Goode v. Goode

John I. Purtle, Justice, dissenting. The chancellor treated appellant’s unliquidated workers’ compensation claim for permanent partial disability benefits as marital property and divided the unliquidated claim pursuant to Ark. Stat. Ann. § 34-1214 (Supp. 1983). Appellant argues that the claim was not marital property, and I agree with him.

The chancellor held that Act 705 of 1979 created a new concept of marital property and that appellant’s pending workers’ compensation claim constituted marital property within the meaning of the Act. In making the award the chancellor noted that no distinction had been made regarding which portions of the pending claim were related to future medical, lost earnings, both past and future, and permanent disability. Since no distinction was made in the claim for permanent disability benefits the court held the entire claim would be treated as marital property. The only question presented to this court is whether an unliquidated claim by an injured employee for permanent partial disability benefits is marital property when a divorce is granted prior to receipt of the benefits claimed. There is no appellate decision in Arkansas on this exact issue and we must therefore construe the statute as it relates to this issue.

Act 705 is an attempt to clarify the meaning of marital property and in pertinent parts states:

(b) For the purpose of this statute “marital property” means all property acquired by either spouse subsequent to the marriage except:

(1) Property acquired by gift, [etc.] . . . ;

(2) Property acquired in exchange . . . ;

(3) Property acquired by a spouse after a decree of divorce from bed and board;

(4) Property excluded by valid agreement . . .

(5) The increase in value of property acquired prior to the marriage.

All property acquired during the marriage, except as above stated, is marital property. An unliquidated claim for damages is not one of the exceptions. The majority is now adding “or to be acquired” to the word acquired. In Potter v. Potter, 280 Ark. 38 , 655 S.W.2d 382 (1983), we held that in order for property to be treated as marital property it must have been acquired during the marriage. In the case of Day v. Day, 281 Ark. 261 , 663 S.W.2d 719 (1984), we restated our position on marital property. In doing so we reviewed all our cases since the passage of Act 705. We treated such matters as pensions, annuities, IRAs and contingent funds which had no loan value and could not be transferred. In Day we did award the wife a half interest in her husband’s pension plan although he could not hypothecate it at the time nor was he eligible to commence drawing benefits. The fund had a value of $95,425.03 at the time of the divorce and had accumulated during the 29 year marriage through monthly contributions from the husband’s salary and equal contributions from the employer. We specifically noted that any contributions to the plan made by Dr. Day after the divorce would not be treated as marital property.

Appellant cites Lowrey v. Lowrey, 260 Ark. 128 , 538 S.W.2d 36 (1976), as supportive of his argument. The court in Lowrey stated: “Consequently, we conclude that such a personal injury claim does not constitute personal property within the meaning of Ark. Stat. Ann. § 34-1214.” The appellee contends that the reasoning in Lowrey is no longer followed and cites Day as authority. I do not think either Lowrey or Day are controlling but I do consider the reasoning in both.

Act 705 did not create any new type of property. It merely provided for a pattern of distribution of property upon the dissolution of a marriage. Workers’ compensation and personal injury claims were not specifically mentioned in the Act. The Texas Court of Civil Appeals has held that a claim for future workers’ compensation benefits is not community property because the Texas Workmens’ Compensation Act prohibits assignment. Hicks v. Hicks, 546 S.W.2d 71 (1976). A provision of the Arkansas Workers’ Compensation Act, Ark. Stat. Ann. § 81-1321 (Repl. 1976), provides that such benefits are not assignable and are not subject to garnishment, levy, attachment, execution or other legal process.

Authorities are divided upon the issue of payment of future workers’ compensation benefits to the ex-spouse. The Arizona Court of Appeals, in Bugh v. Bugh, 125 Ariz. 190 , 608 P.2d 329 (1980), stated their rule as follows:

We hold that workmen’s compensation benefits paid to the injured worker after the dissolution of the worker’s marriage for injuries received during the marriage are the separate property of the worker after the dissolution.

It is fair to state that the majority rule is that workers’ compensation benefits are divisible property if received during the marriage. 10 N. Ky. L. Rev. 531 at 544. The benefits here certainly were not received during the marriage.

The appellant’s outstanding claim is for permanent partial disability, which means he has a diminished earning capacity in the future. When such claim is awarded it is due and payable weekly unless the claimant and the carrier jointly petition the claim in which event it is paid in a lump sum. In either event the amount received by the injured worker represents payment for future losses. The appellant received temporary total disability prior to the divorce and that money, representing a percentage of lost wages, was evidently used in the same manner as were his regular wages. The claim benefits received during the marriage are not in issue here.

A good example of the unfair prejudice the majority creates by the opinion would be when a couple marry and the next week one of them is injured in an accident covered by Workers’ Compensation and is disabled for life. The other spouse then decides to get a divorce and is awarded half the funds to be received by the injured party. The uninjured ex-spouse then remarries a person who is financially sound and earns a good salary. The ex-spouse is also employed at a salary far greater than the benefits being received by the injured party. The only way to prevent this type situation from occurring is to hold that such funds are simply income to the injured party.

I would reverse.

Holt, C.J., and Hickman, J., join in this dissent.