In re Erlandson

973 N.W.2d 601

IN RE the MARRIAGE OF Gary E. ERLANDSON and Susan Kay Erlandson

Upon the Petition of Gary E. Erlandson, Petitioner-Appellee,

And Concerning Susan Kay Erlandson, Respondent-Appellant.

No. 20-1607

Court of Appeals of Iowa.

Filed February 16, 2022

Mark R. Hinshaw of The Law Offices of Mark R. Hinshaw, West Des Moines, for appellant.

Joshua M. Moon of Dutton, Daniels, Hines, Kalkhoff, Cook & Swanson, P.L.C., Waterloo, for appellee.

Heard by Greer, P.J., Badding, J., and Potterfield, S.J.^*

BADDING, Judge.

To paraphrase a Scottish poet, even the best-laid plans often go awry.¹ The plans in this case attempted to give Susan Erlandson an equal share of her former husband's military retirement pay at the time of the divorce. Those plans went awry when, in the years that followed, the military placed Gary Erlandson on the temporary disability retired list before he reached twenty years of service, thereby foreclosing Susan from receiving any share of his retirement pay.

To remedy the situation, Susan petitioned to modify the property and spousal support provisions of the parties’ dissolution decree. The district court dismissed her petition on summary judgment after concluding it lacked authority to entertain her claims. We agree and affirm the court's ruling.

I. Background Facts and Proceedings

Gary and Susan divorced in late 2015 after fifteen years of marriage. Gary was then a full-time member of the Iowa Army National Guard. In his earlier years of service, he was deployed overseas twice, including a twenty-two-month tour of duty in Iraq from 2005 to 2007. He returned from that deployment suffering from a traumatic brain injury, depression, and post-traumatic stress disorder (PTSD). His mental and physical health took a toll on the parties’ relationship, and they eventually separated in 2010.

During their separation, Gary and Susan entered into a "stipulation for separation,"² which the district court approved in a "decree for separation." In their stipulation, the parties agreed Susan would receive the family home, any "real and personal property, household goods, and furnishings" then in her possession, and a "one-half interest in any pension plan, 401K plans and/or any other retirement plan." When Gary filed for divorce—three years after the stipulation was approved—Susan asked the district court to include those terms in its decree dissolving their marriage. She also made a request for spousal support.

After a trial on Gary's dissolution petition, the district court granted Susan's request for spousal support in a March 30, 2016 decree, awarding her "temporary alimony of $400 per month until December 31, 2018." It also honored her request to incorporate the terms of the previously approved stipulation in its decree. But it filled in some blanks, one of which concerned Gary's military retirement pay. Although the parties agreed Susan would receive "one-half interest in any pension plan," they "did not specify when the one-half interest would be determined or how." Erlandson , 2017 WL 3283290, at *2. On that issue, the court found:

In July 2001 Gary joined the military on a part-time basis. He thus is almost a 15-year employee of the military. He will be eligible to retire after 20 years; however, he would not be eligible to draw retirement pay until age 60, as a part-time employee, minus the time that he served in the war zone in Iraq. He became a full-time member of the military in 2008. If he remains a full-time employee, he would be eligible to draw a 50 percent pension of his then rank pay in the year 2028, regardless of his then age. If he does not complete 20 good years of service either as a part-time o[r] full-time military member, he will draw no pension at all. Because the entirety of [Gary's] military pension was earned during the marriage, [Susan] shall be entitled to receive one-half of that pension, per the Benson formula, when and if [Gary] becomes eligible to draw retirement pay. A separate order will be entered to that effect.

The separate order addressed the division of Gary's military pension under the Uniformed Services Former Spouses Protection Act (USFSPA). See 10 U.S.C. § 1408. The order provided that Susan would receive "50% of the Member's Disposable Retired Pay or Retainer Pay."³ For purposes of the order, "military retirement" was broadly defined to include any retired pay "to which [Gary] would be entitled for longevity of active duty and/or reserve component military service and all payments paid or payable under the provisions of Chapter 38 or Chapter 61 of Title 10, United States Codes." Continuing that definition, the order stated:

It also includes all amounts of retired pay [Gary] actually or constructively waives or forfeits in any manner and for any reason or purpose, including but not limited to any waiver made to qualify for Veterans Administration [VA] benefits [or] any waiver made in order to qualify for disability retired pay.

In a separate paragraph, the court retained continuing jurisdiction to modify the

pension division payments or the property division specified herein if [Gary] should waive military retired pay in favor of disability payments or take any other action (such as receipt of severance pay, bonus or an early-out payment) which reduces [Susan's] share or amount herein. This retention of jurisdiction is to allow the Court to adjust [Susan's] share or amount to the pre-reduction level to reconfigure the property division or to award compensatory alimony or damages so as to carry out the original intent of the Court. [Gary] shall indemnify [Susan] as to any reduction in her payments from what they would have been based solely on the length of service.

Several years later, the military's medical evaluation board assessed Gary's health and compiled a list of twenty "diagnosed medical conditions." Based on those findings, Gary was referred for an informal evaluation by the reviewing board, which determined he was "physically unfit" for duty due to his service-related injuries. The reviewing board recommended a 70% disability rating and placed Gary on the temporary disability retired list "with a re-examination during February 2020."⁴ Gary's medical board liaison advised him to apply for disability compensation from the VA because he would receive a higher amount than if he elected to receive disability payments from the Department of Defense. Gary followed this advice, and in November 2019, the VA assigned him a 100% disability rating, entitling Gary to about $3100 per month in benefits.

Meanwhile, Susan filed an application with the Defense Finance and Accounting Service (DFAS) for payment of a portion of Gary's retirement pay pursuant to the USFSPA. But she was notified that because "the entire amount of the member's retired/retainer pay is based on disability, ... there are no funds available for payment under the USFSPA."

Susan sought relief by filing an "Application for Modification of Decree of Dissolution of Marriage" in December 2019 that requested "additional property and/or additional spousal support." In her view, the notice from the DFAS confirmed Gary had waived his military retirement pay to receive disability benefits so that she would not receive any of his retirement pay now or in the future. From that premise, she asked the court to exercise its authority under the pension division order and modify the original property division and spousal support award.

Gary responded with a motion for summary judgment, asserting (1) Susan was not entitled to modify property division or spousal support because her interest in his military retirement pay was contingent on him completing twenty years of military service; (2) disability pay was excluded from division in a dissolution under the USFSPA; and (3) the district court could not order him to indemnify Susan for the loss of her share in the retirement pay under Howell v. Howell , ––– U.S. ––––, 137 S. Ct. 1400, 1406, 197 L.Ed.2d 781 (2017).

Susan resisted, arguing "Gary was awarded military retired pay under Chapter 61 of Title 10." Because he waived that retirement pay in favor of VA disability compensation, Susan asserted she had a right to modify the property and spousal support provisions of the dissolution decree under the terms of the pension division order. In making this argument, Susan clarified that she was not seeking indemnification as prohibited by Howell , but simply asking the court to enforce its prior order allowing for modification under the doctrine of res judicata.

Persuaded by Gary's arguments, the court granted summary judgment and dismissed the action on the ground that it lacked jurisdiction to grant Susan relief. While acknowledging that it "specifically retained jurisdiction to review the dissolution decree pertaining to awarding property should a specific situation occur," the court found the circumstances surrounding Gary's discharge did not warrant such review. Likewise, the court determined Susan failed to establish a sufficient change in circumstances to justify modification of her spousal support. Susan appeals.

II. Scope and Standard of Review

"Summary judgment is appropriate only when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law." In re Marriage of Romanelli , 570 N.W.2d 761, 763 (Iowa 1997).

III. Analysis

Though we do not believe it's necessary to wade too deeply into the complicated law of military retirement pay, we provide a brief background to give context to the parties’ positions on appeal.

Under the USFSPA, state courts "may treat disposable retired pay" as divisible property in a divorce proceeding. 10 U.S.C. § 1408(c)(1). "But the USFSPA excludes some types of military retirement pay from ‘disposable retired pay.’ " In re Marriage of Tozer , 410 P.3d 835, 837 (Colo. Ct. App. 2017). One such type is Chapter 61 disability retirement pay, which is what Gary initially received. 10 U.S.C. § 1408(1)(4)(A)(iii)....