Marriage of Heupel, In re

Citation936 P.2d 561
Decision Date21 April 1997
Docket NumberNo. 95SC754,95SC754
Parties21 Colorado Journal 575 In re the MARRIAGE OF DuWayne P. HEUPEL, Petitioner, and Starr M. Heupel, Respondent.
CourtSupreme Court of Colorado

Otto, Miller & Davidson, John G. Otto, Colorado Springs, for Petitioner.

Gregory John Hock, P.C., Gregory John Hock, Colorado Springs, for Respondent.

Justice MULLARKEY delivered the Opinion of the Court.

We granted certiorari in In re Marriage of Heupel, No. 94CA1291 (Colo.App. Oct. 19, 1995) (not selected for official publication), to determine the applicability of a property division clause in a marital separation agreement to a payment received by the former husband when he resigned from his position as a member of the armed services. Specifically, we consider whether DuWayne P. Heupel's lump sum payment, received from the United States Air Force under the Special Separation Benefit (SSB) program when he voluntarily elected to switch from active duty to reserve status, should be treated as retired pay for purposes of equitable distribution under the separation agreement of his dissolution decree.

A majority of a division of the court of appeals upheld the trial court's finding that the lump sum payment was marital property subject to equitable distribution but reversed the trial court's order of contempt against DuWayne Heupel. Three issues are presented for our review: (1) whether SSB payments are marital property; (2) whether a separation agreement can be reopened in light of the receipt of a "post-decree" benefit; and (3) whether state equitable distribution laws are pre-empted in the area of SSB payments which are disbursed pursuant to federal law. 1

We now hold that state equitable distribution laws are not pre-empted by federal law with respect to SSB payments and that SSB payments are marital property subject to equitable distribution. We further hold that, because an SSB payment is marital property, it is not a "post-decree" benefit. Thus, we find that the trial court did not reopen the separation agreement. Instead, the trial court appropriately enforced the dissolution decree according to its terms concerning the division of retired pay. Accordingly, we affirm the court of appeals and remand to that court for disposition consistent with our decision.


The Heupels were married on February 19, 1973, and had one son, Jason DuWayne Heupel, on February 3, 1983. On December 5, 1989, DuWayne P. Heupel (Husband) and Starr M. Heupel (Wife) filed a petition for dissolution of their marriage. On March 13, 1990, the trial court entered a decree of dissolution incorporating the Heupels' separation agreement. Pursuant to the separation agreement, the Heupels agreed to the court's jurisdiction and stipulated to custody, child support, spousal maintenance, debts, and property division.

Husband, an officer of the United States Air Force, had fifteen years of accredited service in the Air Force at the time of the dissolution. As to Husband's military retirement pension, which had not vested or matured at that time, 2 the separation agreement provided:

Retirement Funds: Military Retirement--[Wife] will receive one-half of the 20 year value of [Husband's] military service retirement benefits upon his retirement.

In September 1993, Wife learned that Husband had transferred from active duty to reserve status. 3 At the time of his transfer, Husband had amassed seventeen years toward the twenty years of active duty service required for a military pension. See supra n. 2. Hence, Husband was only three years away from eligibility for military retired pay when he switched from active to reserve status. In conjunction with this "early-out," Husband received a $117,000 lump-sum settlement from the military, pursuant to the SSB program. See 10 U.S.C. § 1174a (1994). Wife then brought a motion seeking to enforce the provision of the separation agreement pertaining to Husband's military retired pay, quoted above, and seeking to hold Husband in contempt of the dissolution decree.

The trial court found that Husband "had voluntarily impaired [Wife's] rights under the separation agreement." Based on a contempt hearing, the trial court found that Husband's actions were in "wilful contempt" of the separation agreement and the court decree. Further, the trial court found that "the philosophical distinction between the normal military retirement pay entitlement and the separation benefit is nonexistent in a marital property discussion." The trial court noted that the SSB benefit "is calculated in a fashion similar to retired pay based on years of service and grade," and "[t]o say that it is not a payment for recompense of past services seems ... to ignore the reality." Thus, the trial court concluded that the SSB payment was a "buy-out of retirement rights" and that there was no federal pre-emption of state distribution laws as applied to SSB payments.

The court of appeals reversed the trial court's contempt order because the SSB program was not in existence at the time the Heupels entered into the separation agreement and there were no appellate decisions from any Colorado court addressing distribution of such benefits. Therefore, the court of appeals concluded that Husband's failure to pay Wife half of the lump-sum benefit--under the separation agreement--did not constitute "wilful disobedience" of the dissolution decree. Heupel, No. 94CA1291, slip op. at 3.

Next, the court of appeals considered whether federal law pre-empted state equitable distribution provisions. In affirming the trial court, the court of appeals summarily invoked its decision in In re Marriage of McElroy, 905 P.2d 1016 (Colo.App.1995). In McElroy, the court of appeals, after analyzing the pertinent United States Supreme Court cases and federal statutes, concluded "that the trial court was not preempted by federal law from characterizing the SSB funds received by [the] husband as marital property and from awarding a portion of them to [the] wife." McElroy, 905 P.2d at 1020.

Last, the court of appeals rejected Husband's request to render an advisory opinion on what would happen if Husband becomes eligible to receive retired pay as a member of the ready reserve and "repays" the SSB payment when he turns sixty, an option under 10 U.S.C. §§ 1174a(g) and 1174(h) (1994). The court of appeals remanded the case back to the trial court "for further proceedings relative to other forms of relief requested in wife's motion." Heupel, No. 94CA1291, slip op. at 5.

Judge Roy filed a separate opinion concurring in part and dissenting in part. Following his dissent in McElroy, Judge Roy concluded that federal pre-emption precluded distribution of SSB payments.


The analysis of federal pre-emption is key to the resolution of the other issues before us. Federal pre-emption, of course, would be dispositive of the other issues. Under federal law, including the relevant United States Supreme Court decisions, pre-emption can be found only if SSB payments are not retired pay. If SSB payments are retired pay, then there is no pre-emption and SSB payments are marital property subject to equitable division. See In re Marriage of Hunt, 909 P.2d 525, 530 (Colo.1995) (holding that retired pay is divisible marital property). In addition, if it is marital property, an SSB payment cannot be deemed a post-decree benefit, and its division is not dependent on a reopening of the decree of dissolution. Hence, because our determination regarding federal pre-emption drives our resolution of the remaining two issues, we begin our discussion with federal pre-emption.


The United States Supreme Court has consistently held that, under the Supremacy Clause of the United States Constitution, Article VI, Clause 2, a "state law that conflicts with federal law is 'without effect.' " Cipollone v. Liggett Group, Inc., 505 U.S. 504, 515, 112 S.Ct. 2608, 2617, 120 L.Ed.2d 407 (1992) (quoting Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 2128-29, 68 L.Ed.2d 576 (1981)); see also U.S.Const. art. VI, cl. 2 (stating that federal law "shall be the supreme law of the land" notwithstanding any state law or constitution to the contrary). As a starting point, federal pre-emption analysis mandates an inquiry into Congress's intent to pre-empt state law in a given area. See Cipollone, 505 U.S. at 515, 112 S.Ct. at 2616 (finding that congressional intent is the "ultimate touchstone" of federal pre-emption analysis). Congressional intent to pre-empt state law in a given area of law can be explicitly set forth or can be implicit. See id. "In the absence of an express congressional command, state law is pre-empted if that law actually conflicts with federal law ... or if federal law so thoroughly occupies a legislative field as to make reasonable the inference that Congress left no room for the States to supplement it." Id. (citations and internal quotation marks omitted).

The Supreme Court considered distribution of military retired pay in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981). In McCarty, the Supreme Court addressed whether federal law prohibited a state court from dividing military nondisability pay upon dissolution of a marriage. The Supreme Court framed its inquiry as follows: " 'whether the right as asserted [community property] conflicts with the express terms of federal law and whether its consequences sufficiently injure the objectives of the federal program to require nonrecognition.' " 4 Id. at 221, 101 S.Ct. at 2735 (quoting Hisquierdo v. Hisquierdo, 439 U.S. 572, 583, 99 S.Ct. 802, 809, 59 L.Ed.2d 1 (1979)). After examining the relevant legislation and legislative history, the McCarty Court concluded that the asserted community property right and the express terms of the federal laws at issue were in conflict. The Court then explained that the community property right injured the objectives of the federal program by, among other ways, diminishing...

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