Crocker v. Crocker

• Decision Date: 10 December 1991
• Docket Number: No. 75262,75262
• Citation: 824 P.2d 1117,1991 OK 130
• Parties: , 1991 OK 130 Betty A. CROCKER, Appellee, v. James C. CROCKER, Appellant.
• Court: Oklahoma Supreme Court

Page 1117

824 P.2d 1117

30 A.L.R.5th 768, 1991 OK 130

Betty A. CROCKER, Appellee, v.James C. CROCKER, Appellant.

No. 75262.

Supreme Court of Oklahoma.

Dec. 10, 1991.

An Appeal from the District Court of Cleveland County; Alan J. Couch, Trial Judge.

The trial court in a divorce proceeding held that the wife was entitled to one-half of the husband's workers' compensation settlement and Social Security lump sum disability settlement.The trial court also ordered that the equity of the residence of the parties be divided equally between the parties.We find that: 1) A workers' compensation award is marital property only to the extent to which it reimburses the couple for loss of income during the marriage.To the extent that it compensates for loss of post-divorce earnings of the injured party, it is the separate property of the injured spouse, even if the compensable injury occurred during the marriage.2) A lump-sum payment from the Social Security Administration for accrued disability benefits is not marital property subject to property division.3) Because the couple's residence had been awarded to the husband in their previous divorce, and because neither party sought to change its ownership status after their remarriage, the wife is not entitled to one-half interest in the equity in the house.

REVERSED AND REMANDED.

Michael Salem, Salem Law Offices, Norman, for appellant.

Fred J. Shaeffer, Shaeffer Law Office, Norman, for appellee.

KAUGER, Justice.

The issues presented are: 1) whether a lump sum workers' compensation payment is considered to be joint property for the purpose of marital property division; 2) whether social security disability payments are joint property acquired during coverture; and 3) whether the accrued equity in the couple's home could be divided between the parties after the home had been awarded to the husband in the couple's prior divorce.We find that: 1) A workers' compensation award is marital property only to the extent to which it reimburses the couple for loss of income during the marriage.To the extent that it compensates for loss of post-divorce earnings by the injured party, it is separate property, even if the compensable injury occurred during the marriage.2) A lump-sum payment from the Social Security Administration for accumulated disability benefits is not marital property subject to equitable division.3) Because the couple's residence had been awarded to the husband in their previous divorce, and because neither party sought to change its ownership status after their remarriage, the trial court erred in awarding the wife one-half of the equity in the house.

FACTS

Betty Crocker(wife/appellee) is an insurance supervisor with the Norman Regional Hospital.James Crocker(husband/appellant) is a former truck driver who now has a realtor's license.James has had a total colectomy and an ileostomy because he has ileitis and/or Crohn's disease.While working as a truck driver in December of 1987, James sustained a hernia.James is unable to perform manual labor or to lift over ten pounds.Apparently, he requires further surgery to repair the hernia.

On April 18, 1989, James received $39,824.65 in Workers' Compensation benefits.The check was made out to James and Betty, but the proceeds were deposited in James' separate checking account.When Betty filed for divorce on June 16, 1989, $20,000.00 was left in the account.Because James was unemployed, he drew on it for his living expenses, and approximately $16,000.00 remained in the account at the time of the trial on February 14, 1990.Because of his physical condition, James also applied for social security disability benefits.After Betty filed for divorce, James was notified that he would receive an $11,390.00 lump-sum award for accrued social security disability payments.

This is the third time that the couple has been divorced.They married for the first time on November 14, 1966, and they were divorced in March of 1968.The second marriage occurred on September 11, 1970 and the second divorce was granted on September 26, 1977.They remarried on Valentine's Day in 1978, and the third marriage ended in divorce on February 14, 1990.

James was awarded the home in the 1977 divorce.When James and Betty remarried in 1978, the house remained in his name.Although the couple maintained separate joint checking accounts, the house payments were usually made from a joint account.Most of the deposits into that account came from James' earnings.Sometimes, Betty paid the utility bills and other expenses from her separate account.After a hearing on the merits, the trial court divided the property.Betty received 50% of the remaining workers' compensation award and 50% of the lump sum social security back payments.The court also ordered the house sold and the net profits divided equally between James and Betty.James appealed.

I

A WORKERS' COMPENSATION DISABILITY AWARD IS MARITAL PROPERTY ONLY TO THE EXTENT TO WHICH IT REIMBURSES THE COUPLE FOR LOSS OF INCOME DURING THE MARRIAGE.TO THE EXTENT THAT IT COMPENSATES FOR THE LOSS OF POST-DIVORCE EARNINGS BY THE INJURED PARTY, IT IS SEPARATE PROPERTY.

This case presents one issue of first impression--whether a lump sum award received in settlement of a workers' compensation claim before the spouse filed for divorce constitutes jointly-acquired property subject to property division in a divorce proceeding.¹ There is no uniformity among the jurisdictions which have considered this question.² Workers' compensation awards have been treated as wages, personal injury recoveries, marital property, and separate property in effecting a property division.Regardless of the diversity of treatment by various state courts, four basic approaches, which have also been used in determining personal injury awards, have been advocated: 1) a mechanistic division; 2) a case by case division; 3) an unitary division; and 4) an analytical division.

A.The Mechanistic Approach

Under the mechanistic or mathematical approach, courts usually find that workers' compensation awards acquired during coverture are subject to division as marital property.Generally, courts which use the mechanistic method do so because of express statutory definitions controlling the division of separate and marital property.³

B.The Case by Case Approach

The Supreme Court of Iowa, In re Marriage of McNerney, 417 N.W.2d 205, 208(Iowa1987), rejected the analytical method and adopted a case by case approach.The Iowa court found that the terms mechanistic and analytic were misleading.It decided that the better approach was to divide the property on a case-by-case basis.⁴

C.The Unitary Approach

The unitary approach characterizes the award as being uniquely personal to the injured spouse.The award is treated as the separate property of the injured individual.⁵ This theory is the most simplistic, and it is the one the husband and the dissent urge us to endorse.

However attractive the unitary approach might be, it is precluded by the Workers' Compensation Act and by our decisions interpreting it.Historically, in Oklahoma, workers' compensation awards have not been characterized as being personal to the injured employee or strictly denominated as compensation for the loss of physical abilities.From its inception, the purpose of workers' compensation, has been twofold: 1) to provide support for workers during periods of actual disability, and 2) for their dependents in the event of an occupationally-related death, or to cover hospital, medical and funeral expenses.⁶

As early as 1924, this Court in Skelton Lead & Zinc Co. v. State Indus. Comm., 100 Okla. 188, 229 P. 255, 257(1924), interpreted the Act as providing compensation for the disability to work, based upon the average weekly wage, and not as an indemnity for physical impairment.⁷The Court examined the legislative purpose of the Act, and it determined that the purpose was to assure the industrious worker and the worker's dependents a reasonable support and maintenance during the period of enforced idleness resulting from any unfortunate accident which could destroy or impair earning capacity.In Commons v. Bragg, 183 Okla. 122, 80 P.2d 287, 290(1938), the Court determined that the Legislature intended for the workers' compensation benefits to flow to the injured workers and their dependents.This approach was intended to prevent the workers and their families from becoming public charges.

In Van Orman v. Robinson, 150 Okla. 156, 300 P. 412, 414(1931), this Court discussed the purpose of a workers' compensation award.We found that the basis for compensation under the Act is the wage earning capacity of the employee and the degree of his/her impairment.Although the statute does not specifically refer to physical injuries, an award will not be made unless a physical injury has occurred.The inability to earn wages by an injured worker is an incapacity within the meaning of the workers' compensation law.

This Court has not strayed from this traditional concept of workers' compensation.The Act has not been changed significantly since its inception.Oklahoma has not adopted a policy based on the loss of bodily function.Awards continue to be based on compensation in lieu of wages.Stare decisis does not support a finding that the enactment of 85 O.S.Supp.1990 § 22, ⁸ which lists various ailments to the body and which prescribes a fixed number of weeks of compensation for that injury is based on physical injury rather than a loss of wages.Although scheduled payments are not dependent on actual wage loss, the enactment of § 22 does not result in a deviation from the underlying principle of compensation law.The basic theory of compensation to replace wage earning capacity remains the same.The only difference is that the effect on earning capacity is a conclusively presumed one, rather than a specifically proven one based on the individual's...