George and Cathy Heiner were married in 1993 and separated in November 1994. George was ordered to pay Cathy child support for their 2 children.
In 2001, George settled a personal injury case with Kmart. Under the settlement, he received over $2.3 million. The settlement characterized the entire sum paid as "damages on account of physical and personal injuries." In other words, the settlement did not allocate part of the award as compensation for loss of income and loss of earning capacity.
At the hearing requesting modification of the court's order with respect to visitation and child support, Cathy argued that George's personal injury settlement was income and should be taken into account when calculating child support.
The court held that the "entirety of an undifferentiated lump sum personal injury recovery is not income for purposes of child support." In addition, any part of the award found to be compensation for loss of income and earning capacity may be considered as income, but it is within the trial court's discretion to determine the amount. That amount may be zero, as it was in this case.
Read the court's decision here.
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