“Death is not the end; there remains the litigation over the estate.”
Ambrose Bierce, from A Cynic Looks at Life (1912)

So, you have settled an insurance claim with the executor or administrator of an unrepresented estate. Closing your file is as simple as having the executor or administrator sign a release and then issuing the settlement draft to the estate, is it not? Unfortunately, in the Commonwealth of Pennsylvania, it is not so simple. Below we will discuss the legal hurdles—and possible snares—of settling claims with unrepresented estates.

Is Court Approval Needed?

If the parties reached the settlement agreement before the decedent’s death, generally no court approval is necessary. Ress v. Barent, 548 A.2d 1259 (Pa. Super. Ct. 1988) (holding contracts generally survive death of party). If the settlement is brokered with the estate, however, whether the claim is in suit or not, 20 Pa. C.S. § 3323 requires a court’s authorization to settle with an estate. This requirement is fixed to (i) protect the heirs, creditors, and lienholders and (ii) ensure the estate is properly compensated for the claim. Moore v. Gates, 580 A.2d 1138, 1141 (Pa. Super. Ct. 1990). Settlements with estates that are finalized without court approval may have no legal basis for enforcement. See Moore, 580 A.2d at 1142; see also Power by Power v. Tomarchio, 701 A.2d 1371 (Pa. Super. Ct. 1997) (holding in analogous context of minor’s compromise that defendant could not enforce high-low agreement reached without court approval).

The accepted view is that all settlements with estates must be court-approved. 20 Pa. C.S. § 3323. There is small room for disagreement. In one unpublished Superior Court decision, Kennedy v. Glover, No. 1316 WDA 2012 (Pa. Super. Ct. Aug. 13, 2013), the Court implicitly distinguished between survival actions and “simple contract action[s]”, implying court approval would not be required for the settlement of a simple contract claim. The Court’s reasoning for this is unexplained and seems contrary to 20 Pa. C.S. § 3323, requiring settlement of “any claim” brought by or against an estate. Further, the public policy rationale of protecting estate heirs and creditors applies to all claims, not only complex claims. See Moore, supra. So, the most conservative route is simply to seek court approval regardless of the nature of the claim.

Requirements for Approval

Although perhaps obvious, the first step in settling with the estate is confirming there is an estate. This should optimally be done before significant contact with the purported administrator or executor begins. Typically, this is done by reviewing testamentary letters from the local Orphans Court. Before proceeding with disbursing the funds, confirming the estate remains open with the Orphans Court is also helpful in finalizing settlement.

Another issue that arises is whether the insurer must retain legal counsel for the filing of a petition. Although claimants can often file petitions pro se, in this case the non-attorney executor or administrator herself is unable to file the petition. The estate is a separate legal entity, and the executor or administrator cannot appear pro se on behalf of the estate. In re Estate of Rowley, 84 A.3d 337, 341-42 (Pa. Cmwlth. Ct. 2013) (“An estate by its very nature cannot represent itself and, therefore, must be represented by a licensed attorney, regardless of the relation between the administrator and the decedent.”). Consequently, the insurer typically retains counsel to file the petition. Unlike petitions to compromise with minors, “any party in interest” can file a petition to settle, so the insurer itself or the third-party insured can file the petition to finalize settlement. 20 Pa. C.S. § 3323.

The requirements of the petition itself are simple. The petition must set forth “all the facts and circumstances” giving rise to the claim and settlement. Id. In accident cases, this typically includes the date and location of the accident, the police report, and the injuries sustained. Local rules typically require the attachment of certain documents, like the death certificate. Although local rules differ among the counties, usually a petition for settlement where there is no pending litigation is filed in the Orphans Court having jurisdiction over the decedent’s estate.

Wrongful Death and Survival Actions

If the insurance claim is a bodily injury claim concerning an accident resulting in the decedent’s death, there will need to be a secondary consideration about the allocation of wrongful death and survival proceeds. Survival actions are brought by an estate and proceed as if the decedent survived the tort and include the pain and suffering experienced as well as lost wages and other economic damages. 42 Pa. C.S. § 8301. Wrongful death actions are not brought by the estate but the decedent’s spouse, parents, and children for damages arising from the loss of companionship. 42 Pa. C.S. § 8302. Unless the wrongful death claimant is a minor or is incapacitated, wrongful death actions do not require court approval. See Moore, supra.

Although an insurer may care little about how these proceeds are allocated, the allocation remains important in settling the claim and obtaining court approval. To avoid estate taxes and estate creditors, some estates will set up their personal injury claims to be purely “wrongful death” actions instead of survival actions. Realizing this tax and lien loophole, the Pennsylvania Department of Revenue and some Pennsylvania courts require the Estate and wrongful death beneficiaries to seek Department of Revenue approval before allocating between wrongful death and survival actions. Philadelphia also requires notice of settlement to the Department of Human Resources. If an estate and beneficiaries create their own allocation without the Department’s approval, the Department would likely proceed with its own allocation and tax many or all of the proceeds as if they were survival action proceeds. Further, the Court may not approve a settlement that is heavily skewed towards either wrongful death or survival actions. Establishing this allocation before hiring legal counsel to file the petition can save time and legal expenses.

Still, an insurer must be careful when handling allocations. Take this example:

An unrepresented Estate makes a claim for UM/UIM benefits arising from an accident where the decedent died. The Estate’s Administrator, the decedent’s wife, seeks both survival proceeds for the Estate and wrongful death proceeds for herself. The insurer intends to tender the entire policy to the Estate and the Administrator, but, unaware of the possible estate tax consequences of the allocation between survival and wrongful death, the Administrator asks the insurer to determine the allocation. The insurer then retains a lawyer to obtain the necessary Department of Revenue and Court approval to effectuate settlement with the Estate, and the UM/UIM insurer’s lawyer negotiates a survival-wrongful death allocation on behalf of the Estate.

In this case, the insured has delegated, and the insurer has assumed, decision-making authority regarding the allocation, potentially rendering itself a fiduciary on behalf of the claimant. Additionally, the insurer’s lawyer has possibly left herself subject to a further legal malpractice action for improper allocation of survival and wrongful death proceeds. See also Moore, supra, at 1142 (holding settlement unenforceable partially because insurer’s lawyer unilaterally determined allocation without estate’s input).

When faced with these conundrums, the insurer in these situations should first implore the insured to retain counsel so the insured can properly address these issues. If the insured declines to do so, the insurer should inform the insured that it must make these determinations. The insurer must strike the fine balance of requiring the insured to make these choices without advising which choice might be best. Evidence of the insurer’s statements should be in formal letters that would serve as exhibits for a possible breach of fiduciary duty action.


The above is only a brief overview of some of the issues an insurer may face. Although inconvenient, filing a petition to settle may be the only way to finalize the settlement and protect the insurer or its third-party insured from further legal action. If you have a Pennsylvania insurance claim with an unrepresented estate, consider retaining Pennsylvania counsel to file the petition to protect the insurer or its insured.

For additional questions, please contact Christopher S. Regan, Esq. and/or Scott J. Tredwell, Esq.

This article was prepared by McCormick & Priore, P.C. to provide information on areas of interest to our readers. This publication is in no way intended to provide legal advice or to create an attorney-client relationship. All Rights Reserved. This article may not be reprinted without the express written permission of McCormick & Priore, P.C.