In re Marriage of Lodeski, No. 04CA0515.

• Decision Date: 18 November 2004
• Docket Number: No. 04CA0515.
• Citation: 107 P.3d 1097
• Parties: In re the MARRIAGE OF Patricia M. LODESKI, n/k/a Rychel Patricia M. Johnson, Appellee, and Raymond LODESKI, Appellant.
• Court: Colorado Court of Appeals

107 P.3d 1097

In re the MARRIAGE OF Patricia M. LODESKI, n/k/a Rychel Patricia M. Johnson, Appellee, and

Raymond LODESKI, Appellant.

No. 04CA0515.

Colorado Court of Appeals, Div. II.

November 18, 2004.

Kevin C. Massaro, Englewood, Colorado, for Appellee.

Raymond Lodeski, Pro Se.

LOEB, J.

In this post-dissolution proceeding, Raymond Lodeski (husband) appeals the district court's finding of contempt and imposition of sanctions for changing his military pension to veterans' disability benefits, thereby affecting the property division payments to Patricia M. Lodeski, now known as Rychel Patricia M. Johnson (wife). We affirm in part, reverse in part, and remand for further proceedings.

As part of the property division in the 1995 permanent orders, wife was awarded $436 per month as a fractional portion of husband's military retirement pay, forty percent of which included veterans' disability benefits. Husband was ordered to pay "the amount" to wife until she perfected a wage assignment to obtain payment directly from the military. The permanent orders thus contemplated that the security of the wage assignment would remain in place absent further order of the court. Husband was also ordered to pay wife $300 per month as permanent maintenance.

In 1997, husband filed a motion for modification or termination of maintenance, alleging that a permanent disability completely prohibited him from working. After negotiations, the parties stipulated that maintenance was to terminate after five years and that the agreement was contractual and not subject to modification. The parties also stipulated that, as to wife's "receipt of military retirement, [husband] agrees to pay an additional $37.00 per month to [wife] as a standard of living increase." The magistrate adopted the stipulation as an order of the court in August 1998.

Unbeknownst to wife, husband, during the negotiations for the modification of maintenance, was in the process of converting all his military pay to veterans' disability benefits. The conversion occurred in October 1998, and the $436 monthly payment to wife, which by that time came directly from the military, therefore ceased pursuant to federal regulations.

In March 2003, wife filed a motion for contempt citation, alleging that husband, in violation of the permanent orders, had converted the pension, that the $436 monthly payment had ceased, and that arrearages exceeded $10,000. She asserted that the conversion did not relieve husband of his obligation to pay her share of the retirement.

After an initial hearing, in July 2003, the trial court found that husband had knowledge of the permanent orders entered in 1995, which granted wife a portion of his military pay, and that the direct payment from the military ceased because husband had converted his entire military pension to veterans' disability benefits. The court therefore found husband in contempt for altering wife's payee status and ordered him to pay $473 per month (the original $436 as amended by the order for the $37 increase). The court also imposed a sixty-day jail sentence, but suspended that sentence and set another sentencing hearing for September 2003.

At the September 2003 hearing, the court further continued consideration of the sentencing on the "term and condition" that husband comply with the court's order to submit a financial affidavit within thirty days. The court specifically found that failure to file the affidavit as ordered "can be dealt with by the [c]ourt as a further issue of contempt."

At the next hearing in February 2004, husband had not provided a financial affidavit, and the court then vacated the suspension of the sixty-day jail sentence. Furthermore, the court imposed a $2000 fine, "finding that [husband] has not complied with prior orders of the court." Arrearages of $37,610.20 were reduced to judgment, and husband was ordered to pay wife's attorney fees in the amount of $6409.60. This appeal followed.

I.

Husband contends that, because he has the right under federal law to elect to receive veterans' disability benefits and waive military retirement pay, he cannot be held in contempt for converting his pension. We disagree.

Members of the Armed Forces who serve for a specified period may retire with retirement pay. Veterans who become disabled as a result of military service are eligible for disability benefits. To prevent double dipping, a military retiree may receive disability benefits only to the extent that he or she waives a corresponding amount of military retirement pay. Mansell v. Mansell, 490 U.S. 581, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1989).

Military pensions are controlled in relevant part by the Uniformed Services Former Spouses' Protection Act (USFSPA), 10 U.S.C. § 1408 (2002), which authorizes state courts to treat disposable retired pay as property. Such pay specifically excludes, inter alia, any military retirement pay waived in order for the retiree to receive veterans' disability benefits. Mansell v. Mansell, supra; In re Marriage of Riley-Cunningham, 7 P.3d 992 (Colo.App.1999). Thus, the USFSPA does not grant state courts the power to treat as property divisible upon divorce military retirement pay that has been waived so that a veteran may receive veterans' disability benefits. Mansell v. Mansell, supra; see In re Marriage of Franz,

831 P.2d 917 (Colo.App.1992) (veterans' disability retirement pay may not be divided as marital property).

However, nothing in Mansell prohibits the Colorado state courts from dividing nondisability military retirement benefits between the parties when their marriage is dissolved. In re Marriage of Riley-Cunningham, supra. Thus, although husband argues that the permanent orders were "improper" because forty percent of the pension that was divided at that time was disability pay, we perceive no impropriety. Wife's fractional share could be satisfied from the larger portion of the military retirement pay, which did not constitute disability pay, and therefore the permanent orders were not inconsistent with the USFSPA or the holding in Mansell.

Further, the permanent orders contemplated that the wage assignment, absent further order of court, would remain in place as wife's security for the "amount" of $436 to be paid to wife. Husband's obligation to pay that amount from any available assets continued, in spite of his unilateral waiver of retirement benefits that rendered the security of the wage assignment a practical nullity. See Surratt v. Surratt, 85 Ark.App. 267, 148 S.W.3d 761 (2004)

(where order of enforcement did not purport to divide disability benefits, the USFSPA and Mansell were not violated, and the nature of the sources with which husband could satisfy his contractual obligation to wife was beside the point); Krapf v. Krapf, 439 Mass. 97, 108, 786 N.E.2d 318, 326 (2003)(judgment did not divide veterans' disability benefits in contravention of Mansell; judgment merely enforced husband's contractual obligation to wife, which he could satisfy from any of his resources; nothing in USFSPA or Mansell precludes a veteran from voluntarily entering into a contract whereby he agrees to pay a former spouse a sum of money that may come from veterans' disability benefits he receives); Scheidel v. Scheidel, 129 N.M. 223, 4 P.3d 670 (N.M.Ct.App.2000)(court rejected argument that order specifically required husband to indemnify wife with disability benefit monies; fact that order indicated that direct payment from the military should be accomplished if possible was merely a conditional provision and did not constitute a requirement that husband utilize disability pay to satisfy his obligation to wife); Price v. Price, 325 S.C. 379, 383, 480 S.E.2d 92, 94 (S.C.Ct.App.1996)("Given the fact that Husband agreed, after Mansell, to pay Wife a percentage of his gross monthly military retirement pay, which included disability pay, he should not be permitted to complain that the family court erred in enforcing the terms of the Agreement.").

It follows that the permanent orders here are not void and therefore constitute a valid order for purposes of contempt. See Bd. of Water Works v. Pueblo Water Works Employees Local 1045, 196 Colo. 308, 586 P.2d 18 (1978)

(the underlying order in a contempt proceeding is subject to a collateral attack if the order is void for some jurisdictional defect); Charles Milne Assocs. v. Toponce, 770 P.2d 1313 (Colo.App.1988)(a party may not be found in contempt for failure to comply with a void order).

We agree with husband that he had the right, under federal law, to elect to receive veterans' disability benefits and waive military retirement pay. See Krapf v. Krapf, supra. However, we reject husband's corresponding assertion that, because he exercised this right, the trial court in the contempt action had no jurisdiction to enforce the valid permanent orders.

The Colorado Supreme Court has previously rejected voluntary action taken by a military service member to evade the property division provisions of permanent orders. In In re Marriage of Heupel, 936 P.2d 561 (Colo.1997), the permanent orders provided that the wife would receive one-half of the twenty-year value of the husband's military service retirement benefits upon his retirement. However, after seventeen years of service, the husband voluntarily elected to switch from active duty to reserve status, and therefore received a lump sum payment under the special separation benefits (SSB) program. The court held that the SSB funds were disposable retirement pay rather than severance pay and, thus, were marital property subject to distribution under state law. The court also held that the trial court did not improperly reopen the dissolution decree when it apportioned the SSB funds.

Although the facts here are different from those in Heupel (because, unlike in Heupel, the veterans' disability benefits here are not disposable retirement pay and therefore not property subject to...