Husband’s Part of Injury Settlement Deemed Marital Property
Tennessee law case summary on divorce and marital property law and valuation in Tennessee divorce and family law from the Tennessee Court of Appeals.
Lane v. Lane – Tennessee Divorce Laws
Thomas and Wanda Lane were married in 2006. It was the second marriage for both parties. Wanda had children from a previous marriage, and also began the marriage with property shared with her first husband. Thomas had a son from his first marriage, and also owned a piece of property.
Thomas worked throughout the marriage for Cleveland Utilities, and Wanda worked for Derby Industries. Shortly after they married, Thomas was injured at work and was unable to work for five months. During that time, he received worker’s compensation benefits, and a settlement of approximately $15,000. Thomas and Wanda also filed a products liability claim arising out of his injury, and received a settlement of over $42,000. That settlement did not specify which portion was attributed to Wanda and which portion to Thomas.
They incurred various debts over the course of the marriage, including mortgages on the wife’s property. The mortgage on this property was over $107,000, with a monthly payment of $669.
Thomas filed a divorce complaint in 2009, and alleged irreconcilable differences and inappropriate marital conduct. Wanda counterclaimed, denied that she had engaged in inappropriate conduct, but alleged that Thomas had engaged in inappropriate conduct, and also irreconcilable differences and that the marriage was irretrievably broken.
Thomas was 51 years old at the time of trial. He had continued to make the mortgage payments on the property that Wanda had brought to the marriage. He had worked at the utility company for twelve years.
Wanda did provide care for Thomas after his injury. Wanda was 53 years old and had been employed for about five years at $9.50 per hour.
The trial court granted the divorce, and found that the product liability settlement was marital property, but that Thomas had used almost $20,000 of that money to pay off the separate mortgage on his property without Wanda’s knowledge.
Thomas appealed, and argued that the trial court erred in classifying the settlement as marital property. He first argued that this settlement didn’t cover lost wages, since he was already compensated for those by the worker’s compensation benefits.
The Court of Appeals first noted that when a product liability settlement is received during the marriage, there is a rebuttable presumption that it is marital property. The Court held that this rule still applied, even though it specifically excluded a claim for lost wages.
The parties both agreed that a portion of Thomas’s pension was marital property. However, he argued on appeal that the trial court should not have used the present cash value method in valuing it for purposes of the distribution. But the Court of Appeals held that this valuation method was within the trial court’s discretion, and did not disturb the judgment.
Finally, even though the Court of Appeals affirmed, it did not find that the appeal was completely without merit. Therefore, it denied Wanda’s request for attorney’s fees for the appeal.
Lane v. Lane, No. E2011-02293-COA-R3-CV (Tenn. Ct. App., July 26, 2012).
See original opinion for exact language. Legal citations omitted.
Memphis divorce lawyer, Miles Mason, Sr., JD, CPA practices family law exclusively and is founder of the Miles Mason Family Law Group, PLC, which handles Tennessee family law matters including divorce, child support, alimony, prenuptial agreements, child custody, parental relocation, child support modification, alimony modification, and divorces including business valuation and forensic accounting issues.
