Willie Jean Cherry Johnson v. James Franklin Johnson

Docket: A01-9603-GS-00056

Court: Court of Appeals of Tennessee; September 14, 1999; Tennessee; State Appellate Court

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Willie Jean Cherry Johnson appealed the Shelby County Circuit Court's decision that denied her petition to modify a final divorce decree from December 1996. The Court of Appeals affirmed the trial court's judgment, referencing the precedent set in Gilliland v. Stanley. The parties, married in 1967 and separated in 1994, had entered a marital dissolution agreement (MDA) that outlined the division of James Franklin Johnson's military retirement benefits. The MDA stipulated that Willie would receive $1,845 monthly support until February 1, 1997, contingent on the timing of James's military retirement. Upon retirement, Willie is entitled to half of James's military retirement benefits. The trial court's final divorce decree adopted the MDA's terms, specifically acknowledging Willie's entitlement to 50% of the retirement benefits upon James's retirement. Additionally, the court ordered that a certified copy of the Final Decree be provided to Willie for compliance with the Uniformed Services Former Spouse's Protection Act, facilitating her access to the retirement benefits.

Upon the Husband's retirement from active duty, the trial court mandated that the Wife receive 50% of his retirement benefits. The court retained jurisdiction to enforce rights under the Uniformed Services Former Spouses' Protection Act. In May 1998, the Wife filed a petition to modify the divorce decree, claiming that her share of the Husband's retirement benefits had decreased from $1,446 to $1,265 monthly due to the Husband opting to receive part of his retirement as tax-free disability benefits, which federal law does not classify as marital property. To address this reduction, the Wife requested an order for the Husband to pay $181 monthly as alimony, reflecting the difference caused by the change in benefits.

The Wife later amended her petition, seeking relief under Rule 60.02 of the Tennessee Rules of Civil Procedure, arguing the reduction in benefits warranted relief from the divorce decree. She submitted an affidavit stating that the Husband had not disclosed his disability pay proceedings prior to the mediation agreement (MDA) and that she only discovered the benefit reduction in early 1998. In October 1998, the trial court denied the Wife's petition, citing the precedent set in Gilliland v. Stanley, which determined that the MDA did not require the Husband to share his disability benefits with the Wife. The Wife appealed, asserting the trial court's decision was erroneous regarding the division of disability benefits. The appellate court affirmed the trial court's ruling based on the precedent.

Upon the husband's retirement in 1990, the wife began receiving 35% of his military retirement benefits as stipulated in their divorce decree. Following this, the husband opted to waive part of his retirement pay to receive Veterans Administration disability payments, which led to a reduction in the wife's benefits. Upon learning of this change, the wife filed a petition to enforce the divorce decree, seeking to increase her share of the benefits from 35% to 49.5% to restore her previous amounts. The trial court denied her request, referencing the U.S. Supreme Court's ruling in Mansell v. Mansell, which established that military retirement pay waived for disability benefits cannot be divided as marital property. The appellate court upheld the trial court's decision, reiterating that state courts lack authority to modify the division of marital property post-divorce, as established in Tennessee law. The court acknowledged the inequity of the situation but emphasized adherence to established legal principles that prevent modification of marital property divisions once finalized.

Tennessee law does not provide relief from judgment in this case, as established in *Duncan v. Duncan*, where a wife's motion for relief was denied after her husband sold a valued business for significantly more during the appeal process. The trial court correctly refused to modify the property provisions regarding the husband's military retirement benefits. The wife's request to alter the alimony provisions of the final divorce decree is governed by the same principles, affirming the trial court's denial of her petition. Alimony in solido, as awarded in this case, is non-modifiable post-decree, supported by *Self v. Self*, *Day v. Day*, and *Brewer v. Brewer*. Consequently, the Wife is not entitled to relief under Rule 60.02(5) of the Tennessee Rules of Civil Procedure, which is narrowly construed and applicable only in exceptional circumstances, as noted in *Gilliland v. Stanley* and *Tyler v. Tyler*. Even if the alimony were deemed in futuro, the trial court's modification authority would have ceased upon the Husband's retirement from the Marine Corps. The Wife did not assert that the alimony was rehabilitative, which would have allowed for ongoing court control. Rule 60.02(5) serves as a catch-all for post-judgment relief in situations not covered by other clauses or in cases of extreme hardship.

In the case at hand, the Wife argues that the trial court should enforce the parties' Marital Dissolution Agreement (MDA) regarding the division of retirement benefits, asserting that the term "military retirement benefits" encompasses both retired pay and disability pay. The court disagrees, clarifying that veterans' disability payments do not qualify as military retirement benefits. Citing the U.S. Supreme Court decision in Mansell v. Mansell, the court explains that military retirement benefits are calculated based on service time and rank, while disability payments are based on the severity of the disability and its impact on earning capacity. The court concludes that, by law, military retirement benefits available for state court distribution exclude veterans' disability payments and any retired pay waived for disability benefits.

The Wife attempts to differentiate this case from Gilliland v. Stanley by highlighting that the trial court retained jurisdiction over the MDA enforcement. However, the court asserts that the jurisdiction retained was not specifically for enforcing the MDA concerning military retirement benefits. Instead, it was to enforce rights and remedies under the Uniformed Services Former Spouses' Protection Act. Although the Wife claims denial of property rights under the MDA, she fails to demonstrate denial of any rights or remedies under the Former Spouses' Protection Act.

The court's decision is bolstered by the Kansas Court of Appeals case In re Marriage of Pierce, where the property settlement agreement correctly awarded a portion of military retirement benefits under the Former Spouses' Protection Act, illustrating that military retirement benefits are distinctly defined and distributed according to specific legal standards.

The Veterans Administration changed Douglas's disability rating, resulting in the conversion of his entire retirement pay to disability pay, which eliminated Priscilla's monthly payment of $600. Priscilla filed a motion for the trial court to enforce the Property Settlement Agreement (PSA) by reinstating Douglas's military retirement pay or requiring him to pay her the equivalent amounts. The trial court denied her motion, a decision affirmed by the court of appeals. The court referenced the Supreme Court's ruling in Mansell v. Mansell, clarifying that state trial courts lack jurisdiction over a veteran's disability benefits. Thus, the court could not compel Douglas to revert to retirement benefits or to allocate disability benefits to Priscilla.

The court found that Douglas had not violated the PSA, which did not prohibit him from waiving retirement pay for disability benefits. The agreement explicitly stated that Priscilla was entitled to 18/20ths of one-half of Douglas's retirement pay, which implied her entitlement was contingent upon the existence of such pay. Since Douglas had no retirement pay, Priscilla's entitlement was effectively to "18/20ths of one-half of nothing." The court noted that in 1993, it should have been evident that Douglas's choice to waive retirement pay would disadvantage Priscilla, yet the agreement contained no protective provisions for her.

Additionally, the court dismissed Priscilla's argument for relief under Kansas Rule 60.02, citing the elapsed time since the divorce judgment and a lack of evidence of fraud or bad faith by Douglas regarding his retirement plan. The court emphasized the importance of the finality of divorce property divisions and found no valid reason to alter the decree. Ultimately, Priscilla had the opportunity to safeguard her interests during the divorce but failed to do so, resulting in a decline in the value of the asset awarded to her.

A party adversely affected by a decline in the value of an asset awarded in a divorce decree cannot reopen the divorce proceedings to seek additional property or payments. Priscilla's attempt to do so exemplifies this principle. However, contrary rulings exist, such as in Clause on v. Clause on, where the court allowed a wife to seek relief under a catch-all provision. The issue of military retirement benefits has complicated matters, as military retirees can unilaterally modify the equitable distribution set by the trial court, particularly by converting part of their retirement pay to disability pay, thereby reducing tax liabilities. Recent trends show that many jurisdictions have denied military retirees the ability to benefit from such post-decree actions to the detriment of their former spouses. Cases like Pierce and others highlight that relief similar to what Priscilla seeks has been granted by some courts, but this represents the minority view. Overall, the prevailing legal stance favors protecting former spouses from unilateral changes by military retirees that alter agreed-upon property distributions.

The legal excerpt addresses the enforcement of contractual or court-ordered provisions designed to guarantee an ex-spouse a specific portion or amount of a military spouse’s retirement pay as of the divorce date, irrespective of any future declines in the value of the military pension. Citing *Owen v. Owen*, the excerpt notes a property settlement agreement that allocated half of the husband’s gross Army retirement pay to the wife, with prohibitions against actions that would undermine her rights and included indemnity provisions for breaches. Similar protections are illustrated in *Abernethy v. Fishkin*, where the husband was barred from actions that would defeat the wife's entitlement to a share of his retirement pay, and in *McHugh v. McHugh*, which established a fixed monthly payment to the wife from the husband's retirement benefits. Other cases, including *Hisgen v. Hisgen* and *Price v. Price*, further emphasize the importance of maintaining the economic value of assets allocated in property settlement agreements and the necessity for the husband to adhere to payment obligations. The overarching theme is the legal reinforcement of ex-spouses' rights to retirement benefits as stipulated in divorce settlements.

The document outlines the allocation of military retirement benefits in divorce proceedings, specifically addressing the calculation and distribution of these benefits to the spouse. The husband is responsible for paying 34% of his gross military retirement benefits each month, which includes any disability payments. In relevant case law, such as *Torwich v. Torwich* and *In re Marriage of Strassner*, courts have awarded wives a specific percentage of their husbands' military pensions, while prohibiting any actions that would reduce the wife's share, including waiving benefits for increased disability pay. The courts have determined that while military disability benefits cannot be divided, retirees can be required to utilize other available assets to compensate former spouses for the loss of retirement benefits due to voluntary waivers. Additionally, the vested interest in military pensions is affirmed at the time of the final divorce decree, and retirees cannot engage in conduct that undermines this vested interest post-decree. This legal framework is supported by various precedents that emphasize the protection of ex-spouses' rights to military retirement benefits.

Relief can be granted to ex-spouses of military retirees based on interest theory, even without explicit contractual or court-ordered provisions. In *Dexter v. Dexter*, 661 A.2d 171 (Md. Ct. Spec. App. 1995), a settlement agreement awarded the wife 47.5% of the husband's military pension on a monthly basis, post-retirement. After the husband voluntarily waived his rights to these benefits to qualify for greater Veterans Administration disability benefits, the wife's monthly benefits were reduced to zero. She subsequently sought enforcement of the settlement agreement incorporated into the divorce decree. The trial court enforced the agreement, and the appellate court affirmed. The appellate court indicated that the ex-spouse's interest in military retirement benefits could vest as specified in the final decree, referencing *In re Marriage of Gaddis*, 957 P.2d 1010 (Ariz. Ct. App. 1997). The trial court concluded that both parties had obligations under the settlement to ensure its fruition. Ultimately, the trial court rendered judgment for the wife for past sums that would have been received had the husband not unilaterally waived the agreed-upon retirement benefits. The wife's inability to receive these benefits was due to the husband's waiver, not federal statutes or case law. Under Maryland contract law, agreements entitling one spouse to a percentage of pension benefits on a periodic basis are enforceable.

Payments related to pension benefits are already considered payable and being paid. A pensioned party cannot hinder the other party's ability to receive agreed payments by voluntarily waiving or terminating pension benefits. The court ruled that the voluntary waiver of the husband’s Army retirement pension constituted a breach of contract under Maryland law. The measure of damages corresponds to what the spouse would have received if the breach had not occurred. The court emphasized that the benefits were vested, stating that both parties were receiving benefits when the husband unilaterally waived them.

In a referenced case, Gaddis, the husband retired from the U.S. Air Force and, following a divorce, the trial court awarded the wife half of the husband's military retirement benefits. The husband's subsequent civil service employment resulted in a reduction of his military retirement benefits due to federal law requiring dual compensation offsets, which decreased his disposable retirement pay by half. The wife filed a petition arguing that her share should not be reduced by these offsets, leading the trial court to order the husband to continue paying her a set amount monthly. The husband appealed, claiming a prohibition against dividing waived retirement benefits in order to receive civil service compensation. The appellate court rejected this argument.

A request for modification of the community property allocations in a dissolution decree is inconsistent with Arizona law, which stipulates that such decrees are final upon entry, subject only to the right of appeal. Under A.R.S. § 25-325, provisions regarding property disposition cannot be revoked or modified unless extraordinary circumstances warrant reopening the judgment. The Arizona Supreme Court emphasizes the importance of finality and stability in family law, stating that property settlements are generally not subject to alteration (De Gryse v. De Gryse, 135 Ariz. 335, 661 P.2d 185, 1983). In this case, the trial court appropriately denied a modification request to reduce the wife's community property interest in the husband's retirement benefits following a post-decree change in circumstances, reiterating that a spouse cannot unilaterally affect the other spouse's interest in retirement benefits (In re Marriage of Crawford, 884 P.2d 210, Ariz. Ct. App. 1994). Furthermore, neither the Former Spouses Protection Act nor the Mansell case requires altering a court's final award of community property in retirement pay when the military retiree obtains civilian employment post-decree. The 1994 dissolution decree clearly awarded the wife half of the husband's military retirement benefits, and at the time of the decree, there was no dual compensation offset since the husband had not yet secured civilian employment. Therefore, the existing decree had already established her entitlement.

The husband voluntarily waived his retirement benefits, which had been vested in the wife per court decree, thereby frustrating the decree's intent. He could not reduce the wife’s vested interest by unilaterally obtaining civil service employment. The Missouri Court of Appeals indicated that the trial court's award to the wife, calculated as a percentage of disposable retired pay at the time of the decree, did not violate Mansell by distributing amounts that had not been waived. The wife's interest in the husband's military retirement benefits vested either upon the final decree in December 1996 or when she started receiving her portion in 1997. Once vested, the husband could not take actions to impair the wife's interest. The court declined to adopt an alternative reasoning for addressing these issues, citing adherence to precedents established in Gilliland v. Stanley and Kansas appellate court rulings. The trial court's judgment was affirmed, and the case was remanded for further proceedings consistent with this opinion, with costs of the appeal taxed to the wife.