Marshall v. Marshall

298 Neb. 1

902 N.W.2d 223

Amy MARSHALL, appellee,

v.Brian W. MARSHALL, appellant.

No. S-15-035.

Supreme Court of Nebraska.

Filed October 13, 2017

Donald A. Roberts and Justin A. Roberts, of Lustgarten & Roberts, P C., L.L.O., Omaha, for appellant.

Anthony W. Liakos, of Govier, Katskee, Suing & Maxell, P C., L.L.O., Omaha, for appellee.

Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, Kelch, and Funke, JJ.

Stacy, J.

Amy Marshall petitions for further review of the Nebraska Court of Appeals' opinion in Marshall v. Marshall .¹ She argues the Court of Appeals misapplied the principles of Parde v. Parde² when determining how proceeds from a personal injury settlement should be classified in this dissolution action. She also argues the appellate court erred in recalculating child support, reversing the property division, and reversing the award of alimony. On further review, we reverse the decision of the Court of Appeals and remand the cause with directions to affirm the decree entered by the trial court.

I. FACTS

A complete recitation of the facts is set forth in the opinion of the Court of Appeals.³ We summarize here only those facts which are relevant to the issues on further review.

Amy and Brian W. Marshall married in 1993. Amy filed a complaint for dissolution in February 2013, and trial was held in October 2014. By that time, one of the parties' two children had reached the age of majority, and the other was 18. Disputed issues at trial were child support, alimony, classification and division of assets and debts, and attorney fees.

1. TRIAL EVIDENCE

Most of the evidence at trial focused on two issues: how to classify and allocate a personal injury settlement received during the marriage and how to calculate Brian's total monthly income for purposes of child support and alimony. Given the factually intensive nature of these issues, we recite in some detail the evidence on which the district court relied.

(a) Personal Injury Settlement

In 2003, at age 34, Amy suffered a massive stroke. The stroke left her with permanent disabilities, including significant left-sided paralysis. Before the stroke, Amy had been taking the anti-inflammatory drug Vioxx on a regular basis. She did not have a prescription for Vioxx, but had been given free samples of the drug by a physician.

Amy and Brian ultimately reached a settlement with Merck & Co., Inc. (Merck), the manufacturer of Vioxx. As part of the agreement, Amy and Brian executed a release of all claims. The release did not allocate the settlement proceeds to any particular claim or category of damages. The release contained a confidentiality provision limiting disclosure of the amount of the settlement payments; we thus will not reference the gross settlement amount in this opinion. It is sufficient to note that after deducting attorney fees and costs, Amy and Brian received net settlement proceeds totaling $330,621.14.

It is undisputed that the parties spent nearly all the settlement proceeds during their marriage. It is also undisputed that they were able to trace where most of the settlement proceeds were spent. As relevant to the issues on appeal, the evidence showed they used $84,268.83 to pay off the mortgage on the marital home and $90,123.36 to remodel the kitchen of that home. Another $5,211.90 was used for additional remodeling of the home. Brian put $20,000 into a new bank account in his name and used $33,333 to purchase a one-third interest in a business, "Elite Fitness."

(i) Permanent Disability and Pain and Suffering

After the stroke, Amy was hospitalized for 1 week and then moved to a rehabilitation center for another 30 days. Once she was released to return home, Amy continued rehabilitation through physical therapy for approximately 4 years. Both Amy and her mother testified at trial about how the stroke affected her. The most complete explanation of Amy's condition and limitations after the stroke came from her rehabilitation physician:

Despite a complete course of rehabilitation, [Amy] remains with rather significant left-sided paralysis. She has no significant functional use of the left upper extremity. She previously worked as an owner/operator of a hair salon. This stroke eliminated the functional use of her left hand and ultimately she gave up her career and sold her salon. She has not been able to sustain reasonable work as a hairstylist since her stroke.

Functional tasks have become much more difficult.... [F]eeding is made more difficult as she is unable to cut her meat, prepare foods that require two hands and eating one-handed is simply clumsier and more difficult.

Likewise, dressing is performed entirely one-handed. She must select clothes from her wardrobe that do not have buttons or zippers. She also must perform toileting and bathing tasks one-handed and with adaptive equipment. These are performed more slowly and less thoroughly with her one-handed techniques. She is also unable to completely groom herself, particularly placing deodorant on her right side. She has difficulty grooming and bathing her right upper extremity with the paralyzed left arm.

[Amy] has the residuals of a neurogenic bladder post stroke. She has urinary urgency and must get to a bathroom more frequently than prior to her stroke. She is also more prone to the occasional bladder accident as a direct result of her stroke.

Exercise is performed more difficultly with her partially paralyzed left lower extremity. She is unable to ride a bicycle and is certainly unable to go jogging or ride an elliptical trainer. It is harder for her to achieve cardiovascular fitness under her hemiparetic circumstances.

Ambulation for [Amy] is clumsy and adaptive. She swings her left lower extremity forward in a circumferential pattern and has difficulty maintaining static stance on just her left lower extremity. She falls approximately once per month and has had [an] assortment of musculoskeletal bruises, sprains and strains as a result of her falls.

[Amy] requires lifelong treatment with an antiplatelet medication for her stroke. This slightly increases her overall risk of cerebral hemorrhage and certainly increases the amount of bruising she suffers with normal everyday activities.

[Amy] at the present time [December 23, 2009,] is considered at maximum medical improvement in regard to her left hemiparetic stroke residuals. She has adapted her life to the near complete paralysis of her left upper extremity and the partial paralysis of her left lower extremity. Nonetheless, she has suffered significant functional impairments in her activities of daily living as a direct result of her strokesequelae.

(ii) Past and Future Lost Earnings

Before the stroke, Amy co-owned a hair salon and earned approximately $43,580 per year. After the stroke, Amy was not able to work at all for several years, so she sold her interest in the hair salon. Later, she used proceeds from the sale of her salon to remodel a portion of the basement of the parties' home into a hair salon. She eventually returned to work as a hairstylist, working about 3 hours a day, 2 to 3 days a week. She has 10 loyal clients, mostly family and friends, who are willing to assist her with styling. In 2013, the gross income from Amy's home salon was $6,375 and her expenses were $7,000. Amy's past lost earnings from the time of her stroke until the parties' separation exceeded the amount of the Merck settlement proceeds. Her future lost earnings were estimated at over $1,133,000.

(b) Child Support

For purposes of calculating child support, the parties agreed on the amount of Amy's total monthly income, but disagreed regarding the amount of Brian's total monthly income. The evidence showed Brian had several sources of income, as well as in-kind benefits.

Brian works as the property manager for Marshall Enterprises, doing general property maintenance and upkeep.

He owns 49 percent of Marshall Enterprises, and his mother owns the remaining 51 percent. Marshall Enterprises manages properties purchased by Brian's parents and held in trust. Brian testified that he receives a salary of $2,500 per month, but his 2013 tax returns did not show any income from wages or salary. In addition, Marshall Enterprises provides Brian a truck, pays for maintenance and insurance on the truck, pays his cell phone bill of approximately $270 per month, allows Brian to live rent free in one of its rental properties that rents for $1,000 per month, and provides health insurance for Brian and his family.

Brian also operates a snow removal business. He testified he usually earns '‘ $10,000 or more" annually from his snow removal business. Brian's income tax returns for 2009 through 2013 reported net profits for this business of $11,184, $10,830, $15,958, $12,990, and $13,805, respectively. Also, Brian's bank account statements from January to August 2014 showed average monthly deposits of more than $7,400—well in excess of what he claimed to be earning from his property management and snow removal jobs—and he provided conflicting testimony regarding the source of those regular deposits. Brian denied having investment income, but his tax return reported capital gains from the sale of stock acquired during the marriage.

At trial, Amy argued the evidence showed Brian's total monthly income was $11,041.25. Brian argued the evidence showed his total monthly income was $3,600. Generally, the disparity reflected the parties' differing valuations of Brian's in-kind benefits and their differing positions about the source of the regular deposits into his bank account.

2. DISSOLUTION DECREE

The district court entered a 34-page decree, with 17 pages of factual findings. We address only those portions of the decree that are relevant to consideration of the issues on further review.

(a) Merck Settlement Proceeds

The district court's decree acknowledged the parties' primary disagreement over what portion, if any, of the Merck settlement proceeds were properly characterized as nonmarital. It then recited and...