Newborn v. Newborn

• Decision Date: 29 June 2000
• Docket Number: No. 5074,5074
• Citation: 754 A.2d 476,133 Md. App. 64
• Parties: Herbert NEWBORN v. Donnie NEWBORN.
• Court: Court of Special Appeals of Maryland

754 A.2d 476

133 Md. App. 64

Herbert NEWBORN v. Donnie NEWBORN.

No. 5074, Sept. Term, 1998.

Court of Special Appeals of Maryland.

June 29, 2000.

John H. Doud III, Baltimore, for appellant.

Lynn C. Williamson, Baltimore, for appellee.

Argued before SALMON, EYLER and SONNER, JJ.

SALMON, Judge.

If one spouse suffers personal injury prior to separation, do the proceeds from the settlement of that claim constitute marital property? That is one of the questions that must be answered in this case. Surprisingly, there is no reported opinion in Maryland that has decided that issue. In this case, we shall hold that part of the proceeds from the personal injury settlement are marital and part are not.

The issue had its provenance in a suit for absolute divorce filed by Donnie Newborn ("Ms. Newborn") in the Circuit Court for Anne Arundel County against Herbert Newborn. On March 26, 1998, the lower court, after two days of trial, announced that it would dissolve the Newborns' marriage by granting an absolute divorce. The court, however, held sub curia the issue of whether it would make a monetary award. On September 8, 1998, a final judgment of absolute divorce was docketed by the clerk. Fifty-five days later, on October 30, 1998, the trial judge filed an opinion and order granting Ms. Newborn a monetary award in the amount of $50,000. On November 28, 1998, Mr. Newborn filed an appeal to this Court, presenting four questions for our resolution, viz:

I. Did the trial court have jurisdiction to make a monetary award?

II. Did the trial court err when it failed to find that the parties had made their own division of the proceeds from the personal injury settlement?

III. Did the trial court err by finding that a portion of the proceeds from a personal injury settlement constituted marital property?

IV. Did the trial court err by finding that the appellee met her burden in proving that a portion of the settlement was marital property?

Ms. Newborn has filed a motion to dismiss this appeal. She contends that the appeal was filed more than thirty days after the judgment of absolute divorce was docketed—and was thus filed too late. That contention has no merit. We will explain why in conjunction with our resolution of appellant's first question.

I. GENERAL BACKGROUND

The Newborns married on September 6, 1953, when he was seventeen and she was thirteen. Four children were born of the marriage, all of whom are now emancipated adults. The parties permanently separated on August 12, 1996.

For thirty-three years of the forty-five-year marriage, Mr. Newborn worked as a longshoreman affiliated with the Steamship Trade Association of Baltimore.¹ He retired as a longshoreman in November 1997.

Mr. Newborn was involved in a serious automobile accident on March 28, 1978. A car in which he was a passenger was rear-ended by a school bus. He suffered a displaced fracture of the left tibia and fibula; a fractured right pelvis; a dislocated left hip; and an injury to the sciatic nerve that caused a diminished sensation on the right leg below the knee, along with the complete absence of feeling in his right foot. In addition, he experienced urethal trauma. After the accident, Mr. Newborn was homebound for about two years. During part of that time, he used a wheelchair. While he was at home, Ms. Newborn was his sole caretaker.

As a result of the accident, the Newborns filed suit against the driver and owner of the school bus. Included in the suit was a joint claim by the Newborns for loss of consortium. Discovery was conducted, and in June 1981 the defendants' insurer settled with the Newborns for $339,000. A check in that amount was made payable to "Herbert and Donnie Newborn individually, and as Husband and Wife [and their attorneys]." After payment of attorneys' fees and costs, $220,000 remained. The Newborns immediately purchased two automobiles, leaving a $200,000 balance.

Mr. Newborn invested the $200,000 with the Legg Mason investment firm; $190,000 was put in an account in Mr. Newborn's name alone, and $10,000 was invested in Ms. Newborn's name. Between 1981 and August 1996 when the parties separated, the Legg Mason accounts experienced little growth because most of the dividends were spent for family purposes. Moreover, in 1988, Mr. Newborn purchased and registered in his own name a mobile home for $80,000 from Legg Mason funds. As a result of this large purchase, there was only approximately $137,000 in Mr. Newborn's Legg Mason account when the parties separated.

In late 1996 or early 1997, Mr. Newborn was unable to work for several months due to depression. He withdrew money from his Legg Mason account and proceeded to waste $130,000 on gambling and whiskey. By the time he went back to work in the spring of 1997, he had spent all the money he had in his investment account.

TRIAL JUDGE'S DECISION CONCERNING THE MONETARY AWARD

On March 26, 1998, the evidentiary phase of the case was completed. Ms. Newborn took the position that the $80,000 mobile home and the $130,000 her spouse had dissipated were marital property because their source was monies received from the personal injury settlement. Not surprisingly, Mr. Newborn took the opposite view and contended that none of the monies or properties that had their origins in the settlement was marital. In the alternative, he contended that the parties had agreed between themselves that the settlement monies should be divided ninety-five percent/five percent—in his favor.

The trial judge wrote a preliminary opinion dated April 2, 1998, in which he recognized that he was presented with an issue of first impression. He acknowledged that Judge Chasanow's concurring opinion in Blake v. Blake, 341 Md. 326, 670 A.2d 472 (1996), was not binding because five members of the Court declined to join in the concurring opinion. Nevertheless, he quoted the part of that opinion that said that a settlement of a personal injury claim could result in the injured spouse receiving both non-marital and marital property. Blake, 341 Md. at 348-49, 670 A.2d 472. He also quoted the following excerpt:

Examples of non-marital contributions which flowed from Mr. Blake's inchoate [sic] personal injury claim include the loss of his leg, the pain and suffering attendant thereto, and a loss of earnings for the period after dissolution of the marriage. See Queen v. Queen, 308 Md. 574, 587, 521 A.2d 320, 327 (1987)

.... On the other hand, loss of consortium, medical expenses directly or indirectly paid by the marital entity, and lost wages prior to the break-up of the marriage could constitute marital property.

Id. at 346-47, 670 A.2d 472.

At that stage, the trial judge did not say whether he would follow the view expressed in Judge Chasanow's concurring opinion or whether he would adopt the argument of Mr. Newborn. He merely observed that the marital property award issue was so complex that both sides ought to be given the opportunity to show the components of the award. Perhaps the Court file in the tort case, or the attorneys' correspondence, will do so. In any event, we will give the parties twenty days to suggest any such proof. If necessary, we can have another hearing.

The trial judge went on to say that, in his opinion, "the property [at issue] is sufficiently traceable to remain non-marital if in fact it was in the first place."

As the trial judge suggested, counsel for Mr. Newborn, post-trial, sent the judge certain documents that he evidently believed related to the issue to be decided. Those documents were: (1) demand letter dated January 28, 1980, to St. Paul Insurance Company from the attorney who represented the Newborns in their tort action; (2) Herbert Newborn's interrogatory answers filed in the personal injury suit; (3) a letter dated June 15, 1981, from the defense attorney in the tort case to the Newborns' attorney, suggesting various structured settlement options; and (4) a Social Security benefit information letter, dated August 8, 1980, which was sent to Mr. Newborn. The last two mentioned documents provided no useful information, but the first two did contain material of interest.

The demand letter from the Newborns' tort counsel said that Mr. Newborn earned $8.80 per hour (presumably on the date he last worked). He gave no current lost-wage information but said that Mr. Newborn, then age forty-three, had twenty-two years remaining in his expected work life. Counsel calculated Mr. Newborn's future lost wages as $264 per week ($8.80 X 30) or $13,728 per year (52 X $264). Based on those figures, he projected future lost wages of $302,000 ($13,728 X 22).

Like most demand letters, the letter from the Newborns' attorney made no effort to downplay the seriousness of the injuries suffered by his clients. Counsel said:

This case involves grievous personal injuries sustained by Herbert Newborn when the vehicle in which he was a passenger, that was stopped behind a school bus, was hit from the rear by another school bus. Mr. Newborn's injuries are set forth above and have resulted in a complete disruption of not only his own personal life but his marital life as well. Taking into consideration his medical expenses to date, medical expenses he will have in the future, past and future wage loss, painful and disabling nature of his injuries, the damage it has done to the marital relationship and the wife's loss of income, we hereby submit our demand for settlement of this case in the amount of $1,500,000.00.

The letter explained that, although Ms. Newborn was not employed when the accident occurred, she would have sought employment but for the March 28, 1978, accident and would have earned between $7,657 and $7,957 annually.

Counsel put no dollar figure on loss of consortium damages but said:

DAMAGE TO MARITAL RELATIONSHIP

Enclosed you will also find a copy of the report of Baltimore City Hospital dated January 25, 1980.² This report sets forth not only the effect that this

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