Case Title: Damone v. Damone

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2001-09-14T00:00:00Z

Document:
Damone v. Damone (99-203); 172 Vt. 504, 782 A.2d 1208

[Filed 14-Sep-2001]

  NOTICE:  This opinion is subject to motions for reargument under V.R.A.P.
  40 as well as formal  revision before publication in the Vermont Reports. 
  Readers are requested to notify the Reporter of  Decisions, Vermont Supreme
  Court, 109 State Street, Montpelier, Vermont 05609-0801 of any  errors in
  order that corrections may be made before this opinion goes to press.

                                No. 1999-203

Robin Damone	                                 Supreme Court

                                                 On Appeal from
     v.	                                         Windsor Family Court

Phillip Damone	                                 September Term, 2000

Theresa S. DiMauro, J.

Melvin D. Fink of Fink and Birmingham, P.C., Ludlow, for Plaintiff-Appellee.

William E. Kraham, Brattleboro, for Defendant-Appellant.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       SKOGLUND, J.  Defendant Phillip Damone appeals the final decree issued
  in his divorce  proceeding by the Windsor Family Court.  Defendant claims
  the court: (1) abused its discretion and  acted inequitably in refusing to
  enforce the parties' agreement regarding the distribution of the  proceeds
  from a medical malpractice settlement, and in distributing to plaintiff,
  Robin Damone,  proceeds from this settlement which were intended to
  compensate defendant for his pain and  suffering; (2) erred by including
  proceeds from the settlement when it determined, for purposes of  equitable
  distribution of the marital property, what constituted the marital estate,
  and made clearly  erroneous findings regarding the settlement proceeds; (3)
  abused its discretion in its determination of  the maintenance award to the
  plaintiff; and (4) erred in admitting and relying upon statements 

 

  made by a guardian ad litem (GAL) regarding the preferences of the parties'
  children.  We agree with  defendant that it was error for the family court
  to disregard the parties' agreement as to the  distribution of the personal
  injury settlement award and, thus, the court erred in including the 
  personal injury settlement proceeds in the marital estate as property
  subject to distribution between  the parties. (FN1)  As a result of the
  court's error in its property distribution, its determination of 
  plaintiff's maintenance award must also be remanded for reconsideration. 
  Because defendant did not  properly object to the admission of the GAL's
  statements in the hearing, this claim of error was not  properly preserved
  for review, so we do not address it on appeal.  We remand for
  redistribution of  the marital estate and a redetermination of plaintiff's
  maintenance award.

       The parties were married in 1985, while in their late teens, and
  separated in January 1998.   They have two children from the marriage.  The
  marital home was purchased in 1986 for $65,000,  and while the parties
  disagreed on the fair market value of the home at the time of their
  divorce, the  court found the value to be $72,000, with a mortgage balance
  of $58,000.  They acquired a few 

 

  second-hand cars, and amassed $19,153 in consumer debt. (FN2)  Plaintiff
  has a retirement account  which was valued at $582.41.  Defendant's pension
  plan through his employer was valued at  $4,853.55.  The remaining
  components of the marital estate, with one notable exception, were valued 
  at $12,135.96.

       The most significant asset considered by the court in evaluating the
  marital estate was the  proceeds from a personal injury action based on
  medical malpractice suffered by Phillip.  The action  sought damages for
  the past, present, and future pain and suffering for Phillip and for loss
  of  consortium suffered by Robin, and attorney's fees.  In 1991, a tumor
  was discovered in Phillip's back.  He underwent surgery to remove the
  tumor, spending two days in the hospital, and was working  again two weeks
  later.  In 1992, when he continued to have back problems, he underwent
  another  surgery and three more tumors were removed.  After four months of
  recovery from this surgery,  which included six weeks of five-day-per-week
  radiation treatment, he returned to work but suffered  continued pain in
  his back.  He was again admitted to the hospital to address fluid build-up
  around  the surgical site.  On his first day home, he began to feel
  nauseous and was taken by ambulance back  to the hospital, where he
  underwent a spinal tap.  He was diagnosed with a severe staph infection, 
  and underwent another surgery to remove the infection.  He was hospitalized
  for ten days.  Upon his  return home he spent the next two months
  self-administering antibiotics intravenously thrice daily to  insure the
  infection did not return.  Phillip was told that he might experience
  permanent back pain  caused by the massive tissue, muscle, and nerve loss
  he had suffered 

 

  as a result of the surgery.  He was left with a fourteen-to sixteen-inch
  incision site scar, thick cross  lines from where surgical staples had
  been, discoloration from the radiation treatments, and an  indentation in
  his back.  The pain he experiences is worse in the winter, and he relies
  upon a daily  prescription of Percocet to manage, but not alleviate, the
  pain.  

       In 1995, the Damones filed the personal injury action against the
  doctors who initially treated  Phillip for his back pain.  The suit claimed
  that, as a result of the doctors' negligence, Phillip had  suffered both
  physical and psychological pain, increased disfigurement, permanent
  disability or  increased disability, loss of enjoyment of his life, lost
  income, and had incurred substantial medical  expenses.  Robin joined the
  complaint, alleging in a separate count that as a result of the doctors' 
  negligence she had suffered the loss of care, consort and companionship of
  Phillip.  In June 1998,  after the Damones had separated, the case settled. 
  After payment of legal fees, costs and discharge of  a medical lien, they
  received $151,116.11 net from the $250,000 total settlement.  Prior to 
  settlement, the Damones negotiated an agreement between themselves - an
  agreement which was  reached only after considerable disagreement between
  the parties over how much Robin would  receive.  The agreement provided
  that should a settlement be reached in the case, after all fees and 
  expenses were paid, Phillip would be entitled to 82«% of the net amount of
  the settlement, and  Robin would be entitled to 17«%.  Given the net
  settlement amount, this agreement would have  resulted in a distribution of
  $123,845.79 to Phillip and $26,270.32 to Robin.

       In its distribution of marital property, the court awarded plaintiff
  her retirement account,  valued at $582.41.  She also retained an
  automobile she had purchased after the separation.  The  court awarded
  defendant his pension plan, two cars, and the equity in the home, and
  assigned him the  marital consumer debt he had been making payments
  against, resulting in an award valued at 

 

  $11,553.55.  The court offset the discrepancy between the parties' awards
  by its division of the  personal injury settlement proceeds, with defendant
  receiving $90,000 and plaintiff receiving  $60,116.11.  The total
  allocation for each party resulted in plaintiff being awarded $60,698.52
  worth  of marital property, and defendant being awarded property worth
  $101,553.55.

       The court also awarded plaintiff primary legal and physical
  responsibility for the parties' two  children, ages thirteen and eleven at
  the time of the final order.  In determining what award of  parental
  responsibility would be in the best interest of the children, it examined
  the required factors  enumerated in 15 V.S.A. § 665(b).  It also heard
  testimony from the GAL regarding the custodial  preferences expressed to
  her by the children, as well as her own opinion of what custodial 
  arrangement would be in the best interest of the children.  The court
  concluded that the best interests  of the children would be served by
  awarding parental rights and responsibilities to plaintiff, subject  to
  defendant's right to parent-child contact. 

       In addition, plaintiff sought rehabilitative maintenance of $600 per
  month for a period of ten  years.  In determining whether a maintenance
  award was warranted, the court considered the length  of the marriage, the
  age and physical condition of the parties, the level of education of each
  party,  and the standard of living enjoyed during the marriage.  It also
  examined the income brought into the  family by each spouse, the work
  history of each spouse, and the effect plaintiff's employment will  have
  over the next few years on her role as custodian of the children.  The
  court concluded that  plaintiff would require rehabilitative maintenance
  for a period of five years, while she provides after-school care for the
  children, and that the need for those duties would diminish over time as
  she  secures appropriate employment which will compensate her at a level
  that will enable her to meet her  reasonable needs. 

 

       The court then turned to the issue of how much maintenance defendant
  would pay plaintiff  over this period.  It examined the current income
  generated by each party, noted the stability in  defendant's monthly income
  of approximately $2862, and forecast that plaintiff's child-care duties 
  would likely result in a decrease in her income, resulting in monthly
  income for her of approximately  $1591.  The court also calculated that
  after each party used its portion of the settlement proceeds to  pay off
  their respective outstanding debts, the remaining settlement proceeds would
  be $53,716 for  plaintiff and $77,247 for defendant.  The court calculated
  that, based on its distribution of the  settlement proceeds and the rate of
  interest of 4.5% on a one-year U.S. Treasury Bill (as of March 30,  1999),
  plaintiff could derive $2417 annually, or $201 per month, from her net
  portion of the  settlement proceeds, and defendant could derive $3476, or
  $290 per month, from his net portion.   Adding these monthly imputed
  interest income figures to the earned income figures above, the court 
  arrived at a total monthly income of $3,152 for defendant and $1,792 for
  plaintiff.  [pc-13-34]  From  this, the court determined that the
  appropriate amount of rehabilitative maintenance needed to be  paid by
  defendant to plaintiff in order to maintain the respective households at
  the standard of living  established during the marriage would be $500 per
  month.

                                     I.

       We first address defendant's contention that the family court abused
  its discretion by refusing  to honor the parties' agreement on how to
  distribute the personal injury settlement proceeds.  The  parties executed
  an agreement on June 8, 1998, approximately six months after their
  separation and  three months after plaintiff filed the complaint for
  divorce, which reads as follows:

    In regards to a potential settlement in the case of Damone v.
    Lord, Docket No.: S269-95 Wrc 

 

    Both Phillip and Robin Damone agree that should an agreement for
    settlement be reached on this date at the scheduled mediation the
    proceeds shall be divided as follows:

    After all legal fees, costs, expenses and $3,000.00 owed to James
    Damone are paid, Robin Damone shall receive 17 « % of the net
    amount.  Phillip Damone shall receive 82 « % of the net amount. 

  While the agreement does not refer to their pending divorce, it does
  specifically provide for the  distribution of the settlement proceeds.  The
  court acknowledged the agreement, if followed, would  have resulted in a
  distribution of $26,270.32 to plaintiff and $123,845.79 to defendant. 

       The court discussed three possible options for distribution of the net
  personal injury  settlement proceeds.  First, it considered dividing the
  settlement equally between the parties.  It  rejected this approach as
  inappropriate in this case since, it acknowledged, the primary purpose of
  the  settlement proceeds was to compensate defendant for his past and
  future pain and suffering.  The  court also rejected this approach because
  it was "mindful of the parties' written agreement concerning  the
  settlement of the lawsuit." 

       Second, the court considered honoring the parties' agreement.  The
  court rejected this  approach as well, offering two reasons why the
  agreement was not to control the disposition of the  settlement proceeds. 
  One was that the agreement did not specifically state that it would
  "override all  other considerations relevant to an 'equitable division' in
  the context of the divorce action,"  and the  other was that "the approach
  of accepting various independent agreements at face value could easily 
  lead to an inequitable result," causing in this case a "grossly
  disproportionate property division."

 

       The court concluded that neither of the aforementioned options were
  acceptable, because  "[a]lthough it is appropriate to recognize that
  Phillip deserves compensation for his pain and  suffering, it is also
  appropriate to recognize Robin's contributions to the marriage, and to
  leave her in  a reasonable financial position to provide a home for herself
  and for the children."  Instead, stating  that it favored transactional
  efficiency and avoiding future litigation, the court fashioned the property 
  settlement at issue, disregarding the parties' agreement.  The court
  reiterated that this was intended to  be an equitable division of the
  marital estate which would reflect defendant's continuing pain and 
  suffering, both parties' contributions to the marriage, and, quoting
  Naumann v. Kurz, 152 Vt. 355,  360, 566 A.2d 1342, 1345 (1989), would
  provide both spouses "with a nest egg for retirement or a  reserve for
  emergencies."

       "[A] trial court has wide discretion in the disposition of marital
  property upon divorce, and  we will affirm its decision where we find
  reasonable evidence to support the court's findings and  conclusions." 
  Johnson v. Johnson, 155 Vt. 36, 43, 580 A.2d 503, 507 (1990).  "We will not
  disturb  that disposition unless the court's discretion was abused,
  withheld or exercised on untenable grounds  or to a clearly unreasonable
  extent."  Milligan v. Milligan, 158 Vt. 436, 439, 613 A.2d 1281, 1283 
  (1992) (citations and internal quotations omitted).

       Whether a court should recognize a divorcing parties'
  independently-arrived-at property  settlement agreements is an issue which
  is not unique to this case.  We have repeatedly recognized  that parties to
  a divorce may enter into agreements reflecting their preferred disposition
  of marital  property. See Tudhope v. Riehle, 167 Vt. 174, 177,