Personal Injury Settlements in the Context of Child Support Arrearages

turboprop-aircraft-1414643-m-2Maryland has a strong policy supporting child support payments. Typically a custodial parent can ask to have the other parent’s wages garnished when the other parent fails to pay court-mandated child support. However, not all of the other parent’s funds can be garnished to pay off child support arrearages. In a 2010 case, a male custodial parent of two minors tried to garnish funds held by his wife’ s law firm. The money held by the law firm was compensation for a personal injury.

The Circuit Court held that money recovered from a personal injury lawsuit is exempt from garnishment. The ex-husband appealed. The Court of Special Appeals affirmed. The Court of Appeals reviewed the question of whether the personal injury settlement money is exempt from execution on a judgment.

The couple had married in 1985 and, after having two children, got a divorce. The court at that time did not provide for child support. A few years later, however, the mother was ordered to pay child support in the amount of $533.61 every month to the father who was the custodial parent.

The mother did not pay the child support that the court ordered. The father got two judgments against her for the child support arrearages plus interest. The mother was injured years later while a passenger on an airline flight. She retained a law firm to file a personal injury suit against the airline on her behalf. The airline paid a settlement in the amount of $30,000. The check was made out to her and her law firm.

When the father found out, he filed two writs of garnishment against the woman and her law firm. The law firm was still holding the money in trust. The law firm responded that the funds were exempt from execution. Both parties filed summary judgment motions. The trial court granted the law firm’s motion. The father appealed, but the Court of Special Appeals affirmed the lower court. The Court of Appeals agreed to review the issue of whether personal injury payments were exempt from judgments for child support arrearages.

It explained that the Maryland Constitution instructs the General Assembly to protect a certain amount of a debtor’s property from execution. Section 11-504(b)(2) exempts, among other things, money that is payable because of sickness, accident, injury or death, including compensation for loss of future earnings. The appellate court explained that this was unambiguous language. The statute clearly exempted the kind of money at issue here, which was money to compensate the mother for personal injuries. Similarly, these are also exempt: wearing apparel, books, tools and other instruments that are reasonably necessary for the debtor’s trade or profession.

The appellate court explained that creditors should not be able to strip someone of his or her means of possibly becoming whole when hurt due to another’s tortious conduct. Although the person’s car and another goods are subject to attachment, the person him or herself is not chattel.

The husband here argued that there should be an exception based on the clear public policy against deadbeat parents failing to pay child support. He cited to a number of cases related to wages and unemployment benefits. However, the appellate court explained that if the Legislature wanted to carve out such an exception it could have done so within the statutory language. The appellate court held that the personal injury settlement was exempt.

If you have decided to divorce, contact an experienced Maryland family law attorney for representation. Our office may be able to help you through this difficult time.

More Blogs:

Dissipation of Marital Funds in Maryland, Maryland Divorce Lawyer Blog, November 26, 2013

Neglect in Maryland Family Law Cases, Maryland Divorce Lawyer Blog, November 12, 2013

 

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