Weiland v. Weiland

307 Neb. 882

951 N.W.2d 519

Timothy H. WEILAND, appellee and cross-appellant,

v.Ann M. WEILAND, appellant and cross-appellee.

No. S-20-034.

Supreme Court of Nebraska.

Filed December 4, 2020

Andrew J. Hilger, of Law Office of Andrew J. Hilger, Omaha, for appellant.

Steven J. Riekes and Elizabeth Stuht Borchers, of Marks, Clare & Richards, L.L.C., Omaha, for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Miller-Lerman, J.

NATURE OF CASE

This case arises from a divorce action between Timothy H. Weiland, appellee and cross-appellant, and Ann M. Weiland, appellant and cross-appellee, who were married in 1984 and whose marriage was dissolved in 1996. Timothy served in the U.S. Marine Corps Reserve from 1982 through 2005. In the dissolution decree, Ann was "granted one-half of the points accumulated during the marriage by [Timothy] up to the time of the decree, and shall receive the credits for those points and the equivalent amount of money in the event that [Timothy's] retirement benefits vest." After the retirement benefits vested and in order for Ann to start receiving retirement benefits, the parties each moved the district court for Douglas County for clarification of the decree.

Following a hearing, the district court ordered Timothy to pay Ann a fixed award of $465.38 per month for the retirement benefits and further ordered Timothy to pay Ann her share of Timothy's retirement benefits he had received and not paid to Ann. Ann appeals, and Timothy cross-appeals, each challenging the fixed monthly amount of Ann's marital share of Timothy's military pension. As explained below, the district court erred when it assigned a fixed monthly dollar value. Although we honor Ann's entitlement to an award of military pension benefits and affirm Ann's entitlement to back payments, we vacate the fixed monthly benefit award and the fixed monthly amount of back payments; further, we reverse, and remand with directions to determine the equitable distribution of Timothy's military retirement expressed as a formula that honors the points awarded in the decree and is consistent with a hypothetical retired pay award valued as of the date of the decree.

STATEMENT OF FACTS

Timothy entered the U.S. Marine Corps Reserve on August 6, 1982, and the parties were married in 1984 in Omaha, Douglas County, Nebraska. When the parties divorced on September 30, 1996, Timothy had not yet retired from the military. The only issue on appeal is the equitable distribution of Timothy's military retired pay consistent with the divorce decree and applicable legal principles. The divorce decree provided, in relevant part, as follows:

17. That the Petitioner [Timothy] accumulates points which apply to his retirement in the military. The Respondent [Ann] is granted one-half of the points accumulated during the marriage by the Petitioner up to the time of the decree, and shall receive the credits for those points and the equivalent amount of money in the event that Petitioner's retirement benefits vest.

Timothy retired from the military on January 12, 2005, and his pension rights vested after he turned age 60 on September 5, 2017. During his career, Timothy had earned a total of 5,822 retirement points, and after the pension rights vested, he began receiving $2,050 per month from the pension. Thereafter, Ann applied for her share of the pension to the Defense Finance and Accounting Service of the U.S. Department of Defense. However, the accounting service would not calculate or pay Ann's share to her until the district court clarified certain information necessary to determine Ann's share.

Through cross-motions, Ann and Timothy each requested that the district court clarify the decree. Ann also filed a motion to modify the decree to state the number of military retirement points earned during the marriage and a motion for back payments to require Timothy to pay Ann her share of the pension he had already received.

At trial, the parties stipulated that at the time of the September 30, 1996, decree, Timothy had earned 3,334 Reserve retirement points. However, Ann and Timothy assign different values to the cash value of one-half of 3,334 points and propose different formulas to determine the fixed amount Ann should receive monthly from Timothy's military retirement amount. We examine the proposed formulas in the analysis section, below. Ann valued her interest at $586 per month, and Timothy valued Ann's interest at $383 per month.

The district court filed a supplemental order on January 6, 2020, in which it found that it had jurisdiction to modify and clarify the decree to the extent necessary to effect its terms. The court awarded Ann $465.38 per month, beginning November 2019. The court also ordered Timothy to pay $9,549.60 to Ann, representing back payments of $465.38 per month for the 27 months between September 2017 and November 2019, less the income taxes already paid by Timothy.

Ann appeals, and Timothy cross-appeals.

ASSIGNMENTS OF ERROR

Ann claims, summarized and restated, that the district court erred because its clarification of the parties’ decree did not award her an amount based on a proportion of Timothy's total retirement points.

Timothy cross-appeals and claims, summarized and restated, that the district court erred in the amount it awarded to Ann by not utilizing a hypothetical date of retirement as of the date of the decree to determine Ann's interest in his retirement.

STANDARD OF REVIEW

The meaning of a divorce decree presents a question of law, in connection with which an appellate court reaches a conclusion independent of the determination reached by the court below. Braun v. Braun , 306 Neb. 890, 947 N.W.2d 694 (2020).

ANALYSIS

On appeal and cross-appeal, Ann and Timothy each contend that the district court erred by modifying the decree and awarding Ann the fixed monthly amount of $465.38. Ann claims that the fixed monthly amount should be $586, whereas Timothy claims that the fixed monthly amount should be $383. We reject both proposals. Instead, in order to be faithful to the language of the original equitable decree and consistent with Nebraska jurisprudence as well as federal authority, we conclude that the district court erred when it awarded a fixed monthly amount. We vacate the fixed dollar amount and reverse, and remand to clarify that Ann is entitled to a hypothetical retired pay award valued as of the date of the decree plus back payments as explained below.

In Nebraska, marital assets are subject to equitable division in a dissolution proceeding and retirement benefits "whether vested or not vested" are eligible for inclusion in the marital estate. Neb. Rev. Stat. § 42-366(8) (Reissue 2016). In Longo v. Longo , 266 Neb. 171, 663 N.W.2d 604 (2003), we recognized that a military pension was a marital asset. When, as here, a decree is entered prior to the retirement of one of the parties who is a military service member, a clarifying order may later be necessary to determine the rights of the parties. See Schwartz v. Schwartz , 275 Neb. 492, 747 N.W.2d 400 (2008), overruled on other grounds, Smeal Fire Apparatus Co. v. Kreikemeier , 279 Neb. 661, 782 N.W.2d 848 (2010). Our cases have recognized that it is proper for a court to compensate a spouse only for the years for which the marriage coincided with the military service in determining the nonmilitary spouse's share of pension benefits. See Longo v. Longo, supra .

Historically, spousal interests in military retirement have been determined in several different ways consistent with federal law, including the Uniformed Services Former Spouses’ Protection Act (USFSPA), Pub. L. No. 97-252, § 1001, 96 Stat. 730 (codified as amended at 10 U.S.C. § 1408 (2018) ), and Department of Defense rules and regulations. See Department of Defense Financial Management Regulation (DoD FMR) 7000.14-R, vol. 7B. Federal law has evolved over time. See, e.g., Longo v. Longo, supra (discussing history of division of military pensions). In considering military pension orders subsequent to dissolution, we have affirmed a fixed monthly dollar amount where the decree so provided, see Longo v. Longo, supra , and recognized the validity of a point-value method, see Schwartz v. Schwartz, supra .

It is generally agreed that the purpose of the passage of the USFSPA in 1982 was, in part, to permit the States to apply their state dissolution law to division of nondisability military retired pay. See Starr v. Starr , 70 Va. App. 486, 828 S.E.2d 257 (2019). A Senate report stated that the USFSPA was

intended to remove the federal pre-emption found to exist by the United States Supreme Court [in McCarty v. McCarty , 453 U.S. 210, 101 S. Ct. 2728, 69 L. Ed. 2d 589 (1981),] and permit State and other courts of competent jurisdiction to apply pertinent State or other laws in determining whether military retired or retainer pay should be divisible. Nothing in this [USFSPA] requires any division; it leaves that issue up to the courts applying community property, equitable distribution or other principles of marital property determination and distribution.

S. Rep. No. 97-502, at 12 (1982), reprinted in 1982 U.S.C.C.A.N. 1555, 1596, 1611. Thus, Nebraska's equitable division of military pensions is compatible with federal law.

A limitation on former spouses’ retired pay was included in the National Defense Authorization Act for Fiscal Year 2017. See Pub. L. No. 114-328, 130 Stat. 2164 (Dec. 23, 2016). The amendment to 10 U.S.C. § 1408(a)(4)(B) reads as follows:

[I]n the case of a division of property as part of a final decree of divorce ... that becomes final prior to the date of a member's retirement, the total monthly retired pay to which the member is entitled shall be[:]

... the amount of retired pay to which the member would have been entitled using the member's retired pay base and years of service on the date of the decree of divorce, dissolution, annulment or legal separation, as

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