The question periodically arises as to how Utah Courts treat personal injury awards and settlements in dividing marital property in a divorce case.
Special damages are considered to be personal in nature and, as such, are generally awarded to the injured spouse as his or her separate property. Special damages are amounts received as compensation for pain and suffering, disfigurement, disability, or other personal debility. See Naranjo v Naranjo, 751 P.2d 1144, 1148 (Utah Ct. App. 1988); Izatt v Izatt, 627 P.2d 49, 51 (1981).
On the other hand, money received as compensation for things such as lost wages or medical expenses, which diminish the marital estate, are generally regarded as marital property. Naranjo at 1148 citing Bugh v. Bugh, 125 Ariz. 190, 608 P.2d 329, 331 (1980).
In the Naranjo case the husband sustained a serious knee injury in an industrial accident during the marriage, for which he received compensation. The trial court found that he failed to meet his burden of proving the amount of the award that was attributable to pain and suffering, and therefore, the wife was entitled to share in the injury award. Husband appealed, arguing that Colorado law under which he received the personal injury verdict, did not distinguish between special and general damages. The appellate court affirmed the trial court’s decision, noting the trial court’s authority “to make such distributions as are just and equitable, and may compel such conveyances as are necessary to that end.” Id. at 1148, quoting Jackson v. Jackson, 617 P.2d 338, 340-41 (Utah 1980).
The moral of the story as I see it, is that if a personal injury award is the subject of contention in a divorce case, the injured party should be prepared to show the amounts that were received as compensation for special damages that are of a personal nature as opposed to the amounts, if any, that are for things such as lost wages or medical expenses that reduce the marital estate. To paraphrase the Court in Izatt, the fact that amounts which are personal belong to the injured party “is not to be doubted.” Izatt at 51. But the Izatt court still opined that the fact that the injured party possessed the significant sum from her personal injury award could be used as one of the total circumstances considered by the trial court in fashioning what it believed to be an equitable allocation of the parties’ property and finances. See Id.
This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.