Urbaniak v. Urbaniak

• Decision Date: 07 December 2011
• Docket Number: No. 25850.,25850.
• Citation: 2011 S.D. 83,807 N.W.2d 621
• Parties: Julie A. URBANIAK, Plaintiff and Appellee, v. Robert I. URBANIAK, Defendant and Appellant.
• Court: South Dakota Supreme Court

2011 S.D. 83

807 N.W.2d 621

Julie A. URBANIAK, Plaintiff and Appellee,

v.Robert I. URBANIAK, Defendant and Appellant.

No. 25850.

Supreme Court of South Dakota.

Considered on Briefs Oct. 03, 2011.Decided Dec. 7, 2011.

Patricia A. Meyers, Rapid City, South Dakota, Attorney for plaintiff and appellee.

Rena M. Hymans, Sturgis, South Dakota, Attorney for defendant and appellant.

KONENKAMP, Justice.

[¶ 1.] Upon issuing a divorce decree, the trial court awarded Julie A. Urbaniak $500 per month in alimony for eight years and attorney's fees. In granting the alimony, the court considered Robert I. “Ike” Urbaniak's social security and military disability payments, but did not order attachment of those benefits. Ike appeals, arguing that the trial court erred in considering his disability benefits in determining alimony. He also contends that the court abused its discretion in awarding Julie alimony and attorney's fees and costs. We affirm.

Background

[¶ 2.] Ike joined the Army in 1989. In a motor vehicle accident while stationed in Egypt, he suffered a wrist injury and post-traumatic stress disorder. He was honorably discharged in 1996. Julie and Ike married in 2002. During the first year, both worked and contributed all their earnings to the marriage. Thereafter, Ike was unemployed and Julie supported the couple with her earnings. Throughout the marriage, Ike periodically struggled with drug and alcohol abuse.

[¶ 3.] Ike and Julie purchased and remodeled a home in 2003. Julie paid for most of the remodeling costs with money she inherited from her family. Ike and Julie attempted to have children for two or three years. But Julie eventually discovered that Ike was unable to have children. She was not aware of this when they married.

[¶ 4.] Ike has a high school education. He attended college but never obtained a degree. In 2006, the Department of Veterans Affairs (VA) designated Ike as one-hundred percent disabled. Julie had assisted him in applying for VA disability benefits, hiring an attorney, and serving as Ike's protective payee.

[¶ 5.] Ike receives $984 per month in social security disability benefits and $2,823 per month in VA disability benefits. He also received $20,000 in social security back pay, which the couple used to pay credit card and other debts in order to qualify for a loan. Ike was not eligible for military retirement benefits because he served less than twenty years. As protective payee, Julie managed all household finances and monitored Ike's medication intake. Toward the end of the marriage, Julie also performed most of the household chores.

[¶ 6.] Ike has several mental and physical health problems. He twice overdosed on pain medications. His family, including Julie, suspected that Ike was frequently overmedicating. Ike was obsessive compulsive, constantly monitoring Julie's location when she was not at home. Without informing Julie, Ike often cancelled or failed to attend therapy sessions, medical appointments, and individual counseling. Julie tried to introduce Ike to new hobbies and common interests without success.

[¶ 7.] Julie has a high school education and is employed as a cafeteria worker, earning $12.42 per hour, forty hours per week. She also has a retirement fund currently worth $18,053.26. Julie is in good health.

[¶ 8.] After seven years of marriage, Julie sued for divorce in 2009. Their relationship had deteriorated. Both Ike and Julie had become verbally abusive to each other. Julie discovered that Ike had an online girlfriend. He insisted that Julie was mishandling his money as protective payee. Ike continuously threatened to lock Julie out of the house and, on one occasion, choked her during an argument. He also threatened to kill her on several occasions.

[¶ 9.] At the time of the divorce, Julie was forty years old and Ike was thirty-nine. They had no children. Julie earned about $1,500 per month and Ike received $3,807 per month in disability payments. He had no other income, and his disability benefits would decrease by about $150 per month after the divorce became final.

[¶ 10.] Following a trial, the circuit court divided the marital property and debt. Julie was awarded $500 per month in alimony for eight years, subject to termination on her death or remarriage. The court considered Ike's receipt of disability benefits in making this decision, but noted that the alimony award was not to be construed as an attachment of any disability payments. The court also awarded Julie $5,792.12 in costs and attorney's fees, considering the complex nature of the legal issues and Ike's misconduct during the marriage. Ike appeals, arguing that the trial court erroneously considered his disability benefits in determining alimony. He also asserts that the court abused its discretion in awarding Julie alimony and costs and attorney's fees.

VA Disability Benefits

[¶ 11.] Ike maintains that the trial court erred in considering his VA disability benefits in awarding alimony. He contends that the United States Supreme Court's decision in Mansell v. Mansell, 490 U.S. 581, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1989) controls this legal question. He points out that he served in the military and incurred his service-connected disability before he married Julie. Ike does not have direct access to the bank account where his disability benefits are deposited. Only his current payee (Jeff Denison of U.S. Bank) has direct control of the benefits.

[¶ 12.] Julie concedes that the benefits may not be levied, seized, or attached, but notes that the circuit court merely considered Ike's receipt of military disability benefits. Julie contends that federal law does not preclude a court's consideration of such benefits as a source of income relevant to Ike's ability to pay alimony.

[¶ 13.] We review decisions on alimony for an abuse of discretion. Billion v. Billion, 1996 S.D. 101, ¶ 14, 553 N.W.2d 226, 230. But we review questions of law bearing on an alimony award de novo. Oman v. Oman, 2005 S.D. 88, ¶ 4, 702 N.W.2d 11, 12. Military retirement pay and military disability benefits have significant differences. Retirement benefits are for military service members who serve for a specific period, usually twenty years or more. See., e.g., 10 U.S.C. § 3911 (Army); 10 U.S.C. § 6323 (Navy and Marine Corps). The amount of retirement pay a veteran is eligible for is determined according to the number of years served and the rank achieved. 10 U.S.C. § 1401.

[¶ 14.] On the other hand, a military service member who becomes disabled as a result of military service is eligible for disability benefits. 38 U.S.C. § 1131 (peacetime disability benefits). The amount of disability benefits a veteran is eligible for is determined according to the seriousness of the disability and the degree to which the veteran's ability to earn a living has been impaired. 38 U.S.C. §§ 1134 and 1114. Disability benefits are not assignable and are exempt from attachment, levy, seizure, and taxation. 38 U.S.C. § 5301(a)(1) (emphasis added). A military retiree who is also disabled may receive disability benefits (and incur tax-exempt status) only if he or she waives a corresponding amount of military retirement pay. 38 U.S.C. § 5304; 38 C.F.R. § 3.750.

[¶ 15.] In 1981, the United States Supreme Court held that federal law precluded state courts from treating military retirement pay as community property in divorce proceedings. McCarty v. McCarty, 453 U.S. 210, 223, 101 S.Ct. 2728, 2736, 69 L.Ed.2d 589 (1981) (emphasis added), superseded by statute, 10 U.S.C. § 1408. According to the McCarty Court, Congress intended all military retirement benefits to go directly to military service members and not to their former spouses. Id. at 228, 101 S.Ct. 2728 (emphasis added). In direct response to the McCarty decision, Congress passed the Uniform Services Former Spouses' Protection Act (USFSPA), which authorizes state courts to treat retirement pay as community property. 10 U.S.C. § 1408(c)(1). The USFSPA did not include disability benefits in the definition of disposable retirement benefits. See 10 U.S.C. § 1408(a)(4)(B).

[¶ 16.] In 1989 the United States Supreme Court interpreted the USFSPA. See Mansell, 490 U.S. 581, 109 S.Ct. 2023. The Mansell decision acknowledged the USFSPA's affirmative grant of authority to treat retirement pay as community property. Id. at 588, 109 S.Ct. 2023. But the Court held that state courts may not treat military retirement pay waived by retirees in order to receive veterans' disability benefits as divisible property. Id. at 594–95, 109 S.Ct. 2023. The Court did not extend its holding to military disability benefits received by service members who are not also eligible for retirement pay. See id. Furthermore, the Mansell Court addressed the division of benefits as marital property subject to division and not specifically the use or consideration of benefits for spousal support. See id. at 588–90, 594–95, 109 S.Ct. 2023.

[¶ 17.] In this case, Ike receives $2,823 in VA disability benefits each month. He was not eligible for military retirement pay (and therefore had not waived retirement pay in order to receive disability benefits) because Ike served less than twenty years in the Army. Thus, despite Ike's argument otherwise, the Mansell decision does not apply here.¹

[¶ 18.] Ike's disability benefits are exempt from attachment, levy, seizure, and taxation. 38 U.S.C. § 5301(a)(1). The trial court was therefore unable to attach Ike's disability benefits to pay an alimony award. Yet the court did not attach Ike's benefits but instead considered them in determining alimony. In both its conclusions of law and its order, the court specifically indicated that the alimony award should not be construed as an attachment of any disability benefits. The court reasoned that although federal law prohibits attachment of Ike's military disability benefits, the law does not dictate what happens to the money once it is in Ike's...