Marshall v. Marshall
902 N.W.2d 223
| Neb. | 2017Background
- Amy and Brian Marshall married in 1993; Amy suffered a disabling stroke in 2003 and later received a Merck Vioxx personal-injury settlement that netted $330,621.14 (after fees).
- The parties spent nearly all settlement proceeds during the marriage; the record traced substantial expenditures: $179,604 toward mortgage payoff and kitchen remodeling, $20,000 to a bank account (largely spent down), and $33,333 used to buy a business interest.
- At divorce trial (2014) the principal disputes were: classification/allocation of the personal-injury settlement (marital vs. nonmarital), valuation/division of marital property, Brian’s monthly income for child support, and alimony.
- District court (trial court) applied the analytic approach from Parde v. Parde, found settlement insufficient to fully compensate Amy’s personal losses, traced $179,604 of proceeds to the marital home, awarded Amy the home and credited her $179,604 as her nonmarital share, split other traced assets/credits, set Brian’s monthly income at $7,000 and ordered child support of $935/month, and awarded Amy $2,000/month alimony for 21 years.
- Court of Appeals reversed in part: held Amy failed to prove any nonmarital portion of the settlement (thus directed entire settlement be treated as marital), recalculated Brian’s income to $6,000/month for child support, and remanded for division/alimony recalculation.
- Nebraska Supreme Court granted further review, reversed the Court of Appeals, and affirmed the district court: trial court did not abuse discretion in (1) allocating a nonmarital portion of the settlement and tracing spent proceeds, or (2) using $7,000 as Brian’s monthly income; the alimony determination stands.
Issues
| Issue | Plaintiff's Argument (Marshall) | Defendant's Argument (Marshall) | Held |
|---|---|---|---|
| Classification of personal‑injury settlement (marital vs. nonmarital) | Amy argued analytic approach per Parde permits allocation to personal losses; her testimony, doctor’s testimony, and tracing evidence showed a substantial nonmarital portion (e.g., pain/suffering, future lost earnings) | Brian argued Amy failed to prove any allocation to purely personal losses and that the settlement should be presumed wholly marital because the release was silent | Affirmed trial court: Amy met burden; trial court reasonably allocated >50% as nonmarital and credited traced expenditures (no abuse of discretion) |
| Tracing/setting aside spent settlement proceeds into marital assets | Amy argued spent proceeds can be traced into assets (mortgage payoff, remodel) and credited as nonmarital to the extent traceable | Brian contended commingling and lack of explicit allocation meant proceeds were marital | Affirmed trial court: tracing to specific expenditures (mortgage/remodel, bank account, business interest) was sufficient; commingling principles applied correctly |
| Brian’s total monthly income for child support | Amy urged higher income (approx. $11,041 monthly estimate) including in‑kind benefits and regular deposits | Brian claimed much lower income (~$3,600) and disputed sources of deposits and in‑kind valuation | Affirmed trial court: $7,000/month was within trial court’s discretion given conflicting evidence and credibility concerns; no abuse of discretion |
| Alimony award and need for remand | Amy argued trial court’s alimony award was supported and should stand | Brian (via Court of Appeals) argued recalculation of marital estate and child support required revisiting alimony | Supreme Court held alimony need not be revisited because underlying property and income determinations are affirmed; alimony award stands (reversal of Court of Appeals on this point) |
Key Cases Cited
- Parde v. Parde, 258 Neb. 101 (analytic approach to classify personal-injury settlements; nonmarital for pain/suffering/disfigurement/disability/postdivorce earning capacity; burden on claimant to trace/allocate)
- Bandow v. Bandow, 794 P.2d 1346 (Alaska) (trial courts may reasonably apportion settlement awards even without mathematical precision or express allocation in release)
- Gangwish v. Gangwish, 267 Neb. 901 (general rule that property acquired during marriage is marital unless an exception applies; supports flexible income/asset evaluation in dissolution matters)