Maryland Marital Property Law and the Proceeds of Lawsuits

Maryland Divorce Lawyers and their clients want to know: what happens when you recover a big award in a lawsuit and then get divorced? Who gets what?

This was the issue in dispute between Anthony and Teresa Murray.

The judge ruled that Anthony failed to meet his burden of proof in identifying and valuing the proceeds as marital property.

Following her termination as a lawyer with a District of Columbia law firm on December 31, 2002, Teresa had filed an employment discrimination lawsuit. Over 3 1/2 years later, she received a settlement of $550,000. At the time of the divorce trial in August, 2007, Teresa had retained $274,000 of the proceeds.

Anthony was unsuccessful at the trial court level where the judge ruled that he had failed to meet his burden of proof in identifying and valuing the proceeds as marital property. In Murray vs. Murray, the Court of Special Appeals, ruled that trial judge had unduly restricted his efforts to discover information to meet his burden of proof. In its opinion the Court delineated the analytical approach that Anthony had to follow in order to prevail upon remand.

Maryland’s Marital Property statute does not provide a road map for determining what portion of an award is marital. Therefore, Maryland’s Courts have adopted a rule that applies to not only employment discrimination awards, but also to personal injury and workers’ compensation awards. Only that portion of an award that compensates a claimant for loss of wages or earning capacity during the marriage (or loss of consortium) is marital.

In Ms. Murray’s settlement the award had not delineated the components of the amount she received. Anthony had attempted to develop evidence of her earning history and potential but was frustrated by the trial judge. He will get another chance to meet his burden of proof when the case goes back to the trial court.

For more general advice on Marital Property issues the reader may refer to my prior posting on this site.