Kathy D. Stuart v. Loren Stuart
Annotate this Case
Download PDF
DIVISION IV
CA06-1331
A UGUST 29, 2007
KATHY D. STUART
APPELLANT
V.
APPEAL FROM THE CLEBURNE
COUNTY CIRCUIT COURT
[NO. DR-02-306-4]
HON. TIM WEAVER, JUDGE
LOREN STUART
APPELLEE
AFFIRMED IN PART; REVERSED AND
REMANDED IN PART
This is a one-brief appeal from an order of the Cleburne County Circuit Court
modifying the parties’ divorce decree. The modification required appellant Kathy Stuart to
pay as child support fifteen percent of a settlement she will receive as part of a class-action
lawsuit. Appellant raises two points for reversal. We affirm in part and reverse and remand
in part.
Appellant and appellee Loren Stuart were divorced on March 3, 2003. The divorce
decree incorporated a settlement agreement and provided that appellee would have custody
of the parties’ two minor children and that appellant, because of her health condition, would
not be required to pay child support.1
1
One of the children has since attained majority.
On May 30, 2006, appellee filed a petition seeking to modify the decree to require
appellant to pay child support. The petition alleged that appellant had started drawing Social
Security benefits; that she had settled a medical-malpractice lawsuit in the summer of 2005
for $21,000; and that she would soon receive approximately $60,000 for settlement of a
class-action suit involving one of her medications. The petition sought child support based
on appellant’s Social Security benefits, as well as fifteen percent of the settlement proceeds
from the medical-malpractice and class-action lawsuits.
Appellant testified that she settled a medical-malpractice case, which was pending at
the time of the divorce, receiving a net amount of $18,000 after payment of attorney’s fees
and reimbursements to Medicaid and Medicare. She also testified that she was currently
receiving $528 per month from Social Security in SSI benefits and $95 per month in Social
Security disability benefits. Appellant stated that her class-action lawsuit had been settled and
that she would receive money as part of that settlement but that she did not know how much
she would receive or when the settlement would be paid.
Appellee testified that he had received no financial help from appellant for the support
of their minor child. He also stated that a letter from the attorneys handling the class-action
suit indicated that the case had settled and appellant would receive either $60,000 or
$100,000 as her share of the settlement proceeds. Appellee had no knowledge of how much
of any settlement would be payable as attorney’s fees or attributable to appellant’s loss of
income or earning capacity.
-2-
CA06-1331
Appellant argued to the trial court that the funds to be received from the class-action
settlement were not “income” because the supreme court’s Administrative Order No. 10
defines income in accordance with federal tax law definitions and, under those definitions,
compensation for a personal injury is not “income.” She also argued that, because the classaction settlement funds had not been received, the trial court would be issuing an advisory
opinion if the court found that appellee was entitled to child support based on those funds.
In its comments from the bench, the trial court found that Administrative Order
No. 10’s definition was broad enough to encompass appellant’s class-action settlement. The
court stated that it did not like the outcome but felt compelled to reach the result it did. The
trial court entered an order on August 25, 2006, denying appellee’s motion insofar as it
sought fifteen percent of the 2005 settlement. The trial court fixed appellant’s child-support
obligation at $79.20 per month, based on appellant’s Social Security benefits in the amount
of $528 per month. Finally, the trial court ordered appellant to pay fifteen percent of sums
received in her class-action settlement as child support, when the settlement is received.
Appellant appeals only the decision ordering the payment of child support on proceeds to be
received from settlement of her class-action claim.
Child-support cases are reviewed de novo on the record. Cole v. Cole, 89 Ark. App.
134, 201 S.W.3d 21 (2005). As a rule, when the amount of child support is at issue, the
appellate court will not reverse the trial judge absent an abuse of discretion. Id. It is the
-3-
CA06-1331
ultimate task of the trial judge to determine the expendable income of a child-support payor.
Id.
Appellant first argues that the trial court erred in ordering the payment of child
support from the proceeds of the class-action settlement because the issue was not ripe. The
argument is that, because the settlement proceeds have not yet been received, because it is
not known when the settlement proceeds will be received, and because the amount of the
proceeds is not known, the court acted prematurely in setting support based on that
settlement. We agree.
This case is controlled by the supreme court’s decision in Kelly v. Kelly, 341 Ark. 596,
19 S.W.3d 1 (2000), where the court held that the trial court erred because it could not set
a sum-certain dollar amount of support based on the father’s bonus where the receipt of that
bonus was uncertain and contingent upon the profitability of the business. Here, although it
appears likely that appellant will receive some money in settlement of the class-action
lawsuit, the amount of money she will receive as a result of the settlement, and when she will
receive it, are unknown, and the trial court cannot set a sum-certain dollar amount of support
until the amount is known and the settlement proceeds are actually received by appellant.
Further, all or part of the settlement funds may not be received before the minor child attains
majority, at which point appellant’s obligation may terminate.2 Therefore, we reverse the
2
The minor child was sixteen at the time of trial.
-4-
CA06-1331
trial court’s order setting child support based on the class-action settlement proceeds and
remand for further proceedings consistent with this opinion.
Although we reverse on appellant’s first point, we proceed to address her second point
because it is likely to arise again on remand. In her second point, appellant asserts that the
trial court erred in holding that the proceeds from her class-action settlement, when received,
would constitute “income” for purposes of determining child support. Appellant relies on the
definition of “income” found in In re: Guidelines for Child Support Enforcement, 301 Ark.
627, 784 S.W.2d 589 (1990), for her argument that, because personal-injury settlements are
not “income” under the Internal Revenue Code, her class-action settlement for a personal
injury should not be “income” for child-support purposes. The 1990 guidelines, as they relate
to a payor’s periodic income, “refer[ ] to the definition of income in the federal income tax
laws.” 301 Ark. at 630, 784 S.W.2d at 591.
We disagree with appellant’s argument for two reasons. First, the supreme court has
abandoned that definition and, in 1997, adopted a new, broader definition of “income” no
longer tied to the federal tax code definition. In re: Administrative Order No. 10: Ark. Child
Support Guidelines, 329 Ark. 668 (1997). The current definition of “income” is:
Income means any form of payment, periodic or otherwise, due to an
individual, regardless of source, including wages, salaries, commissions, bonuses,
worker’s compensation, disability, payments pursuant to a pension or retirement
program, and interest less proper deductions for:
1. Federal and state income tax;
2. Withholding for Social Security (FICA), Medicare, and railroad retirement;
-5-
CA06-1331
3. Medical insurance paid for dependent children; and
4. Presently paid support for other dependents by Court order.
In re: Administrative Order No. 10: Ark. Child Support Guidelines, 347 Ark. Appx. 1064,
1067 (2002).3 The definition of income is intentionally broad and designed to encompass the
widest range of potential income sources for the support of minor children. Montgomery v.
Bolton, 349 Ark. 460, 79 S.W.3d 354 (2002). Further, the types of income are not limited to
only those listed in Section II of Administrative Order No. 10. Id; see also Evans v. Tillery,
361 Ark. 63, 204 S.W.3d 547 (2005) (holding that money judgments for malicious
prosecution and assault were “income” for support purposes). Second, later cases interpreting
the current definition have held that the definition of income for purposes of support may
differ from income for tax purposes. See Huey v. Huey, 90 Ark. App. 98, 204 S.W.3d 92
(2005); Delacey v. Delacey, 85 Ark. App. 419, 155 S.W.3d 701 (2004); Brown v. Brown, 76
Ark. App. 494, 68 S.W.3d 316 (2002).
Here, the trial court used the correct definition of “income” when it determined that
appellant’s class-action settlement fell within the definition of “income” because it is a
“payment” from “any source.” Therefore, we cannot say that the trial court erred in finding
that the class-action settlement proceeds, when paid, would constitute “income” for purposes
of calculating child support.
3
We note that the supreme court recently issued a revised Administrative Order No. 10,
effective May 3, 2007. The definition of “income” in the new order remains the same.
-6CA06-1331
Affirmed in part; reversed and remanded in part.
M ARSHALL and H EFFLEY, JJ., agree.
-7-
CA06-1331
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.