California Family Code § 780: Personal Injury Damages as Community Property

Plain-Language Summary

California Family Code § 780 provides that if a married person receives money or property due to a personal injury (for example, through a lawsuit judgment or settlement) and the underlying injury happened during the marriage, that compensation is considered community property. In other words, personal injury damages obtained while the spouses are married belong to both spouses jointly. The law treats these funds like any other asset acquired during marriage.

This rule is not absolute – the statute begins with “Except as provided in Section 781,” which means there are important exceptions. Family Code § 781 (not detailed here) says that if the cause of action (the event giving rise to the injury claim) arose after the marriage ended (such as after a divorce judgment or while the spouses were living separate and apart), then the recovery is the separate property of the injured spouse. Likewise, if one spouse injured the other (e.g., domestic violence or an intentional tort against the spouse), any damages paid to the injured spouse are treated as that spouse’s separate property. These exceptions prevent an unfair result where the non-injured spouse would otherwise share in a recovery that accrued after separation or from harming their own partner.

Family Code § 780 also mentions that its rule is “subject to the rules of allocation set forth in Section 2603.” Section 2603 comes into play during a divorce to decide how to divide “community estate personal injury damages.” In a divorce, even though personal injury awards from during the marriage are labeled community property under § 780, the law recognizes that the injured spouse has a special claim to that money. Under Section 2603, community personal injury damages are usually assigned to the injured spouse rather than split equally. A family court can deviate and give a portion to the other spouse only if the interests of justice strongly warrant it – considering factors like each party’s financial needs and how much time has passed since the injury or recovery. Even then, the injured spouse must receive at least 50% of those damages. In practical terms, this means that while an injury settlement from during marriage is jointly owned, the injured spouse will typically keep most or all of it if the marriage ends, unless a court finds a good reason to award some to the other spouse.

Real-World Examples

Car Accident During Marriage: John and Mary are married when John is injured in a car accident caused by a negligent driver. John later receives a $100,000 settlement for his injuries. Because the cause of action (the accident) arose while John and Mary were married, Family Code § 780 says that the $100,000 is community property. If John and Mary divorce, that settlement is part of the community estate. However, under the special rules for personal injury awards, a court would likely award most or all of that $100,000 to John as the injured spouse (ensuring at minimum John gets 50% or more of it), rather than splitting it 50/50. This reflects the law’s recognition that the compensation is intended primarily to make the injured person whole.
Injury After Separation: Suppose John and Mary separate on January 1, and later that year (while the divorce is still pending) Mary is injured at work and wins a judgment for her injuries. Even though they are still legally married until the divorce is finalized, the cause of action arose while they were living separate and the marriage had effectively ended. Under the exception in Section 781, Mary’s injury award would be her separate property, not community property. John would have no ownership interest in that recovery, and it would not be subject to division in the divorce.
Spousal Wrongdoing: In another scenario, imagine during the marriage one spouse physically injures the other (a domestic violence incident) and the injured spouse sues and obtains damages from the wrongdoing spouse. Even though this occurred during marriage, California law (Section 781(c)) classifies the compensation for this inter-spousal injury as the injured spouse’s separate property. It would be unjust for the perpetrator to benefit from the damages paid for harming their spouse, so the law ensures those damages belong solely to the victim spouse.

Published Case Law on § 780

In re Marriage of Devlin (1982) 138 Cal.App.3d 804 – Although decided before the Family Code was enacted (under previous Civil Code provisions), this case illustrates the principle carried into § 780. The husband had received a large personal injury settlement during marriage and used it to purchase various assets. Upon divorce, the trial court awarded the bulk of those assets to the husband (the injured party) instead of splitting them equally. The Court of Appeal upheld this, explaining that personal injury recoveries are community property during marriage but are to be assigned to the injured spouse upon divorce (absent special circumstances). This early case confirmed that it is equitable for the injured spouse to retain most of the injury compensation, foreshadowing the rules now in Family Code §§ 780 and 2603.
Meighan v. Shore (1995) 34 Cal.App.4th 1025 – In this case, the Court of Appeal noted that Family Code § 780 simply continues the prior law (formerly Civil Code § 4800) classifying personal injury claims arising during marriage as community property. The case involved a legal malpractice situation where an attorney failed to inform a wife of her right to file a loss of consortium claim. While the core issue was the attorney’s duty, the court’s discussion recognized that any loss of consortium damages (a spouse’s claim for their own suffering due to the other spouse’s injury) would fall under § 780 if the underlying injury occurred during marriage. In short, Meighan reaffirms that personal injury causes of action arising in the marital period are community assets under California law.
In re Marriage of Klug (2005) 130 Cal.App.4th 1389 – This case applied Family Code § 780 and the related sections to a unique scenario. Here, a wife had received a $346,000 legal malpractice settlement, and the issue was whether that settlement was community property (because the events leading to it began during marriage) or her separate property (because the harm was realized after separation). The Court of Appeal determined that the malpractice cause of action accrued after the spouses’ separation, meaning the settlement was the wife’s separate property and not subject to division as a community asset. Klug underscores how courts determine the character of injury-related recoveries by looking at when the underlying cause of action arose. If it arose during the marriage, § 780 makes it community property; if it arose after separation, it belongs to the injured spouse alone. This decision also highlights that even for community personal injury claims, the injured spouse’s interests are strongly protected – the husband in Klug was not entitled to share in a recovery that was deemed to have arisen after the marital community ended.

Full Text of California Family Code § 780

780. Except as provided in Section 781 and subject to the rules of allocation set forth in Section 2603, money and other property received or to be received by a married person in satisfaction of a judgment for damages for personal injuries, or pursuant to an agreement for the settlement or compromise of a claim for such damages, is community property if the cause of action for the damages arose during the marriage.

This content is provided for general informational purposes only and is not legal advice. Laws and their interpretations can change, and how the law applies to your specific situation may vary. For advice regarding your own circumstances, consult a qualified attorney.