Ronald Geraw v. Pamela Geraw
2021 VT 45
| Vt. | 2021Background
- Parties divorced in 2013; husband was ordered to pay wife a sum that he failed to pay; in 2018 the court entered a money judgment for the deficiency (~$67,815 plus interest).
- Husband received a post-divorce workers’ compensation lump-sum settlement (≈$350,000 gross) in 2014 and used settlement funds to buy a house (2015), a Kubota tractor, and a 2016 Toyota RAV4.
- Wife pursued collection on the judgment; discovery revealed transfers (house conveyed to a revocable trust with partner’s life interest; alleged transfers of tractor/Camaro to relatives) and an investment account that husband asserted was a WCMSA.
- Trial court found husband not credible, concluded he had attempted to shield assets, and ordered further discovery; it held §681 (workers’ comp exemption) does not protect assets purchased with settlement proceeds and evaluated exemptions under 12 V.S.A. §2740.
- The court found SSDI/pension income and the RAV4 (as reasonably necessary) exempt, declined to exempt the tractor as not reasonably necessary, and ruled husband failed to prove existence/value of a WCMSA or value of other vehicles.
- Husband appealed; the Supreme Court affirmed: §681 does not shield assets bought with workers’ comp proceeds; a WCMSA would be exempt but husband failed to prove he had one; tractor exemption was a discretionary factual finding not reversed.
Issues
| Issue | Plaintiff's Argument (Geraw) | Defendant's Argument (Geraw) | Held |
|---|---|---|---|
| Whether 21 V.S.A. §681 exempts assets purchased with workers’ compensation proceeds | §681’s ban on claims by creditors means funds traceable to workers’ comp (and assets bought with them) are absolutely exempt | §681 protects the claim/stream of compensation, not traceable assets; tracing/exemptions are addressed in §2740 | Court rejected Geraw: §681 does not extend to assets purchased with proceeds; tracing not in §681 |
| Whether husband’s investment account is a WCMSA and thus exempt | The account is a self-administered WCMSA (per settlement/CMS letter) and therefore exempt | Husband failed to identify any particular account or produce evidence in discovery to prove it is a WCMSA | Court: WCMSA funds would be exempt, but Geraw failed to prove the account exists or is traceable as a WCMSA; no exemption established |
| Whether the tractor is exempt as “reasonably necessary” under 12 V.S.A. §2740(19) | Tractor is necessary to maintain property (plow driveway, collect firewood) and thus reasonably necessary for support | Tractor is not essential; husband not credible; expensive tractor not comparable to essential farm animals | Court affirmed trial discretion: tractor not reasonably necessary; no abuse of discretion |
| Whether 12 V.S.A. §2740 exemptions apply to enforcement of a divorce money judgment (creditor/debtor status) | Cited authority suggests former-spouse enforcement may not fit ordinary creditor/debtor exemption scheme | Statutory collection remedies for enforcement are subject to §2740 exemptions; Schwartz is distinguishable | Court held §2740 applies to the statutory collection remedies in this enforcement action and distinguished Schwartz |
Key Cases Cited
- Schwartz v. Haas, 739 A.2d 1188 (Vt. 1999) (discusses limits of creditor/debtor exemption analysis in family-equity context)
- Licursi v. Sweeney, 603 A.2d 342 (Vt. 1991) (purpose of §2740 is to protect debtor’s essential living and working property)
- Matter of Carmichael, 100 F.3d 375 (5th Cir. 1996) (bankruptcy interpretation: court determines extent funds are necessary to prevent abuse of exemptions)
- In re Arellano, 524 B.R. 615 (M.D. Pa. 2015) (WCMSA funds treated as held for medical providers and not reachable by general creditors)
- Cardenas v. Cardenas, 478 A.2d 968 (R.I. 1984) (workers’ compensation proceeds may be reached to support spouse/children despite general creditor-exemption language)
- Hagen v. Hagen, 508 N.W.2d 196 (Mich. App. 1993) (similar conclusion that workers’ comp can be reached for spousal/child support)
- Coburn v. Frank Dodge & Sons, 687 A.2d 465 (Vt. 1997) (appellate court will not reweigh trial court’s factual credibility determinations)