Hisgen v. Hisgen, No. 19394

CourtSupreme Court of South Dakota
Writing for the CourtKONENKAMP; AMUNDSON
Citation554 N.W.2d 494,1996 SD 122
PartiesMarilyn HISGEN, Plaintiff and Appellee, v. Richard M. HISGEN, Defendant and Appellant. . Considered on Briefs
Decision Date22 May 1996
Docket NumberNo. 19394

Page 494

554 N.W.2d 494
1996 SD 122
Marilyn HISGEN, Plaintiff and Appellee,
v.
Richard M. HISGEN, Defendant and Appellant.
No. 19394.
Supreme Court of South Dakota.
Considered on Briefs May 22, 1996.
Reassigned July 31, 1996.
Decided Oct. 9, 1996.

James J. Doyle of Doyle and Doyle, Rapid City, for plaintiff and appellee.

Ronald R. Kappelman, Rapid City, for defendant and appellant.

KONENKAMP, Justice (on reassignment).

¶1 Richard Hisgen appeals an order requiring him to pay his former spouse, Marilyn Hisgen, a monthly sum equal to fifty percent of his gross military retirement entitlement, calculated without deducting his disability retirement pay. Based upon the phrasing of their divorce settlement agreement, we affirm.

BACKGROUND

¶2 Marilyn and Richard were divorced on July 26, 1993, after entering a stipulation, child custody and property settlement agreement. During negotiations, both parties were aware Richard was applying for military disability benefits. Paragraph 14 of their stipulation provided:

[Richard] will instruct the Air Force Accounting and Finance (AFA & F) to pay [Marilyn] one-half ( 1/2) of his gross annuity payments (prior to any reductions for disability payments or any other deductions) per month beginning August 1, 1993. This payment shall be made by direct deposit or check at the option of [Marilyn], with the AFA & F deducting full survivor's benefit annuity payments, if available, for such deduction from [Marilyn's] check. [Richard] shall also instruct AFA & F to provide [Marilyn] with an annual 1099 for such division of annuity payments.

At the time of this agreement, Marilyn's one-half share was $394.50 per month. The stipulation plainly treated Richard's retirement pay as property subject to division. After the divorce decree was entered, the Veteran's Administration granted Richard disability benefits. To receive them, Richard waived an equal amount of his military retirement pay. In turn, Marilyn's monthly payment decreased to $50.

¶3 Marilyn sought the balance from the VA, but she was unsuccessful in collecting ongoing payments because federal law prohibits an award of military disability retirement

Page 496

as part of a property division. She sought relief in circuit court. In its memorandum opinion, the court interpreted the parties' stipulation to mean that Marilyn was entitled to an amount equal to one-half of Richard's total gross annuity, before any reduction for disability payments. Accordingly, an order was filed September 7, 1995. Richard appeals. We consider whether a court may require a former spouse to pay as part of a property division an amount equivalent to one-half of a military retirement entitlement when such spouse has waived retirement benefits to receive a corresponding sum in veteran's disability payments.
DISCUSSION

¶4 Divorce stipulations are governed by the rules of contract; their interpretation is a matter of law for the courts to decide. Houser v. Houser, 535 N.W.2d 882, 884 (S.D.1995). In Malcolm v. Malcolm, 365 N.W.2d 863, 865 (S.D.1985) (quoting Huffman v. Shevlin, 76 S.D. 84, 89, 72 N.W.2d 852, 855 (1955)), we set forth the procedure for analyzing a property settlement agreement:

First, in determining the proper interpretation of a contract the court must seek to ascertain and give effect to the intention of the parties. Chord v. Pacer Corp., 326 N.W.2d 224 (S.D.1982); Johnson v. Johnson, 291 N.W.2d 776 (S.D.1980); Huffman v. Shevlin, 76 S.D. 84, 72 N.W.2d 852 (1955). In determining the intention of the parties, a court must look to the language that the parties used. Johnson v. Johnson, supra; Berry v. Benner, 81 S.D. 610, 139 N.W.2d 285 (1966).

* * * * * *

If the intention of the parties is not clear from the writing, then it is necessary and proper for the court to consider all the circumstances surrounding the execution of the writing and the subsequent acts of the parties. Janssen v. Muller, 38 S.D. 611, 162 N.W. 393. The construction given by the parties themselves to the contract as shown by their acts, if reasonable, will be accorded great weight and usually will be adopted by the court.

¶5 Richard served in the Air Force for twenty years. At retirement, he was eligible to receive $789 per month. A veteran who becomes disabled as a result of military service is eligible for disability benefits. 38 U.S.C. § 1131 (peacetime disability). "In order to prevent double dipping, a military retiree may receive disability benefits only to the extent that he waives a corresponding amount of his military retirement pay." Mansell v. Mansell, 490 U.S. 581, 583, 109 S.Ct. 2023, 2026, 104 L.Ed.2d 675, 682 (1989) (citing 38 U.S.C. § 3105). Disabled veterans choose this waiver for its tax advantages because VA disability income is exempt from federal, state and local taxes. 38 U.S.C. § 3101(a). Congress enacted the Uniformed Services Former Spouses' Protection Act (USFSPA), 10 U.S.C. § 1408, in direct response to McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981). McCarty held federal law prohibited state courts from dividing military retirement pay. The USFSPA authorizes state courts to treat as community property "disposable retired or retainer pay[.]" 10 U.S.C. § 1408(c)(1). Yet § 1408(a)(4)(B) specifically excludes military retirement pay waived so the retiree may receive disability payments.

¶6 In Mansell, as here, the former spouse received both military retirement pay and disability benefits. 490 U.S. at 585, 109 S.Ct. at 2027, 104 L.Ed.2d at 683. Major Mansell was required "to share his total retirement pay" with his ex-wife, including that portion of retirement pay waived to receive disability benefits. Id. at 585-86, 109 S.Ct. at 2027, 104 L.Ed.2d at 683. The Court found the USFSPA denies authority to state courts to treat disability payments as property when military retirement payments have been waived to receive such disability amounts. Id. at 594-95, 109 S.Ct. at 2032, 104 L.Ed.2d at 689. This was "one of those rare instances where Congress has directly and specifically legislated in the area of domestic relations." Id. at 587, 109 S.Ct. at 2028, 104 L.Ed.2d at 684. The USFSPA grants state courts the "authority to treat disposable retired pay as community property; they have not been granted the authority to treat total retired pay [which includes

Page 497

disability pay] as community property." Id. at 589, 109 S.Ct. at 2029, 104 L.Ed.2d at 685.

We realize that reading the statute literally may inflict economic harm on many former spouses. But we decline to misread the statute in order to reach a sympathetic result when such a reading requires us to do violence to the plain language of the statute and to ignore much of the legislative history. Congress chose the language that requires us to decide as we do, and Congress is free to change it.

Id. at 594, 109 S.Ct. at 2036, 104 L.Ed.2d at 689. Congress has yet to change it.

¶7 Following Mansell, several jurisdictions conformably ruled military disability retirement pay not subject to division. See Murphy v. Murphy, 302 Ark. 157, 787 S.W.2d 684, 685 (1990); In re Marriage of Franz, 831 P.2d 917, 918 (Colo.Ct.App.1992); Fondren v. Fondren, 605 So.2d 571, 572 (Fla.Dist.Ct.App.1992); Jones v. Jones, 7 Haw.App. 496, 780 P.2d 581, 584 (1989); Bewley v. Bewley, 116 Idaho 845, 780 P.2d 596, 597 (App.1989); Davis v. Davis, 777 S.W.2d 230, 232 (Ky.1989); Harmon v. Harmon, 617 So.2d 1373, 1377 (La.Ct.App.1993); Keen v. Keen, 194 Mich.App. 72, 486 N.W.2d 105, 106...

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34 practice notes
  • SDCP v. Wausau Underwriters Ins. Co., No. 20789
    • United States
    • Supreme Court of South Dakota
    • August 23, 2000
    ...the function of this Court to rewrite a contract. See Kroupa v. Kroupa, 1998 SD 4, ¶ 49, 574 N.W.2d 208, 217 (quoting Hisgen v. Hisgen, 1996 SD 122, ¶ 17, 554 N.W.2d 494, 499) (Sabers, J., dissenting) (noting that "`[i]t is not a function of the court to rewrite the parties' agreements'"). ......
  • Guerrero v. Guerrero, No. S–15340.
    • United States
    • Supreme Court of Alaska (US)
    • September 18, 2015
    ...all his military retirement benefits for an equivalent amount of tax-exempt disability pay as federal law allows."); Hisgen v. Hisgen, 554 N.W.2d 494, 496 (S.D.1996) ("We consider whether a court may require a former spouse to pay as part of a property division an amount equivalent to one-h......
  • Cassinelli v. Cassinelli (In re Cassinelli), E063769
    • United States
    • California Court of Appeals
    • November 2, 2016
    ...Hayward (Pa.Super.Ct. 2005) 868 A.2d 554, 559–560 ; Resare v. Resare (R.I. 2006) 908 A.2d 1006, 1009–1010 ; Hisgen v. Hisgen (S.D. 1996) 554 N.W.2d 494, 498 ; Johnson v. Johnson (Tenn. 2001) 37 S.W.3d 892, 897–898.5 In general, the reasoning in such cases has two simple premises. First, "th......
  • Jennings v. Jennings, No. 20839-3-II
    • United States
    • Court of Appeals of Washington
    • July 10, 1998
    ...to indemnify her for any reduction in retirement benefits. See Abernethy v. Fishkin, 699 So.2d 235, 239-40 (Fla.1997); Hisgen v. Hisgen, 554 N.W.2d 494, 498, 1996 SD 122 (S.D.1996); In re Marriage of Strassner, 895 S.W.2d 614, 617, (Mo.Ct.App.1995); McHugh v. McHugh, 861 P.2d 113, 115, 124 ......
  • Request a trial to view additional results
34 cases
  • SDCP v. Wausau Underwriters Ins. Co., No. 20789
    • United States
    • Supreme Court of South Dakota
    • August 23, 2000
    ...the function of this Court to rewrite a contract. See Kroupa v. Kroupa, 1998 SD 4, ¶ 49, 574 N.W.2d 208, 217 (quoting Hisgen v. Hisgen, 1996 SD 122, ¶ 17, 554 N.W.2d 494, 499) (Sabers, J., dissenting) (noting that "`[i]t is not a function of the court to rewrite the parties' agreements'"). ......
  • Guerrero v. Guerrero, No. S–15340.
    • United States
    • Supreme Court of Alaska (US)
    • September 18, 2015
    ...all his military retirement benefits for an equivalent amount of tax-exempt disability pay as federal law allows."); Hisgen v. Hisgen, 554 N.W.2d 494, 496 (S.D.1996) ("We consider whether a court may require a former spouse to pay as part of a property division an amount equivalent to one-h......
  • Cassinelli v. Cassinelli (In re Cassinelli), E063769
    • United States
    • California Court of Appeals
    • November 2, 2016
    ...Hayward (Pa.Super.Ct. 2005) 868 A.2d 554, 559–560 ; Resare v. Resare (R.I. 2006) 908 A.2d 1006, 1009–1010 ; Hisgen v. Hisgen (S.D. 1996) 554 N.W.2d 494, 498 ; Johnson v. Johnson (Tenn. 2001) 37 S.W.3d 892, 897–898.5 In general, the reasoning in such cases has two simple premises. First, "th......
  • Jennings v. Jennings, No. 20839-3-II
    • United States
    • Court of Appeals of Washington
    • July 10, 1998
    ...to indemnify her for any reduction in retirement benefits. See Abernethy v. Fishkin, 699 So.2d 235, 239-40 (Fla.1997); Hisgen v. Hisgen, 554 N.W.2d 494, 498, 1996 SD 122 (S.D.1996); In re Marriage of Strassner, 895 S.W.2d 614, 617, (Mo.Ct.App.1995); McHugh v. McHugh, 861 P.2d 113, 115, 124 ......
  • Request a trial to view additional results

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