Lead Opinion
OPINION
In this case, we interpret a provision of the Pennsylvania Divorce Code
On April 1, 1999, Justin E. Focht (hereinafter “Appellee”) sustained a serious injury in an accident at the Family Grand Prix Raceway (hereinafter “Raceway”) in Leesport, PA. Approximately two weeks later, Appellee and his then-wife Tracy L. Focht (hereinafter “Appellant”) retained an attorney to represent them in their respective claims of personal injury and loss of consortium. The Fochts filed suit against the Raceway on September 8, 2000, and the case was settled on November 23, 2004, for a total of $410,000. After payment of attorney’s fees and other expenses, Appellee and Appellant received, respectively, $231,618 and $14,784 from the settlement.
Between the dates of the accident and the settlement, specifically on August 1, 2001, the parties separated by mutual consent. Appellee filed a divorce complaint in February 2004, and a divorce decree was entered on January 23, 2009.
During the first year after the settlement of his personal injury suit, by which time the Fochts had separated, Appellee spent his entire portion of the settlement proceeds. He expended some of the proceeds for the purchase of a residence,
During the parties’ lengthy divorce proceedings, it became apparent that the only asset involved was the settlement award from the lawsuit. The special master assigned to the parties’ divorce case determined that all of the settlement proceeds were marital property, subject to equitable distribution. The special master further concluded that Appellant and Appellee were entitled to, respectively, 25% and 75% of the settlement proceeds. Based on this conclusion and after determining the amount that each party had already received, the master calculated that, of the $60,206 that remained from the settlement proceeds, Appellant was entitled to $44,617 and Appellee was entitled to $15,589. The trial court affirmed the decision of the special master.
The parties cross-appealed the equitable distribution order to the Superior Court. Based on its conclusion that the trial court had erred by including the settlement proceeds in the marital estate, the Superior Court vacated the equitable distribution order.
Appellant filed a petition for allowance of appeal in this Court, asserting that the Superior Court’s determination conflicted with this Court’s precedential decision in Drake v. Drake,
The definition of marital property is set forth in the Divorce Code. The issue before us involves the interpretation of this statutory definition, which, like all statutory interpretation, is a pure question of law. Accordingly, our standard of review is de novo and our scope is plenary. St. Elizabeth’s Child Care Center v. Department of Public Welfare,
The statutory definition of marital property is broad, encompassing “all property acquired by either party during the marriage.” 23 Pa.C.S. § 3501(a). The statute presumes that property acquired during the marriage is “marital.” Drake v. Drake,
[Mjarital property does not include:
(1) Property acquired prior to marriage. ...
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(4) Property acquired after final separation until the date of divorce....
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(8) Any payment received as a result of an award or settlement for any cause of action or claim which accrued prior to the marriage or after the date of final separation regardless of when the payment was received.
23 Pa.C.S. § 3501(a) (emphasis added).
With regard to subsection 3501(a)(8), interpretation hinges on the meaning of the word “accrue.” There is no statutory definition of accrue. A general legal definition is the following:
To come into existence as an enforceable claim or right; to arise <the plaintiffs cause of action for silicosis did not accrue until the plaintiff knew or had reason to know of the disease >.
Black’s Law Dictionary, 8th Ed. (2004).
The above legal dictionary definition is consistent with this Court’s long-established, historical understanding, as expressed in Bell v. Brady,
We have explained these well-settled principles in more detail as follows:
The Judicial Code provides in pertinent part that limitations periods are computed from the time the cause of action accrued. 42 Pa.C.S. § 5502(a). In Pennsylvania, a cause of action accrues when the plaintiff could have first maintained the action to a successful conclusion. Thus, we have stated that the statute of limitations begins to run as soon as the right to institute and maintain a suit arises. Generally speaking, in a suit to recover damages for personal injuries, this right arises when the injury is inflicted. Once a cause of action has accrued and the prescribed statutory period has run, an injured party is barred from bringing his cause of action.
Fine v. Checcio,
Subsection 3501(a)(8) must be interpreted in the context of this well-established understanding of the concept of accrual of a cause of action. Thus, when a cause of action accrues (ie., when an injury has been inflicted, leading to the right to institute and pursue a suit for damages) after the date of marriage and before the date of final separation, then any settlement proceeds resolving that cause of action are marital property, regardless of when the settlement actually occurs. 23 Pa.C.S. § 3501(a)(8). Although the statute does not explicitly mention causes of action or claims that accrue during a marriage, prior cases from this Court or the Superior Court have addressed such circumstances.
In reviewing the lower courts’ holdings, this Court first recognized the wide breadth of subsection 3501(a)(8)’s applicability, as follows:
The Divorce Code at Section 3501(a)(8) makes no distinction concerning the purpose of the award or settlement, but posits that it applies equally to all claims or causes of action for personal injury, lost wages, disability or other damage .... it is irrelevant that the settlement or award is for disability payments, personal injuries, lost wages, or future earnings. We look only to the timing of the right to receive [the award or settlement].
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The critical question is ... whether the right to seek a commutation of [husband’s] earnings accrued during the marriage.
Drake, supra at 725-26 (emphases added).
Reviewing the sequence of events, see supra, we further concluded that “as of December 7, 1989, [h]usband certainly had an enforceable right to this lump sum commutation award, and [h]usband’s claim ‘accrued,’ as that term is used in the Divorce Code, well before the parties separated in July of 1993.” Id. Because husband’s claim accrued during the marriage, before the parties separated, the award was marital property. Id.
It is important to recognize the significance of our determination that the Drake husband’s claim had accrued as of the effective date of his partial disability, to wit, December 7, 1989. As of this date, husband had not actually been granted a commutation award, and indeed husband and his employer had not yet entered into any agreement regarding any compensation for his partial disability. It was not until October 1990 that husband and his employer entered into the commutation agreement, pursuant to which the effective date of husband’s partial disability was agreed to have been in the prior year. We concluded that husband’s claim “accrued” not when the commutation agreement was entered and the commutation award was actually granted, but rather as of the effective date of husband’s partial disability, which is when his right to seek commutation of his earnings arose. Id. Although Drake involved a workers’ compensation claim, not a cause of action in tort, our interpretation of when the Drake husband’s claim accrued for purposes of sub
In Nuhfer v. Nuhfer,
Thus, although the facts of Nuhfer and Drake were quite different, the holdings by the Superior Court and this Court, respectively, were consistent: an award or settlement arising from a cause of action or claim that accrued during the marriage of the parties, before final separation, is marital property subject to equitable distribution.
We now apply these principles to the case before us. Appellant contends that the Superior Court misconstrued the plain text of subsection 3501(a)(8), particularly with respect to the concept of accrual. Appellant argues that Appellee’s personal injury cause of action accrued on the date of the accident, or at the latest two weeks later when he retained counsel, because by that time Appellee was fully and completely aware of his injuries and the Raceway’s negligent conduct. Appellant’s Brief at 10. In contrast, Appellee contends that his personal injury claim did not accrue until the date of settlement, which was the first time that he was actually entitled to the settlement proceeds. Appellee’s Brief at 15-18. Appellee insists that a personal injury claim “unliquidated” by verdict or settlement cannot be subject to equitable distribution and, indeed, cannot even be property, much less marital property.
The decision advocated by Appellee and reached by the Superior Court is untenable in light of the plain language of subsection 3501(a)(8); our long-established understanding of the concept of accrual of a cause of action; and this Court’s and the Superior Court’s decisions in, respectively, Drake and Nuhfer. Paraphrasing Drake, the “critical question” here is whether Ap-pellee’s right to seek damages for personal injury by filing a negligence suit accrued during his marriage, not whether his suit was settled during his marriage. See id. at 726. Appellee errs by conflating two very different concepts: accrual of a cause of action and settlement of a cause of action. By the explicit text of subsection 3501(a)(8), the date of accrual of a cause of action is the only date of relevance.
There is no question that Appellee’s cause of action in negligence accrued during his marriage: the accident in which Appellee was injured occurred during his marriage, and he became aware of his serious injuries and of the Raceway’s negligence during his marriage, as shown by the fact that he retained counsel and filed suit against the Raceway during his marriage. See Notes of Testimony, 12/12/07, at 34-35. All of these events occurred one to two years before the parties’ final separation. Thus, because Appellee’s cause of action accrued during the marriage, before the parties’ final separation, proceeds from the settlement of the suit are marital property. The marital property exception set forth in subsection 3501(a)(8) does not apply, and it is irrelevant that the parties had finally separated by the time the suit settled and the settlement award was liquidated. Accordingly, we reverse the order of the Superior Court.
Finally, we recognize that some prior opinions from the Superior Court concerning subsection 3501(a)(8) have not been consistent with our holding here, nor with Drake and Nuhfer. In the present case,
Order of the Superior Court reversed and case remanded to Superior Court for resolution of the parties’ other issues on appeal. Jurisdiction relinquished.
Chief Justice CASTILLE, Justices EAKIN, BAER, TODD and ORIE MELVIN join the opinion.
Justice SAYLOR files a concurring opinion.
Notes
. Act of December 19, 1990, P.L. 1240 No. 206, as amended, 23 Pa.C.S. §§ 3101-3904.
. Appellee purchased the residence for $156,000, apparently in cash, plus closing costs and other expenses, on December 30, 2004. The deed was placed in the names of Appellee and Rebecca J. Keiffer, his then-girlfriend and the mother of his son.
. The parties’ remaining issues concerned the equitable distribution of the settlement proceeds. Because the Superior Court concluded that these proceeds were not marital property, it saw no need to address the remaining issues.
. Nuhfer was decided under the 1980 Divorce Code, 23 P.S. § 101 et seq., as amended by the Act of February 12, 1988, P.L. 66, No. 13, which was the law in effect on September 21, 1989, when the parties’ divorce was filed. The text was subsequently consolidated at 23 Pa.C.S. § 3101 et seq. Current subsection 23 Pa.C.S. § 3501(a)(8) is for all relevant purposes the same as the old subsection 23 P.S. § 401(e)(8).
. In Appellee's brief to this Court, he attempts to rely on two cases decided under the Divorce Code as it existed prior to the 1988 Amendments. See Budnick v. Budnick,
Appellee insists that Budnick and Hurley remain good law and should be followed here, despite the subsequent amendments to the Divorce Code, which amendments included, most relevantly, the addition of subsection 3501(a)(8). Appellee’s Brief at 15-16. Appel-lee totally misapprehends the import of the addition of subsection 3501(a)(8). In 1991, the Superior Court explained the substantial import of the addition of subsection 3501(a)(8) as follows:
In Hurley, a panel of this court held that for purposes of determining whether the proceeds of a personal injury cause of action, which arose prior to separation were marital property, the court must look to the time the proceeds were received. The 1988 amendment has discarded the time of liquidation as the determinative factor. We must now look to the time the cause of action accrued.
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[Based on the 1988 amendments, an] asset is characterized as marital property or non-marital property based on the time the cause of action accrued.
Nuhfer v. Nuhfer,
Concurrence Opinion
concurring.
I agree with the majority that a cause of action “accrues,” for purposes of Section 3501(a)(8) of the Divorce Code, when the right to institute and maintain a lawsuit first arises. See Majority Opinion at 671.1 differ, however, with the majority to the extent it suggests that the meaning of that term is ascertained by employing the principle that words must be construed according to their common and approved usage. See id. at 670-71 (citing 1 Pa.C.S. § 1903(a)). Rather, as “accrued” is a term of art, I would employ the latter principle contained in Section 1903(a) of the Statutory Construction Act — that “technical words and phrases and such others as have acquired a peculiar and appropriate meaning ..., shall be construed according to such peculiar and appropriate meaning or definition.” 1 Pa.C.S. § 1903(a).
I also do not support the majority’s criticism of the Superior Court for adhering to the ruling in Pudlish v. Pudlish,
. While I recognize that the Court has not always limited the instances in which it invoked the common-and-approved-usage rule, I believe the better approach is to employ this principle sparingly, as it stands to reason that there are few words in the English language that have acquired a singular meaning. See generally Baker v. Ret. Bd. of Allegheny County,