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Court of Appeals: Personal Injury Settlement was Marital Property

In Chretien v. Chretian, the Virginia Court of Appeals recently considered the issue of personal injury settlements and their place in equitable distribution schemes.  The case was heard in Richmond on appeal from the Circuit Court of Orange. 

In Chretien, Ms. Chretian was injured while riding as a passenger on her husband's motorcycle. Mr. Chretian's motorcycle crossed the double-yellow line, ultimately causing an accident. Ms. Chretian reached a settlement with various insurance companies for her injuries in the amount of almost $150,000. Three years after the settlement, the Chretians separated and ultimately divorced. 

While the trial court ultimately ruled Mr. Chretian should not benefit from the settlement because of his negligence in causing the accident which injured his wife (a line of reasoning for which the Court of Appeals expressed approval), the Courts did make clear the rule for considering whether personal injury settlements are marital or separate:

Code § 20-107.3 provides:  “In the case of any personal injury or workers’ compensation recovery of either party, the marital share as defined in subsection H of this section shall be marital property.”  Code § 20-107.3(H) defines “marital share” as  that part of the total personal injury or workers’ compensation recovery attributable to lost wages or medical expenses to the extent not covered by health insurance accruing during the marriage and before the last separation of the parties, if at such time or thereafter at least one of the parties intended that the separation be permanent. 

In Chretian, the Court ultimately determined there was no evidence Ms. Chretian's settlement compensated her for anything other than lost wages or unreimbursed medical expenses.  Accordingly, the settlement was marital property.  Unfortunatly for Mr. Chretian, however, the Court of Appeals upheld the trial court's finding that equity would not be served by affording Mr. Chretian any of the settlement due to his negligent operation of the motorcycle in the accident.