Petition — Chisnell v. Chisnell

My nreme C ourt, U. 37

FILED

= ; FEB 22 1979 |

€8-1303 i a

LA MICHABL RODAK, JR., CLERK |

IN THE SUPREME COURT

OF THE

UNITED STATES

October Term, 1978

qe

Beatrice M. Cuisne xt.

Respondent,

vs.

Rosert Lioyp Cuisne te.

Petitione:.

eee

PETITION FOR WRIT OF CERTIORARI TO

THE SUPREME COURT OF THE STATE

OF MICHIGAN

EE <<<

Attorneys for Petitioner

Gary E. Genpernauik of

Daner, Freeman, McKenzie & Marttuews. P.C.

One South Gratiot Avenue

Mount Clemens, Michigan 48043

Phone: (313) 469-2633

—__e———————————————————————

AMERICAN PRINTING COMPANY, 125 WEALTHY STREET, S.E.,

GRAND RAPIDS, MICHIGAN 49503 -~ PHONE GL 8-5326

TABLE OF CONTENTS

Item Page

ee I cc ccc seen ascccnsescces ii

PETITION FOR WRIT OF CERTIORARI .......... I

ee Ss os ecu ccestcscvccsccces l

EEE EES 2

QUESTIONS PRESENTED:

IEEE ET CLT ET EE EET EET EE ET 2

i led ike pba bpceecesesces 2

ST PE UES GAMES ow. ccc cece ccc ccees 3

ARGUMENT:

eee Oakes ois bba esse eccces 4

EELS EEE SELLE 21

CONCLUSION AND RELIEF REQUESTED....... 25

APPENDIX A—

Order of Michigan Supreme Court Denying Applica-

tion for Leave to Appeal—November 29, 1978..... la

APPENDIX B— ;

Opinion of Michigan Court of Appeals—April 18,

EE EEE ES 3a

APPENDIX C—

Judgment of Divorce of the Circuit Court for the

County of Macomb—April 21, 1977. .............. lla

*

INDEX OF AUTHORITIES

Case Law Page

Abbot v United States, 200 Ct. Cl. 384, (1973) ...... 22

Andrews v United States, 81 Ct. Cl. 409, cert. denied

ee Cee ee SE 45-40 4 645 ods wh wane et ckweaes 21, 22

Bell v United States, 366 US 393, 401 (1961)........ tee

Berkey v United States, 361, F 2d 983,

es Ms DP eew sed ce nbeseévessua Ey OP Oey 20,24

Byrd v United States, 103 Ct. Cl. 285 (1945) ........ 22

Busby v Busby, 457 SW 2d 551 (Tex., 1970) ....... yy a

Dominey v Dominey, 481 SW 2d 473, (Tex. Civ. App.

Ps Gis ou ck bho Woah asta s takcba esas ceweeh 15

ls os Se We es Sk hoc ncek sks daetoses 25

Elmwood v Elmwood, 295 NC 168, 244 SE 2d 668 (1978) 25

Fenney v Fenney, 537 SW 2d 367 (1976) ............ 21

Fleming v Nester, 363 US 603, 80 S. Ct. 1367 4 L Ed 2d

EN aes Cknuaanks Thee ovk emer etiniei 19

Florida Avocado Growers v Paul, 373 US 132, 141, 10 L

PP F SS F we ee fi. | errata 16

Franklin National Bank v New York, 347 US 373 98 L

F&F & Se bk Bs SS Bee ore Perry 11

Free v Bland, 369 US 663, 82 S. Ct. 1089, 8 L Ed 2d 180

SEE G4 4 wae Vee ea wince Ca hack ows i a RRR 10, 11

Fulmer v United States, 32 Ct. Cl. 112 (1897) ....... 22

Gibbons v Ogden, (US) 9 Wheat 1, 210, 211, 6 L Ed 23,

5 SEP eee Cart re Pay eh een PY © = Bane tg SOR 11

Heidt v United States, 56 F 2d 559 (Sth Cir., 1932).. 22

Hines v Davidowitz, 312 US 52, 67, 85, L Ed 581, 61 S.

| MPT PTT RET TIT ET TERT ee 16

Hisquierdo v Hisquierdo, 566, P 2d 224 argued

November |, 1978, decided January 22, 1979, U.S. S

Dal bach eh hacku dae On ah anus ee eee les ane eee cbr ee wa 9

Hostinsky v United States, 292 F 2d 508,

ee ee es OT. bk Rk de Kaen b a een ba heshed 20, 23, 24

INDEX TO AUTHORITIES (Cont’d)

Cases: Page

In Re Marriage of Ellis, 538 P 2d 1347 (Colo. App. 1975)

affirmed 552 P 2d 506 (Colo. S. Ct. 1976)....20, 21, 24

In Re Marriage of Fithian, 111 Cal Rptr. 396, 517 P 2d

449 (1974 Cal. St. Ct.) cert. denied 419 US-825, 95 S.

Ce. OE ee ee CEE Wig seaiecsocks 14, 17, 18, 20

In Re Marriage of Nizenkoff, 65 Ca. App. 3d 135 Cal.

PEL ee CWP aan hoe rc ara ois chee siehaves 18

In Re Marriage of Wilson, 10 Cal. 3d 851, 112 Cal. Rptr.

a ee ae I oon bed cc eek ebb evevescs 15

Jacobs v Jacobs, 20 Wash App 272, 579 P 2d 1023, 1978 15

Kewanee Oil Co. v Bicron Corp., 416 US 470 40 L Ed

2d 315, 44 S. Ct. 1879 (1974) at 40 L Ed 324 ..... 16

Krueger v Krueger, 138 NJ 413, 354 Atlantic 2d 340

SE A ca wked Uv eCh cache abh ees bs soo sckuecknee one 15

LeClert v LeClert, 80 NM 235, 453 P 2d 755 (1969).. 15

Lemly v United States, 75 F Supp 248, 109 Ct. Cl. 20, 24

Leonard v United States, 279 oo, F | Baers 22

Lowry v McCarl, 79 F 2d 114 (D.C. Cir., 1935) ..... 22

Magaw v United States, 16 Ct. Cl. 3, (1880) ........ 22

Mora v Mora, 429 SW 2d 660 (Tex. Civ. App 1968). 15

Morris v Morris, 69 Wash 2d 506, 419 P 2d 129 (1966) 15

Otto v Otto, 80 NM 331, 455 P 2d 642 (1969) ....... 15

Payne v Payne, 82 Wash 2d 573, 512, P 2d 736 (1973) 15

Phillips v Phillips, 34 NC App 612, 234 SE 2d 743 (1977) 25

Ramsey v Ramsey, 96 Idaho 672, 535 P 2d 53 (1975 S.

ce I an 06044. Ghas cuba sa be eke kcuees 14, 17, 18

Sears Roebuck & Co. v Stiffel Co., 376 US 225, 229, 11

L Ed 2d 661, 84 S. Ct. 784 (1964).............0.. 16

Smith v Lewis, 107 Cal Rptr. 95 (Cal. App. 1973) ... 15

Sola Electric Co. v Jefferson Electric Co., 317 US 173,

oe ee Of BOO re errr 11, 16

iv

INDEX TO AUTHORITIES (Cont’d)

Cases: Page

Stenquist v Stenquist, 148 Cal Rptr. 9, 582, P 2d 96

CRIED oc cae ind chine chaeceRaeeeeebecdrk case we 15

United States v City and County of San Francisco, 310

mp OG, B. GE. Fae Sere K ccpueeeemerivsarak css 6

United States v McDonald, 128 US 471 (1888) ...... 22

United States v Williams, 370 At. 2d 1134 (1977) .... 25

United States v Wise, 370 US 405, 414, 82 S.T. 1354,

ee CRD 5k 60-040 cabs ee ee cb 6

Watson v Watson, 424 F Supp 866 (1976) ...... 14, 22, 24

Wissner v Wissner, 338 US 655, 70 S. Ct. 398, 94 L Ed

GER CIE ab n00h sins kadidietonia + 3h. &

United States Constitution

Astieie 1, Beste Dy CaOe SD sec cc cice eis ca seeees 5, 24

Aste &,-Ga 6 acs ecedciah’ Aienctindurke ews 5

Ames VE. TR b onc ccks cheese Oieecbyat nce 4, ll

Statutes

D UR SER ions vic dcanvcanweeenicsanse eee 24

S UR Ba os k's vn cccchasnabesnaceeaeceatiaeeae 24

OD SIG SUG ad vie aha isi ie bee oe 20

OD CEs BOON s 06s ck cen dcewas ceanercenben phan 5, 15, 20

OD SF, FRG nce inwucd con dcac eens teen te reeetens 20

SO UE: BS Wo vs vcicccdpevccdnueeackeeneecaee 20

BDU, SORT te WS inc dsc cvadeuctesecgematence ae

OO UR, ROG OW oven cievccdncGanebas cdasesdent ae 12

OD Sie COD Kain ons cucecibacdencuccsw. ase) eee 5

0S CS BRFR OD oe. cadcavqueceuupusaceuaeeyees 25

ae UG SRST GBD. nn nc cucckeuens b06syabhetvtiaseee 2

FE GRE vce vcteeus caccnuuewesteeeen eenesanas 24

Vv

INDEX TO AUTHORITIES (Cont’d)

Cases: Page

EE RRR LENA PIN a" se PCR eel eR 21

ea es ae ee kas 13

Miscellaneous

Act to Provide Additional Inducement to Citizens of the

United States to make Careers of the United States

Military, Ch. 34, Section 6, Stat. 27, P.L. 79-305 ....

Goldberg, Is Armed Services Retired Pay Really Com-

munity Property? 48 Cal. Stat. Bar J. 12 (1973)......

Hart, The Relations Between State and Federal Law, 54

eS

Internal Revenue Code §61 (a) (11) of 1954..........

Military Retirement Pay Scheme, Section 5 (h) (4), 77

RS. re en

Pay Readjustment Act of 1958, 72 Stat. 122, Pub. L.

Te a a eae

6 COS Aramiy & Navy, $20 0 (7) 2... . ccc ccc cccnecn

United States Code Congressional and Administrative

News, 90th Congress, Second Section, 1968, Volume 3,

EE Ry UN GN Pee CU ya as ay eet cua eke ¥ be

17

20

IN THE SUPREME COURT

OF THE

UNITED STATES

OCTOBER TERM, 1978

Beatrice M. Cuisnece.

Respondent,

a

VS.

Rosert Lioyp Cuisne Lt,

Petitioner.

PETITION FOR WRIT OF CERTIORARI

Petitioner respectfully prays that a Writ of Certiorari

issue to review the final Order of the Supreme Court of the

State of Michigan entered herein on November 29, 1978,

affirming the decision of the Court of Appeals, State of

Michigan, and the Decision of the Circuit Court of the State

of Michigan for the County of Macomb.

OPINION BELOW

The Order denying the Application for Leave to Appeal

in the Michigan Supreme Court was entered on November

29, 1978, and is not reported; it is printed in Appendix A at

Page la, infra. The Opinion of the Michigan Court of Appe-

als is recorded at 82 Michigan Appeals 699 and 267 NW 2d,

479. This opinion is printed in Appendix A at Page 3a, infra.

The Judgment of Divorce is printed in Appendix A at Page

lla, infra.

2

JURISDICTION

The Order Denying the Application for Leave to Appeal

of the Michigan Supreme Court was made and entered on

November 29, 1978. This Petition was filed within ninety (90)

days of that date. The jurisdiction of this Court is invoked

under 28 USC 1257 (3). Further, jurisdiction is invoked

pursuant to Rule 19 of Rules of the United States Supreme

Court, Section | (a), where a state court has decided a

federal question of substance not theretofore determined by

this Court or has decided it in a way not in accord with

applicable Decisions of this Court.

QUESTIONS PRESENTED

1 HAS THE UNITED STATES PREEMPTED THE

FIELD OF CHARACTERIZATION OF FEDERAL

MILITARY RETIREMENT PAY BENEFITS BY

VIRTUE OF ITS EXCLUSIVE LEGISLATIVE

JURISDICTION, VIA THE SUPREMACY CLAUSE

OF THE UNITED STATES CONSTITUTION,

THUS PRECLUDING THE STATE OF MICHIGAN

AND ANY OTHER STATE FROM JUDICIALLY

DIVESTING PETITIONER OF ALL OR A POR-

TION OF HIS RETIREMENT PAY?

Il IN LIGHT OF THE FACT THAT FEDERAL

COURTS HAVE CLEARLY DISTINGUISHED BE-

TWEEN FEDERAL PENSIONS AND FEDERAL

MILITARY RETIREMENT PAY AND HAVE

CHARACTERIZED MILITARY RETIREMENT

PAY AS A CONTINUATION OF ACTIVE DUTY

PAY ON A REDUCED BASIS, DOES THIS

CHARACTERIZATION PRECLUDE THE MICHI-

GAN COURTS AND ANY OTHER COURT FROM

CHARACTERIZING SUCH MILITARY RETIRE-

MENT PAY SOLELY AS COMPENSATION FOR

PAST SERVICES, OR IN THE ALTERNATIVE, AS

A MARITAL ASSET, IN ORDER THAT SAID

3

COURTS MIGHT FIND SUFFICIENT JURISDIC-

TIONAL BASIS TO ORDER AN EQUAL DIVISION

OF SAID RETIREMENT PAY PURSUANT TO THE

MARITAL PROPERTY LAWS?

STATEMENT OF THE CASE

The facts relevant to the questions presented by this

Petition may be introduced to the Court, as follows:

Robert Lloyd Chisnell was the Defendant in the original

Complaint for Divorce filed in the Circuit Court for the

County of Macomb, State of Michigan, on December 18,

1975. The Respondent, Beatrice Chisnell, was the Plaintiff.

The parties hereto were married on October 22, 1955.

Petitioner had joined the United States Army in 1944, and

remained on active duty until 1953, when he left the military

service for an approximate period of eighteen (18) months.

Prior to the marriage in 1955, Petitioner reenlisted in the

army and was honorably retired from the same in 1972 as a

Chief Warrant Officer, Fourth Class. At the time the divorce

was entered, the Petitioner was receiving approximately

Nine Thousand Six Hundred and no/100 ($9,600.00) Dollars

per year as retirement pay.

The nature, character and status of compensation

received by Petitioner and similarly situated retired officers

of the United States Army was fully argued in the Circuit

Court for the County of Macomb, State of Michigan, the

original trial court, and also in the Michigan Court of

Appeals and the Michigan Supreme Court, and briefs were

filed therein.

The Judgment of Divorce entered on April 21, 1977,

provided in part that the Respondent was to receive, for the

rest of her life, the sum of Three Hundred Twenty and

no/100 ($320.00) Dollars per month as a portion of

Petitioner's military retirement pay. This sum represents

4

approximately 50 percent of Petitioner's retirement pay after

income taxes on a monthly basis.

The Michigan Court of Appeals affirmed the Judgment of

Divorce with reference to the allocation of a portion of

Petitioner's military retirement pay to the Respondent. The

Court of Appeal’s Opinion is recorded at 82 Michigan

Appeals 699; 267 NW 2d 479, 1978.

The Michigan Supreme Court denied Petitioner's

Application for Leave to Appeal on November 29, 1978, a

copy of which is reproduced in Appendix A.

ARGUMENT

I THE DECISION BELOW CONFLICTS WITH

DECISIONS OF THIS COURT IN THAT IT

DISREGARDED THE SUPREMACY CLAUSE OF

THE UNITED STATES CONSTITUTION,

ARTICLE VI, CLAUSE 2, AND THE

PREEMPTIVE AUTHORITY OF THE UNITED

STATES CONGRESS IN THE AREA OF FEDERAL

MILITARY BENEFITS.

Petitioner contends that his military retirement pay is

within the sole and exclusive realm of the United States

Congress, and that any state court intervention with his right

to receive his benefits is precluded by operation of the

Supremacy Clause of the United States Constitution, Article

VI, Clause 2:

This Constitution, and the Laws of the United States

which shall be made in pursuance thereof and all

Treaties made, or which shall be made, under the

Authority of the United States, shall be the supreme

Law of the Land; and the Judges in every state shall

be bound thereby, any Thing in the Constitution or

Laws of any State to the Contrary notwithstanding.

5

Judicial fiat cannot alter, amend or enlarge the statutory plan

that Congress has established for the payment of services

rendered or to be rendered in the United States Army.

The United States Constitution in Article I, Section 8,

gave Congress the power “‘to raise and support armies, bit

no appropriation of money to that use shall be for a longer

term than two years.”

This language, written by the founding fathers of our

system of government, clearly and unequivocally set the

broad powers to raise and support armies in the federal

Congress. The failure of the trial court to follow the dictates

of the Federal Constitution works an undue hardship on

Petitioner and those similarly situated, and conflicts with the

exclusive jurisdiction of Congress.

Petitioner was a member of the United States Army for

some twenty (20) years and had achieved the rank of Chief

Warrant Officer, fourth class, prior to his retirement in 1972.

(TS). Petitioner was retired pursuant to the Authority of 10

USC 3911, et seq., and the General Military Law 10, USC

1293. At the time of Petitioner’s retirement, he did not

exercise his option to establish a survivor benefit annuity

pursuant to 10 USC 1447 to 1455.

The United States Supreme Court in Wissner v Wissner

338 US 655, 70 S. Ct. 398, 94 L ED 424, (1950), dealt with a

similar military benefit-supremacy problem. In Wissner, the

U.S. Veterans Admini tration made monthly installment

payments to the mother of a deceased army officer, whom he

had named as principal beneficiary on his army life

insurance. His widow, claiming to be entitled under

community property law to half of the proceeds, obtained a

judgment in the state courts in California. The United States

Supreme Court in Wissner reversed the state court decision

holding the congressional life insurance scheme

constitutional and the state court intervention a violation of

the Supremacy Clause.

6

The Wissner court at 338 \.S. at 659, 70 St. Ct. at 400,

noted the impact of the state court determination on the

congressional intent.

Whether directed at the very money received from

the government or an equivalent amount, the

judgment below nullifies the soldier's choice and

frustrates the deliberate purpose of Congress.

Wissner provides certain fundamental requirements that

must be met to consider the retirement as the separate

interest of the retired serviceman:

1. That the military retirement pay must be intended as a

method which might directly enhance the morale of the

serviceman. (338 U.S. at 660, 70 S. Ct., at 401).

2. That Congress must have intended military retirement

pay to be paid from Congressional appropriations (338 U.S.

at 658, 70 S. Ct. at 399).

3. That Congress must have intended the cost of

administering the military pay system to be borne by the

United States. (338 U.S. 658, 70 S. Ct. at 399).

4. The Congress must have intended the Federal Military

Retirement Pay System to afford as much material protection

as possible to the serviceman. (338 U.S. 660, 70 S. Ct. at

401).

It is uncontrovertible that the legislative history of a

statute is the proper source to ascertain the intent of

Congress as to ‘its ultimate purpose. United States v. Wise,

370 U.S. 405, 414, 82 S. T. 1354, 1360 (1962). The legislative

history of an act includes debates and discussions on the

floor of the Congress, as well as committee reports. United

States v City and County of San Francisco, 310 U.S. 16, 60

S. Ct. 749, 1940.

Space does not permit a full demonstration of all

pertinent acts and comments thereto. However, Petitioner

7

relies on an overview of many Congressional acts as

conclusive evidence that the federal military retirement pay

is his separate interest and meets the criteria set forth in

Wissner.

It is clear that Congress was primarily concerned about

raising the morale of the men in the armed services in

enacting the entire system of military retirement. The Act of

February 21, 1946, that being an Act to Provide Additional

Inducement to Citizens of the United States to make a career

of the United States Military, Ch. 34, Sect. 6, 60 Stat. 27,

PL. 79-305, was enacted for the purpose of inducing young

men to make a career of the armed services. Congress

provided the servicemen with specific incentives to remain in

the service for at least 20 years. These incentive included

four provisions in the area of retirement; the statutory age of

retirement was lowered, a new system to compute retirement

pay was established, a man was allowed to retire after only

20 years of service, and the serviceman was not required to

make any contribution to his retirement.

The following excerpt from the Congressional record of a

dialogue between Messrs. Cochran and Vinson is illustrative

of the fact that Congress specifically undertook to have the

benefits paid from Congressional appropriations. The

dialogue refers to the act of February 21, 1946, and reads as

follows:

Mr. Cochran, representative from Missouri:

‘‘They get so much of their basic pay when they

retire?”

Mr. Vinson, ‘exactly.’

Mr. Cochran, ‘“They never contributed one nickel

toward any retirement fund. Is that correct?”

Mr. Vinson, ‘That is absolutely correct.”

(91 Cong. Rec. 12465)

8

That Congress must have intended the cost of

administering the Military Retirement Pay System be borne

by the United States is obvious, based on the fact that no

premiums or contributions are required to be paid by the

servicemen, all liabilities are paid from Congressional

appropriations and the cost of administering the system are

borne by the United States. Congressional comment during

the debate over the Pay Readjustment Act of 1958, act of

June 1, 1958: 72 Stat 122, Pub. Law 85-422 is very

informative:

Fortunately, we have for our military personnel the

most liberal retirement provisions our sub-committee

was able to learn about anywhere in the world.

Retirement compensation is paid by the federal

government... as yet it has not been necessary to

care for any contributions by the personnel involved.

The retirement is paid for by direct appropriations,

with no contribution.

104 Cong. Rec. 7613; remarks of Senator Stenus of

Mississippi.

That Congress intended the Federal Military Retirement

System to afford as much material protection as possible to

the retiree is also evident from excerpts of the Congressional

record. A cost of living index provision was added to the

Military Retirement Pay Scheme by Act of October 2, 1963,

Sect. 5 (h) (4), 77 Stat. 214, Pub. L 88 132. Mr. Cannon, a

representative from Missouri, at 109 Cong. Rec. 14200, made

the following comment:

First to improve the attraction and retention of

service members for career military service by

providing increased basic pay with the larger

percentages increases at points of retention; Second,

to correct certain inequities in the military

compensation (and retirement) system; Third, to

provide for a permanent statutory matter an equitable

basis for adjusting retired pay for members after

9

retirement, based on cost of living increases,

applicable to all retired personnel.

Through the test established in Wissner, supra, Petitioner

has demonstrated that Congress specifically intended federal

military retirement pay to be the separate interest of the

recipient. Respondent played no role in the establishment of

the retirement system nor in meeting its requirements to

secure its benefits.

Petitioner respectfully submits that the case of His-

quierdo v Hisquierdo, 566, P 2d 224, which was reviewed by

the United States Supreme Court, file No. 77-533, argued

November 1, 1978, decided January 22, 1979, is most

analogous to the case at bar. This Honorable Court in

Hisquierdo held that under the Supremacy Clause of the

United States Constitution that the State of California, pur-

suant to its community property laws, could not interfere

with the federal Railroad Retirement Act of 1974 and re-

versed the decision of the California Supreme Court. The

California Supreme Court had applied its community prop-

erty principles in granting Mrs. Hisquierdo an interest in her

husband's railroad retirement benefits. The U.S. Supreme

Court, at page 3 of its slip opinion, indicated that railroad

retirement benefits are not contractual and may be altered or

eliminated by Congress at any time. It should be noted that

these similar principles govern the status of military retire-

ment benefits. The case at bar as well as the Hisquierdo case

dealt with the allocation of federal entitlements. The slip

opinion of the United States Supreme Court in Hisquierdo at

page 11, set forth the applicable tests in considering the

application of the Supremacy Clause in a family law related

area.

The pertinent questions are whether the right as as-

serted conflicts with the express terms of federal law

and whether its consequences sufficiently injure the

objectives of the federal programs to require non-

recognition.

10

Petitioner respectfully submits that the decisions of the

Michigan courts in the case at bar are in clear conflict with

the expressed terms of the federal military retirement statu-

tory provisions and that they injure the objectives of the

federal program. The references to the legislative history set

forth herein establishes the objectives of the federal military

program and the determinations made by the Michigan

courts clearly obstruct and interfere with the objectives.

The decision of the Michigan court, as well as the

numerous decisions of the community property states, in

contrast to the decisions of the Colorado Supreme Court and

the Arkansas Supreme Court, clearly sets forth a system of

non-uniformity and creates an atmosphere which gives rise

to forum shopping.

It is Petitioner's contention that the United States has

exclusive jurisdiction to characterize a federally created right

and that the states cannot operate in the area until or unless

the state law has been absorbed as the federal rule. Assum-

ing arguendo that Wissner and Hisquierdo has left open the

character of federal military retirement benefits, then it must

be a federal law that will govern the interpretation of a

federal right. See Free v Bland, 369, U.S. 663, 8 L Ed, 2d

180, 82 S. Ct 1089 (1962). In Free, supra, United States

Savings Bonds were issued to spouses living in Texas; the

spouses were designated in the bonds as alternative

co-owners. After the wife’s death, the husband claimed

exclusive ownership by operation of a treasury regulation

providing that the survivor would be recognized as the sole

and absolute owner. A son of the deceased wife by a

previous marriage, as the principal beneficiary under her

will, claimed an interest in the bonds by virtue of the state

community property law. The Texas Supreme Court

awarded the widower the title to the bonds, but also awarded

reimbursement to the son for his half interest therein, making

the bonds security for payment. The United States Supreme

Court reversed the Texas decision holding that the

Supremacy Clause of the Federal Constitution invalidated

the state law which conflicted with the U.S. Treasury

regulations. The Supreme Court in Free, 8 L Ed 2d, at page

183 stated as follows:

The Supreme Court of Texas’ interpretation of the

Supremacy Clause is not in accord with controlling

doctrine. The relative importance to the State of its

own law is not material when there is a conflict with a

valid federal law, for the Framers of our Constitution

provided that the federal law must prevail. Article 6,

Clause 2.

This principal was made clear by Chief Justice Mar-

shall when he stated for the Court that any state law,

however clearly within a state’s acknowledged pow-

er, which interferes with or is contrary to federal law,

must yield. Gibbons v Ogden, (US) 9 Wheat 1, 210,

211, 6 L Ed 23, 73. See Franklin National Bank v

New York, 347 US 373, 98 L Ed 767 74 S. Ct. 550;

Wissner v Wissner, 338 US 655, 94 L Ed 424, 70 S.

Ct. 398; Sola Electric Co. v Jefferson Electric Co.,

317 US 173, 87 L Ed 165, 63 S. Ct. 172.

This rationale makes it the obligation of a state court to

recognize the supremacy of the federal statute and at the

same time to set aside or disregard the state law that may be

in conflict with the federal act. In the case at bar, there is no

particular state statute which gives Respondent an interest in

Petitioner's retirement pay. The trial court, in exercising its

equitable powers held that the wife had an interest in her

husband's military retirement pay. This equitable case law

approach to the problem in light of the federal Supremacy

Clause, creates an inconsistency and destroys the uniform

application of the federal military law.

The Free court cited as authority Wissner v Wissner,

supra, as authority for their holding that any state act in

violation of the savings bond statute and/or regulations must

fall under the Supremacy Clause. The Free court also made

note of the fact that Congress had given the serviceman in

12

Wissner the right to select a beneficiary regardless of state

law. In the case at bar, it is obvious that Congress gave

Petitioner the right to name Respondent as a beneficiary

under the Survivor Benefit Plan of 10 USC 1447 to 1455.

The Survivor Benefit Plan, 10 USC 1447, 1455, is perti-

nent to the case at bar for it demonstrates the limited interest

a spouse may have in a retirement pay. In 1953, Congress

enacted the Contingency Option Plan which allowed a retiree

to provide an annuity for eligible widows and dependent

children after he died. The Plan was subsequently renamed,

“The Retired Servicemen’s Family Protection Plan’’

(hereinafter referred to as the R.S.F.P.P.) and because of the

inadequacies therein, Congress enacted the Survivor Benefit

Plan, 10 USC 1447-1455 in 1972.

The R.S.F.P.P. was funded with deductions from the

retiree’s payments and continued even if there was no longer

an eligible beneficiary. (U.S. Code Congressional and Ad-

ministrational News, 90th Cong. Second Session 1968, Vol.

3, 3307). Congress rectified this anomaly by providing an

automatic termination of deduction where there was no

longer an eligible beneficiary (Id. at 3301-3306) and specified

the reason therefor:

To safeguard the participant's future retired pay when

the spouse predeceases the member, or a divorce

occurs...

Id at 3307 (emphasis added)

It should be noted that the Survivor Benefit Plan is

funded by deductions from the retiree’s pay, and that the

serviceman had to elect not to be covered. If the servicemen

so elected, he was required to file written notice with the

proper officials and to notify his spouse of said election. 10

USC 1448 (a). It should be further noted that the Survivor

Benefit Plan as presently enacted allows the serviceman to

provide an annuity for his dependent child and to exclude his

spouse, and if he exercises this option, he is also required to

13

notify his spouse of his decision. Thus, it is obvious that a

spouse of a serviceman can be excluded from any interest in

the retirement pay of her spouse at the option of her spouse.

Congress, in enacting the Retirement Pay Plan for the

military services and in particular in the Survivor Benefit

Pian, set forth various definitions and in the course of doing

so, did not define the term ‘‘ex-wife’’ or ‘‘ex-spouse’’ or

“divorced wife’’.

It is clear that Congress has the wherewithal to define

such terms and is aware of the particular problems of those

individuals falling within these categories. The Congress, in

the Social Security Act, 42 USC 416, set forth numerous

definitions including definitions for the terms ‘‘divorced

wife’’ and ‘‘surviving divorced wife’’. Those terms in es-

sence mean a woman who had been married to an individual

for a period of 20 years immediately before the date the

divorce became effective. It is obvious that Congress,

through their operation of the Social Security Act, intended

to provide certain benefits to divorced women. The fact that

Congress has not acted to provide benefits to a divorced wife

under the Military Retirement Pay Scheme demonstrates that

Congress has not in its wisdom seen fit at this stage to grant

any rights in a retirement pay to an ex-spouse. Unless

Congress acts, the courts of Michigan or any other states

cannot establish new rights that do not exist within the

parameters of the federal statute.

Assuming arguendo that a state court can create certain

rights on behalf of an ex-wife in her husband’s military

retirement pay, then the state courts may also be able to

create by judicial determination, rights of an ex-wife in other

federal benefit plans. This proposition is clearly preposter-

ous. Surely no one would contend that a ex-wife would have

an interest in her husband's GI Bill Benefits, that being the

right to use his rights to defray the cost of her education, nor

could a state court create rights in the ex-wife in her hus-

band’s VA loan privileges, commissary privileges, military

14

hospital privileges or any of the other numerous benefits that

flow to military personnel.

The Supreme Court of California in Jn Re Marriage of

Fithian, 111 Cal. Rptr. 396 517 P 2d 449 (1974 Cal. S. Ct.)

cert. denied 419 US 825, 95 S. Ct. 41, 42, L Ed 2d 48 (1974)

and the Idaho Supreme Court in Ramsey v Ramsey 96 Idaho

672, 535 P 2d 53 (1975) have dealt with the question of

whether or not military retirement pay is subject to division

in a divorce action. Both state supreme courts rejected the

argument that the area of military retirement benefits has

been preempted by federal authority via the Supremacy

Clause of the United States Constitution.

The California and Idaho Courts both established as their

initial premise the military retirement benefits are property

and thus subject to division. Petitioner submits that such a

Starting point is erroneous in light of the federal courts

determination in Watson v Watson, 424 F. Supp (1976), that

retirement pay ‘‘is remuneration for employment’’ and thus

not property.

In Ramsey, the husband had served 17 of 20 years of

service in the Air Force during his marriage, and at the time

of dissolution, the Idaho court held that 17/20ths of the

husbands military retirement pay was community property,

and the wife was entitled to an interest in this proportion of

the retirement pay. The Idaho Supreme Court in its conclud-

ing remarks held that the trial court was required to make a

lump sum award for the present value of a 40% interest in

the husband’s military retirement pay based on the hus-

band’s life expectancy and on a discount rate of 6 percent.

The Ramsey court at 535 P 2d, at page 57, set forth the

generally recognized community property state position with

reference to military retirement benefits:

It is also generally recognized in community property

States that military retirement benefits, to the extent

that such benefits have vested or accrued while the

husband and wife are domiciliary in a community

15

property state, are community property subject to

division between the parties upon dissolution of the

marriage. Jn Re Marriage of Wilson (Wilson v Wil-

son), 10 Cal. 3d, 851 112 Cal. Rptr. 405, 519 P 2d 165,

(1974) Smith v Lewis, 107 Cal. Rptr. 95 (Cal. App.

1973); Payne v Payne, 82 Wash. 2d 573, 512, P 2d 736

(1973); Morris v Morris, supra; Otto v Otto, 830 NM

331, 455 P 2d 642 (1969); LeClert v LeClert, supra,

Busby v Busby, supra; Dominey v Dominey, 481 SW

2d 473 (Tex. Civ. App. 1972); Mora v Mora, 429 SW

2d 660 (Tex. Civ. App. 1968).

The California Supreme Court in Stenquist v Stenquist,

148 Cal Rptr. 9, 582 P 2d 96, (1978) has rejected the applica-

tion of, the federal Supremacy Clause to federal military

disability pay. A similar determination was made by the

Washington Court of Appeals in Jacobs v Jacobs, 20 Wash.

App. 272, 579 P 2d 1023, 1978, when it granted Mrs. Jacobs a

lump-sum interest in her husbands unmatured military re-

tirement pay.

Petitioner is aware of one non-community property state

which has dealt with the allocation of a husband's military

retirement benefits at the time of dissolution of a marriage.

The New Jersey Supreme Court in Krueger v Krueger, 139,

N.J. 413, At. 2d 340 (1976) relied on numerous decisions

from community property states dealing with this issue and

appropriated a portion of the husband’s military retirement

benefits to his former wife.

The threshold question is whether or not Congress has

permitted state intervention in the military pay scheme. The

federal statute, 10 USC 3911, et. seq. sets forth the eligibility

requirements, the computation of pay and who shall receive

benefits. The statute does not provide for payment of ben-

efits to an ex-wife. This absence of authority precludes state

intervention. The proposed state intervention here will stand

as an obstacle to the accomplishments of the purpose and

objectives of Congress.

16

The judicial grant of an interest in one’s military re‘tire-

ment benefits will undoubtedly have an adverse affect on

military morale. The United States Supreme Court in

Kewanee Oil Co. v Bicron Corp., 416 US 470, 40 L Ed 2d

315, 44 S. Ct. 1879, (1974) at 40 L Ed 2d 324, set forth the

following rule in considering a Supremacy Clause issue.

The question of whether the trade secret law of Ohio

is void under the Supremacy Clause involves a con-

sideration of whether that law ‘‘stands as an obstacle

to the accomplishment and execution of the full pur-

poses and objectives of Congress.’’ Hines v

Davidowitz, 312 US 52, 67, 85 L Ed 581, 61 S. Ct. 399

(1940). See Florida Avocado Growers v Paul, 373 US

132, 141, 10 L Ed 2d 248 83 S. Ct. 1210 (1963). We

stated in Sears, Roebuck & Co. v Stiffel Co., 376 US

225, 229, 11 L Ed 2d 661, 84 S. Ct. 784 (1964), that

when state law touches upon the area of federal

Statutes enacted pursuant to constitutional authori-

ty, ‘‘it is ‘familiar doctrine’ that the federal policy

‘may not be set by naught, or its benefits defined’ by

the state law.’’ Sola Electric Co. v Jefferson Elec.

Co., 317 US 173 176, 87 L Ed 165, 63 S. Ct. 172

(1942). This is true, of course, even if the state law is

enacted in the exercise of otherwise undoubted state

power.””

The federal statute dealing with military retirement pay is

designed to give uniform application to all retired servicemen

similarly situated. State court intervention in this realm will

destroy the obvious intent of Congress to provide uniform

benefits. The Ramsey majority at 535 P 2d 57, in footnote

number two acknowledges the fact that a state law cannot

‘frustrate the express or implied purposes of the federal

legislation.’’ Uniformity of benefits is an obvious implicit

intent of the federal legislation at issue.

The Ramsey court split 3 to 2 on whether or not this area

had been preempted with the two dissenting Justices filing

17

separate opinions. Chief Justice McQuade felt that military

retirement pay had been preempted by federal law. At page

62, Chief Justice McQuade referred to Hart, the Relation

between State and Federal Law, 54 Co. L. Rev. 489, 529

(1954).

For every instance in which Congress had made the

choice expressly there are dozens in which it has left

it uncertain. In such cases the Court has come to

recognize with increasing candor in recent years, its

duty to make the choice in Congress’ behalf.

The choice in this matter should surely be that until

Congress acts, an ex-wife has no interest in her ex-husband’s

retirement pay.

Judge B. Abbott Goldberg's article, Goldberg, Is Armed

Services Retired Pay Really Community Property? 48 Cal

State Bar J. 12 (1973), was cited as authority in both Fithian

and Ramsey, supra. At page 15 and page 91, Judge Goldberg

made the following observations:

But nothing has been found to show that Congress

ever conceived that retired pay would be treated as a

species of partnership asset to be divided with a wife

on divorce—a division converting the wife’s share to

separate property and giving her an interest in the

retired pay regardless of her need or remarriage, and

possibly inheritable by her successors on her death.

Such community property concepts cannot be read

into the federal statutes, as they have been read into

the state retirement statutes, by showing that the

federal statutes were ‘‘enacted in a community prop-

erty context.’’ Except for reference to the mode of

computing the retirement income credit for federal

income tax purposes in the service retirement

guides, no mention of community property has been

found in federal materials. Nothing has been found to

indicate that Congress has ever considered treating

retired pay as community property and thereby im-

18

posing an obligation on the retiree unlimited by his

ex-wife’s need for support either in duration or

amount. Congress’ recent action confirms the infer-

ences to be drawn from the earlier actions and state-

ments, that retired pay is indeed a personal entitle-

ment to the retiree, which accrues only to him, and in

which his wife has no rights except as Congress gives

them to her.

This total void of Congressional authority or intent to

provide for a divorced wife mandates the determination that

she has no interest in her ex-husband’s military retirement

pay.

As Justice Bakes stated in his dissenting opinion in

Ramsey, supra, at page 64:

However, as is often the case, result oriented deci-

sions do the further disservice of making bad law.

Petitioner respectfully submits. that the trial court’s de-

termination granting the wife a 50 percent interest in the

husband’s military retirement pay is an undue burden on the

military retirement system in that it provides certain benefits

payable to the former wife, which are not provided by

statute.

The California Supreme Court in a case subsequent to

the In Re Marriage of Fithian, supra, case has heid that

Social Security benefits pursuant to the Federal Social Se-

curity Act, are not subject to division in a divorce proceeding,

and that community property principles cannot interfere with

the Social Security system. The California Court made this

finding in Jn Re Marriage of Nizenkoff, 65 Ca App. 3d, 135

Cal. Rptr. 189 (1977). In Nizenkoff, the husband was 41

years old and his wife was 69 years old and that the parties

had been married for almost 20 years. At the time of the

divorce, the wife was receiving Federal Social Security Old

Age and Retirement Benefits, the husband claimed a 1/2

interest in these benefits. The California court first made

~?

19

note of the fact that in order to qualify as a divisable

community asset, the property must be a contractual right or

property interest, and that a pension right became a property

interest when the employer cannot unilaterally repudiate the

right. The California court made reference to a U.S. Sup-

reme Court case, Fleming v Nester, 363 US 603, 80 S. Ct.

1367, 4 L Ed 2d 1435 (1960), which rejected the argument

that Social Security created either property or contractual

rights. The California court also made reference to the fact

that Congress in 1965 made certain changes in the Social

Security Act to provide for benefits to a divorced wife or a

surviving divorced wife providing them with certain benefits.

The court indicated that these provisions demonstrate that

Congress has considered the termination of a marital rela-

tionship by divorce and has expressly set forth a method for

protecting the interest of a divorced wife. If Congress

wanted to do the same with reference to Military Retirement

Pay, they obviously have the experience and wherewithal to

make provisions for those situations. The California court

also made the observation that the Social Security Act was

not to be interpreted by the variations and idiosyncrasies of

local law citing Wissner v Wissner, supra, and pointed out

that Congress did not intend that state courts rely on state

family law concepts of support, alimony and community

property in deciding whether or not an individual had rights

in Social Security benefits. The California Supreme Court

refused to allow the husband to have an interest in the wife's

Social Security benefits.

It is Petitioner's contention here that since Congress did

not expressly provide for a divorced spouse in the Military

Retirement Act that the ex-wife has no standing to claim an

interest in the Military Retirement benefits. Surely Congress

did not intend that the various state family law concepts

should dictate ones interest in Military Retirement benefits

The Nizenkoff court indicated that family law concepts could

not dictate the entitlement to benefits under Social Security.

20

Since this Court's denial of certiorari in the Jn re Mar-

riage of Fithian case, in 1974, numerous state appellate

courts have dealth with the issue of whether or not an

ex-spouse has an interest in the opposite spouses military

retirement. The Colorado Supreme Court in Jn Re Marriage

of Ellis, 538 P 2d, 1347, 552 P 2d 506, (1976), after reviewing

numerous decisions of appellate courts in community prop-

erty states, held that the husband's military retirement pay

was not an asset subject to division in a divorce action.

The Colorado Court of Appeals in Ellis at 538 P 2d, 1349,

made the following observation:

Army retirement pay is something the soldier has

earned, Berkey vs United States, 361 F 2d 983, 176 Ct.

Cl. 1, and, because he is still subject to recall to

active duty, Lemly vs. United States, 75 F. Supp. 248,

109 Ct. Cl. 760, is still earning, as a continuation of

active duty pay on a reduced basis, Hostinsky v.

United States, 292 F 2d 508, 154 Ct. Cl. 443. He has

to serve at least 20 years to be eligible to retire, and

can elect to retire at any time thereafter. 10 USC

§3911. This right to retirement pay can be said to

have ‘‘vested"’ after 20 years, but he cannot start to

draw it until he does retire and is still alive and,

therefore, the right is subject to divestment on prior

death or discharge. The amount of retired pay is

wholly within the control of Congress, is presently

based on rank and length of service at time of retire-

ment, and the retired soldier can expect increases or

reductions which may be legislated from time to time.

See 10 USC §1401a, §3961, and §3991; 6 CJS Army

and Navy §20a (7).

The full amount of the retired pay is taxable income

under §61 (a) (11) of the 1954 Internal Revenue Code.

The soldier makes no contributions to any retirement

fund, nor is there any such fund under current law.

See 10 USC §§3911 and 3991.

21

The observations made by the Colorado Court of Ap-

peals in Ellis are undoubtedly applicable to the case at bar. The

Arkansas Supreme Court in Fenney v Fenney, 537 SW 2d,

367, (1976), also held that a husband's right to receive

military retirement pay was not subject to division in any

divorce proceeding. It relied heavily upon the finding of /n

Re Marriage of Ellis, supra, in concluding that retirement

pay ‘“‘not yet due and payable, cannot be assigned, sold,

transferred, conveyed or pledged.’ Fenney, supra, at Page

357. The Arkansas court felt the decisions of the community

property states not to be persuasive in that in effect, those

states were treating it as alimony in light of the collectibility

problem created by 42 USC §659.

ll THE DECISION BELOW CONFLICTS WITH

DECISIONS OF FEDERAL COURTS IN THAT

THE DECISION BELOW DETERMINED THAT

FEDERAL MILITARY RETIREMENT PAY IS A

MARITAL ASSET AND NOT WAGES OR IN THE

ALTERNATE, THE SEPARATE ENTITLEMENT

OF PETITIONER.

The threshold question is whether military retirement pay

is property or just a different form of continued active duty

pay.

Petitioner's right to receive his retirement pay is not a

vested or contractual right. It is only created by statute and

is subject to change by Congress. In Andrews v U.S., 175 Ct.

Cl. 561, (1966), Plaintiffs sued the United States to recover

additional retired pay from June 1, 1958, to October |, 1963,

based on the fact that active duty pay had been increased

and that their retired pay should be based on this increase.

Congress had changed the retired pay scheme and was in the

process of using a cost of living index to establish the

‘retired pay’’ scale. The United States Court of Claims in

Andrews at page 563 stated as follows:

The general rule has long been that [a] soldier's

entitlement to pay is dependent upon statutory right

22

*** {land not upon] common law rules governing

private contracts ** *. Beil v United States, 366

U.S. 393, 401 (1961). Ef., Leonard v United States,

279 U.S. 40 (1929); United States v McDonald, 128

U.S. 471 (1888); Byrd v United States 81 Ct. Cl. 409,

cert. denied, 296 U.S. 598 (1935); Fulmer v United

States, 32 Ct. Cl. 112 (1897); Magaw v United States,

16 Ct. Cl. 3 (1880); Lowry v McCarl, 79 F 2d 114,

(D.C. Cir. 1935); Heidt v United States, 56 F 2d 559

(Sth Cir., 1932). And since the pay of officers in the

uniformed services is within the exclusive control of

Congress, it was free to limit the benefits of the 1958

active duty pay increase to members on the active

duty list.

The issue raised in Andrews v United States, supra was

once again brought to light in Abbott v United States, 200

Ct. Cl. 384, (1973). In Abbott, plaintiffs argued that the

changes made by Congress in the ‘‘retired pay’’ scheme

deprived them of property without due process of law in

violation of the Fifth Amendment to the United States

Constitution. Plaintiffs argued that they had a vested right in

the method of computing their ‘‘retired pay." The United

States Court of Claims in Abbott v United States, supra,

reaffirmed its holding that plaintiffs did not have a

contractual right in their ‘‘retired pay.”’

Respondent herein argued in the trial court that the

defendant's retirement pay was a vested asset because

defendant was currently receiving payments. Petitioner

respectfully submits that the mere fact that monies are

presently being paid does not establish a vested right.

Defendant's current military retirement income is

compensation for non-active duty service. In Watson v

Watson, 424 F Supp 866 (1976), the Federal District Court

discussed at great length the status of a retired U.S. Army

officer and the nature of his retirement pay. At page 868 the

23

Watson court stated as follows:

There is no pre-existing retirement fund, earmarked

for the use and benefit of George David Watson,

defendant herein, in the United States Treasury. The’

defendant earns his retirement pay, like his pay when

he was on active duty, by staying alive, obeying

military discipline and being subject to recall to the

active military service. In effect, the defendant

continues to hold the same office, that is, a retired

Colonel, that he held when he was on active duty,

and he continues to receive compensation for his

employment. As stated in Hostinsky v United States,

292 F 2d 508, 154 Ct. Cl. 443, (1961),

Plaintiff says a retired officer does not hold an

office. We think that an officer in the Navy,

though retired, is still an officer. He continues to

draw pay as a retired officer; he draws it because

he is still an officer. Being an officer, he is subject

to recall to active duty at the will of his superiors.

He is subject to recall whether he wishes to serve

or not. He is still subject to naval discipline.

An officer's retirement pay is subject to increases,

decreases and for various reasons it could be terminated.

The Watson court at page 869 set forth the numerous

situations in which a retired officer's retirement pay could be

suspended or restricted.

An officer's retirement pay is based upon the

Consumer Price Index and can rise or fall an amount

depending on the economy. As indicated above, the

retirement pay can be stopped altogether with a

violation of a retired individual of an offense against

the Uniform Code of Military Justice. Retirement pay

is also subject to modification under various federal

laws intending to prevent conflicts of interest as was

the subject of the case in Hostinsky v United Stated,

supra, and as appears in various sections of the

24

United States Code. Title 5, USC Section 5532 states

that retired officers are subject to having their

retirement pay reduced if they receive other

employment. Title 5, USC Section 8312 states that

retirement pay is subject to forfeiture upon conviction

of certain crimes. Title 37, USC Section 801 restricts

retired officers from working in defense work for

private firms within three years after retirement. The

United States Constitution itself, Articles I, Section

9, Clause 8, prevents retired officers from being

employed by any foreign government. As alluded

above, retired officers are subject to return to active

duty whether they wish to or not, and are subject to

good order and military discipline. Moreover,

retirement pay is not inheritable, and does not pass to

the heirs of the retired officer upon his death. As in

the case of his active duty pay, once his services

cease, his pay also ceases, whether active duty or

retirement pay. Most importantly, retirement pay

does not become vested in the retired individual

except on a daily basis. Until and unless he lives from

day to day, no right to retirement pay arises.

The Colorado Court of Appeals in In Re Marriage of

Ellis, supra, also pointed out the fact that the federal courts

have treated retirement pay as continuing earnings for past

and future services rendered. At page 1349, the Ellis court

Stated:

Army retirement pay is something the soldier has

earned, Berkey v United States, 351 F 2d 983, 176 Ct.

Cl. 1, and, because he is still subject to recall to

active duty, Lemly v United States, 75 F. Supp. 248,

109 Ct. Cl. 760, is still earning, as a continuation of

active duty pay on a reduced basis. Hostinsky v

United States, 292 F 2d 508, 154 Ct. Cl. 443.

The Federal District Court in Watson v Watson, 424 F

Supp. 866, 1976, held that the retirement pay was similar to

wages for services rendered. A similar position was taken by

25

the Maryland Court of Appeals in United States of America

v Williams, 370 At. 2d 1135, decided March 21, 1977. The

Maryland Court of Appeals held that the Federal Military

Retirement Pay equalled wages for purposes of their

attachment statute. The Williams court relied on 15 USC

§1672 (a) which provided that the term ‘‘earnings’’ means

compensation paid or payable for personal services, whether

denominated as wages, salary, commissions, bonus or

otherwise and includes periodic payments pursuant to a

pension or retirement program. The Williams court cited

with approval the result reached in Ellis v Ellis, 552 P 2d 506,

1976, which indicated that retirement pay is not a vested

interest subject to division in divorce.

The North Carolina Supreme Court in Elmwood v

Elmwood, 295 NC 168; 244 SE 2d 668, (1978), has also held

that retirement pay is ‘“‘remuneration for employment.’ 244

SE 2d at 675. Also see Phillips v Phillips, 34 NC App. 612,

234 SE 2d 743, (1977).

Petitioner respectfully submits that because of the

numerous and conflicting state appellate court decisions with

reference to the allocation, status and treatment of military

retirement benefits at the time of dissolution of a marriage,

that the courts of the several states along with the bar are in

need of a controlling decision by this Honorable Court in

order to guarantee the uniform application of law to all

present and former members of the military service and their

spouses. This need is further evident by the several federal

court decisions which have indicated that military retirement

benefits are analogous to wages and have thus imposed

limitations on the ability to collect pursuant to the terms of a

Judgment of Divorce.

CONCLUSION AND RELIEF REQUESTED

‘For the foregoing reasons, Petitioner, ROBERT LLOYD

CHISNELL, respectfully requests that this Petition for a

Writ of Certiorari be granted to review the State of Michigan

26

Supreme Court decision affirming the Michigan Court of

Appeals decision in this action.

Dated:

Respectfully submitted,

Daner, Freeman, McKenzie & Mattuews, P.C.

Attorneys for Petitioner

By: (s) Gary E. Gendernalik

Business Address:

One South Gratiot Avenue

Mount Clemens, Michigan 48043

Telephone: (313) 469-2633

la

Order of Michigan Supreme Court

APPENDIX A—

Order of Michigan Supreme Court Denying Application for

Leave to Appeal—November 29, 1978.

AT A SESSION OF THE SUPREME COURT OF THE

STATE OF MICHIGAN, Held at the Supreme Court Room,

in the City of Lansing, on the 29th day of November in the

year of our Lord one thousand nine hundred and seventy-

eight.

Present the Honorable

Tuomas Gites KAVANAGH,

Chief Justice,

G. Mennen WILLIAMS,

Cuarctes L. Levin,

Mary S. CoLeman,

Joun W. FitzGeracp,

James L. Ryan,

Biair Moopy, Jr.,

Associate Justices

CR 23-181 & a

COA: 72-2096

LC: 77-8220-DO

Beatrice M. CuisNeLL,

Plaintiff-Appellee,

Vv 61400

Rosert Lioyp CHIsNELL,

Defendant-Appellant.

On order of the Court, the application for leave to appeal

is considered, and it is DENIED, because the Court is not

persuaded that the questions presented should be reviewed

by this Court.

2a

Order of Michigan Supreme Court

The motion for a performance bond and attorney fees is

DENIED.

STATE OF MICHIGAN—ss.

1, Harold Hoag, Clerk of the Supreme Court of the State

of Michigan, do hereby certify that the foregoing is a true

and correct copy of an order entered in said court in said

cause; that | have compared the same with the original, and

that it is a true transcript therefrom, and the whole of said

original order.

[SEAL]

IN TESTIMONY WHEREOF, |

have hereunto set my hand and af-

fixed the seal of said Supreme Court

at Lansing, this 29th day of

November in the year of our Lord

one thousand nine hundred and

seventy-eight.

(s) Corbin R. Davis, Deputy Clerk.

3a

Opinion of Michigan Court of Appeals

APPENDIX B—

Opinion of Michigan Court of Appeals—April 18, 1978

STATE OF MICHIGAN

COURT OF APPEALS

Beatrice M. CuisneLt,

Plaintiff-Appellee,

Docket

Vv No. 77-2096

Rosert Lioyp CHISNELL,

Defendant-Appellant.

Before: J. H. Gillis, P.J., Bashara and D.C. Riley, JJ.

DOROTHY COMSTOCK RILEY, J.

This case involves an issue of first impression in Michi-

gan; j.e., the treatment of military retirement pay in a di-

vorce proceeding. The issue focuses on the question of

whether the trial court erred in awarding plaintiff a one-half

interest in defendant's net retirement benefits as part of a

property settlement where no provision was made for

alimony.

Defendant entered the United States Army in 1949 but he

left the military in 1953. He re-enlisted in 1955, just prior to

his marriage to plaintiff, and retired in 1972 as Chief Warrant

Officer, fourth class.

No children were born of this marriage. The parties

owned two lots and accumulated personal property, includ-

ing several cars, a boat, a camper and a car trailer, some of

which were encumbered by loans. In 1975, the plaintiff filed

her complaint for divorce.

Following a bench trial, the court awarded plaintiff a

divorce providing that neither party receive alimony and that

4a

Opinion of Michigan Court of Appeals

all of the marital property be sold, with the proceeds going

first to settle the liens on the property and the remainder to

be divided equally between the parties.

The court found that defendant, by virtue of his years of

military service, was receiving military retirement pay of

$9,600 per year. After deducting 20 per cent of this amount

for taxes, the court awarded plaintiff, as part of the property

settlement, one-half of the net amount, or $320 per month.

The payments were ordered to continue until the death of

either party.

Defendant contends on appeal that military retirement

pay is not a marital asset subject to division in a divorce

action property settlement. He argues that the retirement

pay is analogous to wages, which can only be considered as a

factor in granting alimony. Since no alimony was awarded

here, defendant argues, plaintiff has no interest in the net

retirement pay.

Although no Michigan case has precisely decided this

issue, the parties have referred us to several cases from

other jurisdictions where the question has been reached with

conflicting results. Our analysis of these decisions leads us to

the conclusion that, although the question is subject to

considerable debate with defensible arguments on both sides

of the issue, the trial court below correctly held that the

retirement pay was an asset of the marriage subject to a

property division.

It appears to be the uniform holding of the community

property states that military retirement pay is community

property, subject to division upon divorce.' The most com-

prehensive such opinion is that of the California Supreme

Court in Jn re Marriage of Fithian, 10 Cal 3d 592; 111 Cal

Rptr 369; 517 P2d 449 (1974).

' Dominey v Dominey, 481 SW2d 473 (Tex Civ App 1972), Busby v

Busby, 457 SW2d 551 (Tex 1970), LeClert v LeClert, 80 NM 235; 453 P2d

755 (1969), Wilder v Wilder, 85 Wash 2d 364; 534 P2d 1355 (1975), Ramsey

v Ramsey, 96 Idaho 672; 535 P2d 53 (1975).

Sa

Opinion of Michigan Court of Appeals

The Fithian court stated that under their community

property law, retirement benefits which are earned by one

spouse as an element of compensation earned for work done

during the course of the marriage are divisable upon dissolu-

tion of the marriage. Thus, the threshold issue was whether

military retirement pay was intended as deferred compensa-

tion for the person’s service prior to retirement, or payment

for the limited status of the person after retirement.” The

Fithian Court held:

‘(Military retirement pay must be realistically

viewed as compensation for past, not present, services.

Congress’ purpose in creating the retirement pay system

was to enhance the morale of the serviceman and to

encourage him to remain in the military, and not to

compensate him for his limited responsibility to the

government after his retirement. Indeed, the amount of

retirement pay a serviceman receives bears no relation to

any continuing duties after retirement, but is calculated

solely on the basis of the number of years served on

active duty and the rank attained prior to retirement. (10

U.S.C. § 6323(e).) Moreover, should the serviceman

actually be recalled to active duty, he is not only

additionally compensated according to the active duty

pay scale, but his rate of retirement pay is also increased

thereafter. (10 U.S.C. § 1402.) The conclusion is

inescapable that retirement pay is awarded in return for

services previously rendered and therefore is divisible as

community property to the extent the serviceman was

married while on active duty.”” 517 P2d at 456-457.

The Court in Fithian, did not feel that this result was

affected by the fact that the officer had not contributed,

2 On retired status, the officer is subject to recall to active status, can

be court-martialed for certain conduct and thereby lose the retirement pay,

and is subject to various other provisions of Federal law. See Ables v

Ables, 540 SW2d 769 (Tex Civ App 1976). See also, Watson v Watson, 424

F Supp 866 (E.D.N.C. 1976).

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Opinion of Michigan Court of Appeals

either directly or in the form of a payroll deduction, to the

fund out of which the retirement pay is disbursed. The Court

found the question of contribution irrelevant to the ultimate

characterization of the benefits.

‘‘Although the retirement fund was noncontributory,

husband's rights to the benefits vested during marriage

and constituted an integral part of his compensation for

service in the military."’ 517 P2d at 451.

Community property states are not the only jurisdictions

to rule that military retirement pay is an asset of the mar-

riage, divisable upon divorce. In Kruger v Kruger, 139 NJ

Super 413; 354 A2d 340 (1976), the Superior Court of New

Jersey, Appellate Division, held that the trial court had

correctly distributed a share of the husband's retirement pay

to the wife as a portion of the property division. No alimony

was awarded.

The Kruger Court first considered the practical and fi-

nancial aspects of terming such pay as an asset of the

marriage rather than income to the husband.* The Court then

cited from a number of community property cases, including

Fithian, supra, which held the pay to be marital asset. The

Kruger Court held:

‘‘We therefore conclude that both the retired pay and

disability benefits which defendant husband has become

irrevocably entitled to receive for the balance of his life

constitute assets subject to equitable distribution to the

extent that his entitlement thereto is based upon military

service rendered during the existence of the marriage.”’

354 A2d at 344.

> These considerations include the tax treatment of property divided

upon divorce as opposed to alimony and the wife's right to receive

payments after remarriage. In addition, if the pay was treated as income,

the entire amount would be available for computation of alimony. If

treated as an asset, the wife would have an interest only in that amount of

pay that was earned during the years of marriage.

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Opinion of Michigan Court of Appeals

We recognize that the result reached by the Courts in

Fithian, supra, and Kruger, supra, is by no means universal.

Several jurisdictions have held military retirement pay to be

an equivalent to wages, thereby constituting income to the

retired spouse that is unavailable for distribution in a prop-

erty settlement. In United States v Williams, 370 A2d 1134

(My Ct of App, 1977), the Maryland Court of Appeals, after

having the question certified to them by the United States

District Court, held that for the purposes of Maryland di-

vorce law military retirement pay constitutes wages subject

to garnishment for payment of an arrearage in alimony. A

similar result was reached in Watson v Watson, 424 F Supp

866 (E.D.N.C., 1976), although the state’s garnishment law

altered the disposition of the case.

In In re Marriage of Ellis, 538 P2d 1347 (Colo App,

1975), affirmed 552 P2d 506 (Colo S Ct, 1976), the Colorado

Court held that military retirement pay is not marital prop-

erty since ‘‘[ajt no time has it any cash surrender, loan,

redemption, or lump sum value.’’ 538 P2d at 1349.

Although, as we have stated, no Michigan case has ruled

specifically on this issue, the contrasting points of view in

the previously cited cases were discussed by this Court in

Hutchins v Hutchins, 71 Mich App 361; 248 NW2d 272

(1976). In Hutchins, the issue was the treatment of the

husband’s pension from the Michigan State Police. The

Court noted that the pension question was one of first

impression, so it turned to a consideration of analogous areas

of law and to decisions of other states:

‘‘In our research in community and noncommunity

property states, we find the courts holding that state

pensions, private pensions, profit-sharing trust and mili-

tary pensions could be properly distributed as property

under a decree of divorce.’ (Emphasis added.) 71 Mich

App at 365.

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Opinion of Michigan Court of Appeals

After discussing several of the cases concerning military

retirement pay, and cases dealing with other forms of pen-

sions, the Hutchins Court concluded:

‘‘Returning to the Michigan public safety department

pension, accident and disability fund leads us, as do

other jurisdictions with similar statutes, to the conclusion

that it also treats the accumulated deductions in the

husband's account in a manner which makes them mari-

tal property. Here, the plaintiff-husband’s interest was

created in most part from his salary, and we agree with

the defendant-wife that these deductions would have

been available to the parties during their marriage to be

invested in stocks, bonds, savings account, annuity

and/or other investments. The plaintiff-husband’s right in

the fund is fully vested and cannot be subjected to

divestment or forfeiture, except as herein noted for

breach of the public trust. We also hold that it is property

that came to the plaintiff by reason of the marriage and

therefore should be included in the total assets of the

parties. As in New Jersey, our divorce laws make no

reference to vesting. See MCLA 552.1 et seg.; MSA

25.81 et seq. Therefore, it must be included as an asset in

the distribution of property.”’ 71 Mich App at 370-371.

In the present case, we are persuaded by the decisions in

Fithian, supra, Kruger, supra, and by analogy in Hutchins,

supra, that defendant’s military retirement pay was correctly

categorized as a marital asset and included within the prop-

erty settlement.-As the Hutchins Court states, vesting is not

a relevant consideration in our divorce laws. We find, as did

the Court in Fithian, that military retirement pay is primarily

deferred compensation for services rendered prior to retire-

ment. This being the case, the fact that defendant did not

have to contribute to a retirement pay fund does not distin-

guish this type of pension from that in Hutchins. Congress

could have eliminated the retirement pay system and in-

creased the rate of pay during active service. Since the

9a

Opinion of Michigan Court of Appeals

decision was made to provide for retirement benefits, the

deferred compensation was not available to the parties dur-

ing defendant’s active service for use in other investments.

Therefore, plaintiff, through her contribution to the mar-

riage, obtained an interest in the marital asset of the earned

retirement pay.* Hutchins, supra.

Defendant also contends that a decision by this Court

that the retirement pay is a marital asset will conflict with the

supremacy clause of the United States constitution® by inter-

ferring with Congress’ exclusive power to raise and support

armies. We note that this contention was answered contrary

to defendant's assertions in /n re Marriage of Fithian, supra,

at 451-453. We concur in that reasoning and find no violation

of the supremacy clause.

Defendant asserts that the division of property was in-

equitable and that the court should not have considered fault

when making the property division. Fault is still a considera-

tion in matters of property division, notwithstanding Michi-

gan’s no-fault divorce laws. Kretzschmar v Kretzschmar, 48

Mich App 279; 210 NW2d 352 (1973). Our reading of the

record shows that the court considered fault in calculating

the property division. Absent a showing of abuse of discre-

tion, which has not been made here, we will not disturb the

court’s decision. See Dougherty v Dougherty, 48 Mich App

154; 210 NW2d 151 (1973); Johnson v Johnson, 346 Mich

418; 78 NW2d 216 (1956).

4 We note that, consistent with the decision in /n re Marriage of

Fithian, 10 Cal 3d 592; 111 Cal Rptr 369; 517 P2d 449 (1974), the trial court

expressly stated that plaintiff's interest in the retirement pay will cease

upon either the death of defendant or her death, whichever occurs first.

5 US Const, art 6, § 2.

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Opinion of Michigan Court of Appeals

Defendant finally challenges the trial court's award of

$650 in attorney fees to plaintiff. Again, the granting of

attorney fees in a divorce action is a matter of discretion.

Gove v Gove, 71 Mich App 431; 248 NW2d 573 (1976). We

find no abuse of that discretion in the present case.

Affirmed.

Costs to appellee.

lla

Judgment of Divorce of the Circuit Court

APPENDIX C—

Judgment of Divorce of the Circuit Court for the County of

Macomb — April 21, 1977.

STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR

THE COUNTY OF MACOMB

IN THE CIRCUIT COURT FOR

THE COUNTY OF MACOMB

Beatrice M. Cuisne.t,

Plaintiff,

-VS- No. 75-8220-DO

Rosert Lioyp CHIsNeLL,

Defendant.

Tuomas J. Mc Catium (P17274)

Attorney for Plaintiff

JUDGMENT OF DIVORCE

At a session of said Court, held in

the County Building, City of Mt.

Clemens, State of Michigan, on

April 21, 1977

PRESENT: HONORABLE Hunter D. Stair

Circuit Judge

This cause having come on for trial upon the Complaint

of the plaintiff and the answer of the defendant and the

parties having appeared in person and by counsel, and the

Court having heard the testimony and evidence submitted

and the arguments of counsel» and being fully advised in the

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Judgment of Divorce of the Circuit Court

premises, this Court finds that the plaintiff has sustained the

allegations contained in her Complaint and is entitled to a

Decree of Divorce from the defendant.

NOW, THEREFORE, on Motion of Thomas J.

McCallum, attorney for plaintiff,

ABSOLUTE DIVORCE

IT IS HEREBY ORDERED AND ADJUDGED that the

marriage between BEATRICE M. CHISNELL, plaintiff and

ROBERT LLOYD CHISNELL, defendant, be and the same

is hereby dissolved and a divorce from the bonds of

matrimony between said parties be and the same is hereby

adjudged.

ALIMONY

IT IS FURTHER ORDERED AND ADJUDGED that

neither of the parties hereto be awarded permanent alimony

and none is ordered.

PROPERTY SETTLEMENT

IT IS FURTHER ORDERED AND ADJUDGED that

the defendant, ROBERT LLOYD CHISNELL, shall pay to

the plaintiff, BEATRICE M. CHISNELL, from the proceeds

of his monthly vested pension with the United States

Government as a result of his service with the Military

Service of the United States, the sum of Three Hundred

Twenty and 00/100 ($320.00) Dollars per month during the

life of said pension, so long as the plaintiff shall live.

IT IS FURTHER ORDERED AND ADJUDGED that

the parties’ 1973 21-foot Bayliner boat with inboard-outboard

motor and trailer be sold and the proceeds thereon divided

equally between the parties hereto provided, however, that

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Judgment of Divorce of the Circuit Court

any and all liens securing both boat, motor and trailer, up to

the sum of Three Thousand Six Hundred and 00/100

($3,600.00) Dollars be paid equally by the parties hereto and

that any additional liens against said boat, motor and trailer,

be paid by the defendant-husband individually. All proceeds

of said sale exceeding Three Thousand Six Hundred and

00/100 ($3,600.00) Dollars shall be divided equally between

the parties hereto.

IT IS FURTHER ORDERED AND ADJUDGED that

the parties’ 1971 Vagabond Trailer Coach and homemade

trailer be sold and the proceeds divided equally between the

parties hereto, provided however, that all liens on said trailer

coach up to the sum of Four Hundred Thirty-Six and 51/100

($436.51) Dollars be divided equally and paid equally by the

parties hereto and that any liens exceeding the sum of Four

Hundred Thirty-Six and 51/100 ($436.51) Dollars shall be

paid by the defendant, ROBERT LLOYD CHISNELL,

individually. The parties shall then divide equally all sums

received in excess of Four Hundred Thirty-Six and 51/100

($436.51) Dollars and divide same equally.

IT IS FURTHER ORDERED AND ADJUDGED that

the parties’ 1972 Chevrolet Carryall Van be given to the

defendant, ROBERT LLOYD CHISNELL, subject to any

and ali liens thereon and that said defendant shall hold the

plaintiff, BEATRICE M. CHISNELL, harmless from any

obligation thereon.

IT IS FURTHER ORDERED AND ADJUDGED that

each of the parties hereto shall have as their sole personal

property, all right, title and interest in any accounts which

such said parties should have with the Joint Military Services

Credit Union and each party hereto shall hold the other

harmless from any obligations to the Joint Military Services

Credit Union for indebtedness carried in such party’s name.

IT IS FURTHER ORDERED AND ADJUDGED that

the real properties that the parties own in Luce County,

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Judgment of Divorce of the Circuit Court

Newberry, Michigan, and Antrim County, Michigan, be sold

and the proceeds divided equally between the parties hereto.

IT IS FURTHER ORDERED AND ADJUDGED that

the defendant, ROBERT LLOYD CHISNELL, shall have as

his own personal belongings, all of his hand tools.

IT IS FURTHER ORDERED AND ADJUDGED that

the plaintiff, BEATRICE M. CHISNELL, shall have and

receive all of the parties’ household furniture and furnishings

as her personal property.

IT IS FURTHER ORDERED AND ADJUDGED that

the defendant, ROBERT LLOYD CHISNELL, shall

discharge any obligations owing to Sears Roebuck &

Company or Master Charge.

IT IS FURTHER ORDERED AND ADJUDGED that

the plaintiff, BEATRICE M. CHISNELL, shall have and

receive the 1973 Dodge automobile and hold the defendant

harmless from any obligations thereon and that the

plaintiff-wife shall also have and receive the 1970

Volkswagon automobile and hold the defendant harmless

from any obligations thereon.

IT IS FURTHER ORDERED AND ADJUDGED that

the plaintiff-wife shall have and receive any and all items

contained in a certain safe-deposit box with the Mt. Clemens

Bank, located at the North Branch Office of said bank, the

same being safe-deposit Box No. 3-000406-8.

IT IS FURTHER ORDERED AND ADJUDGED that

savings accounts in the name of either of the parties hereto,

be divided equally between the parties hereto.

ATTORNEY FEES

IT IS FURTHER ORDERED AND ADJUDGED that

the defendant, ROBERT LLOYD CHISNELL, shall pay to

|

4

:

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_’ [5a

Judgment of Divorce of the Circuit Court

Thomas J. McCallum, attorney for the plaintiff, the sum of

Five Hundred and 00/100 ($500.00) Dollars as an attorney fee

in this cause forthwith.

INSURANCE POLICIES

IT IS FURTHER ORDERED AND ADJUDGED that

any interest which either of the parties hereto may have had

or now have in any of the insurance policies or contracts of

the other party shall be, and is hereby extinguished. The

parties hereto shall, in the future, hold all such insurance

free and clear of any right or of any interest which the other

may have had heretofore or may have therein or thereto by

virtue of being the beneficiary, the contingent beneficiary or

otherwise.

DOWER

IT IS FURTHER ORDERED AND ADJUDGED that

the defendant, ROBERT LLOYD CHISNELL, shall pay to

the plaintiff, BEATRICE M. CHISNELL, the sum of One

and 00/100 ($1.00) Dollar which shall be in lieu of and in full

accord and satisfaction of any and all claims on the part of

the plaintiff, or account of dower in the lands of her

husband, which he now owns or may hereafter own or have

any interest in, and that he shall hereafter hold his remaining

property, both real and personal, free, clear and discharged

of any dower or claim of dower on the part of the plaintiff.

EXECUTION OF DOCUMENTS

IT IS FURTHER ORDERED AND ADJUDGED that

each of the parties hereto shall execute such documents as

are required by them to be executed to effectuate the terms

of the within Judgment and that if either of the parties hereto

fail to execute and deliver said documents, the other party

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Judgment of Divorce of the Circuit Court

may cause a certified copy of the within Judgment to be

recorded with the Office of the Register of Deeds for the

County of Macomb, State of Michigan, and the Michigan

Secretary of State’s Office and such recordation in and of

itself shall act in lieu of the formal execution of said

documents.

EFFECTIVE DATE OF JUDGMENT

IT IS FURTHER ORDERED AND ADJUDGED that

this Judgment shall be effective and final immediately upon

entry hereof.

(s) Hunter D. Stair

CIRCUIT JUDGE

By (s) Marilyn Clime

DEPUTY CLERK

Approved as to form:

(s) Beatrice M. Chisnell,

Plaintiff

(s) Thomas J. McCallum

Attorney for Plaintiff

(s) Robert Lloyd Chisnell,

Defendant °

(s) Gary E. Gendernalik

Attorney for Defendant