APPEAL from the Superior Court of Riverside County. Irma Poole Asberry, Judge. (Super.Ct.No. RID210136)
The opinion of the court was delivered by: McKinster J.
CERTIFIED FOR PARTIAL PUBLICATION*fn1
Affirmed in part; reversed in part with directions.
Appellant Flora S. Ruiz (wife) and respondent George L. Ruiz (husband) were married on March 17, 1973, and separated on March 18, 2005. Judgment was entered on July 28, 2009, following a trial on disputed property issues. Wife appeals, raising two issues.
The first issue presented on appeal pertains to the trial court's apportionment of a lump-sum payout of workers' compensation benefits wife received approximately three years before their separation. Wife contends that the trial court erred by applying the general presumption that property acquired during marriage is community property, by placing the burden on her to produce evidence that the payout was separate property, and by devising a scheme of apportioning the funds in the absence of any evidence supporting the scheme. Wife also contends that the trial court erred in awarding husband $32,800 in so-called Epstein credits. (In re Marriage of Epstein (1979) 24 Cal.3d 76 (Epstein).)
We find no error in the court's characterization of the workers' compensation award as partially community property and partially separate property and no abuse of discretion as to its apportionment of the award. We will, however, reverse the judgment with respect to the award of Epstein credits.
THE TRIAL COURT CORRECTLY CHARACTERIZED THE WORKERS' COMPENSATION AWARD AS PARTIALLY COMMUNITY PROPERTY AND PARTIALLY SEPARATE PROPERTY
In Raphael v. Bloomfield (2003) 113 Cal.App.4th 617, the court held that where a spouse receives a lump-sum workers' compensation permanent disability award before separation, the award is community property only to the extent that the award is intended to compensate for the injured spouse's reduced earnings during the marriage before separation, and/or for injury-related expenses paid with community funds. The remainder of the award is the separate property of the injured spouse, in that it is intended to compensate for the injured spouse's diminished earning capacity and/or medical expenses, which continue after the separation. (Id. at pp. 622-624.)
In this case, wife suffered a work-related injury in 1992 which left her permanently disabled and unable to work after March 1993. In April 2002, approximately three years before the parties separated, wife received a lump-sum workers' compensation permanent disability settlement for that injury in the amount of $250,000. After deduction of attorney's fees and medical expenses, the net payout was $172,364. Wife contended that Raphael v. Bloomfield, supra, 113 Cal.App.4th 617 creates an exception to the rebuttable presumption, provided for in Family Code section 760, that all property acquired during the course of a marriage is community property, and instead creates a rebuttable presumption that the award is the separate property of the injured spouse, thus placing the burden on the noninjured spouse to produce evidence as to how the award was allocated between compensation for loss of past income and compensation for loss of future earning capacity.*fn3 Accordingly, she contended, it was husband's burden to prove that some portion of the award was community property. Neither party could produce any evidence as to how the award was allocated between compensation for wife's reduced earnings during the marriage and/or expenditure of community funds as a result of her injury and compensation for wife's future loss of income.
The trial court agreed that under Raphael v. Bloomfield, supra, 113 Cal.App.4th 617, only that portion of the award which compensated wife for her lost earnings during the marriage was community property. However, it applied the general rule that a party who claims that property acquired during marriage is separate property has the burden of proof on that issue. It found that wife had not met her burden to prove how much of the award was separate property. It applied a formula suggested by husband to apportion the award between separate and community property.
On appeal, wife contends, first, that under Raphael v. Bloomfield, supra, 113 Cal.App.4th 617 (hereafter sometimes Raphael), the entire workers' compensation award was her separate property unless there is evidence that a portion of the award was intended to compensate for lost earnings during the marriage or for injury-related expenses paid by the community. She contends that ...