Brown v. Brown
| Decision Date | 12 January 1984 |
| Docket Number | No. 49548-3,49548-3 |
| Parties | In re the Marriage of Ronna BROWN, Petitioner, v. William L. BROWN, Respondent. |
| Court | Washington Supreme Court |
Dodel, Skone, Leonardson & Perkins, Edward R. Skone, Seattle, for petitioner.
Atwood, Sferra & Shuey, Stanley F. Atwood, Seattle, for respondent.
When a third-party tortfeasor injures a spouse during the marriage, how should the potential recovery on the personal injury claim be characterized for purposes of distribution in a subsequent dissolution proceeding? The Court of Appeals, Division I, held that Ronna Brown's potential recovery for an injury sustained during her marriage was community property. We reverse. Under our opinion today, recovery for an injury inflicted upon a married person by a third-party tortfeasor is the separate property of the injured spouse, except to the extent the recovery compensates the community for lost wages which would have been community property, or injury-related expenses which the community incurred. The disposition of Ronna's potential recovery entered by the trial judge, which was reversed by the Court of Appeals, is in accord with our holding and is reinstated.
Ronna and William L. Brown were married on January 27, 1967. In October 1975, Ronna filed for dissolution. The parties later reconciled and the action was dismissed. Prior to this dismissal, the parties entered into a post-nuptial agreement. The agreement provided that certain assets were separate and others were community. It further stated that in the event of dissolution each party would be awarded his or her separate property and all of the community property accumulated by the parties would be equally divided.
In September 1979, Ronna instituted a second dissolution action. In this action, both parties agreed that the post-nuptial agreement was valid and binding. The trial judge considered herself bound by the agreement and divided the property accordingly.
Approximately 6 months before the second action was filed, Ronna had been injured in an automobile accident. At trial, no cross-examination concerning her injury or the value of her potential recovery was permitted. Out of pocket expenses relating to her injury and incurred prior to trial had been reimbursed in full. The trial court characterized her potential recovery as follows:
a. Recovery for out of pocket expenses incurred after trial is the separate property of the party incurring said expenses and should be awarded to that party.
b. Recovery for petitioner's lost earnings and diminished earning capacity from the date of the accident until the date of separation, September 4, 1979, is community property and should be awarded one-half to each party.
c. Recovery for petitioner's lost earnings and diminished earning capacity after the date of separation, September 4, 1979, is the separate property of the petitioner and should be awarded to her.
d. Recovery for all other damages is the separate property of the petitioner and should be awarded to her. The control of the litigation should repose with the petitioner who should have exclusive authority to compromise the claim. In the event the case is submitted to the jury trial the above allocation of the damages should proceed upon special interrogatories.
Conclusion of Law VI.A.7, CP 19-20.
William appealed. The Court of Appeals reversed, holding that Ronna's third-party tort claim was community property.
The established rule in Washington has heretofore been that recovery for injuries to a married person by a third-party tortfeasor is community property. Freehe v. Freehe, 81 Wash.2d 183, 191, 500 P.2d 771 (1972).
This rule has its genesis in the early case of Hawkins v. Front St. Cable Ry. Co., 3 Wash. 592, 28 P. 1021 (1892). Hawkins was a tort action brought by husband and wife to recover damages resulting from injuries received by the wife while riding as a passenger on a street car. The defendant tortfeasor challenged an instruction which permitted the jury to take the husband's loss of his wife's services into consideration in computing damages. This court upheld the instruction on the following reasoning:
At common law, when a wife was injured through the tort of a third person, the injury and the right of action were hers, but she could not sue unless her husband, if living, joined her as plaintiff. The recovery in that case was the pecuniary measure of her own injury and suffering in body and mind. But there was another element of damage which could be recovered only by her husband suing alone in a separate action, viz., his loss of her services and his outlay in restoring her to health.
... But inasmuch as the right to sue for a tort which one has suffered is a chose in action, and therefore property, in those states where, as here, all property acquired by either spouse otherwise than by gift, bequest, devise or descent is common or community property, this chose in action is suable by that member of the community who has the disposition of the community personalty.
... In this case, therefore, the husband was the only necessary party, though the wife, by § 7, Code of 1881, is a proper party, and in this action all of the damages naturally flowing from the injury complained of are recoverable.
(Italics added.) Hawkins, at 595-96, 28 P. 1021.
Thus, the issue in Hawkins was whether the plaintiff husband could recover damages for the loss of his wife's services in an action brought for personal injury to his wife. The Hawkins court found it necessary to characterize the personal injury claim in order to determine what role the husband played as a plaintiff in the action. Because the claim was community property, it followed that the husband was suing in his capacity as manager of the community personalty, and all damages were recoverable in the one community action.
The Hawkins rule that a claim for personal injury to a married person by a third-party tortfeasor is community property was consistently followed in subsequent decisions of this court. See, e.g., Chase v. Beard, 55 Wash.2d 58, 346 P.2d 315 (1959); Ostheller v. Spokane & Inland Empire R. Co., 107 Wash. 678, 182 P. 630 (1919); Hammond v. Jackson, 89 Wash. 510, 154 P. 1106 (1916). Although the rule was applied in a variety of contexts, many of the early cases applied it to hold that the husband, as manager of the community personalty, was a necessary party to the wife's action for personal injury sustained during the marriage. See, e.g., Clark v. Beggs, 138 Wash. 62, 244 P. 121 (1926); Hynes v. Colman Dock Co., 108 Wash. 642, 185 P. 617 (1919); Schneider v. Biberger, 76 Wash. 504, 136 P. 701 (1913).
In 1972, the state legislature amended the community property statutes to grant the wife equal power to manage and control community property. RCW 26.16.030. This change made Hawkins and its progeny obsolete to the extent they had held that the husband, as manager of the community property, was a necessary party to his wife's personal injury action. Nevertheless, the vitality of the Hawkins rule itself, which was based on an interpretation of statutes defining separate and community property, continued on unimpaired. 1
Two Court of Appeals decisions applied the Hawkins rule to the issue before us today, namely, proper characterization of a spouse's third-party tort recovery for purposes of distributing it when the marriage has been dissolved. Perez v. Perez, 11 Wash.App. 429, 523 P.2d 455 (1974), was a declaratory judgment action brought to determine a woman's interest in a personal injury settlement received by her former husband after their divorce. The injury had occurred during the marriage. Relying on the Hawkins rule, the Perez court held that the settlement was community property. Since the settlement had not been divided during the divorce action, it was deemed to be property held by the parties as tenants in common. Perez, at 431-32, 523 P.2d 455.
415 (1981), review denied, 95 Wash.2d 1019 (1981), involved a husband who had received $77,500 in settlement of a personal injury claim. Community medical expenses and lost wages had been otherwise reimbursed. In the subsequent dissolution proceeding, the husband argued that the entire settlement was his separate property, since it compensated him for damages to his personal security, an "asset" brought into the marriage.
The Parsons court, believing itself bound by the Hawkins line of authority, held the settlement to be community property. It explained the reasoning behind the Hawkins rule in modern terms:
Separate property is defined as property and pecuniary rights acquired before marriage or acquired after marriage by gift, bequest, devise or descent. It also includes the rents, issues and profits from separate property. RCW 26.16.010, .020. Community property is all other property acquired by either spouse after marriage that is not acquired or owned as separate property. RCW 26.16.030. This "waste basket" definition of community property results in property being characterized as community unless it meets the definition of separate property. The Washington rule is that fortuitous acquisition of damages for personal injury by a third party tort-feasor is community property because it does not fit within the definition of separate property.
(Citations omitted.) Parsons, at 278, 622 P.2d 415.
The Hawkins rule has been criticized by legal commentators and rejected by the majority of our fellow community property states.
Commentators William deFuniak and Michael Vaughn blame the Hawkins rule on an incomplete understanding of the basic principles of community property law:
The frequently evident dissatisfaction with the frequently inadequate reasons given for the doctrine that compensation for personal injuries to a spouse is community property lie in an incomplete understanding of the...
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