## Facts

- Husband and wife married in 1965, divorced in 1983, and had one minor child at the time of dissolution.
- During the marriage (1980), wife suffered toxic shock syndrome, incurred significant medical treatment, and had a potential personal-injury claim.
- The divorce decree anticipated a future recovery and provided that any recovery “directly attributable” to (1) past medical expenses, (2) loss of services to the community, and (3) loss of community earnings up to dissolution would be community property divided equally; the remainder (including physical injury and pain and suffering) would be wife’s separate property.
- After dissolution, wife obtained a personal-injury settlement exceeding $80,000 but could not provide a detailed breakdown of the settlement’s components.
- Wife presented evidence that approximately $1,421.16 in medical costs had been paid out-of-pocket, while roughly $80,000 in medical bills were paid by health insurance obtained through husband’s employment during the marriage.
- Wife later sought enforcement of unpaid alimony and child support; husband did not dispute arrearages but sought a credit based on his asserted community share of the settlement.
- The trial court credited husband approximately half of wife’s out-of-pocket medical expenses ($714.58) on the theory that only those amounts represented community loss and thus community property under the decree.
- Husband appealed, arguing the community portion of the settlement was greater than the out-of-pocket medical payments.

## Issues

1. Under a decree allocating as community property the portion of a personal-injury recovery “directly attributable” to specified community losses, must the court determine what portion of the settlement compensated those losses rather than limiting the community share to out-of-pocket expenditures?
2. Did the trial court err by failing to make findings allocating the settlement to medical expenses and other decree-identified community components before calculating husband’s credit against arrearages?

## Decision

- The Court of Appeals reversed the post-decree order and remanded.
- The trial court erred by treating “directly attributable to past medical expenses” as limited to out-of-pocket payments and by not determining what portion of the settlement itself compensated medical expenses and other community items identified in the decree.
- On remand, the trial court must take evidence and make findings allocating the settlement between decree-defined community components and wife’s separate-property damages, then recalculate any credit.

## Legal Principles

- When a decree characterizes as community property the portion of a spouse’s personal-injury claim or recovery “directly attributable” to specified community losses, the controlling inquiry is allocation of the recovery to those loss categories.
- A court may not substitute a measure of “community loss” (such as out-of-pocket payments) for the decree’s required determination of what portion of the settlement compensated past medical expenses, loss of services to the community, and loss of community earnings up to dissolution.
- Adequate findings are required to support a post-decree allocation of settlement proceeds between community and separate property and any resulting credits or offsets.

## Conclusion

The appellate court required settlement-specific fact-finding and allocation consistent with the decree’s categories, reversing the trial court’s out-of-pocket-only approach and remanding to determine the community portion of the personal-injury settlement and any corresponding credit against arrearages.


Russell v. Russell, 740 P.2d 127 (N.M. Ct. App. 1987)