Amicus Curiae Brief — Padot v. Padot (No. 05-1076)

Tire { nat t's

4) NOV 2 0 2006

SE FICE GF THE ¢ “LERK

No. 05-1076

In the Supreme Court of the Gnited States

KEVIN Y. PADOT, PETITIONER

v.

BRENDA G. PADOT

ON PETITION FOR A WRIT OF CERTIORARI

TO THE DISTRICT COURT OF APPEAL OF FLORIDA,

SECOND DISTRICT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

PAUL D. CLEMENT

Solicitor General

Counsel of Record

PETER D. KEISLER

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

DAN HIMMELFARB

Assistant to the Solicitor

General

MICHAEL S. RAAB

PAUL J. HUTTER JOSHUA WALDMAN

Acting General Counsel

Department of Veterans Attorneys

Affairs Department of Justice

Washington, D.C. 20420 Washington, D.C. 20530-0001

(202) 514-2217

QUESTIONS PRESENTED

~———

When the parties divorced and their property was divided,

petitioner agreed, and the trial court ordered, that respondent

was entitled to 33.96% of petitioner’s military retirement pay.

Petitioner later waived a portion of his retirement pay in

favor of veterans’ disability benefits. The trial court ordered

that respondent was entitled to 33.96% of what petitioner’s

retirement benefits would have been had there been no

waiver. The questions presented are:

1. Whether the trial court’s order violates the

Uniformed Services Former Spouses’ Protection Act, 10

U.S.C. 1408 (2000 & Supp. IV 2004), which was interpreted in

Mansell v. Mansell, 490 U.S. 581 (1989), to authorize the

division of retirement pay but not the portion of retirement

pay waived in favor of disability benefits.

2. | Whether the trial court’s order violates the anti-

attachment provision applicable to disability benefits, 38

U.S.C. 5301(a)(1) (Supp. III 2003).

(I)

TABLE OF CONTENTS

Page

SRR PGI CEE PoC EGS MEAD Mie Seow ARISE SSeS 1

PRONE SOS Be ee Bred Pree EAC RD CENT Se 6

A. Certiorari is not warranted on the question

whether the trial court’s order violates the

USFSPA as interpreted in Mansell ............ 7

1. The decision below does not conflict with

the decision of any state court of last resort ... 7

2. The decision below is correct .............. 14

B. Certiorari is not warranted on the question

whether the trial court’s order violates the

anti-attachment provision applicable to

Weta TNS. ooo as oie see Seeks 16

CIN i ic 5 ease exon os ana 19

TABLE OF AUTHORITIES

Cases:

Abernethy v. Fishkin, 699 So. 2d 235 (Fla. 1997) ...... 4,7

Adams v. Robertson, 520 U.S. 83 (1997) .............. 17

Ashley v. Ashley, 990 S.W.2d 507 (Ark. 1999) .......... 11

Billeck, Ex parte, 777 So. 2d 105 (2000) .......... 9, 10, 11

Black v. Black, 842 A.2d 1280 (Me. 2004) ............... 8

Clauson v. Clauson, 831 P.2d 1257 (Alaska

t+ SERRE re etoile ere py ey ye eae aD 9, 10, 11, 18

Halstead v. Halstead, 596 S.E.2d 353 (N.C. App.

SIN 6 A A Oa 13

Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979) ........ 14

Hisgen v. Hisgen, 554 N.W.2d 494 (S.D. 1996) .......... 8

Howell v. Mississippi, 543 U.S. 440 (2005)... 2.2... 17

(111)

Cases—Continued: Page

Johnson v. Johnson, 37 S.W.3d 892 (Tenn. 2001) ........ 8

Kramer v. Kramer, 567 N.W.2d 100 (Neb. 1997) ..... -9,12

Keough v. Keough, No. 2140-96-4, 1997 WL 242559

C¥a. CO Ans Mie UBIO) ies i ooo cakes ins 13

Krapf v. Krapf, 786 N.E.2d 318 (Mass. 2003) ........ 8, 18

Loria v. Loria, 189 S.W.3d 797 (Tex. App. 2006) ...... 14

Mansell v. Mansell, 490 U.S. 581 (1989) ...... . 2,9, 14, 15

Marriage of Kraft, In re, 832 P.2d 871 (Wash. 1992) .. 9, 11

Marriage of Mansell, In re, 265 Cal. Rptr. 227 (Ct.

App. 1989), cert. denied, 498 U.S. 806 (1990) ........ 15

Marriage of Reinauer, In re, 946 S.W.2d 853 (Tex.

PE TOE i a cas 5 ka RETR ae 14

Marriage of Strong, In re, 8 P.3d 763 (Mont.

ME Ka oh es en eee 9,11, 18

Marriage of Wherrell, In re, 53 P.3d 734 (Kan. 2002) .. 12

McCarty v. McCarty, 453 U.S. 210 (1981) .............. 2

McLellan v. McLellan, 533 S.E.2d 635 (Va. Ct. App.

BN sine ei HERES Roeser ek eae 13

Owen v. Owen, 419 S.E.2d 267 (Va. Ct. App. 1992) ..... 13

Poullard v. Poullard, 780 So. 2d 498 (La. Ct. App.),

writ denied, 790 So. 2d 641 (La. 2001) .............. 13

Resare v. Resare, 908 A.2d 1006 (R.I. 2006) ............ 8

Roee v. Houe, 46) U.S. GIG GR). <n cc cen ccccescesens 3

Ryan v. Ryan, 600 N.W.2d 739 (Neb. 1999) ........... 12

Seddio v. Michaels, 529 U.S. 1068 (2000) ............... 7

Shelton v. Shelton:

78 P.3d 507 (Nev. 2003), cert. denied, 541 U.S. 960

Vv

Cases—Continued: Page

541 U.S. 960 (2004) ......5.0.00% Fer gir el haw e bb os 7

Steiner v. Steiner, 788 So. 2d '771 (Miss. 2001) .......... 9

Surratt v. Surratt, 148 S.W.3d 761 (2004) ............. 12

Wetmore v. Markoe, 196 U.S. 68 (1904) .......5...... 14

Womack v. Womack, 818 S.W.2d 958 (Ark. 1991) .... 9, 11

Wright v. Wright, 594 So. 2d 1139 (La. Ct. App. 1992) ... 13

Vitko v. Vitko, 524 N.W.2d 102 (N.D. 1994) ............. )

Statutes and rule:

National Defense Authorization Act for Fiscal Year

2004, Pub. L. No. 108-136, § 641, 117 Stat. 1511 (10

US.C: 1414 Gago. IV D000) os i ae ike tes 18

Uniformed Services Former Spouses’ Protection Act,

10 U.S.C. 1401 et seq.:

10 U.S.C. 1408 (2000 & Supp. IV 2004) ........... 2

BO Res, PO ois 6 oc bee 0p CL Chater 2

10 U B.C. FAN a ces ak go av sence sdneene 2

10 U.S.C. 1408(a)(4)(B) (1988). ..........-.....- 14

BO US. FAD oo vik oc a cde cee hens bees GS 2

16 USA; AOR ET) CIGGB) oon ei Fr a ietie eres 14

BO TS BO OE Nh hah 4 Fh i BER eed 1

SOR i ER EE os hei cw poeta s Kee Rae eed 1

Sie RTs OOO i oii oe WER a bak PEAS 1

BRE IAL, SEU) oc Sik ovale Seas oy ee eee Rese 16

Oe BE hi a ee VA LAs a ee OT 1

MMT A RI Sb 650s os eR a ote ee oR ES Sos Ae 1

DAs Se (ISO) oo bhi ee chews ne aebeesseenesas 3

VI

Statutes and rule—Continued: a.

Oe reece aks vicdawn codcodeunes vowed cece ieee 17

Be Gs BOE Nii didn ows oad FCS ok GENTE oe ee ey 2

38 U.S.C. 5301(a)(1) (Supp. IT] 2003) ............ 3, 17, 18

BB TBE). BRO ONEAD oie kee ive Here savsctesiee 17

DE ULB. BG sav vic occa eeb reser sievaves eer oe 2

ik Oh eae ic cxcumees 12

In the Supreme Court of the Gnited States

No. 05-1076

KEVIN Y. PADOT, PETITIONER

Vv.

BRENDA G. PADOT

ON PETITION FOR A WRIT OF CERTIORARI

TO THE DISTRICT COURT OF APPEAL OF FLORIDA,

SECOND DISTRICT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

This brief is submitted in response to the Court’s order

inviting the Solicitor General to express the views of the

United States. In the view of the United States, the petition

should be denied.

STATEMENT

1. a. Members of the military services who have served for

the requisite period may retire from active duty and receive

retirement pay. 10 U.S.C. 3911 et seg. (Army); 10 U.S.C. 6321

et seg. (Navy and Marine Corps); 10 U.S.C. 8911 et seg. (Air

Force). In addition, veterans who become partially or totally

disabled as a result of military service may be eligible for

disability benefits. 38 U.S.C. 1110 (wartime disability); 38

U.S.C. 1131 (peacetime disability). In general, however, a

military retiree may receive disability benefits only to the

extent that he or she waives a corresponding amount of re-

(1)

2

tirement pay. 38 U.S.C. 5305. Because disability benefits,

unlike retirement pay, are exempt from taxation, 38 U.S.C.

5301(a), such waivers are common. See Mansell v. Mansell,

490 U.S. 581, 583-584 (1989).

b. In McCarty v. McCarty, 453 U.S. 210 (1981), this

Court held that state courts are preempted by federal law

from treating a service member’s retirement pay as commu-

nity property divisible between the-service member and for-

mer spouse upon divorce. Congress responded to McCarty by

enacting the Uniformed Services Former Spouses’ Protection

Act (USFSPA), 10 U.S.C. 1408 (2000 & Supp. IV 2004), which,

in its current form, authorizes a state court to treat “dispos-

able retired pay” either “as property solely of the [former

service] member or as property of the [former service] mem-

ber and his spouse in accordance with the law of the jurisdic-

tion of such court,” 10 U.S.C. 1408(¢)(1). “Disposable retired

pay” is defined in the statute as “the total monthly retired pay

to which a member is entitled,” less certain amounts. 10

U.S.C. 1408(a)(4). Among the amounts to be “deducted from

the retired pay” are those waived “to receive compensation

under * * * title 38”—7.e., amounts waived to receive dis-

ability benefits. 10 U.S.C. 1408(a)(4)(B).

In Mansell, supra, this Court construed the USFSPA to

reject the McCarty rule, but only in part. The Court held

that, under the statute’s “plain and precise language,” state

courts “have been granted the authority to treat disposable

retired pay as community property,” but “have not been

granted the authority to treat total retired pay as community

property.” 490 U.S. at 589 (emphasis added). Because the

USFSPA excludes disability benefits from the definition of

disposable retired pay, the Court concluded that state courts

are preempted by federal law from treating as divisible prop-

erty retirement pay waived in favor of disability benefits.

3

ce. The veteran in Mansell argued that the state court’s

division of jis total retired pay violated, not only the

USFSPA, but also the anti-attachment provision applicable to

veterans’ disability benefits. Under that provision, 38 U.S.C.

5301(a)(1) (Supp. III 2003) (formerly 38 U.S.C. 3101(a)

(1988)), disability benefits “shall not be assignable except to

the extent specifically authorized by law, and * * * shall be

exempt from the claim of creditors, and shall not be liable to

attachment, levy, or seizure by or under any legal or equitable

process whatever, either before or after receipt by the benefi-

ciary.” In light of its holding that the USFSPA precludes the

division of retirement pay waived in favor of disability bene-

fits, however, the Court found it unnecessary in Mansell to

address whether the anti-attachment provision would inde-

pendently afford such protection. See 490 U.S. at 587 n.6.'

2. Petitioner entered the military in April 1980 and mar-

ried respondent in September 1980. The parties were di-

vorced in 1995. At the time of the final divorce judgment,

petitioner was still on active duty. Pet. App. 2a, 16a.

The parties agreed to a division of “military retirement

* * * nay,” Pet. App. 2a, with respondent entitled to 33.96%

of the payments, 7d. at 2a, 17a. The order incorporating the

agreement provided that “[nJeither party shall take any action

which shall alter or otherwise reduce the interest of the other

party inthe * * * retired pay.” /bid.

Petitioner retired from active military duty in May 2000

and began receiving retirement pay in June 2000. He applied

for disability benefits and was subsequently found to be 30%

disabled. In December 2000, petitioner waived a portion of

' In Rose v. Rose, 481 U.S. 619 (1987), the Court addressed the applicability

of the anti-attachment provision to child support, holding that the provision

“does not extend to protect a veteran’s disability benefits from seizure where

the veteran invokes that provision to avoid an otherwise valid order of child

support.” /d. at 634.

4

his retirement pay in favor of disability benefits. Approxi-

mately four months later, petitioner began working for the

federal government as a civilian air-traffic controller. Pet.

App. 2a-3a, 16a-17a.

In July 2002, respondent filed a “Motion to Enforce Final

Judgment” in the Circuit Court for Pinellas County, Florida.

She argued, among other things, that petitioner’s waiver of a

portion of his retirement pay in order to obtain disability ben-

efits operated to reduce the amount she would receive under

the final divorce judgment. Pet. App. 3a, 16a.

3. The Circuit Court ruled that, by reducing respondent’s

share of his retirement pay, petitioner violated the final di-

vorce judgment. Pet. App. 16a-20a. The court reasoned that

the “overall plan” of the judgment was that “the former wife’s

share of the military retirement would stand in the place of

alimony,” and that petitioner’s waiver of retirement pay “al-

tered” that plan and violated the judgment’s prohibition on

taking any action that altered or reduced respondent’s inter-

est in the retirement pay. Jd. at 18a. The court found that

result particularly “inequitable” because petitioner was re-

ceiving additional income from his job as an air-traffic con-

troller. 7d. at 18a-19a. In so holding, the court noted that, in

Abernethy v. Fishkin, 699 So. 2d 235 (1997), the Florida Su-

preme Court had found that trial courts “are not powerless to

enforce the original agreement so long as no funds from the

disability pool are drawn upon to fulfill the obligations of the

former husband to the former wife.” Pet. App. 19a. The Cir-

cuit Court therefore ordered petitioner to pay respondent

33.96% of “the amount that the former spouse’s military re-

tirement would have been absent his voluntary reduction of

those retirement dollars in favor of disability payments,” but

5

specifically directed that no portion of petitioner’s disability

benefits be used to satisfy that obligation. Jd. at 19a-20a.’

4. The Second District Court of Appeal of Florida af-

firmed in relevant part. Pet. App. la-14a.

Rejecting petitioner’s contention that the “principles of

federal preemption” in Mansell “prohibit{ed] the result or-

dered by the trial court,” the appellate court found Mansell

“materially distinguishable from * * * the present case.”

Pet. App. 4a-5a. The court explained that, unlike in Mansell,

the parties in this case agreed that respondent was entitled to

a percentage of petitioner’s retirement pay and were ordered

not to “take any action to reduce the other party’s interest in

the * * * retire{ment} pay.” Jd. at 5a. The court also ex-

plained that, unlike in Mansell, petitioner’s remaining retire-

ment pay and civilian income would enable him to comply with

his obligations under the divorce judgment and that his dis-

ability benefits were shieided from respondent by the trial

court. Jd. at 5a-6a.

The District Court of Appeal also rejected petitioner’s

contention that the Florida Supreme Court’s decision in Aber-

nethy was distinguishable because the agreement in that case,

but not in this one, explicitly required indemnification in the

event that either party took an action that defeated the other

party’s right to receive a portion of the retirement pay. Pet.

App. 7a-9a. The court explained that the order at issue here

prohibited any action that would reduce the other party’s

interest in the retirement pay and that, although the order

“does not specifically state that the Former Husband must

* In a subsequent order, Pet. App. 21a-23a, the Circuit Court denied

petitioner’s motion for rehearing on a number of issues, including “the military

pay question,” id. at 22a, but modified its earlier decision to provide that

petitioner’s obligations to respondent be retroactive to the initial date of

petitioner’s employment as an air-traffic controller rather than the date of his

retirement from active military service, ibid.

6

indemnify the Former Wife if he takes action that reduces her

interest,” the order “gives the [trial] court continuing juris-

diction ‘to enforce the former spouse’s rights to her share of

the * * * benefits.’” Jd. at 8a.

In coneluding its opinion, the District Court of Appeal

stated that “the Former Wife obtained a vested interest in a

percentage of the Former Husband’s military retirement

* * * pay * * * when the trial court entered the * * *

[ojrder” dividing property, and that, “when years later the

Former Husband took the voluntary action of waiving [re-

_ tirement] pay in order to receive disability benefits, the For-

mer Wife’s vested interest in his military retirement * * *

pay was reduced.” Pet. App. 9a. The court therefore

“ffoujnd no error” in the trial court’s ruling that petitioner

must “make whole the retirement benefits contemplated in

the Final Judgment in favor of the former wife.” [bid.’

5. The Supreme Court of Florida denied petitioner’s peti-

tion for review. Pet. App. 15a.

DISCUSSION

Petitioner contends (Pet. 10-25) that the Circuit Court’s

order, which required him to pay respondent an amount equal

to the percentage of what his retirement pay would have been

had he not waived a portion of that pay in favor of disability

benefits after the final divorce judgment was entered, violates

both the USFSPA as interpreted in Mansell and the anti-at-

In the same opinion, the District Court of Appeal reversed the trial

court’s decision insofar as it provided for payment by “income deduction order”

(because Florida law limits the use of such an order to alimony or child

support), Pet. App. Ya-10a; vacated a “clarification order” concerning

retroactivity (because the order was not authorized by Florida’s procedural

rules), id. at 10a-12a; and reversed another order issued by the trial court

insofar as it required petitioner to cooperate with respondent in obtaining and

paying for a portion of a replacement survivor benefit plan, id. at 12a-13a.

Those aspects of the appellate court’s decision are not at issue here.

7

tachment provision applicable to disability benefits. Peti-

tioner’s USFSPA claim was correctly rejected by the District

Court of Appeal, and its decision does not conflict with any

decision of any state court of last resort. Petitioner’s anti-

attachment claim was not pressed or passed upon below, is in

any event without merit, and has been uniformly rejected by

state courts of last resort. The petition for a writ of certiorari

should therefore be denied.‘

A. Certiorari Is Not Warranted On The Question Whether

The Trial Court’s Order Violates The USFSPA As Inter-

preted In Mansell

1. The decision below does not conflict with the deci-

sion of any state court of last resort

a. The District Court of Appeal approved the Circuit

Court’s order, and held that it did not conflict with Mansell,

because petitioner had agreed, and the Circuit Court had di-

rected, that he would pay respondent a percentage of his re-

tirement pay and take no action to reduce respondent’s inter-

est in it. Pet. App. 4a-9a. The District Court of Appeal relied,

in part, see id. at 6a-8a, on the Supreme Court of Florida’s

decision in Abernethy v. Fishkin, 699 So. 2d 235 (1997). That

case held that, “while federal law prohibits the division of

disability benefits,” it “does not prohibit spouses from enter-

ing into a property settlement agreement that awards the

non-military spouse a set portion of the military spouse’s re-

tirement pay” and includes an “indemnification provision| |

ensuring such payments.” /d. at 240.

The highest courts of at least six other States—Maine,

Massachusetts, Nevada, Rhode Island, South Dakota, and

4

This Court has previously denied certiorari in a case presenting the same

USFSPA claim that is presented here, see Seddio v. Michaels, 529 U.S. 1068

(2000), and in a case presenting the same USFSPA and anti-attachment claims

that are presented here, see Shelton vy. Shelton, 541 U.S. 960 (2004).

8

Tennessee—have approved orders similar to the one entered

by the Circuit Court on the basis of a contract-law theory

similar to the one on which the District Court of Appeal re-

lied.” And, as far as we are aware, no state court of last resort

has rejected such a theory. There is therefore no conflict on

that issue.

The highest courts of at least seven other States—Alaska,

Arkansas, Nebraska, Mississippi, Montana, North Dakota,

and Washington—have approved relief of the type at issue

* See Hisgen v. Hisgen, 554 N.W.2d 494, 498 (S.D. 1996) (Mansell “does

not preclude state courts from interpreting divorce settlements to allow a

spouse to receive property or money equivalent to [the agreed-upon percentage

of] a veteran’s retirement entitlement{s]” if the veteran subsequently waives

a portion of the entitlements in favor of disability pay.); Johnson v. Johnson,

37 S.W.3d 892, 897-898 (Tenn. 2001) (“[Wjhen a{] |marital dissolution

agreement] divides military retirement benefits, the non-military spouse has

a vested interest in his or her portion of those benefits as of the date of the

court’s decres. * * * |AJn act of the military spouse |that unilaterally

diminishes the vested interest] * * * constitutes an impermissible modifica-

tion of a division of marital property and a violation of the court decree

incorporating the [marital dissolution agreement].”) (footnote omitted); Krapf

v. Krapf, 786 N.E.2d 218, 326 (Mass. 2003) (“The judgment in this case does not

divide the defendant's * * * disability benefits in contravention of the

Mansell decision; the judgment merely enforced the defendant’s contractual

obligation to his former wife, which he may satisfy from any of his resources.”);

Shelton v. Shelton, 73 P.3d 507, 509 (Nev. 2003) (“Although states cannot divide

disability payments as community property, states are not preempted * * *

from enforcing contracts [that divide retirement benefits| * * * ,even when

disability pay is involved.”), cert. denied, 541 U.S. 960 (2004); Black v. Black,

842 A.2d 1280, 1285 (Me. 2004) (“the USFSPA does not limit the authority of

a state court to grant post-judgment relief when military retirement pay

previously divided by a divorce judgment is converted to disability pay”);

Resare v. Resare, 908 A.2d 1006, 1010 (R.1. 2006) (“| T]he Family Court did not

in any way divide | the veteran's] disability benefit in contravention of Mansell,

but simply held [him] to the terms of the original [property settlement

agreement] and ordered payment of an amount calculated in accordance with

the agreed upon | property settlement agreement}.”).

9

here, and found it consistent with Mansell, on a different the-

ory. Those courts have held that, in making an equitable dis-

tribution of property or an award of alimony, trial courts may

consider the economic consequences of the veteran’s waiver

of retirement pay in favor of disability benefits and rely upon

them as a basis for increasing the former spouse’s share of

the remaining property or the size of the alimony award.° The

highest court of one state—Alabama—has rejected this the-

ory. In Ex parte Billeck, 777 So. 2d 105 (2000), the Supreme

° See Womack v. Womack, 818 S.W.2d 958, 959 (Ark. 1991) (trial court may

“t{ake] note of the disability benefits” in making an award of alimony); Clauson

v. Clauson, 831 P.2d 1257, 1264 (Alaska 1992) (“federal law does not preclude

our courts from considering, when equitably allocating property upon divorce,

the economic consequences of a decision to waive military retirement pay in

order to receive disability pay”); In re Marriage of Kraft, 832 P.2d 871, 875

(Wash. 1992) ‘“when making property distributions or awarding spousal

support in a dissolution proceeding, * * * the court may consider the

[disability] pay as a basis for awarding ‘he nonretiree spouse a proportionately

larger share of the community property where equity so requires”); Vitko v.

Vitko, 524 N.W.2d 102, 104 (N.D. 1994) (trial court may “consider{} the

disability income ‘so as to determine the financial circumstances of each party

to the divorce’”); Kramer v. Kramer, 567 N.W.2d 100, 113 (Neb. 1997) (trial

court “may consider [disability] benefits and the corresponding waiver of

retirement pension benefits” in “determining whether there has been a

material change in circumstances which would justify modification of an

alimony award to a former spouse who was previously awarded a fixed

percentage of the retirement pension benefits”); /m re Marriage of Strong,

8 P.3d 763, 769 (Mont. 2000) (“a [trial] court may consider * * * disability

benefits in the same way it considers each party’s ability to earn income post-

dissolution as an important factor in achieving an equitable property

division”); Steimer v. Steiner, 788 So. 2d 771, 779 (Miss. 2001) (“Military

disability benefits were properly considered by the chancellor in the award of

alimony.”). Unlike the contract-law theory, this theory is an available ground

for decision not only when the waiver of retirement pay postdates the divorce

deeree and the trial court is ruling on a request for enforcement or modifica-

tion, but also when the waiver predates the divorce decree and the court is

making an initial property distribution or alimony award.

10

Court of Alabama held that, “[wJhen a trial court makes an

alimony award based upon its consideration of the amount of

veteran’s disability benefits,” the trial court “essentially is

awarding the wife a portion of those veteran’s disability bene-

fits[,] and in doing so * * * is violating federal law.” /d. at

109.

There thus does appear to be a conflict on whether federal

law permits a divorce court to consider a veteran’s waiver of

retirement benefits in making an equitable distribution of

property or award of alimony. That question is not presented

in this case, however, because the court below did not address

it. Instead, consistent with the Florida Supreme Court’s deci-

sion in Abernethy, the District Court of Appeal relied on a

contract-law theory in affirming the order challenged by peti-

tioner. Indeed, the Supreme Court of Alabama distinguished

Abernethy on the ground that the agreement incorporated

into the divorce judgment in Billeck, unlike the one in Aber-

nethy, did not contain a provision that “protect[ed] the

monthly sum the wife would receive should the husband’s

military retirement benefits be reduced.” 777 So. 2d at 109.

Insofar as it was suggesting that Billeck would have been

decided differently if the agreement had contained such a

provision, therefore, the Supreme Court of Alabama appears

to agree with the rationale for the decision below (and with

the uniform view of the state courts of last resort to consider

the question)—namely, that a veteran can be contractually

bound not to take action that reduces the former spouse’s

share of retirement benefit.‘

At least three of the courts that allow consideration of a veteran's waiver

of retirement benefits in distributing property or awarding alimony do so on

the condition that the increase in the amount of property or alimony awarded

to the former spouse not simply match dollar for dollar the amount of

retirement pay waived by the veteran, but instead be based on an overall

assessment of what is just and reasonable. See Clawson, 831 P.2d at 1264;

il

b. Petitioner contends that “at least six state supreme

courts (Alabama, Alaska, Arkansas, Kansas, Montana, and

Nebraska) * * * have taken diametrically the opposite posi-

tion of that held below by Florida’s courts.” Pet. 18; accord

Reply Br. 2. That is not correct.

As explained above, see pp. 9-10, swpra, the theory re-

jected in the Alabama decision cited by petitioner, Billeck,

supra, is one on which the decision below did not rely. And

the Alabama decision arguably endorses the theory on which

the decision below did rely.

The Alaska and Montana decisions cited by petitioner,

Clauson v. Clauson, 831 P.2d 1257 (Alaska 1992), and Jn re

Marriage of Strong, 8 P.3d 763 (Mont. 2000), did not address

the contract-law theory on which the decision below relied.

And, as noted above, see note 6, supra, they held that relief of

-the type at issue here is available—albeit on the theory that

courts may consider the economic consequences of a veteran’s

waiver of retirement payments in making an equitable distri-

bution of property. The Arkansas decision cited by petitioner,

Ashley v. Ashley, 990 S.W.2d 507 (1999), likewise did not ad-

dress the contract-law theory, and it likewise recognized that,

when a veteran waives retirement payments in favor of dis-

ability benefits, the trial court may order “an increase in ali-

mony.” /d. at 509 (citing Womack v. Womack, 818 S.W.2d

958, 959 (Ark. 1991)). Moreover, a subsequent decision of the

Court of Appeals of Arkansas did adopt the contract-law the-

ory, and, in doing so, explicitly stated that Ashley did not

Kraft, 832 P.2d at 875-876, 277; Strong, 8 P.3d at 769. It is not clear whether

that is the rule in other jurisdictions. Even if it is not, however, this case is not

a suitable one for resolving any conflict that may exist on the issue, because the

court below did not address the question whether a waiver-of retirement

benefits may be considered in making an equitable distribution of property, and

thus necessarily did not address the subsidiary issue of dollar-for-dollar

matches.

12

foreclose its adoption. Surratt v. Surratt, 148 S.W.3d 761, 766

(2004).

As for the Kansas and Nebraska decisions cited by peti-

tioner, neither Jn re Marriage of Wherrell, 58 P.3d 734 (Kan.

2002), nor Ryan v. Ryan, 600 N.W.2d 739 (Neb. 1999), ad-

dressed whether relief of the type at issue here is available

under either of the theories described above. Wherrell ad-

dressed the distinct question whether a particular payment to

the veteran was “divisible retirement or indivisible military

disability.” 58 P.3d at 736. And Ryan held that “th{e] portion

of the [divorce] decree purporting to divide [the veteran’s]

disability income” was “void for vant of jurisdiction,” because

“federal law precludes a state court, in a dissolution proceed-

ing, from exercising subject matter jurisdiction over * * *

disability benefits.” 600 N.W.2d at 745. As noted above,

moreover, see note 6, swpra, a prior decision of the Supreme

Court of Nebraska, Kramer v. Kramer, 567 N.W.2d 190

(1997), held that relief of the type at issue here is available, on

the theory that courts may consider the consequences of a

waiver of retirement payments in making an award of ali-

mony. Any tension between the “jurisdictional” approach of

Ryan and the decision in Kramer should be resolved by the

Nebraska courts.

Petitioner also contends that the principle applied by the

court below has been rejected by “the intermediate courts of

appeals of an additional four jurisdictions (Louisiana, North

Carolina, Texas, and Virginia).” Pet. 18. That contention

would not support certiorari even if it were true, because this

Court ordinarily grants certiorari in state cases only to re-

solve a conflict between “state court[s] of last resort” (or be-

tween a state court of last resort and a federal court of ap-

peals). Sup. Ct. R. 10(b). In any event, there is no such con-

flict.

13

The Louisiana decision cited by petitioner, Wright v.

Wright, 594 So. 2d 1139 (Ct. App. 1992), applied the principle

that was applied in the decision below, but simply found that

there was no breach of the agreement in that case. /d. at

1142. The same court applied the same principle in a subse-

quent decision and came to the opposite conclusion on the

facts of that case. See Poullard v. Poullard, 780 So. 2d 498,

500 (La. Ct. App.) (“We agree with the trial court that ‘the re-

designation of pay cannot defeat the prior agreement of the

parties.’”), writ denied, 790 So. 2d 641 (La. 2001). Similarly,

the unpublished Virginia decision cited by petitioner, Keough

v. Keough, No. 2140-96-4, 1997 WL 242559 (Ct. App. May 13,

1997), held that the veteran’s former spouse was not entitled

to a portion of his disability payments because the particular

agreement in that case “unambiguously require[d] a reduction

of the gross retirement pay by the disability payments re-

ceived.” Jd. at *2. In published decisions issued both before

and after Keough, the same court held, consistent with the

decision below, that “parties may use a property settlement

agreement to guarantee a certain level of income by providing

for alternative payments” to compensate for a waiver of re-

tirement pay. McLellan v. McLellan, 533 S.E.2d 635, 638 (Va.

Ct. App. 2000); Owen v. Owen, 419 S.E.2d 267, 269 (Va. Ct.

App. 1992).

The North Carolina decision cited by petitioner, Halstead

v. Halstead, 596 S.E.2d 353 (Ct. App. 2004), did not address

the theory on which the decision below relied. And it explic-

itly endorsed the other theory on which relief of the type at

issue here has been approved: that “federal law d[oes] not

preclude the consideration of the economic consequences of a

decision to waive military retirement pay in order to receive

disability pay in determining the equitable distribution of

marital assets.” Jd. at 356.

14

As for the Texas decisions cited by petitioner, neither /n

re Marriage of Reinauer, 946 S.W.2d 853 (App. 1997), nor

Loria v. Loria, 189 S.W.3d 797 (App. 2006), addressed

whether relief of the type at issue here is available under ei-

ther theory.

2. The decision below is correct

Mansell held that the USFSPA prohibits state courts

from “treat[{ing] as property divisible upon divorce military

retirement pay that has been waived to receive veterans’ dis-

ability benefits.” 490 U.S. at 595. It does not follow from that

holding, however, that the USFSPA prohibits state courts

from interpreting settlement agreements that divide retire-

ment pay to require the veteran to make the former spouse

whole if the veteran takes an action that reduces the former

spouse’s proportion of the pay. Indeed, in at least two re-

spects, the principle applied by the court below not only is

consistent with Manseli, but finds affirmative support in it.

First, the Court recognized in Mansell that “domestic

relations are preeminently matters of state law,” that Con-

gress “rarely intends to displace state authority in this area”

when it passes general legislation, and that this Court there-

fore “will not find pre-emption absent evidence that it is ‘posi-

tively required by direct enactment.’” 490 U.S. at 587 (quot-

ing Hisquierdo v. Hisquierdo, 439 U.S. 572, 581 (1979), in

turn quoting Wetmore v. Markoe, 196 U.S. 68, 77 (1904)). The

Court concluded that Mansell “present[{ed] one of those rare

instances where Congress has directly and specifically legis-

lated in the area of domestic relations,” ibid., because, in

“plain and precise language,” the USFSPA provides that a

state may treat “disposable retired * * * pay” as divisible

property and “specifically defines” that term to exclude re-

tirement pay waived in favor of disability benefits, id. at 588-

589 (quoting 10 U.S.C. 1408(a)(4)(B) and (c)(1) (1988)). In

15

contrast, the USFSPA does not “directly and specifically”

address the interpretation and enforcement of property-set-

tlement agreements that guarantee the former spouse a fixed

proportion of retirement pay. Indeed, the statute does not

address that subject at all.

Second, the property-settlement agreement incorporated

into the divorce decree in Mansell divided the total amount of

the veteran’s retirement pay, including the amount he had

waived in favor of disability benefits, and the veteran re-

quested modification of the decree to remove the provision

requiring him to share the waived portion of his retirement

pay. 490 U.S. at 585-586 & n.5. In this Court, the former wife

argued that “the doctrine of res judicata should have pre-

vented this pre-McCarty property settlement from being re-

opened,” but the Court held that “[w]Jhether the doctrine of

res judicata, as applied in California, should have barred the

reopening of pre-McCarty settlements is a matter of state law

over which we have no jurisdiction.” Jd. at 586 n.5. On re-

mand, the state appellate court ruled against the veteran on

the ground that state law precluded the reopening of the set-

tlement agreement, /n re Marriage of Mansell, 265 Cal. Rptr.

227 (Ct. App. 1989), and this Court denied certiorari, 498 U.S.

806 (1990). So, too, the question whether a particular settle-

ment agreement obligates a veteran to make his or her former

spouse whole in the event that the veteran subsequently

waives retirement pay in favor of disability benefits is a mat-

ter of state contract law that—like the state law of judg-

ments—is not preempted by the USFSPA. Indeed, insofar as

the USFSPA’s preemptive effect is concerned, there is little

difference between a state-law rule prohibiting a veteran from

challenging a divorce decree that divides disability benefits if

he agreed to the division when the decree was entered (the

rule at issue on remand in Mansell) and a state-law rule pro-

hibiting a veteran from reducing a former spouse’s share of

16

retirement benefits if he agreed not to take any action that

would have that effect (the rule at issue here).

Petitioner places considerable emphasis (Pet. i, 7-10, 12-

13, 15-16 & n.6, 21; Reply Br. 3) on the fact that there is no

express indemnification provision in the settlement agree-

ment. As the court below explained, however, the order in-

corporating the agreement prohibited petitioner from taking

any action that would reduce respondent’s interest in the re-

tirement pay and gave the trial court continuing jurisdiction

“to enforce [respondent’s] rights to her share of the * * *

benefits.” Pet. App. 8a. Adjusting petitioner’s payment obli-

gations to make respondent whole for such a reduction in re-

tirement pay would appear to be a legitimate enforcement

mechanism. In any event, the question of what specific lan-

guage is necessary to give a party an enforceable right under

a contract or a court order incorporating a contract is one of

state law, and any disagreement that may exist among state

courts on that question is therefore not a basis for certiorari.”

B. Certiorari Is Not Warranted On The Question Whether

The Trial Court’s Order Violates The Anti-Attachment

Provision Applicable To Veterans’ Benefits

Petitioner invokes this Court’s jurisdiction (Pet. 1) under

28 U.S.C. 1257(a). Under that statute, “this Court has almost

unfailingly refused to consider any federal-law challenge to a

state-court decision unless the federal claim ‘was either ad-

dressed by or properly presented to the state court that ren-

* This case does not present the quite different question whether a state

court could enter an injunction or other order barring a veteran from waiving

a portion of his retirement pay so as to receive tax-free disability benefits. This

case, and the other cases discussed in this brief, concern only the consequences

of such a waiver when the veteran has made a contractual commitment,

embodied in a court decree, to provide the spouse with a certain level of

alimony or division of property.

17

dered the decision [the Court has] been asked to review.’”

Howell v. Mississippi, 543 U.S. 440, 443 (2005) (per curiam)

(quoting Adams v. Robertson, 520 U.S. 83, 86 (1997) (per

curiam)). Petitioner’s contention that the Circuit Court’s

order violates the anti-attachment provision applicable to vet-

erans’ benefits, 38 U.S.C. 5301(a)(1) (Supp. III 2003), was not

addressed by the District Court of Appeal. See Pet. App. 3a-

10a. When a state court “is silent on a federal question,” this

Court “assume{s] that the issue was not properly presented,

and the aggrieved party bears the burden of defeating this

assumption.” Adams, 520 U.S. at 86-87 (citation omitted).

Petitioner makes no attempt to discharge that burden, and it

appears that any such attempt would be unsuccessful.’ That

is a sufficient basis for denying certiorari on the second ques-

tion in the petition.”

In any event, the anti-attachment provision affords peti-

tioner no basis for relief. Under that provision, it is only

“{pjayments of benefits due or to become due under any law

administered by the Secretary |of Veterans Affairs]” (which

* An anti-attachment claim was not raised either in petitioner's initial brief

or in his reply brief in the District Court of Appeal. See Pet. Dist. C.A. Br. 13-

- 26; Pet. Dist. C.A. Reply Br. 3-7. And although petitioner’s motion for re-

hearing in that court quoted a subparagraph of 38 U.S.C. 5301, see Pet. Mot.

For Reh’g 7 (quoting Section 5301(a)(3)(A)), it did not quote the anti-attach-

ment provision (Section 5301(a)(1)). Moreover, this Court has “generally

refused to consider issues raised * * * for the first time in a petition for

rehearing when the state court is silent on the question.” Adams, 520 U.S. at

89 n.3.

"© Since the court below did not cite or mention—much less discuss—the

anti-attachment provision, it is hard to know what petitioner means when he

says that the court was “clearly cognizant” of it. Pet. 24. In any event, it is not

enough that a lower court be “cognizant” of the statutory provision on which

the petitioner is relying in this Court; the actual legal claim that is based on the

provision must have been pressed by the petitioner or passed upon by the lower

court.

18

include disability benefits) that are non-assignable, exempt

from the claim of creditors, and not liable to attachment, levy,

or seizure. 38 U.S.C. 5301(a)(1) (Supp. III 2003). Whatever

applicability that provision might have in a case in which the

veteran is ordered to pay the former spouse a portion of his

disability benefits, this is not such a case. Petitioner is receiv-

ing civilian income and retirement pay in addition to disability

benefits, and the trial court’s order explicitly provides that

nothing in its order “should be read to require the former

husband to pay any portion of his disability * * * income

* * * over to the former wife” and that “no portion of that

pool of funds in whatever amount that pool may be from time

to time [may] be payable over to the former wife.” Pet. App.

19a. Far from having violated the anti-attachment provision,

the trial court took pains to comply with it.

Nor is there any conflict among state courts of last resort

on the second question in the petition. Some of the decisions

that reject the contention that relief of the type at issue here

violates the USFSPA as interpreted in Mansell also reject the

contention that such relief violates the anti-attachment provi-

sion applicable to veterans’ benefits. See Krapf, 786 N.E.2d

at 326 n.12 (contract-law theory); Clauson, 831 P.2d at 1263 &

n.9 (theory that disability payments may be considered in

dividing property); Strong, 8 P.3d at 769-771 (same). But

petitioner cites no decision of any state court of last resort

that has reached a contrary conclusion, and we are not aware

of any."

"' Under Section 641 of the National Defense Authorization Act for Fiscal

Year 2004, Pub. L. No. 108-136, 117 Stat. 1511 (codified primarily at 10 U.S.C.

1414 (Supp. IV 2004)), which is being phased in over ten years, a service

member who did not retire based on a determination of medical unfitness and

is at least 50% disabled will be entitled to receive both retirement pay and

disability benefits without waiving any portion of the retirement pay. We are

informed by the Department of Defense that those who benefit from that law

19

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitied.

PAUL D. CLEMENT

Solicitor General

PETER D. KEISLER

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

DAN HIMMELFARB

PAUL J. HUTTER Assistant to the Solicitor

Acting General Counsel General

Department of Veterans 4

Affairs MICHAEL S. RAAB

JOSHUA WALDMAN

Attorneus

NOVEMBER 2006

constitute approximately one fourth of the total number of service members

who are eligible for both retirement pay and disability benefits. Accordingly,

while the law is likely to cause a decrease in the number of cases in which the

retirement pay divided upon divorce is later reduced as a result of the veteran's

receipt of disability benefits, and thus in the number of cases in which the

questions presented here may arise, such cases will not be eliminated entirely.