Gallegos v. Gallegos
In Gallegos v. Gallegos, 174 Ariz. 18, 846 P.2d 831 (App. 1992), a father settled a personal injury claim and received two payments totaling nearly two million dollars. Id. at 19-20, 846 P.2d at 832-33.
On a petition to modify the amount of child support, the family court included the entire amount of the settlement in the father's income and ordered the child support payment increased accordingly. Id. at 20, 846 P.2d at 833.
The Court reversed and held that:
The amount the father received in settlement of his personal injury claim was to reimburse him for the extraordinary expenses he would incur to maintain an appropriate level of functioning during his lifetime. While his injury does not relieve him from his obligation to pay child support, it does require a determination of the necessary medical, drug and special care expenses the father incurs each month in calculating his child support obligation. Such amounts should be deducted from his gross income in determining his income to calculate the child support obligation under the schedule of basic child support. Id. at 22, 846 P.2d at 835.
The Court concluded that "the trial court abused its discretion . . . because a strict application of the guidelines was inappropriate and unjust . . . and violated the statutory provisions from which they were enacted." Id. at 20, 846 P.2d at 833.
The Court remanded for a determination of what portion of the settlement was properly considered as income. Id. at 22, 846 P.2d at 835.