dissenting. I disagree with the majority decision. The court’s holding does correctly recognize that Clayton v. Clayton, 297 Ark. 342, 760 S.W.2d 875 (1988), controls, but the court then erroneously applies the rule in Clayton.
In Clayton, this court held that a spouse’s Federal Employers’ Liability Act (FELA) claim for an unliquidated personal injury is subject to being divisible as marital property under Ark. Code Ann. § 9-12-315, however, the Clayton court excepted from marital property those FELA benefits received for any degree of permanent disability or future medical expenses. In Clayton, this court remanded, instructing the lower court to hold further proceedings and to make necessary findings to determine what benefits were to be considered marital property and distributed under § 9-12-315.
Unlike in Clayton, here appellee Cornelius Collins settled his FELA claim with his employer, Union Pacific Railroad Company (Union Pacific), in the gross amount of $742,000, but deducting therefrom attorneys’ fees, litigation and other costs, leaving him a lump-sum payment of $480,717.18. Collins then structured this net amount, claiming all of it was for permanent disability or future medical expenses, thus, making these specific benefits indivisible as non-marital property under § 9-12-315(b)(6).1 The trial court then improperly adopted Collins’s manipulation of his settlement terms that completely excluded his wife, Martha Collins, from sharing in any of his FELA benefits.
Our court and the General Assembly have clearly decided that divorcing spouses should share in unliquidated personal injury claims — except for permanent disability and future medical expenses. Consequently, we should not permit an injured spouse to settle around the other spouse by manipulating settlement terms so as to designate all benefits as resulting from a permanent disability.2
Mr. Collins’s unrebutted expert testimony rendered by Dr. James Long at the hearing on this matter reflects Collins had suffered past wage losses in the amount of $244,784.00.3 That being so, such past lost-wage benefits accumulated during the marriage are clearly marital property to be equally distributable under § 9-12-315(a). The trial court’s failure to state reasons for failing to divide these lost wages equally was error. See Harvey v. Harvey, 295 Ark. 102, 747 S.W.2d 89 (1988); see also Duncan v. Duncan, 11 Ark. App. 25, 665 S.W.2d 893 (1984). Candidly, it makes no sense for the trial court to accept the injured spouses’ argument that he sustained a permanent injury without acknowledging he also suffered past medical expenses and lost income. In fact, as already pointed out, that is exactly what the proof here showed below. For this reason alone, this case should be reversed and remanded for further proceedings.
Another benefit in issue arises involving a $14,856.85 check which was made payable to Mr. Collins. Although the trial court’s finding suggests Mr. Collins received checks payable to medical providers in the amount of $14,856.85, the record reflects a check was made payable in this amount to Mr. Collins.4 It appears the trial court’s finding was clearly erroneous on this point, and it, too, should be reconsidered by the trial court on remand.
In conclusion, I point out that my earlier interpretation of Arkansas’ marital property statute, Ark. Code Ann. § 9-12-315 (Repl. 1998), was that a spouse’s “unliquidated” personal injury claim is not marital property. However, I lost that argument in a 4-3 decision in Bunt v. Bunt, 294 Ark. 507, 744 S.W.2d 718 (1988) (Hickman, Purtle and Glaze, JJ., dissenting). In that dissent, I posed a series of questions concerning problems that likely would arise when judges would be required to retain jurisdiction to divide future proceeds from personal injury claims.
While I remain firmly convinced that a spouse’s unliquidated personal injury claims should not be marital property, our case law now clearly holds otherwise. In addition, the General Assembly has not deemed it necessary to modify § 9-12-315 so as to except such personal injury claims; instead, in 1987, it merely amended § 9-12-315(b), only to exclude the marital property benefits from personal injury claims when those benefits are for any degree of permanent disability or future medical expenses. However, by endorsing a procedure under § 9-12-315, whereby an injured spouse can unilaterally settle his personal injury claim so as to exclude his or her spouse, we can expect more cases like the instant one and ex-spouses will find themselves without recourse to protect whatever benefits that were intended for them under the statute. We should reverse and remand for the reasons above.
ARNOLD, C.J., and Imber, J., join this dissent.Provision (b)(6) reads:
(b) For the purpose of this section, “marital property” means all property acquired by either spouse subsequent to the marriage except:
(6) Benefits received or to be received from a workers’ compensation claim, personal injury claim, or social security claim when those benefits are for any degree of permanent disability or future medical expenses. (Emphasis added.)
In Mr. Collins’s release to Union Pacific, he said, “Considering myself permanently disabled as a result of said accident and injuries, I further agree as a consideration for the payment to me of the sum of money mentioned herein, that I shall not return, nor attempt to return to work for [Union Pacific].”
The majority opinion concedes this testimony, but then suggests there is nothing in the record to indicate the chancellor did not consider this evidence in reaching his conclusion that the entire settlement was awarded for permanent disability. Again, the majority loses sight of the fact that past lost wages are marital property and, once that was established, it was the chancellor’s responsibility to comply with the requirement to state the basis for not dividing the property equally. No such reasons or findings are found in the chancellor’s decision.
At pages 96-109 in the transcript, particularly Mr. Collins’s attorney, Nelson Gregory Wolff, testified to damages sustained by Mr. Collins and how settlement monies were disbursed. Wolff said:
There are checks that are paid to Neal (Collins), and on the back, he endorsed to medical providers for, for Neal himself so he can walk out of the office and not worry about having to deal with paying medical bills now, in the future or expenses or anything.
The first check was in the amount of $14,856.85 that was made payable to Neal. That was a breakdown of part of the settlement so that he wouldn’t have to carry it all in a big lump sum. He received a bigger check later. At the bottom he gets another check in the amount of $480,787.18.
These checks were all payable to Neal. Some of them were on behalf of outstanding medical bills that may have been related or unrelated to the case and that is how they were prepared. The checks that have medical providers in parenthesis, were all medical bills due and owing at the time of setdement.
Clearly from Wolffs unrebutted testimony, Mr. Collins was paid for past medical expenses and checks were both related and unrelated to Collins’s FELA claim. Obviously, the past medical expenses are not excepted from the marital property statute, and if the chancellor desired to treat these checks as nonmarital, he was required to state his reasons for doing so. Again, the chancellor merely accepted Mr. Collins’s setdement terms as providing all funds paid to be for permanent disability and future medical expenses, which was wrong.