Missouri Court of Appeals Rules on Disputed Division of Military Benefits After Divorce

In a Missouri divorce case, a judge must dispose of all issues between the spouses before signing a final order. This includes child custody and child support, as well as division of marital property. Courts encourage parties in any kind of litigation to try to work out a settlement instead of going to trial. Judges are usually happy to sign an order based on their agreement. A word of warning, though. Submitting a property division agreement might give the court authority it would not otherwise have. It is critical that you understand exactly what you are agreeing to do in any divorce settlement. This includes understanding when state law applies, when federal law applies, and when it makes no difference.

Missouri courts operate under state law. They do not necessarily have jurisdiction over property that is governed by federal law, such as military benefits. Several years ago, an ex-husband appealed a judgment awarding part of his military disability pay to his ex-wife. He argued that a Missouri state court lacked jurisdiction over those benefits. The Missouri Court of Appeals ruled in Moore v. Moore that, whether the trial court had jurisdiction or not, the ex-husband had agreed to divide the benefits in the original divorce proceeding years earlier. His agreement gave the trial court the authority over his benefits. Under a long-standing legal principle, the husband could not challenge a part of the order to which he had originally agreed.

Military Retirement and Disability Benefits

On the surface, the Moore case looks like a dispute over whether a Missouri court has jurisdiction over military retirement or disability benefits. While the court ultimately found that this was not the central issue, it is still worth addressing.

State and Federal Law

Divorce and other family law disputes in Missouri are governed by state law, which is enacted by the Missouri Legislature in Jefferson City. The U.S. Armed Forces are part of the Department of Defense (DOD). They are governed by laws enacted by the U.S. Congress and regulations established by the Pentagon. As a general rule, Missouri courts do not have jurisdiction over property located outside of the state, or property that is subject to federal law.

Congress passed the Uniformed Services Former Spouses Protection Act (USFSPA) in 1982 to give state courts the authority to divide military retirement benefits in divorce cases. A state court can treat “disposable retired pay” paid to a veteran of the Armed Forces as marital or separate property, based on how state law defines “marital” and “separate” property. This statute specifically applies to retirement pay, leaving open the question of whether a state court could divide other kinds of military benefits.

Retirement versus Disability

Eligibility for military retirement pay is based on age, years of service, and a disability rating from the DOD. With some exceptions, a person becomes eligible at age sixty, and after twenty years of service.

A separate program for disability benefits is administered by the Department of Veterans’ Affairs (VA). It bases compensation on a different disability rating and the individual’s number of dependents.

Federal law states that no individual may receive more than one type of military benefit. It allows veterans who are eligible for retirement pay to waive that pay in order to receive disability benefits instead.

Jurisdiction of Missouri Courts Over Military Benefits

The U.S. Supreme Court ruled in Mansell v. Mansell in 1989 that state courts may only treat “disposable retired pay” as marital property in a divorce. At that time, the USFSPA’s definition of “disposable retired pay” specifically excluded retirement benefits that a veteran waived in order to obtain disability benefits.

Missouri courts have cited this decision to find that, while military retirement benefits could be considered marital property, disability benefits and waived retirement benefits are not marital property. The Missouri Court of Appeals, for example, affirmed this view in Morgan v. Morgan in 2008.

Appealing a Court Order Based on a Signed Agreement

The parties in Moore were divorced in 2013. The court incorporated the parties’ negotiated settlement agreement into the Judgment and Decree of Dissolution of Marriage. The husband received benefits based on twenty-three years of military service and retirement due to disability. The settlement agreement included a fifty percent split of the husband’s “Military Pension,” including half of any cost-of-living increases, but minus deductions for Survivor Benefit Plan costs. If the husband received $3,000 in net pay for a given month, he would pay $1,500 to the wife.

The husband’s benefits turned out to be disability benefits from the VA, as he had waived retirement benefits. About a year after the divorce was finalized, the DOD informed the husband that it had no further obligation to pay him benefits because of his waiver. The husband then stopped making payments to the wife. The wife filed a motion to enforce the divorce decree, which the trial court granted in early 2015. The husband’s appeal followed.

Since the benefits were all based on disability through the VA, the husband argued that they were not marital property under Missouri law, and the trial court therefore had no jurisdiction. The Court of Appeals found that, while this is technically true, it was not relevant to the husband’s situation. It cited the doctrine of res judicata and ruled in the wife’s favor in March 2016.

The husband signed a settlement agreement in 2013, in which he agreed to split his military benefits 50/50. The agreement treated the benefits as marital property. The trial court entered a judgment incorporating that agreement. Res judicata holds that a party to a lawsuit cannot relitigate an issue that has already been resolved. In this case, the trial court did exactly what the parties asked it to do. Even if the court lacked jurisdiction over the husband’s benefits under federal law, the husband gave the court jurisdiction by agreeing to the property division.

Mark A. Wortman is a Kansas City, Missouri family law attorney whose practice focuses exclusively on divorce, property division disputes, and other family law matters. Please contact us today online or at (816) 523-6100 to schedule a confidential consultation with a skilled and experienced legal advocate.