Rubbing kitty's nose in urine, spanking it and yelling will not train kitty to behave; it will only make kitty stressed and anxious. I can understand how exasperated and frustrated you both are, but it's too bad your kids had to see your hubby loose his cool with Midnight and hope they don't model his behaviour.
You definitely want to get Midnight out of the habit of going on your bed. I really think to get kitty's mind off the bed you're going to have to keep him out of the bedroom completely as he seems to be very focused on peeing on the bed. You'll have to keep your bedroom door closed all the time. The bedroom should be off limits--you'll have to be consistent with this for any chance of success. Do you have a warm small room?---laundry room or bathroom--where you can put Midnight at night with Tigger to keep him company away from your Lab. Set it up with cat bed or blankets food, water and litterbox. (if he pees on his blankets or cat bed, put down a cardboard box on its side and put in some shredded newspaper). This should settle him down, and hopefully in six months he has forgotten about peeing on your bed. Hope this will be a solution to your problem.