Marriage of McElroy, In re

Decision Date10 August 1995
Docket NumberNo. 94CA0957,94CA0957
Citation905 P.2d 1016
PartiesIn re the MARRIAGE OF Ronald D. McELROY, Appellee, and Donna M. McElroy, Appellant. . V
CourtColorado Court of Appeals

F.R. Pamp, Colorado Springs, for appellee.

John D. Braun, Colorado Springs, for appellant.

Opinion by Judge ROTHENBERG.

There are two primary issues in this appeal by Donna M. McElroy (wife) from a post-dissolution of marriage action: (1) whether the trial court had jurisdiction to award wife a portion of the special separation benefits (SSB) received by former husband, Ronald D. McElroy (husband), upon his voluntary discharge from the Air Force, or whether the court was preempted by federal legislation from doing so; and (2) if the court was not preempted, whether the SSB constituted marital property subject to division. Because we hold that the trial court was not preempted from exercising jurisdiction over the SSB benefit and that the SSB does constitute marital property, we reverse and remand for further proceedings.

As part of their marital settlement agreement approved by a California court in 1988, the parties agreed wife would receive 25% of husband's "gross military retirement/pension benefits" from the Air Force. Husband was to notify her in writing within 10 days of his eligibility to receive such benefits.

The agreement also provided for the establishment of a trust, revocable in writing by wife. As trustee, husband was required to remit wife's 25% benefit to her within 5 days after receiving each payment. The purpose of the trust was to secure wife's share of the benefit in the event of delays in obtaining it or if she were unable to obtain direct enforcement from the Air Force. The parties' agreement further provided the trial court would retain jurisdiction over the retirement/pension provisions to comply with any specific language requirements of the Air Force.

In 1988, wife moved to Colorado and husband registered the California decree in this state. Since then, Colorado has exercised jurisdiction in this case.

After 16 years of creditable military service, husband accepted SSB funds totalling over $100,000 in gross benefits, but failed to notify wife. When wife learned he had done so, she filed a motion with the trial court requesting at least 25% of the benefits, plus interest on her share from the date husband had received them.

The trial court found that: (1) the SSB constituted marital property; (2) if husband eventually completes his military career and retires, he will have the option to "buy back" his retirement benefits by repaying the SSB; (3) under such circumstances, husband controlled receipt of wife's award and she should have the option of accepting 25% of the SSB or of retaining her right to 25% of the future retirement pay; and (4) it would be equitable under the California decree to award wife 25% of the net payment because husband's acceptance of the SSB had deprived her of her portion of his retirement.

Nevertheless, the trial court ruled that it lacked authority to allocate 25% of the net payment to wife or to order such payment because federal law controls the issue. On the basis of preemption, therefore, it denied her motion for division of the SSB. After finding no significant difference between the parties' respective incomes, the court also denied wife's request for attorney fees.


Wife contends the trial court erred in determining that federal law preempted its ability to divide the special separation benefit. We agree.


In 1991, Congress established two related programs to reduce the size of the armed forces in response to the perceived diminished threat to United States' interests. Elzie v. Aspin, 841 F.Supp. 439 (D.D.C.1993). SSB payments are provided for under 10 U.S.C. § 1174a (1994) and voluntary separation incentive benefits (VSI) are provided for by 10 U.S.C. § 1175 (1994).

The programs were designed to compensate career-oriented service members who had been denied a career opportunity because of circumstances beyond their control. H.Conf.Rep. No. 101-665, 101st Cong., 2d Sess. 6 (1990), reprinted in 1990 U.S. Code Cong. & Admin. News 2962, 2995.

The pertinent statutes have reciprocal provisions granting armed forces members, who have been offered benefits under either program, the option to choose benefits under the other program. 10 U.S.C. §§ 1174a(e)(3) & 1175(c) (1994).

An eligible member of the armed forces who requests separation under § 1174a(a) receives SSB that is a lump sum benefit equal to 15% of that member's monthly basic pay multiplied by 12 and by the number of years of service. 10 U.S.C. § 1174a(b)(2)(A) (1994). Legislative history shows that pay offered under the SSB program was established at 15% of basic pay, rather than the normal 10% applicable in determining involuntary separation pay, so that such enhancement would provide an equitable, up-front incentive for volunteer personnel who are not retirement-eligible to choose in lieu of facing the prospect of involuntary separation. H.Conf.Rep. No. 102-311, 102d Cong., 1st Sess. 3 (1991), reprinted in 1991 U.S. Code Cong. & Admin. News 1112.

A member of the armed forces who is offered the VSI receives benefits computed under a formula providing monthly payments for a period equal to twice the number of service years. 10 U.S.C. § 1175(d)(3)(e)(1) (1994). The stated purpose of the VSI is to "provide a financial incentive to members of the armed forces ... for voluntary appointment, enlistment, or transfer to a reserve component...." Section 1175(a).

Additional legislative history discussing the "force drawdown" and predating enactment of the VSI/SSB programs recommended a comprehensive package of benefits to assist separating personnel and their families in adjusting to civilian life. In a different context, one court has described the VSI and SSB programs as an inducement to elect early retirement. Elzie v. Aspin, supra.


The trial court concluded that, based upon preemption, the court lacked subject matter jurisdiction to award any portion of husband's SSB. We do not agree.

The concept that federal enactments may prohibit the enforcement of state laws is grounded upon the Supremacy Clause of the United States Constitution which provides that the laws of the United States, made pursuant to the national constitution, "shall be the supreme law of the land." U.S. Const., art. VI.

Any state law that conflicts with federal legislation, either directly or indirectly because its enforcement would stand as a barrier to the accomplishment of Congress' full purposes and objectives, is without effect and cannot be enforced. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992); Celebrity Custom Builders v. Industrial Claim Appeals Office, --- P.2d ---- (Colo.App. No. 94CA1937, June 15, 1995). See also L. Tribe, American Constitutional Law § 6-25 (2d ed. 1988).

Domestic relations are preeminently matters of state law. Therefore, when Congress passes general legislation, it rarely intends to displace state authority in this area. Mansell v. Mansell, 490 U.S. 581, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1989).

On the rare occasion when state family law has come into conflict with a federal statute, the United States Supreme Court has limited review under the Supremacy Clause to a determination of whether Congress has positively required by direct enactment that state law be preempted. Rose v. Rose, 481 U.S. 619, 107 S.Ct. 2029, 95 L.Ed.2d 599 (1987) (no preemption found regarding state statute allowing a disabled veteran to be found in contempt for failing to pay child support, even when veteran's benefits were the only means for satisfying that obligation). See In re Marriage of Rahn, 1995 WL 478464, --- P.2d ---- (Colo.App. No. 94CA0106, August 10, 1995) (ERISA does not preempt enforcement of otherwise valid prenuptial agreement with regard to waiver of spousal death benefits).

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 precluded state courts from distributing military retirement benefits in marital dissolution proceedings. Thereafter, Congress responded to the McCarty decision by enacting the Uniformed Services Former Spouses' Protection Act (USFSPA), 10 U.S.C. § 1408 (1982), which gave the states express authority to treat a service member's disposable retired or retainer pay as property subject to equitable distribution. See In re Marriage of Gallo, 752 P.2d 47 (Colo.1988); In re Marriage of Grubb, 745 P.2d 661 (Colo.1987).

Relying on Mansell v. Mansell, supra, husband contends that the field of military financial benefits is completely preempted by federal law. However, in Mansell, preemption was found based upon a specific provision in the definitional section of the USFSPA expressly excluding consideration of a service member's disability pay from "disposable retired or retainer pay." See 10 U.S.C. § 1408(a)(4)(B) (1994). Nothing in Mansell prohibits the division of a service member's SSB. Indeed, the Court in Mansell concluded the USFSPA's savings clause was designed to defeat any inference that the federal direct payments mechanism displaced the authority of state courts to divide and garnish property not covered by the mechanism.

Nor do the statutes governing the SSB and VSI programs contain any prohibition concerning the power of the state court to determine the nature of such benefits. To the contrary, the legislative history shows that SSB and VSI benefits were adopted to benefit service members and their families and were designed to induce otherwise career-oriented members voluntarily to resign and to seek early retirement. See Elzie v. Aspin, supra. Hence, we perceive no inference of an intent to preempt. See Belgard v. United Airlines, 857 P.2d 467 (Colo.App.1992).

In the two reported appellate decisions we have...

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6 cases
  • Marriage of Heupel, In re
    • United States
    • Supreme Court of Colorado
    • April 21, 1997
    ...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, con......
  • Kelson v. Kelson
    • United States
    • United States State Supreme Court of Florida
    • March 21, 1996
    ...agreement or court decree dividing military retirement pay under circumstances similar to those present here. In re Marriage of McElroy, 905 P.2d 1016 (Colo.Ct.App.1995) (marital settlement agreement providing for division of husband's "gross military retirement/pension benefits" and predat......
  • Boedeker v. Larson, Record No. 0900-04-1.
    • United States
    • Court of Appeals of Virginia
    • December 7, 2004
    ...service members who had been denied a career opportunity because of circumstances beyond their control." In re Marriage of McElroy, 905 P.2d 1016, 1018 (Colo.Ct.App.1995). Absent these incentives, the typical service person who opted or was forced to leave the military before completing twe......
  • Lykins v. Lykins, 1999-CA-000094-MR.
    • United States
    • Court of Appeals of Kentucky
    • November 17, 2000
    ...plan asset"); Kulscar v. Kulscar, 896 P.2d 1206 (Okla.App.1995) (SSB payments are in lieu of retirement benefits); In re McElroy, 905 P.2d 1016 (Colo.App.1995) (SSB's are marital 16. 271 Mont. 196, 894 P.2d 958, 961-62 (1995). 17. See 10 U.S.C. § 1175(e)(3)(2000). 18. Heupel, supra at 571. ......
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