King v. King

• Decision Date: 20 May 1986
• Docket Number: Docket No. 74987
• Citation: 149 Mich.App. 495,386 N.W.2d 562
• Parties: Sandra F. KING, Plaintiff-Appellee, v. George F. KING, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 562

386 N.W.2d 562

149 Mich.App. 495

Sandra F. KING, Plaintiff-Appellee, v. George F. KING, Defendant-Appellant.

Docket No. 74987.

Court of Appeals of Michigan.

Submitted Dec. 11, 1984.

Decided March 3, 1986.

Released for Publication May 20, 1986.

Schaden and Heldman, by Victoria C. Heldman, Detroit, for plaintiff-appellee.

Duane S. Weed, Grosse Pointe, for defendant-appellant.

Before GRIBBS, P.J., and MacKENZIE and GAGE ^*, JJ.

GAGE, Judge.

Defendant appeals as of right from a circuit court order denying defendant's motion to amend a default judgment of divorce. The circuit court ruled that defendant's United States military disability pension was distributable as a marital asset.

A default judgment of divorce was entered against defendant on March 2, 1983. At the hearing for entry of the default judgment of divorce, defendant appeared in pro per and plaintiff testified that, in lieu of alimony, she wanted one-half of the marital assets, which included one-half of defendant's military disability pension. Defendant argued that his military disability pension payments were not marital assets. The trial court nevertheless granted the default judgment of divorce and ordered defendant to pay plaintiff one-half the value of the disability pension, such payment to be made from defendant's share of the proceeds from the sale of the marital home. The court similarly denied defendant's motion to amend, ruling that the disability pension constituted a marital asset which should be equally divided between the parties.

Initially, plaintiff argues that the trial court properly denied defendant's motion because defendant did not meet the requirements of GCR 1963, 520.4 for setting aside a default judgment. We disagree. The default was entered against defendant on March 2, 1983. The default judgment was entered on August 19, 1983. Defendant filed his motion to amend on September 1, 1983, pursuant to GCR 1963, 527.5 and 528.3. Therefore, defendant complied with the time constraints of GCR 1963, 527.5 (20 days after entry of judgment) and 528.3(6) (a reasonable time). GCR 1963, 528.3(6) provides for relief from a final judgment for "any other reason justifying relief from operation of the judgment". There is no requirement that the moving party meet the requirements of GCR 1963, 520.4 in order to obtain relief under GCR 1963, 528.3(6). Relief may be granted under GCR 1963, 528.3(6) when relief is time barred under GCR 1963, 520.4. Olender v. Quality House Bakery, Inc., 48 Mich.App. 647, 650-651, 211 N.W.2d 113 (1973).

The substantive question in this case is whether the Uniformed Services Former Spouses' Protection Act, 10 U.S.C. Sec. 1401 et seq., and the supremacy clause of the federal constitution, U.S. Const., art. VI prevent a state court from treating a military disability pension as a distributable marital asset.

In McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981), the United States Supreme Court held that federal law precludes a state court from dividing military nondisability retirement pay pursuant to state community property law. In Grotelueschen v. Grotelueschen, 113 Mich.App. 395, 318 N.W.2d 227 (1982), lv. den. 417 Mich. 940 (1983), this Court held that McCarty, which involved a community property state, applied equally in Michigan.

McCarty was subsequently overruled when Congress passed the Uniformed Services Former Spouses' Protection Act (the Act), supra. See S.Rep. No. 502, 97th Cong., 2d Sess. 5, reprinted in 1982 U.S.Code Cong. & Ad.News 1555, 1596, 1599-1600. The Act provides in part:

"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. Sec. 1408(c)(1) (emphasis added).

The Act defines "retired or retainer pay" as follows:

" 'Disposable retired or retainer pay' means the total monthly retired or retainer pay to which a member is entitled (other than the retired pay of a member retired for disability under chapter 61 of this title) less amounts which--

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"are required by law to be and are deducted from the retired or retainer pay of such member, including * * * amounts waived in order to receive compensation under title 5 or title 38 * * *." 10 U.S.C. Sec. 1408(a)(4).

Thus, under 10 U.S.C. Sec. 1408(c)(1), military retirement pay may be treated as a distributable marital asset by state courts. However, disability pay is not included in the definition of "disposable retired or retainer pay".

In In re Marriage of Cullen, 145 Cal.App.3d 424, 193 Cal.Rptr. 590 (1983), and In re Marriage of Stenquist (Stenquist II), 145 Cal.App.3d 430, 193 Cal.Rptr. 587 (1983), the California Fourth District Court of Appeals held that Congress did not intend to deprive state courts of jurisdiction to determine the individual or community character of disability pay merely by failing to include disability pay within the definition of "disposable retired or retainer pay". In In re Marriage of Costo, 156 Cal.App.3d 781, 203 Cal.Rptr. 85 (1984), however, the Third District Court of Appeals held that because Congress specifically excluded disability payments made under Chapter 61 of Title 10 (10 U.S.C. Sec. 1201 et seq.) and disability payments made under Title 38 (38 U.S.C. Sec. 301 et seq.), disability pay is excluded from division by the state courts. Other courts have also concluded that 10 U.S.C. Sec. 1408(a)(4) excludes disability pay from the definition of "disposable retired or retainer pay". Russell v. Russell, 465 So.2d 181, 183 (La.App.,1984); Inzinna v. Inzinna, 456 So.2d 691, 693 (La.App.,1984).

We similarly are persuaded that disability pay is excluded from division by the state courts under 10 U.S.C. Sec. 1408. Consequently, the trial court was precluded from considering defendant's military disability pension as a marital asset and improperly awarded plaintiff one-half the value of defendant's military disability pension. ¹

In McCarty, the Supreme Court clearly held that a retirement pension could not be distributed as a marital asset. In a footnote, the Court noted that this prohibition is not to be circumvented by an "off-setting award". 453 U.S. 228-229 fn. 22, 101 S.Ct. 2939 fn. 22. Although McCarty has been overruled by 10 U.S.C. Sec. 1408, its rationale applies here since 10 U.S.C. Sec. 1408 does not allow distribution of a disability pension. Thus, we agree with defendant that his military pension may not be considered "directly or indirectly" in the distribution of the marital property. Cf. Kendall v. Kendall, 106 Mich.App. 240, 243-244, 307 N.W.2d 457 (1981).

In Michigan, the goal in distributing assets in a divorce proceeding is to reach a fair and equitable distribution of property depending on the needs and resources of each party. Darwish v. Darwish, 100 Mich.App. 758, 770, 300 N.W.2d 399 (1980). Other considerations are the length of the marriage, the age of the parties and their health, their station in life, earning ability, and other necessities and circumstances....