Skelton v. Skelton
5 S.W.3d 2
Ark.
1999
Check Treatment

*1 Diane SKELTON Allen SKELTON Kathy Roy 3d 2 5 S.W. 99-152 of Arkansas Court Supreme November delivered Opinion *3 Firm, Pettus, Pettus Law Donna C. Pettus and E. Lamar for by: appellant. Firm,

Smith Law Donna for by: Hayden Lyles, appellee. This arises out of a appeal Ju THORNTON, sti sti ce ce .. involves the distribution of a pension RAY benefits as marital disability raises three property. Appellant First, on he that the trial points court erred in appeal. argues his fireman’s as 'marital including for distribution Second, he that Ark. Code Ann. purposes. argues itself or in 1998), combination with (Repl. Administrative Order No. Guidelines, 10: Arkansas Child violates the Support Protection Third, Clause of the Equal Fourteenth Amendment. he that the chancellor argues did not err in his exempting disability benefits from marital We affirm the trial court. Skelton and

Roy Skelton were married Kathy on September 6, 1974. At the time of the Mr. Skelton had marriage, been work- for the ing Fire Fayetteville Department approximately eight Ms. Skelton filed for years. divorce on 1998. The divorce May was held on October hearing 1998. The had settled all parties issues the division of Mr. except Skelton’s fireman’s pension.

The Fireman’s Relief and Pension Fund is a retirement pro- established under gram Ark. Code Ann. 24-11-101 1996), (Repl. and allowed federal law. Under the ’by fund, rules of the pension Mr. Skelton was from prohibited contributions to or making paying taxes for social based upon employment by city. Mr. Skelton is Although benefits, for social ineligible he covered under the Fayetteville Pension Fund. Firefighters

Mr. Skelton retired from the fire after department twenty- three and four months of years service. At the time of his retire- ment, a could retire at fireman of his fifty percent regular salary plus dollars month for twenty each per served the year twentieth beyond of service. year If retirement resulted from a the disability, disability benefit was an additional fifteen of the fireman’s percent regular 1990, salary. January Skelton was awarded retirement regular $1,264.63 benefits in the amount of gross month. The per City Fayetteville contested Mf. Skelton’s entitlement to retire- disability ment, 31, 1991, and on the circuit January court of Washington found that Mr. Skelton County was entitled to continue to receive as a service-related, benefits result of a disability disa- line-of-duty. from an bility resulting 15, 1990, disorder. Since anxiety February $1,264.63 Mr. Skelton has received in retirement regular

231 benefit of retirement for a total monthly $361.38 disability $1,626.01. still receives these benefits. Mr. Skelton rule that retirement

Arkansas follows well-established benefits earned considered during marriage 261, v. Ark. 374 Meinholz (1986); v. 281 663 S.W.2d Day Day, Meinholz, Based 283 Ark. 678 S.W.2d 348 (1984). upon Allard, the trial of Allard v. 708 A.2d 554 (R.I. 1998), reasoning a marital asset under court treated Mr. Skelton’s retirement as court deter Arkansas’s statute. The chancery equitable-distribution mined that Mr. Skelton’s was marital awarded month, of that of Mr. $417.80 Ms. Skelton or one-half per portion Skelton’s benefit that resulted from gross regular monthly contributions to the The chancellor plan during marriage. declined to award Ms. Skelton of the retirement bene any portion fits that was awarded for Mr. Skelton’s We line-of-duty disability. $417.80 note that month is per approximately twenty-six percent $1,626.01. Mr. Skelton’s retirement benefit of monthly gross has excluded from its definition of marital Congress prop from social The Social Act erty any security. provides:

The of any future under this sub- right person any payment not be shall transferable or at law or in chapter assignable, equity, and none or or under moneys paid payable rights existing execution, attachment, shall be subject levy, subchapter or other or to the garnishment, legal process, operation any law. bankruptcy insolvency U.S.C. United States Court has (a) (1994). Supreme that this “a broad section bar adopted position imposes against the use of to reach all benefits.” any legal process Bd., v. Essex 409 U.S.413 We held County (1973). Philpott Welfare that the to make future of one attempt assignment spouse’s 42 U.S.C. preempted by provisions (a) 938 S.W.2d Gentry Gentry, (1997). We first address of whether contractual retirement question *5 that social benefits should be from security plans replace exempted marital The courts are divided on this point. sharply Florida, Dakota, Utah, Wisconsin, North West Connecti- Virginia, cut, Minnesota, view, and Rhode Island take the majority holding 232

that that social benefits are replace security plans v. included marital distribution. See 895 Jefferies, Jefferies Loudermilk, P.2d 835 v. (Utah 1995); Ct. Loudermilk 397 App. Olson, S.E.2d 445 1990); 905 Va. Olson v. N.W.2d 1 (W (N.D. Mack, 323 N.W.2d Ct. 1989); Mack v. 153 . (Wis. App. 1982) view, Ohio take the and Pennsylvania minority allowing to be from replacement plans exempt marital Cohenour, Cohenour v. 696 A.2d 201 1997); McClain v. (Pa. McClain, Walker, 693 A.2d 1355 v. (Pa. Walker 677 N.E.2d 1997); v. A.2d 641 (Ohio 1996); Endy Endy, (Pa. 1992); Schneeman, Schneemanv. 615 A.2d 1369 (Pa. 1992); Cornbleth v. Cornbleth, A.2d (Pa. 1990). Cornbleth, Skelton relies in which heavily the upon supra,

court held of the that the that husband’s was consid- part ered to be in lieu of social was from exempted marital estate. The Cornblethcase stands for proposition a once becomes a security replacement of the plan part estate, will be “there no Social benefit waiting court, cushion this financial Id. The Cornbleth pitfall.” relying solely law, to balance upon Pennsylvania sought between the equities wife, husband and the who both had pension plans.

We that Mr. Skelton to be recognize at appears placed because he was from disadvantage prohibited to social contributing however, under his fireman’s pension plan; minority view on which he relies does not take into account fundamental difference between social A Florida pension plans. court makes this distinction in 726 So. 2d 393 Johnson, Johnson Dist. Ct. (Fla. 1999). Florida’s distribution App. statute equitable benefits, 11vested and non-vested provides and funds rights, “[a] retirement, accrued during pension, profit-sharing, deferred annuity, and insurance compensation, plans programs are marital assets distribution.” Fla. Stat. subject equitable Ann. § 61.076(1) held (West 1997). Johnson, the court that the hus- band’s social a marital security replacement asset. Id. The court, Mack, decision in Mack v. persuaded supra, Johnson further reasoned that social security were replacement pension plans not so similar to federal social benefits as to render them from the Florida statutes. exempt *6 case, the Mack the Wisconsin Court

In Appeals provided rationale: following increases in relative social account security Although employee’s life, is not a like a security property value over his social working It a of social insurance. ‘To system engraft upon pension. a of accrued would security system property rights social concept to ever- it of the and boldness flexibility adjustment deprive it conditions which demands.’ changing Nestor, Id. v. 363 U.S. 603 (I960)). Flemming (citing issue, are we further Since courts divided on examine the behind social benefits and security purposes pension In the United States case of Court plans. Supreme Hisquierdo case, 439 U.S. 572 a railroad-benefits (1979), Court Hisquierdo, discussed the contractual nature of vis-a-visthe non- plans contractual nature of social for the security. Writing majority, Jus tice Blackmun states:

Like Social and unlike Security, most rail- private pension plans, alter, road retirement benefits are not contractual. Congress may ehminate, and even them at time. This to con- any vulnerability edict contrasts with the gressional strongly has protection Congress creditors, afforded from tax and all recipients those who gatherers, would of benefits.... ‘anticipate’ receipt Id. The in the benefits stated possibility changes expressly alter, amend, Social Act: “The to right any repeal of this is reserved to 42 U.S.C. provision Congress.” [Act] This (1994). the difference between social language emphasizes out, As the Mack case pension plans. points welfare, benefits are a or social insur- type public income; however, ance. Social revenue or provide is not contractual in nature and does not become a interest. It is to act at property subject change by congressional any time. most

According Hisquierdo, private pension plans contractual between the agreements employer employee. case, Mr. Skelton’s the contributions to his were made pension plan and became a interest during during 9-12-315; Ark. Code Ann. marriage. Day, supra. Skelton’s was not noncontractual social designed replace benefits; rather, it benefit which provided exceeded that of the social We note that Ms. security system. Skelton, which would otherwise by foregoing have compensation been received contributed during marriage, indirectly pen- *7 sion Because the of social and the plan. retirement purposes different, are plan are not fundamentally they interchangeable. Therefore, we affirm the trial court on this issue. his

In second on Mr. Skelton point Ark. appeal, argues Code Ann. 9-12-315 and the administrative order governing § child violate his to He support rights asserts that equal protection. classification exists impermissible between state who employees must forfeit social benefits and those who do employees not. He asserts “that there is no rational basis expressly for depriving one class of individuals of two-thirds of their retirement when pay the statute allows one-half to be taken as marital another one-third stated, for child As we have support.” previously Ms. $417.80 Skelton’saward of month is per approximately twenty- six of Mr. Skelton’s percent benefits. After the pension deductions of Ms. Skelton’saward of $417.80 month of the and an per $340.00 award of month for child Mr. per Skelton still support, $868.21 retains month of his $1626.01 per benefits. The assertion that he is of two-thirds of his deprived pay not true.

All doubts to a statute in pertaining question resolved in favor of 294, Arnold v. 306 Ark. constitutionality. Kemp, 813 S.W.2d 770 Where a (1991). constitutional construction is we are possible, of the compelled statute uphold validity under attack. Id. We have addressed the previously constitutionality of Ark. Code Hamilton, Ann. 9-12-315 in Hamilton v. 317 Ark. § 572, Hamilton, 879 S.W.2d case, 416 (1994). an elective share we held that this statute does Clause, not violate the Protection Equal or as Id. facially We declined to strike applied. down Ark. Code Ann. 9-12-315 because we could discern a easily rational § basis behind the General of the class of Assembly’s handling spouses the division of disputing Id. We also noted that effort any to amend the treatment of the class more addressed appropriately to the General Id. Assembly. Ark. Code Ann. Similarly, 9-12-315 is not violative of the Protection Equal Clause this case.

235 Ann. Mr. that Ark. Skelton Code argues the classificationof is unconstitutional as 1998) (R.epl. applied Mr. Skelton as marital We disagree. correctly test cites the rational basis for an to a challenge equal protection statute, Arthur, 53, Ark. as established in Adams v. 333 969 S.W.2d Arkansas 598 and Arkansas Ass’n. v. State Bd. (1998) Hosp. 454, 763 S.W2d 73 burden to (1989). Pharmacy, of the statute Mr. unconstitutionality Skelton. prove upon v. Estate Ark. Citizens Bank 667 S.W.2d Pettyjohn, he has the (1984). Skelton states that burden of correctly not that the act is related to proving rationally achieving any legiti mate of state under objective government conceiva any reasonably ble state of Ark. facts. See Streight S.W.2d Ragland, 459 (1983).

Mr. Skelton’s he fails because does not meet argument burden. In whether a determining statute violates equal protection *8 we consider several the factors: character of principles, (1) the classification; the individual (2) interests asserted of the support classification; and the asserted (3) governmental interests in support of Arnold, See classification. Matter In the the Estate supra; of of 35, 679 284 Ark. S.W.2d Epperson, 792 (1984). Protec Equal tion Clause Indeed, does not all preclude classifications. statutory classificationswhich have a rational basis and are statutory reasona related to the of the bly statute are purpose permissible. Urrey 711, CeramicTile v.Co. S.W.2d Mosley, 54 (1991). factors, On the first and second Mr. Skelton mis characterizes his as a for social replacement security. Social benefits are based that consider upon computations status, retirement age, income, amount outside including increases, for adjusted cost-of-living and other factors. many By contrast, Mr. Skelton’s pension for provided payment fifty per cent of his $20.00 for salary plus month each regular served per year the twentieth beyond year service. noted We have that he is not of two-thirds deprived as he Accord argues. pay, Mr. Skelton not ingly, disadvantaged, as a individually member of a class. We have concluded that Ark. Code Ann. related to several rationally legitimate governmental purposes,

one of which is to share of give marriage partners equal, earned benefits We have stated: during marriage. is not our role to discover the actual basis for the legislation. [I]t

Instead we are rational merely consider whether basis exists any which demonstrates the of a deliberate possibility nexus with state that the objectives, so is not the legislation product utterly and and void of hint arbitrary capricious government purpose any of deliberate and lawful purpose. The statute that earned

Streight, supra. recognizes money during to the It also marriage belongs both partnership. recognizes have contributed to the spouses pension plan during marriage and balances the distribution There is a rational basis accordingly. for the determination that statutory rights acquired during should be treated as marital With regard allowance of child this benefit reflects his support, responsibility children, of his minor end will when become support they adults. There ais rational basis for this treatment. we Accordingly, hold that Ark. Code Ann. 9-12-315 and the Administrative Order do not violate the Protection Clause of the Fourteenth Equal Amendment United States Constitution.

In the last on Ms. Skelton point appeal, argues disability 14, 1998, are On October the trial court ruled that these nonmarital monthly disability and shall-remain the sole and of Mr. Skelton. Mr. separate property 13, Skelton filed his notice of on November 1998. Pursuant appeal to Ark. R. P.—Civ. a notice of Ms. Skelton’s cross- App. filed on November 1998. appeal timely *9 Arkansas benefits from marital exempted disability in property the 1987 amendment to Ark. Code Ann. 9-12-315 (b)(6) (Repl. § 1998). statute reads: section,

(b) For the of purposes “marital property” means all property acquired by spouse subsequent except:

* * * (6) Benefits received or to be received from a ... personal . . . injury claim when those are for of any degree perma- nent or future disability medical expenses....

Id. In 297 Ark. 760 S.W.2d 875 we Clayton Clayton, (1988), that Act 676 of 1987 from marital emphasized “excepted property those benefits from an only claim that unliquidated personal injury would be for any degree or future medical permanent disability We further stated that “the expenses.” benefits or ele remaining ments of from one’s claim damage personal injury subject division as marital to Ark. Code Ann. 9-12- pursuant Id. 315(a)(1)(A).”

Later, Mason, in Mason v. 895 S.W.2d 513 we (1995), a test to implemented determine whether a two-prong claim as a satisfiesthe for “personal injury” an requirement exemp First, tion from marital the claim must be degree or future Second, medical permanent disability expenses. injury be must sustained while on the or in job of a tortious consequence case, act. In the Mason we held that Mr. Mason’s claim for his condition did not physical constitute a claim for “personal injury” as Ark. Code Ann. contemplated by (b)(6) because the ultimate source of his could be traced back to disability the wounds he suffered World War II. Id. during Mr. Mason’s did not injury test, second satisfy as it was a prong condition preexisting that was exacerbated Therefore, fall. on-the-job his disability benefits did not fall within the statutory marital-property exemption.

This case is Here, from distinguishable Mason. the ques tion is whether Mr. Skelton’s reflected a injury degree permanent and whether it disability was job-related. We note that the Wash ington Circuit Court’s County in 1991 that Mr. finding Skelton suffers from an disorder is anxiety not disputed. Approximately after the eight issue of years was disability adjudicated, Skelton continues to be for this compensated His contin disability. ued reflects that he still compensation suffers a degree permanent disability. there is no Additionally, that the dispute disability On the job-related. basis of the court, evidence before the trial we do not find reversible error in the chancellor’s determination that these benefits are not marital disability we Accordingly, affirm the decision of the trial court.

Affirmed.

CORBIN, J., concurring part; dissenting part.

238 in Corbin, concurring part; dissenting L. Ju ce,ce, s s ti ti I believe that the chancellor part.

DONALD the faded to balance in mari- properly equities dividing parties’ tal The facts of this case demonstrate that during Roy Skelton’s with Fire twenty-three-year employment Fayetteville he was to did contribute to the Department, Fireman’s required Relief and Pension Fund established by Fayetteville. City chancellor found that contribution to the specifically Roy’s fund was in lieu of social The chancellor found further that security. never made to contributions is thus not Roy security entitled to receive social benefits as a result of his employ- words, ment with the other was forced to city. Roy essentially his to collect social benefits in give up rights exchange fireman, as a an Fayetteville that employment arrangement benefitted the undoubtedly city. the chancellor ruled that the

Despite foregoing findings, entire minus that earned pension, prior marriage, In so the chancellor refused to ruling, whether inquire and to what extent Skelton is entitled to receive social Kathy secur- benefits. In this ity was error. my opinion, this is an issue of first I believe

Although that this impression, court should used the courts in adopt approach Pennsylvania Neel, and Ohio. v. See Neel 680 N.E.2d (Ohio Dist. App. Cohenour, v. 1996); Cohenour 696 A.2d 201 (Pa. Super. 1997); Schneeman, Schneemanv. 615 A.2d 1369 (Pa. v. 1992); Super. Endy 603 A.2d (Pa. Cornbleth, Endy, 1992); Cornbleth Super. A.2d 369 (Pa. 1990). those cases hold Super. that Collectively, because social benefits are from marital exempted property, a who receives a but no social spouse may be entitled to have from the marital exempted portion be considered spouse’s pension might in figuratively of social. benefits. The rationale for place position best stated in Cornbleth: One our with goals regard distribution must equitable be to treat individuals with circumstances a differing so as to equate different fashion thus, them one another as as nearly possible, bias in eliminating favor individuals. To the extent individuals with a class of, against,

Social enjoy that “asset” from exemption distribution we equitable believe those individuals participating must, likewise, service retirement programs] be so posi- [civil *11 individual divorced at tioned. Consider example being a normal work age fifty. history, approximately Assuming will have accrued a substantial as well as a likely pension person to Social When the is divided right Security. pension equitable there will be a distribution diminution of expected However, the will income. Social offset presence help contrast, the diminution. In an individualwho was civilservice will, the trialcourt’s is be manyyears approach approved, participantfor if dealta doubleblow sorts.The will become the marital pension part and, thus, divided, estate there will be no Social yet Securitybenefit to cushionthis waiting pitfall. financial 580 A.2d at 371-72 added). (emphasis

Thus, to reach an order distribution of marital equitable it is to consider the individual property, necessary spouses’ eligibil- not, however, for social benefits. This does ity security require chancellor social automatically exempt figurative security Rather, benefits. it the chancellor to conduct an requires inquiry determine whether such an under the cir- exemption equitable McClain, cumstances. See McClain v. 693 A.2d 1355 (Pa. Super. that the husband 1997) was not entitled to set aside (holding part 'his federal benefits in lieu of social because security the wife had no social benefits of her own to appreciable balance such a credit). against courts courts of The chancellor

Chancery equity. clearly has the to divide marital other than one-half to power property when it is to do so. Ark. party Code Ann. 9- equitable .each Brown, 12-315(a)(l)(A) 1998); Brown v. (Repl. Askins, S.W.2d 810 Askins v. Ark. (1998); 704 S.W.2d 632 Indeed, section (1986). 9-12-315(a)(l)(A)(iv) allows the specifically chancellor to consider the amount and sources of income for each this court should remand party. my this case to the opinion, chancellor to determine the extent of to social Kathy’s-entitlement benefits from her current full-time at Wal employment .Mart, as well as from she has held. Once that any previous jobs made, determination is the chancellor should fashion an equitable distribution of To allow the chancellor to Roy’s pension. blindly view the entire as marital patently inequitable. reason, For this I dissent. I concur with the

Additionally, majority’s section holding Clause; however, does not violate the Protection I Equal with the used to disagree reach that analysis conclusion. In my section 9-12-315 is not opinion, unconstitutional because it does not between those distinguish persons receiving retirement benefits and those a retirement receiving in lieu fact, of social not, benefits. In face, the statute does on its retirementbenefits from exempt marital property; rather, *12 those social only benefits for disa- paid permanent bilities and future medical are This expenses is evident exempted. statute, from the of the which language in provides pertinent part: section, (b) For the of purpose this “marital property” means all property acquired by spouse subsequent except:

(6) Benefits received or to be received from a workers’ com- claim, claim, pensation personal injury or social security claim when those any degree permanent disabilityor benefits for future medicalexpenses[.][Emphasis added.] Because there is no differential treatment of the two classes of there can be no persons, Moreover, violation. equal-protection benefits were Roy’s disability from the exempted property Thus, the chancellor. he by cannot that he is argue treated being under the statute. differently also that

Roy section argues 9-12-315 in combination with this court’s Administrative Order No. 10 is unconstitutional because is deemed pension both marital and income property for pur of child poses support. is Though somewhat argument confus it ing, be appears on the premised notion that it is unfair to consider his benefits as both marital and income. property In this respect, argument be a appears of that duplication If, raised in the however, first point. Roy the statute arguing and administrative order from the definition of exempt income benefits, social benefits, but not argument without merit. Both of benefits are types considered properly as income for purposes child determining support. Gentry Gentry, 938 S.W.2d 231 (1997) (recognizing federal law allows social benefits to be reached a former by division). child but not for alimony support,

spouse Thus, more than benefits are not any true social security exempt the definition income in child benefits from determining support. sum, not afford to either section 9-12-315 does protection i.e, those

“class” receiving persons, such, As and those benefits. Roy’s receiving pension equal- Moreover, is without merit. section 9-12-315 protection argument unconstitutional, No. are not as and Administrative Order they true social do not differentiate between those persons receiving in benefits and those lieu of receiving pension Both classesof benefits be viewed as income for security. may child for the reasons determining support. Accordingly, purposes stated, in the herein I concur result reached on this majority issue.

Concurring part; dissenting part.