary
losses of any kind or nature.” Air Stabilization Act,
115 Stat. 237 § 402(7) (2001). Because of the
inherent difficulty in determining non-economic
losses for individual claimants, the regulations
designated uniform non-economic loss awards of
$250,000 for the Estate of the decedent and $100,000
for the spouse and each dependent of the victim. 67
Fed. Reg. 11,233, 11,239 (Mar. 13, 2002); 28 C.F.R. §
104.44 (2008). The Special Master could deviate from
such “presumed” non-economic loss amounts in
extraordinary circumstances. 28 C.F.R. = §§
104.31(b)(2), 104.33(6)(2) (2008).
A-4
{7} The Fund was remarkable for its efforts to
guarantee substantial compensation, as opposed to
just minimal assistance, for victims of the September
11th attacks. See generally Kenneth S. Abraham &
Kyle D. Logue, The Genie and the Bottle: Collateral
Sources Under the September 11th Victim
Compensation Fund, 53 De Paul L. Rev. 591, 594
(Winter 2003). However, there was also a concern to
avoid over-compensation. See id. at 597-98.
Important to this appeal, Congress required the
Special Master to reduce a claimant’s total award
“by the amount of the collateral source compensation
the claimant has received or is entitled to receive.”
Air Stabilization Act, 115 Stat. 239 § 405(b)(6).
Collateral source compensation included life
insurance proceeds, pension funds, and other death
benefits programs. 28 C.F.R. § 104.47(a) (2008).
{8} After the Special Master determined the
amount to be awarded on a given claim, he would
send a letter to the Personal Representative
detailing the final award determination. The letter
broke down the various components of the award,
specified the collateral offsets and beneficiaries to
whom those offsets were attributable, and provided
other information to guide the Personal
Representative in distributing the award according
to the law of the decedent’s domicile. 28 C.F.R. §
104.52. The Special Master’s award determinations
were final and not subject to judicial review. Air
Stabilization Act, 115 Stat. 238-39 § 405(b)(3).
Claim on Behalf of Alfred G. Marchand
{9} Rebecca filed a timely claim with the Fund as
the Personal Representative of the Estate. Her
efforts in pursuing the award included retaining a
A-5
New York law firm, traveling to New York City for
testimony, and preparing an economic loss analysis
of Alfred’s anticipated income. Joshua did not
participate in filing the claim with the Fund, nor
was he required to. Rebecca submitted a list of all
individuals entitled to a Fund award and agreed to
distribute any award according to New Mexico law.
Though Rebecca submitted a proposed distribution
plan for the award, there is no indication in the
record that the Special Master ever approved that
plan.
{10} The Special Master detailed the final award
determination in a letter to Rebecca dated June 24,
2004. The total award before collateral source offsets
was $1,847,969.88, comprised of an economic loss
component of $1,397,969.88, and non-economic loss
awards of $100,000 each for Rebecca and Trae, as
spouse and dependent child of the decedent, and
$250,000 for the Estate. The letter specified the
relevant state law that should govern distribution of
each portion of the award. The economic loss portion
of the award was to be distributed according to New
Mexico wrongful death law; the non-economic loss
award to the Estate was to be distributed according
to New Mexico intestate law, there being no will of
record. The non-economic loss awards to Rebecca
and Trae were to go directly to them.
{11} However, the Estate did not actually receive
$1,847,959.88. Instead, the Estate received a final
award of $769,971.88, reflecting a deduction of
$1,077,998 in collateral offsets mandated by the Act,
due primarily to pension benefits paid directly to
Rebecca for her own use. The Special Master’s letter
broke down the amount of collateral offsets
A-6
attributed to each individual: $1,012,321 was
attributable to the benefits received by Rebecca,
$25,000 to the Estate, $23,177 to Trae, and $17,500
to Joshua. The letter also instructed as follows:
“Generally, collateral offsets should first be apphed
to the share of the individual who received the
benefit. Any excess benefit should be applied to the
remaining shares of the award.” The proper
distribution of the $769,971.88 actually received by
the Estate is the subject of this appeal.
Lower Court Proceedings
{12} On July 27, 2004, Rebecca filed a motion for
subsequent administration in the probate court
seeking reappointment as Personal Representative
for the purpose of distributing the Fund award.
Joshua moved for a temporary injunction on July 19,
2004, to prevent Rebecca from distributing the Fund
award. Subsequently, both parties stipulated to
removing the probate proceedings to district court
and to depositing any Fund payments into the
court’s registry pending the outcome of the litigation.
Both Joshua and Rebecca then moved for summary
judgment.
{13} Before the district court, Joshua argued that
Rebecca as Personal Representative was obligated to
distribute the Fund award according to New Mexico
law and as directed by the Special Master's letter.
The letter specified that the economic loss portion of
the award should be distributed according to New
Mexico wrongful death law, while the state’s non-
economic loss award should be distributed according
to New Mexico’s intestacy statutes.
A-7
{14} Under the New Mexico wrongful death law,
one-half of a wrongful death award goes to the
surviving spouse, and the other half goes to the
surviving children. NMSA 1978, § 41-2-3(B) (1939,
as amended through 2001). Under New Mexico
intestacy statutes, the surviving spouse receives one
quarter of the decedent’s separate property, and
surviving children receive the remaining three
quarters. NMSA 1978, § 45-2-102 (1975). Thus,
Joshua argued that he was entitled to half of the
total economic loss award prior to collateral offsets,
plus three-fourths of the non-economic loss awards
to the Estate, Rebecca, and Trae.
{15} Rebecca responded that under federal law, the
Special Master’s award determination was final and
not subject to review. She contended that the
economic loss portion of the award was community
property, and thus should pass entirely to her as the
surviving spouse. She also argued that the $100,000
non-economic loss awards to her and Trae were
statutory awards designated for spouses and
dependents and were not subject to distribution
under intestacy law.
Therefore, she reasoned that Joshua was only
entitled to $112,000, representing one-half of the
non-economic loss award to the Estate after
subtracting the $25,000 in collateral offsets allocated
to the Estate. Because Joshua had failed to file a
claim directly with the Fund or object to the Special
Master’s allocation of the award, Rebecca argued
that Joshua could not “seek to avoid or rearrange the
determination of the Special Master.”
{16} The district court granted summary judgment
in favor of Rebecca, holding that (1) the Special
Master’s determination of collateral offsets served
only to reduce the amount of the total award, and
each individual’s share of the award should not be
reduced by the amount of collateral benefits
attributed to that individual; (2) the $100,000 non-
economic loss awards to Rebecca and Trae were part
of the Special Master’s final award determination
and not subject to review; (3) the non-economic loss
award of $250,000 to the Estate, allocated according
to New Mexico intestacy law, was to be divided
between Joshua (3/4 as surviving child, $187,500)
and Rebecca (1/4 as surviving spouse, $62,500); and
(4) the remaining $319,971.88 ($769,971.88 -
$450,000), as economic loss, was community
property and passed entirely to Rebecca. Joshua
appealed from this ruling.
{17} The Court of Appeals reversed in part, holding
that the district court erred in classifying the
economic loss award ($319,971.88) as community
property that passed to Rebecca. Instead, the Court
of Appeals held that the economic loss award should
be distributed according to New Mexico’s wrongful
death statute as directed by the Special Master in
his June 24, 2004 letter. Marchand v. Marchand,
2007-NMCA-138, 9 24, 142 N.M. 795, 171 P.3d 309.
Under the wrongful death statute, Section 41-2-3(B),
Rebecca and Joshua would each be entitled to half
the economic loss award without any offset against
Rebecca for collateral benefits received by her.
Rebecca did not seek review of this holding. The
Court of Appeals left undisturbed the other rulings
of the district court.
A-9
{18} Joshua sought review by this Court, and we
granted certiorari to decide whether the collateral
benefits assigned to each individual in the Special
Master’s letter should be applied to offset that
individual’s portion of the award.
DISCUSSION
Standard of Review
{19} This case requires us to interpret the Special
Master’s letter, the relevant federal statutes and
regulations, and New Mexico law to determine the
proper distribution of the Fund award among
Alfred’s beneficiaries. These are matters of law that
are subject to de novo review. Unfortunately, due to
the unique circumstances that gave rise to the Fund,
there is little if any law on point to guide us in our
decision.
Collateral Offsets
{20} Joshua argues that the Court of Appeals did
not comply with the Special Master’s directive that
collateral offsets be applied to the share of the
individual who received the benefit. According to
Joshua, this directive requires that individual shares
of the award received by Rebecca and Trae be
reduced by the amount of collateral benefits assigned
to them in the Special Master’s letter. Essentially,
Joshua’s position is that it would be unfair for
Rebecca to receive any of the Fund award when she
has already received over $lmillion in collateral
benefits which, in turn, served to reduce the giobal
award, lessening the amount left for distribution to
Joshua and all other beneficiaries. Thus, Joshua
argues that the collateral benefits received by
Rebecca and Trae should be deducted from their
A-10
individual portions of the final award and added to
his award to bring it closer to the amount he would
have received if not for those collateral benefits
given to Rebecca and Trae.
{21} The calculations under Joshua’s argument
would lead to the following result. Rebecca’s share of
the award, prior to offsetting for collateral benefits,
would equal (a) $100,000 non-economic loss award as
Alfred’s spouse, (b) one-quarter of the $250,000 non-
economic loss award to the Estate ($62,500), as
directed by the New Mexico intestacy statutes, and
(c) one-half of the total economic loss award (prior to
subtracting collateral offsets) of $1,397,969.88, or
$698,984.94, as directed under the New Mexico
wrongful death statutes. When these amounts are
added together, Rebecca’s share would come to
$861,484.94. But Rebecca has already received
$1,012,321.00 in collateral benefits, and therefore
when one is offset against the other Rebecca wouid
not be entitled to anything at all from the Fund
award. Joshua does not argue that Rebecca actually
owes him money, only that she should not receive
any money from the Fund so long as the collateral
benefits assigned to her outweigh her designated
share of the award.
Close Turning to Trae’s share of the award, $100,000
in non-economic loss as a dependent of Alfred,
Joshua would offset Trae’s collateral benefits
($23,177) and reduce Trae’s share to $76,823. When
Trae’s $76,823 is subtracted from the final award of
$769,971.88, Joshua would receive the balance or
$693, 148.88.
A-l1l
{22} Rebecca argues that the collateral offsets are
only applied initially by the Special Master to reduce
the gross award, but should not be applied to reduce
individual allocations from the total award. Thus,
she argues that the $769,971.88 actually received
from the Special Master already takes into account
the collateral benefits, and the final award should
simply be divided as is, without accounting for each
beneficiary's collateral offsets. The calculations
under Rebecca’s argument would be as follows. The
Special Master awarded a total amount of
$1,847,969.88 and then reduced that amount by the
total amount of collateral benefits received by all the
beneficiaries to reach a final award amount of
$769,971.88. This final amount would then be
distributed under state law as directed by the
Special Master’s letter. Rebecca and Trae would each
get $100,000. The $250,000 in non-economic loss
would be distributed according to New Mexico
intestacy law—one-quarter, or $62,500, to Rebecca
and three-quarters, or $187,500, to Joshua. Finally,
the remaining $319,971.88 would be divided equally
between Rebecca and Joshua pursuant to wrongful
death law, each receiving $159,985.94. Thus, Trae’s
total share of the Fund award would be $100,000;
Joshua’s would be $347,485.94; and Rebecca’s would
be $322,485.94. This is also the result counseled by
the Court of Appeals.
{23} Both Rebecca and the Court of Appeals
construe Joshua’s argument as advocating an
impermissible “reallocation” of what the Special
Master has already calculated which would be
contrary to federal law. We disagree. See Marchand,
2007-NMCA-138, § 27. It is true that the Special
Master's calculations are final. But Joshua does not
A-12
claim that the Special Master incorrectly calculated
the amount of collateral benefits attributable to each
beneficiary. Rather, Joshua contends that the
amount of collateral benefits assigned to each
beneficiary should be applied against’ that
individual’s share of the award, thereby offsetting
each person’s share in proportion to the collateral
benefits that person has already received. We read
the Special Master's letter as directing the
application of those offsets to the individual shares,
and to that extent we agree with Joshua. However,
as we discuss later, we do not agree with Joshua
that the offsets apply to all components of the award.
Application of Collateral Offsets Generally
{24} Itis true, as Rebecca argues, that the Act and
accompanying regulations do not expressly require
that an individual's share of a Fund award must be
reduced by the amount of collateral benefits that
individual received. However, the Air Stabilization
Act gives the Special Master power to administer the
Fund and determine the amounts to be awarded to
individual claimants. Further, the Special Master
was authorized to “provide such other information as
appropriate to provide adequate guidance for a court
of competent jurisdiction.” 28 C.F.R. § 104.33(g). In
this case, the Special Master’s letter to Rebecca
instructs that “[glenerally, collateral offsets should
first be applied to the share of the individual who
received the benefit.” The Court of Appeals
concluded that this language was without any legal
effect, included solely to provide information
regarding the origin and calculation of collateral
offsets.
A-13
{25} We disagree that the Special Master’s
language has no effect on the award distributions. A
plain reading of this language indicates a directive to
the Personal Representative to be followed in
calculating the appropriate distribution of the
remaining award among the beneficiaries. We also
note that the Special Master’s letter provided a
breakdown of collateral offsets, showing the amount
of collateral benefits attributable to each individual
beneficiary—$1,012,321 to Rebecca, $25,000 to the
Estate, $23,177 to Trae, and $17,500 to Joshua. This
breakdown, taken in conjunction with the language
directing that collateral offsets “should first be
applied to the share of the individual who received
the benefit,” persuades us that the Special Master
intended that individual collateral offsets should be
applied as an offset to individual awards. If that
were not the Special Master's intent, there would
seem to be no reason to set forth a breakdown of
collateral benefits individually, as opposed to just
one lump-sum award.
{26} Our interpretation of the Special Master’s
letter is also supported by general principles of
fairness. We observe that if Rebecca had not received
$1,012,321 in collateral benefits, and the others had
not received collateral benefits in much smaller
amounts (a total of $65,677), the final award for
economic loss alone would have totaled 1,397,969.88.
After distributing this amount according to the
wrongful death statute, Section 41-2-3(B), Joshua
would have received half, or $698,984.94. Even
subtracting Joshua’s collateral benefits actually
received, he would have been entitled to nearly that
amount. However, Rebecca’s disproportionate share
of collateral benefits to her personally reduced the
A-14
total award substantially, and thereby reduced
Joshua’s share as well to only $159,985.94, being
one-half of $319,971.88. Thus, Rebecca’s collateral
benefits served to reduce Joshua’s share of the
award by over $500,000.
{27} Under these circumstances, the Special
Master's directive embodies a basic notion of
fairness. It seeks to avoid excessive compensation for
one beneficiary at the expense of the remaining
beneficiaries. See, e.g., Strickland v. Roosevelt
County Rural Elec. Coop., 103 N.M. 63, 64, 65, 702
P.2d 1008, 1009, 1010 (Ct. App. 1984) ¢holding that
the proceeds of a wrongful death award should be
divided into equal shares and each beneficiary
should reimburse the compensation carrier from his
equal share of the total judgment “the amount of
workers compensation benefits received by that
beneficiary,” and noting that “It]his makes each
beneficiary whole and avoids double recovery by
either”). For the purpose of-clarity we repeat:
Rebecca is not entitled to any of the economic loss
component of the award. Joshua is entitled to all of
the individual economic loss award.
Collateral Offsets as Applied to the Estate’s Non-
Economic Loss Award
{28} As for the $250,000 in non-economic losses
awarded to the Estate, we apply each individual's
collateral offsets to that individual’s share. As
previously discussed, Joshua is entitled to three-
quarters of the Estate’s $250,000 non-economic loss
award, or $187,500, pursuant to New Mexico
intestacy statutes. Section 45-2-102(A)(2). Joshua’s
collateral benefits of $17,500 reduce his total share
to $170,000. Rebecca’s collateral benefits of
A-15
$1,012,321 entirely eliminate her share of the non-
economic loss to the Estate.
Rebecca’s and Trae’s Non-Economic Loss Awards
{29} While we agree with Joshua that Rebecca’s
collateral benefits should be offset against her share
of the economic loss award, reducing it to zero, we
- disagree that those offsets apply to Rebecca’s
personal non-economic loss award. Rebecca’s award
of $100,000 in non-economic “presumed” damages
was a fixed amount set by federal regulation for
spouses of deceased victims. 28 C.F.R. § 104.44 (“The
presumed non-economic losses for decedents shall be
. . . $100,000 for the spouse and each dependent of
the deceased victim.”). That portion of the award
served to compensate Rebecca for her pain and
suffering as well as loss of consortium resulting from
Alfred’s death. See Air Stabilization Act, 115 Stat.
237 § 402(7) (defining “noneconomic losses”). Such
damages are personal to Rebecca and do not come at
Joshua’s expense; they would not have been part of
the overall award if Joshua had been the only
beneficiary who sought compensation from the Fund.
Thus, they do not detract unfairly from what Joshua
would have otherwise been entitled to receive if not
for Rebecca. The same is true for the $100,000
awarded to Trae as Alfred’s dependent. Therefore,
we hold that the $100,000 in non-economic losses
awarded by the Special Master individually to both
Rebecca and Trae (a total of $200,000) is not subject
to offset for collateral benefits. Each is entitled to
$100,000 from the total award.
Summary of the Award
{30} For the reasons stated, Rebecca and Trae each
receive $100,000 not subject to offsets. From the
A-16
final Fund award of $769,971.88, that leaves
$569,971.88. As previously explained, Rebecca’s
collateral benefits caused the final award from the
Special Master to be reduced dramatically, thereby
causing Joshua’s share to be substantially smaller.
Therefore, the entire balance of the award, or
$569,971.88, is awarded to Joshua. Joshua’s Claims
Against Rebecca for Fraud, Malfeasance, or
Accounting
{31} Joshua also appeals the district court’s grant
of summary judgment on his claims of malfeasance,
fraud, and request for accounting. These claims
challenge Rebecca’s conduct as Personal
Representative in connection with the division of
Alfred’s assets other than the Fund, specifically,
certain insurance proceeds and real estate that was
Alfred’s separate property. The Court of Appeals
affirmed the summary judgment, finding that
Joshua’s allegations were time-barred, and that
there was no basis for any claims against Rebecca for
fraud, malfeasance, or an accounting, either
individually or as personal representative of the
estate. Marchand, 2007-NMCA-138, J 29°32. We
agree with the Court of Appeals and affirm the
district court’s summary judgment with respect to
Joshua's claims of fraud, malfeasance, or accounting.
{32} Rule 12-201(A)(2) NMRA required that
Joshua file an appeal within thirty days of the
Probate Court’s December 5, 2003 Order (“A notice
of appeal shall be filed . . . within thirty (30) days
after the judgment or order appealed from is filed in
the district court clerk's office”). Joshua neither
appealed the Order, nor pursued a claim of breach of
fiduciary duty within the prescribed statutory
A-17
period. Joshua argues that Rebecca’s reappointment
as Personal Representative for the purposes of
administering the Fund award should restart the
statute of limitations. We find no merit in this
argument. Joshua’s claims pertain to issues decided
in the original probate proceedings that were
resolved in the Order of Complete Settlement and
Discharge of Representative. The limitations period
for challenging that Order expired prior to the
reinstatement of Rebecca as Personal Representative
for purposes of distributing the Fund award. We will
not start an entirely new limitations period,
triggered by the reopening of the probate to address
the Fund award, for Joshua to raise claims entirely
unrelated to the Fund award—claims that he failed
to raise during the hmitations period triggered by
closure of the original probate proceedings.
{33} We also agree with the Court of Appeals that
the record does not support Joshua’s contentions
that Rebecca improperly or fraudulently took money
received from the Fund so as to lift the six-month
statute of limitations for pursuing a breach of
fiduciary duty claim against a _ personal
representative under NMSA 1978, § 45-3-1005
(1975). We affirm the district court's denial of
Joshua’s claims for fraud, malfeasance or
accounting, and we refer the parties to the opinion of
the Court of Appeals for a more thorough discussion
of the record as it relates to this issue. See
Marchand, 2007-NMCA-138, 4 31-32.
CONCLUSION
{34} For the foregoing reasons, we reverse the
Court of Appeals with respect to the application of
collateral offsets. We affirm the Court of Appeals on
A-18
all other matters. The case is remanded
proceedings consistent with this opinion.
{35} ITIS SO ORDERED.
RICHARD C. BOSSON,
Justice
WE CONCUR:
EDWARD L. CHAVEZ, Chief Justice
PATRICIO M. SERNA, Justice
PETRA JIMENEZ MAES, Justice
CHARLES W. DANIELS, Justice
A-19
for
Appendix B
IN SUPREME COURT OF THE
STATE OF NEWMEXICO
December 8, 2008
NO. 30,608
JOSHUA MARCHAND,
Petitioner/Petitioner
VS.
REBECCA L. MARCHAND, individually
and as personal representative of the Estate
of Alfred G. Marchand,
Respondent/Respondent
ORDER
WHEREAS, THIS MATTER CAME ON FOR
CONSIDERATION BY THE Court upon motion for
rehearing, memorandum in support, and response
thereto, and the Court having considered said
pleadings and being sufficiently advised, Chief
Justice Edward L. Chavez, Justice Patricio M. Sena,
Justice Petra Jimenez Maes, Justice Richard C.
Bosson, and Justice Charles W. Daniels concurring;
NOW, THEREFORE, IT IS ORDERED that
the motion for rehearing hereby is DENIED.
IT IS SO ORDERED
A-20
WITNESS, Honorable
Edward L. Chavez, Chief
Justice of the Supreme
Court of the State of New
Mexico, and the seal of
said Court this 8 day of
December, 2008
(SEAL)
Kathleen Jo Gibson,
Chief Clerk of
the Supreme Court of the
State of New Mexico
A-21
Appendix C
Certiorari Granted, No. 30,608, October 15, 2007
IN THE COURT OF APPEALS OF THE STATE OF
NEW MEXICO
Opinion Number: 2007-NMCA-138
Filing Date: June 27, 2007
Docket No. 26,558
JOSHUA MARCHAND,
Petitioner-Appellant,
Vv.
REBECCA L. MARCHAND, Individually
and as Personal Representative of the Estate
of Alfred G. Marchand,
Respondent-Appellee.
APPEAL FROM THE DISTRICT COURT OF
OTERO COUNTY
Frank K. Wilson, District Judge
Steven K. Sanders & Associates, LLC
Steven K. Sanders
Albuquerque, NM
for Appellant
Stevan J. Schoen, LLC
Stevan J. Schoen
Placitas, NM
for Appellee
A-22
OPINION
KENNEDY, Judge.
{1} Plaintiff Joshua Marchand (Joshua) appeals
from the district court's summary judgment order.
Joshua's issues on appeal involve the proper
distribution of an award from the September 11th
Victim Compensation Fund of 2001 (the Fund),
which was awarded after his father, Alfred G.
Marchand (Alfred), died on September 11, 2001. The
Special Master, appointed by the United States
Attorney General to oversee the Fund, determined a
final award amount which was to be distributed, in
part, to Joshua, to his stepmother, Rebecca
Marchand (Rebecca), and to her son Trae Hale (Trae)
in accordance with New Mexico intestate succession
laws and wrongful death laws. Joshua argues that
the district court erred in its distribution of the
award from the Fund because the award was not
distributed in accordance with New Mexico intestate
succession laws and wrongful death laws.
Specifically, Joshua is requesting that this Court
order that he be awarded the entire economic portion
of the Fund awarded by the district court to Rebecca,
because after collateral offsets are taken into
account, the entire amount is his legal and rightful
share of the proceeds.
{2} We affirm the summary judgment order on
two of the three issues. We hold that the district
court did not err in awarding the two $100,000 non:
economic loss awards to Rebecca and Trae. We
further hold that the district court did not err in
dividing the $250,000 non-economic loss award to
the Estate between Joshua and Rebecca, nor did it
A-23
err in dismissing the other claims raised against
Rebecca for fraud, improper accounting, and
malfeasance. However, for the reasons stated below,
we hold that the district court erred in awarding the
balance of the final award to Rebecca, and we
remand for further proceedings on that issue.
FACTUAL AND PROCEDURAL BACKGROUND
{3} Alfred was a flight attendant on United
Airlines Flight 175, which crashed into the World
Trade Center on September 11, 2001. Alfred was
survived by his widow Rebecca, his son, Joshua, and
his stepson, Trae. Alfred died intestate, leaving no
Last Will and Testament. Alfred's Estate (the
Estate) was probated in the Probate Court of Otero
County, on the application of Rebecca, who was
appointed Personal Representative of the Estate on
September 17, 2001. An estate inventory was filed
with the Probate Court. A Final Account and Report
was also filed with the Probate Court. After a
hearing, the probate of the Estate was closed and
Rebecca was discharged as Personal Representative
by order of the Probate Court on December 5, 2003.
{4} On November 28, 2003, while the Estate was
still in probate, Rebecca fled a claim with the Fund
as Personal Representative of the Estate, on behalf
of herself and all of the heirs and dependents of
Alfred. Rebecca also retained a law firm in New York
City with expertise in preparation and litigation of
compensation claims filed with the Fund. Rebecca
personally prepared documents required to process a
claim and worked with an economist who prepared
the "Economic Loss Award Analysis Utilizing Special
Master's Methodology for Mr. Alfred Marchand" as
A:°24
evidence of Alfred's economic losses. On April 29,
2004, Rebecca traveled to New York to testify at a
hearing before the Special Master, who requested
evidence to be presented in person to corroborate the
documents already in evidence. As part of the claim
for compensation in Section IIj of the Fund
compensation application, Rebecca was required to
submit to the Special Master a plan for distribution
of any award received from the Fund. Allegedly,
Joshua did not participate in the preparation or
presentation of the claim, although Rebecca
repeatedly requested that he do so.
{5} The record indicates that although Rebecca
submitted a distribution plan during the claims
process, the plan was not approved by the Special
Master. On June 24, 2004, the Special Master sent a
letter to Rebecca notifying her that a final award
determination had been made. The letter contained
no distribution plan and stated that the award
would be paid to Rebecca, as the "Personal
Representative, who is legally obligated to distribute
the award in accordance with the laws of the
decedent's domicile" and that the distribution must
be based on "either an agreement of all potential
beneficiaries" or at the "direction of a court of
competent jurisdiction in accordance with the law of
the decedent's domicile." On June 28, 2004, the
Special Master sent a second letter to Rebecca
providing her with specific information about the
$769,971.88 final award described therein and the
time for payment of the award.
{6} On July 19, 2004, Joshua filed a Verified
Complaint for Temporary Restraining Order,
Injunctive Relief, Declaratory Relief, Accounting,
A°25
and Damages against Rebecca, both individually and
as Personal Representative of the Estate. Joshua
alleged that during the probate of the Estate,
Rebecca breached her fiduciary duties and took
separate property belonging to Alfred prior to their
marriage, including a home owned by Alfred, giving
no separate property belonging to Alfred to Joshua.
He further alleged that Rebecca was about to
receive, as the purported Personal Representative of
the Estate, an additional payment of $769,971.88
from the Fund, and that Rebecca proposed to take
$769,971.88 and distribute only $70,000 to Joshua,
retaining the remainder for herself and her son Trae.
{7} Joshua also filed a motion for temporary
restraining order on July 19, 2004, arguing that
immediate and irreparable injury, loss, or damage
would result to Joshua because he just received
verbal notice that the funds from the final award
would be distributed to Rebecca on July 19, 2004, if
Joshua did not agree to a settlement by July 19th
and a release of any claims to the Fund award. The
district court issued a temporary restraining order
on July 19, 2004, ordering Rebecca to be enjoined
and restrained from distributing any money from the
Fund and it ordered her to deposit the same into the
Court registry.
{gs} On July 27, 2004, Rebecca responded to
Joshua's complaint that she is the surviving widow
of Alfred. She further stated that the federal
government, pursuant to the Air Transportation
Safety and System Stabilization Act (Air
Stabilization Act) 49 U.S.C.A. § 40101 (2001),
established an administrative process for the
determination of claims’ resulting from the
A-26
September 11, 2001, terrorist attack. Rebecca
contended that under federal law, approval of the
award by the Special Master was final and not
subject to judicial review, see Air Stabilization Act §
405(b)(3), 49 U.S.C.A. 40101, and any review of the
award is prohibited by federal law. Eventually, the
parties stipulated that the probate be removed to the
district court, and that any payments received from
the Fund be administered by Rebecca as Personal
Representative in a supervised administration, and
that any payments be held in an interest bearing
account.
{9} On July 27, 2004, Rebecca filed a motion for
subsequent administration in the probate court,
which stated that she was the duly qualified
Personal Representative of the Estate until it was
settled by the probate court on December 20, 2003. It
further stated that other property had been
discovered since the settlement of the Estate because
the Estate was eligible for a distribution of funds as
a final award from the Fund. Therefore, the motion
stated that reappointment of Rebecca was necessary
for the administration of the subsequently
discovered property of the award from the Fund. The
probate court granted the motion for subsequent
administration.
{10} Litigation ensued, and Joshua moved for
summary judgment on May 18, 2005, arguing that
there were two issues in the lawsuit: the calculation
and distribution of the award from the Fund and
misappropriation by Rebecca as _ Personal
Representative of the Estate. He argued that
according to the laws of New Mexico, the award of
$1,018,984.94 from the Fund should be distributed
A-27
to him. Joshua also contended that the
misappropriation issue should be decided at trial.
Rebecca responded to Joshua's motion for summary
judgment stating that the issues raised by the
motion for summary judgment have already been
adjudicated in favor of Rebecca in a decision
rendered on June 28, 2004, by the Special Master.
{11} On July 12, 2005, Rebecca also moved for
summary judgment arguing that, with regard to the
misappropriation issue, the Estate was closed on
December 5, 2004, and no appeal was taken from
that order, and Joshua cannot pursue an appeal or
new action based on the December 5th order.
Rebecca further argued that concerning Joshua's
claim that he was entitled to most or all of the award
from the Fund, Joshua did not file a claim with the
Fund, and therefore received no award from the
Fund. Therefore, because Joshua did not file his
claim in a timely and proper manner, Rebecca
argued that summary judgment should be entered
on her behalf, and that Joshua's July 19, 2004,
motion for a restraining order on distribution of the
Fund award should be dismissed.
{12} Based on the cross-motions for summary
judgment, the district court found that no genuine
issues of material fact existed and that the case
could be decided as a matter of law. The district
court also made the following findings: (1) the final
award arising out of the claim from the Fund was
$769,971.88, (2) the collateral offsets deducted from
the total damages by the Special Master to arrive at
the final award are not subject to review or
reallocation, and (3) the $100,000 non-economic
damage awards to Rebecca and Trae as spouse and
A-28
dependent child are part of the final award, as
directed by the Special Master, and are not subject
to review or reallocation by the court. The court held
the following: (1) the collateral offsets deducted from
the total damages by the Special Master is
consistent with the apparent Congressional intent
that they be offset against general economic
damages; (2) the remaining amount of the final
award, $769,971.88, was awarded by the Special
Master as economic damages which are community
property under NMSA 1978, § 45-2-102 (1975) and
pass entirely to Rebecca; (3) the $250,000 general
non-economic damage award is part of a final award
which was not allocated as directed by the Special
Master among the claimants and is_ separate
property of Alfred; and (4) under Section 45-2-102,
Joshua is entitled to 3/4 of this amount ($187,500)
and Rebecca is entitled to 1/4 of this amount
($62,500). After the calculation of taxes, costs, and
attorney fees, the district court ordered that Joshua
be awarded $98,750.00 plus a pro-rata share of
interest. The district court ordered that all other
claims be denied, and all other requests for summary
judgment inconsistent with his findings be denied.
Joshua appeals from this order. Other additional,
pertinent facts will be provided throughout the
opinion as needed.
DISCUSSION
i. Standard of Review
{13} A district court's grant of summary judgment
is reviewed de novo, and is only appropriate "where
there are no genuine issues of material fact and the
movant is entitled to judgment as a matter of law."
Self v. United Parcel Serv., Inc., 1998-NMSC-046, {
A-29
6, 126 N.M. 396, 970 P.2d 582. "[Wle view the facts
in a light most favorable to the party opposing the
motion {for summary judgment] and draw all
reasonable inferences in support of a trial on the
merits[.]" Handmaker v. Henney, 1999-NMSC-043, ¥
18, 128 N.M. 328, 992 P.2d 879.
2. The Creation and Implementation of the Fund
{14} In order to compensate the victims and their
families of the September 11, 2001, tragedy,
President Bush signed the Air Stabilization Act into
law. Kenneth Feinberg, Esq., was appointed as the
Special Master charged with the duty of
administering the Fund. The rules and regulations
of the Fund, codified at 28 C.F.R. § 104 (2002),
provide, in part, that by electing to file a claim with
the Fund, a claimant waives all rights to bring a civil
action regarding the events of September 11th,
except to recover collateral source obligations (i.e.,
life insurance, pension funds) or to sue knowing
participants in the hijacking conspiracy. See 28
C.F.R. § 104.61 (explaining the limitations on civil
actions). The rules further provide that the claimant
must be a victim or the personal representative "of
those who were killed as a result of the crashes." See
28 C.F.R. § 104.1. The rules also state that the
Special Master shall review submitted claims
according to three factors: harm to the claimant,
facts of the claim, and the individual circumstances
of the claimant. See Air Stabilization Act § 405(b)(1),
49 U.S.C.A. 40101. The Special Master's
determination is final and not subject to judicial
review. See id. § 405(b)(3).
A-30
{15} The Fund provides that only one personal
representative shall be appointed for the decedent.
See 28 C.F.R. § 104.4. Pursuant to 28 C.F.R. §
104.52, "[t]he Personal Representative shall
distribute the award in a manner consistent with the
law of the decedent's domicile or any applicable
rulings made by a court of competent jurisdiction."
Further, the regulations require that the personal
representative shall be either the executor or
administrator of the decedent's estate, or the first
person in the line of succession under the intestacy
laws of the decedent's domicile. 28 C.F.R. §
104.4(a)(2).
{16} The regulations further require that before
any funds’ are distributed, the personal
representative must submit a distribution plan to
the Special Master of the Fund for approval. See 28
C.F.R. § 104.52. The regulations also provide that
should the Special Master find that the distribution
plan does not adequately compensate individuals
provided for in decedent's will or under applicable
state intestacy laws, the Special Master may direct
the personal representative to distribute funds to
“such spouse, children, or other relatives." Id.
{17} The Fund allocated final awards based on
economic and non-economic losses to the decedent's
estates. According to 28 C.F.R. § 104.43 (providing
determinations of presumed economic loss for
decedents), Congress determined that the Special
Master shall consider sums corresponding to loss of
earnings or other benefits related to employment
and medical expense loss, replacement services loss,
loss due to death/burial costs, and loss of business or
employment opportunities. According to _ the
A-31
regulations, "economic loss" means any pecuniary
loss resulting from harm (including the loss of
earnings or other benefits related to employment,
medical expense loss, replacement services loss, loss
due to death, burial costs, and loss of business or
employment opportunities) to the extent recovery for
such loss is allowed under applicable State law. See
id.; Air Stabilization Act § 402(7), 49 U.S.C.A. 40101.
Additionally, 28 C.F.R. § 104.44 focuses on the
determination of presumed non-economic losses for
decedents. Non-economic losses means losses for
physical and emotional pain, suffering,
inconvenience, physical impairment, mental
anguish, disfigurement, loss of enjoyment of life, loss
of society and companionship, loss of consortium
(other than loss of domestic service), hedonic
damages, injury to reputation, and all other non-
pecuniary losses of any kind or nature. Air
Stabilization Act § 402(7), 49 U.S.C.A. 40101. "The
presumed non-economic losses for decedents shall be
$250,000 plus an additional $100,000 for the spouse
and each dependent of the deceased victim." 28
C.F.R. § 104.44. "Such presumed losses include a
non-economic component of replacement services
loss." Id. Finally, after a final award is determined,
Congress contemplated the distribution of the
economic and non-economic losses, and 28 C.F.R. §
104.52 controls the distribution of the award to a
decedent's beneficiaries. Section 104.52 states that
the personal representative shali distribute the
award "in a manner consistent with the law of the
decedent's domicile or any applicable rulings made
by a court of competent jurisdiction.” Id
{18} Applying the regulations, along with the laws
of the decedent's domicile, in this case, the Special
A-32
Master arrived at a final award determination for
Rebecca's claim. The wrongful death statute in New
Mexico provides for the distribution of proceeds as
follows: "[I]f there is a surviving spouse and a child
or grandchild, then one-half to the surviving spouse
and the remaining one-half to the children and
grandchildren, the grandchildren taking by right of
representation[.]" NMSA 1978, § 41-2-3(B) (2006).
Section 45-2-102(A), New Mexico's intestate
succession law, provides as follows:
A. as to separate property:
(1) if there is no surviving issue of the decedent, the
entire intestate estate; or
(2) if there is surviving issue of the decedent, one-
fourth of the intestate estate; and
B. as to community property, the one-half of the
community property as to which the decedent could
have exercised the power of testamentary disposition
passes to the surviving spouse. The Special Master's
letter to Rebecca notifying her that a final award
determination had been made noted that awards
from the Fund included the three’ general
components discussed above:
1) compensation for economic loss to be generally
distributed according to the wrongful death law of
the decedent's domicile, 2) $250,000 for non-
economic harm distributed in accordance with a will,
or if there is no will, the intestate law of the
decedent's domicile, and 3) a $100,000 non-economic
award for each spouse and/or dependent.
The letter further stated that the Fund must also
deduct "collateral sources" from the award, which
includes life insurance, pension funds, death benefit
payments, and payments by Federal, State, or local
A-33
governments related to the terrorist-related aircraft
crashes of September 11, 2001. In this case, the
aggregate final award was $769,971.88. The final
award amount is undisputed.
3. Propriety of this Appeal
{19} As a threshold issue, we address Rebecca's
contention that the Special Master's award was
based on the approved plan of distribution and
therefore the award is final, binding, and not subject
to judicial review as set forth in the Air Stabilization
Act. Joshua contends that this lawsuit is proper
because he is not challenging the Special Master's
final award. Rather, he is challenging the
distribution of the award. We agree with Joshua's
argument, and determine that contrary to Rebecca's
contention, the Act does not bar this lawsuit.
{20} Section 405(b)(3) of the Air Stabilization Act
provides:
Not later than 120 days after that date on which a
claim is filed . . . the Special Master shall complete a
review, make a determination, and provide written
notice to the claimant, with respect to the matters
that were the subject of the claim under review.
Such a determination shall be final and not subject
to judicial review.
Air Stabilization Act § 405(b)(3), 49 U.S.C.A. 40101.
Although Rebecca contends that Section 405(b)(3)
bars this lawsuit, Section 405(b)(3) is unavailing to
Rebecca under the facts presented. This case
involves the determination of the proper distribution
of the award under state law, and not the Special
A-34
Master's award determination itself. Such a case is
expressly anticipated by the Fund's guidelines, and
in the language of the Special Master's final award
letter to Rebecca. See 28 C.F.R. §§ 104.33(g), 104.52.
We note that state courts have exercised jurisdiction
in similar matters relating to the Fund. For
example, the New York Appellate Division recently
affirmed a denial of a motion to dismiss in a dispute
over Fund award distribution. See Cruz _ v.
McAneney, 816 N.Y.S.2d 486, 489 (N.Y. App. Div.
2006). As no party has challenged the rules of the
Special Master or his calculation of the total award,
this appeal is properly before this Court, and we can
discuss the distribution of the final award.
4. Distribution of the Fund
{21} With regard to the distribution of the award,
we hold that the district court did not err in finding
that the $100,000 non-economic damage awards to
both Rebecca and Trae were final as directed by the
Special Master and not subject to review or
reallocation. The Special Master's June 28, 2004,
letter to Rebecca directs separate awards of $100,000
to Rebecca as Alfred's spouse and to Trae as Alfred's
dependent. This award is expressly contemplated in
28 C.F. R. § 104.44, which directs to a spouse and to
each dependent the amount of $100,000 as
compensation for presumed non-economic loss of
replacement services. Unlike other components of
loss, the Fund and its attendant regulations did not
provide that the $100,000 non-economic awards
would be distributed according to the state law of a
decedent's domicile. See id. We therefore affirm the
district court's distribution of this component of the
final award.
A-35
{22} With regard to the $250,000 award for the
non-economic loss to the Estate, we hold that the
district court did not err in finding that Joshua is
entitled to 3/4 of the award ($187,500) and Rebecca
is entitled to 1/4 of the award ($62,500). Rebecca
agrees that summary judgment was proper as to the
$250,000 non-economic damage award, as the award
was not specifically allocated as directed by the
Special Master. According to 28 C.F. R. § 104.44, the
presumed non-economic losses for decedents is
$250,000, and the Special Master directed that this
award be distributed in accordance with a will, or if
there is no will, the intestate law of the decedent's
domicile.
{23} In this case, the $250,000 non-economic award
is the separate property of the decedent, Alfred.
Therefore, pursuant to Section 45-2-102(A), the
district court correctly held that as a matter of law,
Joshua is entitled to three-fourths of the award and
Rebecca is entitled to one-fourth of the award.
{24} Finally, with regard to the economic loss
component of the final award, we hold that the
district court applied the wrong principle of law
when it distributed the economic loss portion of the
award ($769,971.88 less $450,000 for the
distribution of non-economic loss awards) entirely to
Rebecca as her share of community property. The
Special Master's June 24, 2004, letter states that the
economic loss component is to be generally
distributed according to the wrongful death law of
the decedent's domicile. In this case, the district
court disregarded the explicit instructions of the
Special Master and found that the economic award
A*36
was community property and did not apply our
wrongful death laws when it distributed the entire
award to Rebecca. We hold that the economic loss
portion of the award should be distributed to both
Rebecca and Joshua according to Section 41-2-3(B).
{25} Joshua contends that he is entitled to receive
the entire $769,971.88, or perhaps more, because
collateral offsets were improperly applied to his
share of the final award. Rebecca contends that she
should receive the entire economic loss award
because she was the only person who suffered
economic loss and Joshua was not awarded any of
the economic loss award by the Special Master. We
are not persuaded by either party's arguments.
{26} With regard to Joshua's contentions, he
misconstrues the Special Master's directions that
compensation for economic loss is to be generally
distributed according to the wrongful death laws of
the decedent's domicile and misinterprets the law.
First, as stated above, our wrongful death law
directs that the economic loss award be split between
Rebecca and Joshua. Second, with regard to Joshua's
contention that the collateral offsets were
improperly applied in this case, we note that
Congress bestowed great discretion on the Special
Master to determine appropriate offsets, and we
cannot say that based on its directives, the Special
Master erred in this case. See, e.g., 28 C.F.R. §
104.47(a) (providing that when determining the
appropriate collateral offsets the Special Master may
employ an appropriate methodology).
{27} The Special Master's final award letter to
Rebecca states that "[glenerally, collateral offsets
A-°37
should first be applied to the share of the individual
who received the benefit." It further states that
pursuant to court order or an arrangement by the
parties, a reallocation of collateral offsets may be
appropriate under certain circumstances. We do not
read this language as directing the trial court to
reallocate the offsets, but rather the language
provides information as to the origin of the offsets
and how they were calculated in coming to the final
award amount. In this case, the district court found
that collateral offsets deducted from the total
damages by the Special Master to arrive at the final
award are not subject to review or reallocation, and
the district court found that the deduction was
consistent with the apparent Congressional intent
that deductions be offset against general economic
damages. Based on the discretion given to the
Special Master and the state courts by the federal
government, we cannot say that the district court
erred as a matter of law with regard to collateral
offsets.
{28} With regard to Rebecca's argument that she
should receive the entire economic award, we note
that she also misconstrues the Special Master's
directions that economic losses be _ generally
distributed according to the wrongful death laws.
Although Rebecca contends that she is the only
claimant that is entitled to the economic loss portion
of the final award as set forth in the proposed
distribution plan, the parties acknowledge that the
Special Master did not approve the distribution plan.
Further, to award the economic loss award according
to our community property laws would completely
ignore the Special Master's directive. As the Special
Master's letters to Rebecca indicated that the award
A-38
from the Fund remained undistributed and should
be distributed according to New Mexico law, we hold
that the district court did not apply the appropriate
legal principles to the distribution of the economic
loss award.
Therefore, we remand this case to the district court
to distribute the economic damages to Joshua and
Rebecca pursuant to Section 41-2-3(B).
5. Claims Against Rebecca for Fraud,
Malfeasance, or Accounting
{29} Joshua raised claims against Rebecca as
Personal Representative of the Estate’ or
individually, for fraud, malfeasance, or improper
accounting in his July 19, 2004, complaint. In
essence, he argued that Rebecca did not follow all of
the procedures for eligible claimants of the Fund or
the procedures set forth in the New Mexico Probate
Code. Although the district court did not make any
specific findings regarding Joshua's claims against
Rebecca in its summary judgment order, it did order
that all the claims be denied. We hold that the
district court did not err.
{30} On appeal, Joshua contends that contrary to
Rebecca's arguments before the district court, the
claims for fraud, misrepresentation, and inadequate
disclosure are not barred by the statute of
limitations even if any other rights are barred. We
are not persuaded by Joshua's arguments. First, the
record convinces us that any claim arising from the
probate court's December 5, 2003, Order of Complete
Settlement and Discharge of the Personal
Representative is an untimely and impermissible
A-39
collateral attack of a final order. Joshua did not
appeal the Order of Complete Settlement within
thirty days as provided by our rules of appellate
procedure. See Rule 12-201(A)(2) NMRA.
Furthermore, Joshua did not pursue a claim for
breach of fiduciary duty against Rebecca as Personal
Representative with regard to the probated estate
before the award from the Fund was distributed, as
set forth in NMSA 1978, § 45-3-1005 (1975)
(ordinarily providing a six-month statute of
limitations after filing the closing statement).
Rather, Joshua received full payment of his
distribution from the probate estate on January 13,
2003. Cf. Courtney v. Nathanson, 112 N.M. 524,
525, 817 P.2d 258, 259 (Ct. App. 1991) ("The general
rule is that a party waives her right to appeal when
she accepts the benefit of a judgment."). Joshua also
received an accounting showing the calculation for
distribution of the Estate. Moreover, Rebecca was
duly appointed Personal Representative of the
Estate, and Joshua did not contest the appointment.
{31} To the extent that Joshua contends that
Rebecca improperly or fraudulently took money
received from the Fund, which, if proven, would lift
the six-month statute of limitations under Section
45-3-1005, this contention is not supported by the
record. The record reveals that only one claimant
was permitted to file a claim for compensation from
the Fund. Rebecca filed a claim and gave notice to all
heirs and potential beneficiaries of Alfred's estate.
Joshua was notified of the claim and was asked to’
participate in the prosecution of the claim. For
whatever reasons, Joshua chose not to participate in
or contest the claim before the Special Master.
A-40
{32}. The record further reflects that after payment
from the Fund was received by Rebecca, she and
Joshua agreed by stipulated order to keep the award
in an interest-bearing bank account until further
order of the district court and upon resolution of this
appeal. There is no evidence in the record, nor does
Joshua allege, that any money received from the
Fund was improperly or fraudulently
misappropriated by Rebecca or that there has been
inadequate disclosure or misrepresentation with
regard to payments from the Fund.
Therefore, as there is no basis for any claims against
Rebecca either individually or as _ Personal
Representative of the Estate, we hold that the
district court did not err in denying all claims
against Rebecca for fraud, malfeasance, or
accounting.
CONCLUSION
{33} For the foregoing reasons, we affirm the
district court's distribution of the Fund with regard
to all of the non-economic damage awards. We
reverse the district court's distribution of the
economic damage award to Rebecca, and remand to
the district court so that it can distribute the award
according to New Mexico wrongful death law. We
affirm the district court's denial of all claims against
Rebecca for fraud, malfeasance, or accounting.
{34} ITISSO ORDERED.
RODERICK T. KENNEDY, Judge
A-41
WE CONCUR:
CELIA FOY CASTILLO, Judge
MICHAKEL E. VIGIL, Judge
A-42
Appendix D
IN THE TWELFTH JUDICIAL DISTRICT COURT
COUNTY OF OTERO
IN THE STATE OF NEW MEXICO
JOSHUA MARCHAND,
Petitioner,
Vs. NO. CV-04-356
Division IV
REBECCA L. MARCHAND, Individually
And as Personal Representative of the Estate
Of Alfred G. Marchand,
Respondent.
SUMMARY JUDGMENT
This matter having come before the Court on
the Motion for Summary Judgment filed by Joshua
L. Marchand and the Motion for Summary
Judgment filed by Rebecca L. Marchand, and the
Court having reviewed the record, together with the
exhibits submitted by the parties, and having
considered the Memorandum of Law submitted by
each of the parties, and the Court being otherwise
fully advised in the premises FINDS THAT there are
no genuine issues of material fact, and the case can
be decided as a matter of law and the Court further
FINDS THAT:
1. This Court has jurisdiction of the parties
and the subject matter. Neither the filing of the
Federal Court lawsuit nor the earlier closing of the
Probate Court action limits this Court's jurisdiction
in any way.
A-43
{
2. The Court finds that there is no genuine
issue of material fact that the “final award” arising
out of this claim upon the September 11‘ Victims
Compensation Fund is $769,971.88.
3. The Court finds that the “collateral
offsets” deducted from the total damages by the
Special Master to arrive at the “final award” are not
subject to review or re‘allocation by this Court
except that the Court holds that it is consistent with
the apparent Congressional intent that they be offset
against general economic damages.
4. The Court finds that the $100,000, non-
economic damage award to the surviving spouse,
Rebecca L. Marchand, is a part of the “final award”
and was awarded “as directed by the Special Master”
and is not subject to review or re-allocation by this
Court.
5. The Court finds that the $100,000, non-
economic damaged award to the dependent child
Trae Hale is a part of the “final award” and was
awarded “as directed by the Special Master” and is
not subject to review or re-allocation by this Court.
6. The Court holds that the remaining
amount of the “final award” ($769,971.88 -$450,000
=$319,971.88) was awarded by the Special Master as
economic damages which are community property
under Section 45-2-102, NMSA, and pass to the
surviving spouse.
7. The Court holds that the $250,000, gexeval
non-economic damage award is a part of the “final
award” which was not allocated “as directed by the
Special Master” among the claimants and it is
separate property of the Decedent. Under Section
45-2-102, NMSA, Plaintiff, surviving child, is
entitled to % of this amount ($187,500) and
A-44
Defendant surviving spouse is entitled to %
($62,500) of this amount.
8. The Court finds that Joshua L. Marchand
has already been paid the sum of $70,000.00 from
the general non-economic damage award by Rebecca
L. Marchand, as the Personal Representative of the
Estate of Alfred G. Marchand, Deceased, in advance
of the ruling by this Court.
9. The Court finds that the “final award” was
reduced by ten per cent (10%) for fees and costs paid
to the law firm of Kreindler and Kreindler, New
York, which law firm prosecuted the administrative
law claim on behalf of all of the parties hereto,
leading to the final award from the Special Master of
the September 11 Victims Compensation Fund.
10. The portion of attorneys fees and costs
incurred in the prosecution of the administration law
claim before the Special Master of the September
11th Victims Compensation Fund are to be shared by
all of the parties on a pro-rata basis. Therefore, the
share of the general non-economic damage award to
be awarded to Joshua L. Marchand shall be reduced
by the sum of $18,750.00 as his share of the fees and
costs incurred in obtaining the “final award”.
($187,500.00 x 10% = $18,750.00).
11. The total claim of Joshua L. Marchand, as
surviving child, has been calculated to be
$187,000.00; less fees and costs of $18,750.00, and
less $70,000.00, already paid to him, for a net total
distribution due Joshua L. Marchand in the sum of
$98,750.00, plus his pro-rata share of the interest in
the fund that the proceeds have been invested in
since receipt by the Personal Representative.
IT IS ORDERED, ADJUDGED AND
DECREED that Joshua Marchand, be and he hereby
A-45
is awarded judgment in the sum of NINETY-EIGHT
THOUSAND SEVEN HUNDRED AND FIFTY DOLLARS
($98,750.00) plus a pro-rata share of the interest
earned in the Personal Representative interest
bearing account, plus costs of Court, against Rebecca
L. Marchand as Personal Representative of the
Estate of Alfred G. Marchand, Deceased to be
disbursed to Joshua L. Marchand by the Personal
Representative.
IT IS FURTHER ORDERED, ADJUDGED
AND DECREED that pursuant to stipulation of the
parties, all funds in the interest bearing account
administered by the Personal Representative of the
Estate of Alfred G. Marchand, Deceased be held by
Rebecca LL. Marchand as_ the _ Personal
Representative of the Estate of Alfred G. Marchand
ip. an interest bearing account pending further Order
of the Court
IT IS FURTHER ORDERED, ADJUDGED
AND DECREED that all other claims are denied,
and all other requests for Summary Judgment
inconsistent herewith are denied.
THE HONORABLE FRANK K. WILSON
District Court Judge
Submitted by:
STEVAN J. SCHOEN, LLC
Stevan J. Schoen, Esq.
Attorney for Rebecca L. Marchand
A-46
Approved as to form by:
Steven K. Sanders, Esq.
Attorney for Joshua Marchand
A-47
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.