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Doucette v. Washburn
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2001 ME 38
Docket:	Cum-00-382
Submitted 
on Briefs:	December 20, 2000
Decided:	February 22, 2001

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.



JEANNE E. DOUCETTE v. CARL P. WASHBURN


SAUFLEY, J.

	[¶1]  Carl Washburn appeals from the judgment of the Superior Court
(Cumberland County, Delahanty, J.) affirming a divorce judgment entered in
the District Court (Portland, Sheldon, J.).  Washburn challenges the court's
conclusions regarding the identification and distribution of the parties'
marital property.  Primarily at issue is the nature of the proceeds of a lump
sum workers' compensation settlement received by Washburn during the
marriage.  We affirm the judgment.
BACKGROUND
	[¶2]  At the time of the divorce hearing, Carl Washburn and Jeanne
Doucette had been married for almost twenty-eight years.{1}  Washburn was
forty-eight years old and Doucette was forty-six.  Neither of the parties has
any education beyond high school.  They have three adult daughters. 
Throughout much of the marriage, Washburn worked for S.D. Warren. 
Doucette worked in the home raising the children and in occasional retail
jobs while their daughters were growing up. 
	[¶3]  Doucette left the family residence in 1992 or 1993.  No decree
of legal separation was ever issued.  Washburn remained in the family home
during the separation and maintained control of the marital assets.  Doucette
received no spousal support from Washburn during the separation.  Doucette
now works as an assistant manager for a retail store and earns $8 per hour. 
She cannot afford a car.  She will have to pay $17.60 per week for health
insurance through her employer, is earning no pension benefits, and lives
with her mother, whom she pays $50 per week for room and board.  
	[¶4]  Washburn was injured in several work-related accidents at S.D.
Warren.  He retired in 1994 with a workers' compensation lump sum
settlement of $225,000, and a pension that had a present value of $102,078
at the time of the hearing.  Most of the lump sum award still exists and is in
an account in Washburn's name only.  The account increased in value during
the marriage. 
	[¶5]  Doucette filed for divorce in August 1996, but the matter was not
heard until December 1998.  In the divorce judgment, the court determined
that Washburn's pension was entirely marital because it was a benefit that
Washburn had earned entirely within the period of the marriage. 
Addressing the lump sum workers' compensation award, the court found
that a portion of the award was marital and a portion was nonmarital.{2}  It set
apart the nonmarital component to Washburn, and went on to divide the
parties' marital property.  The value of the marital property totalled
$331,407 and the nonmarital property totalled $267,019.  Ultimately,
Washburn received $267,019 in nonmarital property and $58,639 in marital
property, totalling $325,658.  Doucette owned no nonmarital property.  She
received $272,768 in marital property.  The court denied her request for
spousal support.
	[¶6]  Washburn appealed to the Superior Court, and the Superior Court
affirmed the judgment of the District Court.  Washburn then filed this
appeal, and Doucette cross-appealed.  Among other things, Washburn
contends that the court should have found the entire lump sum workers'
compensation award to have been a nonmarital asset and argues that the
court erred in awarding a greater proportion of the marital property to
Doucette.  In her cross-appeal, Doucette contends that the court erred in its
treatment of the lump sum workers' compensation award, challenges the
court's distribution of marital property, and challenges the court's refusal to
award her alimony.  Doucette presses her cross-appeal, however, only in the
event that the trial court's judgment is vacated as a result of Washburn's
appeal.
DISCUSSION
	[¶7]  When the Superior Court acts as an intermediate appellate court,
we review the decision of the District Court directly.  Kapler v. Kapler, 2000
ME 131, ¶ 6, 755 A.2d 502, 506.  We will disturb a divorce judgment only if
(1) the court's factual findings are clearly erroneous, (2) the court has erred
as a matter of law, or (3) the court has abused its discretion in crafting the
judgment.  Nolette v. O'Neil, 679 A.2d 1084, 1085 (Me. 1996); Craigue v.
Craigue, 617 A.2d 1027, 1029 (Me. 1992).  The court's determination of the
marital or nonmarital nature of the property owned by the parties is
reviewed for clear error.  Sewall v. Saritvanich, 1999 ME 46, ¶ 14, 726 A.2d
224, 227.  We will "not disturb the [marital property] determination if there
is competent evidence in the record to support it."  Id. ¶ 14, 726 A.2d at
227-28.
 
A.  Workers' Compensation Lump Sum Award

	[¶8]  Washburn's lump sum award was allocated by the workers'
compensation hearing officer among three separate components: 
permanent impairment, wage replacement, and medical costs.  After
hearing the parties' testimony, the court set apart the permanent
impairment component to Washburn as his nonmarital property and
determined that approximately 87% of the wage replacement and medical
cost components were nonmarital because they represented a replacement
of assets that Washburn would have received after the divorce was final.  The
resulting calculation designated approximately 13% of the wage and medical
cost components as marital property.  Washburn contends that the District
Court erred by finding that any part of his workers' compensation lump sum
award was marital property.  Alternatively, he argues that the court
incorrectly calculated the marital components of the award.  
	[¶9]  Because workers' compensation benefits usually represent a
replacement for lost earnings, they relate to "the earning power of the
[marital] community" if received during the marriage, and therefore, will be
determined to be marital property unless proven otherwise.  Cummings v.
Cummings, 540 A.2d 778, 779 (Me. 1988).{3}  The fact that the benefits are
received in the form of a lump sum award does not result in an analysis
different from any other asset.{4}  The spouse urging the nonmarital status of
any or all of the award must prove the existence of the nonmarital
component.  Craigue, 617 A.2d at 1028. 
	[¶10]  There is no dispute here that the award was received during
the marriage.  It is also evident that the lump sum does not readily fall into
one of the specific exceptions to the marital property presumption set out at
19-A M.R.S.A. § 953(2) (1998).{5}  It was not acquired before the marriage or
after a legal separation; it was not excluded by agreement of the parties; it
does not represent the increase in value of property acquired before the
marriage; and it certainly was not acquired by gift, bequest, devise or
descent.  See id.  Thus, unless Washburn demonstrates that the award
represents, in whole or in part, a direct replacement of  nonmarital assets
pursuant to section 953(2)(B),{6} the award must be treated as marital 
property.  See Sewall, 1999 ME 46, ¶ 17, 726 A.2d at 228 (holding that
property acquired from the proceeds of nonmarital property is nonmarital).{7} 
	[¶11]  The court accepted Washburn's evidence that the lump sum
award contained the three distinct types of compensation: permanent
impairment, wage replacement, and medical costs.{8}  It then went on to
determine which, if any, of those components represented compensation
for, or replacement of, nonmarital assets.  We address each component in
turn.

	1.  Wage Replacement Component

	[¶12]  The wage replacement component of a workers' compensation
benefit is designed to replace earnings lost to the employee resulting from a
work injury.  Cummings, 540 A.2d at 779.  When those benefits are received
as weekly or periodic compensation, they are treated as ordinary earnings
for purposes of a marital property analysis.  See id.  If received during the
marriage, they are marital property.  Id.  When received after the marriage,
they are not included in the marital estate.  Id. at 780.
	[¶13]  A more complex analysis may be necessary when the benefits
are received, not in the form of periodic compensation, but in a lump sum
award.  As always, the analysis must start from the understanding that when
the lump sum award is received during the marriage, it will be presumed to
be marital unless proved to be otherwise.{9}  That proof may be accomplished
by demonstrating that the award is intended to compensate the recipient
for earnings that would not have accrued during the marriage.  See id.
	[¶14]  Washburn received the lump sum award in November of 1994. 
The divorce judgment was entered on January 5, 1999.  Washburn offered
evidence that, in allocating the award, the hearing officer assumed that
Washburn had a life expectancy of 31.1 years.  From the hearing officer's
allocations, the court concluded that the wage replacement component was
intended to compensate Washburn for lost earnings throughout his
remaining lifetime, that is, from receipt of the lump sum award in
November of 1994 through approximately November of 2025.
	[¶15]  The court found that Washburn met his burden of proving that
part of the wage replacement component was not marital property because
it represented earnings that would have accrued to Washburn after the
divorce.  The court therefore apportioned the wage loss component between
the years of marriage and the post-divorce years through 2025, using the
date of the divorce judgment as the end point of the marriage.  The marital
component of the wage replacement was determined by applying the ratio of
marital years (4.1 years of marriage following receipt of the
award-November 1994 to January 1999) to Washburn's life expectancy as of
November 1994 (31.1 years).  That ratio yielded a marital property
component of approximately 13%.  
	[¶16]  In sum, the court determined that the amount of the wage
replacement award attributable to the time after the receipt of the lump
sum award during which the parties remained married was marital property
and that the remaining amount represented wage replacement for the years
following the divorce.  Because Washburn's post-divorce earned income
would be nonmarital property, wage replacement for those earnings would
similarly be nonmarital.  We find no error in the court's application of the
law to the wage replacement component.  The court correctly allocated
replacement for marital earnings to the marital estate and set aside
replacement for nonmarital earnings as Washburn's separate property.{10}
 
	2.  Permanent Impairment

	[¶17]  The amount allocated to permanent impairment may be
understood to be analogous to a separate pain and suffering award in a
personal injury dispute.{11}  Looking to the workers' compensation law
regarding Washburn's benefits suggests that the permanent impairment
component was intended to compensate Washburn for loss directly
associated with the loss or reduced use of a part of his body.  When a
permanent impairment award is awarded separately from compensation for
the loss of earning capacity, the award is singular to the person suffering the
loss.{12}  The very personal nature of a permanent impairment award, as it
existed in Maine law at the time of Washburn's award, separated it from
association with the marital estate.  Because it compensated the spouse for a
loss that is uniquely personal, that is, the loss of or reduced use of a part of
the human body, the court did not err in determining that the permanent
impairment component constituted a nonmarital asset.{13} 

	3.  Medical Costs

	[¶18]  Determining the marital or nonmarital nature of the medical
costs component of the award should be a straightforward process.  As with
any other asset, the award will be presumed marital unless the spouse
urging its nonmarital status demonstrates that a specific amount has been
allocated for reasonably certain future medical expenses, and thus, that the
award compensates the spouse for anticipated, post-marital expenses. 
	[¶19]  The record before us is devoid of any specific evidence
regarding medical expenses anticipated in the future or even incurred
during the marriage.  Washburn argues that since Doucette has not proved
the presence of marital expenditures, the court was required to find that
the medical cost component was nonmarital.  Nothing could be clearer,
however, than our often repeated admonition that the spouse urging a
nonmarital designation has the burden of presenting evidence in support of
that conclusion.  See Clum v. Graves, 1999 ME 77, ¶ 10, 729 A.2d 900, 904-
05.
	[¶20]  Washburn failed to meet that burden.  The record contains little
more than Washburn's bald assertion that no marital funds had been
expended on medical care.  He presented no specific evidence that he
would incur medical expenses after the marriage ended.  On this record, the
medical costs component would have to be determined to be a marital asset. 
The court, however, allocated the medical costs using the same ratio as
applied to the wage replacement component, resulting in the determination
that only approximately 13% of the medical component was marital. 
Because Washburn received the benefit of the court's calculation, and
because Doucette does not challenge the result in light of our affirmance of
the judgment, we do not disturb it.{14}

B.  Distribution of Marital Property

	[¶21]  The total marital estate was valued at $331,407.  Washburn
received $58,639, or approximately 18% of the marital assets.  In addition,
the court set apart to him $267,019 in nonmarital property.  Accordingly,
his assets upon dissolution of the marriage totaled $325,658.  Doucette, who
had no nonmarital property, received the lion's share of the marital
assets-$272,768.  The court awarded no spousal support to either party.
	[¶22]  Washburn contends that the court's distribution of marital
property represents a plain and unmistakable injustice, that the court
abused its discretion, and that the court should not have entwined
Doucette's request for spousal support with its division of marital property. 
	[¶23]  We review the disposition of marital property for an abuse of
discretion, Craigue, 617 A.2d at 1029, and we will overturn a divorce court's
division of marital property if there is a "violation of some positive rule of
law or if the division results in a 'plain and unmistakable injustice, so
apparent that it is instantly visible without argument.'"  Pederson v.
Pederson, 644 A.2d 1045, 1046 (Me. 1994) (citations omitted).  In dividing
marital property, the court must "divide the marital property in proportions
the court considers just after considering all relevant factors."  19-A
M.R.S.A. § 953(1) (1998).{15}  
	[¶24]  A just distribution of property is not synonymous with an equal
distribution.  To the contrary, we have made it clear that a court is not
required to divide the marital property equally, but is required to make the
division fair and just considering all of the circumstances of the parties.  See
Pederson, 644 A.2d at 1046; Pongonis v. Pongonis, 606 A.2d 1055, 1058
(Me. 1992); Deditch v. Deditch, 584 A.2d 649, 652 (Me. 1990); Robinson v.
Robinson, 554 A.2d 1173, 1176 (Me. 1989).  "Although the idea of an equal
allocation may certainly be entertained by a divorce court, it carries no
presumptive weight either in its favor or against it."  Robinson, 554 A.2d at
1176.  In addition, the court is specifically authorized to consider the "value
of the property set apart to each spouse" in reaching an equitable
distribution of the marital property.  19-A M.R.S.A. § 953(1)(B).
	[¶25]  In the absence of a weighted award of the marital property,
Washburn would have exited the marriage with extensive assets, leaving
Doucette with little because Doucette held no nonmarital property.  Given
Doucette's limited earning capacity, spousal support would almost certainly
have been necessary.  In its supplemental findings, the court indicated that
one of its primary considerations in the division of property was to eliminate
Doucette's need for spousal support.  Because the court "may also consider
the division of marital property that its decree makes, and whether the
property distribution provides the [spouse] with the income necessary to
meet her living expenses" when considering the award of alimony, Deditch,
584 A.2d at 652, the court did not err in determining that a weighted
distribution of the marital assets was an appropriate substitute for a spousal
support award.{16}
	[¶26]  Nor did the court err in concluding that spousal support would
have been necessary absent the weighted distribution of marital property.  
The court had before it two individuals with no post-high school education
who had accumulated a modest amount of assets during the marriage.  The
primary source of income during the marriage, Washburn's S.D. Warren
salary, had been replaced by the receipt of disability payments and a lump
sum workers' compensation award, most of which would be awarded to
Washburn.  Doucette has very limited work capacity beyond minimum wage
employment, she has no car, lives with her mother whom she pays $50 per
week for room and board, has no pension other than her $12,000 IRA, and
must pay $17.60 per week for health insurance.  Washburn, in addition to
being awarded most of the income from the workers' compensation
settlement, owns a truck and two boats, lived rent-free for many years in the
marital home, and paid no spousal support to Doucette.  
	[¶27]  Thus, the facts would have supported an award of spousal
support to Doucette.{17}  No statute or positive rule of law precludes the court
from considering post-divorce need in its award of marital property. 
Providing for the financial needs of one spouse through the division of
marital property is both contemplated by the statute and supported by the
facts in this case.  See 19-A M.R.S.A. § 953(1).  See also Crooker v. Crooker,
432 A.2d 1293, 1296 n.1 (Me. 1981).  
	[¶28]  Moreover, the award of a larger share of marital property was
designed by the court to allow the parties to separate their financial matters
permanently, a goal which we have encouraged.  See Berry v. Berry, 658
A.2d 1097, 1099 (Me. 1995) (holding that a court should attempt to "divide
the marital property in such a manner as to avoid continued financial
interaction between the parties").  In addition, the court considered the tax
consequences of a support award.  The court was concerned that Washburn
might not be able to pay periodic spousal support and believed that imposing
a lump sum spousal support award would cause him to incur capital gains
taxes on the sale of assets necessary to realize the lump sum.  
	[¶29]  The division of marital property does not represent a plain and
unmistakable injustice, and the court did not exceed the bounds of its
discretion in entering the award.{18} 
	The entry is:
Judgment affirmed.
    
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