IN RE MARRIAGE OF WHERRELL, 86,791.

• Citation: 30 Kan. App.2d 166,38 P.3d 753
• Decision Date: 25 January 2002
• Docket Number: No. 86,791.,86,791.
• Parties: In the Matter of the Marriage of DEBORAH S. WHERRELL, Appellee, and WESLEY R. WHERRELL, Appellant.
• Court: Court of Appeals of Kansas

30 Kan. App.2d 166

38 P.3d 753

In the Matter of the Marriage of DEBORAH S. WHERRELL, Appellee, and WESLEY R. WHERRELL, Appellant.

No. 86,791.

Court of Appeals of Kansas.

Opinion filed January 25, 2002.

Frank D. Taff, of Topeka, for appellant.

Chris R. Davis, of Phelps-Chartered, of Topeka, for appellee.

Before GREEN, P.J., KNUDSON, J., and STEPHEN D. HILL, District Judge, assigned.

HILL, J.:

Wesley Wherrell appeals the district court's decision awarding Deborah Wherrell one-half of the payment he received upon his discharge from the Navy. We reverse and remand.

A review of the facts is necessary to understand the issues that arise in this case. The Wherrells were married in October 1976, while Wesley was a member of the United States Navy. In 1995, he was placed on temporary disability retirement. At that time, Wesley was found 10% disabled due to a respiratory condition. Deborah filed for divorce in 1998, which was granted. Their journal entry of divorce contained this provision: "[Deborah shall receive] 50 percent (50%) of the disposable retired or retainer pay otherwise payable to respondent due to his military service."

Wesley received monthly retirement checks and monthly disability checks until his discharge from the Navy in 1999. According to his discharge letter, Wesley would receive severance pay. Wherrell also received a Form 1099-R from the United States Department of the Treasury showing the distribution of a retirement plan and how much money was withheld for taxes. The form also contained the following information: "Call ... if you have a question about your retired 1099-R."

Then, in August 2000, Deborah filed a motion to enforce the divorce decree. She claimed that since Wesley received $1,300 a month in disability pay, she should have received $650. In fact, Wesley only sent Deborah $400 a month from September 1998 through November 1999. Deborah also claimed that Wesley received a $60,910.15 check in December 1999 for his retirement. Deborah asked the court to order Wesley to pay her $3,750 as her share of the back disability pay and $30,455.07 from the retirement pay. Wesley argued to the district court that the money he received was disability severance pay and not divisible in the divorce.

Our standard of review for the division of property is based upon an abuse of discretion. Appellate courts have held consistently that trial courts have wide latitude in dividing the assets of divorcing parties. Ordinarily the trial court's ruling will not be disturbed unless there is a clear showing of abuse. In re Marriage of Callaghan, 19 Kan. App.2d 335, 340, 869 P.2d 240 (1994). A finding of abuse occurs if no reasonable person would adopt the trial court's view. It cannot be said a trial court abused its discretion if reasonable people could differ as to the soundness of the trial court's action. Wood v. Groh, 269 Kan. 420, 429, 7 P.3d 1163 (2000).

The parties differ about the nature of the lump sum payment made to Wesley. Wesley contends that the payment was a disability check and not subject to division in a divorce. Deborah contends the payment was a retirement check and can be divided.

The distinction between a retirement payment and a disability payment is important. Our United States Supreme Court ruled in McCarty v. McCarty, 453 U.S. 210, 235-36, 69 L. Ed.2d 589, 101 S. Ct. 2728 (1981), that state courts could not distribute any portion of a military nondisability retirement pension to the former spouse of a military retiree. In 1982, in reaction to the McCarty decision, Congress enacted the federal Uniformed Services Former Spouses' Protection Act (USFSPA), 10 U.S.C. § 1408 (2000). According to that statute, "[a] court may treat disposable retired pay payable to a member ... 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) (2000).

When it created the Spouses' Protection Act, Congress specifically excluded from the definition of "disposable retired pay" disability benefits deducted from the retired member's pay. See 10 U.S.C. § 1408(a)(2)(C) (2000). The United States Supreme Court followed with Mansell v. Mansell, 490 U.S. 581, 104 L. Ed.2d 675, 109 S. Ct. 2023 (1989), where it ruled that the Spouses' Protection Act does not allow state courts to divide veterans' disability benefits in marital property settlements under state law. 490 U.S. at 594-95.

This court ruled in In re Marriage of Pierce, 26 Kan. App.2d 236, 982 P.2d 995, rev. denied 268 Kan. 847 (1999), that the trial court in that case was correct when it ruled that the retired serviceman was not required to pay disability benefits to his former spouse. 26 Kan. App.2d at 240.

In this case, the district court noted that the Pierce decision did not control this issue. The district court ruled that disability benefits were not at issue. As a result, the district court concluded that the benefits were retirement pay from the Navy. Under the divorce decree Deborah was entitled to 50 percent of the lump sum settlement paid to Wesley due to his military service and his retirement therefrom. The district court, however, was incorrect in its view that the lump sum payment to Wherrell was a retirement payment because Wesley did not have sufficient time in the service to retire.

A review of the federal scheme of payments to servicemen and women is important to this decision. Under 10 U.S.C. § 1210(e) (2000), if a service member's physical disability is determined to be less than 30 percent after a physical examination, and he or she has worked less than 20 years for the service, his or her name has to be removed from the temporary disability retired list. That person can then be separated from the military under 10 U.S.C. § 1203 (2000).

10 U.S.C. § 1203 (2000) provides that after a finding of unfitness due to physical disability, the service member may be separated from the military with disability severance pay. The disability severance pay is computed under 10 U.S.C. § 1212(a) (2000): "Upon separation from his armed force under section 1203 or 1206 of this title, a member is entitled to disability severance pay." But, before this can occur, the military must make certain determinations about the disability.

The military must find:

"(1) the member has less than 20 years of service computed under section 1208

...;

"(2) the disability is not the result of the member's intentional misconduct or willful neglect, and was not incurred during a period of unauthorized absence;

"(3) based upon accepted medical principles, the disability is or may be of a permanent nature; and

"(4) either—

....

(B) the disability is less than 30 percent under the standard schedule of rating disabilities in use by the Department of Veterans Affairs at the time of the determination, and the member has at least eight years of service computed under section 1208 of this title, or

(C) the disability is at least 30 percent under the standard schedule of rating disabilities in use by the Department of Veterans Affairs at the time of the determination, the disability was neither (i) the proximate result of performing active duty, (ii) incurred in line of duty in time of war or national emergency, nor (iii) incurred in line of duty after September 14, 1978, and the member has less than eight years of service computed under section 1208 of this title on the date when he would otherwise be retired under section 1201 of this title or placed on the temporary disability retired list under section 1202 of this title." 10 U.S.C. § 1203 (2000).

What this means in Wesley's case is that when he was informed he was first placed on the temporary disability retired list and his disability rating fell below 30 percent, he might have been entitled to retirement pay or separation with disability severance pay....