The court held that the funds that had been intended to compensate Mr. Landwehr for his personal injuries were not distributable under N.J.S.A. 2A:34-23. The Appellate Division reversed that judgment. It held that the entire personal injury settlement was marital property subject to equitable distribution. Landwehr v. Landwehr, 200 N.J. Super. 56 (1985). Thereafter the trial court entered a second order holding that Mrs. Landwehr was entitled to forty percent of the settlement.
When the classification of a personal injury award received by the injured spouse prior to the divorce is at issue, most courts applying equitable distribution statutes have ruled that the entire award is marital property. E.g., Liles v. Liles, 289 Ark. 159, 168-170, 711 S.W.2d 447, 452 (1986); In re Fjeldheim, 676 P.2d 1234, 1236 (Colo.Ct.App. 1983); Gan v. Gan, 83 Ill. App.3d 265, 268-270, 38 Ill.Dec. 882, 885, 404 N.E.2d 306, 309 (1980); Nixon v. Nixon, 525 S.W.2d 835, 839 (Mo.Ct.App. 1975); Maricle v. Maricle, 221 Neb. 552, 553-554, 378 N.W.2d 855, 857 (1985); Landwehr v. Landwehr, 200 N.J. Super. 56, ___, 490 A.2d 342, 344 (1985); Platek v. Platek, 309 Pa. Super. 16, 20-24, 454 A.2d 1059, 1061-1062 (1982); Bero v. Bero, 134 Vt. 533, 534-535, 367 A.2d 165, 167 (1976). An inchoate tort claim is not assignable.
A number of early decisions involving equitable distribution concluded that a personal injury award was marital property which should be divided between the parties. See, e.g., Liles v. Liles, 289 Ark. 159, 711 S.W.2d 447 (1986); In re Marriage of Dettore, 86 Ill. App.3d 540, 42 Ill.Dec. 51, 408 N.E.2d 429 (1980); Gan v. Gan, 83 Ill. App.3d 265, 38 Ill.Dec. 882, 404 N.E.2d 306 (1980); Gonzalez v. Gonzalez, 689 S.W.2d 383 (Mo.App. 1985); Landwehr v. Landwehr, 200 N.J. Super. 56, 490 A.2d 342 (1985); Bero v. Bero, 134 Vt. 533, 367 A.2d 165 (1976). Such decisions were generally based upon a purely mechanical reading of statutory definitions of marital and separate property.
See, e.g., Bunt v. Bunt, 294 Ark. 507 (1988); In re Marriage of Dettore, 86 Ill. App.3d 540 (1980); In re Marriage of McNerney, 417 N.W.2d 205 (Iowa 1987). Weakley v. Weakley, 731 S.W.2d 243 (Ky. 1987); Moulton v. Moulton, 485 A.2d 976 (Me. 1984); Heilman v. Heilman, 95 Mich. App. 728 (1980); Van de Loo v. Van de Loo, 346 N.W.2d 173 (Minn.Ct.App. 1984); Landwehr v. Landwehr, 200 N.J. Super. 56 (1985); Brown v. Brown, 100 Wn.2d 729 (1984). Richardson v. Richardson, 139 Wis.2d 778 (1987).
The trend evidenced by the relatively few reported cases from equitable distribution jurisdictions is to follow this mechanistic approach to conclude that a personal injury award acquired during marriage is entirely marital property. See, e.g., Liles v. Liles, 289 Ark. 159, 711 S.W.2d 447 (1986); In re Marriage of Dettore, 86 Ill. App.3d 540, 42 Ill. Dec. 51, 408 N.E.2d 429 (1980) (workers' compensation award); In re Marriage of Gan, 83 Ill. App.3d 265, 38 Ill. Dec. 882, 404 N.E.2d 306 (1980); Gonzalez v. Gonzalez, 689 S.W.2d 383 (Mo.App. 1985) (F.E.L.A. settlement); Landwehr v. Landwehr, 200 N.J. Super. 56, 490 A.2d 342 (1985); Bero v. Bero, 134 Vt. 533, 367 A.2d 165 (1976). But see Ettinger v. Ettinger, 107 Misc.2d 675, 435 N.Y.S.2d 916 (N.Y. Sup.Ct. 1981); N.Y. Dom. Rel. Law 236 (B)(1)(d)(2) (McKinney Supp. 1986) ("the term separate property shall mean . . . compensation for personal injuries").
New Jersey courts have held that potential damages in a personal injury case for pain and suffering, loss of earnings, and medical expenses constitute a chose in action and, as such, are marital property acquired by the injured spouse during the marriage under that state's statute, subject to equitable distribution if and when the proceeds materialized. Landwehr v. Landwehr, 200 N.J. Super. 56, 490 A.2d 342 (1985); Harmon v. Harmon, 161 N.J. Super. 206, 391 A.2d 552 (1978); DiTolvo v. DiTolvo, 131 N.J. Super. 72, 328 A.2d 625 (1974). According to Little v. Little, 74 N.C. App. 12, 327 S.E.2d 283, 287-88 (1985), this is the majority rule, i.e., that claims and awards for personal injuries resulting from occurrences during the marriage are marital property, unless the statute provides that such claims are the separate property of the injured spouse.
The first method recognizes a personal injury settlement as marital property in its entirety. Heilman v. Heilman (1982), 95 Mich. App. 728, 291 N.W.2d 183; Trapani v. Trapani (Mo.App. 1984), 684 S.W.2d 500; Landwehr v. Landwehr (1985), 200 N.J. Super. 56, 490 A.2d 342. The second method recognizes such a settlement award as non-marital property not subject to division.
This case has not been followed, however, in factual situations similar to the present case. In 200 N.J.Super. 56, 490 A.2d 342 (1985), the court limited Amato to its facts and held that money recovered for claims settled prior to divorce was to be included within the distributable marital estate upon divorce. It appears that New Jersey adheres to the majority rule with respect to claims settled before divorce.
982); Queen v. Queen, 308 Md. 574, 521 A.2d 320 (1987); Smith v. Smith, 113 Mich. App. 148, 317 N.W.2d 324 (1982); Hafner v. Hafner, 406 N.W.2d 590 (Minn. Ct. App. 1987); In re Marriage of Blankenship, 682 P.2d 1354 (Mont. 1984); Hughes v. Hughes, 132 N.J. Super. 559, 334 A.2d 379 (1975); Orszula v. Orszula, 356 S.E.2d 114 (S.C. 1987); Patt v. Patt, 689 S.W.2d 505 (Tex. Ct. App. 1985); B. Goldberg, Valuation of Divorce Assets § 12.10 (1984 Supp. 1987); L. Golden, Equitable Distribution of Property §§ 6.24-27 (1983); see Elser Anton, Distribution of Personal Injury Awards upon Divorce, 56 Fla.B.J. 552 (1982); see also Campbell v. Campbell, 255 Ga. 461, 339 S.E.2d 591 (1986) (personal injury award); In re Marriage of Burt, 144 Ill. App.3d 177, 98 Ill. Dec. 746, 494 N.E.2d 868 (1986) (same); Van De Loo v. Van De Loo, 346 N.W.2d 173 (Minn. Ct. App. 1984) (same); Trapani v. Trapani, 684 S.W.2d 500 (Mo. Ct. App. 1984) (same); Johnson v. Johnson, 317 N.C. 437, 346 S.E.2d 430 (1986) (same); Landwehr v. Landwehr, 200 N.J. Super. 56, 490 A.2d 342 (1985) (same); Platek v. Platek, 309 Pa. Super. 16, 454 A.2d 1059 (1982) (same); Bero v. Bero, 134 Vt. 533, 367 A.2d 165 (1976) (same); Brown v. Brown, 100 Wn.2d 729, 675 P.2d 1207 (1984) (same); cf. Diffenderfer v. Diffenderfer, 491 So.2d 265 (Fla. 1986) (vested and matured pensions and retirement benefits, which essentially represent the fruits of deferred income during marriage, are marital property). See generally Blumberg, Marital Property Treatment of Pensions, Disability Pay, Workers' Compensation, and Other Wage Substitutes: An Insurance, or Replacement, Analysis, 33 U.C.L.A.L.Rev. 1250 (1986).
Our Appellate Division has recently held that in appropriate circumstances recoveries from personal injury suits are subject to equitable distribution. Landwehr v. Landwehr, 200 N.J. Super. 56 (App.Div. 1985). Adjudication of a final judgment of divorce at this time would not unjustly deprive the wife of marital assets, but to the contrary would eliminate the potential of injustice to the children insofar as the wife may receive a large portion, if not all, of the assets of the decedent based on intestacy.