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In re Marriage of Nielsen

July 11, 2003

IN RE MARRIAGE OF SUSAN NIELSEN, F/K/A SUSAN MOLLER-NIELSEN, F/K/A SUSAN MAGRINI, PETITIONER-APPELLEE, AND MARK LOUIS MAGRINI, RESPONDENT-APPELLANT.


Appeal from the Circuit Court of Du Page County. No. 86-MR-238 Honorable Brian R. McKillip and Hollis L. Webster, Judges, Presiding.

The opinion of the court was delivered by: Justice Gilleran Johnson

PUBLISHED

The respondent, Mark Magrini, appeals from the November 3, 2000, and April 30, 2002, orders of the circuit court of Du Page County, awarding the petitioner, Susan Nielsen, a portion of his military disability benefits. We affirm in part and reverse in part and remand the cause for additional proceedings.

The facts relevant to the disposition of this case are as follows. The parties' judgment for dissolution of marriage was entered on April 1, 1985, in Clarion County, Pennsylvania. On May 8, 1986, the judgment for dissolution of marriage was enrolled in the circuit court of Du Page County. The judgment for dissolution of marriage incorporated a marital settlement agreement dated August 6, 1984. The parties could not reach an agreement concerning Mark's military pension at that time, however, and expressly reserved that issue for a future determination by the trial court.

On November 25, 1987, the parties subsequently entered into an agreed order concerning Mark's military pension. The November 25, 1987, agreement provided as follows:

"The military pension of Mark Louis Magrini shall be distributed 25% to Susan Moller-Nielsen, 75% to Mark Louis Magrini to be paid if and when said pension is received. Said 25% shall be paid directly to Susan Moller-Nielsen pursuant to the provisions of 71 U.S.C. 10, Section 1408 and shall be 25% of the gross retired or retainer pay due Mark Louis Magrini ***, Susan Moller-Nielsen to include in her income and pay all taxes on any sums received."

Section 1408 of chapter 71 of Title 10 of the United States Code, otherwise known as the Uniformed Services Former Spouses' Protection Act (USFSPA) (10 U.S.C. §1408 (2000)), authorizes state courts to treat as community property a party's "disposable retired or retainer pay." Disposable retired or retainer pay is defined by the USFSPA as the total monthly retired pay to which a member is entitled minus certain deductions. 10 U.S.C. §1408(a)(4) (2000). Among the amounts required to be deducted from the total pay are those amounts which are waived by the retiree in order to receive veterans' disability benefits under chapter 11 of Title 38 or chapter 61 of Title 10 of the United States Code. 10 U.S.C. §§1408(a)(4)(B), (a)(4)(C) (2000). Additionally, the USFSPA creates a payment mechanism under which the federal government will make direct payments to the nonmilitary former spouse who presents, to the Secretary of the relevant military service, a state court order granting her a portion of the military spouse's disposable retired or retainer pay. 10 U.S.C. §1408(e)(1) (2000).

On May 1, 1993, Mark retired from the military, after 20 years of service, at the rank of Major. Mark would have been eligible to receive retired or retainer pay in the amount of $2,185 per month. However, at the time of Mark's retirement, the Veteran's Administration (VA) reviewed his medical records and determined that he was 10% disabled. This determination was based on Mark suffering migraine headaches and having high blood pressure and back and knee problems. As such, Mark elected to receive monthly disability benefits under Title 38, which reduced his monthly retired or retainer pay by 10%, or to $1,966.50 per month. *fn1 Pursuant to the parties' settlement agreement and in accordance with the USFSPA, Susan started receiving her monthly payments. The payments reflected 25% of Mark's disposable retired or retainer pay of $1,966.50.

On July 7, 1996, the Veteran's Administration reviewed Mark's records again upon Mark's request and adjudged him 60% disabled. Consequently, Mark's monthly disability benefits increased, but his retirement pay was reduced another 50%. Susan's monthly check reflecting her 25% share of Mark's retired or retainer pay was accordingly reduced. On July 28, 1999, Susan filed a petition seeking to enforce the November 25, 1987, agreement. The petition alleged that Susan was not receiving the full amount to which she was entitled to under the parties' agreement.

On October 5, 2000, following a hearing, the trial court ruled that Susan was entitled to an amount worth 25% of Mark's military pension as it existed on the date he retired. On November 3, 2000, the trial court entered a written order reflecting its oral ruling of October 5, 2000. On April 30, 2002, the trial court assessed Susan's damages to date as $14,515.80 and ordered that, going forward, Mark should withhold and pay to Susan 22.5% of his monthly retired or retainer pay and 22.5% of his disability pay. Mark thereafter filed a timely notice of appeal.

On appeal, Mark argues that the trial court erred in awarding Susan a portion of his military disability benefits. In order to address the merits of Mark's argument, we must take a closer look at the USFSPA, why it was enacted, and the progeny of cases that have followed the USFSPA's enactment.

Congress enacted the USFSPA in 1982, in direct response to the United States Supreme Court's decision in McCarty v. McCarty, 453 U.S. 210, 69 L. Ed. 2d 589, 101 S. Ct. 2728 (1981). The McCarty Court held that federal law preempted the application of state community property or equitable distribution laws to a military serviceman's retirement pay. McCarty, 453 U.S. at 233, 69 L. Ed. 2d at 606, 101 S. Ct. at 2741-42. It is clear that in enacting the USFSPA, Congress intended to remove the federal preemption found to exist by the McCarty Court and permit state and other courts of competent jurisdiction to apply their laws in determining whether military retired or retainer pay should be divisible upon a dissolution of marriage.

Several years later, despite the unambiguous language of the USFSPA specifically prohibiting the division of a military serviceman's disability benefits, the divisibility of such benefits was called into question. The Supreme Court in Mansell v. Mansell, 490 U.S. 581, 594-95, 104 L. Ed. 2d 675, 689, 109 S. Ct. 2023, 2031 (1989), clarified this issue. In Mansell, the husband retired from the Air Force prior to entering into a settlement agreement with his wife. Mansell, 490 U.S. at 585-86, 104 L. Ed. 2d at 683, 109 S. Ct. at 2027. The ensuing settlement agreement entered into by the parties provided that the wife would receive 50% of the husband's total military retirement pay, including those portions waived so that he could receive veteran's disability benefits. Mansell, 490 U.S. at 585-86, 104 L. Ed. 2d at 683, 109 S. Ct. at 2027. After the parties divorced, the husband filed a petition to modify that portion of the judgment for dissolution that incorporated the settlement agreement provision that required him to share his total retirement pay. Mansell, 490 U.S. at 586, 104 L. Ed. 2d at 683, 109 S. Ct. at 2027. The trial court denied the motion, but the Supreme Court ultimately reversed, finding the plain language of the USFSPA dispositive and holding:

"The Former Spouses' Protection Act does not grant state courts the power to treat as property divisible upon divorce military retirement pay waived by the retiree in order to receive veterans' disability benefits." Mansell, ...


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