Griggs v. Griggs

• Citation: 686 P.2d 68,107 Idaho 123
• Decision Date: 08 August 1984
• Docket Number: 14820,Nos. 14250,s. 14250
• Parties: Amy Ruth GRIGGS, Plaintiff-Respondent, v. Charlie E. GRIGGS, Jr., Defendant-Appellant.
• Court: United States State Supreme Court of Idaho

Page 68

686 P.2d 68

107 Idaho 123

Amy Ruth GRIGGS, Plaintiff-Respondent, v. Charlie E. GRIGGS, Jr., Defendant-Appellant.

Nos. 14250, 14820.

Supreme Court of Idaho.

Aug. 8, 1984.

Robert A. Wallace, Boise, for defendant-appellant.

Francis H. Hicks, Mountain Home, for plaintiff-respondent.

DONALDSON, Chief Justice.

This case is an appeal from an Order of the District Court issued on reconsideration, pertaining to the distribution of property incident to a divorce proceeding. On May 2, 1954, plaintiff-respondent (wife) and defendant-appellant (husband) were married in Maryland. Husband served in the United States Air Force for four years prior to the marriage, and eighteen years during the marriage. During his tour of duty, husband was injured in Vietnam, and was assessed as being disabled to the extent of 20%.

On March 4, 1980, wife brought an action in Idaho for a divorce, and a division of the property of the marriage. The magistrate court granted the divorce and divided the property of the marriage between the parties. The magistrate court specifically found that at the time of the divorce, husband was receiving both retirement and disability pay. The court determined the disability pay was not awarded in addition to husband's full retirement pay, but rather "payment of this disability pay reduces the amount of retirement pay received in the same amount." The magistrate concluded that both the retirement pay and the disability pay were community property. That portion of benefits attributed to the time husband served in the military prior to the marriage was determined to be husband's separate property.

Subsequently, husband moved to amend the Findings and Conclusions of the magistrate court, contending that the military disability payments were his separate property. The magistrate court thereafter amended the Findings, Conclusions and Decree to provide that the disability pay was husband's separate property.

Wife then appealed the Amended Order of the magistrate court to the district court stating "[t]he sole issue on Appeal is whether the Judge of the Magistrate's Division committed error in holding that the defendant's military retirement pay is separate property and in awarding the entire amount of such retirement pay to the defendant." The district court reversed the amended decree of the magistrate court and held that the disability benefits were community property.

Husband appealed from the district court's order to the Idaho Supreme Court. However, by stipulation of the parties, the appeal was held in abeyance pending negotiations for post-trial relief. On reconsideration of the district court's orders, wife contended that only the division of the military disability payments were before the court. Husband contended that the division of the entire military benefits were before the court. Furthermore, husband informed the court that McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981), had been decided by the United States Supreme Court, on June 26, 1981, after both the magistrate court and district court had issued their decisions. On the basis of the McCarty holding, husband asserted that the supremacy clause of the United States Constitution prohibited the district court from characterizing either the military retirement pay, or the disability pay, as community property. Husband urged the court to apply the McCarty decision to this case and decree that husband's entire military benefits were his sole and separate property.

On reconsideration, the district court held that only the issue of the disability pay was placed in issue on appeal, and concluded that the disability pay was husband's separate property in light of McCarty. This decision left intact the status of the magistrate court's order which classified the retirement pay as community property. Husband appeals from this order.

I. Retirement Pay

The district court stated that only the classification of the disability pay was placed in issue on appeal from the magistrate court, and again on reconsideration. We do not express an opinion as to whether the district court erred in this holding, because we view this case as one of those rare occasions in which we choose to exercise our plenary jurisdiction under Article 5, § 9 of the Idaho Constitution. We deem it necessary to address the issue of the proper classification of military retirement pay, in order to clarify the issue for the benefit of the bench, the bar, and the citizens of Idaho. ¹ See Worden v. Ordway, 105 Idaho 719, 672 P.2d 1049 (1983) (Donaldson, C.J., specially concurring); Stockwell v. State, 98 Idaho 797, 573 P.2d 116 (1977); State v. Lewis, 96 Idaho 743, 536 P.2d 738 (1975).

A series of recent decisions from our Court and the United States Supreme Court, as well as subsequent remedial legislation, have made the classification of military retirement benefits difficult at best to discern. At the time this case was decided before the magistrate and district courts, and prior to the issuance of McCarty v. McCarty, supra, Idaho law was well settled. Military retirement benefits were classified as community or separate property "according to whether the active service upon which the benefits are based took place prior to marriage or after marriage." Ramsey v. Ramsey, 96 Idaho 672, 678, 535 P.2d 53, 59 (1975). Thus, in keeping with general community property principles, military retirement benefits were community property to the extent that they were earned during the marriage. Conversely, military retirement benefits were separate property to the extent they were earned prior to the marriage. Id.

However, after both the magistrate and district courts issued their decisions, the United States Supreme Court issued the McCarty decision. We previously stated that the McCarty Court determined that "state courts are precluded from applying community property principles and dividing military retirement pay in divorce actions." Rice v. Rice, 103 Idaho 85, 87, 645 P.2d 319, 321 (1982).

On the basis of the McCarty holding, husband filed an appeal to this Court, and a motion for relief from the district court's order. While this case was pending appeal, we issued our decision in Rice, supra. In Rice, we recognized that we were required to apply the McCarty holding and thus, we overruled Ramsey, insofar as it conflicted with McCarty. In sum, we concluded that military retirement pay was separate property not subject to division between the parties in a divorce action. Rice, supra.

In 1982, Congress responded to the McCarty decision, by enacting remedial legislation--Uniformed Services Former Spouses' Protection Act--as a part of Public Law 97-252, Title X. Department of Defense Authorization Act, Pub.L. No. 97-252, Tit. X, 96 Stat. 718, 730 (1982). This Act amended chapter 71 of Title X, United States Code by adding § 1408(c)(1) which provides as follows:

"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."

10 U.S.C. § 1408(c)(1) (1982). By the terms of this amendment, Congress clearly authorizes the states to decide the character of military retirement payments as community property or as separate property in accordance with state law. ² See In re Marriage of Hopkins, 142 Cal.App.3d 350, 191 Cal.Rptr. 70 (Cal.Ct.App.1983).

In view of the above, we have reviewed our opinion in Rice. Because our holding therein was premised solely on the basis of McCarty, which has been effectively overruled, we overrule Rice and reinstate our holding in Ramsey as the law of Idaho.

We must now discuss the specific effect the amendment will have on the case at bar. The effective date of the amendment is February 1, 1983, and thus, the amendment is operative in this case. 10 U.S.C. § 1408 (1982). The legislative history to the amendment indicates that the amendment applies to court orders "finalized" on or after the McCarty decision. H.R.Conf.Rep. No. 749, 97th Cong., 2d Sess. 166, reprinted in 1982 U.S.Code Cong. & Ad.News 1569, 1571. See In re Marriage of Hopkins, supra.

This case is not a final decree as defined by the amendment ³ because the record clearly confirms that this case was timely appealed at each level. Because this case is presently on appeal, it will in fact be finalized after the June 26, 1981 McCarty decision. Therefore, the amendment overruling McCarty is operative in the case at bar. And, in accordance with the terms of the amendment, we hold that the military retirement benefits of the case at bar shall be classified consistent with our state law as set out in Ramsey.

II. Disability Pay

The record discloses that the magistrate court made the following Finding of Fact in its original decree on September 12, 1980.

"The Defendant receives disability pay from the United States Air Force for injuries received in Viet Nam. However, the payment of this disability pay reduces the amount of retirement pay received in the same amount. The only benefit Defendant receives as a result of this exchange of entitlement is that the portion of pay designated as disability pay, is not taxable."

This finding has never been contested and was incorporated into the district court's original order and again on reconsideration. In view of this finding, the magistrate court concluded that the effect of receiving the disability payments was to reduce the retirement benefits proportionately. Thus, the magistrate ruled that the disability pay was community property. Thereafter, the magistrate court amended its decree to provide that husband's disability pay was his separate property. On appeal from the magistrate court, the district court determined that the disability pay was community property. However, on...