By Atty. Scott McGowan
For my first entry here on our blog, I combined my two areas of my practice experience. I hope to show you how unfortunate accidents and injuries can have wide-ranging effects on our lives – effects we wouldn’t normally think possible.
For instance, let’s start with a married couple. Let’s suppose one of the spouses is involved in a tragic accident where he or she is injured by a third party’s malfeasance and can no longer work. What happens if the couple’s marriage deteriorates to the point where one decides to obtain a dissolution of their marriage? Should the uninjured spouse be able to claim any portion of the personal injury award as part of the marital estate? If so, does it make a difference if the personal injury award had actually delineated between past and future pain and suffering, lost earnings, and medical expenses, instead of awarding one lump sum with no delineation?
In Connecticut, the first case to ponder such an issue was Raccio v. Raccio, 556 A.2d 639 (Conn. Super. 1987). Left in an untenable position of having to decide if the uninjured wife should receive any portion of the injured husband’s potential proceeds from his personal injury action, the Court made a valiant effort at dividing not a piece of property but only the potential for property, as there was no actual proceeds from the case as of yet.
Normally, the Court does not like to award abstract amounts of property in a divorce action. In almost all such instances, the judge wants to know the value of the property she is dividing, or at least have an inkling of its value before division. For instance, the Court will not divide the expected inheritance of another. It’s impossible to do when the asset does not actually exist.
Since this was a case of first impressions, the Court in Raccio decided to look at how other states handled the division of what apparently doesn’t exist yet. Upon review of the law, the Court concluded, even though the award didn’t actually exist, it was still a property interest (even if still undefined) and could be considered as part of the marital estate and treated as marital property.
Now that the Court has determined you CAN divide the award, it must then decide HOW to do so. In Raccio, the Court looked at several different types of schemes to divide the award. Do we prorate it as what is marital or non-marital? Do we limit the divisible share as only the portion of the award representing lost wages and medical expenses while considering the award for pain and suffering as personal only to the injured spouse? In my opinion, this Court avoided these questions instead of defining a process future Courts could follow. They merely awarded a third of the recovery up to $125,000 to the uninjured wife with no direction as to how they developed this figure.
Looking ahead by about a decade, Lopiano v. Lopiano tackled a similar issue. Lopiano v. Lopiano, 247 Conn. 356, 752 A.2d 1000 (1998), is distinguished from Raccio in that the personal injury action had already been decided and the parties had already received the award, so there was an actual asset to divide. The Court was tasked to decide if a personal injury award is a property interest as defined under the Connecticut General Statutes §46b-81, the statute defining the factors to be used in property distribution in a dissolution of marriage action (divorce).
The Court pondered three questions in its analysis: (1) whether such an award is completely non-marital and entirely separate from the marital estate; (2) whether the compensation, although marital in nature, is personal to the injured spouse; or (3) whether the award regardless of its purpose is acquired during the marriage and therefore deemed marital property and divisible? In the end, the Court decided a personal injury award is indeed marital property and, if awarded during the marriage, is divisible under the factors cited in §46b-81 (factors which are too long to discuss here).
So, what have we learned? First, if you are married, try to stay that way. In almost all circumstances divorced spouses fare worse financially than married couples. Second, although it may seem counter-intuitive, a personal injury award may not be all that personal in nature, especially when divided in a divorce. I hope you have found this discussion interesting, and if you have any questions, please email me at ScottM@trantololaw.com.