Patrick H. Poziombke v. Sharon M. Poziombke ( 2006 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Clements and Haley
Argued by teleconference
PATRICK H. POZIOMBKE
MEMORANDUM OPINION* BY
v. Record No. 1150-05-1 JUDGE JAMES W. HALEY, JR.
FEBRUARY 14, 2006
SHARON M. POZIOMBKE
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
Edward W. Hanson, Jr., Judge
Robert N. Pritchard for appellant.
Philip A. Liebman for appellee.
In this cause, Patrick H. Poziombke (husband) maintains: (1) that those provisions of a
divorce decree dealing with his military pension are void ab initio; and (2) that the trial court
erred in ordering indemnification of Sharon M. Poziombke (wife) for any diminution in sums
received resulting from a partial reclassification of his pension benefits as disability payments
and the continuation of payments in an undiminished amount. The core of husband’s argument
is based upon 10 U.S.C. § 1408(a)(4)(B), the Uniformed Services Former Spouses Protection
Act (“the Act”), and the decision of the United States Supreme Court in Mansell v. Mansell, 490
U.S. 581 (1989). Wife assigns as cross-error the failure of the trial court to award interest and
attorney’s fees. Finding no error, we affirm, and we deny wife’s request for an award of
attorney’s fees on appeal.
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
I.
The parties were divorced by final decree entered September 19, 1995. The parties had
not entered into any form of property settlement agreement. The divorce decree contained the
following provisions:
ADJUDGED, ORDERED AND DECREED that the
Defendant shall pay the Plaintiff immediately upon his retirement
from active duty military service on the first day of the month
immediately following such retirement and on the first day of each
month thereafter, by military allotment, from the United States
Navy Finance Center, or other appropriate United States
Government Agency, a portion of his disposable monthly
retirement, and/or retainer pay resulting from and/or related to his
retirement and/or release from active duty military service each
month, and that (“portion”) hereafter called the (“martial share”)
shall be calculated as follows:
The Plaintiff shall have and be paid monthly fifty percent
(50%) of a fraction of the monthly disposable retirement/retainer
pay, the numerator of that fraction shall be 11.5 and the
denominator of that fraction shall be the total number years and
months of Defendant’s active duty military service up to the date
of his release from such active duty service, to include the same
percentage of any cost of living increases. Should the United
States Navy Finance Center or other appropriate United States
Government Agency fail to pay the Plaintiff hereinafter, the
Defendant shall pay the Plaintiff directly on all of his obligations
under this paragraph; and it is further
ADJUDGED, ORDERED AND DECREED that Defendant
shall not take any action which would defeat, reduce, or limit
Plaintiff’s right to receive her share of Defendant’s military
pension benefits, including merging retired pay with other
pensions or waiving any portion of retired pay in order to receive
increased disability pay. If Defendant breaches this provision, he
shall indemnify and pay directly to Plaintiff, all sums reduced by
such action, if any . . . .
When the divorce decree was entered in 1995, husband was on active duty with the
military and receiving no retirement or disability payments. The parties agree that under the
formula provisions of the decree, quoted above, wife was entitled to 28.3591% of husband’s
“disposable retirement/retainer” benefit when received. The final decree was entered without
exception or objection.
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In June 1998, husband retired and paid wife the quoted percentage of that benefit. In
October 1998, husband began receiving a Veterans’ Administration disability benefit, which
reduced the amount of his “disposable retirement/retainer benefit” in an amount equal to the
disability benefit. Thereafter husband paid wife the quoted percentage of that net benefit. At a
show cause hearing on March 11, 2005, wife demonstrated that the disability payments received
by husband from October 1998 through November 2004 totaled $34,988.41. She sought
28.3591% of that sum, and an order directing husband to begin paying her a sum equivalent to
that which he would have received without the disability benefit conversion.
By order entered April 12, 2005, the trial court held the September 19, 1995 decree was
final and that husband “shall indemnify and pay directly to the [wife] all sums to which she
would have been entitled had he not taken disability payments[,] . . . as required by the Final
Decree of Divorce.” The trial court did not order that any such sum be paid from husband’s
veterans’ disability benefits.
II.
ANALYSIS
A.
AUTHORITY OF COURT TO ORDER PAYMENT OF SUM
EQUAL TO HUSBAND’S MILITARY RETIREMENT PAY
Succinctly stated, in Mansell v. Mansell, 490 U.S. 581, 594-95 (1989), the United States
Supreme Court held that 10 U.S.C. § 1408(a)(4)(B) denies “state courts the power to treat as
property divisible upon divorce military retirement pay that has been waived to receive veterans’
disability benefits.” Husband maintains that the provisions of the September 19, 1995 decree
dealing with his military pension, quoted above, are void ab initio as violative of the Act as
interpreted in Mansell, and, thus, the decree is void ab initio.
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Initially we note that this Court has held that a trial court effecting an equitable
distribution may, without violating the Act and Mansell, order a party to pay a sum equivalent to
a percentage of existing or anticipated military retirement or veterans’ disability benefits, or a
combination of both, via an indemnification provision ensuring such payments, as long as
veterans’ disability payments are not ordered to serve as the source of those payments. See
Boedeker v. Larson, 44 Va. App. 508, 516-18, 605 S.E.2d 764, 768-69 (2004); McLellan v.
McLellan, 33 Va. App. 376, 381-84, 533 S.E.2d 635, 637-39 (2002); Cook v. Cook, 18 Va. App.
726, 728, 446 S.E.2d 894, 895 (1994); Holmes v. Holmes, 7 Va. App. 472, 478, 375 S.E.2d 387,
391 (1988).
On brief, husband acknowledges this principle but cites McLellan and Owen v. Owen, 14
Va. App. 623, 419 S.E.2d 267 (1992), for the proposition that a court has such authority only if a
final divorce decree incorporates a property settlement agreement in which a military spouse has
agreed not to take any action to defeat the nonmilitary spouse’s entitlement to a share of military
retirement pay.
In Owen, we held that the parties may enter into a property settlement agreement to
guarantee a particular level of income, to be determined by considering the amount of disability
benefits and retirement benefits, because the agreement “does not offend the federal prohibition
against a direct assignment of military disability pay.” Id. at 628, 419 S.E.2d at 270. In
McLellan, where husband was receiving disability benefits at the time the parties entered into a
property settlement agreement, we noted that “It is clear from the agreement that husband clearly
intended for wife to receive forty-two percent of his entire retirement pay. The parties drew no
distinction between disability and regular retirement pay . . . [and husband could pay] . . . from
whatever source he chose.” Id. at 383-84, 446 S.E.2d at 638-39. On those facts, we affirmed the
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trial court’s authority to order Mr. McLellan to pay Mrs. McLellan benefits in that particular
amount. Id.Husband contends that, absent a property settlement agreement, federal law prohibited
the trial court from ordering him not to take any action negatively affecting wife’s right to
receive her share of his military pension benefits and, as a result, that the entire decree is void
ab initio. We disagree under the facts of this case, in which the decree specifically provided as
the remedy for husband’s breach that “he shall indemnify . . . [wife for] all sums reduced by such
action” and husband made no objection to that provision before the decree became final.
The Act provides state courts with the authority to divide military retirement benefits “‘in
accordance with state [equitable distribution] law.’” Boedeker, 44 Va. App. at 516, 605 S.E.2d
at 768 (quoting Brett R. Turner, Equitable Distribution of Property § 6.04, at 300 (2d ed. 1994)).
“Equitable distribution in divorce cases in Virginia is a . . . creature of statute.” Booth v. Booth,
7 Va. App. 22, 25, 371 S.E.2d 569, 571 (1988). Property settlement agreements are authorized
by Virginia law, and in a case in which the parties have executed one, a court’s equitable
distribution order may not contain provisions that conflict with the agreement. See, e.g.,
Code §§ 20-109(C), 20-155. Nevertheless, a court’s authority to equitably distribute a marital
estate is not dependent on the existence of a property settlement agreement. See generally Code
§ 20-107.3 (setting out statutory scheme for equitable distribution); Code § 20-109(C) (setting
out effect in equitable distribution case in which parties have executed a stipulation or
agreement). With or without a property settlement agreement, state courts have the authority to
divide military retirement benefits under state equitable distribution law. Further, “[i]f an
indemnity provision is inserted into a divorce decree, and the service member fails to object to
that provision before the decree becomes final, the indemnity provision is clearly valid under a
theory of res judicata.” 3 Brett R. Turner, Equitable Distribution § 6.10, at 63-64 & n.4 (3d ed.
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2005) (citing Danielson v. Evans, 36 P.3d 749 (Ariz. Ct. App. 2001), in which decree expressly
reserved jurisdiction to compensate wife if husband took action that diminished amount of wife’s
award and court held provision enforceable under res judicata); see id. § 6.9, at 60 & n.2 (citing
Mansell, 490 U.S. at 587 n.5, for this proposition and noting “strong majority of state court cases
likewise hold that military benefits of all sorts can be divided under the law of res judicata”).
Thus, the absence of a property settlement agreement affirmed, ratified, and incorporated in the
decree lacks legal significance at this stage of these proceedings.1
We conclude, therefore, that the decree is not void ab initio and that the court’s order to
husband to comply with the decree’s indemnification provision was not error.
B.
POST-DECREE INTEREST
The final order in the show cause proceeding directed husband to “indemnify and pay
directly to [wife] all sums to which she would have been entitled had [husband] not taken the
disability benefits.” Wife seeks interest on those sums at the judgment rate set forth in Code
§ 6.1-330.54, pursuant to the provisions of Code § 8.01-382 providing for interest on judgments
or decrees.
1
Here, the language of the decree included the provision at issue, ordering husband not to
take action to negatively impact wife’s entitlement to receive a share of his military pension, as a
condition precedent to husband’s duty to indemnify wife, in order to guarantee wife a particular
level of income, and the court applied the provision only in this context. We need not decide
whether breach of such a provision would support some other action, such as a finding of
contempt, without running afoul of the Act or Mansell or how the presence or absence of a
property settlement agreement might impact such a case. We conclude only that the specific
language in the decree at issue in this case did not render the entire decree or the indemnification
provision void ab initio. See 3 Turner, supra, § 6.10, at 67-68 (opining that “a state court cannot
actually order a service member not to waive his military retirement benefits in favor of
disability or other replacement benefits” and that “[s]uch an order probably violates federal law”
but that such an order is unnecessary because a court may “order the service member to
compensate the former spouse for any harm caused by the election, and not to order the service
member not to make the election in the first place”).
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In Ragdsale v. Ragsdale, 30 Va. App. 283, 293, 516 S.E.2d 698, 703 (1999), this Court
noted that an award of a portion of a marital asset under Code § 20-107.3 entitles one “to
post-decree interest on [the] equitable distribution award as a matter of law.” See Dairyland Ins.
Co. v. Douthat, 248 Va. 627, 449 S.E.2d 799 (1994). However, in Shackelford v. Shackelford,
39 Va. App. 201, 212, 571 S.E.2d 917, 922 (2002), we held that “Code § 20-107.3(D) further
explains, ‘The provisions of § 8.01-382 . . . shall apply unless the court orders otherwise.’”
In this case, the trial court’s order specifically denied the requested interest on the
indemnification sums, thereby “order[ing] otherwise” in accordance with Code § 20-107.3(D).
We affirm the trial court’s ruling on this issue.
C.
ATTORNEY’S FEES
Wife asserts the trial court erred in not awarding her attorney’s fees. “We are guided by
the principle that ‘[a]n award of attorney’s fees is a matter submitted to the trial court’s sound
discretion and is reviewable on appeal only for an abuse of discretion.’” Bruemmer v.
Bruemmer, 46 Va. App. 205, 212, 616 S.E.2d 740, 743 (2005) (quoting Graves v. Graves, 4
Va. App. 326, 333, 357 S.E.2d 554, 558 (1987)). Circumstances for consideration in the
exercise or abuse of discretion include the following: (1) the failure of the trial court to consider
statutory factors in equitable distribution, Rowe v. Rowe, 24 Va. App. 123, 139, 480 S.E.2d 760,
767 (1997); (2) a trial court’s error of law, Mina v. Mina, 45 Va. App. 215, 222, 609 S.E.2d 622,
626 (2005); (3) the failure of the trial court to consider or act upon evidence presented as to the
relative financial resources of the parties, Artis v. Artis, 4 Va. App. 132, 138, 354 S.E.2d 812,
815 (1987)2; (4) the existence of a PSA or prior decree providing for attorney’s fees upon
specified conditions, O’Hara v. O’Hara, 45 Va. App. 788, 799, 613 S.E.2d 859, 864-65 (2005);
2
See also Poliquin v. Poliquin, 12 Va. App. 676, 681, 406 S.E.2d 401, 405 (1991).
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or (5) where a party has unnecessarily prolonged or compounded the litigation, Northcutt v.
Northcutt, 39 Va. App. 192, 200-02, 571 S.E.2d 912, 916 (2002).3
The measure of “a proper award of counsel fees . . . [is] reasonableness under all of the
circumstances revealed by the record.” Westbrook v. Westbrook, 5 Va. App. 446, 458, 364
S.E.2d 523, 530 (1988). “Given the unique equities of each case, our appellate review steers
clear of inflexible rules and focuses instead on ‘reasonableness under all the circumstances.’”
Kane v. Szymczak, 41 Va. App. 365, 375, 585 S.E.2d 349, 354 (2003) (quoting Joynes v. Payne,
36 Va. App. 401, 429, 551 S.E.2d 10, 24 (2001)); see also Mullin v. Mullin, 45 Va. App. 289,
304-05, 610 S.E.2d 331, 338 (2005). Applying the standard of reasonableness, and noting the
absence of those circumstances set forth above, we find that the trial court did not abuse its
discretion in failing to award wife attorney’s fees.
Wife also seeks an award of attorney’s fees on appeal. We decline that request for fees.
The rationale for the appellate court being the proper forum to
determine the propriety of an award of attorney’s fees for efforts
expended on appeal is clear. The appellate court has the
opportunity to view the record in its entirety and determine
whether the appeal is frivolous or whether other reasons exist for
requiring additional payment.
O’Loughlin v. O’Loughlin, 23 Va. App. 690, 695, 479 S.E.2d 98, 100 (1996). In this context,
and upon consideration of the record in this case, we hold husband’s position was not so
unreasonable as to entitle wife to an award of attorney’s fees incurred in this appeal. See Estate
of Hackler v. Hackler, 44 Va. App. 51, 75, 602 S.E.2d 426, 438 (2004) (“[W]e find the litigation
addressed appropriate and substantial issues and that [husband did not] generate[ ] unnecessary
3
See also Smith v. Smith, 43 Va. App. 279, 290, 597 S.E.2d 250, 256 (2004), and
Blackson v. Blackson, 40 Va. App. 507, 527-28, 579 S.E.2d 704, 714 (2003).
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delay or expense in pursuit of [his] interests.”). Therefore, we deny wife’s request for an award
of fees on appeal.
Affirmed.
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