Marshall v. Marshall, 298 Neb. 1

Background

Amy and Brian Marshall married in 1993; Amy suffered a massive stroke in 2003 and later received a Merck Vioxx personal-injury settlement; net proceeds after fees were $330,621.14.
The parties spent nearly all settlement proceeds during the marriage; the record traced $179,604 to paying off the marital mortgage and remodeling the kitchen, $20,000 to a bank account in Brian’s name, and $33,333 to a one-third interest in a business.
At trial (Oct. 2014) disputed issues included classification/division of the settlement proceeds, child support (dispute over Brian’s monthly income), and alimony.
The district court applied the analytic approach from Parde, found the settlement insufficient to fully compensate either Amy’s personal losses or the marital losses, traced $179,604 to the marital home, awarded Amy the home with a $179,604 credit (treating that sum as Amy’s nonmarital funds), and set Brian’s monthly income at $7,000 for child support ($935/month) and alimony at $2,000/month for 21 years.
The Nebraska Court of Appeals reversed as to classification of the settlement (holding all proceeds marital) and recalculated Brian’s income at $6,000/month, remanding for redivision and recalculation; it affirmed alimony but ordered reconsideration. The Nebraska Supreme Court granted further review.

Issues

Issue	Plaintiff's Argument (Marshall)	Defendant's Argument (Brian)	Held
Classification of personal-injury settlement proceeds	Amy argued analytic approach (Parde): portions compensating personal pain/suffering/disability are nonmarital; evidence of her injuries and lost future earnings supported a nonmarital allocation and tracing of spent funds	Brian argued Amy failed to prove any portion was nonmarital and that silence in the release means proceeds are marital	Court affirmed district court: analytic approach applies; Amy met burden with credible testimony and tracing; court did not abuse discretion in treating $179,604 as nonmarital credited to Amy
Tracing spent settlement proceeds into marital assets	Marshall: spent proceeds traced to specific assets (mortgage pay‑off, remodel) so nonmarital portion is traceable despite being spent	Brian: spent nature and lack of allocation in release preclude setting aside nonmarital funds	Court held tracing into the marital home was sufficient; commingling rules applied but burden met — nonmarital portion traceable and credited accordingly
Calculation of Brian’s monthly income for child support	Amy argued Brian’s income was higher (proposed ~$11,041/month) and that in-kind benefits and deposits should be included	Brian argued lower income (~$3,600/month); evidence of deposits/conflicting testimony created uncertainty	Court reversed Court of Appeals and affirmed district court’s $7,000/month finding: trial judge’s credibility determinations and equitable, fact-specific income inquiry justified splitting the difference; no abuse of discretion
Alimony award and remand consequence	Marshall sought affirmation of alimony tied to property division and income findings	Brian sought reversal/remand given Court of Appeals’ revaluation of assets and income	Supreme Court held alimony need not be reconsidered because it affirmed the underlying property classification and income finding; Court of Appeals’ reversal on alimony was moot; district court’s award stands

Key Cases Cited

Parde v. Parde, 258 Neb. 101 (analytic approach for classifying personal-injury settlements between marital and nonmarital components)
Heser v. Heser, 231 Neb. 928 (property division disturbed only if patently unfair)
Stephens v. Stephens, 297 Neb. 188 (three-step equitable division under § 42-365; marital/nonmarital classification and valuation)
Gangwish v. Gangwish, 267 Neb. 901 (flexible, fact-specific inquiry into income for child support purposes)