Prepared for the Houston Bar Association
Family Law Section
September, 1998
|
Jeff E. Rusk
Shields & Rusk, P.C. 910 Lavaca Austin, TX 78701 Tel: 512-476-7600 Fax: 512-476-7731 www.shields-rusk.com info@shields-rusk.com |
Susan Myres
Pollicoff, Smith, Myres & Remels, L.L.P One Greenway Plaza Suite 300 Houston, TX 77046 Tel: 713-622-6866 Fax: 713-622-5905 |
Lee Ann Smith
Pollicoff, Smith, Myres & Remels, L.L.P One Greenway Plaza Suite 300 Houston, TX 77046 Tel: 713-622-6866 Fax: 713-622-5905 |
I. Questions to be addressed
When a person is injured and there is a cause of action for those injuries the questions a family lawyer must answer with the help of their favorite P.I. attorney include:
- When did the injury occur? (one event or a recurring injury)
- How the money been paid? When? How? (annuity, lump sum, future payments)
- What documents give information about the recovery?
- What are the elements of damages for those injuries?
- Does anyone besides the directly injured person have a cause of action? (loss of consortium)
- How is the cause of action viewed outside the family law arena? (taxes)
- Where did all the money go? (tracing, commingling and other gymnastics)
II. General Rule
The general rule regarding the character of personal injury damages is found in Texas Family Code § 3.001
"A spouse's separate property consists of:
- the property owned or claimed by the spouse before marriage;
- the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage."
III. Types of Damages in a Personal Injury Action
There is probably an unlimited number of types of damages in personal injury actions. In Section 43.40 of the Texas Family Law Services you can find a listing of some of the damages that can be awarded. I have prepared the following chart of likely property characterizations depending on when the injury occurred and what period of time the damages cover. The numbers within the chart refer to the cases discussed. You are cautioned to not rely solely on this chart or the cases because of the fact intensive nature of these cases and the propensity of our current courts to appear to "modify" res judicata.
| ELEMENTS OF DAMAGES | BEFORE MARRIAGE DAMAGES | DURING MARRIAGE DAMAGES | AFTER MARRIAGE DAMAGES |
| Past medical expenses for doctors, hospitals, etc. | s.p. if paid for b/f marriage |
c.p. (4) | s.p |
| Future medical expenses | s.p. | c.p./s.p. (4) | s.p. |
| Past actual loss of wages | s.p.(5) | c.p. if wages lost were to have been earned during marriage(5) | s.p. (5) |
| Past loss of vocational skill | s.p. | ? | s.p. |
| Past loss of capacity to earn increased wages | s.p. | c.p.(3), (17) | ?(3), (17) |
| Past loss of profits or net income by person in business | s.p. | c.p. | ? |
| Future loss of wages | s.p. | c.p. | ? |
| Future loss of vocational skill | s.p. | c.p. | ? |
| Future loss of profits or income from person in business | s.p. | c.p. | ? |
| Cost of hiring a substitute or assistant | s.p. | c.p. | ? |
| Cost of hiring home care attendants | s.p. | c.p. | ? |
| Cost of occupational therapy or training | s.p. | c.p. | ? |
| Cost of special equipment and devices | s.p. | c.p. | ? |
| Past and future pain and suffering from physical injuries | s.p.(2) | s.p.(2) | s.p.(2) |
| Mental Anguish and associated symptoms | s.p.(2) | s.p.(2) | s.p.(2) |
| Sexual Dysfunction/Loss of reproductive capacity | s.p. | ? | ? |
| Past and future enjoyment of life | s.p. | ? | ? |
| Punitive/Exemplary Damages | s.p. | ?(9), (10) | ?(9), (10) |
| Prejudgment interest | s.p. | c.p. | %? |
| Litigation fees and costs | s.p. | ? | ? |
|
|
|||
| Loss of consortium | n/a | s.p.(6) | s.p. |
| Loss of household services of spouse | n/a | c.p.(5) | ?(5) |
| Parent's loss of minor's services | n/a | s.p.(7) | s.p.(7)depends on divorce decree terms |
| Loss of companionship of decedent | n/a | s.p.(8) | s.p.(8) |
| Mental anguish of survivors | n/a | s.p. | s.p. |
| Funeral and burial expenses | n/a | c.p. | s.p. |
|
c.p.=community property s.p.=separate property | |||
IV. Types of Personal Injury Actions
Question: What if, instead of a car accident the injury occurred over a long time during time periods where victim was single and married and they suffered from asbestosis or other toxic exposure diseases?
These damages are the separate property of the injured person, Johnson v. Holly Farms, 731 S.W.2d 641 (Tex Tex.App. - Amarillo 1987, no writ).(2)
Cases discussing this element seem to reflect that loss of earning capacity occurs at a single, fixed point in time. Several cases using this term decide characterization depending on the time of the event as though the Inception of Title Rule applied. If the capacity is lost during the marriage it is community and if the capacity is lost before or after marriage it is separate. Dawson v. Garcia, 666 S.W.2d 254 (Tex.App. - Dallas 1984, no writ).(3) - H only lived a few hours following the accident, however all recoveries for loss of his earning capacity were characterized as community property because the injury occurred during the marriage and were not the separate property of his widow exempt from judgment for damages against deceased husband.
The character for recovery for medical expenses depends on which estate paid for the expenses.
Graham v. Franco, 488 S.W.2d 390 (Tex. 1972)(4) - recovery for medical expenses are community on the theory that because the community has the burden to pay these expenses, the community is the injured estate - however, one spouse may bring suit alone for medical expenses.
The character depends on the marital status when the wages were lost. Loss of services of a spouse (household, domestic duties) are damages to the community. McKnight, Matrimonial Property, 26 Sw.L.J. 31,49 (1972).(5)
Wittlesey v. Miller, 572 S.W.2d 665 (Tex. 1978)(6)
- recovery for loss of consortium is separate property because the deprived spouse sustains damage to emotional interests stemming from their relationship and is a cause of action that is independent from the injured spouse's negligence claim; there is no danger of double recovery.
Johnson v. Holly Farms, 731 S.W.2d 641 (Tex.App.- Amarillo 1987, no writ)(7)
- pecuniary loss to parents is usually described as the care, maintenance, support, services, advice, counsel and contributions that the child would have "given" parent; therefore they are the nature of a gift and are the separate property of each parent.
B.1 Odds & Ends - Legal Malpractice
B.2 Worker's Compensation
Lewis v. Lewis, 944 S.W.2d 640 (Tex 1997)(17)
- disability occurred seven months before marriage but the settlement for $30,000 occurred after marriage. H was permanently disabled before marriage H couldn't have more loss of earning capacity to give to community estate. This case theory does not follow traditional theories regarding worker's compensation benefits. You are encouraged to look at the underlying compensation award to ascertain the true character.
The Texas Litigation Guide reflects that the Texas worker's compensation law was designed to pay compensation and other benefits to a worker or a worker's beneficiaries for incapacity or death caused by a work related injury. The general purpose of the statutes is to provide for loss of earning capacity and impairment as a practical alternative to common-law negligence remedies.
Temporary income benefits, impairment income benefits, supplemental income benefits, and lifetime income benefits are all forms of compensation in addition to other benefits allowed under the worker's compensation statutes. Temporary income benefits are paid to disabled employees who have not attained maximum medical improvement. Impairment income benefits are paid to employees who after having reached maximum medical improvement resulting from a compensable injury and that injury being reasonably presumed permanent. Supplemental income benefits are paid to employees if, at the expiration of the impairment income eligibility period they (1) have an impairment rating from a compensable injury of 15 percent or more; (2) they have not returned to work or have returned to work earning less than 80 percent of the employee's average weekly wage as a direct result of the employee's impairment; (3) they have not elected to receive a lump sum to commute any portion of the impairment income benefits; and (4) they have in good faith attempted to obtain employment commensurate with the employee's ability to work. Lifetime income benefits are paid to employees who (1) have total and permanent loss of sight in both eyes; (2) have loss of both feet at or above the ankle; (3) have loss of both hands at or above the wrist; and (4) loss of one foot at or above the ankle and the loss of one hand at or above the wrist. The amount of income benefits payable to employees is dependent on the employees' average weekly wage.
Other benefits that injured employees may recover include medical expenses. In other regular personal injury cases these expenses are community in nature if paid for by the community estate regardless of when the injury occurred. If injured spouse received substantial award during marriage for injury late in marriage and divorced soon after award, would it be equitable for uninjured spouse to receive money intended to compensate worker for future wages?
V. Torts Between Spouses
Traveler's Companies v. Wolfe, 838 S.W.2d 708 (Tex.App. - Amarillo 1992, no writ)(13)
Stites v. Gillum, 872 S.W.2d 768 (Tex.App. - Fort Worth 1994, writ denied)(22)
Murphy v. Texas Farmers, Inc., No. 01-97-00100-CV, WL 224033 (Tex.App. - Houston [1st Dist.] May 1, 1998)(12)
- Innocent co-insured whose spouse burned property was entitled to insurance for her half of community property that was divided by partition agreement after the fire, even though she learned of the arson after the fire.
- Although W did not own personal property of corporation which was destroyed by H's arson, her ownership of one half of corporate stock vested her with insurable interest in property, and this interest was specifically retained by her as separate property by virtue of divorce decree.
Schlueter v. Schlueter, No. 96-1091 Tex. July 3, 1998)(20)
- motion for rehearing pending. The Supreme Court has found the 'just and right' division standard allows redress for a spouse's fraud with a disproportionate division of community assets, spouses may no longer bring a cause of action for fraud on the community.
These actions were abolished per § 1.107
Helena Laboratories Corp. v. Snyder, 886 S.W.2d 767 (Tex 1994)21
- There is no cause of action for negligent interference with a familial relationship despite the fact that the elements of this action look a lot like loss of consortium. But if you cannot sue the spouse for the action would it be fair to sue the employer for the same damages?
- W filed action against third party claiming 'Interference with Familial Relationship'; held that the action was an action for 'Alienation of Affections' couched in other terms and sanctioned W's attorney.
Boyles v. Kerr, 855 S.W.2d 593 (Tex 1993) (24)
- The Supreme Court has decided that there is only one tort that you cannot recover from if it is committed with mere negligence (i.e. where there might be some insurance coverage). In the family law context you might 'recover' for those actions when you include those factors in your pleadings and proof for emotional and physical cruelty for a disproportionate division.
VI. Joinder of Tort and Divorce
VII. Practical Issues in Allocation of Proceeds
Finding of Separate Character leads to Reversals
Moreno v. Alejandro, 775 S.W.2d 735 (Tex.App. - San Antonio 1989, writ denied)(28)
Kyles v. Kyles, 832 S.W.2d 194 (Tex.App. - Beaumont 1992, no writ)(27)
- H injured during marriage; received lump sum award. The Court of Appeals held that in subsequent divorce action all of the proceeds were community because there was no allocation which could be used to characterize the award as separate.
- in a post divorce partition (now it would be a post divorce division action) of the P.I. suit; the court looked at the language of the pleadings and the judgment to determine the character of the proceeds. H asked for medical expenses and lost earning capacity therefore at least some portion of the judgment was community and could belong to the wife. H had burden of proof.