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Personal Injury Awards and Divorce in Arizona

Posted on : April 17, 2016, By:  Christopher Hildebrand
Personal Injury Awards and Divorce in Arizona.

Personal Injury Awards and Divorce in Arizona

Jurek Personal Injury Award

Under Arizona community property law, all property either spouse “acquires” during the marriage belongs to both spouses as community property. For many years, if one spouse was injured during a marriage and received a personal injury payment, that was considered community property because it was “acquired” during the marriage.

In Jurek v. Jurek, 606 P.2d 812, 124 Ariz. 596 (Ariz. 1980) the Arizona Supreme Court took another look at the issue of whether a spouse’s personal injury award is community property or separate property.

Facts of the Case

James and Sharon Jurek separated in 1976, and James filed for divorce in January 1977. Two days later, James lost his right hand and part of his right forearm in an accident. He filed a personal injury claim. The trial court ruled that the personal injury claim was a community asset and that half of any recovery would belong to Sharon. James appealed this ruling.

Jennifer, thank you for being my attorney. I could not have been more pleased with the outcome of my family court hearing. Everything you have done for me throughout this case reflects in the final ruling of the judge. You helped me keep my head together and taught me a lot about myself as a person. I learned so much about my life from observing and listening to you. I will take all the advice you gave me to continue taking responsibility for my choices, continue to put the kids' needs first, and always stay truthful. Your diligence, dedication, and persistence in my case made what seemed impossible, possible. You are a wonderful person and an amazing attorney and I am stronger and more confident because of you.
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20:31 20 Sep 17
I just want to again thank the Firm for working with me all that it has. I could not have done anything without everyone's assistance. You, Chris and Stacey have been and continue to provide me with compassion and hard work towards my case. Also a very special thanks to Kip for taking my case in the beginning. Also continued support from him and his dedication to providing me with his expertise in this matter.
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21:41 07 Nov 17
After interviewing several law firms, I came across Jennifer Shick, and her firm, who I hired to represent me for my Family Court case. Jennifer has extensive knowledge of the law and is determined to bring the truth to every issue involved within the case. Throughout my case, Jennifer was prepared meticulously as well as went above and beyond all of my expectations. Even when the other party tried to differ from the truth, lie to the Judge, and turn situations around, Jennifer remained attentive and provided substantial evidence to show the judge the facts as well as the proof to support what was the best interests of my children. Additionally, Jennifer helped me endure many difficult experiences, situations and inspired me to remain positive throughout the entirety of my case. Her kindness, compassion, and professionalism helped me through very difficult times and made the process feel a thousand times lighter on my shoulders. She truly has my children and my best interest at heart and I trust her perspective as well as her honesty on each and every aspect of my case. She lessened the burden on my shoulders and even when I felt like the case was not going to go in my favor, Jennifer was open-minded and reassured me that the Judge would, in fact, see the truth, which he did and the case went in my favor. After nine months of court, everything finally came together. I cannot declare how much Jennifer has been an outstanding attorney. She addressed each and every issue with diligence, she cares about her clients and their families. Jennifer genuinely cares about her clients and her dedication to the details of the case was remarkable. Overall, I am extremely pleased with Jennifer’s services and I am truly thankful that I was so blessed to have her represent my children and me. I highly recommend Jennifer as one of the best attorneys in Arizona and if the situation ever arises, I will definitely have her represent my children and me again.
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Dear Stacey and Kip, How can I ever thank you enough for helping me through the most difficult time in my life? I couldn't put into words my heartfelt gratefulness. You both were so compassionate and professional at every given moment throughout this process with me. I thank you from the bottom of my heart. You helped me to regain my freedom.
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16:03 22 Nov 17
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18:16 18 Sep 17
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19:22 23 Aug 17
I feel that Tracey Van Wickler is certainly one of the best family lawyers around. She is logical, intelligent, and truly cares. Tracey always does what is in the clients best interest, does it well, timely and with integrity. She is good at keeping her clients informed as to what is going on and clear in her communication both written and verbally. I have recommended Tracey to other people and will continue to recommend her. I recommended Tracey to someone who was having issues with their ex-wife and his response was, “I know how good she is because I went up against her and she ate me for lunch”. This same person was so impressed with her, he even recommended her to someone else, WOW, that is impressive! I am exceptionally happy with her attention to detail, her ability to explain things in ways that are easy to understand, as well as her ability to keep everyone focused on the most important things. I would recommend Tracey to anyone who may be in need of her services.
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17:44 23 Jun 16
I retained Hildebrand Law after interview a number of firms in the valley. Working with Michael C. was incredibly easy and informative. My case progressed in such a organized and thought out way to ensure that my needs were met. Michael was incredibly proactive and was able to see far ahead into my case to steer clear of some roadblocks. I would not hesitate to recommend Michael Clancy, and Hildebrand Law in general, to anyone.
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21:53 27 Feb 18
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Sam Franchimone
Sam Franchimone
22:09 12 Sep 13

Community Property Law Applicable through Dissolution

James argued that when he filed the dissolution action, the community property laws no longer applied to his earnings. The Supreme Court rejected this view, noting that in Arizona, community property laws apply to the couple’s income until the dissolution is final.  That rule was later changed by the Arizona legislature by the passage of a statute that now provides that the community is deemed to be terminated upon the service of the divorce petition on the other spouse, but only if the case results in a decree of dissolution of marriage being issued in the case.

Ownership of Personal Injury Awards in Arizona

The Court reviewed case decisions about whether one spouse’s personal injury award is separate property or community property in Arizona. The Arizona rule — pronounced in a 1926 case and consistently followed – was that any amounts of money recovered for injuries to one spouse during marriage are community property.

Personal Injury Awards and Divorce in Arizona.

Personal Injury Awards and Divorce in Arizona.

James urged the Court to rethink this rule, which had at one time been the general rule in community property states, but over time had fallen into disfavor. The Court reviewed and quoted from the Funiak and Vaughn’s text, Principles of Community Property § 82 (2d ed. 1971). Except for gifts clearly made to the marital community, community property only consists of that which is acquired by onerous title, that is, by labor or industry of the spouses…It must be plainly evident that a right of action for injuries to person … is not property acquired by onerous title.

The labor and industry of the spouses did not bring it into being. For that matter, it is not property acquired by lucrative title [gift, succession, inheritance] either. What then, is it? Since the right of action for injury to the person…is intended to bring about compensation for the injury, and the compensation is intended to repair or make whole the injury … the compensation partakes of the same character as that which has been injured or suffered loss.

The trial court stated that the rule that a cause of action for personal injuries is community property was based on the notion that since the cause of action arose during the marriage, it was property “acquired” during the marriage, and thus community property under the statute.

The Court of Appeals reviewed with approval cases from Nevada and New Mexico holding that the part of a personal injury award that compensates for the damage to a person’s body was the injured spouse’s separate property. It finished by adopting that approach for Arizona. In the case at issue, the serious injuries to the appellant are personal to him.

In the same fashion as pointed out in Soto, the body which he brought to the marriage is certainly his separate property. The compensation for injuries to his personal well-being should belong to him as his separate property. Any expenses incurred by the community for medical care and treatment and any loss of wages resulting from the personal injury should be considered the community in nature, and the community is entitled to recover for such losses.

The Supreme Court sent the case back to the superior court to figure out the amount the community actually lost wages and medical expense from the injury, and to give the community fair compensation for these items. The remainder of any recovery, the Court ruled, should be awarded to James as his separate property.

Later Cases

This case was mentioned in Hatcher v. Hatcher, 933 P.2d 1222 (Ariz. Ct. App. 1996) where the Court of Appeals determined that the proceeds from a disability insurance policy for an accident occurring during the marriage may be subject to division at dissolution. During the marriage, the Court said, a disabled spouse’s reduced earning capacity results in a loss to the community. At dissolution, however, any reduced earning capacity becomes the separate loss of the disabled spouse.

In Gersten v. Gersten, 219 P.3d 309 (Ariz. Ct. App. 2009), the Court of Appeals rejected the position that FECA benefits compensate a claimant for injury to personal well-being and are therefore the claimant’s sole and separate property. Rather, FECA benefits compensate a claimant for lost wages, loss of earning capacity, and medical expenses. Benefits paid for wage replacement and to reimburse medical expenses are community assets, and the burden is on the claimant to show what portion of his FECA benefits, if any, constituted compensation for injury to his personal well-being.



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