Krapf v. Krapf

• Decision Date: 02 April 2003
• Citation: 439 Mass. 97,786 NE 2d 318
• Parties: CONSTANCE E. KRAPF v. ALBERT H. KRAPF.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

439 Mass. 97

786 NE 2d 318

CONSTANCE E. KRAPF v. ALBERT H. KRAPF.

Supreme Judicial Court of Massachusetts, Middlesex.

February 4, 2003.

April 2, 2003.

Present: MARSHALL., C.J., GREANEY, IRELAND, SPINA, COWIN, SOSMAN, & CORDY, JJ.

Clarence V. LaBonte, Jr. (F. Joseph Gentili with him) for Albert H. Krapf.

Joseph S. Tangusso for Constance E. Krapf.

MARSHALL, C.J.

Albert H. Krapf (defendant) appealed from a declaratory judgment ordering him to pay to his former spouse, Constance E. Krapf (plaintiff), an amount equal to the military pension income she would have received pursuant to the parties' separation agreement (agreement) had the defendant, after the divorce, not voluntarily and without the plaintiff's consent waived his military retirement benefits in order to receive Veterans Administration (VA) disability payments. The defendant also appealed from the judge's order that he pay the plaintiff's appellate attorney's fees pendente lite. The Appeals Court affirmed the declaratory judgment with modifications. Krapf v. Krapf, 55 Mass. App. Ct. 485, 492 (2002). We granted the defendant's application for further appellate review. We conclude that the judge acted properly in construing and specifically enforcing the agreement and in awarding the plaintiff appellate counsel fees, pendente lite. Accordingly, we affirm the declaratory judgment, as modified by the Appeals Court, see id., and the award of attorney's fees.

1. Facts. The core facts are undisputed. In 1984, after twentyseven years of marriage and three children, the defendant filed for divorce from the plaintiff. At the time, the plaintiff was approximately fifty-one years old; the record does not disclose either her health status or her employment status. The defendant was approximately forty-nine years old. He was on inactive or reserve duty in the United States Army. According to his counsel at oral argument, the defendant was "able bodied," in good health, and suffered from no known or suspected disability.

On December 5, 1985, the parties entered into the separation agreement, three provisions of which are germane to this case. First, the parties agreed that the plaintiff would receive $200 a month in alimony for seven months, and that "[t]hereafter, neither [party] will make any claim against the other for alimony, support or maintenance." Second, the parties agreed that the defendant would "cause to be entered by the Middlesex Probate Court an order allocating half his pension rights with the U.S. Army to the [plaintiff]." Third, the parties provided that, if the agreement were breached, the breaching party "shall be responsible for all reasonable costs incurred by the nonbreaching party to enforce" the agreement.¹ The agreement was incorporated in the divorce judgment but survived as an independent contract.²

On June 2, 1986, a judge in the Probate and Family Court entered a qualified court order, see 10 U.S.C. § 1408(a)(2) (2000),³ directing the Secretary of the Army to apportion to the plaintiff fifty per cent of the defendant's "disposable retire[ment] or retainer pay" accrued as of December 5, 1985, the date of the judgment of divorce nisi.⁴ The qualified court order stated that it was "intended to carry out an approved property settlement" entered in connection with the judgment nisi. In May, 1994, the defendant separated from the army after thirtyseven years of service. Both he and the plaintiff began receiving their respective fifty per cent allotment of the defendant's military retirement benefit, including periodic cost-of-living increases, directly from the Department of Defense. See 10 U.S.C. § 1408(d) (2000).

In early 1997, without the plaintiff's knowledge, the defendant applied for VA disability benefits on the ground that he suffered from posttraumatic stress disorder stemming from his army service. See 38 U.S.C. § 1110 (2000) (wartime disability). In April, 1997, the VA classified the defendant as ten per cent disabled. In April, 1998, it reclassified him as fifty per cent disabled; and in June, 2000, it reclassified him as one hundred per cent disabled. With each determination of increased disability, the defendant received a commensurate increase in VA disability income. However, because Federal law prohibits a military retiree from "double dipping" into Federal retirement accounts, see Mansell v. Mansell, 490 U.S. 581, 583 (1989), the defendant executed a waiver that reduced his military retirement payments one dollar for every dollar of VA disability payments he received. See 38 U.S.C. § 5305 (2000).⁵ Because the waiver applied to the defendant's total military retirement pay, his election to forgo his army pension reduced not only his own military retirement income but also that of the plaintiff, as follows:

April, 1997, reduced from $1,009.04 to $969.09 a month;

May, 1998, reduced from $969.09 to $797.38 a month;

June, 2000, reduced from $787.38 to $145 a month.

As of April 4, 2001, the defendant's total VA disability payment was $2,166, an amount that included a stipend for his current wife. He received an additional $145 each month in military retirement pay. The plaintiff received only $145 each month in military retirement pay. In other words, after he obtained a one hundred per cent disability rating, the defendant's service-related income more than doubled, while his former wife's service-related income fell by approximately eighty-six per cent.

On July 19, 2000, the plaintiff filed a contempt complaint against the defendant in the Probate and Family Court, alleging that he violated the qualified court order by "unilaterally" electing to make changes in his disposable military retirement income that resulted in the reduction of her own pension income. On September 18, 2000, a judge in the Probate and Family Court summarily dismissed the complaint with prejudice.⁶ On October 6, 2000, the plaintiff filed a complaint for declaratory judgment pursuant to G. L. c. 231A in the Probate and Family Court. She alleged that the defendant's actions in seeking and obtaining VA disability pay "defeated the intentions of the parties" under the agreement that the plaintiff would receive one-half of the defendant's military retirement pay. The plaintiff sought a declaration of the rights of the parties concerning the VA and Department of Defense payments, an award of an amount that would "restore [the plaintiff] to the financial position she would have enjoyed from April, 1997 to date," and counsel fees. The defendant answered and filed a motion to dismiss pursuant to Mass. R. Civ. P. 12 (b) (5) and Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1994). He claimed that he was in compliance with the agreement that the plaintiff receive fifty per cent of his disposable retired or retainer pay accrued as of December 5, 1985, and thus there was no controversy. He also claimed that the complaint for declaratory judgment was an impermissible attempt to circumvent final and binding determination on the merits occasioned by the dismissal with prejudice of the contempt action. See Mass. R. Civ. P. 41 (b) (3), 365 Mass. 803 (1974). Waiving a hearing, the parties submitted the case on the pleadings and on a statement of agreed facts.⁷

On April 4, 2001, the judge issued a memorandum of decision and entered declaratory judgment for the plaintiff. She concluded that the defendant impermissibly modified the agreement by divesting himself of an asset that he had legally pledged to the plaintiff in which she thus had a vested interest, and from which she had a reasonable expectation of receiving income. See Nile v. Nile, 432 Mass. 390, 398-399 (2000). She further held that, in so acting, the defendant violated his fiduciary obligation to his former spouse, see Eaton v. Eaton, 233 Mass. 351, 370 (1919), the covenant of good faith and fair dealing inherent in all contracts, see Kerrigan v. Boston, 361 Mass. 24, 33 (1972), and the court's authority and obligation to provide equitably for divorcing spouses. See G. L. c. 208, § 34. The judge "specifically enforc[ed]" the agreement by ordering the defendant to pay to the plaintiff an amount that, when added to the amount the plaintiff currently received, was the equivalent of fifty per cent of his pension "if same was in payout status." The judge also ordered the defendant to pay arrearages accumulated from April, 1997, to the judgment date. She declined to award attorney's fees "[a]s this is a case of first impression. . . ."

The defendant filed a motion for reconsideration pursuant to Mass. R. Civ. P. 52 (b), as amended, 423 Mass. 1402 (1996), on the ground that the judgment constituted a division of his military disability pay in violation of 38 U.S.C. § 5301 (2000) (exempting VA disability payments from certain creditors' claims and enforcement mechanisms). The judge denied the motion, and the defendant appealed from both the April 4, 2001, declaratory judgment and the denial of his reconsideration motion. In May, 2001, the plaintiff filed a motion to restrain the defendant from diminishing his assets and a motion for attorney's fees pendente lite to defend against the appeal. Another Probate and Family Court allowed both motions, and the defendant filed a motion for reconsideration of both orders. When the motion was denied, he timely filed a second notice of appeal.⁸ He also filed motions to stay the award of attorney's fees in the Probate and Family Court and in the Appeals Court, respectively. Both motions were denied. On the main appeal, the Appeals Court affirmed the order of the trial judge in all respects, except that it modified the judgment to include "a declaration that the plaintiff is entitled to receive from the defendant, pursuant to the agreement, a sum of money per month equivalent to fifty per cent of the monthly military retirement pay that the defendant would receive if his military retirement pay were not reduced by the disability payments minus the monthly...