Petition for Writ of Certiorari — Holmes v. Holmes

Supreme Court brief1989

Ask Donna

What actually matters in this document.

Text

Supreme Court, Us

JUL 24 jog.

“OL. UR

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

ELWIN F.. HOLMES,

Petitione Pe

FRANCES SUE P. HOLMES,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF VIRGINIA

JAN HORBALY *

5310 Renaissance Court

Burke, Virginia 22015

(703) 978-7909

THOMAS B. THROCKMORTON

SCULLY, THROCKMORTON,

AND GLASS

20 South Kent Street

Post Office Box 3038

Winchester, Virginia 22601

(703) 667-6900

Counsel for Petitioner

Date: July 24, 1989 * Counsel of Record

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTION PRESENTED

Whether state courts, consistent with the Uniformed

Services Former Spouses Protection Act, 10 U.S.C. See.

1408 (1982 ed. and Supp. V), may treat, as property di-

visible upon divorce, a portion of military retirement

pay waived by the retiree in order to receive physical dis-

ability benefits under Ciiapter 61, Section 1201 of Title

10 of the United States Code.

(i)

LIST OF PARTIES

Plaintiff-Petitioner is Elwin F. Holmes

Defendant-Respondent is Frances Sue P. Holmes

TABLE OF CONTENTS

Page

Gy ts |) ae i

a ona snenaussnschcnnsisnebhebnbesnanasnnse ~~ ii

TABLE OF AUTHORITIES ............................ acbahpecnanes iv

Nee TT sn. asnicksananehstcsierndinasnecsecnnsaunness 1

Neen ee eee nn nn <cccninasduaxnaabetustsesenvaussaeiocs 2

ge pe SG 5 9 2

STATEMENT OF THE CASE ...................... es ere 4

cs cinsnasaceananecencneseverseenenuvenceees 3

Nee a os toda nl sbsinsannenheneninineasannaameun 4

C. Computation of Retirement and Disability Pay.... 4

D. Division of Marital EEE SAA ee 7

E. Trial Court Opinion .............. OD etOG SeEROOP ee 9

F. Exceptions to the Trial Court Opinion ....... eartvikee 10

G. Trial Court’s Supplemental Opinion ..................... 11

eee 12

I. Appeal to the Court of Appeals of Virginia... 13

J. Appeal to the Supreme Court of Virginia .......... 16

REASONS FOR GRANTING THE WRIT .................... 17

I. Mansell v. Mansell, —— U.S. —— (No. 87-201,

(May 30, 1989) ......... Ce Sinica 17

II. Former Spouses Protection Act .....2...0..0000000000.... 22

III. Internal Revenue Code .....................0..000000.ce.. 26

a 28

Cases

TABLE OF AUTHORITIES

Page

Griggs v. Griggs, 107 Idaho 128, 686 P.2d 68

(1984)

Holmes v. Holmes, 5 V.L.R. 1259 (Cir. Ct. Fred-

erick Cty., Va., December 20, 1988)

Holmes v. Holmes, VA. —— (No. 890059,

April 26, 1989) (unpublished)

Mansell v. Mansell, U.S. —— (No. 87-201,

May 30, 1989)

Repash v. Repash, 148 Vt. 70, 528 A.2d 744

(1987)

ee ee el

Statutes

Act of March 1, 1881, chap. 548, 26 Stat. 1082

Act of July 27, 1882, chap. 227, 27 Stat. 282 -...........

Act of May 9, 1900, chap. 385, 31 Stat. 171

Act of February 6, 1907, chap. 468, 34 Stat. 879.

Act of May 11, 1912, chap. 123, 37 Stat. 113

Act of June 5, 1920, chap. 245, 41 Stat. 982

Act of June 7, 1924, chap. 320, 43 Stat. 623

Act of May 27, 1944, chap. 209, 58 Stat. 230...

Pub. L. 97-252, Title X, 96 Stat. 730-38 (1982)

Pub. L. 99-661, 100 Stat. 3816 (1986)

10 U.S.C.

26 U.S.C.

38 U.S.C.

Sec

. 1401 (1982 and Supp. V)

. 1403 (1982 and Supp. V)

. 1408 (a) (4) (1982 and Supp. V)..

. 3911 (1982 and Supp. V)

:. 3991 (1982 and Supp. V)

. 8911 (1982 and Supp. V)

.104(a) (4) (1982)

. 1201 (1982 and Supp. V)

. 3926 (1982 and Supp. V)

. 6323 (1982 and Supp. V)

. 6322-27 (1982 and Supp. V)

. 8929 (1982)

.310 (1982 and Supp. V)

.314 (1982 and Supp. V)

. 331 (1982 and Supp. V)

. 355 (1982 and Supp. V)

oe passim

eee: passim

TABLE OF AUTHORITIES—Continued

Page

38 U.S.C. Sec. 3101 (a) (1982 and Supp. V) ............. 7

38 U.S.C. See. 3105 (1982 and Supp. V) ...............-...- 7

4A Code of Virginia Sec. 20-107.3(G) (1983) ........ 14, 15

Regulations

32 C.F.R. Chap. 1, Sec. 63.6(e) (2) (July 1, 1988) .. 10, 23

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

No. 89-

ELWIN F. HOLMES,

Petitioner,

Vv.

FRANCES SUE P. HOLMEs,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF VIRGINIA

Elwin F. Holmes petitions for a writ of certiorari to

review an opinion and judgment of the Supreme Court of

Virginia entered on April 26, 1989. The Supreme Court

of Virginia affirmed the opinion and judgment of the

Court of Appeals of Virginia by ruling that there is no

reversible error in the judgment complained of and re-

fusing the petition for appeal.

OPINIONS BELOW

The decision of the Supreme Court of Virginia is

unreported. It appears in the Appendix at la. The

decision of the Court of Appeals of Virginia is reported

at 5 V.L.R. 1259 (Ct. App. Va., 1988). It appears in

the Appendix at 2a. The opinion letters of the Circuit

Court for Frederick County are unreported. They ap-

pear in the Appendix at 19a, 23a, 28a, 39a, 42a and 59a.

JURISDICTION

The judgment of the Supreme Court of Virginia was

entered on April 26, 1989. Jurisdiction of this Court is

invoked under 28 U.S.C. See. 1257(3) (1982).

STATUTES INVOLVED

10 U.S.C. See. 1201 (1982 and Supp. V)

Upon a determination by the Secretary concerned

that a member of a regular component of the armed

forces entitled to basic pay . . . is unfit to perform

the duties of his office, grade, rank, or rating because

of physical disability incurred while entitled to basic

pay, the Secretary may retire the member, with re-

tired pay computed under section 1401 of this title

[10 USC See. 1401], if the Secretary also determines

that—

(1) based upon accepted medical principles, the

disability is of a permanent nature and stable;

(2) the disability is not the result of the mem-

ber’s intentional misconduct or willful neglect,

and was not incurred during a period of unau-

thorized leave; and

> |

(A) the member has at least 20 years of

service computed under section 1208 of this

title [10 USC See. 1208}.

Former Spouses Protection Act, Pub. L. No. 97-252,

96 Stat. 730-31 (1982) (emphasis added).

(4) “Disposable retived . . . pay” means the total

monthly retired . . . pay to which a member is en-

titled ‘other than the retired pay of a member re-

tired for disability under chapter 61 of [Title 10] )

less amounts which...

(E) are deducted as Government life insurance

premiums (not including amounts deducted for

supplemental coverage) ;

10 U.S.C. See. 1408(a) (4) (A-E) (1982 and Supp. V)

(Former Spouses Protection Act) (emphasis added). See

1987 Department of Defense Authorization Act, Pub. L.

No. 99-661, 100 Stat. 3816 (November 14, 1986)

(4) “Disposable retired . . . pay” means the total

monthly retired . . . pay to which a member is en-

titled Jess amounts which—

(A) are owed by that member to the United

States;

(B) are required by law to be and are de-

ducted from the ‘retired .. . pay of such mem-

ber, including fines and forfeitures order by

courts-martial, Federal employment taxes, and

amounts waived in order to receive compensa-

tion under title 5 or title 38 [veterans dis-

ability benefits; [and]

(E) in the case of a member entitled to retired

pay under chapter 61 of [Title 10], are equal to

the amount of retired pay of the member under

that chapter computed using the percentage of

the member’s disability on the date when the

member was retired.

STATEMENT OF THE CASE

A. Air Force Career

Petitioner, Elwin F. Hoimes, and his wife, Frances

Sue P. Holmes, Respondent, were married in San Antonio,

Texas on March 7, 1942. On the same day, Petitioner en-

tered the U.S. Air Force (U.S. Army Air Force) where

he served as an officer for approximately 30 years until

he retired as a Colonel on August 11, 1971. When he

retired from the U.S. Air Force, Petitioner was in ill

health suffering from atheriosclerosis and two ruptured

discs in his spine. In addition, he had undergone two

operations for poor circulation in his right leg. Because

of his poor health, Petitioner was declared physically un-

fit for duty and was separated from the U.S. Air Force

pursuant to Chapter 61 of Title 10 of the United States

Code. 10 U.S.C. See. 1201 (1982 and Supp. V).

B. Divorce Action

On April 19, 1983, approximately twelve years after

he retired from the Air Force, Petitioner filed for divorce

from his wife, the Respondent. On April 25, 1983, six

days later, Respondent filed for a divorce from Petitioner.

On June 13, 1983, the two divorce actions were consoli-

dated and a joint hearing was held. At the time, Peti-

tioner was 64-years-old and Respondent was 62-years-

old.

On August 3, 1983, the trial court granted Petitioner a

divorce based on a one-year separation. The trial court

awarded Respondent temporary spousal support and con-

tinued to a later date matters concerning equitable dis-

tribution of the joint marital property and permanent

spousal support.

C. Computation of Retirement and Disability Pay

One of the items the trial court reserved for further

consideration was division of Petitioner’s military re-

tirement pay. As a retired Colonel with almost 30 years

of active duty military service, Petitioner was entitled to

a pension equal to 75% of his Air Force basic pay.’ On

August 3, 1983, the date of his divorce, Petitioner’s basic

pay was $4,720.00 per month. Seventy-five percent of his

basic pay was $3,540.00 ($4,720.00 « .75 — $3,540.00).

At the time of his divorce, therefore, Petitioner was en-

1 Members of the Armed Forces who serve 20 vears or more on

active duty generally are eligible to retire and receive a pension.

10 U.S.C. Sec. 8911 et seg. (1982 and Supp. V) (Air Force); 10

U.S.C. See. 3911 et seq. (1982 and Supp. V) (Army); 10 U.S.C.

Sec. 6323 et seq. (1982 and Supp. V) (Navy and Marine Corps).

titled to collect $3,540.00 per month in longevity retire-

ment pay.*

When he retired, the U.S. Air Force determined that

Petitioner was 70% physically disabled as a result of in-

juries he received in three major wars and the Berlin

Airlift. A 70% disability rating means that Petitioner

* See the following papers lodged with the Clerk of the Court:

(1) Air Force Retiree Annuitant Account Statement (April 30,

1983); (2) Vertification of Pay Information (February 23, 1989);

and (3) DD Form 214 Armed Forces of the United States Report

of Transfer or Discharge (August 11, 1971). The amount of pay

a retired military member receives in retirement each month de-

pends on the length of service or the percentage of disability and

the member’s rank. See 10 U.S.C. Sec. 1401 (1982 and Supp. V).

See generally 10 U.S.C. Sec. 8929 (1982) (Air Force): 10 U.S.C.

Secs. 3926 and 3991 et seg. (1982 and Supp. V) (Army); 10 U.S.C.

Secs, 6322-27 et seq. (1982 and Supp. V) (Navy and Marine Corps).

Upon a determination by the Secretary concerned that a

member of a regular component of the armed forces entitled

to basic pay ... is unfit to perform the duties of his office,

grade, rank, or rating because of physical disability incurred

while entitled to basic pay, the Secretary may retire the mem-

ber, with retired pay computed under section 1401 of this

title [10 USC Sec. 1401], if the Secretary also determines

that—

(i) based upon accepted medical principles, the disability

is of a permanent nature and stable;

(2) the disability is not the result of the member’s inten-

tional misconduct or willful neglect, and was not incurred

during a period of unauthorized leave: and

(3)

(A) the member has at least 20 years of service com-

puted under section 1208 of this title [10 USC See.

1208 }.

10 U.S.C. Sec. 1201 (1982 and Supp. V). See alse 38 U.S.C. 310

(wartime disability) ; Sec. 331 (peacetime disability) (1982 and

Supp. V). The amount of the disability awarded to a retired

service member is based on the type of injury received and the

extent to which it impairs the service member’s ability to earn a

living. 38 U.S.C. Secs. 314 and 355 (1982 and Supp. V).

is entitled to receive 70% of his basic pay in disability

pay. On August 3, 1983, Petitioner’s basic pay was

$4,720.00 per month. Seventy percent of his $4,720.00

basic pay is $3,304.00 and this is what the Petitioner was

entitled to receive in disability pay from the Air Force

each month ($4,720.00 x .70% == $3,304.00) .°

Between his 75% longevity retirement pay and his 70%

physcial disability pay, Petitioner was eligible to collect

$6,844.00 in pay per month when he retired from the Air

Force ($3,540.00 (longevity pay) + $3,304.00 (disability

pay) — $6,844.00 (total)). Petitioner could not collect

this amount, however, because federal law prohibits mili-

tary retirees from collecting dual payments, that is, both

longevity retirement pay and physical disability pay.*

Under federal law, the maximum compensation retired

~ military personnel can receive is 75% of the member’s

basic pay at the time of retirement.’

While federal law prohibits military retirees from re-

ceiving both military retirement pay and physical dis-

ability pay, it permits military retirees to waive a per-

centage of their retired pay in order to accept the physi-

cal disability pay to which they are entitled.* As a prac-

#10 U.S.C. Sec. 1401 (1982 and Supp. V) provides that the

amount of disability pay a member of the armed forces is entitled

to receive is determined by multiplying the percentage of dis-

ability by the amount of the member’s basic pay at retirement.

Sd.

6 See Act of March 3, 1881, chap. 548, 26 Stat. 1082; Act of

Jul. 27, 1882, chap. 277, 27 Stat. 282; Act of May 9, 1900, chap.

385, 31 Stat. 171; Act of Feb. 6, 1907, chap. 468, 34 Stat. 879;

Act of May 11, 1912, chap. 123, 37 Stat. 113; Act of June 5, 1920,

chap. 245, 41 Stat. 982; Act of Jun 7, 1924, chap. 320, 43 Stat. 623.

710 U.S.C. Sec. 1401 (1982 and Supp. V) (computation of re-

§“For example, if a military retiree is eligible for $1500 a

month in retirement pay and $500 a month in disability benefits,

he must waive $500 of retirement pay before he can receive any

‘

tical matter, retired military personnel who are entitled

to receive physical disability payments elect to waive

a portion of their longevity retirement pay in order to

receive physical disability pay. They do this because

physical disability payments are nontaxable.”

In Petitioner’s case, he elected to accept $3,304.00 per

month in physical disability pay in lieu of $3,304.00 per

month in longevity retirement pay. Each month there-

fore, Petitioner receives a check for $3,540.00, $3,304.00

of which is physical disability pay and $236.00 of which

is longevity retirement pay."

D. Division of Marital Assets

Numerous hearings were held by the trial court on the

distribution of the joint marital property and on the

award of permanent spousal support. To aid the trial

court in resolving these matters, Petitioner provided the

trial court with a copy of Section 1408 of the Uniform

Services Former Spouses Protection Act (Former Spouses

Protection Act).'! In addition, Petitioner presented evi-

disability benefits.” Mansell v. Mansell, U.S. (No. &7-

201, May 30 1989) (Slip opinion at 2 n.1). See Act of May 21,

1944, chap. 209, 58 Stat. 230. See also 38 U.S.C. Sec. 3105 (1982

and Supp. V).

926 U.S.C. Sec. 104(a) (4) (1982). “Because disability benefits

are exempt from federal, state, and local taxation, Sec. 3101(a),

military retirees who waive their retirement pay in favor of dis-

ability benefits increase their after-tax income.” Mansell v. Mansell,

U.S. (No. 87-201, May 30, 1989) (Slip Opinion at 2).

See 38 U.S.C. 3101(a) (1982 and Supp. V).

10 Th. $3,304.00 Petitioner received in physical disability pay

was not taxable, but the $236.00 he received in longevity retirement

pay was taxable.

1110 U.S.C. See. 1408 (1982). At the time, the Former Spouses

Protection Act specifically excluded Chapter 61 retired physical

disability payments from division in state divorce actions.

dence to the trial court which showed that his taxable

income or “disposable retired pay” was $236.00 per

month. (See Air Force Retiree Annuitant Account State-

ment (April 30, 1983) and Verification of Pay (February

23, 1989) lodged with the Clerk of Court.)

In addition to this evidence, Petitioner testified about

his retired and disability pay. In his testimony, however,

Petitioner misstated the amount of “disposable retired

pay” he was receiving. Rather than informing the trial

court (1) that his longevity retired pay was $3,540.00

per month; (2) that his physical disability pay was

$3,304.00 per month"; and that his disposable retired

pay was $236.00 (the difference between the amount of

his longevity pay and physical disability pay), Peti-

tioner testified (1) that his longevity pay was $3,540.00";

(2) that his disability pay was $2,478.00 and (3)

that his disposable retired pay was $1,062.00." Peti-

tioner’s mistake concerning the amount of his “disposable

retired pay,” namely testifying that it was $1,062.00 per

month rather than $236.00 per month, was due to a mis-

understanding of federal law.

12 $4,720.00 (basic pay) x .75% (percentage of pay for figuring

retirement) = $3,540.00 (longevity retired pay)

13 $4,720.00 (basic pay) x 70% (disability rating) =$3,304.00

(physical disability pay)

14 $3,540.00 (longevity pay )—$3,304.00 (disability pay) =$236.00

(disposabie retired pay)

15 $4,720.00 (basic pay) x .75% (percentage of pay for figuring

retirement) = $3,540.00 (longevity pay)

16 $3,540.00 (longevity pay) x 70% (percentage of pay for

figuring retirement) =$2,478.00 (disability pay)

17 Petitioner arrived at his $1,062 figure by multiplying 70%

times his longevity pay, $3,540.00, for a total of $2,478.00

($3,540.00 x 70% =$2,478.00). He then subtracted $2,478.00 from

his longevity pay ($3,540.00) which resulted in a figure of $1,062.00

($3,540.00 (longevity pay)—$2,478.00 (disability pay) =$1,062.00

(disposable retired pay) ).

E. Trial Court’s Opinion

On March 28, 1985, the trial court issued an opinion

directing distribution of the couple’s marital assets. The

distribution of assets included a division of the Petition-

er’s “disposable retired pay.” In dividing Petitioner’s

“disposable retired pay” between the parties, the trial

court used the $1,062.00 figure supplied by Petitioner,

rather than the $236.00 figure which appeared in the

evidence Petitioner submitted to the Court.

While Elwin’s [nondisability] retired pay is

$1,062/.00], his monthly government life insurance

premium is $19.00. The latter figure is deductible

to arrive at ‘disposable retired or retainer pay’ un-

der subsection (a) (4) (E) of 10 USC Section 1408,

resulting in a figure of $1,043.00, or $12,516.00 an-

nually. He was sixty-four at the date of the divorce

and the [life expectancy] factor to be used under

Section 55-261 is 7.718. This multiplied by the an-

nual amount gives a present value of Elwin’s retire-

ment benefits as of the date of divorce of $96,598.00.

(See Appendix 47a). In determining what proportion

of the $1043.00 in “disposable retired pay” should be

awarded to Respondent, the trial court recognized that—

virtually all of the existing intangible marital prop-

erty is directly related to [Petitioner’s] vocational

endeavors away from the comforts and security of

home and out in the competitive and sometimes harsh

realities of the workaday world. For those reasons

it appears to the Court right and just that he should

retain [60% and she 40%] of these categories of

marital property.

Id. at 53a. The trial court noted that “Elwin’s military

disability benefits must be excluded from the marital

property of the parties and must not be used to give an

indirect effect in the equitable distribution of that prop-

erty.” Id. at 48a (emphasis added).

‘

F. Exceptions to the Trial Court’s March 28, 1985 Opinion

On April 10, 1985, shortly after he received the trial

court’s March 28, 1985 opinion, Petitioner filed a Mem-

orandum of Exceptions to the trial court’s opinion. In

the Memorandum, Petitioner argued that—

{T]he Court’s opinion indicates that the [Petition-

er’s] Armed Forces Retirement Pay, at its present

value is marital property [47a]. The Court’s find-

ing is contrary to the plain meaning under 10 USC

Section 1408(a) (4). The Plaintiff was retired from

the Air Force as a service member under Chapter

61. Therefore, his retirement pay is excluded from

divisibility at divorce.

Memorandum of Exceptions (April 10, 1985). Petition-

er’s argument in this regard is supported by language in

the Code of Federal Regulations which states that “for

court orders issued on or before November 14, 1986...

disposable retired [pay] does not include retired pay of a

member retired for disability under 10 U.S.C. Chapter

61.” 32 CFR Chap. 1, Sec. 63.6(e) (2) (July 1, 1988).

In a further motion filed with the trial court on April

22, 1985, Petitioner argued more specifically that Section

1408(a) (4) of the Former Spouses Protection Act pro-

vides that:

(4) “Disposable retired or retainer, pay’ means

the total monthly retired pay... to which a member

is entitled (other than the retired pay of a member

retired for disability under chapter 61 of this title)

Memorandum (April 22, 1985) (emphasis added). Peti-

tioner argued that “persons retired|,] other than for dis-

ability purposes under 10 USC 1201[,] will have their

pay subject to the provisions of Public Law 97-252 known

as the Former Spouses Protection Act|,] but that those

retired for disability purposes are exempt from division

of their retirement pay as alimony or marital property as

provided in said act.” Jd. at 2 (emphasis added). In ad-

dition, the Petitioner again argued that in defining “dis-

posable retired pay,” the Former Spouses Protection Act

specifically excludes the retired pay of a member retired

for disability under Chapter 61, Title 10, U.S.C. Peti-

tioner argued too that “there is a significant federal in-

terest in protecting service members pay from distribu-

tion as marital property when service members are re-

tired for disability purposes.” Jd.

G. Trial Court’s Supplemental Opinion

On December 17, 1985, the trial court issued a Supple-

mental Opinion addressing the Petitioner’s exceptions to

the trial court’s March 28, 1985 opinion. In its Supple-

mental Opinion, the trial court denied Petitioner’s mo-

tion for reconsideration and motion for introduction of

further evidence in light of the provisions of the Former

Spouses Protection Act. In denying Petitioner’s motions,

the trial court stated that—

fi]Jn view of the fact that the [Petitioner] introduced

evidence, made representations and advanced a theory

with respect to his disposable retirement income, and

that [the court’s] opinion was written accepting

these and was based on them in this regard[,] the

Court will not reconsider its prior opinion or admit

additional evidence on the matter.

(See Appendix 30a) In addition, the trial court noted

that “[{flor the sake of finality, expeditious disposition of

cases and due regard for an opposing party|,] the other

party cannot await an opinion based on his evidence and

theory of an issue and then because he is disappointed

in the results obtained seek a re-hearing in order to

change his theory and evidence, hopefully to achieve a

different result.” Jd. (emphasis added). Petitioner’s

maintains that his purpose in correcting his testimony as

to the amount of his “disposable retired pay” was to cor-

rect the record and te apprise the court that its distribu- .

tion of Petitioner’s disability pay was in violation of fed-

eral.law. It is Petitioner’s contention that he had a duty

to so advise the court, as soon as he learned that a mis-

take had been made and he became aware that the federal

law was not being followed.

H. Motion for Rehearing

On May 7, 1986, Petitioner asked the trial court to

rehear the evidence in the case on the grounds that its

opinion was based on a “material mistake of fact.” In

asking the trial court to reexamine the evidence, Peti-

tioner argued that “it is apparent from the record that

the disposable pay, if any, of the | Petitioner] is approa-

imately $217.00 per month, as set forth in the April, 1983

pay form submitted to the court, that is, $236.00 — $19.00,

rather than the $1062.00 per month testified to by the

{Petitioner|].” Motion for Rehearing (May 7, 1986). In

addition, Petitioner argued that an “error was made, and

accepted by all of the parties hereto, because of a mistake

. concerning the manner in which percentages of dis-

ability are used to figure monthly entitlements of military

retirement pay.”

[The] error was material to the proceedings in that

this Court in its letter opinion [of March 28, 1985]

determined that only non-disability retirement pay

could be the subject of equitable distribution, and

such error amounts to a difference of approximately

$800.00 per month. Calculations using the true

figure of approximately $217.00 a month instead

of the $1,043.00 a month [$1,062.00 minus $19.00

—= $1,043.00], and using the Court’s award of 40%

of present value would yield a difference in the

award to the Respondent of approximately $30,000.00.

Id. (emphasis added). In effect, Petitioner argued that

he was not presenting new evidence, but rather was cor-

recting a mistake made by the trial court in applying

federal law to evidence which had been presented to it.

On July 8, 1986, the trial court denied Petitioner’s Mo-

tion for Rehearing. While the trial court admitted that

“no final decree on the point ha[d yet] been entered,” the

court nevertheless stated that the “findings and rulings

contained in the opinion of March 28, 1985 are com-

parable to a jury verdict” and that “[t]o grant the peti-

tion would be in effect to order a new trial on the basis

of after-discovered evidence on an important aspect of

equitable distribution settled by that opinion.” (See Ap-

pendix 24a). In addition, the court noted that “the evi-

dence petitioner seeks to introduce now was available to

the petitioner from the time of his filing his bill of com-

plaint in April of 1983 and continued to be available to

the time of the opinion rendered March 28, 1985.” Id.

“Tt is this long available evidence [which Petitioner]

wishes to introduce now in substitution of his evidence

given months before rendition of decision, which relied

on that evidence and which decision he has found un-

palatable.” Jd. at 25a. In sum, the trial court concluded

that the litigation must come to an end, and “[e]nough is

enough.” Jd.

On December 1, 1986, more than three and half years

after Petitioner’s divorce was granted by the trial court,

more than eighteen months after the trial court issued its

March 28, 1985 opinion, and more than eight months

after it was advised of the mistake made in determining

Petitioner’s disability and disposable pay, the trial court

issued a Final Decree in the case. (See Appendix 19a).

I. Appeal to the Court of Appeals of Virginia

On appeal to the Court of Appeals of Virginia, Peti-

tioner argued that the trial court made a “material mis-

take of fact” concerning the amount of Petitioner’s dis-

posable retired pay available as a source of spousal sup-

port and for equitable distribution. Petitioner argued

that he was in error when he testified that his “disposable

retired pay” was $1,062.00 per month. He stated that

his testimony was erroneous because Section 1401 of Title

10 of the United States Code clearly provides that the

amount of a retiree’s monthly disability pay is deter-

mined by multiplying the retiree’s “monthly basic pay”

($4,720.00) times the “percentage of his disability”

(70%). In Petitioner’s case, this yields a figure of

$3,304.00.° Subtracting the $3,540.00 in longevity pay

leaves $236.00 in “disposable retired pay.” '

Unfortunately, Petitioner multiplied his “longevity

pay” ($3,540.00) by his “percentage of his disability”

(70% ).2° This resulted in a figure of $2,478.00 for his

disability pay.*! Subtracting $2,478.00 in physical dis-

ability pay from $3,540.00 in longevity pay left him with

$1,062 in “disposable retired pay.” *

On appeal, Petitioner argued that as soon as he dis-

covered he made an error in calculating his “disposable

retired pay,” he filed a Memorandum with the trial court

advising the court of the nature of the mistake and set-

ting forth the correct method for determining his “dis-

posable retired pay” under federal law. Because the trial

court used the “wrong amount” in determining the

amount available for equitable distribution, namely,

$1,043.00 per month rather than $216.00 per month, Peti-

tioner also argued that “the award {set by the trial

court] violates the provisions of Section 20-107.3(G),

18 $4,720.00 x 70% =$3,304.00

19 $3,540.00 (longevity pay )—$3,304.00 (disability pay) =$236.00

(disposable retired pay)

20 Petitioner should have multiplied his “monthly basic pay”

($4,720.00) times his “percentage of his disability (70%)

21 $3,540.00 (longevity pay) x 70% (percentage of disability)

= $2,478.00 (disability pay)

22 $3,540.00 (longevity pay )—$2,478.00 (disability pay) =$1,062

(disposable retired pay )

Code of Virginia,”* since more than 50% of the disposable

cash benefits received from [Petitioner’s] pension have

been awarded to [Respondent].” Brief of Appellant at

15, Holmes v. Holmes, 5 V.L.R. 1259 (Cir. Ct. Frederick

Cty., Va., 1988).

In addition Petitioner argued on appeal that he “did

not ask the Trial Court to order a new trial on the basis

of after-discovered evidence as stated by the Trial Court

at Page 2 of its Letter Opinion of July 8, 1986.” (See

Appendix 24a). Instead, Petitioner “asked the Trial

Court to reconsider all the evidence already in the record

on the basis of a mistake of a material fact.” Jd. at 16.

On appeal, Petitioner also noted that he presented his re-

quest for the trial court to reexamine the evidence ap-

proximately 8 months before the trial court entered its

Final Decree in the case.

On December 20, 1988, the Court of Appeals of Vir-

ginia denied Petitioner’s appeal. The Court of Appeals

initially ruled that “[a]lthough the trial judge’s letter

ruling did not specifically address the issue of whether

there was an error on the face of the record, its ruling

implies a finding that there was no such error.” Holmes

v. Holmes, 5 V.L.R. 1259, 1268 (Cir. Ct. Frederick Cty.,

1988 (See Appendix 10a). The Court of Appeals then

stated that the “trial judge’s ruling . . . does not consti-

tute an error on its face because 10 U.S.C. Section 1401

merely provides the basis to calculate the total retirement

pay and does not designate the amounts of pay allotted

to disability pay verses non-disability pay.” Jd. at 1269.

(See Appendix lla). In addition, the Court of Appeals

23° G. No part of any monetary award based upon the value of

pension or retirement benefits, whether vested or nonvested,

shall become effective until the party against whom such award

is made actually begins to receive such benefits. No such

award shall exceed fifty percent of the cash benefits actually

received by the party against whom such award is made.

4A CODE OF VIRGINIA Sec. 20-107.3(G) (1983) (emphasis

added).

c 16

noted that Petitioner did not object to the court’s meth-

od for determining his “disposable retired pay” until

after the trial court had entered its March 25, 1985

opinion. The Court of Appeals noted tco that in reach-

ing its decision, the trial court relied on Petitioner’s tes-

timony and affidavit in arriving at the $1043.00 figure

for disposable retired income. Jd. at 1270. See Appendix

lla. Finally, the Court of Appeais ruled that because

Petitioner did not allege the discovery of new evidence

or point out an error on the record, his petition for a

rehearing was properly dismissed. Jd. at 1271. See Ap-

pendix 12a.

J. Appeal to the Supreme Court of Virginia

On January 13, 1989, Petitioner appealed the decision

of the Court of Appeals of Virginia to the Supreme Court

of Virginia. On appeal, Petitioner argued that the trial

court’s actions in awarding a portion of Petitioner’s re-

tired military disability pay to the Respondent violates

federal law and, hence, the Supremacy Clause of the Con-

stittuion of the United States. Brief of Appellant at 2,

Holmes v. Hoimes, VA. (No. 890059, April 26,

1989) (unpublished opinion). After hearing oral argu-

ment, the Supreme Court of Virginia ruled that “there

is no reversible error in the judgment complained of [and

alecordingly, the Court refuses the petition for appeal.”

Order in Holmes v. Holmes, VA. —— (No. 890059,

April 26, 1989) (unpublished opinion) (See Appendix

la.

The Supreme Court of Virginia’s decision concerning

the division of Petitioner’s disability pay is contrary to

the Supreme Court of Idaho's decision in Griggs v. Griggs,

107 Idaho 123, 686 P.2d 68 (1984). In Griggs the Su-

preme Court of Idaho held that the trial court must

“award that portion of the total payment received which

has been designated as ‘disability pay’ in accordance with

the segments of 10 U.S.C. Sees. 1401 and 1403, to the

husband as his separate property”. /d. at 128, 686 P.2d

at 73.

REASONS FOR GRANTING THE WRIT OF CERTIORARI

The Supreme Court should GRANT, VACATE, and

REMAND this case in light of Mansell v. Mansell,

US. (No. 87-201, May 30, 1989). There are three

reasons why the Court should grant the petition for a

writ of certiorari in this case, vacate the judgment below,

and remand the case to the Supreme Court of Virginia

for further consideration in light of Mansell.

First, the decision of the Supreme Court of Virginia is

in direct conflict with the Supreme Court of the United

States’ recent decision in Mansell v. Mansell, —— U.S.

—— (No. 87-201, May 30, 1989). Second, the decision

of the Supreme Court of Virginia ignores the “plain and

precise” language of Section 1408(a)(4)(E) of the

Former Spouses Protection Act which states that “physi-

cal disability payments” received by a retired service

member of the armed forces un:'er Chapter 61 of Title 10

of the United States Code are not to be treated as “‘dis-

posable retired . . . pay” for purposes of property division

upon divorce. And third, the decision of the Supreme

Court of Virginia ignores the provisions of Section

104(a) (4) (1982) of the Internal Revenue Code by re-

classifying a portion of Petitioner’s nontaxable disability

pay as taxable longevity retirement pay, and treating it

as marital property subject to division on divorce.

I. Mansell v. Mansell, -— U.S. —— (No. 87-201, May 30,

1989)

The issue in the present case is virtually identical to

the issue decided by the Supreme Court of the United

States in Mansell v. Mansell, —— U.S. —— (No. 87-

204, May 30, 1989). In Mansell, the Court held that “the

Former Spouses Protection Act does not grant state

courts the power to treat, as property divisible upon

divorce, military retirement pay that has been waived

to receive veterans disability benefits.” /d. at 13 (Slip

opinion).

In Mansell the Appellant, a retired Air Force Major,

was married to his wife for 23 years. In 1979, their

marriage ended. As part of the property settlement

agreement entered into between the parties, Major

Mansell agreed to pay his wife “50 percent of his total

military retirement pay, including a portion of retirement

pay waived so that [he] could receive disability benefits.”

Id. at 4.

Four years later, in 1983, Major Mansell “asked the

Superior Court to modify the divorce decree by removing

the provision that required him to share his total retire-

ment pay with Mrs. Mansell.” Jd. The Superior Court

denied his request and Cailfornia Court of Appeal af-

firmed “reject[ing] that portion of Major Mansell’s argu-

ment based on the Former Spouses Protection Act.” Id.

at 5. Major Mansell appealed the decision of the Cali-

fornia Court of Appeals to the Supreme Court of Cali-

fornia and the Supreme Court of California denied his

petition. Id.

Major Mansell then appealed to the Supreme Court of

the United States. In his appeal, Major Mansell argued

that he had asserted the supremacy of federal law “in

every forum available to him” and that the “California

Courts ... refused to address the issue.” Jurisdictional!

Statement of Appellant at 6. He also argued “that the

refusal [of the California Courts] to recognize the sup-

remacy of federal law is an affront to the settled doctrine

of federalism.” Id.

There can be no doubt [he argued] that Congress

[in the Former Spouses Protection Act] granted the

states a limited right to divide ‘disposable retired

pay.’ However, Section (a) (4) of the Act removes

any ambiguity as the meaning of ‘disposable’ by ex-

pressly defining what the state courts may divide.

Id. at 8. In support of his position, Major Mansell ar-

gued that Section 1408(a) (4) of the Act clearly defines

‘disposable retired ... pay” as follows:

eee

—————

(4) “Disposable retired ... pay” means the total

monthly retired . . . pay to which a member is en-

titled less amounts which—

(A) are owed by that member to the United

States;

(B) are required by law to be and are deducted

from the retired . . . pay of such member, including

fines and forfeitures ordered by courts-martial, Fed-

eral employment taxes, and amounts waived in order

to receive compensation under title 5 or title 38],

that is, veterans disability benefits].

Id. (emphasis added). Major Mansell argued that

“{t]here is no ambiguity whatsoever in section 1408(a)

(4)” and that Congress unequivocally stated and intended

to exclude from division by the state courts those

“amounts waived in order to receive [veterans disability

benefits] under... title 38.’ Jd.

The facts in the present case are similar to the facts

in Mansell except that the disability payments received

by Petitioner are “physical disability payments” awarded

him under Chapter 61 of Title 10 rather than “veterans

disability benefits” awarded to Mansell under Title 38.

As in the case of “veterans disability benefits” received

by Mansell under Title 38, “physical disability benefits”

received by Petitioner under Chapter 61 of Title 10 are

specifically exempted from “disposable retired . . . pay”

under Section 1408(a)(4)(E) of the Former Spouses

Protection Act.

Section 1408(a) (4) (E) of the Former Spouses Pro-

tection Act provides are follows:

(4) “Disposable retired . .. pay’? means the total

monthly retired ... pay to which a member is en-

titled less amounts which—

(A) are owed by that member to the United

States;

(B) are required by law to be and are deducted

from the retired ... pay of such member, in-

cluding fines and forfeitures order by courts-

martial, Federal employment taxes, and amounts

waived in order to receive compensation under

title 5 or title 38 [veterans disability benefits]

[Mansell] ; [and]

(E) in the case of a member entitled to retired

pay under chapter 61 of (Title 10], are equal to

the amount of retired pay of the member under

that chapter computed using the percentage of

the member’s disability on the date when the

member was retired [the present case].

10 U.S.C. See. 1408(a) (4) (A-E) (1982 and Supp. V)

(emphasis added). In short, Section 1408 (a) (4) (E) of

the Former Spouses Protection Act states that the amount

of physical disability pay received under Chapter 61 by

a retired member is exempt from the member’s “dispos-

able retired pay.”

In Mansell, the Supreme Court held that the amounts

of retired pay which a retired member of the armed

forces waives in order to receive “veterans disability

benefits” under Title 38 of the Code are not “disposable

retired pay” and cannot be treated by state courts as

property divisible upon divorce. In the present case,

Petitioner is not receiving ‘“‘veterans disability benefits,”

but is receiving Chapter 61 “physical disability benefits”

under Sec. 1201 of Title 10. These benefits, like “vet-

erans disability benefits,’ are nontaxable and are not

subject to division on divorce. See Repash v. Repash, 148

Vt. 70, 74, 528 A.2d 744, 745 (1987).

Chapter 61 “physical disability benefits” are awarded

to members of the armed forces who are separated from

military service because of physical disabilities and in-

juries received while serving on active duty. 10 U.S.C.

Sec, 1201, et seg. (1982 and Supp. V). Members of the

armed forces who are separated for physical disability

under the provisions of Section 1201 of Title 10 are en-

titled to monthly retirement pay. 10 U.S.C. Sec. 1401

(1982 and Supp. V). The amount of pay they receive

is arrived at by using one of two formulas in Section

1401 of Title 10.

Under one of the formulas, a retiree multiplies the

number of years served on active duty times 214% (30

years & 212% = 75%). The resulting percentage

(75%) is then multiplied times the member’s basic pay

at retirement ($4,720.00). The result of the multiplica-

tion is the amount of the member’s retirement, $3,540.00.?!

Under the second formula, a retiree multiples his per-

centage of disability (70%) times his basic pay

($4,720.00) and the resulting figure ($3,304.00) is the

amount of the member’s ‘physical disability pay.” > Sec-

tion 1401 provides that a retired member “is entitled to

be paid under the applicable formula that is most favor-

able to him.” 10 U.S.C. Sec. 1401 (1982). Since Sec-

tion 104(a) (4) of the Title 26, the Internal Revenue

Code, states that physical disability benefits are nontax-

able, Chapter 61 retirees with high percentages of phys-

ical disability elect to use the second formula for deter-

mining how much they are to receive each month.

In sum, the Supreme Court of the United States held

in Mansell that the intent of Congress was not to include

“veterans disability benefits’ as part of a member’s

‘disposable retired pay” for purposes of dividing property

in divorce actions. For the same reasons relied on by

the Court in Mansell, Counsel for Petitioner contends

that Chapter 61 “physical disability benefits” are not to

*4 $4,720.00 (basic pay) x 75% (215% times the number of

years of service) = $3,540.00 (longevity pay)

25 $4,720.00 (basic pay) x 70% (percentage of disability)

= $3,305.00 (physical disability pay)

be included in a member’s “disposable retired pay” for

purposes of dividing property in divorce actions. Not only

should “veterans disability payments” under Title 38 and

“physical disability payments” under Chapter 61 be

treated the same, but also the language used by Congress

in Section 1408(a) (4) (E) makes clear that they both

are to be excluded from a member’s ‘disposable retired

pay.” Because the issue raised in the present case is

basically the same as the issue presented in Mansell,

Counsel for Petitioner respectfully submits that the Su-

preme Court should grant, vacate and remand the pres-

ent case to the Supreme Court of Virginia for further

consideration in light of the Court’s decision in Mansell.

II. Former Spouses Protection Act

The second reason the Court should grant, vacate, and

remand in the present case is because the Supreme Court

of Virginia has ignored the plain language of Section

1408(a) (4) (E) of the Former Spouses Protection Act

in affirming the decision of the Court of Appeals of Vir-

ginia. As noted, the language of Section 1408(a) (4) (E)

specifically provides that Chapter 61 physical disability

benefits are not to be treated as part of a member’s

“disposable retired pay.”

At the time Petition filed for divorce from Respondent

on April 19, 1988, Section 1408(a) (4) provided as fol-

lows:

“Disposable retired ... pay”. means the total monthly

retired . . . pay to which a member is entitled (other

than the retired pay of a member retired for dis-

ability under chapter 61 of [Title 10]) less amounts

which...

Former Spouses Protection Act, Pub. L. No. 97-252, 96

Stat. 730-31 (1982).

In the trial court Petitioner argued that, under this

version of Section 1408(a) (4), none of Petitioner’s re-

tirement benefits were subject to division under the

Former Spouses Protection Act because the language of

the statute specifically excludes retirement pay received

for disability under Chapter 61 from the definition of

‘disposable retired . . . pay.” 76

In 1986, Congress amended Section 1408(a) (4) of the

Former Spouses Protection Act by changing the defini-

tion of “disposable retired . . . pay” and by adding new

language to Subsection E:

(4) “Disposable retired . . . pay” means the total

monthly retired pay ... to which a member is en-

titled less amounts which—

(EK) In the case of a member entitled to retired

pay under Chapter 61 of the title, are equal to the

amount of retired pay of the member under that

chapter, computed using the percentage of the mem-

ber’s disability on the date when the member was

retired (or the date cn which the member’s name

was placed on the temporary disability retirement

list) ;

1987 Department of Defense Authorization Act, Pub. L.

No. 99-661, div. A, title VI, § 644(a), 100 Stat. 3887

(November 14, 1986) (emphasis added). The significance

of the amendments made to the Former Spouses Protec-

tion Act in 1986 is that Congress specifically changed the

law as to how physical disability payments received by

retired members under Chapter 61 of Title 10 are to be

treated under the Former Spouses Protection Act.

Under the old provision, retirement pay awarded un-

der Chapter 61 was totally exempt from coverage by the

Former Spouses Protection Act. In 1986, Congress

“6 “For court orders issued on or before November 14, 1986...

disposable retired [pay] does not include retired pay of a member

retired for disability under 10 U.S.C. Chap. 61” 32 C.F.R. Ch. 1,

§ 63.6(e) (2) (July 1, 1988).

amended Section 1408(a) (4) to provide that “ ‘disposable

retired . . . pay’ means the total monthly retired pay

... to which a member is entitled to receiv. .ess amounts

which... (E) ... are equal to the amount of retired

pay of the member under [Chapter 61] computed using

the percentage of the member’s disability on the date

when the member was retired.” 10 U.S.C. Section 1408

(a) (4) (A-E) (1982 and Supp. V) (emphasis added).

By making this change to the Former Spouses Protection

Act, Congress clearly expressed its intent to treat “phy-

sical disability pay’ received by retirees under Chapter

61 in the same way it treats “veterans disability bene-

fits” under the Act. The 1986 Amendment to the Former

Spouses Protection Act, in other words, made clear that

Chapter 61 physical disability benefits are not to be in-

cluded in “disposable retired pay’ for purposes of divid-

ing property on divorce.

This is confirmed by provisions in the Code of Federal

Regulations which define military retired pay as follows:

Retired pay . .. [is t]he gross entitlement due a

member based on conditions of the retirement law,

pay grade, years of service for basic pay, years of

service for percentage multiplier, if applicable, and

date of retirement. . .

32 CFR Ch. 1, Sec. 63.3(0) (July 1, 1988). Section

63.6(e) (2) (vi) further states that among the authorized

deductions from “disposable retired pay” are:

(vi) The amount of retired pay of the member wa-

der 10 U.S.C. Chapter 61 computed using the per-

centage of the members’s disability [pay] on the

date, when the member was retired ... for court

orders issued after November 14, 1986.

32 C.F.R. Ch 1, Sec.63.6(e) (2) (vi) (July 1, 1988).

The final trial court decision in Petitioner’s case was is-

sued on December 1, 1986, just two weeks after the

effective date of the amendment.

The language of Section 1408(a) (4) of the Former

Spouses Protection Act and the provisions of the Code

of Federal Regulations governing the distribution of dis-

ability and retired pay clearly indicate that physical dis-

ability payments under Chapter 61 are not to be included

in “disposable retired pay” for purposes of dividing prop-

erty in divorce actions.

In Petitioner’s case, the trial court was aware of the

provisions of the Former Spouses Protection Act which

Petitioner had submitted to it as evidence early in the

case. Indeed, the trial court had the provisions of the

Former Spouses Protection Act in its possession during

the year and half it had the case before it issued its

March 28, 1985 opinion. Thus, the trial court was

aware of the provisions of the Former Spouses Protection

Act governing ‘disposable retired pay” long before it

issued its March 28, 1985 opinion. In addition, the trial

court was aware that Petitioner’s taxable retired income

from the Air Force was only $236.00 per month.

The trial court stated, however, that Petitioner is to

blame, and not the court, for the court’s failure to decide

the matters before it in accordance with the provisions

of *:e Former Spouses Protection Act. It is the conten-

tion of Counsel for the Petitioner that the trial court

is the sole source of the law in such cases and that it is

the court’s responsibility to comply with the provisions of

the federal statute, in particular where the law is clear,

where special calculations are called for, and where the

parties’ interpretation of federal laws may be in error.

In short, federal laws must be applied uniformly

throughout the nation and it is no excuse for a court to

argue that it is bound by a party’s particular interpre-

tation of federal law. In the present case, not only is the

federal law clear about what amounts are to be excluded

from “disposable retired pay,” but federal law also is

clear about how such amounts are to be calculated. By

using the “wrong amount” of Petitioner’s “disposable re-

all

tired pay” rather than the “right amount” of Petitioner’s

“disposable retired pay,” the trial court issued a decision

which is contrary to federal law and which must be

reversed.

For this reason, Counsel for Petitioner respectfully

requests that the Supreme Court of the United States

grant, vacate and remand the issue in the present case

to the Supreme Court of Virginia for further considera-

tion in light of the Court’s decision in Mansell.

III. Internal Revenue Code

The third reason for the Supreme Court to grant, va-

cate, and remand in the present case is because the deci-

sion of the Supreme Court of Virginia also ignores the

provisions of Section 104(a) (4) of the Internal Revenue

Code. 26 U.S.C. See. 104(a) (4) (1982).

Section 104(a) (4) of the Internal Revenue Code pro-

vides that physical disability pay is to be excluded from

a retired member's “gross income as ‘amounts received

... for personal injuries.’” Griggs v. Griggs, 148 Idaho

123, 128, 686 P.2d 68, 73 (1984). In short, Section 104

(a) (4) provides that the total amount of physical dis-

ability pay a retired member receives under Chapter 61

is exempt from federal income tax. This is an important

tax advantage which Congress has provided to retired

service members who have been disabled in the line of

duty. It is the total amount of the disability awarded to

a disabled retiree which is excluded from taxation and it

is a matter over which the retired member has no con-

trol or election.

In the present case, the trial court disregarded the

fact that the physical disability payments Petitioner re-

ceived under Chapter 61 are nontaxable. By using

$1,043.00 instead of $216.00 as the amount of Petition-

er’s “disposable retired pay” and awarding 40% of the

$1,043.00 amount to Respondent, the trial court changed

more than $800.00 per month of Petitioner’s nontaxable

disability pay into taxable retirement pay and made it

divisible on divorce. By reclassifying approximately

$800.00 of Petitioner’s “disability pay” per month as re-

tirement pay, the trial court in effect “transfer{red] the

tax advantage intended for the ‘disability pay’ to retire-

ment pay.” Jd. at 128, 686 P.2d at 73. In other words,

the trial court either transferred part of the tax advan-

tage to Respondent, or decided that $800.00 per month of

Petitioner’s disability pay should be treated as taxable

income for purposes of the divorce action. —

It is doubtful Congress intended for the states to take

a portion of a retiree’s nontaxable income and treat it as

taxable income for purposes of dividing property in di-

vorce actions. But that is what the trial court did in the

present case, and both the Court of Appeals of Virginia

and the Supreme Court of Virginia affirmed the trial

court’s actions in this regard.

As in matters concerning the raising and supporting

of the armed forces, the operation and application of the

Internal Revenue Code is a matter of importance to the

federal government. The laws of the nation concerning

such matters are federal in nature and must be the su-

preme law of the land. Not only are these areas of spe-

cial concern to the federal government, but also they are

areas where uniformity of application throughout the na-

tion is important. In these areas, federal law must be

supreme.

For the reasons stated, Counsel for Petitioner respect-

fully submits that the Supreme Court of the United States

should grant, vacate, and remand the present case to the

Supreme Court of Virginia for further consideration in

light of the Supreme Court’s decision in Mansell v. Man-

sell, US. (No. 87-201, May 30, 1989).

—

CONCLUSION

Counsel for Petitioner respectfully requests that the

Supreme Court of the United States grant, vacate, and

remand the decision of the Supreme Court of Virginia in

the present case (1) because the decision of the Supreme

Court of Virginia is in conflict with the Supreme Court

of the United States’ recent decision in Mansell v. Man-

sell, —— USS. (No. 87-201, May 30, 1989); (2)

because the decision of the Supreme Court of Virginia

ignores the “plain and precise” language of Section 1408

(a) (4) (E) of the Former Spouses Protection Act; and

(3) because the decision of the Supreme Court of Vir-

ginia ignores the language of Section 104(a) (4) of the

Internal Revenue Code which provides that Petitioner’s

nontaxable disability benefits are not to be reclassified

and treated as taxable income for purposes of dividing

property in a state divorce action.

Respectfully submitted,

JAN HORBALY *

5810 Renaissance Court

Burke, Virginia 22015

(703) 978-7909

THOMAS B. THROCKMORTON

SCULLY, THROCKMORTON,

AND GLASS

20 South Kent Street

Post Office Box 3038

Winchester, Virginia 22601

(703) 667-6900

Counsel for Petitioner

Date: July 24, 1989 * Counsel of Record

APPENDICES

APPENDIX TABLE OF CONTENTS

Opinion of Supreme Court of Virginia (April 26,

1989)

Opinion of Court of Appeals of Virginia (Decem-

ber 20, 1988)

Final Decree from the Circuit Court of Frederick

County, Virginia (December 1, 1986)

Supplemental Letter Opinion from the Circuit

Court of Frederick County, Virginia (July 8,

1986)

Supplemental Letter Opinion from the Circuit

Court of Frederick County, Virginia (December

17, 1985)

Memorandum to the Circuit Court of Frederick

County, Virginia from Petitioner (August 19,

1985)

Decree from the Circuit Court of Frederick

County, Virginia (July 30, 1985)

Opinion of Circuit Court of Frederick County,

Virginia (March 28, 1985)

Trial Decree of Circuit Court of Frederick County,

Virginia (August 3, 1983)

APPENDIX A

VIRGINIA:

In the Supreme Court of Virginia held at the Supreme

Court Building in the City of Richmond on Wednesday

the 26th day of April, 1989.

Record No. 890059

Court of Appeals No. 1449-86-4

ELWIN F. HOLMEs, ;

Appellant,

against

FRANCES SUE POE HOLMES,

Appellee.

From the Court of Appeals of Virginia

-_—

Upon review of the record in this case and considera-

tion of the argument submitted in support of and in op-

position to the granting of an appeal, the Court is of

opinion there is no reversible error in the judgment com-

plained of. Accordingly, the Court refuses the petition for

appeal.

A Copy,

Teste:

David B. Beach

Clerk

By: /‘s/ Illegible

Deputy Clerk

APPENDIX B

COURT OF APPEALS OF VIRGINIA

Present: Judges Barrow, Benton and Cole

Argued at Alexandria, Virginia

— -

Record No. 1449-86-4

ELVIN F. HOLMES

FRANCES SUE POE HOLMES

From the Circuit Court of Frederick County

Robert K. Woltz, Judge

OPINION BY

JUDGE JAMES W. BENTON, JR.

December 20, 1988

Thomas B. Throckmorton (Scully, Throckmorton &

Glass, on briefs), for appellant.

John E. Wetsel, Jr. (Kuykendall, Wetsel & Kuyken-

dall, P.C., on brief), for appellee.

Elwin F. Holmes was granted a divorce a vinculo mat-

rimonii from his wife, Frances Sue Poe Holmes, on the

statutory no-fault ground. The husband contends that

the trial judge erred in determining the amounts of the

monetary award and spousal support award, and he

raises the following issues in this appeal: (1) whether

military pensions are property subject to distribution by

monetary award; (2) whether the trial judge erred in

failing to reduce the gross estimated value of the hus-

band’s military pension to its present value; (3) whether

the trial judge abused his discretion by refusing to grant

a petition for a rehearing based on the allegation of a

material mistake of fact apparent on the face of the

record; (4) whether the trial judge erred by failing to

consider the monetary award to the wife as income for

the purpose of determining the wife’s spousal support

award; (5) whether spousal support award constituted an

abuse of discretion; (6) whether the trial judge erred by

awarding monthly spousal support and monetary award

payments to the wife that exceed the husband’s monthly

non-disability income; (7) whether the trial judge erred

in determining that the bank accounts were marital prop-

erty subject to distribution by monetary award; and (8)

whether the trial judge erred in reserving the right to

reopen the suit in the event of the husband’s death. For

the reasons that follow we affirm the judgment.

The parties were married in 1942. They reared four

children, all of whom were emancipated at the time of

the divorce proceedings. After serving twenty-nine years

with the Air Force, the husband retired as a colonel with

a seventy percent disability rating.

Upon entry of the decree granting the husband a no-

fault divorce, the trial judge awarded the wife $531 per

month temporary spousal support. The trial judge also

continued to a later date matters of distribution of prop-

erty by monetary award and permanent spousal support,

and he appointed a commissioner in chancery to take evi-

dence concerning the classification and valuation of the

property owned by the parties. The commissioner in

chancery found that, with the exception of insignificant

tangible personal property belonging to the wife, all other

property was marital property. The wife filed no excep-

tions to the commissioner’s report.

In his March 28, 1985, letter opinion, the trial judge

noted that the commissioner in chancery erred in failing

to classify and value the husband’s military pension. The

judge found that the husband’s retirement benefits were

a marital asset and that at the time of the divorce the

husband was receiving retirement benefits totalling $3540

per month. The husband’s evidence established that of

this sum, $1,062 was retired pay and $2,478 was disabil-

ity pay. The trial judge deducted the husband’s monthly

government life insurance premium from $1,062 and de-

termined the husband’s disposable pay to be $1,043. The

judge then multiplied the amount of the husband’s an-

nual disposable pay by a factor found in Code § 55.269.1

(the statutory annuity table), and determined the present

value of the husband’s disposable retired pay benefits to

be $96,598.

The trial judge confirmed the commissioner’s classifi-

cation of the other marital properties and assessed their

values as follows:

(1) Tangible personalty $19,387

(2) Intangible personalty

(exclusive of retirement pay) $39,426

(3) Real estate $68,000

The trial judge awarded the wife a monetary award of

$98,103, a sum equal to fifty percent of the value of

tangible personalty and real estate and forty percent of

the value of intangible personalty and the husband’s mili-

tary retirement pay.

In considering the factors enumerated in Code § 20-

107.3(E), the judge noted that while the husband had

made nearly all monetary contributions to the marriage,

the wife had made significant non-monetary contributions

by performing the duties of homemaker, mother, and

military officer’s wife. The judge also found that the

duration of the marriage was over forty-one years and

that the evidence did not indicate one party was more

culpabie than the other in the demise of the marital

relationship.

The trial judge also awarded the wife $1,000 per

month spousal support, finding that this amount would

not place undue hardship on the husband and would allow

both parties to live in a manner similar to that to which

they were accustomed during the marriage.' In addition

1 The trial judge’s opinion assessed the income of the parties be-

fore and after spousal support as foliows:

Monthly Annually

(A) Husband’s Income : 4

(1) Gross retired pay $1,062.00 $12,744.00

(a) Less monthly monetary

award 417.00 5,004.00

(b) Net retired pay 645.00 7,740.00

(2) Disability retired pay 2,478.00 29,736.00

(3) Social Security disability

benefit 576.00 6,912.00

(4) Total non-investment income

before spousal support 3,699.00 44,388.00

(5) Spousal support 1,000.00 12,000.00

(6) Income after payment spousal”

support : $2,699.00 $32,388.00

(B) Wife’s Income

(1) Social Security $ 226.00 $ 2,712.00

(2) Investment income

(a) Presently inv:sted $10,000.00

(b) Monthly monetary

award for one year 5,000.00

payable by 12/1/85 15,000.00

[Continued ]

to the factors considered in the determination of the

monetary award, the trial judge considered the following

factors in making the spousal support award: the wife’s

limited opportunity to secure further education and train-

ing at age sixty-four; the husband’s superior resources;

the husband’s annual tax-free disability retired pay of

$29,736; the tax benefit of the deductibility of the hus-

band’s spousal support payments from his gross income;

the inclusion of support payments in the wife’s gross tax-

able income; the wite’s continued eligibility for military

health and commissary benefits; the wife’s $383.50 per

month mortgage on a home purchased subsequent to the

divorce; and the husband’s ownership of a home not sub-

ject to a mortgage.”

The husband filed exceptions to the judge’s ruling,

contending that since he was retired for disability rea-

sons, his entire retirement pay was not “disposable” un-

der 10 U.S.C. § 1408(a) (4) and therefore was not avail-

able for distribution by monetary award. The husband

took further exception to basing a monetary award upon

the value of retirement benefits he had not actually re-

ceived. In addition, the husband filed a motion for a

stay of execution of the court’s order directing him to

1 [Continued |

Monthly Annually

(d) Total investment - Tia,

funds $30,000.00

at 8% 200.00 2,400.00

(3) Total income without spousal

support 426.00 5,122.00

(4) Spousal support 1,000.00 12,000.00

(5) Total income $1,426.00 $17,122.00

“The husband does not raise as an issue (and we, therefore, do

not address) whether the trial judge erred by including the balance

of the husband’s net retirement pay after the deduction of the

monthly monetary award in determining his income for purposes

of awarding spousal support.

pay the monetary award, and he also alleged that the

award improperly invaded savings accounts derived from

disability income.

Pursuant to the husband’s exception, the judge deferred

the portion of the monetary award based on military re-

tired pay pending his consideration of the status of mili-

tary retirement pay; however, the judge denied the mo-

tion for a stay of execution. After considering the par-

ties’ memoranda and oral arguments and refusing a sec-

ond motion for a stay of execution, the judge issued a

supplementary letter opinion holding that the husband’s

trial testimony, affidavit, and memorandum, which stated

that thirty percent of his military retirement pay was

disposable, amounted to an admission that bound the

husband to that position and prevented him from intro-

ducing contrary evidence.

Alleging that a material mistake of fact had been made

in the method of computing his disposable retirement pay,

the husband requested a rehearing. After hearing argu-

ment on the petition, the judge issued a second supple-

mental letter opinion denying the petition to rehear,

stating that although no final decree had been entered,

the findings and rulings contained in the earlier opinion

were comparable to a jury verdict and that he considered

the nature of the husband’s petition to be a bill of review.

The judge further stated that a rehearing at that time

would in essence be the granting of a new trial and that

since the evidence which the husband wished to introduce

was readily available at the time of the commencement

- of the litigation there was no basis on which to receive

additional evidence.

The husband contends that his military pension is not

subject to distribution by monetary award because it is

not property but merely an expectation of income. This

Court addressed that precise issue in Sawyer v. Sawyer,

1 Va. App. 75, 335 S.E.2d 277 (1985), and held:

We agree that pensions do not have the normal

attributes of assets as such but they are property

rights. Mr. Sawyer can enforce his right to his pen-

sion in the courts of the United States. Code ‘ 20-

107.3(E) (8) specifically requires the Chancellor to

consider the present value of pensions and retirement

benefits in deciding upon an equitable distribution

award. This reference alone does not necessarily

lead to the conclusion that a pension or retirement

benefit is marital property; however, the legislature

made clear its intent by providing in Code § 20-107.3

(G) that “[n]o part of any monetary award based

upon the value of pension or retirement benefits,

whether vested or nonvested, shall become effective

until the party against whom such award is made

actually begins to receive such benefits.” Our read-

ing of the statute leads us to conclude that the legis-

lature intended all pensions, including military pen-

sions, to be personal property and subject to equi-

table distribution.

Id. at 78, 335 S.E.2d at 279-80. For the reasons stated

in Sawyer, we hold that the trial judge properly found

that a military pension is property subject to distribu-

tion by monetary award.

The husband next contends that the trial judge erred in

failing to discount the gross amount of his military pen-

sion to arrive at a present value of his pension. The

husband asserts that the judge multiplied his annual dis-

posable retired pay, $12,516, by 7.718 years, which the

husband alleges to be his life expectancy, to arrive at

$96,598 as a value of his pension. The husband then as-

serts that the trial judge should have discounted that

amount by some factor, which the husband does not dis-

close, to determine its present value. “Code § 20-107.3

(E) (8) specifically requires the trial court to consider

the present value of pensions and retirement benefits in

deciding upon the amount of a monetary award.” Brink-

ley v. Brinkley, 5 Va. App. 182, 188, 361 S.E.2d 139, 141-

42 (1987) (emphasis in original). Contrary to the

husband’s contention, the husband’s statutory life ex-

pectancy at his age of 64 is 15.9 years. See Code § 8.01-

419. The annuity table in Code § 55-269.1 that the judge

used to determine the present value of the disposable

portion of the husband’s military pension is not merely

a quantification of the husband’s life expectancy but is

a method by which a present value is determined. See

Code §§ 55-269.1, 55-270, and 55-271. Therefore, we find

the husband’s contention that the judge erred in calculat-

ing the present value of the husband’s pension is without

merit.

The husband’s further contends that a material mis-

take of fact is apparent on the record and that the trial

judge erred in failing to grant a rehearing. The husband

argues that the denial of his petition arose from the

judge’s incorrect assumption that the husband’s petition

was of the nature of a bill of review instead of that of

a petition for a rehearing. We agree with the husband’s

characterization of the nature of his petition as a peti-

tion for a rehearing. Hutcheson v. Savings Bank, 129

Va. 281, 296, 105 S.E. 677, 682 (1921); see also Royall

v. Peters, 180 Va. 178, 187, 21 S.E.2d 782, 786 (1942).

A bill of review only lies to a final decree. Downing v.

Huston, Parbee Co., 149 Va. 1, 8-9, 141 S.E. 184, 136-37

(1927). We do not agree, however, that the trial judge

abused his diseretion in dismissing the petition.

After a court has concluded an evidentiary hearing

“during which each party had ample opportunity to pre-

sent evidence, it [is] within the court’s discretion to re-

fuse to take further evidence on this subject.” Morris

v. Morris, 3 Va. App. 303, 307, 349 S.E.2d 661, 663

(1986). In order to demonstrate an entitlement to a

10a

rehearing, a petitioner must show either an “error on the

face of the record, or . . . some legal excuse for his fail-

ure to present his full defense at or before the time of

entry of the decree.” Downing, 149 Va. at 9, 141 S.E.

at 136-37; see also Baker v. Watts, 101 Va. 702, 706, 44

S.E. 929, 930 (1903). Although the trial judge’s letter

ruling did not specifically address the issue whether there

was an error on the face of the record, its ruling implies

a finding that there was no such error. We agree.

Specifically, the husband alleges that the record dem-

onstrates that his monthly disposable retirement income

subject to equitable distribution, if any, is $217 rather

than the $1,043 figure which he presented in evidence.

When the husband retired from the military, he was

seventy percent disabled. In arriving at the amount of

$1043 monthly disposable retirement pay, the judge mul-

tiplied the husband’s total monthly income of $3,540 by

seventy percent to arrive at a figure of $2,478. He then

subtracted this amount (the amount determined to be

disability pay) from the $3,540 to arrive at $1,062. He

then further reduced this amount by $19, the monthly

life insurance premium, to arrive at the amount of

$1,043 disposable retirement pay subject to equitable

distribution. The husband alleges that this method of

determining his disposable retirement pay was _ incor-

rect because his disability income should have been de-

termined by multiplying his base pay of $4,720 by

seventy percent instead of his total retirement pay by

seventy percent. Such revaluation would result in a figure

of $217 monthly disposable retirement pay instead of

$1,043 because the calculation would be: the total monthly

pay ($3,540 less disability pay ($3,304) less insurance

($19) equals disposable retirement pay ($217). The

husband contends that this error in computation of the

amount of disposable retirement pay is apparent on the

record because (1) an exhibit shows his taxable income

to be $236 monthly and (2) the federal statute titled

“Computation of Retired Pay” states that the percentage

lla

of disability will be taken against base pay to arrive at

the amount of disability.*

The trial judge’s ruling, however, does not constitute

an error on its face because 10 U.S.C. $1401 merely

provides the basis to calculate the total retirement pay

and does not designate the amounts of pay allotted to

disability pay versus non-disability pay. Although the

record indicates that the husband’s monthly taxable in-

come is $236, this evidence alone does not necessitate a

finding that an error in the method of determining the

amount of disposable retirement was made.

Moreover, since the husband’s second proposed method

of computation was available at the beginning of the

proceedings, he has no ground upon which to contend that

he should have been granted a rehearing on the basis

of after-discovered evidence. Baker, 101 Va. at 706, 44

S.E. at 930. Prior to the filing of his memorandum in

March of 1986, almost one year after the judge had

written an extensive opinion resolving monetary award

and support issues, the husband had never raised objec-

tion to the use of his total retirement pay as a base figure

from which to compute the amount of his disability in-

come. Furthermore, the judge derived his finding con-

cerning disposable retirement income from the husband’s

testimony and affidavit that his disposable retirement

income was in fact $1,042 per month.

310 USC $1401 states that in order to compute the amount of

retired pay for a person retired under § 1201, the member should

take his “|mljonthly basic pay of grade to which member is entitled

under section 1372 or to which he was entitled on day before re-

tirement or placement on temporary disability retired list, which-

ever is higher” and multiply that amount by “[a|s member elects—

(1) 21,& of years of service credited to him under section 1208;

or (2) the percentage of disability on date when retired,” and

then subtract from that amount the “[e}xcess over 75% of pay

upon which computations is based.”

12a

After the court issued its first detailed letter opinion

in March, 1985, the husband argued exceptions on sev-

eral other grounds at numerous ore tenus hearings. When

the judge denied the husband’s petition for a rehearing,

the case had been pending for over three years. As the

trial judge stated in its third detailed letter opinion,

“enough is enough.”

Courts are provided for the purpose of putting an

end, and a speedy end, to controversies, and not as

a forum for endless litigation. Without valid ex-

cuse, no party who has had his day in court can

reopen the hearing after final decision of extrinsic

matters in controversy between the same parties on

the mere ground that he wishes to interpose other

defenses which he neglected to interpose before such

decision was made. It is seldom that such defenses

have any real merit, and where it chances that they

have any validity, it is better that they should be

lost by the negligent litigant than the vitally im-

portant rule that there must be an end of litigation

should be set at naught.

Gills v. Gills, 126 Va. 526, 546, 101 S.E. 900, 906 (1920).

‘“TA]s the petition to rehear did not allege the discovery

of new and important [evidence] not known or accessible

to petitioner before the former hearing and pointed out

no error upon the face of the [record], it was properly

dismissed.” Woods v. Early, 95 Va. 307, 311, 28 S.E.

374, 375 (1897).

The husband next argues that the trial judge erred in

failing to consider the $417 per month monetary award

payment from his military pension as income when de-

termining the wife’s spousal support award. In deter-

mining the amount of support and maintenance for a

spouse, the judge must consider, among other factors, the

intangible property interests of the parties, the financial

13a

recources of the parties, and the provisions made with

regard to the marital property under Code § 20-107.3.'

Thus, the judge was mandated by statute to consider the

monthly $417 sum. The record, however, discloses that

the judge did consider the $417 per month payment at-

tributable to the pension when determining his spousal

support award. In his opinion, the judge stated that he

considered the financial resources of the parties. Fur-

thermore, when computing the wife’s income, the judge

factored in an annual eight percent yield on the sums

awarded to the wife by monetary award. We find that

the trial judge complied with the dictates of Code

§ 20-107.1 when making the spousal support award.

4 Code § 20-107.1 states in pertinent part:

The court, in determining support and maintenance for a spouse,

shall consider the following:

1. The earning capacity, obligations, needs and financial re-

sources of the parties, including but not limited to income

from pension, profit sharing or retirement plans;

The education and training of the parties and the ability

and ovportunity of the parties to secure such education and

training;

3. The standard of living established during the marriage;

4. The duration of the marriage;

5. The age and physical and mental condition of the parties;

6. The contributions, monetary and nonmonetary, of each

party to the well-being of the family;

The property interests of the parties, both real and per-

sonal, tangible and intangible;

8. The provisions made with regard to the marital property

under § 20-107.3; and

9. Such other factors, including the tax consequences to each

party, as are necessary to consider the equities between the

parties.

14a

The husband additionally argues ermanent

spousal support award was not supported by the evide

because the judge (1) failed to specifically address

factors listed in Code § 20-107.1, and (2), without taking

any new evidence, increased the prior temporary support

award by fifty percent when making the permanent sup-

port award.

“In determining spousal support, a trial court has

broad discretion and ‘the appellate court will not inter-

fere with such discretion, unless it is clear that some

injustice has been done.’” Morris v. Morris, 3 Va. App.

803, 309, 349 S.E.2d 661, 664 (1986) (quoting Oliver

v. Oliver, 202 Va. 268, 272, 117 S.E.2d 59, 62 (1960) ).

In exercising discretion, however, the judge must consider

the factors enumerated in Code § 20-107.1. Bristow v.

Bristow, 221 Va. 1, 3, 267 S.E.2d 89, 90 (1980). We

find ample evidence in the record that the judge con-

sidered all the factors enumerated in Code § 20-107.1.

The judge noted that, although the husband made nearly

all the monetary contributions during the parties’ forty-

one-year marriage, the wife had made significant non-

monetary contributions in raising the parties’ four chil-

dren and in assisting the husband in his career. The

judge further noted that both parties were mentally alert,

that the husband, though suffering from hypertension,

was not limited more than any other person his age, and

that the wife was in good health for her age. The judge

stated that since both parties were in their mid-sixties

their opportunities to secure education and training were

largely academic.

In assessing the parties’ financial resources, the judge

found that the husband’s resources were vastly superior

to those of the wife. The husband owned a home mort-

gage free and received $29,736 annual disability benefits

tax free. The wife, on the other hand, owned a home

lda

subject to a $383 per month mortgage. In considering

the tax consequences, the judge noted that the husband

was allowed to deduct his support payments from his

ee that the support payments were in-

cludable wife’s gross income. The judge stated

that, after spousal support payments, the husband’s ap-

proximate annual income is over $32,000 and the wife’s

annual income, including investment income from her

equitable distribution award and her support payments,

is slightly over $17,000. After consideration of all these

factors, the judge ordered the husband to pay $1,000

per month spousal support, stating that this sum would

not put undue hardship on the husband and would afford

both parties the opportunity to live in a life style sim-

ilar to that enjoyed by them during the marriage. The

facts clearly support the trial judge’s determination that

the amount of the spousal support award will not place

undue hardship on the husband and that the award will

meet the financial needs of the wife.

That the amount of the permanent award was a sub-

stantial increase over the amount of the temporary award

is of no consequence. The amount of temporary support

is not a factor under Code § 20-107.1 that the judge

must consider when determining the appropriate amount

of spousal support. Accordingly, we conclude that the

trial judge gave due consideration to the factors enumer-

ated in Code § 20-107.1 and did not abuse his discre-

tion. Collier v. Collier, 2 Va. App. 125, 129, 341 S.E.2d

827, 829 (1986) ; Thomasson v. Thomasson, 225 Va. 394,

398, 302 S.E.2d 63, 66 (1983).

VII

The husband next argues that the trial judge erred

in ordering $1,000 monthly spousal support because the

monthly spousal support and equitable distribution pay-

ments exceeded his monthly non-disability income of

$1,062. The husband contends that since the amounts

of the awards necessitate an invasion of his disability

l6a

funds, the judge is in essence ordering him to pay from

funds that have exempt status. We find no merit in this

argument.

The judge did not specify that the payments had to

come from the husband’s excluded disability benefits.

Contrary to the husband’s contention, the source of the

payments need not come from his exempt disability pay;

the husband is free to satisfy his obligations to his former

wife by using other available assets. Furthermore, we

conclude that the husband’s military disability benefits

could properly be considered in determining the amount

of spousal support awarded to the wife. See Parker v.

Parker, 335 Pa. Super. 348, 350-54, 484 A.2d 168, 169-79

(1984); Mims v. Mims, 442 So. 2d 102, 103-04 (Ala. Ct.

App. 1£83); see also Rose v. Rose, U.S. , 107

S. Ct. 2029 (1987) (veterans’ disability benefits may

be used for the support of veterans’ dependents).

Vill

The husband further contends that the trial judge

erred in considering the funds in his bank accounts as

marital property subject to distribution by monetary

award because those funds consisted almost entirely of

exempted retired disability pay. He cites Pfeil v. Pfeil,

115 Wis. 2d 502, 341 N.W.2d 699 (1983), as authority

for the proposition that exempt disability income retains

its exempt status after it is banked and received. The

husband further asserts commingling of exempt dis-

ability funds with marital funds has no effect on the

exempt status of the disability funds because 38 U.S.C.

§ 310, concerning military disability benefits paid by the

Veterans Administration, and 10 U.S.C. § 1408, concern-

ing military disability payments, state no requirement

that these exempt payments be maintained separately and

distinctly from other assets. We find it unnecessary to

address the husband’s arguments that certain exempt dis-

ability funds retain their exempt status after being de-

posited in accounts and that these funds need not be

maintained separately and distinctly from marital funds

17a

because we conclude that the husband did not carry his

burden in establishing that the sources of his bank ac-

count funds were his disability pay.

Code § 20-107.3(A) (2) creates a rebuttable presump-

tion that property acquired during the marriage is mar-

ital property. Code § 20-107.3(A) (2); see also Lambert

v. Lambert, 6 Va. App. 94, 99, 367 S.E.2d 184, 187

(1988); Brown v. Brown, 5 Va. App. 238, 242, 361

S.E.2d 364, 366 (1987); Rexrode v. Rexrode, 1 Va. App.

385, 392, 339 S.E.2d 544, 548 (1986). Beyond the hus-

band’s bald assertions in a memorandum and a motion

that the sources of the bank accounts were disability

payments, there is no evidence in the record establishing

the sources of these funds. “The burden is always on

the parties to present sufficient evidence to provide the

basis on which a proper determination can be made.”

Hodges v. Hodges, 2 Va. App. 508, 517, 347 S.E.2d 134,

139 (1986). Because the husband did not present suffi-

cient evidence that the sources of nis accounts were

exempt property, we find no error in the trial judge’s

classification of these accounts as marital property sub-

ject to distribution by monetary award.

The husband’s fina! argument is that the judge erred

in reserving the righ: to reopen the suit at the event

of his death. In the final decree, the judge ordered the

husband to pay the portion of the award attributable to

the pension in two lump sums and the remainder in

monthly payments of $417. The judge further stated

that-‘[t]o the extent that a balance remains to be paid at

the death of either party, then this suit shall be subject

to reopening to determine questions presented at that

time.” The husband contends that this reservation of

power to reopen the case is error because McLaughlin v.

McLaughlin, 2 Va. App. 463, 472, 346 S.E.2d 535, 540

(1986), precludes the charging of a pension award

18a

against his estate in the event of his death prior to the

payment of the total award.

We believe, however, that a ruling from this Court

ordering the trial judge to excise that portion of its

decree reserving power to reopen the case would be pre-

mature. The decree reserved the power to reopen the

suit at either party’s death. It is possible that the wife

will die before the husband and the judge will reopen

the suit at that time to relieve the husband from making

further payments to her estate. It also is possible that

the husband will die before the wife and the court will at

that time render an order consistent with our holding in

McLaughlin. The following statement in Morris v. Mor-

ris, 3 Va. App. 308, 305, 349 S.E.2d 661, 663 (1986),

is appropriate to this issue:

[A] trial court has the power to reserve in a

decree of divorce the authority to make a monetary

award under Code § 20-107.3. Parra v. Parra, 1

Va. App. 118, 127, 336 S.E.2d 157, 162 (1985).

This holding is consistent with the long held prin-

ciple that a court of chancery need not fully exercise

its power at one time but may adapt its relief to

the circumstances of a particular case. Brinn v.

Brinn, 147 Va. 277, 285, 187 S.E. 503, 505 (1927).

The trial court’s decision was also consistent with its

authority to reserve consideration of support ques-

tions beyond the time of the final decree. Thomasson

v. Thomasson, 225 Va. 394, 397 n.1, 302 S.H.2d 63,

65 n.1 (1983). Therefore, we find no error in the

trial court’s exercise of this authority.

For all the reasons stated, the judgment below is

affirmed.

Affirmed.

19a

APPENDIX C

VIRGINIA:

IN THE CIRCUIT COURT OF FREDERICK COUNTY

Chancery No. 7108

ELWIN F. HOLMES,

Complainant

Vv.

FRANCES SUE POE HOLMES,

Defendant

Chancery No. 7119

FRANCES SUE POE HOLMES,

Complainant

ELWIN F. HOLMEs,

Defendant

FINAL DECREE

This case came before the Court on March 26, May 28

and July 30, 1986, for entry of a Final Decree, on motion

of the Wife’s attorney for additional attorney’s fees, and

on the Husband’s motions to reopen the case to allow

further evidence and to re-hear on the basis of a material

mistake of fact.

The Husband appeared by his counsel, and the Wife

appeared by her counsel. Argument was heard, and in

consideration whereof, and in acordance with the Court’s

letter opinion of March 28, 1985, and supplemented by

20a

its letter opinions of December 17, 1985 and July 8, 1986,

it is ADJUSTED and DECREED as follows:

1. Husband’s motions to reopen the case to present

further evidence and to re-hear on the basis of a material

mistake of fact are denied.

2. Considering all of the factors enumerated in Vir-

ginia Code Section 20-107.1, Elwin F. Holmes is OR-

DERED to pay spousal support to Frances Sue Poe

Holmes in the amount of One Thousand Dollars

($1,000.00) per month, payable on the first day of each

month, beginning April 1, 1985, and continuing on the

same day of each month thereafter until the death or

remarriage of Frances Sue Poe Holmes, the death of El-

win F. Holmes, or further Decree of this Court.

3. Considering all of the factors enumerated in Vir-

ginia Code Section 20-107.3, Elwin F. Holmes is OR-

DERED to pay to Frances Sue Poe Holmes the following

installment amounts in satisfaction of the monetary

award in accordance with Schedule II of the Court’s

opinion of March 28, 1985:

A. The sum of $2,140.00, payable April 1, 1985, which

sum has been paid.

B. The sum of $7,500.00, payable August 1, 1985,

which sum was paid with interest.

C. The sum of $7,500.00, payable January 17, 1986,

which sum has been paid with interest.

D. Mrs. Holmes’ share of Husband’s retired military

pay shall be payable as follows:

1. The sum of $7,927.00, with interest at the rate of

10% from April 1, 1985, which sum has not been paid

and for which judgment is hereby ENTERED against

Elwin F. Holmes in the amount of $7,927.00, plus inter-

est at the rate of 10% from April 1, 1985 until paid.

21a

2. The sum of $6,672.00 is due to Frances Sue Poe

Holmes representing Frances Sue Poe Holmes’ share of

the Husband’s retirement benefits at the rate of $417.00

per month in the period from April 1, 1985 through

July 5, 1986, for which judgment is hereby ENTERED

against Elwin F. Holmes in the amount of $6,672.00,

plus interest from July 5, 1986, until paid.

3. Following payment of the aforesaid two payments,

Mr. Holmes shall pay to Mrs. Holmes the sum of

$24,046.00 ($30,712.00—$6,672.00) in monthly payments

of $417.00 per month, which shall be paid on or before

the 5th day of each month, beginning August 5, 1986.

To the extent that a balance remains to be paid at the

date of death of either party, then this suit shall be

subject to reopening to determine questions presented at

that time. |

EK. Elwin F. Holmes shall pay to John E. Wetsel, Jr.,

Attorney for Frances Sue Poe Holmes, the sum of $350.00

as additional attorney’s fees incurred incident to the

various post-opinion matters raised by counsel for Elwin

F. Holmes, on or before April 30, 1986, which amount

has not been paid. Therefore, judgment is hereby EN-

TERED against Elwin F. Holmes in the amount of

$350.00, plus interest from April 30, 1986 until paid.

4. Counsel for the Husband, Elwin F. Holmes, duly

objected and excepted to all adverse rulings of the Court.

5. Upon Motion by the Husband for the Court to set

a bond for the suspension of execution of those portions

of this Final Decree set forth in paragraphs 3.D.1;

3.D.2.; and 3.D.3., the Court does set bond for suspen-

sion of execution of such portions of this Decree in the

amount of $20,000.00, in accordance with the provisions

of Section 8.01-676.1 C and F, Code of Virginia, as

amended.

The following is stated pursuant to Section 20-60.3,

Code of Virginia, as amended:

22a

1. Support payments in arrears may be withheld pur-

suant to Section 20-79.1, from earnings as defined in

Section 63.1-250, without further order of any court or

having to file an application for services with the De-

partment of Social Serviees ;

2. The Social Security Number of Elwin F. Holmes is:

245-14-8945.

This Decree is a Final Decree. There being nothing

further to be done in this cause, the Clerk is directed

to place this cause among those ended.

ENTERED this lst day of December, 1986.

/s/ Robert K. Woltz

Judge

I ASK FOR THIS:

/3/ John E. Wetsel

JOHN E. WETSEL, JR.,

Counsel for Frances Sue Poe Holmes

SEEN AND OBJECTED TO AS NOTED ABOVE:

/s/ Thomas B. Throckmorton

THOMAS B. THROCKMORTON,

Counsel for Elwin F. Holmes

23a

APPENDIX D

COMMONWEALTH OF VIRGINIA

[SEAL]

TWENTY-SIXTH JUDICIAL CIRCUIT

July 8, 1986

Thomas B. Throckmorton, Esquire John E. Wetsel, Jr., Esquire

Scully, Throckmorton & Glass Kuykendall, Wetsel

Post Office Box 3038 & Kuykendall, P.C.

Winchester, Virginia 22601 Post Office Box 2760

Winchester, Virginia 22601

Re: Hoimes v. Hoimes—Circuit Court of

Frederick County—Chancery Nos. 7108 and 7111

Gentlemen:

After filing detailed opinion March 28, 1985 on equit-

able distribution, Elwin Holmes filed motion for recon-

sideration and for introduction of further evidence. This

was made on the basis that the equitable distribution de-

termination concerning his military retirement pay was

in error. The motion was denied for reasons set forth in

letter opinion of December 17, 1985.

Even subsequent thereto he filed a memorandum May

26, 1986 again putting forward his reasons why recon-

sideration and additional evidence should be had. Why

final decree had not been presented for entry prior to

that time escapes understanding. Subsequent to filing of

that memorandum Holmes obtained new counsel, who, on

April 19 and April 24, 1986 filed petition to re-hear and

amended petition to re-hear on which argument was had.

The petition substantially re-asserts the grounds previ-

ously asserted by Holmes.

The Court has not changed its opinion and denies this

facet of the petition to re-hear for the reasons stated in

24a

the opinion. Additiona! explication of those rulings fol-

lows:

There must be an end to all litigation (though one may

doubt that general principle in reference to this case).

True, no final decree on the point has been entered but

nonetheless the petitions are in the nature of a bill of

review, the grounds for granting which are stated gen-

erally in 3A Michie Juris., Bills of Review $ 16, wherein

it is also stated that the office of that pleading is the

same in chancery as is a motion for new trial at law and

generally with the same requirements. The findings and

rulings contained in the opinion of March 28, 1985 are

comparable to a jury verdict. To grant the petition would

be in effect to order a new trial on the basis of after-

discovered evidence on an important aspect of equitable

distribution settled by that opinion, which was based in

that regard on the unequivocal assertions and theory of

the petitioner.

Both at law and equity there is the requirement that

granting new trial or hearing on the basis of new evi-

dence means newly discovered evidence which was not

available at the time. Clearlv the evidence petitioner

seeks to introduce now was available to the petitioner

from the time of his filing his bill of complaint in April

of 1983 and continued to be available to the time of the

opinion rendered March 28, 1985. Certainly due dili-

gence would have disclosed it. At law and by analogy in

equity, “A new trial for after-discovered evidence is

granted with great reluctance and with special care and

caution.” Burke, Pleading and Practice (4th ed.), § 324,

page 601. Applications for new trials “are hased on the

ground that there never has been a fair trial on the

merits,” and rest with the sound discretion of the Court.

Id.

Discretion is exercised in this case on the following

factors:

25a

(1) The “new” evidence petitioner seeks to introduce

at a new hearing was obviously readily available at the

previous hearing. It had been since the commencement

of this litigation almost eighteen months before. It is this

long available evidence he wishes to introduce now in

substitution of his evidence given months before rendi-

tion of decision, which relied on that evidence and which

decision he has found unpalatable.

(2) The case has been pending now for over three

years with numerous pleadings, memoranda, ore tenus

hearings and arguments, plus a reference to a Commis-

sioner in Chancery. Once given a full and fair hearing

on the merits both parties are entitled to have the litiga-

tion put to rest without re-opening on the basis of claims

of new and additional evidence, particularly where that

evidence was previously readily available.

(3) The petitioner has been quite litigious, even cap-

tious at times, and thereby has already caused substan-

tial delays. The present petition and amended petition

are but additional examples of his efforts to frustrate

termination of litigation on other than his own terms.

Before these last two pleadings the Court, at the expense

of great time and effort, had meticulously considered the

evidence and the law and rendered an extensive opinion.

Subsequently, in view of the petitioner’s objections to it,

the Court reaffirmed the holding of that opinion by yet

another written opinion. In spite of this, petitioner re-

asserts essentially the same ground in another effort to

upse’ the settled ruling and re-open the point. Enough is

enough, and the other party has a powerful interest in

and right to finality in this case, not further delayed by

relitigation.

One new point is raised in the amended petition to re-

hear which would open up the whole matter of equitable

distribution. Petitioner filed his bill of complaint April

19, 1983 and final decree granting him divorce was en-

26a

tered August 3, 1983. Decree of reference to the Com-

missioner was entered September 26, 1983 directing an

accounting and valuation of marital and separate prop-

erty as of the date divorce decree was granted. The Com-

missioner’s report was filed March 30, 1984.

Petitioner now asserts that re-hearing is necessary be-

cause determination of the property of the parties should

have been made as of April, 1983. This is based on the

1984 amendment to § 20-107.3 in subsection 2. The perti-

nent provision with the amendment emphasized is:

All property . . . acquired by either spouse during

the marriage, before the filing of a bill of complaint

stating a ground for divorce is presumed to be mari-

tal property in the absence of satisfactory evidence

that it is separate property.

Re-hearing on this ground is denied. First of all, peti-

tioner took no exception to the decree of reference setting

the date of divorce decree as the date in respect of which

determinations of marital and other property should be

made. Second, the report of the Commissioner made his

determination with respect to marital property existing

as of the date of the divorce decree and petitioner took

no exception to the report in this regard. Before the

statutory amendment several dates for determination of |

marital property were available to be chosen and the op-

tion exercised by the Court in choosing the date of divorce

has in all proceedings been assented to by the petitioner —

until now. Finally, there is nothing in the amendment

to show that it is retroactive in effect and under the cir-

cumstances it should not be retroactively applied in this

case.

Counsel for Frances Holmes will as expeditiously as

practical prepare decree making disposition of all remain-

ing issues in the case, which decree shall take note of all

exceptions taken to it by Elwin Holmes.

Yours very truly,

Robert K. Woltz

ROBERT K. WOLTZ

Judge

}

Original! to Court File

28a

APPENDIX E

COMMONWEALTH OF VIRGINIA

(SEAL |

TWENTY-SIXTH JUDICIAL CIRCUIT

December 17, 1985

(Dictated December 16, 1985)

Joseph A. Massie, Jr., Esquire John E. Wetsel, Jr., Esquire

44 South Cameron Street Kuykendall, Wetsel

Post Office Box 2812 & Kuykendall, P.C.

Winchester, Virginia 22601 Post Office Box 2760

Winchester, Virginia 22601

Re: Holmes v. Holmes—Circuit Court of

Frederick County—Chancery Nos. 7108 and 7111

Gentlemen:

This letter opinion is supplemental to formal opinion

of March 28, 1985 in these consolidated cases. Following

filing of that opinion the former husband, Elwin Holmes,

seeks to have the rulings contained in it changed. He now

maintains all of his military retirement pay is disability

retirement pay so as to reduce the equitable distribution

monetary award provided for in Section 20-107.3 and also

reduce the amount of the award for spousal support.

He filed a “Memorandum of Exceptions” to the opinion,

a motion to reconsider and seeks to introduce further

evidence in support of his claim as to retirement pay.

He does in fact attach certain documents and makes vari-

ous allegations of new facts in his memorandum suppor-

tive of his new position.

This proceeding has been long and protracted and in-

volved a number of ore tenvs hearings. It is apparent

that the movant is now disappointed in the determina-

tions of the Court both as to equitable distribution and

spousal support. In his effort to obtain a reconsideration

of the matters and hopefully thereby obtain rulings more

29a

favorable to him, he now takes a position at great vari-

ance from that taken in the various proceedings prior to

rendition of the opinion.

There was evidence to show that his total military re-

tirement pay was $3,540 per month and that his per-

centage of disability retirement was 70%. Thirty per-

cent of that amount is $1,062 which, when reduced by $19

National Service Life Insurance premium, leaves a bal-

ance of $1,043 (disregarding odd cents).

In accordance with local practice he filed with the

Court an affidavit of April 26, 1984 setting forth various

items of income and expense and other matters. This

affidavit was submitted to be considered along with other

evidence in making a determination on temporary spousal

support for the wife. His affidavit included an entry

“Disposable Retirement Pay” in the net amount of $1,042.

He omitted from the affidavit entirely the remaining

$2,478 of his retirement pay and the $19 life insurance

premium. In a memorandum filed by him by counsel

May 27, 1984 he states that, “Your Complainant’s dis-

posable retirement payment is $1,042 per month, one-half

of which is available for support of the Defendant.” At a

December 12, 1984 hearing he stated that his disposable

retirement income was $1,042 and in support of this

filed an Air Force Retiree Annuitant Account Statement

on which he had written ‘$1,062.03 disposable Income,”

noted deduction from that of $19.20 for the life insurance

premium, leaving a balance of $1,042.83.

At every stage of the proceedings prior to rendition of

the earlier opinion of the Court his whole theory of the

case has been that this particular sum was the only por-

tion of his total military retirement money which could be

considered for equitable distribution purposes and that the

remainder, or $2,478, of his total military retirement

money was disability retirement and by law exempt from

any consideration in effecting equitable distribution.

30a

The wife did not dispute this. As a consequence the

Court accepted it and in its opinion scrupulously excluded

the $2,478 in its extensive and detailed computation of

the monetary award.

In the Court’s Opinion the motion for reconsideration

should be denied and no new evidence should be intro-

duced. The complainant, who was the party receiving the

military retirement beenfits, held himself out as being

knowledgeable concerning his retirement pay and disabil-

ity retirement pay. As indicated above, he filed both an

affidavit and a copy of an Air Force form in which he

stated the amount available for equitable distribution;

and in his name his counsel filed a memorandum to estab-

lish the same thing. Complainant’s testimony and sub-

missions were “clear and unequivocal and internally con-

sistent.” Friend, Law of Evidence in Virginia, Section

263. They amounted to judicial admissions which are con-

cessions made by a party during the course of litigation

which bind the party and prevent contrary evidence from

being introduced.” Id., Section 250.

In view of the fact that the complainant introduced

evidence, made representations and advanced a theory

with respect to his disposable retirement pay, and that

opinion was written accepting these and was based on

them in this regard the Court will not reconsider its prior

opinion or admit additional evidence on the matter. For

the sake of finality, expeditious disposition of cases and

due regard for an opposing party the other party cannot

await an opinion based on his evidence and theory of an

issue and then because he is disappointed in the results

obtained seek a re-hearing in order to change his theory

and evidence, hopefully to achieve a different result.

The movant also claims that the award of spousal sup-

port invalidly invades his disability retirement pay. The

Court merely set an amount of spousal] support to be paid

by him without specifying the source of that payment and

3la

he does have sources other than the disability retirement

pay from which to pay it.

He also asserts that his considerable savings are sacro-

sanct as a source from which no spousal support pay-

ments can be derived. Assuming without deciding that

this is true, he presented no evidence to prove that these

disability retirement payments were segregated in ac-

counts pure and unadulterated by admixture of other

sources of funds or income. No presumption arises that

they are so segregated. This being true he is now at this

late date foreclosed from opening up the case to prove this

assertion.

The second $7,500 installment on monetary award

which was provided for in the previous opinion was pay-

able to the wife December 1, 1985. If he has not paid

it pending decision as contained in this letter, then in

order to give him opportunity to make arrangements

for its payment without undue complications to his in-

vestment plans, this payment is deferred until no later

than January 17, 1986, with payment of interest thereon

as provided in the previous opinion of March 28, 1985.

Yours very truly,

‘s/ Robert K. Woltz

ROBERT K. WOLTZ

Judge

32a

APPENDIX F

VIRGINIA:

IN THE CIRCUIT COURT OF FREDERICK COUNTY

In Chancery No. 7108

ELWIN F. HOLMES,

Complainant

FRANCES SUE POE HOLMES,

Defendant

In Chancery No. 7119

FRANCES SUE POE HOLMES,

Complainant

ELWIN F. HOLMES,

Defendant

MEMORANDUM

TO THE HONORABLE ROBERT K. WOLTZ, JUDGE

This Memorandum is for the purpose of looking at

the matter of military retirement benefits and Social

Security Benefits, and the question of whether they can

be divided, apportioned, or made subject to accessability

by the Court for an award to the wife.

In McCarty v. McCarty, 453 U.S. 210 (1981), the

United States Supreme Court, after affirming that dis-

ability retired benefits could not be assigned or distrib-

33a

uted, ruled that non-disability military retired benefits

could not be distributed upon divorce.

The Uniform Services Former Spouses’ Protection Act

(USFSPA), 10 U.S.C. § 1408 was a response to the

McCarty decision. This Act agreed with the decision

as it pertains to those members who retired under the

authority of Chapter 61, Title 10, U.S.C., as Colonel

Holmes did. However, it did in effect overrule the

decision as it pertains to non-disability retirees. The

USFSPA not only agreed with the McCarty decision,

as it pertains to Chapter 61 retirees on distribution of

property upon divorce; but it expanded the derision to

include alimony awards as well. This Act gave the

Courts authority, subject to certain limitations, to con-

sider Disposable Retired Pay. In defining Disposable

Retired Pay, the Act specifically excludes the retired

pay of a member retired for disability under Chapter

61, Title 10, U.S.C. Thus, this exemption from consid-

eration by the court includes both aspects of retired pay,

non-disability and disability benefits as received by Colo-

nel Holmes.

The Virginia statutes pertaining to divorce (20.107.1

on maintenance and support, and 20.107.3 on distribution

of property) are inconsistent with the McCarty decision

and the USFSPA as they pertain to military retired

members under Chapter 61. Therefore, any award based

upon these statutes that are not in accord with these

prevailing laws and decisions are illegal and cannot be

accepted.

In related decisions such as Grant v. Grant, 9 Kan.

App. 2nd 671, 685 F. 2nd 327 (1984), the Court held

that military retirement pay has no present determinable

value and, therefore, cannot be marital property. It

would be exceedingly difficult to ascertain a lump sum

present value of the benefits and to treat the benefits,

like an annuity would yield on a speculative value. More-

over, the pay has none of the qualities attributal to

34a

marital assets, such as cash surrender value, loan value,

redemption value, or a value realizable after death of a

beneficiary. Such payments should only be treated as

income.

The Virginia statute does not address the distinction

between pensions, retirement benefits, disability benefits,

military retirement pay, and military disability retire-

ment pay. The Virginia statute § 20.107.3 Subsection

D.8, states that the court shall determine the award and

method of payment whether the pension or retirement

benefits are vested or non-vested. These terms are better

fitted and probably thought of by the legislature in lay

terms of business pensions and retirement benefits such

as profit sharing, Individual Retirement Accounts, in-

surance annuities, and other such funds devised by busi-

ness and the individuals, and not those created by the

United States Government. A distinction is commonly

made between a miiltary retirement pension and a dis-

ability pension. A disability pension is in the nature of

a personal injury award and is direct recompense for the

serviceman; it is therefore, not a true retirement benefit.

Further, in Pfeil v. Pfeil, 115 Wis. 2d 502, 341 N.W.

2d 699 (1983), where it was held that, on the basis of

federal law, further military disability benefits or the

present cash value of the benefits were not assets sub-

ject to distribution. A division of property which gave

$20,000.00 more to the wife because the husband would

receive these disability payments was, therefore, im-

proper. 341 N.W. 2d at 701. (Citing 38 U.S.C. § 3101

(a)). This included money already received and banked

by the husband. 341 N.W. 2d at 701. Nor could the dis-

ability benefits be considered in any aspects of the dis-

tribution, either as an offset or as any other factor:

“(M)ilitary disability benefits paid or payable to a dis-

abled veteran are not to be divided between spouses in

a divorce action and are not to be made the basis for an

offsetting or compensatory award to the spouse of the

35a

disabled veteran receiving the service-connected disability

award. This cannot be done, directly or indirectly, by

state court or state legislation.” Jd. at 701. Accordingly,

the retirement pension in this case is entirely a Chapter

61 benefit, any distribution of it or award made in con-

sideration of it is erroneous.

Also, the award of 40% of Colonel Holmes’ savings

and the insurance annuities are improper since these sav-

ings are derived from his disability and exempted retire-

ment benefits. In Pfeil, the husband had $18,000 in a

bank account which represented disability payments paid

to him prior to the divorce. The trial court had held that

this was separate property because it was not com-

mingled with assets received during the marriage. The

appellate court affirmed, but articulated a rationale dif-

ferent from the trial court’s, relying instead on the

exempt nature of the payments:

In a case involving veteran’s benefits deposited in

an account in a federal savings and loan association

where they were subject to withdrawal on thirty

day’s notice, the United States Supreme Court held

that “bank credits derived from veterans’ benefits

were within the exemption, the test being whether

as so deposited the benefits remained subject tc de-

mand and use as the needs of the veteran for sup-

port and maintenance required.” Porter v. Aetna

Casualty & Surety Co., 370 U.S. 159, 161, 82 S.Ct.

1231, 1233, 8 L.Ed. 2d 407 (1962). By that test,

the test of “immediate availability,” the $18,000 sav-

ings account is not a marital asset subject to divi-

sion, and we add only the warning that, on remand,

as with future disability benefits, the $18,000 sav-

ings account is not to be given weight or considera-

tion in reaching the appropriate division of property

between these parties. The $18,000 has not been

“invested;” it is “immediately available’ for use by

the appellant, and it is to be treated exactly as pres-

36a

ent and future disability benefits payments are to be

treated.

Colonel Holmes opened a separate savings account in

his name only on April 15, 1983, before the divorce, to

accumulate money to pay for the one-half (1/2) interest

in the house and to facilitate any loans that would be

needed. Also, his checking account was changed from a

joint account in both he and his ex-wife’s names to a

separate account in his name only in 1980. At divorce,

these two accounts contained only deposits from his ex-

empted retired pay, social security disability benefits,

and the insurance loan of $8,300.00 from a policy which

premiums were payed from the exempted retired pay.

Therefore, it is considered that the decision of April 12,

1985, pertaining to savings should be reversed and the

$7,800.00 payment of August 1, 1985, should be ordered

refunded to Colonel Holmes.

In view of the foregoing on legal restrictions to the

court’s considerations, the amount of monthly alimony

should also be reconsidered as the court recognized in its

decision of April 12, 1985. Colonel Holmes has never

abrogated his responsibility to provide his ex-wife with

the means to support a standard of living at the level

to which she was accustomed during the marriage. This

was demonstrated upon separation on March 1, 1982,

when he gave $1,000.00 a month for living expenses, as

well as $38,000.00 to assist in getting settled. Although

the monthly amount varied, she testified in hearing with

the Commissioner that she was doing fine on $950.00 per

month income that she had in November, 1983.

As so stated, this level of income was providing the ac-

customed standard of living. Since the divorce, Mrs.

Holmes has received $34,000.00 for interest in the home

and $2,719.00 for her share of tangible personal prop-

erty. A responsible investment of $30,000.00 in June,

1984, when received, she would be receiving over $300.00

per month in interest income now. Instead, she chose to

}

37a

invest $21,500.00 in a house to live in, thus forfeiting

some $215.00 per month income, and to invest $10,000.00

in certificates of deposit apparently with interest income

of $80.00 to $100.00 per month. With Social Security

income of $230.00 per month, this gives her a total of

$330.00 per month. However, to recoup the loss of

$215.00 per month income she lost by buying the house,

she could readily share the house and expenses with some

compatible person and receive $250.00 to $300.00 per

month income This would give her an income of over

$600.00 per month. The only income of Colonel Holmes

that is not exempted from the Court’s consideration for

alimony is the $576.00 per month of Social Security bene-

fits. Awarding a monthly alimony payment of $500.00

from this benefit would give her a total of $1,100.00 per

month income or $13,200 per year. This amount, with

free medical and hospital benefits, will provide more than

a modest life-style for her to which she was accustomed

and which is much above the income of the average

single person in the State. Such an award is considered

to be within the spirit and intent of the State Code and

would not be arbitrary or excessive. It certainly would

provide for a standard of living that is as good or better

than what she was accustomed to during marriage.

Respectfully,

ELWIN F. HOLMES

By /s/ Joseph A. Massie, Jr.

JOSEPH A. MASSIE, JR.,

Counsel

44 South Cameron Street

P. O. Box 2812

Winchester, Virginia 22601

703-667-9787

ooa

Wee

CERTIFICATE

I hereby certify that a true copy of the foregoing

Memorandum was mailed or delivered to John E. Wetsel,

Jr., Esquire, 208 South Loudoun Street, P. O. Box 2760,

Winchester, Virginia 22601, Counsel for Frances Sue Poe

Holmes. 8/20/85

39a

APPENDIX G

VIRGINIA:

IN THE CIRCUIT COURT OF FREDERICK COUNTY

In Chancery No. 7108

ELWIN F. HOLMES,

Complainant

FRANCES SUE POE HOLMEs,

Respondent

In Chancery No. 7119

FRANCES SUE POE HOLMES,

Complainant

Vv.

ELWIN F. HOLMEs,

Respondent

DECREE

This case came before the Court on July 10, 1985, for

argument on the motion of Elwin F. Holmes for a stay

of execution of the Court’s Order of April 12, 1985, and

for argument on the objection of Frances Sue Poe Holmes

to Elwin F. Holmes’ motion to introduce new evidence.

Counsel for Col. Elwin F. Holmes presented argument

that because his client is retired under 10 USC See.

1201 (Chapter 61), all of his retired pay is excluded

from distribution and consideration by the Court upon

divorce and therefore the Court should grant the motion

aaa

40a

for stay of execution of the Order of 12 April, 1985,

wherein Col. Elwin F. Holmes is ordered to pay Seven

Thousand Five Hundred Dollars ($7,500.00) on or be-

fore August 1, 1985, and the sum of Seven Thousand

Five Hundred Dollars ($7,500.00) on or before Decem-

ber 1, 1985; in further support of Col. Elwin Holmes’

motion, counsel for Col. Holmes argued that the two

$7,500.00 payments must be paid from savings made up

of military retired pay and social security disability bene-

fits and therefore the Court’s Order, of April 12, 1985,

is contrary to law.

Counsel for Frances Sue Poe Holmes argued against

the motion for stay of execution on the grounds that this

Court previously ordered the payments to be made by

Col. Elwin F. Holmes and even if Col. Holmes were to

finally prevail regarding his legal position on the exclu-

sion of military retired pay the Court could readjust the

amount ordered to be paid by Col. Elwin F. Holmes as

equity requires;

Counsel for Col. Elwin F. Holmes then presented argu-

ment regarding Frances Sue Poe Holmes objection to the

admissibility of new evidence. Counsel stated that no

final orders had been entered by the Court and therefore

no bill of review should be required to be filed by Col.

Elwin F. Holmes. Counsel argued that he needed a ruling

by the Court so he could either appeal the decision of the

Court or file a bill of review.

After consideration of counsel’s arguments, the Court

finds the Fifteen Thousand Dollars ($15,000.00) Col.

Elwin F. Holmes is ordered to pay in two payments of

Seven Thousand Five Hundred Dollars ($7,500.00) to his

ex-wife, Frances Sue Poe Holmes, represents a cash set-

tlement for Frances Sue Poe Holmes’ just share of mari-

tal property; The fact that he allegedly will pay these

sums from savings made up of military retirement pay

and social security benefits notwithstanding.

4la

The Court is considering the legal position of Col.

Elwin F. Holmes and has written for a memorandum

on the question of whether military person’s retired under

10 U.S.C. 1201 are entitied to have their retired pay ex-

empt from distribution upon divorce.

Upon consideration whereof, the Court did ADJUDGE

and DECREE that:

1. Elwin F. Holmes’ motion for a stay is denied, to

which ruling of the Court counsel for Elwin F. Holmes

did duly object.

2. The Court will keep under advisement Elwin F.

Holmes’ motion for leave to introduce new evidence, and

Frances Sue Hulmes’ objection thereto.

ENTER this 30th day of July, 1985.

/s/ Robert K. Woltz

Judge

SEEN:

/s/ John E. Wetsel

JOHN E. WETSEL, JR.

Counsel for Frances Sue Poe Holmes

‘s/ Paul H. Thompson

PAUL H. THOMSON

Co-Counsel for Elwin F. Holmes

42a

APPENDIX H

VIRGINIA:

IN THE CIRCUIT COURT OF FREDERICK COUNTY

In Chancery Nos. 7108 and 7111

ELWIN FRANKLIN HOLMES,

Complainant

FRANCES SUE POE HOLMEs,

Defendant

OPINION

At issue for decision are equitable distribution, includ-

ing consideration of the report of the commissioner in

chancery and the exceptions to it, permanent spousal

support, award of counsel fees and payment of costs.

The following is a summary of previous proceedings:

Husband, for convenience hereafter Elwin, filed suit for

divorce on the ground of one-year’s continuous separa-

tion and less than a week later the wife, hereafter

Frances, filed suit based on the same ground. The cases

were consolidated and some difficulty is caused by various

pleadings and other papers being placed indiscriminately

in one or the other file. On hearing ore tenus Elwin on

the ground alleged was granted divorce August 3, 1983

but the matter was continued to enable the Court to de-

termine equitable distribution, Code Section 20-107.3,

and after that determination, consideration of award of

permanent spousal support prayed for by Frances. Early

in proceedings she had been granted temporary support,

which has been altered twice as a result of changed cir-

cumstances.

43a

At the divorce hearing Elwin introduced evidence to

show Frances’ desertion and moved she be denied per-

manent support on the basis of Section 20-107.1. Sce

McClung v. McClung, 206 Va. 782 (1966). This request

was denied on the ground that the desertion alleged had

not been proven by the preponderance of the evidence.

That being true and he obtaining divorce on the no fault

ground provided in Section 20-91/9) (a), she is not fore-

closed from consideration for permanent support. Mason

v. Mason, 209 Va. 528 (1969).

I. COMMISSIONER’S REPORT—EXCEPTIONS,

AMENDATION AND SUPPLEMENTATION

(1) Exceptions

Considering the exceptions, after reviewing the com-

missioner’s report and portions of the transcript of the

testimony taken ore tenus before him, the exceptions are

found to be insubstantial and are overruled. Nevertheless

despite lack of exceptions to the report in other respects

the Court sua sponte both amends and supplements the

report as particularized below.

(2) Amendations

While the report of the commissioner does not have the

weight of a jury verdict, Section 8.01-610, it is prima

facie correct. Raiford v. Raiford, 193 Va. 221 (1952) ;

Lyle, Equity Pleading & Practice, 3d ed., Section 260. A

commissioner is to assist the chancellor not to supplant

him and by reference to a commissioner the chancellor

does not delegate his judicial function to the former.

Hoffecker v. Hoffecker, 200 Va. 119 (1958). Section

8.01-610 further provides that “[{t]he court shall confirm

or reject such report in whole or in part according to the

view which it entertains of the law and the evidence.”

In addition the rule concerning the weight to be given

the commissioner’s finding of fact is “not applicable to

44a

pure conclusions of law contained in the report.” Hill v.

Hill, 227 Va. 569, 577 (1984).

The commissioner reported a total value of the marital

property in the possession of Frances at $8,324.00 He

then deducted $500.00 for loans owed to certain family

members, which loans do not appear to be liens against

any of the property. Again, the commissioner shows the

marital property in the possession of Elwin at $118,489.48

but then subtracts $8,328.00 from it because of a loan

Elwin made against cash surrender value of a life in-

surance policy. Proceeds of the loan as evidence before

the Court shows were deposited in a marital property

bank account.

The equitable distribution statute, Section 20-107.3,

does not provide specifically for reducing the value of

marital property by indebtedness. Nevertheless of the

eleven factors to be considered in determining a monetary

award and its payment the seventh factor provides, “The

debts and liabilities of each spouse, the basis for such

debts and liabilities, and the property which may serve as

security for such debts and liabilities.” This provision

does not affect gross valuations of marital property but

where an item of such property is specifically subject

to a debt or liability the net value of the item is affected.

The listed debt of Frances is unsecured. The listed

debt of Elwin, though secured by the life insurance policy,

is not such an indebtedness as will reduce the value of

marital property in his possession. At the time of his

loan the cash surrender value of the insurance policy was

reduced by an equal amount but his bank account was

increased to the same extent. The resulting decrease and

increase cancel each other out. We cannot get a second

credit resulting from the loan by additionally showing it

as a liability. Consequently no reduction in the value of

his marital property resulted. The commissioner’s report

is amended by disregarding the loan of Frances and that

of Elwin and restoring the amounts of these deductions

45a

to the values of their marital property. This has been

done on the attached Schedule I of marital property (in

which all odd cents have been disregarded.) This Sched-

ule also corrects the report error in showing the total

value of the real estate in Elwin alone.

The commissioner’s report takes no cognizance of El-

win’s Air Force retirement benefits. At the time of the

divorce these amounted to $3,540.00 monthly. Of. this,

$1,062,000 represents his retired pay and the balance,

or $2,478.00, his disability retirement. Under McCarty

v. McCarty, 453 U.S. 210 (1981), which arose in a com-

munity property state, armed forces retired pay was held

not to be community property. Though acknowledging

the power in the States generally to control the areas of

divorce and of property rights of the parties upon dis-

solution of marriage, the Supreme Court found that the

Congress by federal enactments had preempted state

power with respect to military non-disability retirement

pay in order to protect a substantial federal] interest

in the national military retirement system. The case

relied strongly on Hisquierdo v. Hisquierdo, 439 U.S.

572 (1979), where a like preemption was found with

respect to benefits deriving under the Railroad Retire-

ment Act.

Congress reacted promptly and positively in 1982 by

enacting the Uniformed Services Former Spouses’ Pro-

tection Act, 10 USC Section 1408. The McCarty ruling

was essentially nullified by subsection (¢) (1), which

provides:

Subject to the limitations of this section, a court

may treat disposable retired or retainer pay payable

to a member for pay periods beginning after June

25, 1981, [the date of the McCarty decision] either

as property solely of the member or as property

of the member and his spouse in accordance with

the law of the jurisdiction of such court.

46a

Note that the Act does not require reitrement pay to

be treated or not treated as community property or

property subject to equitable distribution. On this basis

at least one State has opted even after the Act not to

divide military retired pay upon dissolution of marriage,

Grant v. Grant, 685 P.2d 327 (Ken. App. 2d 1984);

basically holding that such benefits were not “property”

subject to division under the Kansas statute. To the con-

trary is Griggs v. Griggs, 686 P.2d 68 (Idaho 1984).

holding military retired pay to be community property.

One State also subsequent to the Act has elected to treat

military retired pay as income to the retired serviceman

and a consideration in determining alimony rather than

as marital property and a consideration in making equita-

ble distribution. Brown v. Brown, 302 S.E.2d 860 (S.C.

1983).

Virginia’s equitable distribution statute, in listing the

factors to determine the amount of a monetary award,

specifically provides in subsection E. 8, “The present

value of pension or retirement benefits, whether vested or

non-vested.” Subsection G further deals with pension or

retirement benefits by restricting the effective date of and

limiting the amount of monetary awards based on such

benefits. From these provisions a clear legislative intent

appears that generally pension or retirement benefits are

includable as marital property at their present value. No

intent appears to make distinction among private, pub-

lic and military retirement benefits. By virtue of the

statute, in conjunction with 10 USC Section 1408 Elwin’s

armed forces retired pay at its “present value” is marital

property.

Even where a retirement benefit is vested and actually

being paid various accounting and actuarial bases to do

so are available. In view of the fact that the unforesee-

able future is involved perhaps no method is perfect. The

Court in Grant, supra, where the husband was already

all

47a

rec’.ving military retirement benefits, as a part of the

basis for declining to declare such benefits as property

subject to distribution mentioned the speculative nature

of such valuations. In the present case no evidence of

consequence has been presented on the point. While other

methods may be available, the Court chooses in this case

as being fair and appropriate the life expectancy factor

statutorily approved in Section 55-269.1, thereby treating

the retirement benefit as an annuity.

While Elwin’s retired pay is $1,062, his monthly gov-

ernment life insurance premium is $19.00. The latter

figure is deductible to arrive at “disposable retired or

retainer pay” under subsection (a) (4)(E) of 10 USC

Section 1408, resulting in a figure of $1,043.00, or

$12,516.00 annually. He was sixty-four at the date of the

divorce and the factor to be used under Section 55-261

is 7.718. This multiplied by the annual amount gives

a present value of Elwin’s retirement benefits as of the

date of divorce of $96,598.00. This amount is includable

in the marital property and the report of the commis-

sioner is supplemented by this addition, giving a grand

total of all marital property of $223,411.00 as appears

from the attached Schedule I.

I. DISABILITY RETIREMENT BENEFITS

AND EQUITABLE DISTRIBUTION

The military disability retired benefits of Elwin, as

distinguished from his disposable retired pay, amounting

to $2,478.00 per month, are now considered. McCarty

dealt only with military retired, not disability, payments.

It found in that instance such a strong federal interest,

evidenced by congressional enactment, as to preempt this

area from the vital state interests and power over family

and property law. Presumably all the more would the

same preemption result with respect to military disability

payments. This conclusion is reinforced by the fact that

48a

the Uniformed Services Former Spouses’ Protection Act,

subsection (a) (4), specifically exempts from its opera-

tion retired disability pay. Additionally the latter Act,

subsection (d), provides a method whereby the former

spouse may receive direct from the paying authority

amounts ordered to be paid as a distributive share of

retired pay, whereas disability retirement benefits under

38 USC Section 3101(a) are not subject to any sort of

attachment or assignment and it preempts state com-

munity or marital property laws. In re Marriage of

Hapaniewski, 438 N.E.2d 466 (Ill. App. 1982).

The preemption influence of Hisquierdo, supra in the

context of railroad retirement benefits cannot be dis-

counted in this regard. In other related fields, Richard v.

Richard, 659 S.W.2d 746 (Tex. Ct. App. 1983), held

Social Security disability benefits are not subject to state

community property laws; Ex parte Johnson, 591 S.W.2d

453 (Tex. 1979), likewise because of federal preemption

held that Veterans Administration disability benefits were

not divisible upon divorce; in a community property

state and in an equitable distribution state Social Se-

curity benefits have been held not subject to division or

distribution upon dissolution of marriage; In re Marriage

of Cohen, 105 Cal. App. 3d 836 (1980), and In re Mar-

riage of Evans, 406 N.E.2d 916 (Ill. App. 1980). Pfeil

v. Pfeil, 341 N.W.2d 699 (Wis. Ct. App. 1983), not only

held that military disability benefits could not be divided

or distributed between the former married partners, but

citing Hisquierdo, that no compensating or offsetting

factor in equitable distribution could be made in respect

of one party receiving military disability benefits, which

benefits must be disregarded in the distribution.

The conclusion then is that Elwin’s military disability

benefits must be excluded from the marital property of

the parties and must not be used to give an indirect

effect in the equitable distribution of that property. Those

benefits. while they do not fit any of the three categories

49a

of separate property mentioned in subsection A.1 of

Section 20-107.3, are, as a result of federal preemption,

in effect separate property or what may be termed quasi-

separate property. Since the divorce Elwin on reaching

age sixty-five commenced receiving Social Security dis-

ability benefits in the amount of $576.00 per month.

These would be excluded if for no other reason because

they did not exist at the time of the dissolution of the

marriage. Section 20-107.3 A.

Ill. EQUITABLE DISTRIBUTION

(1) Monetary Award—Amount

Equitable distribution does not necessarily mean equal

distribution else most of the factors mentioned in Sec-

tion 20-107.3 E substantially would be surplusage. Con-

sidering those factors Elwin obviously has made nearly

all the monetary contributions both to the well being of

the family and in the acquisition of the marital property.

Frances has made substantial non-monetary contribu-

tions to the well being of the family in bearing and rear-

ing the four children of the marriage, of making a home

for them as well as Elwin and in assisting him in his

career in the ways generally incumbent on a military

wife. The length of the marriage, over forty-one years at

the date of dissolution and one week short of forty years

at the time of separation, is of considerable significance,

being substantially longer than the average modern-day

marital liaison frequently terminated through anparent

short-lived connubial bliss and quick divorce. Whether

blissful or not the parties formed the liaison in their

early twenties and it lasted nearly until they were of

customary retirement age.

Frances for her age is in comparatively good health.

Elwin, though suffering from hypertension, is by no means

an invalid or house bound and subject to this malady the

evidence does not indicate that his activities are other-

50a

wise limited by additional physical impairments than

those which would be normal to a person of his age. Both

are mentally fully alert.

Obviously there were difficulties in this marriage, as

there must be in any, and with the passage of years they

intensified to the extent of separation and now divorce.

The evidence does not indicate any particular greater

degree of culpability on the part of one over the other.

Elwin did, however, fail of persuasion that Frances was

at fault so as to foreclose her rights to spousal support

and the evidence does show that it was he who requested

her to get out of the marital domicile.

There is little evidence and nothing particularly re-

markable concerning the acquisition of the marital prop-

ertv. The tangible personalty is consistent with the ac-

cumulations of a lengthy marriage and the usual pur-

chase of automobiles and appliances. The bulk of the

intangibles derive from savings of Elwin with accumula-

tions of interest. The jointly titled marital home was

acquired after his retirement and after disposal of a

previously owned home seventy or so miles distant in

a metropolitan area. Frances’ debt is small and more

recently has been partially paid off and Elwin’s sole obli-

gation is his insurance loan, a debt only in form rather

than substance.

The value of Elwin’s retirement benefits has been

valued above. The liquidity of the marital property is a

factor related more to the manner or means of effecting

equitable distribution than to the quantum of distribu-

tion. No issue has been raised by counsel regarding the

tax consequences of any distribution and so it is assumed

that those consequences at most would be minimal.

Among other factors is the limited opportunity of

Frances to make monetary contribution to marital prop-

erty due to her lack of special occupational training or

experience, she having been primarily a housewife, home-

5la

maker and mother with only part-time and occasional

employment, the last being some years before the separa-

tion. Her ability to increase her estate over and above

what she may receive by way of distribution appears

de minimis. Elwin has provided comfortably for his

family and there is evidence of liberality, extending even

to the present toward their children. Frances’ separate

property is of inconsequential value. Except for his dis-

ability retirement benefits, which are to be disregarded

for purposes of computing marital distribution, Elwin has

no separate property.

A monetary award in satisfaction of equitable distribu-

tion is determined at $98,103.00, summarized on Sched-

ule II attached, as follows:

(a) Tangible personalty. One-half the value of this

category or $9,694.00 is awarded as a portion of the

monetary award to Frances. As Frances already has

$6,975.00 in value of this category in possession, in ac-

cordance with the provisions of Section 20-107.3 D ap-

proval is given to Elwin to satisfy to this extent that

portion of the monetary award by formal written transfer

or quit claim to Frances of the tangible personalty which

was in her possession at the time of the divorce. On

exercise of this option the remaining $2,219.00 will be

satisfied in cash and in default of exercising the option

the entire $9,694.00 will be satisfied in cash.

(b) Real estate. On decreeing divorce in pursuance of

Section 20-107.3 C. the Court ordered partition of the

jointly owned marital residence, the only marital real

estate. One-half its value by way of monetary award is

assigned to Frances. The value of the property being

established at $68,000.00 Elwin promptly tendered and

paid to Frances $34,000.00 at her interest in this item.

Elwin therefore has satisfied the portion of the monetary

award as it relates to this item of marital property.

The Court is unaware whether formal conveyance has

been executed and tendered by Frances in this regard.

} ene

52a

The two foregoing categories of marital property are

what might be termed of a domestic nature, being the

home of the parties and those items of furniture, furnish-

ings and vehicles accumulated and used by the parties

during their marriage in conjunction with their making

a home and a life together. In this case it seems both

natural and equitable that the value of these items should

in the form of a monetary award be shared equally.

pay). This item amounts to $39,426.00, of which Frances

had $1,349.00 in possession. Forty percent of the total

or $15,770.00, is decreed to her in respect to this cate-

gory of property in partial satisfaction of the total mone-

tary award. The $1,349.00 she had in possession is

deemed to be in partial satisfaction of this particular

distribution, leaving. a balance of $14,421.00 to be satis-

fied in cash by Elwin.

(d) Military retired pay. This items totals $96,598.00.

Forty percent of this or $38,639.00 is determined to be

an appropriate distribution from this item in partial

satisfaction of the total monetary award. This portion of

the monetary award is based upon retirement benefits

presently being received and so is now effective. Section

20-107.3 G. It seems equitable that this portion of the

award be paid on an accrual basis. Commencing with

September, 1983 and ending with the present month

$1,043.00 per month for nineteen months, or $19,817.00,

has accrued to Elwin. Consequently forty percent of this,

or $7,927.00, has likewise accrued to this month. This

accrued sum will be payable by Flwin to Frances at the

time specified below. Beginning April 1, 1985 and on

the same date monthly thereafter the balance of that por-

tion of the monetary award based on retired pay, such

balance being $39.712.00, shall be paid by Elwin to

Frances at the rate of $417.00 per month, being forty

percent of his monthly retired pay, until the entire bal-

ance has been discharged.

58a

The equitable distribution statute, subsection E. 8,

speaks of the “present. value” of retirement benefits and

it is on that present value monetary award is being made

to Frances. Therefore should she or he die before that

portion of the present value awarded her has been paid

then this suit shall be subject to reopening to determine

questions presented at that time.

Awarding forty percent of retirement benefits and

other intangible personalty rather than fifty percent in

the case of tangible personalty and real estate seems more

| equitable. While Frances’ agreed role as ‘ife, mother

and homemaker during this lengthy marriage was no

small contribution, yet virtually all of the existing in-

tangible marital property is directly related to Elwin’s

vocational endeavors awav from the comforts and secu-

rity of home and out in the competitive and sometimes

harsh realities of the workaday world. For those reasons

it appears to the Court right and just that he should

retain a substantial major portion of these categories of

marital property.

It also seems appropriate-to the Court that the total

of the monetary award be arrived at by applying for

that purpose different percentages to different categories

of marital property, as has been done. Nothing in Sec-

tion 20-107.3 forbids it and it has been used simply as a

method or device to reach an equitable result. Instead of

applying varying percentages to different categories of

marital properties on a reasoned basis, the Court could

have made the same calculations and then merely ap-

plied a 43.91-++ percent to the $223,411.00 total of marital

property and thereby more opaque!;; reached the same

amount of monetary award. The computation of the

marital award is summarized in the attached Schedule II

| and the method of its satisfaction is detailed in Schedule

| ITI.

(2) Monetary Award—Time of Payment

Presumably Elwin will transfer the marital tangible

personalty now in Frances’ possession. This with the in-

54a

tangible personalty she already has and his payment for

her interest in the marital home, all amounting to

$42,324.00, reduces the balance of the monetary award

to $55,779.00. Thirty thousand seven hundred twelve

dollars is with respect to retired pay to be received by

him in the future and payable at the rate of $417.00 per

month commencing April 1, 1985. This leaves a mone-

tary award cash payment in the sum of $25,067.00 (as

shown by Schedules III and IV attached). It is this

latter baiance due for which a scheme of payment must

be devised fair to both parties.

The commissioner’s report shows Elwin had more than

this sum in banks but does not show whether it was in

demand deposits or in some form of time deposit, the

premature withdrawal of which would result in the

sufferance of a penalty. There is no other evidence on

the point. Therefore Elwin is given options in satisfying

this portion of the marital award as shown on Schedule

IV attached, namely:

The accrued award with respect to retired pay is

$7,927.00 and that plus $2,140.00, or a total of $10,067.00,

will be payable April 1, 1985. The remaining balance of

$15,000.00 will be payable in two additional installments

of $7,500.00 each, the first of them being payable August

1, 1985 and the other payable December 1, 1985. If

Elwin does not have the $25,067.00 presently available

or wants to stretch out the payments, these installment

provisions will accommodate him. Nevertheless Frances

is essentially entitled to the latter two installments forth-

with and in return for his being accommodated and to

compensate her for delay in receipt of them they will

each bear interest from April 1, 1985 unuil paid at the

judgment rate of twelve percent per annum.

To accommodate Elwin further and also to enable

Frances to receive earlier payment of these last two in-

stallments, Elwin may anticipate payment on either one

or both of them in increments as to each of them in mul-

55a

tiples of $500.00 with interest as stated above. Elwin also

has the option of paying the full $25,067.00 in one lump

sum on April 1, 1985, thereby assuring Frances of early

payment and himself of avoidance of interest charges.

IV. SPOUSAL SUPPORT

Upon divorce neither spouse has an absolute right to

support from the other and the granting of support is

discretionary with the Court. Bristow v. Bristow, 221

Va. 1 (1980). The statute on the subject, Section 20-

107.1, clearly makes the matter discretionary and lists

numerous factors to be considered in the exercise of that

discretion. In conformance with subsection F. of Section

20-107.3 the matter of monetary award has been deter-

mined “without regard to maintenance and _ support

awarded ...”’ The obvious logic of that provision is that

several of the factors under Section 20-107.1 necessary

for consideration of spousal support would be unavail-

able for that purpose until decision had been made under

Section 20-107.3. Of the factors mentioned in the former

section, the financial resources of the parties has in part

been determined, and the contributions of the parties to

the well-being of the family and the provisions with re-

gard to marital property in whole have been considered

above and need not be dealt with further.

The standard of living during the marriage, though no

extensive evidence of it was introduced, appears to have

been comfortable, consistent with the expense of rearing

four children, and more so after those responsibilities

were discharged. Their standard after that, including

the time just prior to separation, was apparently at the

same level.

The property interests of the parties have been estab-

lished for the most part except that since the divorce

Frances has purchased with a daughter and son-in-law a

home valued at $63,900, slightly less than the value of

Elwin’s residence which she alone occupies. Though he

56a

owns his house free of debt hers is subject to deed of

trust on which she pays $383.50 per month in charges.

His financial resources which, under subsection 1 of the

statute, include “all pension, profit sharing or retirement

plans, of whatever nature,” are greatly superior to hers,

as shown on Schedule V attached. The deed of trust is

her only debt obligation and he has none other than the

phantom loan against insurance cash surrender value.

Elwin, now almost sixty-six, retired in 1971 at age

fifty-two on seventy percent physical disability. Her

earning capacity, as well as her age, she having just

turned sixty-four, and the physical and mental condition

of the parties, have been examined above. Considering all

these factors the elements of their respective earning ca-

pacities and opportunity to secure education and train-

ing are largely academic.

Other factors of note are that Elwin’s disability re-

tired pay of $29,736.00 per vear is tax free. To the ex-

tent he has taxable income his spousal support payments

are deductible from his gross income. 26 USC Section

215. On the other hand such payments will be includable

in the gross income of Frances and taxable. 26 USC Sec-

tions 61 and 71. To her benefit, however, is that having

been married for at least twenty vears to a military

spouse so long as she remains unmarried she qualifies

under 10 USC Section 1072 (Fi (i) as a military de-

pendent with entitlement to certain medical and dental

services under 10 USC Sections 1074, et sey., and under

that same qualification she is entitled to commissary and

post exchange privileges as though she were the surviv-

ing spouse of a retired member of the uniformed serv-

ices. Pub. Law 97-252 (Unitormed Services Former

Spouses’ Protection Act), Section 1005.

After consideration of allthestatutorily mandated fac-

tors as is required, Bristow, supra; Brooker Vv. Brooker,

218 Va. 12 (1977), including all the resources of the

57a

paying spouse, Butler v. Butler, 217 Va. 195 (1976), the

amount of whose investment income at this time has been

discounted as too speculative, the needs of the wife then

become the focal point in determining support as she

“has the right to be maintained in the manner to which

she was accustomed during the marriage,” Lapidus V.

Lapidus, 218 Va. (1984), but not to the extent that

the amount will result in “an undue hardship on him,”

Oliver v. Oliver, 202 Va. 268 (1960). Giving due regard

for other elements in the melange of considerations, the

ultimate determination is founded on a balancing of the

wife’s needs with the husband’s ability to pay. Oliver,

citing Robertson Vv. Robertson, 215 Va. 425 (1975).

As a result the spousal support is set in the sum of

$1,000.00 per month commencing April 1, 1985. This

will not by any means reduce Elwin to penury or be any

undue hardship on him. At the same time it should,

in view of her other resources, resulting principally from

the marital award, meet the needs of Frances and en-

able her to live comfortably to an extent not dissimilar

from the standard of living enjoyed during the marriage,

and at the same time afford a like opportunity to Elwin.

Note is made of the fact that on Schedule V part of the

money available for Frances’ living expenses is attributa-

ble to income from investments which she will be able to

make. She has already done so with a portion of the

liquid funds she previously received by way of monetary

award. Such income is included as being a reasonable

income-producing option to her. It will be her decision

whether to take this option or expend the principal either

to reduce the secured obligation on the house or on a

higher living standard. In any event her comfort, at

least for the present, is assured. Her permanent support

is slightly more than one-third greater than her most re-

cent award of temporary support, but this is not unusual

as temporary support is generally in an amount “to hold

the fort” until the factors of fault, need and ability to

58a

pay can be more fully presented by the evidence and more

maturely considered by the Court.

V. ATTORNEY FEES AND COSTS

Based on the submission and claim of her attorney she

is awarded counsel fees and expenses in the sum of

$3,000.00 against which $350.00 has previously been paid

by way of temporary counsel fee. The balance of $2,650.00

of the total allowed will be payable not later than July

1, 1985. The relatively modest remainder of her attorney

fee will be borne by her.

The fee of the commissioner in chancery of $582.00

will be borne by the parties in the proportions of two-

thirds to Elwin and one-third to Frances.

Frances’ counsel will prepare draft of decree in con-

formance with this opinion.

/s/ Robert K. Woltz

Judge

28 March 1985

NOTE: Most of the cases cited from other jurisdictions

were not available to the Court to read, and the

substance of their holdings mentioned was based

on the contents of articles, journals and anno-

tations.

[Exhibits to this Opinion lodged with the Court]

59a

APPENDIX I

VIRGINIA:

IN THE CIRCUIT COURT OF FREDERICK COUNTY

In Chancery No. 7119

FRANCES SUE PoE HOLMEs,

Complainant

ELWIN FRANKLIN HOLMES,

Defendant

In Chancery No. 7108

ELWIN F. HOLMES,

Complainant

FRANCES SUE POE HOLMEs,

Defendant

TRIAL DECREE

This case came before the Court on June 13, 1983, for

a trial on the issue of the grounds of divorce of the par-

ties and the determination of temporary support for the

Wife. The parties appeared in person and with their

counse]

Counsel for Frances Sue Holmes asked the Court to

consolidate the divorce suit which she had filed with that

filed by her husband, to which there was no objection by

the husband. The Court did, therefore, ADJUDGE and

60a

DECREE that Chancery causes 7119 and 7108 be con-

solidated for further proceedings.

Whereupon, Elwin F. Hoimes introduced evidence in

support of his prayer for divorce, at the conclusion of

which it appeared to the Court, independent of the ad-

missions of either party, by pleadings or otherwise that:

1. The parties were married on March 7, 1942 in San

Antonio, Texas.

2. Four children were born of said marriage, all of

whom are over the age of twenty-one years.

3. The parties have been actual bona fide residents and

domiciliaries of the State of Virginia for more than six

months next preceding the commencement of this suit.

4. The parties are over the age of eighteen years, and

neither of them is in the active military service of the

United States.

5. The parties last cohabited in Frederick County, Vir-

ginia on March 1, 1982, from which time they have lived

separate and apart continuously, without cohabitation

and without interruption for more than one year.

Accordingly, the Court did grant Elwin F. Holmes’

prayer for divorce and proceeded to hear evidence upon

Frances Sue Holmes’ entitlement to spousal support and

evidence on the question of the amount of temporary

spousal support, if awarded. Frances Sue Holmes then

proceeded to introduce evidence in her behalf, at the

conclusion of which counsel for Elwin F. Holmes moved

the Court to strike her prayer for spousal support on the

ground that she had not proven by the greater weight of

the evidence that she was entitled te support from her

Husband and that she was guilty, which would constitute

a fault ground for divorce, which motion was overruled

by the Court over the objection of counsel for Elwin F.

Holmes.

6la

Elwin F. Holmes then proceeded to introduce further

evidence on his behalf, at the conclusion of which, the

Court found from the evidence that Elwin F. Holmes had

not proven that Frances S. Holmes was guilty of such

conduct which constituted a fault ground for divorce,

thereby forfeiting her right to spousal! support in that

he had failed to prove that it was her intent on March

1, 1982 to permanently desert the marital relationship,

whereupon the Husband again moved to strike the evi-

dence of the Wife as to her claim for temporary support

and to deny her the same, which motion the Court denied

and overruled to which ruling the Husband duly objected

and excepted. It is therefore, ADJUDGED and DE-

CREED that:

1. Elwin F. Holmes is hereby granted a final divorce

from Frances Sue Holmes, pursuant to Virginia Code

Section 20-91/9) (a), on the ground that the parties have

lived separate and apart without cohabitation and with-

out interruption for more than ene year.

2. Frances S. Holmes is entitled to receive temporary

spousal support from Elwin F. Holmes and that the

amount of said spousal support shall be temporarily set in

the amount of Five Hundred Thirty-one Dollars ($531.00)

pavable on the first day of each month until further

Order of this Court.

3. Elwin F. Holmes shall pay to John E. Wetsel, Jr.,

Counsel for Franees 8S. Holmes, the sum of Three Hun-

dred Fifty Dollars ($350.00), payable within ten days

of the entry of this Decree, as a partial award of attor-

ney’s fees incurred in this cause, the ultimate award of

attorney’s fees to be determined upon the final resolu-

tion of this case.

4. This case is set for trial on August 12, 1983 before

this Court at 2:30 p.m., or as soon thereafter as counsel

may be heard upon the following issues:

62a

A. The issue of equitable distribution of the joint mari-

tal property of the parties; and

B. The amount of permanent spousal support, if any,

payable to Frances S. Holmes.

However, it is to be understood that in the event the

parties have not reached an agreement as to the valua-

tion of the parties’ property, that that matter will be re-

ferred to a Commissioner in Chancery, because the Court

will not hear evidence on the valuation of the property.

In the event that a valuation has not been agreed upon

by the parties, and the matter has to be referred to a

Commissioner for that purpose, said trial wiil be con-

tinued until the revort of that Commissioner.

ENTERED this 3rd day of August, 1983.

/s/ Robert K. Woltz

Judge

SEEN AND OBJECTED TO:

s/ John E. Wetsel, Jr.

JOHN E. WETSEL, JR.

Counsel for Frances S. Holmes

SEEN:

/s/ Joseph A. Massie, Jr.

JOSEPH A. MASSIE, JR..,

Counsel for Elwin F. Ho!mes

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.