Shelby County Health Care Corp. v. Southern Farm Bureau Casualty Insurance Co.

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 15-3765
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Shelby County Health Care Corporation, doing business as Regional Medical Center,
lllllllllllllllllllll Plaintiff - Appellant,
v.
Southern Farm Bureau Casualty Insurance Company; Medford Farm Partnership;
Aaron Medford; Barbara Ford, as Special Administratrix of the Estate of John
Dallas Smiley,
lllllllllllllllllllll Defendants - Appellees.
____________
Appeal from United States District Court
for the Eastern District of Arkansas - Jonesboro
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Submitted: September 20, 2016
Filed: April 28, 2017
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Before COLLOTON, MELLOY, and SHEPHERD, Circuit Judges.
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COLLOTON, Circuit Judge.
Shelby County Health Care Corporation, doing business as Regional Medical
Center (“The Med,” for short), seeks relief for alleged impairment of a hospital lien.
The district court dismissed The Med’s claim on the ground that it was barred by the
Rooker-Feldman doctrine and, alternatively, that it failed under Arkansas law. We
conclude that the claim is not barred by Rooker-Feldman, and that Tennessee law
should apply, so we vacate the district court’s order and remand for further
proceedings.
I.
The hospital lien in question arose from treatment that John Smiley received
at The Med in Memphis, Tennessee, from February 18, 2009, when he was involved
in an automobile accident, until March 6, 2009, when he died of his injuries. The
Med promptly filed a hospital lien for Smiley’s medical bills pursuant to the
Tennessee Hospital Lien Act in the Shelby County Circuit Court in Tennessee. Tenn.
Code Ann. § 29-22-101. The Med mailed a copy of the hospital lien to the attorneys
for Smiley’s estate.
Barbara Ford was appointed administrator of Smiley’s estate by an Arkansas
circuit court. Ford negotiated a settlement with the tortfeasor’s insurer, Southern
Farm Bureau Casualty Insurance Company. As part of the settlement negotiations,
Ford sent to the insurer Smiley’s hospital bill and records from The Med documenting
Smiley’s pain and suffering. The insurer, along with its insured Aaron Medford, and
Medford’s employer Medford Farm Partnership, settled with Ford for $700,000. The
administrator of the estate allocated the entire $700,000 to recovery for wrongful
death and none to the recovery of compensatory damages for medical services and
other expenses.
In September 2010, the settling parties (which did not include The Med)
memorialized the agreement in an Arkansas probate court judgment that purported
to extinguish any outstanding liens. The Med learned of the probate court judgment
by April 2011, but did not seek to intervene in the proceedings. The probate court
closed Smiley’s estate on September 16, 2011.
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The Med sued the settling parties to recover $355,364.16 in damages for the
impairment of its hospital lien. The district court granted summary judgment for the
defendants on the ground that The Med failed to enforce its lien by neglecting to file
it in the Arkansas probate court. The Med appealed, and this court reversed,
concluding that the district court misconstrued The Med’s claim as one for lien
enforcement rather than lien impairment. Shelby Cty. Health Care Corp. v. S. Farm
Bureau Cas. Ins. Co., 798 F.3d 686, 689 (8th Cir. 2015). We remanded for the
district court to address, among other questions, whether Arkansas law or Tennessee
law applied to The Med’s lien impairment claim. Id. at 689-90.
On remand, the district court again granted summary judgment for the settling
parties. The court first ruled that the Rooker-Feldman doctrine barred The Med’s
claims. See D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983); Rooker v. Fid.
Tr. Co., 263 U.S. 413 (1923). Alternatively, the court reasoned that Arkansas’s
choice-of-law rules called for the application of Arkansas law, and that The Med’s
claim failed under Arkansas law. The court concluded that The Med did not properly
perfect its lien under Arkansas law, and that even if the lien were perfected, it would
be unenforceable because Arkansas law prevents a hospital lien from attaching to a
wrongful death recovery.
II.
We consider first the district court’s ruling that it lacked jurisdiction. In
concluding that The Med’s claim “appears to be barred by the Rooker-Feldman
doctrine,” the district court reasoned that “[t]o now find that there was a valid,
enforceable lien would effectively reverse the decision made by the Arkansas probate
court.” The court explained that the probate court found that The Med’s lien was
void and not enforceable in Arkansas, while The Med now alleges that the defendants
impaired a valid lien.
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The Rooker-Feldman doctrine is confined to “cases brought by state-court
losers complaining of injuries caused by state-court judgments rendered before the
district court proceedings commenced and inviting district court review and rejection
of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280,
284 (2005). The doctrine does not apply here, because The Med was not a “state-
court loser.” The Med was not a party to the state-court probate proceedings.
Whatever narrow application the Rooker-Feldman doctrine might have to de facto
appeals by non-parties is not germane here, where The Med has no relationship to the
parties in probate court. Cf. Lance v. Dennis, 546 U.S. 459, 466 n.2 (2006) (per
curiam) (reserving judgment on whether Rooker-Feldman applies where an estate
takes a de facto appeal in a district court of an earlier state decision involving the
decedent).
The district court relied on Lemonds v. St. Louis County, 222 F.3d 488 (8th Cir.
2000), which stated a broader view of the Rooker-Feldman rule: “The Rooker-
Feldman doctrine forecloses not only straightforward appeals but also more indirect
attempts by federal plaintiffs to undermine state court decisions.” Id. at 492.
Starting from that premise, Lemonds said the fact that federal-court plaintiffs were not
parties to an earlier state-court lawsuit “does not automatically preclude a Rooker-
Feldman bar.” Id. at 495. The court ruled that non-parties who could have pursued
a claim in state court were barred by Rooker-Feldman from proceeding in federal
court when “the entire upshot of a favorable decision” would have been “to unwind
the decision of the state court.” Id. at 496.
Lemonds, however, has been superseded by the Supreme Court’s clarification
of the Rooker-Feldman doctrine. In Exxon Mobil, the Court observed that “the
doctrine has sometimes been construed to extend far beyond the contours of the
Rooker and Feldman cases.” 544 U.S. at 283. The Court emphasized that the
doctrine applies only to claims brought by “state-court losers” and “does not
otherwise override or supplant preclusion doctrine or augment the circumscribed
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doctrines that allow federal courts to stay or dismiss proceedings in deference to
state-court actions.” Id. at 284. In Lance, the Court explained that “[t]he Rooker-
Feldman doctrine does not bar actions by nonparties to the earlier state-court
judgment simply because, for purposes of preclusion law, they could be considered
in privity with a party to the judgment.” 546 U.S. at 466. To apply Rooker-Feldman
here to a non-party who had an opportunity to intervene in state-court proceedings
would echo the pre-Exxon Mobil lower-court rulings that expanded the doctrine too
far.
In this case, moreover, The Med does not seek to reverse the order of the
Arkansas probate court. The Med acknowledges that it could not seek a judgment
directly against the proceeds of the personal injury settlement; those proceeds were
awarded to Ford. In this case, The Med asserts that the probate court’s order is
evidence that the settling parties impaired The Med’s hospital lien, and The Med
seeks a judgment against Ford and the other settling parties. The Rooker-Feldman
doctrine thus does not bar The Med’s claim.
III.
The district court ruled alternatively that Arkansas law applies to the dispute
between the parties, and that The Med’s claim fails under Arkansas law. On appeal,
the parties debate whether Arkansas law or Tennessee law should apply.
Federal jurisdiction over this case is based on diversity of citizenship, so we
apply the choice-of-law rules of Arkansas, the forum State, to determine which law
governs the dispute. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941).
Under Arkansas law, the framework for deciding the choice-of-law question depends
on the type of claim involved. A contract claim triggers different analysis than a tort
claim.
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The Med argues that the case raises an issue in contract, because hospital liens
arise from an express or implied contract that is formed when the hospital provides
emergency medical services. See Midwest Neurosurgery, P.C. v. State Farm Ins.
Cos., 686 N.W.2d 572, 578 (Neb. 2004). But the Arkansas Supreme Court, in
considering its own State’s hospital lien statute, has not accepted that
characterization. In Stuttgart Regional Medical Center v. Cox, 33 S.W.3d 142 (Ark.
2000), the court rejected a patient’s argument that a hospital enforcing its lien brought
an action that “sounded in contract” based on agreements with a hospital; instead, the
hospital’s “sole cause of action was to enforce its lien.” Id. at 145.
Here, of course, the action is not to enforce a lien, but to seek relief for
impairment of a lien. Ford, citing Lane v. Celadon Trucking, Inc., 543 F.3d 1005 (8th
Cir. 2008), argues that the action raises an issue in tort. Lane involved a worker’s
compensation subrogation claim in which an employer paid worker’s compensation
benefits to an injured employee. The employer had negotiated both an employment
agreement and a settlement agreement in which the employer retained its statutory
rights to recover amounts paid to the employee by third parties based on the injury.
The employer then asserted a worker’s compensation lien on any recovery the
employee might receive from the tortfeasor who caused the injury, and later attempted
to recover proceeds of a settlement that the employee received from the tortfeasor.
In determining the type of action involved for purposes of choice-of-law analysis, this
court concluded that despite the agreements and the lien, “the issue was not simply
one of contract because it implicated the tort aspects of the plaintiff’s recovery for his
personal injuries.” Id. at 1009.
Although there are differences between a subrogation claim to recover on a
worker’s compensation lien and a claim alleging impairment of a hospital lien, see
Nat’l Ins. Ass’n v. Parkview Mem’l Hosp., 590 N.E.2d 1141, 1145 (Ind. Ct. App.
1992), we think the dispute between the parties in this case is still best characterized
as raising an issue in tort. The relevant tort here is the alleged impairment of the
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hospital lien secured by The Med. A lien is an interest in another’s property. A claim
of lien impairment is an assertion that the defendants interfered with this property
interest, a wrong analogous to the common-law tort of conversion. See Unigard Ins.
Co. v. Tremont, 430 A.2d 30, 32-33 (Conn. Super. Ct. 1981); Rew v. Maynes, 125
N.W. 804, 804 (Iowa 1910). We therefore expect that the Arkansas courts are likely
to treat a claim of lien impairment as raising an issue in tort rather than contract, and
we proceed with the choice-of-law analysis accordingly.
Once upon a time, Arkansas courts resolving choice-of-law questions in tort
cases followed the rule of lex loci delicti: apply the law of the place where the tort
was committed. E.g., Wheeler v. Sw. Greyhound Lines, Inc., 182 S.W.2d 214, 215
(Ark. 1944). More recently, however, the Arkansas Supreme Court has “evolved” to
consider the five choice-influencing factors identified by Professor Robert Leflar “to
soften the formulaic application of lex loci delicti.” Schubert v. Target Stores, Inc.,
201 S.W.3d 917, 922 (Ark. 2005). As we understand current Arkansas law, the state
supreme court considers first which State has the most significant relationship to the
action and the parties, and then analyzes the Leflar factors: (1) predictability of
results, (2) maintenance of interstate and international order, (3) simplification of the
judicial task, (4) advancement of the forum’s governmental interests, and
(5) application of the better rule of law. Ganey v. Kawasaki Motors Corp., U.S.A.,
234 S.W.3d 838, 846-47 (Ark. 2006).
In determining which State has the most significant relationship to the action
and parties, Arkansas courts examine the contacts that are most relevant in the
particular case. Here, the most significant contacts do not weigh clearly in favor of
either Arkansas or Tennessee. The medical bills that formed the basis for the hospital
lien were incurred in Tennessee. The Med filed its hospital lien in Tennessee, would
have received funds based on the lien in Tennessee, and thus felt the harm from any
impairment of the lien in Tennessee. But the settlement agreement and corresponding
probate order that allegedly impaired the lien were filed in Arkansas. The parties’
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domiciles do not tip the balance. The Med is a Tennessee corporation that conducts
business exclusively in Tennessee. Ford is domiciled in Virginia. The insurer is
incorporated in Mississippi and does business in several states, including Arkansas,
but not Tennessee. Medford is an Arkansas resident, employed by Medford Farm
Partnership, which operates in Arkansas. That Mr. Smiley’s automobile accident
occurred in Arkansas carries little weight in the analysis. The relevant wrong here
is alleged impairment of the lien, not negligent operation of a vehicle, and the factors
described above are most significant in the lien impairment action.
So we turn to the Leflar factors, three of which are most pertinent here. The
first factor is predictability of results. “The consideration here is the idea that a
decision following litigation on a given set of facts should be the same regardless of
where the litigation occurs in order to prevent forum shopping.” Schubert, 201
S.W.3d at 922. We think this factor favors Tennessee law. Judge Moody was quite
right in State Farm Mut. Auto. Ins. Co. v. Shelby Cty. Health Care Corp., No.
3:10CV00169, 2011 WL 5508854, at *3 (E.D. Ark. Nov. 10, 2011), that “[f]orcing
The Med, or any other regional hospital, to predict [in] which state an insurer would
administer the claims of Med patients would certainly result in unpredictable results.”
Applying Tennessee law to hospital liens filed in Tennessee creates consistent
outcomes for patients who live in different States when they seek medical care at the
same facility in Tennessee. Forum-shopping might not be a concern in the case of
deceased patients, because probate law restricts where an estate could settle a claim.
But many patients live beyond their stay at The Med, and uniform application of
Tennessee law prevents forum shopping in lien impairment actions involving former
patients. The choice of law should not depend on whether a patient has died.
The second Leflar factor—the maintenance of interstate and international
order—also favors Tennessee law. This factor focuses on whether one State’s law
would “manifest disrespect for [another state’s] sovereignty or impede the interstate
movement of people and goods.” Whitney v. Guys, Inc., 700 F.3d 1118, 1125 (8th
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Cir. 2012) (alterations in original). The record reflects that The Med is the only Level
1 Trauma Center within a 150-mile radius of Memphis, and the facility renders
life-saving trauma care to hundreds of Arkansas residents per year. Arkansas itself
encourages hospitals to provide emergency services to its residents, as illustrated by
its own hospital lien statute. Ark. Code Ann. § 18-46-104. But application of
Arkansas law here would be disruptive to interstate order, because it would deprive
The Med of compensation for emergency care administered to severely injured
Arkansans.
Under the fourth Leflar factor—the advancement of the forum’s interest—we
determine the forum’s interest by examining its contacts with the case. Schubert, 201
S.W.3d at 923. Arkansas’s primary contact with this lien impairment action is that
an Arkansas probate court order memorialized the settlement that The Med alleges
impaired its lien. Arkansas’s hospital lien statute reflects the State’s general interest
in encouraging hospitals to provide emergency services to its residents. See Ark.
Code Ann. § 18-46-104. In the case of a wrongful death settlement, however,
Arkansas law prevents a third party from attaching a lien to a wrongful-death
recovery. Ark. Code Ann. § 16-62-102(e). And according to a divided opinion of
the Arkansas Court of Appeals, Arkansas law permits the administrator of an estate
like Ford to allocate all of a settlement in a wrongful-death and survivor action to the
wrongful-death aspect of the action, and none to medical expenses that would benefit
the creditors of the estate. Mid-South Adjustment v. Estate of Harris, 189 S.W.3d
518, 520 (Ark. App. 2004).
Because the settlement here was allocated entirely to a wrongful-death
recovery, the fourth factor concerning advancement of the forum’s interest arguably
points to Arkansas law. But Arkansas’s statutory policy preventing creditors from
attaching liens to wrongful-death recoveries is implicated as to the full recovery here
only because Mid-South Adjustment allows an estate’s administrator unilaterally to
allocate a settlement to avoid the claims of an estate’s creditors. The Arkansas
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legislature has not spoken to the allocation issue, and given the concerns expressed
by the dissenting judges about tension between the State’s probate laws and the
wrongful-death statute, id. at 520-22 (Robbins, J., dissenting), we are not confident
that the Arkansas Supreme Court would agree with the intermediate court. Even
taking the court of appeals decision as the best indicator of current Arkansas law, the
court did not identify a strong Arkansas public policy in favor of the allocation
procedure.
In any event, we are not convinced that the forum’s interest outweighs the
concerns previously expressed about forum shopping and the maintenance of
interstate order that favor application of Tennessee law. The Arkansas Supreme
Court, speaking of interstate order, has acknowledged that “[d]eference to sister state
law in situations in which the sister state’s substantial concern with a problem gives
it a real interest in having its law applied, even though the forum state also has an
identifiable interest, will at times usefully further this part of the law’s total task.”
Gomez v. ITT Educ. Servs., 71 S.W.3d 542, 547 (Ark. 2002) (quoting Robert A.
Leflar, American Conflicts of Law § 104, at 208 (3d ed. 1977)). We believe that this
case presents such an occasion.
Having considered both which State has the most significant relationship to the
parties and the action, and Professor Leflar’s choice-influencing factors, we conclude
that Tennessee law should apply to The Med’s lien impairment claim. We therefore
reverse the district court’s order granting summary judgment in favor of the
defendants and remand the case for further proceedings in accordance with this
opinion.
SHEPHERD, Circuit Judge, dissenting.
Until now, the commonplace procedure where an Arkansas resident is fatally
injured in an accident that occurs in Arkansas is that an Arkansas probate court
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appoints an administrator in an Arkansas county for the purpose of bringing a
wrongful death claim. After that claim is settled in an Arkansas probate court, there
has been no question that the proceeds from that action do not become a part of the
assets of the estate and, therefore, are not subject to the debts of the deceased. Thus,
the court defies controlling Arkansas law by holding that an out-of-state medical care
provider—who is located less than 100 miles away and has actual notice of the
proceedings, but nevertheless fails to file a claim against the estate, perfect an
Arkansas medical lien, or otherwise appear in the probate case—is entitled to
proceeds from a wrongful death action. Accordingly, I respectfully dissent.
Accordingly, although I agree with the majority’s determination that the
Rooker-Feldman doctrine does not bar the present action, I cannot agree with the
outcome of its conflict of laws analysis. The state, in Arkansas Code Annotated
section 16-62-102(e), made unmistakably clear its policy goals with regard to the
question of whether damages recovered by survivors of the deceased for wrongful
death may be claimed by creditors by stating that “[n]o part of any recovery referred
to in this section shall be subject to the debts of the deceased or become, in any way,
a part of the assets of the estate of the deceased person.” Further, this policy has been
reiterated and applied in a number of subsequent state court decisions. See, e.g.,
Douglas v. Holbert, 983 S.W.2d 392, 396 (Ark. 1998).
I agree with the majority’s conclusion that this action sounds in tort rather than
in contract. See Stuttgart Reg’l Med. Ctr. v. Cox, 33 S.W.3d 142, 145 (Ark. 2000).
Thus, Arkansas courts first determine which state has the most significant relationship
to the parties and the litigation by examining the contacts relevant to the dispute.
Ganey v. Kawasaki Motors Corp., U.S.A., 234 S.W.3d 838, 847 (Ark. 2006). Next,
the courts consider the lex loci delicti doctrine and Professor Leflar’s five “choice-
influencing considerations.” Id. (internal quotation marks omitted). Those factors
are “1) predictability of results; 2) maintenance of interstate and international order;
3) simplification of the judicial task; 4) advancement of the forum’s governmental
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interests; and 5) application of the better rule of law.” Gomez v. ITT Educ. Servs.,
Inc., 71 S.W.3d 542, 546 (Ark. 2002).
Assuming that an examination of the relevant contacts does not favor the
application of either state’s law, I dissent from the majority’s conclusion that factors
one, two, and four indicate that Tennessee law should apply. The first
factor—predictability of results—weighs in favor of applying Arkansas law. “The
consideration here is the ideal that a decision following litigation on a given set of
facts should be the same regardless of where the litigation occurs in order to prevent
forum shopping.” Schubert v. Target Stores, Inc., 201 S.W.3d 917, 922 (Ark. 2005).
Simply put, forum shopping is not a legitimate concern in a probate case such as this
when there is only one state in which the estate could be settled. While the majority
correctly observes that this could potentially be a concern when a patient does not
pass away during the course of his treatment, the majority’s opinion loses sight of the
fact that this is not what happened here.
The second factor—maintenance of interstate order—likewise favors
application of Arkansas law. “When the forum has little or no interest in applying its
own law, its parochial decision to do so anyway could adversely affect the smooth
functioning of the federal system and lead to retaliation in future cases by courts in
the other state with a substantial interest in having its law applied.” 2 David Newbern
et al., Arkansas Civil Practice & Procedure § 6:6 (5th ed. 2010). It is for this reason
that the state supreme court has “note[d] that ‘[d]eference to sister state law in
situations in which the sister state’s substantial concern with a problem gives it a real
interest in having its law applied, even though the forum state also has an identifiable
interest, will at times usefully further this part of the law’s total task.’” Gomez, 71
S.W.3d at 547 (second alteration in original) (quoting Robert A. Leflar, American
Conflicts of Law § 104, at 208 (3d ed. 1977)). On the other hand, “where the
enforcement of the foreign law would contravene the established policy of the state
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of the forum, the law of the forum governs.” Sutherland v. Ark. Dep’t of Ins., 467
S.W.2d 724, 726 (Ark. 1971).
“Under current Arkansas law, when a person’s death is caused by the
negligence of another, two causes of action arise.” Davis v. Parham, 208 S.W.3d 162,
167 (Ark. 2005). First, the estate can maintain a survival action under Arkansas Code
Annotated section 16-62-101 for claims the decedent personally could have brought
against a tortfeasor had death not occurred. See id. Second, the decedent’s
beneficiaries may bring a wrongful death action for their own injuries caused by the
tortfeasor. See id.; Ark. Code Ann. § 16-62-102. Further, in Arkansas, survival
claims and wrongful death claims are “typically brought by the personal
representative of the decedent and joined in one action.” Howard W. Brill, Arkansas
Law of Damages § 34.1 (6th ed. 2014) (citing Dawson v. Gerritsen, 748 S.W.2d 33,
(Ark. 1988)). Unlike recoveries in survival actions, the Arkansas legislature has seen
fit to protect wrongful death recoveries from the grasp of creditors: “No part of any
recovery referred to in this section shall be subject to the debts of the deceased or
become, in any way, a part of the assets of the estate of the deceased person.” Ark.
Code Ann. § 16-62-102(e). The reasoning for this is quite logical. Survival actions
pursue claims personal to the decedent1 and, thus, those recoveries should also be
subject to the decedent’s debts. Wrongful death suits, on the other hand, seek relief
for the beneficiaries’ own injuries2 and, as such, that recovery rightfully forms no part
1
Elements of such damages include, inter alia, the decedent’s medical expenses,
lost earnings prior to death, and pain and suffering. Brill, supra, § 34.2. “Apart from
the personal injury action, the administrator may assert any claim that the decedent
could have asserted if he had lived.” Id.
2
Recovery for wrongful death is intended to compensate the statutory
beneficiaries for pecuniary losses—“defined as the present value of the benefits,
including money, goods, and services, that the decedent would have contributed to
the statutory beneficiaries if he had lived”—mental anguish, and loss of consortium.
Brill, supra, §§ 34.4, 35.5.
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of the decedent’s estate. Therefore, because application of Tennessee law in this
instance “contravene[s] the established policy” of Arkansas, I believe this factor
weighs in favor of applying Arkansas law. Sutherland, 467 S.W.2d at 726.
Finally, the fourth factor—advancement of the forum’s interest—favors
application of Arkansas law. Analysis of this factor “requires the court to identify the
factual connections linking the case to the forum state and then determine whether
those facts implicate state policies that would justify application of forum law to the
particular issue.” 2 Newbern et al., supra; see also Schubert, 201 S.W.3d at 923. The
Arkansas contacts relevant to this action are as follows: The accident giving rise to
the wrongful death occurred there. The decedent was domiciled there. The estate
was opened there. The probate court appointed an administrator to pursue survival
and wrongful death claims there and, in the absence of outstanding claims against the
estate or medical liens filed pursuant to Arkansas law, determined that the $700,000
offer was a “full and final settlement of any and all claims arising under the Arkansas
Wrongful Death Act.” These facts clearly implicate Arkansas’s policy against
subjecting wrongful death recoveries to claims by creditors. See Ark. Code Ann.
§ 16-62-102(e). “Once a settlement is obtained, subsection (e) declares that the
settlement proceeds do not become assets of the decedent’s estate . . . . Instead, the
proceeds of a wrongful-death action are for the sole benefit of the statutory
beneficiaries and may not be used to pay off debts of the estate.” Douglas, 983
S.W.2d at 396.
The majority correctly notes that an Arkansas Court of Appeals decision—Mid-
South Adjustment Co. v. Estate of Harris, 189 S.W.3d 518, 520 (Ark. Ct. App.
2004)—upheld a probate court’s decision that allocated 100% of a settlement to
recovery for wrongful death. But the majority then goes on to conclude that “the
court did not identify a strong Arkansas public policy in favor of the allocation
procedure.” The majority reasons that the Arkansas legislature has not spoken to the
precise issue and that the dissenting judges in Mid-South Adjustment noted tension
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between Arkansas probate and wrongful-death laws. However, the Arkansas
legislature has spoken on the issue—it has clearly stated that “[n]o part of any
recovery referred to in this section shall be subject to the debts of the deceased or
become, in any way, a part of the assets of the estate of the deceased person.” Ark.
Code Ann. § 16-62-102(e) (emphasis added). Thus, whether Mid-South Adjustment
identified a strong public policy is beside the point because the State of Arkansas has
a clear policy against subjecting wrongful death recoveries to claims by the
decedent’s creditors.
Moreover, the primary concern noted by the dissenters in Mid-South
Adjustment involved the fact that the estate was settled and closed without notice to
the creditors. See 189 S.W.3d at 521 (Robbins, J., dissenting). That concern is
entirely absent here. The Med concedes that it had notice of the probate proceedings
by April of 2011. As this is six months before the estate was closed, the Med had
ample time to take action in Arkansas by filing its lien there or filing a claim against
the estate, either of which would have entitled it to more notice. Significantly, in its
September order approving the settlement, the Monroe County Circuit Court sitting
in probate noted that no medical lien had been filed in Arkansas and that all claims
against the estate had been paid. Instead, the Med filed the lien in Tennessee and
then waited until August of 2013—more than two years after the estate was
closed—to instigate the present action.
Because I believe all three applicable factors favor the application of Arkansas
law, I respectfully dissent. I would affirm the district court’s determination that
Arkansas substantive law applies to the problem at issue.
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