Title: Kozich v. Kozich

State: pennsylvania

Issuer: Pennsylvania Supreme Court

Document:

397 Pa. Superior Ct. 463 (1990) 580 A.2d 390 Deane R. KOZICH v. David T. KOZICH, Appellant. Supreme Court of Pennsylvania. Argued June 26, 1990. Filed September 26, 1990. David J. Weaver, Johnstown, for appellant. Andrew D. Gleason, Johnstown, for appellee. *464 Before McEWEN, TAMILIA and BROSKY, JJ. TAMILIA, Judge. This appeal presents the issue whether the disability portion of a tort settlement remains separate property of the injured spouse for purposes of equitable distribution. The trial court, by Order dated November 22, 1989, adopted the recommendations of the master, which, inter alia, determined that the settlement proceeds were marital property, and ordered appellant/husband David T. Kozich to pay to appellee/wife $320,000. We affirm. The parties were married on October 16, 1976 and had two minor children who now reside with the wife. On March 20, 1982, while in the course of his employment as a cable television installer in Houston, Texas, appellant was electrocuted, resulting in the amputation of both his arms approximately two inches below his elbows. Consequently, the Koziches filed suit in Houston against Houston Lighting and Power and Houston Treetop Apartments, Inc. On June 27, 1984, the Koziches and the defendants negotiated a settlement, the proceeds of which are now at issue on appeal. The parties eventually separated and on April 7, 1987, appellee filed a complaint in divorce and secured an Order for spousal and child support in the interim. The parties agreed to submit the issues of equitable distribution, counsel fees and costs and alimony to a master for hearing. Master's hearings were held August 12, 1988 and September 8, 1988. The master's report was filed August 28, 1988, from which appellant filed exceptions. The court entered the November 22, 1989 Order from which this appeal followed. On appeal, appellant relies on this Court's prior decision in Ciliberti v. Ciliberti, 374 Pa.Super. 228, 542 A.2d 580 (1988), wherein a panel of the Superior Court declined to hold that true disability payments are marital property subject to equitable distribution. The Court went on to note, however, that where it can be shown "that a portion of the employee spouse's disability pension is representative of retirement benefits, the amount received by the *465 disabled employee in lieu of retirement benefits remains marital property subject to distribution." Id., 374 Pa.Superior Ct. at 234, 542 A.2d at 582. Appellant contends there is no evidence of record that the settlement in the instant case was part of a retirement benefit, but instead was plainly for loss of income earning ability. While we agree with the earlier decision in Ciliberti, we are not prepared to extend the rationale of that case to the circumstances of the case at bar. Ciliberti involved a retirement/disability pension arising out of contract, whereas this case involves a liquidated amount arising from a tort action settlement. As such, there is no basis upon which a finding can be made that the settlement is either a disability or retirement fund. Since the settlement compromised all claims before the jury reached a verdict, there was no specification as to which portion might have been awarded to the wife for loss of consortium, thus her claim was merged into the total settlement, further distinguishing this case from the division in Ciliberti. We are guided instead by our decision in Platek v. Platek, 309 Pa.Super. 16, 454 A.2d 1059 (1982), a divorce action similar to the case instantly in that it concerned the proceeds of a tort claim settlement obtained by the parties. The court in Platek held that settlement proceeds are not excepted from marital property. Section 401(f) of the Divorce Code, unchanged by amendment in 1988, provides: 23 P.S. § 401. Section 401(e)(1) excepts "[p]roperty acquired prior to marriage or property acquired in exchange for property *466 acquired prior to the marriage." Id. The question presented instantly is similar to that presented in Platek: Platek, supra at 21-23, 454 A.2d at 1061-62 (footnote omitted). The Master's Report in the case sub judice also states: The trial court found, as do we, that the Master correctly determined the settlement proceeds to be marital property. Therefore, appellant's claims in this regard are without merit. Appellant's final argument is the trial court erred in awarding $320,000 to a noninjured spouse out of a total amount available for distribution of $905,000. The equitable distribution of marital property is within the sound discretion of the trial court, whose decisions shall not be disturbed on appeal absent an abuse of that discretion. Gee v. Gee, 314 Pa.Super. 31, 460 A.2d 358 (1983); see 23 Pa.S. § 401(d). From our thorough review of the record, we find the Master properly considered the enumerated relevant factors of section 401(d) of the Divorce Code, and we discern no abuse of the trial court's discretion in accepting the Master's finding and recommendations. Accordingly, appellant's contention is without merit and we affirm the judgment of the trial court. Judgment affirmed.