Earlier this year, Mark Ashton, a partner in our Chester County office, wrote about the Pennsylvania Supreme Court decision, Focht v. Focht. This case is significant because it overruled Pennsylvania's prevailing caselaw addressing how to determine whether a lawsuit and personal injury settlement are marital or non-marital assets. The old law looked to the timing of when the proceeds were received as determinative of whether or not it was subject to equitable distribution. The Focht decision established that it was when the cause of action accrues which determines whether the eventual settlement proceeds or judgment are marital assets or not.
This decision was recently cited in the July denial of an appeal from a Northumberland County decision, Glosek v. Glosek, CV-2005-1695.
The husband in that case had his worker’s compensation proceeds included as a marital asset even though it was paid out to him approximately a year after the parties separated. The Court determined that the timing of the injury determined whether the workers compensation was subject to equitable distribution and not when the settlement agreement on the injury was entered into. He appealed on the basis of the old law (Pudlish v. Pudlish) and Section 3501(8) of the Divorce Code which addresses payments based on a claim accruing prior to the marriage or after the date of separation.
In what will be (or has been) one of many examples of Focht shaping equitable distribution outcomes, the court upheld the trial court’s decision that the Focht case explicitly overruled the old law (Pudlish v. Pudlish) and recommends that the appeal is without merit and should be dismissed. The order requiring husband to pay the wife $33,600.00 was upheld, as well as the court’s rationale in determining that specific amount.