MARSH v. MARSH
8/9/1993
The issue presented in this domestic action is whether proceeds of a personal injury settlement acquired during the marriage are entirely marital property subject to the family court's jurisdiction. We hold under our equitable distribution statute that these proceeds constitute marital property and, therefore, affirm the family court's order equitably dividing these proceeds.
FACTS
In 1984, Mr. Marsh (hereinafter "Husband") was injured in a work-related automobile accident. In 1989, Husband received
This domestic action was commenced in the family court in April 1990. Both parties sought a divorce based on the ground of a one-year separation and the equitable distribution of the marital assets. The family court found both parties' settlement recoveries to be marital property and awarded Wife twenty percent of Husband's settlement and Husband twenty percent of Wife's settlement. Husband appealed. The Court of Appeals affirmed the award. Marsh v. Marsh, ___ S.C. ___, 417 S.E.2d 638 (Ct.App. 1992). Husband petitioned for certiorari to this Court, maintaining the Court of Appeals erred in its determination that the personal injury settlement proceeds were marital property. According to Husband, the proceeds are not marital property because the settlement included compensation for pain and suffering as well as compensation for loss of future post-divorce income. We granted the petition for certiorari and now affirm the Court of Appeals.
LAW/ANALYSIS
There are three approaches to classifying personal injury awards or settlements for the purpose of distribution in a divorce proceeding. The first approach is to classify any personal injury award or settlement as personal, and therefore entirely the separate property of the injured spouse. Unkle v. Unkle, 305 Md. 587, 505 A.2d 849 (1986) (inchoate personal injury claim); Gloria B.S. v. Richard G.S., 458 A.2d 707 (Del. Fam. Ct. 1982); Izatt v. Izatt, 627 P.2d 49 (Utah 1981).
The second approach, often referred to as 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. Johnson v. Johnson, 317 N.C. 437, 346 S.E.2d 430 (1986). Applying the analytic approach, compensation for pain and suffering is personal. Id. Compensation for loss of wages and medical expenses incurred during the marriage is marital but compensation for
The third approach has been referred to as the literal or
mechanistic approach. Under this approach, if the award or
settlement is acquired during the marriage, it is deemed
marital property regardless of the underlying purpose of the
award or the loss it is meant to replace. See Dalessio v.
Dalessio, 409 Mass. 821, 570 N.E.2d 139 (1991); Boyce v.
Boyce, 541 A.2d 614 (D.C. App. 1988); Matter of Marriage of
Powell, 13 Kan. App. 2d 174, 766 P.2d 827 (1988); In re
Marriage of McNerney, 417 N.W.2d 205 (Iowa 1987); In re
Fjeldheim, 676 P.2d 1234 (Colo. Ct. App. 1983); Gan v. Gan,
83 Ill. App.3d 265, 404 N.E.2d 306 (1980); Raccio v. Raccio,
41 Conn. Sup. 115, 556 A.2d 639 (1987); Maricle v. Maricle,
221 Neb. 552, 378 N.W.2d 855 (1985); Heilman v. Heilman,
95 Mich. App. 728, 291 N.W.2d 183 (1980); Platek v. Platek,
309 Pa. Super. 15, 454 A.2d 1059 (1982); Bero v. Bero, 134 Vt. 533,
367 A.2d 165 (1976).
In Orszula v. Orszula, 292 S.C. 264, 356 S.E.2d 114 (1987), this Court held a workers' compensation award acquired during the marriage was marital property. Our holding in Orszula was based on our equitable distribution statute which provides all property acquired during the marriage is marital unless it falls within one of the specifically del
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