Tuesday, August 11, 2015

Personal Injury Awards and Divorce

Divorce and personal injury awards often overlap for some strange reason. This was the issue in  Hemsley v. Hemsley, 639 So. 2d 909, 915 (Miss. 1994). The issue then arises whether a particular spouse’s personal injury award, settlement money, or any remainder thereof constitutes marital property subject to equitable distribution.   Following the trend in Georgia and North Carolina courts, in 1999, the Mississippi Supreme Court adopted a specific approach–called the “analytic approach”–in assessing whether a personal injury award, or whatever sum remains outstanding at the time of divorce, constitutes separate or marital property. Tramel v. Tramel, 740 So. 2d 286, 290 (Miss. 1999). Under the analytic approach, Mississippi courts must delineate between certain “detailed portions” that make-up a given personal injury award or settlement when classifying property. Id. As the Tramel court declared:
(1) that portion of the proceeds award allocable to compensation to the initially injured spouse for pain, suffering, and disfigurement should be awarded in its entirety to the injured spouse;
(2) that portion of the proceeds allocable to lost wages, lost earnings capacity, and medical and hospital expenses, to the extent those apply to the time period of the marriage, are marital assets and are to be divided according to equitable distribution principles; and (3) that portion of the proceeds allocable to loss of consortium should be awarded in its entirety to the spouse who suffered that loss.
Id. at 291. Thus, the amount of a given personal injury award designated to account for pain, suffering, or disfigurement incurred by the injured spouse and any award for post-divorce wages and medical expenses exclusively constitute separate property of the injured spouse that is not subject to property division. Id. Likewise, any award for loss of consortium (loss of companionship and loss of love and affection) constitutes the separate property of the non-injured spouse, which is not subject to property division; while on the other hand, an awarded amount for lost wages and medical expenses during the marriage constitutes marital property subject to property division. Id.

It is important to note that the analytic approach is not so easy to apply in practice because some personal injury awards, and especially many financial settlements, may allocate a given amount for some other reason that does not fit into one of the “detailed portions” or categories outlined in Tramel. Thus, a personal injury award or settlement will not always neatly fit into one of the Tramel categories. In these events, the chancery courts will rely on their broad discretion in dividing the marital estate on a case-by-case basis.

1 comment:

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