Ex parte Vaughn

• Decision Date: 27 August 1993
• Parties: Ex parte Madge W. VAUGHN. (Re Madge W. VAUGHN v. Charles G. VAUGHN). 1911634.
• Court: Alabama Supreme Court

Page 533

634 So.2d 533

Ex parte Madge W. VAUGHN (Re Madge W. VAUGHN v. Charles G. VAUGHN).

1911634.

Supreme Court of Alabama.

Aug. 27, 1993.

Rehearing Denied Dec. 3, 1993.

Ernest L. Potter, Huntsville, for petitioner.

David A. Kimberley of Floyd, Keener, Cusimano & Roberts, Gadsden, for respondent.

John L. Capell III and Ellen M. Hastings of Capell, Howard, Knabe & Cobbs, P.A., Montgomery, for amici curiae Madison County Women's Political Caucus, Alabama Women's Political Caucus, Alabama League of Women Voters, American Ass'n of University Women, Alabama Chapter, American Ass'n of University Women, Huntsville Chapter, Churchwomen United-Huntsville, Nat. Ex-pose (Ex-Partners of Service Men [Women] for Equality), Alabama Ex-pose, Alabama Women's Com'n and Rocket City Business and Professional Women.

ADAMS, Justice.

We granted the petition of Madge W. Vaughn for certiorari review of the judgment of the Court of Civil Appeals in Vaughn v. Vaughn, 634 So.2d 530 (Ala.Civ.App.1992). We reverse and remand.

Madge W. Vaughn and Charles G. Vaughn were married on April 23, 1966, and they were divorced on March 13, 1991. During the marriage, Mr. Vaughn was a member of the United States Army and retired as a Lt. Colonel in October 1986. Since his retirement, Mr. Vaughn has been employed in the private sector, and he has also been receiving military retirement pay. Mrs. Vaughn is currently employed by the Huntsville school system.

After an ore tenus hearing, the trial court entered a divorce judgment providing for the distribution of real and personal property, nonpension financial assets, child support, and alimony payments. The trial court, however, denied Mrs. Vaughn's request for an award of an interest in Mr. Vaughn's military retirement pay, stating, on the basis of Tinsley v. Tinsley, 431 So.2d 1304 (Ala.Civ.App.1983), that "military retirement benefits cannot be considered as marital property and may not be included in an award of alimony in gross or in a division of property. It may be considered only as a source of income regarding periodic alimony."

The Court of Civil Appeals affirmed; we granted certiorari review to address the issue of whether the military retirement benefits of one spouse may be considered as marital property and, thus, subject to property division and/or included in an award of alimony in gross. We answer affirmatively.

The standard governing the treatment of military retirement benefits, upon the dissolution of a marriage, in Alabama was set out in Kabaci v. Kabaci, 373 So.2d 1144 (Ala.Civ.App.1979). The Court of Civil Appeals refused to treat an award of military retirement benefits as either a property settlement or alimony in gross and stated:

"After an exhaustive search, we have been unable to find any authority for a court to treat an award of retirement benefits as either a property settlement or alimony in gross. In the absence of sound authority for so classifying such an award, we decide that such cannot be done by the courts of this state."

Kabaci, 373 So.2d at 1146. While this premise--the "absence of sound authority"--may have been valid at the time the Court of Civil Appeals ruled in Kabaci, it is no longer true.

The United States Supreme Court held in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981), that on dissolution of the marriage, federal law precludes a state court from dividing military nondisability retired pay pursuant to state community property laws. The Supreme Court, however, "recognize[d] that the plight of an ex-spouse of a retired service member is often a serious one," but suggested that the decision of whether "more protection should be afforded a former spouse of a retired service member ... [was] for Congress alone." 453 U.S. at 235, 101 S.Ct. at 2742.

Congress responded to the Supreme Court's suggestion and enacted the Uniformed Services Former Spouses' Protection Act ("USFSPA") (codified in part at 10 U.S.C. § 1408) in 1982. Section 1408(c)(1) (as amended 1990) of the USFSPA provides:

"Subject to the limitations of this section, a court may treat disposable retired 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. 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 the 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 incident 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."

Section 1408(a)(4) (as amended 1990) defines "disposable retired pay" or "retainer pay" as:

"(4) The term 'disposable retired pay' means the total monthly retired pay to which a member is entitled less amounts which--

"(A) are owed by that member to the United States for previous overpayments of retired pay and for recoupments required by law resulting from entitlement to retired pay;

"(B) are deducted from the retired pay of such member as a result of forfeitures of retired pay ordered by a court-marital [sic] or as a result of a waiver of retired pay required by law in order to receive compensation under title 5 or title 38;

"(C) in the case of a member entitled to retired pay under chapter 61 of this title, 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 (or the date on which the member's name was placed on the temporary disability retired list); or

"(D) are deducted because of an election under chapter 73 of this title to provide an annuity to a spouse or former spouse to whom payment of a portion of such member's retired pay is being made pursuant to a court order under this section."

The Act has been explained as follows:

"The purpose of this provision is to place the courts in the same position that they were in on June 26, 1981, the date of the McCarty decision, with respect to treatment of non-disability military retired or retainer pay. The provision is intended to remove the federal pre-emption found to exist by the United States Supreme Court and permit State and other courts of competent jurisdiction to apply pertinent State or other laws in determining whether military retired or retainer pay should be divisable [sic]. Nothing in this provision requires any division; it leaves that issue up to the courts applying community property, equitable distribution or other principles of marital property determination and distribution. This power is returned to the courts retroactive to June 26, 1981. This retroactive application will at least afford individuals who were divorced (or had decrees modified) during the interim period between June 26, 1981 and the effective date of this legislation the opportunity to return to the courts to take advantage of this provision."

Senate Report No. 27.502, 97th Congress, Second Session 16, reprinted in 1982 United States Code Congressional and Administrative News, 1611. See also Mansell v. Mansell, 490 U.S. 581, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1989) (holding that under the federal USFSPA, 10 U.S.C. § 1408, state courts may not treat as property divisible upon divorce, military retirement pay waived by the retiree in order to receive veterans' benefits).

It is obvious that the USFSPA does not mandate, but rather, authorizes, state courts to consider military retirement benefits as marital property, and, thus, subject to equitable division. A significant number of state courts have taken notice of this authorization given by the USFSPA and have held that military retirement benefits are subject to distribution as...