Martin v. Martin
| Decision Date | 07 July 1989 |
| Citation | 561 A.2d 1231,385 Pa.Super. 554 |
| Parties | James R. MARTIN, Appellant v. Grace G. MARTIN. 972 PITTS. 1988 |
| Court | Pennsylvania Superior Court |
Michael A. Johnson, Mount Pleasant, for appellant.
Joseph M. George, Uniontown, for appellee.
Before CIRILLO, President Judge, and CAVANAUGH, BROSKY, McEWEN, OLSZEWSKI, BECK, TAMILIA, POPOVICH and JOHNSON, JJ.
This is an appeal from the Order of the trial court granting the parties a decree in divorce and directing an award of equitable distribution between the parties.
Appellant raises the following issues for our consideration: (1) whether the trial court had the jurisdictional ability to make the Order it did; and (2) whether the trial court properly held that appellant's Veteran's Disability Compensation Benefits constituted marital property subject to equitable distribution under the Pennsylvania Divorce Code.
For the reasons that follow, we now vacate that part of the order as it pertains to equitable distribution, and remand for further proceedings consistent with this opinion. The provision in the order which grants the parties' divorce is affirmed.
Appellant-husband and appellee-wife were married on June 17, 1950. Eleven children were born of the marriage; nine are surviving. During the majority of the time that the parties lived together appellant was a member of the Armed Services. In 1983 appellant filed a complaint in divorce alleging that the parties had been separated for a period in excess of three years and that the marriage was irretrievably broken.
Appellee made a claim for equitable distribution which was referred to the Master. A hearing was held on the matter on April 29, 1987. At the hearing appellant testified that he was forced to terminate his service with the U.S. Air Force because of a physically disabling injury received while in the Air Force. The monies he has received since his termination have been in the form of Veteran's Administration Disability Compensation Benefits, and not military retirement pay.
On September 11, 1987, the Master filed a report and recommendation, wherein he concluded that appellant's Veteran's Administration Disability Compensation Benefits are marital property subject to equitable distribution, and awarded 60 percent of the benefits to appellant and 40 percent to appellee.
Appellant filed exceptions to the Master's report. The trial court, however, dismissed the exceptions and adopted the recommendations of the Master. This appeal followed.
The determination of whether appellant's disability pay is distributable as marital property ultimately revolves around the interplay of Federal and Pennsylvania law. Both parties present law which, they contend, and with which we would agree, supports their position that appellant's disability pay is or is not subject to distribution. According to appellant, federal law (the Uniformed Services Former Spouse's Protection Act) prohibits distribution of his disability benefits. Appellee, asserts, however, that distribution is allowable and called for under Pennsylvania law.
Generally speaking, in matters of a domestic nature, including divorce and property settlement, the Federal government and courts refrain from infringing upon or impinging on the individual states authority to govern such matters. On certain occasions, however, there is a deviation from the general position. The matter of military pensions is one area where such a deviation has occurred.
Previously, under then governing federal law, military retirement pay was completely excluded from possible distribution as marital or community property, and although certain state laws purported to consider such retirement pay differently, the inability of the states to alter this treatment was determined by the United States Supreme Court in its decision in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981). The Court reasoned that to allow the states to alter the non-divisible status of such retirement pay would do "clear damage" to the Congressional intent that such pay reach the veteran and no one else. The Court thus concluded that to the extent a state law conflicted with federal law on divisibility of military pensions by considering such pension a marital asset, the state law was pre-empted by the Federal law. The Court did opine, however, that if Congress felt otherwise it was free to change the statutory framework governing the matter.
In response to the McCarty decision, Congress passed the Uniformed Services Former Spouses Protection Act which loosened or modified the non-divisible stance previously espoused. Under the Act, at 10 U.S.C. § 1408(c)(1), a service member's "disposable retired ... pay " may be treated "as property solely of the member or as property of the member and his spouse in accordance with the law of the jurisdiction." Thus, the new Act allowed the states to decide whether or not such retirement pay shall be divisible as marital property.
Appellant argues, however, that disability pay, and retirement pay waived in order to receive disability pay, are exempt from the scope of the Former Spouses Protection Act and thus, retain a non-divisible status. It is exempt, it is argued, because it is explicitly excluded from the definition of disposable retired pay and thus, not of the class which the states are free to treat as marital property.
"Disposable retired pay" is defined by the Act as follows:
(4) "Disposable retired ... pay " means the total monthly retired ... pay to which a member is entitled ... less amounts which--
(B) are required by law to be and are deducted from the retired ... pay of such member, including fines and forfeitures by court-martial, Federal employment taxes, and amounts waived in order to receive compensation under ... title 38.
10 U.S.C.S. §§ 1408(a)(4)(B) (emphasis added). Under the statutory scheme, in order for a service member to obtain the V.A. disability benefits to which he is entitled, the member has to waive the amount of his retired pay equal to the amount of V.A. disability compensation he is entitled to receive. Instantly, appellant had to waive all of his pension in order to receive disability benefits, as the disability represented a larger sum than his pension. And since, according to the federal statute, the amount of pension waived in order to receive disability compensation is expressly disallowed as distributable income, appellant would have no "disposable retired pay", within the terms of the Act, to speak of.
Additionally, and important to our analysis as we shall soon disclose, 38 U.S.C.S. § 3101(a) states the following:
§ 3101. Nonassignability and exempt status of benefits
(a) Payments of benefits due or to become due under any law administered by the Veterans' Administration shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary....
This, presumably, would also act as a bar to distribution of appellant's disability benefits.
The Pennsylvania Divorce Code, however, takes a different approach toward disability benefits, and appellee asserts that its provisions support the actions of the trial court. 23 P.S. § 401(e)(6) states:
For purposes of this chapter only, "marital property" means all property acquired by either party during the marriage except:
Veterans' benefits exempt from attachment or seizure pursuant to the Act of September 2, 1958 public law 85-857, 72 statute 1229, as amended, except for those benefits received by a veteran where such veteran has waived a portion of his military retirement pay in order to receive veterans' compensation. (emphasis added).
Appellant's VA compensation is exempt from attachment under § 3101 quoted above and, as such, under the first part of the above quoted portion of the Divorce Code, would likewise be excluded from marital property. However, appellant's compensation is brought back within the definition of marital property due to the fact that appellant waived retirement pay in order to receive it. Thus, it appears that the...
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