Opinion
1180487
01-10-2020
EX PARTE Scott Ross WEISBERG (In re: Scott Ross Weisberg v. Sari Tamers Weisberg)
Randall W. Nichols and Richard A. Bearden of Massey, Stotser & Nichols PC, Birmingham, for petitioner. Jacquelyn H. Wesson of Wesson & Wesson, LLC, Warrior, for respondent.
Randall W. Nichols and Richard A. Bearden of Massey, Stotser & Nichols PC, Birmingham, for petitioner.
Jacquelyn H. Wesson of Wesson & Wesson, LLC, Warrior, for respondent.
PER CURIAM.
WRIT QUASHED. NO OPINION.
Parker, C.J., and Bolin, Shaw, Wise, Bryan, Mendheim, Stewart, and Mitchell, JJ., concur.
Sellers, J., dissents.
SELLERS, Justice (dissenting).
Scott Ross Weisberg ("the former husband") petitioned this Court for a writ of certiorari after the Court of Civil Appeals affirmed, without an opinion, a judgment entered by the Jefferson Circuit Court divorcing the former husband from Sari Tamers Weisberg ("the former wife"). Weisberg v. Weisberg (No. 2160689, Jan. 11, 2019), 292 So. 3d 331 (Ala. Civ. App. 2019) (table). We granted the former husband's petition to consider the trial court's award to the former wife of one-half of disability-insurance benefits the former husband may collect in the future. The Court now quashes the writ. I respectfully dissent from the Court's decision to quash the writ.
During the marriage, the former husband, a medical doctor, acquired disability-insurance policies, the premiums for which were paid with marital funds. In 2013, the former husband was participating in the Boston Marathon when two bombs were detonated near the finish line. As a result of the bombing, the former husband suffers from multiple medical conditions that have affected his ability to practice medicine.
In December 2014, the former husband filed a complaint seeking a divorce from the former wife. The former husband testified during the divorce proceedings that he had submitted claims for disability benefits under his disability policies but that his insurers had not paid the claims. He also testified that he had sued the insurers in an effort to obtain disability benefits and that his action against the insurers was pending at the time of the divorce trial.
The trial court entered a judgment divorcing the parties, ordering joint legal custody of the parties' minor children, ordering the former husband to pay child support, and dividing the parties' property. The judgment did not award alimony, but expressly reserved that issue for future consideration. After the parties filed postjudgment motions, the trial court entered an amended judgment containing the following provision regarding the former husband's disability claims:
"[The former husband] has pending claims which are presently being litigated by the [former husband]. The insurance policies were acquired and paid for during the course of the marriage and are an asset of the marriage. The [former husband] has policies with the following companies: Metropolitan Life Insurance Company (‘MetLife’), Guardian Life Insurance Company of America and Berkshire Life Insurance Company of America. [The former wife] is hereby awarded one-half (1/2) and/or Fifty Percent (50%) of any and all proceeds (past, present or future) received by [the former husband] or that the [former husband] may be entitled [to] regarding any claims, lawsuits, settlement or damages that were filed or occurred during the marriage of the parties. Any and all litigation costs, attorney fees or similar expenses associated with any of [the former husband's] claims shall be deducted as follows: Sixty Percent (60%) from [the former husband's] share of any proceeds and Forty Percent (40%) from [the former wife's]."
The former husband urges this Court to adopt the "analytic approach" in considering whether disability-insurance benefits are divisible marital property. He argues that, under the analytic approach, the trial court should not have awarded the former wife one-half of the benefits he may recover from his disability-insurance policies. In my view, the former husband sufficiently raised the issue of the divisibility of the disability-insurance benefits in the trial court and in the Court of Civil Appeals so as to preserve the issue for this Court's review.
In Smith v. Smith, 959 So. 2d 1146 (Ala. Civ. App. 2006), the Court of Civil Appeals discussed various approaches used to determine whether a portion of proceeds from a spouse's personal-injury claim can be awarded to the other spouse in a divorce judgment. The husband in Smith had agreed during the marriage to accept a payment in settlement of a personal-injury claim arising out of injuries he sustained in an automobile accident that had occurred during the marriage. According to the Court of Civil Appeals:
"Courts of other states have utilized three different approaches in determining whether to treat a payment in settlement of a spouse's personal-injury claim as marital property or as the separate property of the injured spouse. See Golden v. Golden, 681 So. 2d [605,] 609 [ (Ala. Civ. App. 1996) ] (Crawley, J., dissenting). One approach, sometimes referred to as the mechanistic approach,
deems the settlement payment to be marital property if it is acquired during the marriage. See Bladow v. Bladow, 665 N.W.2d 724 (N.D. 2003) ; and In re Marriage of Simon, 856 P.2d 47 (Colo. Ct. App. 1993). Another approach, sometimes referred to as the unitary approach, deems the settlement payment to be the injured spouse's separate property regardless of when the settlement payment is acquired. See, e.g., Fleitz v. Fleitz, 200 A.D.2d 874, 606 N.Y.S.2d 825 (1994). The third approach is sometimes referred to as the analytic approach. See Bollaci v. Nieporte–Bollaci, 863 So. 2d 440 (Fla. Dist. Ct. App. 2003) ; Tynes v. Tynes, 860 So. 2d 325 (Miss. Ct. App. 2003) ; and Sullivan v. Sullivan, 159 S.W.3d 529 (Mo. Ct. App. 2005). Under the analytic approach, ‘to the extent that its purpose is to compensate an individual for pain, suffering, disability, disfigurement, or other debilitation of the mind or body, a personal injury award constitutes the separate nonmarital property of an injured spouse.’ Hardy v. Hardy, 186 W.Va. 496, 501, 413 S.E.2d 151, 156 (1991) ; and Staton v. Staton, 218 W.Va. 201, 206, 624 S.E.2d 548, 553 (2005). Likewise, the portion of a personal-injury settlement intended to compensate the injured spouse for loss of future wages is deemed to be that spouse's separate property under the analytic approach. Bandow v. Bandow, 794 P.2d 1346, 1348–49 (Alaska 1990). However, ‘economic losses, such as past wages and medical expenses, which diminish the marital estate are distributable as marital property when recovered in a personal injury award or settlement’ under the analytic approach. Hardy, 186 W.Va. at 501, 413 S.E.2d at 156."
959 So. 2d at 1149. The Court of Civil Appeals in Smith adopted the analytic approach with respect to settlements of personal-injury claims. As the former husband points out, courts in other jurisdictions have analyzed disability-insurance benefits the same way they analyze personal-injury damages. See Hardin v. Hardin, 301 Ga. 532, 534, 801 S.E.2d 774, 776 (2017) (stating that " ‘[p]roceeds from private disability ... insurance policies are generally treated like personal injury and workers' compensation awards’ " (quoting 2 Brett R. Turner, Equitable Distribution of Property § 6:90 (3d ed. November 2016))); Lachney v. Lachney, 529 So. 2d 59, 66 (La. Ct. App. 1988) ("[J]urisprudence allocating tort damage awards and worker's compensation benefits after dissolution [of a marriage] ... are analogous in nature to ... disability benefits ....").
Of the different approaches, the analytic approach, which focuses on the loss or damage the benefits are intended to remedy, has been used by a majority of jurisdictions in determining whether disability-insurance benefits are divisible in divorce. Hardin, 301 Ga. at 534–35, 801 S.E.2d at 776–77 ("[T]he majority of courts have ‘focuse[d] on the nature and purpose of the specific disability benefits at issue’ and applied [the] analytical approach ‘both to disability benefits paid in connection with insurance coverage maintained by the disabled spouse's employer and to disability benefits paid in connection with a private policy of disability insurance acquired with marital funds during the marriage.’ " (quoting Gragg v. Gragg, 12 S.W.3d 412, 417 (Tenn. 2000) (citations omitted))); Finkel v. Finkel, 162 N.C. App. 344, 347, 590 S.E.2d 472, 474 (2004) ("Courts in a majority of other states have elected to follow the analytic approach in classifying disability benefits ...."). See also Hudson v. Hudson, 865 S.W.2d 405, 407 (Mo. Ct. App. 1993) ("The focus under the analytical approach is on the loss or damage[ ] that a particular award or benefit is intended to remedy."). Disability-insurance proceeds are usually meant to compensate for lost future earnings:
"Private disability insurance policies ... are ‘designed to provide a substitute for earnings when the insured is deprived of his capacity to earn by bodily injury or disease.’ Hill v. New York Life Ins. Co., 38 Cal. App. 2d 627, 101 P.2d 752, 755 (1940). Thus true disability benefits payable to a disabled spouse after the dissolution of the marriage represent a substitute or replacement for the loss of future earnings."
Gibbons v. Gibbons, 10 So. 3d 127, 132 (Fla. Dist. Ct. App. 2009). See also Hatcher v. Hatcher, 188 Ariz. 154, 158, 933 P.2d 1222, 1226 (Ct. App. 1996) ("The primary intent of a disability policy is to insure against the risk of loss of the insured's future earning capacity."). Courts have, however, acknowledged that disability-insurance benefits can serve other purposes. See, e.g., Gragg, 12 S.W.3d at 416 (acknowledging that disability-insurance benefits may compensate for lost income, but suggesting that they can also be a substitute for retirement benefits or compensation for personal pain and suffering caused by a disability).
According to the Georgia Supreme Court in Hardin, a spouse may be awarded a portion of the other spouse's disability-insurance benefits if those benefits represent compensation for lost income that would have been earned during the marriage, but not if they are a substitute for income that would have been earned after the dissolution of the marriage:
"The classification of compensation for lost wages, whether that compensation is in the form of a personal injury award or disability insurance proceeds, ‘depends upon when the wages would have been received. If the wages would have been received after the marriage, the compensation is separate property.... Conversely, compensation for lost wages is marital property to the extent that the wages would have been received during the marriage.’ "
301 Ga. at 540, 801 S.E.2d at 780 (quoting 2 Turner, Equitable Distribution of Property § 6:55). See also Gibbons, 10 So. 3d at 130 ("[W]here the money that a disabled spouse receives from disability benefits from a private disability policy constitutes payment for future lost wages based on the disabled spouse's inability to work, the disability policy is a nonmarital asset not subject to equitable distribution."); Finkel, 162 N.C. App. at 347, 590 S.E.2d at 474 ("Courts in a majority of other states have elected to follow the analytic approach in classifying disability benefits received after separation as separate property."); Hudson, 865 S.W.2d at 407 ("[D]isability benefits, to the extent they are compensation for post-dissolution lost earning capacity, are non-marital."). Cf. Smith, 959 So. 2d at 1146 (under the analytic approach, a spouse's personal-injury settlement is separate property to the extent the settlement is intended to compensate the spouse for post-divorce lost wages but is distributable marital property to the extent it represents compensation for economic losses that diminished the marital estate). In addition, disability-insurance benefits are not divisible if they represent compensation for personal pain and suffering associated with the disability. Hardin, 301 Ga. at 539, 801 S.E.2d at 779 (citing 2 Turner, Equitable Distribution of Property § 6:52). Cf. Smith, 959 So. 2d at 1149 (" ‘Damages for pain and suffering, mental anguish, and the like compensate for a loss which is so personal to the claimant spouse that classifying them as marital property would be inequitable.’ " (quoting Bandow v. Bandow, 794 P.2d 1346, 1349 (Alaska 1990) )). Finally, to the extent disability benefits are really a substitute for retirement benefits, they are divisible to the same extent as retirement benefits. See Gibbons, 10 So. 3d at 131. See also § 30-2-51, Ala. Code 1975 (governing the division of retirement benefits in divorce).
I would adopt the analytic approach applied by the Supreme Court of Georgia and other jurisdictions and hold that the former wife may seek a share of the former husband's disability-insurance benefits to the extent those benefits represent compensation for lost income that would have been earned during the marriage or for other economic losses that diminished the marital estate. I would also hold that the former wife may seek a share of the disability benefits to the extent they are meant to provide a substitute for retirement benefits.