Young v. Young
549 So. 2d 437, 1989 WL 109044 (1989)
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Rule of Law:
A personal injury cause of action that arises prior to a marriage is the separate property of that spouse, and settlement funds received during the marriage retain their separate character. These separate funds do not become community property merely by being placed in a joint account if they can be traced with sufficient certainty to the purchase of specific assets.
Facts:
- Four months before his marriage to Sandra Touchet Young, Phillip Mark Young sustained a work-related injury that rendered him permanently disabled.
- Phillip and Sandra married on April 28, 1978.
- On March 18, 1980, during the marriage, Phillip received a settlement of $155,602.37 for his premarital injury.
- On the same day, Phillip used the settlement money to purchase a $120,000 certificate of deposit and deposited the $35,602.37 balance into a joint checking account, with both financial instruments titled in the names of both spouses.
- The next day, Phillip used funds from the joint checking account to purchase a lot for $9,800.
- Subsequently, Phillip used $64,000 derived from the certificate of deposit to purchase a house and used funds from the joint account to buy another lot and a tractor.
- During the marriage, Sandra earned between $800-$1000 per month, which was insufficient to fund the major asset purchases.
- Phillip also received a separate settlement of $111,995.97 for an injury that occurred during the marriage, which he deposited into a different joint account and used to purchase another property (the McSween lot).
Procedural Posture:
- Phillip Young and Sandra Young were granted a judicial separation.
- Sandra filed a petition in a Louisiana trial court to partition the community property.
- Phillip sought reimbursement, claiming certain assets were purchased with his separate funds from personal injury settlements.
- The trial court found that 50% of the settlement for the premarital injury was community property and that the remainder was so commingled with community funds that Phillip was not entitled to reimbursement.
- Phillip Young, as defendant-appellant, appealed the trial court's judgment to the Court of Appeal of Louisiana, Third Circuit.
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Issue:
Are personal injury settlement funds received during a marriage considered the separate property of the injured spouse if the injury occurred before the marriage, and do those funds lose their separate character if they are deposited into a joint account and used to purchase assets?
Opinions:
Majority - Knoll, Judge
Yes. Personal injury settlement funds for a premarital injury are the separate property of the injured spouse, and they do not become community property through commingling if they remain traceable. The court reasoned that a cause of action for personal injury is a vested property right that acquires its character as separate or community at the time the injury occurs. Since Phillip's injury occurred four months before the marriage, the resulting cause of action and its subsequent settlement were his separate property. The court cited Broussard v. Broussard, holding that since the community did not exist at the time of injury, no portion of the settlement could be attributed to a loss of 'community earnings.' Furthermore, the court applied the tracing principle from Curtis v. Curtis, finding that merely placing separate funds in a joint account does not convert them to community property. The funds remained traceable because the major purchases were made immediately after the settlement was received, Sandra's testimony confirmed the community lacked funds for these purchases, and the sheer amount of the purchases was far greater than what community income could support.
Analysis:
This case solidifies the principle in Louisiana that the character of a personal injury award is determined at the inception of the right, i.e., the moment of injury. By distinguishing damages for premarital injuries from those sustained during the community, the court prevents the non-injured spouse from claiming a share in compensation for losses that predate the marital partnership. The decision also provides a clear application of the commingling and tracing doctrines, emphasizing that courts will look past the title on a bank account to the substantive source of the funds. This provides a strong precedent for spouses seeking to prove the separate nature of assets acquired during marriage, so long as a clear financial trail exists.
