25,889 La.App. 2 Cir. 6/22/94, Sherrill v. Sherrill

• Decision Date: 22 June 1994
• Citation: 639 So.2d 794
• Parties: 25,889 La.App. 2 Cir
• Court: Court of Appeal of Louisiana — District of US

Page 794

639 So.2d 794

25,889 La.App. 2 Cir. 6/22/94

Larry J. SHERRILL, Plaintiff-Appellee, v. Donna J. Olds SHERRILL, Defendant-Appellant.

No. 25,889-CA.

Court of Appeal of Louisiana, Second Circuit.

June 22, 1994.

Sutton & Sutton by Bobby D. Sutton, Jr., Shreveport, for appellant.

Nelson & Hammons by Parker Self, Shreveport, for appellee.

Before NORRIS, VICTORY and WILLIAMS, JJ.

VICTORY, Judge.

Donna J. Olds Sherrill appeals a trial court judgment finding that she was not entitled to a portion of the military retirement benefits of her former husband, Larry Lee Sherrill. For the reasons stated, we reverse.

FACTS

¹

Larry Lee Sherrill entered the United States Air Force on January 2, 1958. On June 28, 1959, he married Donna J. Olds Sherrill, in New Bern, North Carolina. Mr. Sherrill continued his military service for over 20 years, until he retired on September 30, 1978. He began receiving military retirement benefits on October 1, 1978.

On January 13, 1982, Mr. Sherrill filed a petition for legal separation. A judgment of legal separation was subsequently granted on February 4, 1982. The Sherrills entered into a community property settlement on June 28, 1982; however, no mention was made of Mr. Sherrill's military retirement. A judgment of divorce was rendered on July 12, 1982.

On September 9, 1992, Mrs. Sherrill filed a petition to partition her former husband's military retirement benefits. Therein, she alleged that she was entitled to an undivided 46.38 percent interest in the retirement benefits. She requested that the trial court render a money judgment totalling 46.38 per cent of all of the past military retirement benefits paid to Mr. Sherrill since termination of the community, on January 13, 1982. She also requested that the trial court recognize her undivided 46.38 per cent interest in all future military retirement benefits.

Mr. Sherrill answered the petition to partition on October 5, 1992. Therein, he asserted that all community property issues existing between he and Mrs. Sherrill were finalized by their community property settlement. On the date of trial, January 29, 1993, Mr. Sherrill filed peremptory exceptions of prescription and res judicata. In support of his res judicata exception, Mr. Sherrill reargued that all community property issues were previously compromised. In support of his prescription exception, Mr. Sherrill claimed that more than 10 years had elapsed since execution of the settlement agreement, and that Mrs. Sherrill's partition action had prescribed pursuant to LSA-C.C. Art. 3499.

For reasons hereinafter discussed, the trial court denied Mrs. Sherrill's request for partition of the military retirement benefits. Because of the trial court's finding, no ruling was made on Mr. Sherrill's peremptory exceptions. Mrs. Sherrill appeals. We reverse.

DISCUSSION

CLASSIFICATION OF MILITARY RETIREMENT BENEFITS AS COMMUNITY PROPERTY

Prior to 1981, Louisiana courts had held that former spouses were entitled to a community share of the other spouse's military retirement pay when the right to such benefits was acquired during the marriage. See, e.g., Moon v. Moon, 345 So.2d 168 (La.App. 3d Cir.1977), writ denied, 347 So.2d 250 (La.1977); and Swope v. Mitchell, 324 So.2d 461 (La.App. 3rd Cir.1975). However, the law changed on June 26, 1981, when the United States Supreme Court announced, in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981), that military retirement pay was not subject to division under state community property regimes. In so finding, the Court stated that:

[C]ongress may well decide, as it has in the Civil Service and Foreign Service contexts, that more protection should be afforded a former spouse of a retired service member. This decision, however, is for Congress alone.

McCarty, 453 U.S. at 236-37, 101 S.Ct. at 2743.

Thereafter, in the case of Dedon v. Dedon, 404 So.2d 904 (La.1981), Louisiana acknowledged the effect of McCarty, supra, by recognizing that the federal scheme of military retirement benefits preempted state community property law.

On September 8, 1982, the Congress accepted the U.S. Supreme Court's invitation to afford greater protection to former spouses of military retirees, by enacting the Uniformed Services Former Spouses' Protection Act (USFSPA), effective January 1, 1983. The key provision of the Act was set forth in subsection (c)(1) of 10 U.S.C. § 1408, which provided that:

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, 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.

This statute returned to the states the authority to determine if military retired pay is to be treated as the separate property of the service member or if it is to be treated as the community property of the service member and spouse.

The language of the statute clearly indicates that Congress intended for 10 U.S.C. § 1408(c)(1) to apply retroactively in such a manner as to totally eliminate the effect of McCarty, supra. Simmons v. Simmons, 453 So.2d 631, 633 (La.App. 3rd Cir.1984). Furthermore, Congress intended for this statute to apply to those decrees issued during the "window" between McCarty, supra, and enactment of 10 U.S.C. § 1408(c)(1). This is reflected by the Senate report which states that, "(f)ormer spouses divorced in the interim period between the McCarty decision and the effective date of this law will have the opportunity to return to court to have their decrees modified in light of this legislation." Senate Report No. 97-502, July 22, 1982, reprinted in 1982 United States Code Congressional and Administrative News, 1555, 1596-1600.

Following the passage of 10 U.S.C. § 1408(c)(1), courts were inundated with requests by former spouses in previously closed divorce cases, to apply the new statute to the partition of military retirement benefits. Johnson v. Johnson, 605 So.2d 1157, 1159 (La.App. 2d Cir.1992), writ denied, 608 So.2d 152 (La.1992). In response to this flood of cases seeking to reopen pre-McCarty divorce cases, Congress amended 10 U.S.C. § 1408(c)(1), in 1990, by adding the following phrase:

A court may not treat retired pay as property in any proceeding to divide or partition any amount of retired pay of a member as the property of a member and the member's spouse or former spouse if a final decree of divorce, dissolution, annulment, or legal separation (including a court ordered, ratified, or approved property settlement incidental to such decree) affecting the member and the member's spouse or former spouse (A) was issued before June 25, 1981, and (B) did not treat (or reserve jurisdiction to treat) any amount of retired pay of the member as property of the member and the member's spouse or former spouse.

The legislative history and purpose underlying the amendment to 10 U.S.C. § 1408(c)(1) is outlined in [1990] United States Code Congressional and Administrative News, 2931, 3166. This publication explains, that if a final decree of divorce, dissolution, annulment or legal separation was issued before the McCarty decision, and did not treat or reserve treatment of military retirement pay as the property of both the retired member and the former spouse, then the court, subsequent to McCarty, supra, may not divide retired pay between the retired member and the former spouse. Johnson, 605 So.2d at 1161. It is clear, that the intent of the Congress in amending the statute was to prevent relitigation of cases concluded prior to McCarty, supra. Johnson, 605 So.2d at 1161. Conversely, if a final decree of divorce, dissolution, annulment or legal separation was issued after McCarty, supra, courts may treat the retired pay as community property, and divide it between the retired member and the former spouse.

RETROACTIVITY OF 10 U.S.C. § 1408(c)(1)

Despite the plain language of 10 U.S.C. § 1408(c)(1) and clear Congressional motivation for enactment thereof, the trial court found that Mrs. Sherrill was not entitled to a portion of the military retirement benefits. This conclusion was based upon two erroneous legal conclusions. First, the trial court found that the Congress does not have constitutional authority to overrule the U.S. Supreme Court retroactively. Second, it found that retroactive application of 10 U.S.C. § 1408(c)(1) would unconstitutionally deprive Mr. Sherrill of vested substantive rights.

These issues have been previously addressed and settled by our brethren of the Louisiana Third Circuit Court of Appeal, in Menard v. Menard, 460 So.2d 751 (La.App. 3d Cir.1984), and Simmons, supra. In Simmons, supra, the parties filed for divorce and requested partition of their community property on May 12, 1982, during the "window" between McCarty, supra, and enactment of 10 U.S.C. § 1408(c)(1). The judgment of divorce and partition was issued on June 10, 1983, subsequent to enactment of 10 U.S.C. § 1408(c)(1). In that judgment, the husband's military retirement benefits were declared community property. The husband appealed, claiming that retroactive application of 10 U.S.C. § 1408 unconstitutionally deprived him of a vested right and violated due process.

The court found the husband's contentions meritless. It concluded that retirement status for military personnel and the right to an amount of retirement benefits are controlled by statute. Furthermore, the court found that legislation providing for pension or retirement systems is generally considered remedial, and may be retrospectively applied. Simmons, 453 So.2d at 634, citing Maillet v. Board of Trustees, Teachers' Retirement System of La., 248 La. 964, 183 So.2d 321 (1966). Having found that the statute could be applied retroactively, the court analyzed whether such retroactive application comported with the test of due process. The court found...