Court Opinion

ID: 4711686
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:37:10.646632+00
Date Added: 2024-06-11T08:05:53.069849
License: Public Domain

Guy, C.J.
(concurring) — I agree with the majority that the rule enunciated in In re Marriage of Brown, 100 Wn.2d 729, 675 P.2d 1207 (1984), applies to wage-replacement disability insurance benefits. I write separately because (1) I would specifically overrule Chase v. Chase, 74 Wn.2d 253, 444 P.2d 145 (1968), and (2) I would clarify that post-dissolution wage-replacement benefits are not “assets” that are before the trial court in a dissolution proceeding.
Courts and commentators alike have recognized the inconsistency in Washington’s case law in this area. See, e.g., In re Marriage of Huteson, 27 Wn. App. 539, 542-43, 619 P.2d 991 (1980) (questioning both the logic and wisdom of Chase, and holding “To treat . . . disability payments as a community asset would unfairly and permanently burden those future earnings to the same extent as would an award of permanent alimony.”); In re Marriage of Brewer, 89 Wn. App. 425, 430, 949 P.2d 404 (1998) (noting that, in light of criticism and newer case law, the continuing viability of the Chase rule “is questionable”)69; 1 Washington State Bar Ass’n, Family Law Deskbook § 38.3(5), at SU-38-2 (Supp. 1996) (“The status of Washington law as to when disability benefits to be paid after entry of a decree constitute ‘property’ subject to distribution by the trial court in a dissolution action is ‘not all together clear.’ In fact, some Washington cases classify disability benefits as property subject to distribution, others classify them as income not subject to distribution, and still others classify disability benefits as part property and part income.”); Harry M. Cross, The Community Property Law in Washington (Revised 1985), 61 Wash. L. Rev. 13, 64 (1986) (“the proper treatment of disability insurance or pension payments . . . should be reconsidered in light of the decision in Brown”); 20 Kenneth W Weber, Washington Eractice: Family and Community *773Property Law § 32.17, at 190-91 (1997) (“retirement benefits are generally considered deferred compensation for past services, and . . . are considered an asset and divisible as such. ... By contrast, disability benefits that are in the nature of compensation for lost future wages (sometimes called future earnings replacement) are generally not an asset for distribution upon dissolution, though contrary results have been reached in a few cases.” (footnote omitted).
The authors of the State Bar Association Community Property Deskbook state:
Disability payments normally represent compensation for diminished earning capacity, replacing lost wages. Thus viewed, the payments are not a form of deferred compensation, rather they are a form of current compensation.
The California courts have held that disability payments received during marriage will be considered community property. Payments to be received after dissolution of marriage will be considered separate property.
This result should be reached in Washington under the reasoning of In re Marriage of Brown .... Earlier cases, however, reached a contrary result.
Washington State Bar Ass’n, Community Property Deskbook § 3.24, at 3-31 to 3-32 (2d ed. 1989) (citation omitted). See also In re Marriage of Nuss, 65 Wn. App. 334, 343, 828 P.2d 627 (1992) (disability benefits which are in the nature of compensation for lost future wages are not an asset for distribution upon dissolution; by contrast, disability benefits which are in the nature of deferred compensation or retirement pay are community property); In re Marriage of Anglin, 52 Wn. App. 317, 324, 759 P.2d 1224 (1988) (disability benefits characterized as repayment for lost future wages were not a marital asset to be characterized and distributed by the court).
In my view, we should clarify the law by overruling Chase and hold: Disability payments which are in the nature of earnings replacement are treated the same as the earnings *774of a healthy spouse. Therefore, when the parties are married and not separated, the replacement earnings would be community property; assets purchased with or generated by community funds are assets belonging to the community. RCW 26.16.030. When the parties are separated, their earnings—whether a result of wage replacement disability benefits or of personal labor—are separate property. RCW 26.16.140. Future, postdissolution earnings, whether received from employment, business ventures, investment, or disability benefits, are not “assets” which are before the court for disposition in a dissolution action. See Brown, 100 Wn.2d at 738; In re Marriage of Hall, 103 Wn.2d 236, 247, 692 P.2d 175 (1984) (future earning capacity is not a marital asset). However, the trial court may consider such earnings when determining what constitutes a fair and equitable distribution of the assets and debts which are before the court. RCW 26.09.080 (economic circumstances of each spouse is a relevant factor in making a property disposition); Hall, 103 Wn.2d at 247; In re Marriage of Leland, 69 Wn. App. 57, 72, 847 P.2d 518 (1993). The trial court also may consider such earnings when determining the propriety and amount of any maintenance award. RCW 26.09.090.
Durham, Madsen, and Alexander, JJ., concur with Guy, C.J.

Because of the similarity of the facts in this case and those in Chase v. Chase, 74 Wn.2d 253, 444 P.2d 145 (1968), I cannot fault the Court of Appeals for feeling—reluctantly—bound to follow the rule articulated in Chase.