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PERSONAL INJURY SETTLEMENT PROCEEDS
© 1999 National Legal Research Group, Inc.
MISSISSIPPI: Tramel v. Tramel, 740 So. 2d 286 (Miss.
1999).
Personal injury settlement proceeds are only partially marital assets subject to equitable distribution.
In this case, the couple had been married for 17 years before the granting of a divorce in 1996. In 1984, the husband had been injured in a work-related accident; his arm had been completely severed and then reattached. In January 1988, a settlement agreement was reached.
A check for $250,000 was received as part of the settlement agreement. The check was made out to the husband and the wife individually and as husband and wife. Reimbursements were made for costs advanced, workers' compensation benefits, and attorney's fees. In addition to the $250,000 lump sum, the husband or his estate would receive monthly payments of $1,940.71 for 30 years, or for the rest of his life if he should live longer than 30 years.
The husband or his estate was also guaranteed to receive eight specific lump-sum payments in increasing amounts every four years until the year 2019.
The chancellor found that the entire proceeds from the settlement were subject to equitable distribution and awarded the wife 40% of all monthly and future lump-sum payments. The husband argued that the chancery court erred in finding that the entire proceeds of the personal injury settlement were marital assets subject to equitable distribution.
The supreme court here decided that the "analytic approach" adopted by the Supreme Courts of Georgia and North Carolina was preferable to a hard and fast rule. The analytic approach involves an evaluation of the purpose of the compensation in the determination of the character of the award or settlement as marital or personal. Under the analytic approach, compensation for pain and suffering is personal, while compensation for loss of wages and medical expenses is marital. Thus, the chancellor in a case such as this must divide the settlement proceeds into three portions: (1) that portion of the settlement proceeds allocable to compensation for pain, suffering, and disfigurement should be awarded totally to the injured spouse; (2) that portion of the settlement proceeds allocable to lost wages, lost earning capacity, and medical and hospital expenses are marital assets and are to be divided according to equitable distribution principles; and (3) that portion of the settlement proceeds allocable to loss of consortium should be awarded to the spouse who suffered that loss.
Here, the supreme court reversed and remanded for the proceedings necessary to make the allocations as enumerated.
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