Smith v. Smith

• Decision Date: 18 February 1997
• Docket Number: No. 42A05-9608-CV-327,42A05-9608-CV-327
• Parties: Phillip C. SMITH, Appellant-Respondent, v. Lori Lynn SMITH, Appellee-Petitioner.
• Court: Indiana Appellate Court

Page 388

676 N.E.2d 388

Phillip C. SMITH, Appellant-Respondent, v. Lori Lynn SMITH, Appellee-Petitioner.

No. 42A05-9608-CV-327.

Court of Appeals of Indiana.

Feb. 18, 1997.

Richard C. Rusk, Rusk Overton & Sobecki, Washington, for appellant-respondent.

Jerry J. McGaughey, Vincennes, for appellee-petitioner.

OPINION

SHARPNACK, Chief Judge.

Phillip C. Smith appeals the marital property division in favor of his former wife, Lori Lynn Smith. Phillip raises two issues for our review which we restate as:

(1) whether the trial court properly found that the lump sum settlement payments from a personal injury action constituted marital property; and

(2) whether the trial court properly found that Lori did not have to pay child support.

We affirm and remand with instructions.

The record establishes that the parties married on February 5, 1982. They had two children, who were ages thirteen and fifteen at the time of the dissolution proceedings. On September 17, 1984, Phillip was injured while working for Cooper/T. Smith Stevedoring Co. (the "employer"). As a result of this injury, Phillip and Lori sued the employer for damages and eventually obtained a settlement. Under the settlement agreement, the employer was required to make the following payments: (1) an immediate payment of $31,000 to Phillip, (2) an immediate payment of $10,000 to Lori, (3) a monthly $1,000 payment to Phillip for his lifetime with a guarantee of twenty years, (4) a lump sum of $12,500 to Phillip "or his named beneficiary" on May 15, 1996, (5) a lump sum of $50,000 to Phillip "or his named beneficiary" on May 15, 2001, (6) a lump sum of $125,000 to Phillip "or his named beneficiary" on May 15, 2006, and (7) $65,000 to the Smiths' attorney. The injury sustained by Phillip does not prevent him from working as a truck driver or operating a tree trimming service.

On January 13, 1995, Lori filed a petition for dissolution of marriage. On February 1, 1995, Phillip filed a cross-petition for dissolution of marriage. On February 24, 1995, the trial court issued a provisional order requiring in part that the parties retain joint custody of the children with physical custody awarded to Phillip and that Lori pay $50.00 per week in child support until further order by the court.

On August 18, 1995, the trial court held a hearing on the dissolution petitions. Initially, the trial court noted the Smiths' partial agreement as to the distribution of certain property, the custody of the children, the temporary possession of the marital home, the tax deduction, and visitation rights. The trial court noted that the remaining issues in dispute were the child support award, health care expenses, distribution of the real estate and the marital debt, and whether the personal injury settlement constituted marital property. After the hearing, the trial court took the matter under advisement. On July 10, 1996, the trial court issued its order regarding the disputed issues, which provided:

"In dispute in this action is a personal injury settlement entered into on September 17, 1984....

The Court generally cannot conclude future income to be considered as marital property if it is contingent or speculative, however in this case other than monthly payments which are assigned to Phillip for lost income a total amount of settlement is a fixed amount even though payable in installments in the future and, therefore the Court must consider it as earned or fixed income and, therefore a marital property asset. The Court finds that the three stipulated lump sum payments must be divided as marital assets on a 50-50 basis between Phillip Smith and Lori Lynn Smith, therefore she is entitled to one-half of the lump sum payment paid May 15, 1996, as well as one-half of the lump sum payment payable May 15, 2001, as well as one-half the lump sum payment payable May 15, 2006. The Court concludes that Lori Lynn Smith is not entitled to one-half of any monthly payment being made to Phillip Smith for projected loss of income.

* * *

The Court finds that as of the date of the hearing Lori Lynn Smith was in arrears in child support to the amount of One Thousand Two Hundred Fifty Dollars ($1,250.00), any existing arrearage of child support as of the date of this ruling should be payable out of her portion of the May 15, 1996, lump sum payment...."

Record, pp. 90-91. Phillip now appeals this order.

I.

The first issue for our review is whether the trial court properly found that the three lump sum payments constituted marital property subject to division during the dissolution proceedings. In reviewing a trial court's division of marital property, we consider only the evidence most favorable to the judgment. Berger v. Berger, 648 N.E.2d 378, 381 (Ind.Ct.App.1995). We presume that the trial court correctly divided the property and will reverse only where the result reached is clearly against the logic and circumstances before the court. Id.; see Sedwick v. Sedwick, 446 N.E.2d 8, 10 (Ind.Ct.App.1983). The party challenging the trial court's division of marital assets is charged with overcoming the presumption that the court considered all of the evidence and properly applied the statute. Hughes v. Hughes, 601 N.E.2d 381, 384 (Ind.Ct.App.1992), trans. denied.

Pursuant to Ind.Code § 31-1-11.5-11(b), the trial court shall divide the "property of the parties, whether owned by either spouse prior to the marriage, acquired by either spouse in his or her own right after the marriage and prior to final separation by the parties, or acquired by their joint efforts, in a just and reasonable manner...." The "one pot" theory of § 11(b) specifically prohibits the exclusion of any asset from the reach of the trial court's power to divide and award. Huber v. Huber, 586 N.E.2d 887, 889 (Ind.Ct.App.1992), trans. denied. The term "property" is broadly defined as "all the assets of either party or both parties." I.C. § 31-1-11.5-2(d).

Phillip claims that the lump sum payments should be treated as lost future wages for permanent injury to his income producing capacity similar to the way that worker's compensation benefits are treated. ¹ Citing Leisure v. Leisure, 605 N.E.2d 755 (Ind.1993), Phillip concludes that the trial court erroneously included the lump sum payments in the marital pot. We disagree.

In Leisure, the supreme court considered whether federal worker's compensation benefits constituted marital property. The court found that the purpose of the worker's compensation act is to remove obstacles and to insure a more certain remedy for the injured worker. Leisure, 605 N.E.2d at 758. The court also found that worker's compensation benefits are intended to replace the future wages that the employee would earn if the employee were able to continue to work, noting that the "benefits are not compensation for actual work performed, but compensate the employee for decreased working capacity as a result of the work-related injury." Id. at 759. Next, the court noted that worker's compensation benefits are contingent on the employee's continued disability. Id. As a result, the court concluded that worker's compensation benefits are not a vested property interest subject to division, but rather represent future income. Id.

In addition, the court specifically noted that a worker's compensation award is not identical to a personal injury recovery because "[t]he Worker's Compensation Act does not contemplate a recovery for pain and suffering." Leisure, 605 N.E.2d at 758. "[I]t is now generally accepted that worker's compensation is awarded in lieu of lost wages and not as damages for pain, suffering, and monetary loss caused by the fault of the employer." Id.

Turning to the present case, the settlement agreement released the employer from any remedy which the Smiths may have had as a result of Phillip's injury, including:

"any and all rights, claims, liens, remedies or causes of actions whatever nature ... for damages, costs, expenses, loss of earnings, loss of society, loss of consortium, pecuniary and nonpecuniary damages, pain, suffering or disability, including the aggravation of any prior or pre-existing condition, arising out of or in anyway connected with the aforementioned accidents ... including the aggravation of any prior or pre-existing condition, ... including, without limitation, all claims under the Jones Act (46 U.S.C. § 688) the laws of the State of Louisiana or any other state or nation, the Federal Employer's Liability Act (45 U.S.C. § 851), the tort and compensation laws of the State of Louisiana or any other state or nation ... the Longshore and Harbor Workers Compensation Act (33 U.S.C.A. 901, et seq., as amended), the Admiralty and Maritime Law of the United States or any other nation, or any other laws which may afford them or their heirs a right or cause of action based upon any claim of unseaworthiness of the LST Rig S-24, or any other vessel or vessels which are or might be involved, ... including any claims for punitive damages for any alleged unseaworthiness, or for past or future maintenance and cure or damages, including attorneys fees, for failure to pay maintenance and cure, or under any compensation statute, federal or state, or in tort, civil or maritime or under any contract or policy of insurance, whether at law, equity or in admiralty and whether on account of or in any way connected with the alleged accidents and injuries, as aforementioned, and whether the same to be now known or...