Citation Codes

Equivalent Citations

citation codes

Docket Number

No. 0477-21-4

Attorney(S)

Ryan M. Schmalzle (Beckman Schmalzle Georgelas & Ross, on briefs), for appellant. John C. Whitbeck, Jr.; Raymond S. Dietrich (Kristin E. Glenn; WhitbeckBennett, PLLC; Raymond S. Dietrich, PLLC, on briefs), for appellee.

Judges

MARY GRACE O'BRIEN JUDGE

Acts

Armed Forces — General Military Law — Computation Of Retired Pay — Personnel — Payment Of Retired Or Retainer Pay In Compliance With Court Orders

See more information ...

Smart Summary

Summary of Memorandum Opinion: John K. Leo v. Dannah A. Leo (02-01-2022)

Factual and Procedural Background

The parties were married in 2005 and separated in 2018. After separation, they resolved certain issues and, on December 1, 2020, the circuit court conducted a trial on remaining issues including spousal support. Prior to trial the parties executed written stipulations incorporated into the final divorce order. One stipulation stated that "wife shall receive 50% of the marital share of the [h]usband's DFAS retirement." The stipulations were otherwise silent on the husband's military retirement pay.

The parties stipulated to incomes: wife's gross monthly income of $6,295.83 and husband's gross monthly income of $16,246.99. The circuit court ordered husband to pay $3,100 per month in spousal support for ten years, noting disparate earning capacity, the parties' high standard of living during the marriage, and that wife was "at capacity" to work outside the home given childcare circumstances.

Subsequently wife submitted a proposed order assigning to her 50% of husband's military retirement pay and including provisions that (1) prohibited husband from making any election (including merging retirement with another pension plan) that would adversely affect the amount or existence of his military retired pay or wife's rights under the order, and (2) required husband to indemnify wife for any military retired pay waived as a result of a disability election (paying wife directly as if payments were made pursuant to the order). Husband objected to these provisions. The circuit court entered the military pay order containing these disputed provisions and incorporated it into the divorce order.

Legal Issues Presented

Whether the circuit court erred by entering a military pay order that (a) prohibited the husband from making elections affecting his military retired pay and (b) required husband to indemnify wife for any military retired pay waived for disability—thereby modifying the parties' equitable distribution stipulation and conflicting with federal law (10 U.S.C. § 1408 and related Supreme Court precedent).
Whether the spousal support award must be reconsidered because the military pay order's invalid provisions affected the value of wife's equitable distribution share and thus the statutory factors the court must consider in fixing spousal support.

Arguments of the Parties

Husband's Arguments (Appellant)

The military pay order, as entered, impermissibly modified the parties' stipulation that wife would receive 50% of the marital share of husband's DFAS retirement by including prohibitions on husband's elections and by requiring indemnification for disability elections—altering the substantive nature and value of the stipulated distribution.
The court lacked jurisdiction or authority under federal law to enter an order containing provisions that prohibit elections affecting military retirement pay or that require indemnification for waived retirement pay (citing 10 U.S.C. § 1408 and related federal precedent).
Because the invalid provisions affected the value of wife's share of the military retirement, the spousal support award based on consideration of property interests must be reversed and remanded for recalculation consistent with a corrected military pay order.

Wife's Arguments (Appellee)

The opinion does not contain a detailed account of the appellee's legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Wiencko v. Takayama, 62 Va.App. 217 (2013)	Standard of review: equitable distribution awards reviewed for abuse of discretion.	The court used this case to state the ordinary standard for reviewing equitable distribution awards.
Owens v. Owens, 41 Va.App. 844 (2003)	Statement that a trial court abuses its discretion when it makes an error of law.	Quoted to explain that an error of law constitutes an abuse of discretion.
Shooltz v. Shooltz, 27 Va.App. 264 (1998)	Support for the quoted principle that an error of law is an abuse of discretion.	Quoted within the Owens discussion to support the abuse-of-discretion principle.
Dixon v. Dixon, 71 Va.App. 709 (2020)	When issue involves statutory interpretation of federal and state law, review is de novo.	Invoked to justify conducting a de novo review of the court's decision because it involved statutory interpretation.
McCarty v. McCarty, 453 U.S. 210 (1981)	Historical rule that, prior to 10 U.S.C. § 1408, military retirement could not be divided between divorcing spouses.	Used to explain the pre-§1408 rule and the subsequent statutory change.
Mansell v. Mansell, 490 U.S. 581 (1989)	Federal statute prohibits treating as divisible property military retirement pay waived to receive veterans' disability benefits.	Applied to show that waived retirement pay may not be divided and former spouse is not entitled to portion of disability pay.
Howell v. Howell, 137 S. Ct. 1400 (2017)	Reimbursement and indemnification orders that displace 10 U.S.C. § 1408(a)(4)(A) are preempted by federal law.	Central precedent: the court held that the challenged indemnification and prohibitory election provisions contradicted Howell and therefore were invalid and preempted.
Yourko v. Yourko, 74 Va.App. 80 (2021)	Applied Howell: Virginia courts may not issue orders requiring servicemembers to make indemnification promises that contravene Howell.	Relied on as state precedent applying Howell and overruling prior Virginia cases that permitted circumvention of Mansell by agreement; used to support invalidation of indemnification/election provisions.
Robinson v. Robinson, 54 Va.App. 87 (2009)	Court must consider statutory factors and identify which were significant in determining a spousal support award.	Invoked to state the requirement that the trial court identify the statutory factors significant to its spousal support determination.
Fadness v. Fadness, 52 Va.App. 833 (2008)	Support for the requirement to consider statutory factors in spousal support determinations.	Used alongside Robinson to describe the statutory-factor requirement for spousal support orders.
Bruemmer v. Bruemmer, 46 Va.App. 205 (2005)	The court need not quantify or elaborate the weight it gave to every statutory factor.	Quoted to explain the limits of the trial court's obligations when explaining support awards.
Miller v. Cox, 44 Va.App. 674 (2005)	Quoted authority for the Bruemmer proposition about weighing factors.	Cited via Bruemmer to support the statement that precise quantification of weight is not required.

Court's Reasoning and Analysis

The court divided its analysis into two parts: (I) equitable distribution as it relates to the military pay order, and (II) the spousal support award.

I. Equitable Distribution and Military Retirement:

The court began by stating the applicable standards of review: equitable distribution generally reviewed for abuse of discretion, but where federal and state statutory interpretation is implicated, review is de novo (citing Wiencko, Owens, Shooltz, and Dixon).
The court explained the relevant federal statutory framework: 10 U.S.C. § 1408 allows division of "disposable retired pay" but explicitly excludes division of retired pay waived to receive veterans' disability compensation (citing 10 U.S.C. § 1408(a)(4)(A) and Mansell).
The Supreme Court's decision in Howell directly addresses indemnification for waived retirement pay, holding that reimbursement/indemnification orders are preempted because they conflict with § 1408(a)(4)(A).
The Virginia Court of Appeals had applied Howell in Yourko, holding that Virginia courts cannot require servicemembers to make indemnification promises inconsistent with Howell.
Applying Howell and Yourko, the court concluded that the military pay order's provisions (prohibiting husband from making elections affecting his military retired pay and requiring indemnification to wife for waived retirement pay) contradicted Howell and were therefore preempted and invalid.
Accordingly, the court reversed the military pay order, vacated the disputed provisions, and remanded for entry of a new order consistent with federal law and the opinion.

II. Spousal Support:

The court described the statutory scheme for spousal support (Code § 20-107.1(E)) and the requirement that a court consider listed statutory factors and identify those significant to its decision (citing Robinson, Fadness, and Code § 20-107.1(F)).
It noted that wife's share in husband's military retirement, as reflected in the parties' stipulation, is a property interest that must be considered when determining spousal support (citing Code § 20-107.1(E)(8)).
Because the military pay order included invalid provisions that affected the value of wife's share, and because that property interest was a relevant statutory factor, the court determined the spousal support award could not stand unchanged; it ordered reversal and remand so the trial court could recalculate spousal support after entry of a corrected military pay order.

Holding and Implications

REVERSED AND REMANDED

Holding:

The court held that the military pay order's provisions prohibiting the husband from making elections affecting his military retired pay and requiring indemnification for any retirement pay waived for disability were preempted by federal law (10 U.S.C. § 1408) as interpreted by Howell v. Howell. The military pay order was reversed and vacated, and the matter was remanded for entry of a new order consistent with federal law and this opinion.
The court also reversed and remanded the spousal support award so the trial court can recalculate the appropriate amount after considering a corrected military pay order and properly accounting for the property's value in light of the corrected order.

Implications:

Direct effect on the parties: the military pay order is vacated and the spousal support award must be reconsidered; the trial court must enter a new military-pay-related order consistent with Howell and applicable federal law and then reconsider spousal support in light of that corrected order.
The opinion applies existing federal and Virginia precedent (Howell and Yourko) to invalidate indemnification and election-prohibiting provisions; it does not announce a new legal doctrine beyond applying those precedents.

Disposition: Reversed and remanded. (Opinion not designated for publication pursuant to Code § 17.1-413.)

Show full summary ...

JOHN K. LEO v. DANNAH A. LEO JOHN K. LEO

MARY GRACE O'BRIEN JUDGE

FROM THE CIRCUIT COURT OF LOUDOUN COUNTY JAMES P. FISHER, JUDGE

Present: Judges Beales, O'Brien and Russell Argued by videoconference

Ryan M. Schmalzle (Beckman Schmalzle Georgelas & Ross, on briefs), for appellant.

John C. Whitbeck, Jr.; Raymond S. Dietrich (Kristin E. Glenn; WhitbeckBennett, PLLC; Raymond S. Dietrich, PLLC, on briefs), for appellee.

MEMORANDUM OPINION ^[*]

MARY GRACE O'BRIEN JUDGE

John K. Leo ("husband") appeals a divorce order requiring him to pay Dannah A. Leo ("wife") monthly spousal support of $3, 100 for ten years. Husband also appeals an order assigning wife's share of his military retirement pay, contending that the court impermissibly modified the parties' equitable distribution stipulations.

BACKGROUND

The parties married in 2005 and separated in 2018. After separating, they resolved certain issues pertaining to their divorce, and on December 1, 2020, the court conducted a trial on the remaining issues, including spousal support. Prior to trial, the parties executed written stipulations that were incorporated into the final divorce order. The stipulations included the parties' agreement concerning equitable distribution of property. Husband previously had served in the military, and one stipulation provided that "[w]ife shall receive 50% of the marital share of the [h]usband's DFAS retirement." The stipulations were otherwise silent on the issue of husband's military retirement pay.

The parties stipulated that wife's gross monthly income was $6, 295.83, and husband's gross monthly income was $16, 246.99. The court ordered husband to pay $3, 100 per month in spousal support for ten years, noting the "disparate" earning capacity between the parties. The parties had two children, and the court determined that based on the children's ages and a "special circumstance" with one child for whom wife is the sole custodian, wife was "at capacity" in her ability to work outside the home. The court also observed that the parties enjoyed "a substantially high standard of living" during the marriage.

At a subsequent hearing, wife submitted a proposed order assigning to her the 50% share of husband's military retirement pay. The order included the following provisions limiting "further actions" by husband:

1. [Husband] is prohibited from making any election, including merging his Military Retired Pay with another pension plan, that in any way adversely affects the existence or amount of his Military Retired Pay or the rights of [wife] as set forth in this Order.

2. [Husband] agrees to indemnify [wife] for any Military Retired Pay waived as a result of a disability election. Accordingly, [husband] will pay to [wife] directly the monthly amount provided to [wife]

above, under the same terms and conditions as if those payments were made pursuant to the terms of this Order.

(Emphasis added).

Husband objected to the language "prohibit[ing him] from making any election" and requiring him to "indemnify" wife for any retirement pay "waived as a result of a disability election." The court entered the military pay order with the disputed provisions on the same day it entered the divorce order, which provided that the military pay order was "fully incorporated herein."

ANALYSIS

I. Equitable Distribution

Husband contends the court erred by modifying the parties' stipulation concerning equitable distribution. Initially, he argues that the military pay order does not reflect their stipulation that "[w]ife shall receive 50%" because it prohibits him from changing the nature of his retirement pay and requires him to reimburse wife if he elects disability pay in lieu of retirement pay. Further, he contends that the Court did not have "jurisdiction or authority . . . under federal law" to enter the order containing the disputed provisions.

Generally, we review a court's equitable distribution award for an abuse of discretion. Wiencko v. Takayama, 62 Va.App. 217, 229-30 (2013). "[A] trial court 'by definition abuses its discretion when it makes an error of law.'" Owens v. Owens, 41 Va.App. 844, 853 (2003) (quoting Shooltz v. Shooltz, 27 Va.App. 264, 271 (1998)). Because resolution of the issue in this case involves statutory interpretation of both federal and state law, we conduct a de novo review of the court's decision. See Dixon v. Dixon, 71 Va.App. 709, 718 (2020).

Prior to the passage of 10 U.S.C. § 1408, military retirement could not be divided between divorcing spouses. See McCarty v. McCarty, 453 U.S. 210, 228-29 (1981), superseded by statute as recognized in Howell v. Howell, 137 S.Ct. 1400 (2017). The enactment of 10 U.S.C. § 1408 changed the rule and codified the circumstances under which "disposable retire[ment] pay" could be divided as property between a veteran and the veteran's spouse in a divorce proceeding. 10 U.S.C. § 1408(c)(1). However, the statute specifically excluded the division of military retirement pay waived for various reasons, including retirement pay waived for a veteran to receive disability compensation. 10 U.S.C. § 1408(a)(4)(A). Waived retirement pay may not be divided in a divorce proceeding; a former spouse is not entitled to any portion of a veteran's disability pay. 10 U.S.C. § 1408(a)(4)(A); see also Mansell v. Mansell, 490 U.S. 581, 594-95 (1989) (holding that the federal statute prohibits "treat[ing] as property divisible upon divorce military retirement pay that has been waived to receive veterans' disability benefits").

In Howell, the United States Supreme Court dealt squarely with the issue of dividing waived military retirement pay. 137 S.Ct. at 1402, 1406. The Court addressed whether a veteran could be ordered to indemnify, or reimburse, a former spouse for any difference in retirement pay resulting from the veteran's waiver of the benefit in favor of disability pay. Id. at 1406. The Court reversed an Arizona court's order requiring reimbursement, holding that "reimbursement and indemnification orders displace the federal rule [10 U.S.C. § 1408(a)(4)(A)] and stand as an obstacle to the accomplishment and execution of the purposes and objectives of Congress. All such orders are thus pre-empted." Id.

This Court recently applied the holding in Howell in Yourko v. Yourko, 74 Va.App. 80 (2021). Overruling previous Virginia cases that permitted parties to "circumvent the Mansell prohibition by agreement," we held that Virginia courts are prohibited from "issu[ing] orders that require . . . servicemembers to make contracts, 'guarantees,' or 'indemnification' promises to formers spouses in contravention of Howell." Id. at 96.

Here, over husband's objection, the court entered an order requiring him to "indemnify [wife] for any Military Retired Pay waived as a result of a disability election" and prohibiting husband from making "any election . . . that in any way adversely affects the . . . amount of his Military Retired Pay." This language clearly contradicts the holding of the United States Supreme Court in Howell. Accordingly, we reverse the court's ruling, vacate the military pay order, and remand for entry of a new order consistent with this opinion.

II. Spousal Support

Husband also challenges the court's ruling regarding his spousal support obligation. Code § 20-107.1(E) permits a court to order "support and maintenance for a spouse" based on certain circumstances. The statute lists the factors the court must consider before determining the "nature, amount and duration" of a support award. Code § 20-107.1(E). These factors include "income from all pension, profit sharing or retirement plans, of whatever nature;" "[t]he property interests of the parties, both real and personal, tangible and intangible;" and "[t]he provisions made with regard to the marital property under [Code] § 20-107.3." Code § 20-107.1(E)(1), (7)-(8).

Before awarding spousal support, the court is required to consider all the statutory factors and specifically identify which were significant in determining the support award. Robinson v. Robinson, 54 Va.App. 87, 91 (2009); see also Fadness v. Fadness, 52 Va.App. 833, 845-46 (2008); Code § 20-107.1(F) (requiring that orders awarding spousal support "shall be accompanied by written findings and conclusions of the court identifying the factors in [Code § 20-107.1(E)] which support the court's order"). However, the court need not "quantify or elaborate" the weight it gave to every factor. Bruemmer v. Bruemmer, 46 Va.App. 205, 210 (2005) (quoting Miller v. Cox, 44 Va.App. 674, 679 (2005)).

Here, wife's share in husband's military retirement, as reflected in their stipulation, constituted a property interest. It is, therefore, part of wife's equitable distribution award and must be considered when the court determines the appropriate amount of spousal support. See Code § 20-107.1(E)(8). However, the military pay order included invalid provisions prohibiting election and requiring indemnification, which affected the value of wife's share. Because we reverse the military pay order, we must also reverse and remand the spousal support award for the court to recalculate the appropriate amount after considering the corrected military pay order.

CONCLUSION

We find that the court erred by entering a military pay order with provisions in violation of 10 U.S.C. § 1408 as applied in Howell v. Howell, 137 S.Ct. 1400 (2017). Additionally, as a result of the court's error, the spousal support award must be reconsidered. Accordingly, we reverse and remand for further proceedings consistent with this opinion.

Reversed and remanded. ^[*] Pursuant to Code § 17.1-413, this opinion is not designated for publication.

Leo v. Leo