{
  "id": 9158153,
  "name": "PUBLIC EMPLOYEE CLAIMS DIVISION v. Richard CHITWOOD",
  "name_abbreviation": "Public Employee Claims Division v. Chitwood",
  "decision_date": "1996-03-25",
  "docket_number": "95-456",
  "first_page": "30",
  "last_page": "35",
  "citations": [
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      "cite": "324 Ark. 30"
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      "cite": "918 S.W.2d 163"
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    "name": "Arkansas Supreme Court"
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      "category": "reporters:state_regional",
      "reporter": "S.W.2d",
      "year": 1991,
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      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        1916696
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      "category": "reporters:state",
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        1630069
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      "year": 1972,
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      "cite": "223 Ark. 894",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        1650415
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      "year": 1954,
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        "/ark/223/0894-01"
      ]
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    {
      "cite": "312 Ark. 286",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        1935036
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      "weight": 2,
      "year": 1993,
      "opinion_index": 0,
      "case_paths": [
        "/ark/312/0286-01"
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    {
      "cite": "312 Ark. 481",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        1935079
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      "weight": 2,
      "year": 1993,
      "opinion_index": 0,
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        "/ark/312/0481-01"
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    {
      "cite": "322 Ark. 461",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        1447579
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      "weight": 2,
      "year": 1995,
      "opinion_index": 0,
      "case_paths": [
        "/ark/322/0461-01"
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    {
      "cite": "Ark. Code Ann. \u00a7 11",
      "category": "laws:leg_statute",
      "reporter": "Ark. Code Ann.",
      "opinion_index": 0
    }
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  "last_updated": "2023-07-14T16:22:54.921906+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [],
    "parties": [
      "PUBLIC EMPLOYEE CLAIMS DIVISION v. Richard CHITWOOD"
    ],
    "opinions": [
      {
        "text": "ANDREE LAYTON Roaf, Justice.\nThe issue in this appeal is whether the appellant Public Employee Claims Division of the Arkansas Insurance Department (PECD), the workers\u2019 compensation carrier for state agencies, owes a one-third attorney fee as costs of collection from its subrogation claim against a personal injury judgment awarded to appellee Richard Chitwood, a state employee. We agree that the Circuit Court erred in finding that Chitwood\u2019s attorneys were entided to recover one-third of PECD\u2019s subrogation claim as costs of collection, and reverse.\nRichard Chitwood, an employee of the Arkansas Department of Labor, was involved in a job-related automobile accident in January 6, 1988. Chitwood filed a workers\u2019 compensation claim with PECD, and also filed suit against the negligent driver, the driver\u2019s employer, and their respective insurance companies. PECD paid $8,096.80 in worker\u2019s compensation benefits to Chitwood and advised Chitwood\u2019s attorney of its subrogation lien.\nPECD learned of Chitwood\u2019s lawsuit a few days before the trial date, and filed a Motion to Intervene and Complaint in Intervention on the day of trial. The trial court granted the Motion to Intervene, and trial was held on the third-party tort claim. PECD\u2019s only participation in the litigation was to provide Chitwood\u2019s attorney with copies of medical bills. The jury awarded Chitwood $33,654.99. The trial court ordered the judgment paid into the registry of the court pending resolution of the subrogation claim, and allowed Chitwood to withdraw $25,549.14, leaving $8,096.80, or the amount of PECD\u2019s claim. Chitwood\u2019s attorney received one-third of the amount withdrawn as attorney\u2019s fees plus court costs of $634.55, and the remainder was paid to Chitwood.\nAfter a hearing, the trial court ruled that since attorney\u2019s fees had not been taken from the entire amount of the judgment, one-third should be deducted from the $8,096.80 subrogation amount for attorney\u2019s fees and costs. The trial court ordered $5,417.40 to be paid to PECD and the remainder paid to Chitwood and his attorney.\nPECD argues that the trial court incorrectly interpreted and applied statutory law in finding that Chitwood\u2019s attorneys were entitled to recover one-third of its subrogation claim as fees and costs. Arkansas Code Annotated \u00a7 11-9-410 (Supp. 1995) deals with third-party liability, and provides in pertinent part:\n(a) LIABILITY UNAFFECTED.\n(1) The making of a claim for compensation against any employer or carrier for the injury or death of an employee shall not affect the right of the employee, or his dependents, to make claim or maintain an action in court against any third party for the injury, but the employer or his carrier shall be entitled to reasonable notice and opportunity to join in the action. If they, or either of them, join in the action, they shall be entitled to a first lien upon two-thirds (2/3) of the net proceeds recovered in the action that remain after the payment of the reasonable costs of collection, for the payment to them of the amount paid and to be paid by them as compensation to the injured employee or his dependents.\n(2) The commencement of an action by an employee or his dependents against a third party for damages by reason of an injury to which this chapter is applicable, or the adjustment of any claim, shall not affect the rights of the injured employee or his dependents to recover compensation, but any amount recovered by the injured employee or his dependents from a third party shall be applied as follows:\n(A) Reasonable costs of collection shall be deducted;\n(B) Then, in every case, one-third (1/3) of the remainder shall belong to the injured employee or his dependents, as the case may be;\n(C) The remainder, or so much as is necessary to discharge the actual amount of the liability of the employer and the carrier; and\n(D) Any excess shall belong to the injured employee or his dependents. (Emphasis added).\nThe statute provides not only for the intervening carrier\u2019s lien upon proceeds received in an action against a third party, but also spells out how the carrier\u2019s entitlement shall be computed. Reasonable costs of collection are first deducted, and the employee is awarded outright the first one-third of the net proceeds. The insurance carrier is given a first lien on only two-thirds of the net proceeds. PECD submits the following distribution as the correct application of the statutory formula:\nGROSS JUDGMENT SUM $33,645.99\nCOST OF COLLECTION (hypothetical) $ 1,000.00\nAFTER COST AMOUNT $32,645.00\n1/3 ATTORNEY FEE $10,882.00\nNET AFTER FEE $21,763.00\n1/3 TO CLAIMANT $ 7,254.34\nBALANCE AVAILABLE FOR SUBROGATION $14,508.66\nSUBROGATION TO PUBLIC EMPLOYEE CLAIMS DIVISION $ 8,096.80\nBALANCE PAYABLE TO CLAIMANT AND RESERVED AS FUTURE CREDIT TO PUBLIC EMPLOYEE CLAIMS DIVISION $ 6411.86\nChitwood\u2019s attorneys did not take a full one-third attorney\u2019s fee of the gross amount of the judgment, in order to preserve their claim against PECD for one-third of the subrogation amount. However, the statute provides for the attorney\u2019s entitlement to first be deducted from the gross amount, and their election not to collect their full fee does not affect the determination of PECD\u2019s claim.\nChitwood asserts that Ark. Code Ann. \u00a7 11 \u2014 9\u2014 410(a)(2)(A) requires a compensation carrier in all instances to participate in the payment of reasonable costs of collection of a personal injury claim, including attorney\u2019s fees. We do not agree. This section provides only that reasonable costs of collection shall first be deducted from the gross amount received, before the net amount is allocated between the claimant and subrogee. The statute clearly does not provide for splitting of the gross sum in order to make a pro rata allocation of the costs of collection from both the claimant and the insurance carrier, as Chitwood suggests.\nIn fact, the insurance carrier will bear none of the costs of collection where the gross-judgment amount is in excess of three times the subrogation claim, absent an agreement with the claimant\u2019s attorney, as in Chitwood\u2019s case. Although the carrier will receive less than the full amount of its claim where the judgment is less than three times the subrogation claim, in such a situation the carrier will always recover twice the amount that the claimant receives, no matter how small the judgment. It is debatable whether the carrier can ever be said to share in the costs of collection under this statutory scheme. However, we cannot say that the general assembly has been ambiguous in spelling out precisely how a gross judgment or settlement is to be divided. Where statutory language is clear and unambiguous, our task is to follow the statute, not interpret it. See Office of Child Support Enforcement v. Harnage, 322 Ark. 461, 910 S.W.2d 207 (1995); Arkansas Dep\u2019t of Human Serv. v. State, 312 Ark. 481, 850 S.W.2d 847 (1993).\nPECD cites only one case as supportive of its interpretation of \u00a7 11-9-410. In Continental Casualty Co. v. Sharp, 312 Ark. 286, 849 S.W.2d 481 (1993), we reversed the trial court\u2019s award to Sharp of an attorney\u2019s fee from the insurance carrier\u2019s subrogation claim, because Sharp\u2019s attorney had already collected a full one-third attorney\u2019s fee from the gross amount of the judgment. Chitwood submits that the holding in Sharp has left the door open for the allocation of collection costs between the claimant and insurance carrier where the attorney does not collect a full fee from the gross amount. However, in Sharp, we said that the carrier had \u201ceffectively paid its proportionate share of the attorney\u2019s fees\u201d pursuant to the statute, even though our holding resulted in the carrier receiving the full amount of its subrogation claim and paying none of the costs of collection.\nMoreover, the several cases relied upon by Chitwood as supportive of the trial court\u2019s ruling are also consistent with today\u2019s holding. In Winfrey & Carlile v. Nickles, Admr., 223 Ark. 894, 270 S.W.2d 923 (1954) this court affirmed an award to the claimant\u2019s attorney of a fifty-percent contingency fee from the gross judgment of $6,433.10; the carrier had resisted payment of any costs of collection because it had employed separate counsel.\nIn Burt v. Hartford Accident & Indem. Co., 252 Ark. 1236, 483 S.W.2d 218 (1972), the claimant\u2019s attorney was denied an attorney\u2019s fee from the carrier\u2019s share of the recovery; however, the claimant had resisted the carrier\u2019s intervention and the carrier was required to retain counsel to assert its right to a lien. State Farm Mut. Auto. Ins. Co. v. Bing, 305 Ark. 280, 808 S.W.2d 204 (1991), involved a subrogation claim for medical payments made by the claimant\u2019s automobile insurance carrier; such claims are governed by a different statute, and this case is not relevant to the interpretation of \u00a7 11-9-410.\nReversed and remanded for further proceedings consistent with this opinion.",
        "type": "majority",
        "author": "ANDREE LAYTON Roaf, Justice."
      }
    ],
    "attorneys": [
      "Richard S. Smith, for appellant.",
      "David E. Smith, for appellee."
    ],
    "corrections": "",
    "head_matter": "PUBLIC EMPLOYEE CLAIMS DIVISION v. Richard CHITWOOD\n95-456\n918 S.W.2d 163\nSupreme Court of Arkansas\nOpinion delivered March 25, 1996\nRichard S. Smith, for appellant.\nDavid E. Smith, for appellee."
  },
  "file_name": "0030-01",
  "first_page_order": 54,
  "last_page_order": 59
}