Is Your tort settlement part of the marital estate in divorce?
DID YOU KNOW- “Proceeds from a personal injury lawsuit meant to compensate for pain and suffering are not joint marital property.” Pickering v Pickering, 268 Mich App 1, 10; 706 NW2d 835 (2005). Nevertheless, those proceeds can be distributed as part of the property division under MCL 552.23 or MCL 552.401. Id. Also, a personal injury settlement can be treated as marital property where the original action included a loss of consortium claim and the settlement check was made payable to both parties and was treated by the parties as marital property. Id. at 11.
Flint Divorce lawyer Terry R. Bankert presents several marital Property Issues. Questions call 810-235-1970 or go to http://attorneybankert.com
ISSUES :
1.Appeal from a judgment of divorce;
2.Whether the trial court should have determined the proceeds from a tort lawsuit settlement were marital property and included them in the marital estate; Berger v. Berger; McDougal v. McDougal; McNamara v. Horner; Reed v. Reed; MCL 552.19; MCL 552.23; MCL 552.401; Pickering v. Pickering;
3.Whether the trial court correctly found that defendant did not use any of the Gocha Enterprises loan proceeds for marital interests; Woodington v. Shokoohi (Unpub.); 4.Whether the property division was inequitable
SEE
Court: Michigan Court of Appeals (Unpublished),Case Name: Gocha v. Gocha
e-Journal Number: 47237,No. 292442,Genesee Circuit Court Family Division
LC , Theile, No. 07-278858-DO,Appellate Judge(s): Per Curiam – Borrello, Cavanagh, and Owens
LOWER COURT RULES TORT SETTLEMENT NOT PART OF MARITAL ESTATE
The court held, inter alia, that the trial court properly refused to determine whether the proceeds from a tort lawsuit settlement based on a botched surgery claim by the plaintiff-wife were marital property or separate property and did not include the lawsuit proceeds in the marital estate.
FORTY YEAR MARRAIGE
The parties were married for nearly 40 years. They had three children, all of whom were adults when plaintiff filed for divorce. At that time, she was employed as a nurse and the defendant-husband was employed as a mechanic/technician, and they earned about the same amount per year.
COURTS JOB IS TO DETERMINE A FAIR DISTRIBUTION OF THE PROPERTY
Absent a binding agreement, the goal in distributing marital assets in a divorce
proceeding is to reach an equitable distribution of property in light of all the circumstances. Berger, 277 Mich App at 716-717. To reach an equitable division, the trial court should consider the duration of the marriage, the contribution of each party to the marital estate, each party’s station in life, each party’s earning ability, each party’s age, health and needs, fault or past misconduct, and any other equitable circumstance. McDougal v McDougal, 451 Mich 80, 89; 545 NW2d 357 (1996).
SEPARATE ASSETS MAY NOT BE INVADED GENERALLY
The court noted that generally, marital assets are subject to division between the parties, but the parties’ separate assets may not be invaded.
Generally, marital assets are subject to division between the parties but the parties’
separate assets may not be invaded. McNamara v Horner, 249 Mich App 177, 183; 642 NW2d 385 (2002). Marital assets are those assets a spouse earns during the course of a marriage. MCL 552.19; Reed v Reed, 265 Mich App 131, 152; 693 NW2d 825 (2005). However, a spouse’s separate estate can be opened for redistribution when one of two statutorily created exceptions is met. Separate property may be invaded if, upon entry of a divorce judgment, the property awarded to one party is not sufficient for the suitable support of one party or the party’s children. MCL 552.23. In the alternative, separate property may be invaded if one “party contributed to the acquisition, improvement or accumulation of the property.” MCL 552.401.
PERSONAL INJURY [PI] AWARDS FOR PAIN AND SUFFERING ARE NOT MARITAL PROPERTY
“Proceeds from a personal injury lawsuit meant to compensate for pain and suffering are not joint marital property,” based on Pickering.
WHEN THERE IS NEED THEY CAN BE ALLOCATED BETWEEN THE PARTIES
Nevertheless, those proceeds can be distributed as part of the marital property division under MCL 552.23 or MCL 552.401.
LOSS OF CONSORTIUM MAKES IT JOINT PROPERTY
Also, a personal injury settlement can be treated as marital property where the original action included a loss of consortium claim, the settlement check is made payable to both parties, and was treated by the parties as marital property.
THIS CASE WAS PAIN AND SUFFERING ONLY
However, in this case the record indicated that the settlement proceeds were intended to compensate the plaintiff for pain and suffering related to the surgery.
THE PI AWARD WAS SEPARATE PROPERTY
Thus, they were properly treated as her separate property.
SHE SUFFERED
Plaintiff suffered horrible injuries as the result of a failed tummy tuck and hernia repair procedure. She was on a ventilator for four days and in the ICU for six days. She was in the hospital for more than 3 weeks and was out of work for 14 weeks. She suffered permanent scarring of her abdomen and thighs.
NO EVIDENCE THAT HUSBAND MADE A LOSS OF CONSORTIUM CLAIM
There was no evidence in the record that defendant made a loss of consortium claim in her original case. While both the wife and husband signed the settlement release, there was no evidence that the settlement check was made out to both. The only evidence indicated the wife was compensated for her pain and suffering as a result of medical malpractice.
LOWER COURT CALLED PI PROCEEDS SEPARATE
Thus, the trial court did not clearly err in finding the settlement proceeds amounted to separate property.
Generally, as noted above, marital assets are subject to division between the parties but
the parties’ separate assets may not be invaded. McNamara, 249 Mich App at 183. Marital assets are those assets that came to a spouse “by reason of the marriage . . . .” MCL 552.19; Woodington v Shokoohi, ___ Mich App ___; ___ NW2d ___ (Docket No. 288923, issued May 4, 2010), slip op, p 3. “The goal of a court when apportioning a marital estate is to equitably divide it in light of all of the circumstances.” Reed, 265 Mich App at 152. As noted above, to reach an equitable division, the trial court should consider the duration of the marriage, the contribution of each party to the marital estate, each party’s station in life, each party’s earning ability, each party’s age, health and needs, fault or past misconduct, and any other equitable circumstance. McDougal, 451 Mich at 89.
LOWER COURT REFUSED ALLOCATED THIS SEPARATE PROPERTY
Further, the trial court did not err in refusing to invade plaintiff’s separate property under either MCL 552.23 or MCL 552.401. The settlement proceeds were not required to insure the support of the defendant, he did not request alimony, and he recognized he did not need financial support from plaintiff. Also, defendant did not contribute to greatly relieving plaintiff’s pain and suffering after her surgery. He testified he was not even aware she was having the surgery until the day before. He did help her recover by assisting with bathing and changing her dressings, but he lost at most two days of work. The trial court did not clearly err in refusing to invade plaintiff’s settlement proceeds and distribute them as part of the marital property. The court also held that the other issues raised on appeal by the defendant had no merit and affirmed.
Presented here 11/15/10
By Terry R. Bankert
http://attorneybankert.com
