Clauson v. Clauson

• Decision Date: 08 May 1992
• Docket Number: No. S-4150,S-4150
• Citation: 831 P.2d 1257
• Parties: , 15 Employee Benefits Cas. 1913 James F. CLAUSON, Appellant, v. Dorothy F. CLAUSON, Appellee.
• Court: Alaska Supreme Court

Page 1257

831 P.2d 1257

60 USLW 2779, 15 Employee Benefits Cas. 1913

James F. CLAUSON, Appellant, v. Dorothy F. CLAUSON, Appellee.

No. S-4150.

Supreme Court of Alaska.

May 8, 1992.

William T. Ford, Anchorage, for appellant.

Timothy E. Troll, Roger H. Beaty, Beaty, Draeger, Locke & Troll, Anchorage, for appellee.

Before RABINOWITZ, C.J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ.

OPINION

BURKE, Justice.

James Clauson appeals a superior court order requiring him to pay his former wife, Dorothy Clauson (now Dorothy Crabtree), $168 per month to replace her share of his waived military retirement pay. Four years after the parties stipulated to a marital property settlement in which Dorothy was awarded a portion of James' military pension, James elected to waive his military pension in order to collect veterans disability benefits. The waiver resulted in Dorothy's payments ceasing and led her to seek a modification of the divorce judgment.

James challenges both the procedural and substantive aspects of the modification order. The threshold procedural issue concerns Dorothy's entitlement to relief from a final property settlement judgment. If, upon remand, the trial court finds that Dorothy's motion was timely filed, we conclude that the circumstances presented here support Civil Rule 60(b)(6) relief from judgment.

The substantive question we must address is whether the Uniformed Services Former Spouses' Protection Act (USFSPA), ¹ as it has been interpreted in Mansell v. Mansell, 490 U.S. 581, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1988), precludes state courts from considering a former spouse's military disability benefits received in lieu of waived retirement pay when making an equitable division of marital assets. The Mansell holding clearly prohibits state courts from treating veterans' disability pay as divisible property upon divorce. However, the Supreme Court's interpretation of the USFSPA does not require our courts to entirely disregard this source of post-divorce income in effecting an equitable distribution of the parties' assets.

Alaska Statute 25.24.160(a)(4) (1991) requires a trial court to "fairly allocate the economic effect of divorce" based, inter alia, on the earning capacity and financial condition of the parties involved. Since the waiver of retirement pay and collection of disability benefits clearly affects James and Dorothy's relative financial positions, Dorothy is entitled to a redistribution of the marital estate under these new circumstances.

Nevertheless, in the case at bar, the trial judge simply ordered James to pay an amount equivalent to Dorothy's share of the waived retirement pension as if the waiver had never occurred. The effect of the modification order was to award Dorothy a portion of James' disability benefits. The order, therefore, runs afoul of the holding in Mansell and, consequently, the Supremacy Clause of the federal constitution. We vacate the modification order and remand the case for a hearing to reconsider an equitable division of the parties' marital assets in light of the new circumstances.

I

Dorothy and James were married in Texas in 1958 and divorced in Alaska in 1984. The parties entered into a stipulated property settlement at the time of their divorce that provided, in part:

A. Plaintiff shall receive:

....

(iv) 13/40 of Defendant's current military pension and increases therein, which will currently entitle her to approximately $150.00 per month, which sum shall be paid directly to her by the Department of Defense for the rest of her natural live (sic), or the natural life of defendant, whichever event occurs first.

James' pension was part of a marital estate which included automobiles and some real estate. Both parties were represented by counsel during the divorce proceeding. The trial court accepted the parties' stipulated findings of fact and conclusions of law and stated in the divorce decree that "the division of the parties' property is found to be fair and equitable."

Four years later, James elected to waive all of his military retirement pension in order to receive disability benefits. ² Dorothy had been receiving $168 per month from the federal government as her share of the pension. After the waiver, the payments stopped.

On May 23, 1990, Dorothy filed a "Motion to Amend [the] Decree of Divorce." The motion and its supporting memorandum did not cite any statute or rule of civil procedure authorizing a court to amend a property settlement included in a final divorce decree. James, citing Mansell, opposed Dorothy's motion but did not challenge her right to modify a final property settlement. Even so, in her reply to the opposition, Dorothy maintained that James' waiver of his retirement pay, which terminated her own interest in this benefit, "is a change of circumstances under AS 25.24.170 ³ and in addition constitute[d] a destruction of the Court's original finding in its Divorce Decree that the property division was fair and equitable." There is no record that James objected to Dorothy's motion on procedural grounds at any stage of the proceedings below.

Dorothy requested oral argument to resolve the legal issues in the case, but it appears that no hearing took place. In August 1990, Judge Carlson signed an order requiring James to pay Dorothy:

the sum of $168 per month for the months of December 1989 through May 1990 in the total amount $888 for past payments due. Future payments of $168 per month beginning June 1990, or such amount as is due pursuant to the Divorce Decree in the event Defendant's retirement pay has increased, shall also be paid by Defendant to Plaintiff.

The modification order contained no supporting findings of fact or conclusions of law. James now appeals.

II

1. Do the circumstances of this case justify relief from judgment under Civil Rule 60(b)(6)? ⁴

James argues on appeal that Dorothy is not entitled to modify the final divorce decree because she has not established "extraordinary circumstances" justifying relief from judgment as required by Civil Rule 60(b)(6). See Lowe v. Lowe, 817 P.2d 453 (Alaska 1991); Schofield v. Schofield, 777 P.2d 197 (Alaska 1989); Foster v. Foster, 684 P.2d 869 (Alaska 1984). ⁵ Our prior cases have enunciated four factors constituting extraordinary circumstances justifying relief, under Rule 60(b)(6), from a property division:

Those factors [a]re: (1) the fundamental, underlying assumption of the dissolution agreement ha[s] been destroyed; (2) the parties' property division was poorly thought out; (3) the property division was reached without the benefit of counsel; and (4) the [asset in controversy] was the parties' principal asset.

Lowe at 458-59. If, as James assumes, the presence of all four factors is necessary to support a finding of "extraordinary circumstances," then Dorothy would not be entitled to modify her divorce decree because few, if any, of these factors are present in this case.

However, we have never held that all of these factors are essential for a finding of "extraordinary circumstances." Rule 60(b)(6) is, after all, a catch-all provision and "should be liberally construed to enable court's to vacate judgments whenever such action is necessary to accomplish justice." O'Link v. O'Link, 632 P.2d 225, 230 (Alaska 1981) (emphasis added). The four factors which we have cited in previous cases are not strictly necessary conditions but, rather, are particular instantiations of the equitable factors required to overcome the principle that, at some point, "litigation [must] be brought to an end." Lowe, 817 P.2d at 459 (quoting Livingston v. Livingston, 572 P.2d 79, 85 (Alaska 1977)).

In this case, the equities clearly reside with Dorothy. In reality, she is not even seeking to modify the divorce decree. James did that, unilaterally and extrajudicially, when he decided to waive his retirement pension in order to collect disability benefits. Dorothy is merely trying to reestablish the status quo through her motion. Therefore it does not matter whether the first property settlement was well thought out or whether both sides were adequately represented by counsel. The financial loss to Dorothy of her share of James' military pension is not insignificant and likely justifies a redistribution of the parties' marital property.

As we stated in Norman v. Nichiro Gyogyo Kaisha, Ltd., 761 P.2d 713, 717 (Alaska 1988), "[i]n reaching the conclusion that [a party] is entitled to relief from judgment under Rule 60(b)(6) we balance the interest in the finality of judgments against the interest in granting relief from judgment when justice so requires." Since Dorothy is essentially trying to enforce the financial arrangements of the earlier decree, there is very little weight on the "finality" side of the scale. We conclude, therefore, that these circumstances are sufficiently extraordinary to support a 60(b)(6) motion for relief from judgment.

2. Does federal law preclude the modification of a property settlement to compensate for the loss of military retired pay which has been waived to secure veterans disability benefits?

The Uniformed Services Former Spouses' Protection Act provides that state courts may treat "disposable retired pay" either as the property of the armed forces member "or as property of the member and his spouse in accordance with the law of the jurisdiction." 10 U.S.C. § 1408(c)(1) (Supp.1991). The USFSPA clearly confers upon state courts the authority to divide military pensions according to applicable state divorce and property laws. ⁶ See Chase v. Chase, 662 P.2d 944, 946 (Alaska 1983).

In Chase, we noted that the USFSPA gave state courts "the option to consider military retirement pay in effecting an equitable and just property division." Id. We then held that under state law, military pensions are divisible marital property upon dissolution of marriage. Id.; see also Lang v. Lang, 741 P.2d 1193, 1196 (Alaska 1987) (trial courts can award a...