STATE OF NEW YORK
SUPREME COURT : COUNTY OF CHAUTAUQUA
-vs- Index #H-07936
MICHAEL J. SULLIVAN, ESQ.
BRANDT, LAUGHLIN, SCHAACK,
WHIPPLE AND CLARK, P.C.
(Richard F. Whipple, Jr.,
Esq. of Counsel) for
DECISION AND ORDER
Plaintiff seeks as marital property a share of a $199,000
lump sum personal injury settlement defendant, a former
railroad employee, received under the Federal Employer's
Liability Act ("FELA"). After deduction was made for liens
for expenditures and advances, defendant received
Defendant contended the proceeds were his separate property
because they came from a negligence settlement under FELA.
FELA provides injured employees compensation based on
negligence principles. There is no workers compensation for
Because the net proceeds of settlement had been deposited in the joint account, the referee at an earlier hearing held,
and this Court confirmed, that the settlement proceeds became
a marital asset because defendant failed to overcome the
presumption under Section 675 of the Banking Law.
Defendant withdrew the funds in the joint account to
purchase two parcels of real property which he placed in his
Defendant argues that the Court should credit 100% of the
real property purchased by defendant from the proceeds from
the personal injury settlement because this is a "pure
personal injury case".
Personal injury recovery for pain and suffering has been held to be separate property. REED V. REED, 126 Misc 2d 530, 483 NYS2d 150. However, compensation for past wages can be
marital property; so, too, an award for future lost wages.
Although there are no New York cases, other courts have held that FELA settlements are marital property and should be
divided equally, or in part, in divorce proceedings. See
CLAYTON V CLAYTON, 297 ARK. 342 (reversed Chancery Court
finding that FELA claim was not marital property; GONZALEZ V.
GONZALES, 689 S.W.2d 383 (FELA settlement is marital
property); , PEREZ V PEREZ, 11 Wash. App. 429 (settlement
from personal injury settlement is community property to be
By the Court's earlier decision, any part of the settlement determined to be for future wages was to be equitably divided between the parties, and the balance credited to defendant for his contribution of separate property.
The sole question to be determined as a result of this
hearing is the portion of the FELA settlement that reflected
The key witness at the hearing was John J. Wasley, Assistant Claim Agent of Conrail, who testified: there is no Worker's Compensation for railroad employees; to insure that the settlement was tax free, no amount was allocated to earnings although for settlement purposes, consideration was given to future earnings to age 65, and to age 62. He said damages were "balled together in one figure." (Damages recoverable under FELA consist of pain and suffering, past and future medical expenses, past and future lost earnings.
At the hearing, there was no proof of the amount allocated for future wages or future medical care; no proof as to how much of the award was for pain and suffering; no expert
opinion by Mr. Wasley or other expert on these points.
The defendant has the burden of proving the amount to be
credited to him. As there was no proof as to the breakdown of
the settlement, the Court could properly conclude that the
full net amount represented future lost wages.
Although the Court could require the parties to present
expert testimony, in the interest of justice, they should not
be put to further expense when there is an equitable approach
to ascertain value.
Defendant's attorney claims that the present value of the
settlement as of October, 1988 when it was received, based
upon a ten percent discount rate and Mr. Hartung's age of 37
years, is $39,359.12.
Defendant testified he expended approximately $80,000 of the settlement for the purchase of the property and spent the
balance of the joint account on family expenses. In addition,
he assumed a $25,400 marital debt.
This Court holds it would be inappropriate to split the net settlement equally in this case.
Prior to the injury, Mr. Hartung was earning approximately $30,000 a year. He now earns about $15,000 a year.
As determined in the earlier decision of this Court, the
husband would have been required to pay maintenance if he had
not suffered a work related injury.
In this marriage, the wife gave birth to four sons and worked as a homemaker. Maintenance in the amount of $90.00 a week for 6 years ($4680 annually) for this marriage of nearly 20 years would have been a reasonable allowance. That would
translate to $27,840.
The Court could also have factored in the physical condition and special needs of the youngest child who has
On the other hand, the Court notes plaintiff's income has
improved; she is presently an assistant nurse in the Silver
Creek School District and receives $460 per month social
security for the disabled child.
Defendant has two of the boys with him. He is a grape farmer and licensed real estate agent whose income has been almost nil.
A reasonably equitable distribution can be accomplished in the following manner. The wife is to be awarded the school
house property which the parties agreed is only worth about
$6000, and is currently uninhabitable as it has no
In addition, the husband is to install or pay the cost of
installing a septic system approved by the Chautauqua County
Health Department on the school house property, pay all back
taxes and fire insurance premiums due on the school house
property, and pay to the wife the sum of $5,000, $1,000
within 90 days of the entry of the order on this decision,
and the balance in annual payments of $1,000 each.
The basis for this decision is three fold. First, there was a presumption of a joint interest in the proceeds deposited in the bank which defendant could not overcome. Secondly, the settlement definitely took into account lost wages. Third, the property purchased during the marriage in the name of the husband alone was the marital residence occupied by both under a lease to both, a purchase the wife had been led by the husband to believe would be in the name of both parties from the joint funds.
This is the decision and order of this Court. No further order is necessary.
Dated: March 6, 1995
Mayville, New York
Supreme Court Justice