Oakey v. Tyson, 35,769

Background

Tawana Lucero died December 1, 2009; her nephew Lance Lucero (Lance) was later appointed personal representative of her probate estate and filed a wrongful-death/medical-malpractice suit on July 3, 2012 naming Dr. Tyson among defendants.
Lance settled with Dr. Tyson in April 2013 and the court entered an agreed dismissal with prejudice as to Tyson on May 13, 2013; the case continued against other defendants without anyone challenging Lance’s authority for over two years.
In July 2015 the district court concluded Lance had not been appointed as a Wrongful Death Act (WDA) personal representative, removed him, and appointed Kathleen Oakey as WDA PR and Teresa (Tawana’s mother) as probate PR; the court ordered certain funds turned over to Teresa’s counsel.
Oakey (as WDA PR) moved in January 2016 to set aside the Tyson settlement and reinstate Tyson as a defendant, arguing the Tyson settlement was void because Lance lacked statutory authority to prosecute or settle WDA claims.
The district court granted Oakey’s motion under Rule 1-060(B)(6) NMRA, set aside the May 2013 dismissal, and reinstated claims against Dr. Tyson; this interlocutory order was appealed.
The Court of Appeals reversed, holding (1) New Mexico law in effect when the suit was filed did not require a separate district-court appointment for a probate personal representative to serve as WDA personal representative, and (2) the district court abused its discretion in using Rule 1-060(B)(6) to reinstate claims against Tyson.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether, at the time of filing/settlement (pre-2014 rule), a probate PR needed a separate district-court appointment to serve as WDA PR	Oakey: Lance lacked statutory authority to prosecute/settle WDA claims because he had no separate WDA appointment, so the Tyson settlement is void	Tyson/Defendants: Law did not require separate WDA appointment; prior dismissal with prejudice is valid and settlement stands	Held: No. Pre-2014 law did not clearly require separate WDA appointment; Lance had authority and the court erred in declaring the Tyson settlement void
Whether the district court properly set aside a dismissal-with-prejudice and reinstate a settled defendant under Rule 1-060(B)(6)	Oakey: Exceptional circumstances (misappropriation of proceeds; wrong WDA beneficiary paid) justify relief under (B)(6)	Tyson/Defendants: Motion was untimely, (B)(6) not available to circumvent one-year limit for (B)(1)-(3); prejudice and finality bar relief	Held: The court abused its discretion. The motion was untimely as to (B)(1) and (B)(6) cannot be used to evade the one-year limit or to undo a valid settlement/dismissal
Whether relation-back or retroactive appointment of a WDA PR can be used to avoid WDA statute-of-repose problems while invalidating prior settlements	Oakey: Oakey’s appointment should relate back to the complaint filing to preserve the action and cure authority defects	Tyson/Defendants: If plaintiff lacked authority when suit was filed, the statute of repose would bar suit and dismissal should stand; relation-back cannot both revive the action and void settlements	Held: Court rejected relation-back as a basis to both salvage the action and unsettle a valid dismissal; ministerial appointment/ratification (not a do-over) would be the proper remedy if any technical defect existed
Proper remedy for alleged misappropriation of settlement funds by the original PR	Oakey: Setting aside settlement and reinstating defendant is necessary to vindicate statutory beneficiaries’ rights	Tyson/Defendants: Remedies exist against the PR or counsel (tort/probate/accounting); those do not justify undoing a valid settlement and prejudicing settled defendant	Held: Misappropriation claims do not justify reinstating a defendant who settled and was dismissed with prejudice; beneficiaries may pursue separate claims against PR or counsel

Key Cases Cited

Henkel v. Hood, 156 P.2d 790 (N.M. 1945) (broad construction of “personal representative” under WDA; nominal role of PR)
Chavez v. Regents of Univ. of N.M., 711 P.2d 883 (N.M. 1985) (WDA PR is nominal trustee for statutory beneficiaries; probate PRs may serve as WDA PR)
Leyba v. Whitley, 907 P.2d 172 (N.M. 1995) (attorney handling WDA owes beneficiaries duty of care; beneficiaries may sue for misappropriation)
Ferri (Resolution Tr. Corp. v. Ferri), 901 P.2d 738 (N.M. 1995) (Rule 1-060(B)(6) relief limited to exceptional circumstances and not a vehicle to evade one-year limit for (B)(1)-(3))
Spencer v. Barber, 299 P.3d 388 (N.M. 2013) (personal representative’s nondiscretionary duty to distribute WDA proceeds per statute)
Edens v. Edens, 109 P.3d 295 (N.M. Ct. App. 2005) (Rule 1-060(B) intended to balance finality and relief; applies only in exceptional cases)