Mallard v. Burkart

• Decision Date: 30 August 2012
• Docket Number: No. 2010–CA–02069–SCT.,2010–CA–02069–SCT.
• Citation: 95 So.3d 1264
• Parties: James MALLARD v. Tonya Mallard BURKART.
• Court: Mississippi Supreme Court

95 So.3d 1264

James MALLARD

v.Tonya Mallard BURKART.

No. 2010–CA–02069–SCT.

Supreme Court of Mississippi.

Aug. 30, 2012.

Robert James Curtis, Clarksdale, attorney for appellant.

Cheryl D. Hayden, Petal, attorney for appellee.

Before CARLSON, P.J., PIERCE and KING, JJ.

CARLSON, Presiding Justice, for the Court:

¶ 1. James Mallard and Tonya Mallard (now Tonya Mallard Burkart) ¹ were divorced on April 25, 2001. Incorporated into the Final Judgment of Divorce was the Child Custody and Support and Property Settlement Agreement executed by the parties. A significant portion of the financial settlement that Burkart received in the property settlement agreement consisted of forty percent of Mallard's “disposable military retirement pay” for ten years. Following the divorce, Mallard elected to adopt a sixty-percent disability rating as part of his retirement pay. Mallard did not provide any of these disability benefits to Burkart. When Mallard filed a Petition for Modification of Judgment of Divorce in chancery court pursuant to child-support and custody matters not at issue on this appeal, Burkart filed a counter-petition for contempt, asserting that Mallard had structured his retirement in such a way as to defeat her forty-percent interest in the total retirement pay. The chancellor determined that Burkart was entitled to forty percent of the disability benefits, but he declined to find Mallard in contempt. From this judgment, Mallard appeals to us.

¶ 2. Today, we find that, since federal law preempts state law, state courts are precluded from allocating military disability benefits to a nonmilitary spouse; therefore, we reverse and remand the case for further proceedings consistent with this opinion.

FACTS AND PROCEEDINGS IN THE CHANCERY COURT

¶ 3. On January 5, 2001, Tonya Mallard and James Mallard filed a joint complaint for divorce in the Lamar County Chancery Court on the grounds of irreconcilable differences. On April 25, 2001, a final judgment of divorce was entered, ratifying and incorporating the parties' Custody and Support and Property Settlement Agreement. The property settlement agreement incorporated into the judgment of divorce provided, inter alia, as follows:

Pursuant to the Uniform Services Former Spouses Protection Act (“USFSPA”), 10 U.S.C. § 1408, the Court makes the finding followings of fact:

(A) That the Husband is currently an active duty service member in the United States Air Force.

(B) That Husband's rights under the Soldiers and Sailors Civil Relief Act have been observed in these proceedings.

(C) That Wife and Husband were married for at least ten (10) years during which Husband performed at least ten (10) years creditable service, making Wife eligible for involuntary military deductions under The USFSPA at such time [a]s Husbandbecomes entitled to retirement pay.

(D) Wife is awarded 40% of Husband's disposable military retired pay for ten (10) years unconditional. Wife shall continue to receive 40% of Husband's disposable military retired pay after ten (10) years if she does not remarry or has not lived with someone for a cumulative of sixty (60) days. Payments shall continue until Wife remarries or lives with someone for a cumulative of sixty (60) days upon which time payments shall cease. It is Wife's responsibility to notify the Defense Finance and Accounting Service and Husband of any change of eligibility for payment.

(E) The Husband voluntarily consents to the exercise of jurisdiction to the State of Mississippi, County of Forrest for division [of] military retired pay.

(Emphasis added.)

¶ 4. Mallard and Burkart married on May 24, 1980, and Mallard was on active service with the United States Air Force for the entire period of the marriage. Following the divorce, Mallard retired from the military in October 2002, without any disability benefits. At some point prior to his retirement, Mallard sustained a back injury and a herniated disk. The record does not reveal whether this injury occurred before or after the divorce. Mallard received a partial disability rating of sixty percent in June 2003, which was backdated to his retirement date of October, 2002.

¶ 5. The percentage of a disability rating is deducted from retirement pay on a dollar for dollar basis. 38 U.S.C. § 5305 (2004). Mallard testified that, after going on disability, he sent Burkart monthly payments amounting to forty percent of only the portion of his retirement which did not consist of disability benefits. The record reflects that, before going on disability, Mallard sent Burkart monthly payments of $571, but that, once the disability rating took effect, the monthly payments dropped to between $80 and $120 per month.²

¶ 6. On October 4, 2006, Mallard filed a Petition for Modification of Judgment of Divorce, pursuant to child support and custody matters not at issue on this appeal. An amended petition was filed on January 18, 2007. On April 3, 2007, Burkart filed an Answer and Counter–Petition, asserting, among other things, that Mallard had structured his retirement from the Air Force in such a way as to defeat her forty-percent interest in the retirement pay. Trial was held on both Mallard's amended petition and Burkart's counter-petition on November 12, 2009, and the chancellor's Findings of Facts, Conclusions of Law, and Final Judgment were entered on November 19, 2009.

¶ 7. The chancellor ruled in favor of Burkart. Pertinent to the instant appeal, the chancellor held that Mallard unilaterally had breached the settlement by going on disability and denying any portion of the disability benefits to Burkart. Mallard claimed that, under U.S.Code Section 1408 and the U.S. Supreme Court case of Mansell v. Mansell, 490 U.S. 581, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1989), federal law preempts state law, thus precluding the state trial court from being able to award those monies. The chancellor found that “there does not seem to be any Mississippi [caselaw] that considers the question at hand, [but] the Court finds most persuasive, a 2001 opinion rendered by the SupremeCourt of Tennessee that appears to be directly on point.” ³ Applying the Tennessee rule, the chancellor rejected Mallard's argument, determining that Burkart's interest in Mallard's total retirement pay, including his disability benefits, had vested at the time of the entry of the final judgment of divorce, which adopted and incorporated by reference the attached property-settlement agreement.

¶ 8. The chancellor held that Mallard was liable to Burkart for $21,213.57, reflecting the difference between what Burkart would have received had Mallard not gone on disability and what she actually had received, plus six percent interest. The chancellor declined to hold Mallard in contempt, since he was using military rules and regulations available to all retirees. Aggrieved, Mallard has appealed to this Court.

DISCUSSION

¶ 9. Mallard couches the sole issue before us as follows:

Whether the chancellor erred in requiring [Mallard] to compensate [Burkart] for the reduction in her payments for her share of [Mallard's] military retirement benefits previously awarded to her as marital property and subsequently reduced due to [Mallard's] post-divorce waiver of military retirement benefits in exchange for a corresponding amount of veterans disability benefits[.]

On the other hand, Burkart couches the sole issue before us as follows:

W[he]ther [the][c]hancellor erred in the determination of facts by clear and convincing evidence and the application of the [l]aw in holding that [Mallard] was required to compensate [Burkart] in an amount representative of her share of [Mallard's] military retirement previously awarded to her as marital property in a Final Judgment and Property Settlement Agreement where said retirement benefits were unilaterally reduced due to [Mallard's] post-divorce and post-retirement actions of waiver of his military retirement benefits in exchange for a corresponding amount of tax free veterans disability benefits.

Considering the issue as presented to us by the parties, we reword the issue by stating that today we must determine whether federal law preempts state law, thus precluding state courts from treating as property divisible upon divorce, military retirement pay waived by the military spouse in order to receive military [veterans'] disability benefits.

¶ 10. “This Court will not disturb the findings of a chancellor when supported by substantial evidence unless the chancellor abused his discretion, was manifestly wrong, clearly erroneous or an erroneous legal standard was applied.” Duncan v. Duncan, 774 So.2d 418, 419 (Miss.2000) (citing Kilpatrick v. Kilpatrick, 732 So.2d 876, 880 (Miss.1999)). “Under the standard of review utilized to review a chancery court's findings of fact, particularly in the areas of divorce, alimony and child support, this Court will not overturn the court on appeal unless its findings were manifestly wrong.” Duncan, 774 So.2d at 419 (citations omitted). “As to matters of law, however, a different standard applies. In that case, our review is de novo, and if we determine that the chancellor applied an incorrect legal standard, we must reverse.” Carter v. Carter, 735 So.2d 1109, 1114 (Miss.Ct.App.1999)(citing Morreale v. Morreale, 646 So.2d 1264, 1267 (Miss.1994)).

¶ 11. We agree with the chancellor and both parties that the present question is one of first impression in Mississippi. Thus, we look to other jurisdictions for guidance.

¶ 12. We start with the United States Supreme Court's decision in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981). McCarty is a case from a community-property state. The Court reasoned that the federal statutes then in effect prevented state courts from treating military retirement pay as community property, finding that it was clear Congress intended that military retirement benefits could be paid only to the veteran and no one else. McCarty, 453 U.S....