Parde v. Parde
| Decision Date | 12 November 1999 |
| Docket Number | No. S-97-985.,S-97-985. |
| Citation | 602 N.W.2d 657,258 Neb. 101 |
| Parties | Daniel A. PARDE, appellant, v. Loralee A. PARDE, appellee. |
| Court | Nebraska Supreme Court |
David P. Lepant and Reggie L. Ryder, of Andersen & Lepant, Beatrice, for appellant.
James E. Gordon and Kevin T. Lytle, of DeMars, Gordon, Olson and Shively, Lincoln, for appellee.
Loralee A. Parde (wife) petitions this court for further review of the Nebraska Court of Appeals' decision in Parde v. Parde, 8 Neb.App. 242, 591 N.W.2d 783 (1999), claiming that the appellate court either ignored or incorrectly applied the principles set forth in Maricle v. Maricle, 221 Neb. 552, 378 N.W.2d 855 (1985). The Court of Appeals had determined that the marital estate in a divorce proceeding does not include that portion of one spouse's personal injury settlement which represents compensation for pain and suffering or future earnings; rather, the marital estate includes only that portion of a judgment or settlement which diminishes the marital estate, e.g., items such as past wages and medical expenses. Parde v. Parde, supra.
We granted the petition for further review to clarify the law regarding which portions of an injured party's personal injury or workers' compensation award should be included in the marital estate for purposes of property division in this equitable distribution jurisdiction.
Daniel A. Parde (husband) and the wife were married on December 11, 1976. The Pardes separated on January 5, 1997, and a decree of dissolution was entered on August 11, 1997. The evidence reveals that during the marriage, the husband worked 16 years for Burlington Northern Railroad Company. In the scope of his employment, the husband was injured on three separate occasions in 1989 and 1990. As a result of these injuries to his lower back, the husband negotiated a settlement with Burlington Northern on August 26, 1992, a settlement memorialized by a "General Release Agreement" (Release). The husband was 40 years old at the time of the settlement.
The Release was negotiated pursuant to the Federal Employers' Liability Act (FELA). As part of the Release, the husband agreed that the injuries he sustained had permanently disabled him and would prevent him from ever returning to work for Burlington Northern. Additionally, at the time he signed the Release, the husband received a check for $148,364.16. This cash payment was expressly divided into two components: $54,101.70 for "time lost" between July 1, 1992, and May 31, 1996, and $98,892.30 to "other factors." The "time lost" component was allocated so that the husband could receive creditable service hours for the purpose of receiving railroad retirement benefits. Railroad retirement tax and railroad retirement board liens were deducted, resulting in the net cash payment of $148,364.16.
The Release also provided that Burlington Northern would arrange for payment to the husband of an annuity in the sum of $98,750 on September 1, 2002, the amount being payable notwithstanding the husband's death.
The primary issue at the trial court was whether the $98,750 amount remaining to be paid under the Release should be included or excluded from the marital estate. Likewise, the divisibility of the cash settlement is not contested on appeal; rather, it is the divisibility of the annuity which is at issue. The trial court found that the cash portion of the settlement received by the husband in 1992 was already reflected in the other assets of the parties which were divided pursuant to their settlement agreement. The parties stipulated to a nearly equal division of all other property, each receiving approximately $60,000 in net value. There was no express allocation in the Release regarding past wages or future earnings with respect to the $98,750 annuity. The husband sought to prove, through the testimony of Burlington Northern's claims representative Lori Savidge and the language of the Release itself, that the $98,750 annuity represented compensation for loss of future earnings and was thus excludable from the marital estate.
Savidge's testimony did not provide a precise allocation of the settlement proceeds between loss of past wages, pain and suffering, and loss of future earnings. The following colloquy, however, occurred during the testimony regarding the settlement proceeds:
Q. [The husband's counsel] Ms. Savidge, when you negotiated this settlement and determined an amount to be paid, how much of it was based on economic loss?
A. I would say the majority of it. I would — I don't break it down, the figure, into so many dollars for future, so many dollars for pain and suffering, so many dollars for liability or contrib. [sic], but I can say the majority of it was based on the fact that he was not working for the railroad. He was a young man and disabled and he was going to lose some earnings down the road at least 20-some years.
The evidence also revealed that after the settlement, the husband attended and graduated from Southeast Community College, which prepared him to become a respiratory therapist. Child support calculations show that at the time of trial, the husband was making approximately $26,000 per year working as a respiratory therapist at Bryan Memorial Hospital. The record does not show the date of the husband's graduation or when he was first employed following the date of the Release.
The district court found that the entire amount of the settlement, both cash and annuity, was based upon injuries the husband received during the marriage of the parties and upon his income earned during the marriage, and determined that the entire settlement should be considered marital property. The husband appealed, assigning as error the district court's holding that the annuity was marital property. The Court of Appeals agreed and found that the district court abused its discretion in failing to exclude the annuity portion from the marital estate and modified the decree accordingly. See Parde v. Parde, 8 Neb.App. 242, 591 N.W.2d 783 (1999). The wife petitioned this court for further review, and we will narrowly review the Court of Appeals' determination that the amount due under the annuity should be excluded from the marital estate. All other aspects of the Court of Appeals' judgment stand affirmed.
In her petition for further review, the wife specifically assigned as error (1) the Court of Appeals' finding that the district court abused its discretion in deciding that insufficient evidence had been presented to support an allocation of the annuity; (2) the Court of Appeals' ignoring Maricle v. Maricle, 221 Neb. 552, 378 N.W.2d 855 (1985), and incorrectly applying Mathew v. Palmer, 8 Neb.App. 128, 589 N.W.2d 343 (1999); (3) the Court of Appeals' determining that because the testimony of Savidge was not contradicted by direct evidence, the evidence was necessarily not in conflict and, therefore, the court need not accord weight to the fact that the finder of fact heard and observed the witness and chose to reject such testimony; (4) the Court of Appeals' finding that since the lump-sum payment was reflected in the parties' marital property, it must necessarily be treated as an allocation of the marital estate; (5) the Court of Appeals' determining what part of the entire settlement was marital or nonmarital in character, even though only the characterization of the annuity as marital property was assigned as error; (6) the Court of Appeals' failing to dismiss the appeal on the ground that the husband had accepted the benefits of the district court judgment; and (7) the Court of Appeals' failing to award attorney fees for the services of the wife's attorneys in the Court of Appeals.
In actions for dissolution of marriage, an appellate court reviews the case de novo on the record to determine whether there has been an abuse of discretion by the trial judge. This standard of review applies to the trial court's determinations regarding division of property, alimony, and attorney fees. Davidson v. Davidson, 254 Neb. 656, 578 N.W.2d 848 (1998). In a review de novo on the record, an appellate court reappraises the evidence as presented by the record and reaches its own independent conclusions with respect to the matters at issue. Rauch v. Rauch, 256 Neb. 257, 590 N.W.2d 170 (1999). A judicial abuse of discretion exists when the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition. Pope v. Pope, 251 Neb. 773, 559 N.W.2d 192 (1997).
We granted further review in this cause to clarify what has unnecessarily become a muddled area of the law—i.e., which portions of an injured party's personal injury or workers' compensation award should be included in the marital estate for purposes of property division. This court last dealt with the issue of one spouse's personal injury settlement being considered marital property in Maricle v. Maricle, 221 Neb. 552, 378 N.W.2d 855 (1985).
The divorce in Maricle v. Maricle occurred a few years after the husband had been injured in a truck collision that left him permanently and totally disabled. In actions for damages arising out of the accident, the husband and wife received a $300,000 settlement. After attorney fees, this sum was divided so that the wife received 20-some thousand dollars for loss of consortium and the husband received the balance. When the couple divorced, the question presented to this court was whether the husband's personal injury settlement should be included in the marital estate for purposes of dividing the parties' property. Without discussing whether and what portions of such an award should be considered to be...
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