Husband’s settlement proceeds should be included in marital pot

The Indiana Court of Appeals upheld the decision of the Monroe Circuit Court to include a husband’s settlement proceeds from an action against his former employer as a marital asset when he and his wife divorced.

Paul Edwards sued his former employer alleging damages to his career for the non-renewal of his contract in 2006; in July 2010, his wife Zobeida E. Bonilla-Vega filed for divorce. In October 2010, Edwards’ lawsuit against his former employer settled.

In November 2011, when the trial court entered the decree dissolving the marriage, the judge included the settlement proceeds in the marital pot. Edwards doesn’t believe those proceeds should be included, but the trial court denied his motion to correct error.

The action against Edwards’ former employer is a chose in action. Edwards argued that the proceeds aren’t subject to distribution in the marital estate because the exact amount of damages weren’t known at the time Bonilla-Vega filed for divorce. She argued that the proceeds should be included because the chose in action was a property right that existed before she filed for divorce.

The trial court agreed with the ex-wife in Paul D. Edwards v. Zobeida E. Bonilla-Vega, 53A05-1203-DR-163.

“The fact remains a chose in action is a property right that comes into existence when the tort occurs,” Judge Melissa May wrote. “Pursuant to statute, a property right acquired during the marriage is subject to division as part of the dissolution. Here, there is no dispute that Husband’s chose in action against his employer came into existence in 2006, which was during the marriage. Thus, Husband’s chose in action was marital property that the court did not have discretion to exclude from the marital estate.”