In re Marriage of Washkowiak
2012 IL App (3d) 110174
Ill. App. Ct.2012Background
- Petitioner Christopher Washkowiak and Rosana Washkowiak were married in 2004 and divorced in 2010, with a judgment incorporating a settlement allocating 17.5% of net proceeds to Rosana.
- Net proceeds were defined as the agreed settlement amount minus workers’ compensation attorney fees and usual litigation costs, and included reimbursements for unemployment and medical payments actually paid.
- The workers’ compensation settlement included a Medicare Set-Aside (MSA) of $70,000, funded to pay future Medicare-covered medical expenses.
- Arbitrator approved a separate Pipeline settlement; total settlement was $435,000 with $70,000 allocated to the MSA and $296,330 paid to petitioner after deductions.
- Dispute arose whether Rosana’s 17.5% should include the $70,000 MSA funds, with the trial court and majority appellate panel concluding it should be included.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the MSA funds part of the net proceeds for 17.5% calculation? | Washkowiak: MSA funds are not net proceeds. | Washkowiak: MSA funds are included as net proceeds per decree. | MSA funds included in net proceeds; Rosana entitled to 17.5%. |
| Does MSP/MSA framework affect inclusion of MSA funds as net proceeds? | MSA is Medicare protection, not part of net proceeds. | MSA funds fall within net proceeds under dissolution decree. | MSA funds fall within net proceeds; MSP framework does not exclude them. |
| Is there a public policy reason to exclude MSA funds from net proceeds? | Exclusion aligns with Medicare as sole beneficiary of MSAs. | No public policy to exclude under contract term; MSA funds are partner’s share. | No reversal on public policy; majority positions prevail. |
Key Cases Cited
- New York Life Insurance Co. v. United States, 190 F.3d 1372 (Fed. Cir. 1999) (MSP and MSAs interplay with Medicare secondary payer rules)
- Frazer v. CNA Insurance Co., 374 F. Supp. 2d 1067 (N.D. Ala. 2005) (MSP framework and set-aside considerations)
- In re Marriage of Joynt, 375 Ill. App. 3d 817 (2007) (de novo review when contract terms unambiguous)
- In re Marriage of Turrell, 335 Ill. App. 3d 297 (2002) (contract interpretation of settlement terms in dissolution)