Opinion ID: 881949
Heading Depth: 1
Heading Rank: 5

Heading: Personal Injury Awards

Text: Terri further argues that the District Court abused its discretion when it found that Ed's personal injury awards are not considered income when determining a child support modification. Terri argues that this finding is contrary to 1) the Uniform District Court Child Support Guidelines [1] , which provide that all income, from whatever sources, is to be considered in child support modifications, and 2) the standards under § 40-4-204, MCA. The District Court found that Ed's financial awards regarding his personal injury are damages as a result of personal injury, and as such, are for the purpose of compensating [Ed] for his losses to restore him to the status quo ante. The District Court further found that: Respondent is not richer than he was; he is now blinder than he was. Therefore, the Court finds that the moneys received by Ed Durbin in this settlement are not to be included and cannot be included in the determination of child support guidelines. Further, the Court finds that pursuant to the testimony concerning his settlement, Ed Durbin is responsible for one-half of any and all medical expenses to be incurred in the future by Ed Durbin. These moneys as a result of this personal injury must therefore be maintained and used for purposes of defraying the medical expenses to be incurred by Ed Durbin in the future, which are anticipated to be substantial. Based on these findings, the District Court denied a modification of child support; however it is unclear as to whether the District Court indeed applied the Uniform District Court Child Support Guidelines to this case. Section 40-4-204(3)(a), MCA, provides that a court shall apply the Uniform District Court Child Support Guidelines and the enumerated standards under § 40-4-204, MCA, when determining a child support modification unless the court finds by clear and convincing evidence that the application of the standards and guidelines is unjust to the child or to any of the parties or is inappropriate in that particular case. We hold that under the facts of this case, the application of the Uniform District Court Child Support Guidelines regarding Ed's personal injury awards is inappropriate and falls within the exception contained in § 40-4-204(3)(a), MCA. Here, the record indicates that if the Uniform District Court Child Support Guidelines were applied to Ed's gross monthly income, including his personal injury awards, Ed would be obligated to pay a monthly child support payment totaling $1,624.56. The record indicates that applying the Uniform District Court Child Support Guidelines to Terri's income results in a monthly child support obligation for Terri of $407.83. Subtracting Terri's obligation from Ed's results in Ed paying monthly child support of $1216.73. The Uniform District Court Child Support Guidelines do not take into consideration Ed's medical expenses as a result of his personal injury. The Guidelines simply provide that all income from all sources is to be considered when determining a modification in child support. The District Court found that Ed's future medical expenses are anticipated to be substantial. Considering all of Ed's personal injury awards without considering Ed's actual and necessary needs including those resulting from his permanent disability is an inappropriate result. The noncustodial parent's financial resources and needs are to be considered by the District Court under § 40-4-204(2)(e), MCA. Just as inappropriate, however, is to preclude Ed's personal injury awards when considering a child support modification in this instance. Ed's personal injury awards serve in part to replace the income he can no longer earn through employment. The enumerated standards of § 40-4-204(2), MCA, include the consideration of the financial resources of both parents, the needs of the noncustodial parent, the standard of living the children would have enjoyed had the marriage continued, and the age of the children. The record indicates that Ed's gross annual income, following the filing of his modification petition, is between $87,000 and $143,000. The record indicates that Terri's 1990 gross annual income is $26,411. The record indicates that Edwin will be responsible for one-half of his future medical expenses and his Medicare insurance will cover the remaining one-half. The record, however, does not indicate how much these future medical expenses might be, or whether Ed has medical insurance beyond Medicare, which would cover any or part of Ed's attributable future medical expenses. The District Court only found that Ed's future medical expenses are anticipated to be substantial. We hold that the District Court's interpretation and application of the law was incorrect under § 40-4-204(2), MCA, in concluding that Ed's personal injury awards were precluded from consideration in Terri's counter-petition for a modification of child support. We remand this case to the District Court with instructions to make additional findings and conclusions concerning 1) Ed and Terri's financial resources, 2) Ed and Terri's annual gross income, 3) the children's expenses, and 4) Ed's actual and necessary financial needs including those associated with his medical care resulting from his blindness. We instruct the District Court to subtract Ed's actual and necessary needs including those associated with his medical care from his financial resources, and consider the remaining amount in determining a future child support modification under the enumerated standards of § 40-4-204(2), MCA. We wish to note that this opinion does not affect the federal tax exemption allowed to Ed concerning his personal injury awards.