Are the Proceeds of Petitioner’s Settlement of a Lawsuit for a Wrongful Conviction Marital Property for Purposes of Distributing a Marital Estate?

The circumstances that led to this appeal stem from petitioner’s conviction in 1993 for murder. Petitioner was incarcerated from the time of his arrest in 1992 until January 2012, after his conviction was reversed by the appellate court. While he was incarcerated, he got married (October 31, 2000). After his release from prison in 2012, he filed a petition for dissolution of marriage from is wife in 2014. In March 2015, he settled his lawsuit for $20 million.

The wife argued that it was marital property, since the award occurred during the marriage.  The husband of course argued that the action stemmed from a date before he knew his wife.

Turning to the classification of the settlement proceeds, the trial court found that no cases presented the exact factual situation present here, but that this case could be analogized to cases that address characterization of traditional personal injury claims as marital or nonmarital property. The court wrote as follows:

“[F]or purposes of property characterization in the present divorce action, the Court will regard [petitioner’s] lawsuit and settlement proceeds therefrom as no different than other personal injury lawsuits involving injuries that occurred before marriage. In such cases, the claim remains non-marital, regardless of whether the lawsuit is brought or the settlement is paid during the marriage.”

Nonetheless, the court later noted that the “differentiation between the simultaneous cause of action simultaneously with his injury, is what causes this to be an issue of first impression for this Court.” The court rejected respondent’s claim the settlement (or at least a portion of it) was marital property because the defamation claim was based on events that occurred during the marriage.

The wife argues that her husband’s lawsuit, and consequently the proceeds of the settlement of that lawsuit, is marital property. See In re Marriage of Gan, 83 Ill. App. 3d 265, 270 (1980) (“The proceeds of the personal injury settlement having been properly declared to be marital property, they are subject to disposition, along with other marital property, pursuant to the provisions of sec. 503(c) and (d) of the Act.”). First, it was argued that under Heck v. Humphrey, 512 U.S. 477 (1994), Ferguson v. City of Chicago, 213 Ill. 2d 94 (2004), and Rivera v. Lake County, 974 F. Supp. 2d 1179 (N.D. Ill. 2013), petitioner’s section 1983 cause of action did not exist and therefore did not accrue until his conviction was reversed during the marriage. Second, under In re Marriage of DeRossett, 173 Ill. 2d 416 (1996), a cause of action that accrues during a marriage is marital property. Third, prior to the conviction being vacated, the cause of action was not a present property interest but a mere expectancy, and under In re Marriage of Centioli, 335 Ill. App. 3d 650 (2002), it was not property for purposes of the Dissolution Act. Because the cause of action came into existence during the marriage (when petitioner’s wrongful conviction was vacated) it is property “acquired” during the marriage and, therefore, pursuant to section 503 of the Dissolution Act (750 ILCS 5/503 (West 2014)), the cause of action is marital property.

Section 503(a) states that “marital property” means “all property acquired by either spouse subsequent to the marriage.” (Internal quotation marks omitted.) Id. (quoting 750 ILCS 5/503(a) (West 1994)).

The trial court found that the award was marital, since the lawsuit accrued during the marriage and the Appellate Court affirmed the trial court’s ruling.

 

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