Marshall v. Marshall
298 Neb. 1
| Neb. | 2017Background
- Amy and Brian Marshall married in 1993; Amy suffered a massive stroke in 2003 and later settled Vioxx-related claims with Merck for net proceeds of $330,621.14 (confidential gross amount).
- The settlement release was silent as to allocation among types of damages; nearly all proceeds were spent during the marriage.
- Traced expenditures included $179,604 for mortgage payoff and kitchen remodel of the marital home, $20,000 to a bank account (later nearly depleted), and $33,333 for a one-third interest in a business.
- At trial, Amy claimed a portion of the settlement compensated her for purely personal losses (pain, suffering, disability, lost postdivorce earning capacity) and thus should be nonmarital under Parde v. Parde; Brian argued the entire settlement was marital.
- The district court credited Amy’s evidence, found the settlement inadequate to fully compensate her personal losses, traced $179,604 to the marital home, credited Amy that nonmarital amount, set Brian’s monthly income for child support at $7,000, and awarded Amy $2,000/month alimony for 21 years.
- The Court of Appeals reversed in part: it held the whole settlement was marital, recalculated Brian’s income to $6,000/month for child support, and remanded; the Nebraska Supreme Court granted further review.
Issues
| Issue | Plaintiff's Argument (Amy) | Defendant's Argument (Brian) | Held |
|---|---|---|---|
| Classification of personal-injury settlement proceeds | Parde allows analytic allocation; Amy presented testimony, medical evidence, and tracing showing a substantial nonmarital portion for personal losses | Settlement was silent on allocation and wholly inadequate to compensate both personal and marital losses; presumption is marital unless proven otherwise | Trial court did not abuse discretion: evidence supported classifying a substantial portion (including $179,604 traced to the home) as nonmarital; Court of Appeals reversed on this point and Supreme Court reinstated trial court |
| Tracing spent settlement proceeds into marital assets | Traced expenditures (mortgage payoff, remodel, bank account, business buy-in) made nonmarital portion identifiable and creditable against awarded assets | Argued lack of specific allocation in settlement and that proceeds should remain marital because inadequacy to fully compensate marital loss | Tracing was sufficient; spent proceeds can be allocated if traceable and not inextricably commingled; trial court’s crediting was equitable and upheld |
| Calculation of Brian’s monthly income for child support | Trial court’s split-the-difference ($7,000) was reasonable given conflicting evidence and credibility concerns | Court of Appeals: trial court erred; de novo review supports $6,000/month | Supreme Court: no abuse of discretion in $7,000 finding given conflicted evidence and trial judge’s credibility determinations; Court of Appeals reversed here |
| Alimony award and remand for recalculation | Alimony appropriate under § 42-365 given circumstances | Brian challenged as affected by property and support recalculations | Because Supreme Court affirms property and income rulings, alimony need not be reconsidered; Court of Appeals reversal as to alimony was moot and trial court award stands |
Key Cases Cited
- Parde v. Parde, 258 Neb. 101, 602 N.W.2d 657 (1999) (adopts analytic approach: allocate injury awards between purely personal losses—excluded from marital estate—and damages replacing marital losses—included)
- Brozek v. Brozek, 292 Neb. 681, 874 N.W.2d 17 (2016) (discusses commingling and tracing of separate property)
- Gangwish v. Gangwish, 267 Neb. 901, 678 N.W.2d 503 (2004) (general rule that property acquired during marriage is marital absent exception)
- Donald v. Donald, 296 Neb. 123, 892 N.W.2d 100 (2017) (standard of review in dissolution: de novo review on record but trial court discretion normally affirmed)