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Beckley v. Beckley2/10/2005
On Petition To Transfer from the Indiana Court of Appeals, No. 05A02-0211-CV-929
The question presented is whether an award of benefits under the Federal Employers' Liability Act (FELA) is a part of the marital estate subject to distribution. We conclude: only that portion of the award intended as compensation for losses incurred during the marriage is included in the marital estate.
Facts and Procedural History
Jack D. Beckley (Husband) was injured in a work-related accident while employed by the Norfolk Southern Railroad Company. Husband settled his claim pursuant to FELA. The Act covers employees of common carrier railroads. The total settlement equaled $250,000. After expenses and attorney fees, Husband received a lump sum settlement in the amount of $175,000. About four months after the settlement, Carolyn S. Beckley (Wife) filed a petition for dissolution of marriage. Although the parties stipulated to the division of some of their assets, they could not agree on the treatment of the FELA settlement. In its distribution of assets, the trial court included the entire settlement in the marital estate, awarded three-fourths of the settlement to Husband, and awarded the remaining one-fourth to Wife. In the end Husband received sixty-nine percent of the marital property and Wife received thirty-one percent. As grounds for the unequal distribution the trial court noted among other things Husband's ability to earn income was less than that of Wife, and "a portion of the personal injury settlement was for future lost wages." Appellant's App. at 63 (Final Order on Division of Property). Both Husband and Wife appealed. Wife complained the trial court erred in dividing the marital estate unequally, and Husband complained the trial court erred in including the FELA settlement in the marital estate. Noting this was a case of first impression, the Court of Appeals reversed the judgment of the trial court reasoning that an award under FELA is similar to workers' compensation benefits, which are excluded from the marital pot. See Beckley v. Beckley, 790 N.E.2d 1033, 1036-37 (Ind. Ct. App. 2003). Having previously granted Wife's petition to transfer we now affirm the judgment of the trial court.
Discussion
In an action for dissolution of marriage the trial court is required to divide the marital property in a "just and reasonable manner." Indiana Code § 31-15-7-4(b). Our statutes define "property" as:
ll the assets of either party or both parties, including:
(1) a present right to withdraw pension or retirement benefits;
(2) the right to receive pension or retirement benefits that are not forfeited upon termination of employment or that are vested (as defined in Section 411 of the Internal Revenue Code) but that are payable after the dissolution of marriage; and
(1) the right to receive disposable retired or retainer pay (as defined in 10 U.S.C. 1408(a)) acquired during the marriage that is or may be payable after the dissolution of marriage.
I.C. § 31-9-2-98(b). It has long been the law in this State that future earnings are not considered part of the marital estate for purposes of property division. Neffle v. Neffle, 483 N.E.2d 767, 769 (Ind. Ct. App. 1985), trans. denied; In re Marriage of McManama, 399 N.E.2d 371, 373 (Ind. 1980); Wilcox v. Wilcox, 173 Ind. App. 661, 365 N.E.2d 792, 795 (1977). In Leisure v. Leisure, this Court held that workers' compensation benefits represent future earnings and thus are not vested property interests subject to division in a marital estate. 605 N.E.2d 755, 759 (Ind. 1993). " t is now generally accepted that worker's compensation is awarded in lieu of
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