Damone v. Damone, 99-203.

• Decision Date: 14 September 2001
• Docket Number: No. 99-203.,99-203.
• Citation: 782 A.2d 1208
• Parties: Robin DAMONE v. Phillip DAMONE.
• Court: Vermont Supreme Court

782 A.2d 1208

Robin DAMONE v. Phillip DAMONE.

No. 99-203.

Supreme Court of Vermont.

September 14, 2001.

Melvin D. Fink of Fink and Birmingham, P.C., Ludlow, for Plaintiff-Appellee.

William E. Kraham, Brattleboro, for Defendant-Appellant.

Present: AMESTOY, C.J., DOOLEY, MORSE, JOHNSON and SKOGLUND, JJ.

SKOGLUND, J.

Defendant Phillip Damone appeals the final decree issued in his divorce proceeding by the Windsor Family Court. Defendant claims the court: (1) abused its discretion and acted inequitably in refusing to enforce the parties' agreement regarding the distribution of the proceeds from a medical malpractice settlement, and in distributing to plaintiff, Robin Damone, proceeds from this settlement which were intended to compensate defendant for his pain and suffering; (2) erred by including proceeds from the settlement when it determined, for purposes of equitable distribution of the marital property, what constituted the marital estate, and made clearly erroneous findings regarding the settlement proceeds; (3) abused its discretion in its determination of the maintenance award to the plaintiff; and (4) erred in admitting and relying upon statements made by a guardian ad litem (GAL) regarding the preferences of the parties' children. We agree with defendant that it was error for the family court to disregard the parties' agreement as to the distribution of the personal injury settlement award and, thus, the court erred in including the personal injury settlement proceeds in the marital estate as property subject to distribution between the parties.¹ As a result of the court's error in its property distribution, its determination of plaintiff's maintenance award must also be remanded for reconsideration. Because defendant did not properly object to the admission of the GAL's statements in the hearing, this claim of error was not properly preserved for review, so we do not address it on appeal. We remand for redistribution of the marital estate and a redetermination of plaintiff's maintenance award.

The parties were married in 1985, while in their late teens, and separated in January 1998. They have two children from the marriage. The marital home was purchased in 1986 for $65,000, and while the parties disagreed on the fair market value of the home at the time of their divorce, the court found the value to be $72,000, with a mortgage balance of $58,000. They acquired a few second-hand cars, and amassed $19,153 in consumer debt.² Plaintiff has a retirement account which was valued at $582.41. Defendant's pension plan through his employer was valued at $4,853.55. The remaining components of the marital estate, with one notable exception, were valued at $12,135.96.

The most significant asset considered by the court in evaluating the marital estate was the proceeds from a personal injury action based on medical malpractice suffered by Phillip. The action sought damages for the past, present, and future pain and suffering for Phillip and for loss of consortium suffered by Robin, and attorney's fees. In 1991, a tumor was discovered in Phillip's back. He underwent surgery to remove the tumor, spending two days in the hospital, and was working again two weeks later. In 1992, when he continued to have back problems, he underwent another surgery and three more tumors were removed. After four months of recovery from this surgery, which included six weeks of five-day-per-week radiation treatment, he returned to work but suffered continued pain in his back. He was again admitted to the hospital to address fluid build-up around the surgical site. On his first day home, he began to feel nauseous and was taken by ambulance back to the hospital, where he underwent a spinal tap. He was diagnosed with a severe staph infection, and underwent another surgery to remove the infection. He was hospitalized for ten days. Upon his return home he spent the next two months self-administering antibiotics intravenously thrice daily to insure the infection did not return. Phillip was told that he might experience permanent back pain caused by the massive tissue, muscle, and nerve loss he had suffered as a result of the surgery. He was left with a fourteen- to sixteen-inch incision site scar, thick cross lines from where surgical staples had been, discoloration from the radiation treatments, and an indentation in his back. The pain he experiences is worse in the winter, and he relies upon a daily prescription of Percocet to manage, but not alleviate, the pain.

In 1995, the Damones filed the personal injury action against the doctors who initially treated Phillip for his back pain. The suit claimed that, as a result of the doctors' negligence, Phillip had suffered both physical and psychological pain, increased disfigurement, permanent disability or increased disability, loss of enjoyment of his life, lost income, and had incurred substantial medical expenses. Robin joined the complaint, alleging in a separate count that as a result of the doctors' negligence she had suffered the loss of care, consort and companionship of Phillip. In June 1998, after the Damones had separated, the case settled. After payment of legal fees, costs and discharge of a medical lien, they received $151,116.11 net from the $250,000 total settlement. Prior to settlement, the Damones negotiated an agreement between themselves an agreement which was reached only after considerable disagreement between the parties over how much Robin would receive. The agreement provided that should a settlement be reached in the case, after all fees and expenses were paid, Phillip would be entitled to 82½% of the net amount of the settlement, and Robin would be entitled to 17½%. Given the net settlement amount, this agreement would have resulted in a distribution of $123,845.79 to Phillip and $26,270.32 to Robin.

In its distribution of marital property, the court awarded plaintiff her retirement account, valued at $582.41. She also retained an automobile she had purchased after the separation. The court awarded defendant his pension plan, two cars, and the equity in the home, and assigned him the marital consumer debt he had been making payments against, resulting in an award valued at $11,553.55. The court offset the discrepancy between the parties' awards by its division of the personal injury settlement proceeds, with defendant receiving $90,000 and plaintiff receiving $60,116.11. The total allocation for each party resulted in plaintiff being awarded $60,698.52 worth of marital property, and defendant being awarded property worth $101,553.55.

The court also awarded plaintiff primary legal and physical responsibility for the parties' two children, ages thirteen and eleven at the time of the final order. In determining what award of parental responsibility would be in the best interest of the children, it examined the required factors enumerated in 15 V.S.A. § 665(b). It also heard testimony from the GAL regarding the custodial preferences expressed to her by the children, as well as her own opinion of what custodial arrangement would be in the best interest of the children. The court concluded that the best interests of the children would be served by awarding parental rights and responsibilities to plaintiff, subject to defendant's right to parent-child contact.

In addition, plaintiff sought rehabilitative maintenance of $600 per month for a period of ten years. In determining whether a maintenance award was warranted, the court considered the length of the marriage, the age and physical condition of the parties, the level of education of each party, and the standard of living enjoyed during the marriage. It also examined the income brought into the family by each spouse, the work history of each spouse, and the effect plaintiff's employment will have over the next few years on her role as custodian of the children. The court concluded that plaintiff would require rehabilitative maintenance for a period of five years, while she provides after-school care for the children, and that the need for those duties would diminish over time as she secures appropriate employment which will compensate her at a level that will enable her to meet her reasonable needs.

The court then turned to the issue of how much maintenance defendant would pay plaintiff over this period. It examined the current income generated by each party, noted the stability in defendant's monthly income of approximately $2,862, and forecast that plaintiff's child-care duties would likely result in a decrease in her income, resulting in monthly income for her of approximately $1,591. The court also calculated that after each party used its portion of the settlement proceeds to pay off their respective outstanding debts, the remaining settlement proceeds would be $53,716 for plaintiff and $77,247 for defendant. The court calculated that, based on its distribution of the settlement proceeds and the rate of interest of 4.5% on a one-year U.S. Treasury Bill (as of March 30, 1999), plaintiff could derive $2,417 annually, or $201 per month, from her net portion of the settlement proceeds, and defendant could derive $3,476, or $290 per month, from his net portion. Adding these monthly imputed interest income figures to the earned income figures above, the court arrived at a total monthly income of $3,152 for defendant and $1,792 for plaintiff. From this, the court determined that the appropriate amount of rehabilitative maintenance needed to be paid by defendant to plaintiff in order to maintain the respective households at the standard of living established during the marriage would be $500 per month.

I.

We first address defendant's contention that the family court abused its discretion by refusing to honor the parties' agreement on how to distribute the personal injury settlement proceeds. The parties executed an agreement on June 8, 1998, approximately six months after their separation and three months...