Can a Personal Injury Claim Be Subject to Division in a Georgia Divorce?

Can a Personal Injury Claim Be Subject to Division in Divorce?

Yes, a personal injury claim, just as a personal injury jury verdict or settlement proceeds, may be subject to an equitable division in a divorce in Georgia.

In a divorce in Georgia, the law is clear that the portion of a personal injury jury verdict or settlement proceeds corresponding to compensation for a loss that is "peculiarly personal" to the spouse receiving the compensation is deemed to be that spouse's separate property. Examples of compensation for a loss that is "peculiarly personal" to the spouse receiving the compensation include pain and suffering, disfigurement, disability, and loss of consortium.

However, the portion of a personal injury jury verdict or settlement proceeds representing compensation for a loss that is not "peculiarly personal" to the spouse receiving the compensation is deemed to be marital property. Examples of compensation for a loss that is not "peculiarly personal" to the spouse receiving the compensation include lost wages, lost earning capacity, and medical expenses.

How Injury Claims Are Resolved and Valued

When an injured spouse asserts a personal injury claim, the injured spouse's goal is to receive compensation for the loss that the spouse suffered. One common way for the injured spouse to achieve that goal is to negotiate with the at-fault party's insurance carrier (if the at-fault party has applicable insurance coverage) and reach a settlement agreement, in which case the injured spouse would execute some sort of a release of liability. If negotiations fail, then the injured spouse might file a personal injury lawsuit and then seek a jury verdict. Regardless of whether the injured spouse receives the compensation via settlement or jury verdict, the amount of compensation would be certain.

However, if the divorce litigation is coming to a conclusion when the personal injury claim has not culminated in either a settlement agreement or jury verdict, then there could be a question regarding the value of such personal injury claim. Nonetheless, this should not prevent an argument for the division of the personal injury claim in the divorce litigation.

The reason is that trial courts have the authority to make a finding that the personal injury claim is worth a specific amount of money. We see examples where trial courts make a finding regarding the value of a spouse's pension or business. Valuation of a spouse's pension, for example, could be just as speculative as the valuation of a spouse's personal injury claim because an essential factor in the calculation of the value of a spouse's pension benefits is the life expectancy of that spouse based upon published life expectancy statistics. Furthermore, if a spouse had the pension prior to the date of the marriage, then the Coverture Fraction (also known as the Time Rule Formula) may be used to calculate the marital portion versus the non-marital portion. When using the Coverture Fraction, we would figure out the period of time prior to the date of marriage the spouse earned the pension and also the period of time subsequent to the date of the marriage the spouse earned the pension.

Valuing an Injury Claim Despite Uncertainty

To calculate the premarital portion of the present-day value of the pension, we would first divide the period of time prior to the date of marriage the spouse earned the pension by the total period of time the spouse earned the pension, and then we would multiply the resulting multiplier by the present-day value of the pension. To calculate the marital portion of the present-day value of the pension, we would first divide the period of time subsequent to the date of marriage the spouse earned the pension by the total period of time the spouse earned the pension, and then we would multiply the resulting multiplier by the present-day value of the pension. However, this method of calculation necessarily assumes that every year of the spouse's service towards the pension is exactly equal, which may actually not be the case. Nonetheless, the Coverture Fraction is a widely accepted method of calculation in a divorce case in Georgia.

Simply put, the speculative nature of a personal injury claim should not be an automatic bar to an argument for its division in a divorce in Georgia. Using discovery, a party could obtain evidence to support the valuation of a personal injury claim. For example, it is common practice for personal injury attorneys to exchange written offers of settlement with insurance carriers or defense attorneys. If the injured spouse sent a written offer of settlement to the insurance carrier or defense attorney asserting that the personal injury claim is worth a specific dollar amount, then such written offer of settlement may be an indication of the value of the personal injury claim. Also, hiring a personal injury attorney as an expert witness to opine on the value of the personal injury claim may be an option as well.

If you are going through divorce litigation, and personal injury claims may be the subject of a dispute, then it may be wise to consult with a Georgia Divorce Lawyer or Atlanta Divorce Lawyer about this issue.

Written by: Daesik Shin