Russell McCallister v. Angela McCallister

FILED
Jun 26 2018, 5:29 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Nicholas Dandurand Kathleen M. Meek
Gilley Dandurand & Summerfield Law Justin T. Bowen
Group, LLP Bowen & Associates, LLC
Anderson, Indiana Carmel, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Russell McCallister, June 26, 2018
Appellant-Respondent, Court of Appeals Case No.
49A02-1704-DR-887
v. Appeal from the Marion Superior
Court
Angela McCallister, The Honorable Patrick J. Dietrick,
Judge
Appellee-Petitioner.
The Honorable Caryl F. Dill,
Magistrate
Trial Court Cause No.
49D12-1606-DR-19232
Friedlander, Senior Judge.
[1] Russell McCallister appeals the trial court’s order finding him in contempt of
court, directing him to reinstate his former wife, Angela McCallister, as the
beneficiary of his Survivor Benefit Plan, and ordering him to pay Angela’s
attorney fees. Concluding the trial court correctly determined that Russell
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violated the parties’ Marital Settlement Agreement, but constrained by the
federal statutes which prevent the enforcement of the trial court’s order, we are
compelled to reverse and remand in part and affirm in part.
[2] Russell raises three issues for our review, which we restate as:
1. Whether the trial court erred in ordering Russell to reinstate
Angela as the beneficiary under his Air Force Survivor Benefit
Plan.
2. Whether the trial court erred in finding Russell in contempt of
court.
3. Whether the trial court erred in ordering Russell to pay
Angela’s attorney fees.
[3] Russell and Angela married on June 11, 1983. For the duration of the
marriage, Russell served on active duty in the United States Air Force. After
more than twenty years of marriage, Angela filed a petition for dissolution. On
November 15, 2011, the parties executed a Marital Settlement Agreement
providing for the disposition of their property. The Agreement included a
clause that Russell would designate Angela as his beneficiary under the Air
Force Survivor Benefit Plan (“SBP”) and that he would execute all necessary
paperwork and provide documentation that he had done so. Specifically,
paragraph 19 of the parties’ Agreement provided:
19. SURVIVOR’S BENEFIT PLAN. Upon his retirement, the
Husband shall designate his Wife as his beneficiary under the Air
Force Survivor’s Benefit Plan as specifically authorized in the
“Uniformed Services Former Spouses’ Protection Act” Public
Law 97-252, and all amendments thereto, to the extent of her
interest in the Husband’s Military Retired pay. The Husband
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shall, within 15 days of the date of execution of this agreement,
execute and forward to proper authorities, whatever documents
may be required to effectuate the provisions of this paragraph.
The Husband shall provide the Wife with copies of all such
documents within such 15 day period. A copy of the Final
Judgment of Dissolution of Marriage incorporating this
agreement shall be [sic] also be sent directly to the Defense
Finance and Accounting Service in order to qualify as a “deemed
election” of the Survivor Benefit Plan.
Appellant’s Appendix Vol. 2, pp. 55-56. On November 16, 2011, Russell
signed a form designating Angela as the beneficiary of his SBP. The parties’
Agreement was incorporated into a divorce decree dated December 2, 2011.
[4] On December 22, 2012, Russell remarried. In June 2013, he changed the
beneficiary of his SBP from Angela to his current wife. Angela did not learn
that she was no longer the beneficiary of Russell’s SBP until May 2016. Upon
learning this information, Angela filed a motion for rule to show cause with the
trial court. The court held a hearing on Angela’s motion and subsequently
issued an order holding Russell in contempt of court for violating the Marital
Settlement Agreement by removing Angela as the beneficiary of his SBP,
ordering Russell to reinstate Angela as the beneficiary, and ordering Russell to
pay Angela’s attorney fees. Russell filed a motion to correct error, which the
trial court denied. This appeal ensued.
1. Reinstatement of Beneficiary
[5] Russell first contends the trial court erred by ordering him to reinstate Angela as
the beneficiary of his SPB. He asserts that, pursuant to the applicable federal
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statutes, Angela’s time frame for SPB former spouse eligibility has expired and,
therefore, she is just simply out of luck.
[6] SBP was created by Congress in 1972 to provide an annuity payable to
survivors of a retired military service member upon the service member’s death.
Silva v. Silva, 333 S.C. 387, 509 S.E.2d 483 (Ct. App. 1998); see generally 10
U.S.C. §§ 1447-1455. Under the plan, premiums are deducted from the service
member’s retirement pay, and, when the service member dies, payments go to
the service member’s designated beneficiary. Holmes v. U.S., 98 Fed. Cl. 767
(2011). A former spouse can be a service member’s designated beneficiary, and
such a designation is accomplished in one of two ways. See 10 U.S.C. §
1448(b)(2), (3). First, the service member can elect a former spouse as
beneficiary by submitting a written, signed election to the appropriate
government Secretary within one year after the date of the divorce decree. See
10 U.S.C. § 1448(b)(3)(A)(iii). Second, if the service member is required, such
as under a court order, to elect a former spouse as beneficiary and fails or
refuses to do so, the former spouse can, within one year of the date of the
divorce decree, file with the appropriate government Secretary a written request
that an election be deemed to have been made designating the former spouse as
beneficiary along with a copy of the pertinent court order. See 10 U.S.C. §
1450(f)(3). Thus, under the applicable statutory framework, a court-ordered
election of a former spouse as beneficiary may be made either by the service
member or the former spouse; however, in both instances the election must be
made within one year of the court order directing the election. Further, the
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SBP annuity is not assignable or subject to execution, levy, attachment,
garnishment, or other legal process. 10 U.S.C. § 1450(i).
[7] It appears no Indiana case has addressed the precise question posed here:
whether, at the present time, it is possible to designate Angela as the beneficiary
of Russell’s SBP. Where no Indiana case has addressed an issue, we may look
to decisions from other jurisdictions for guidance. DiMaggio v. Rosario, 950
N.E.2d 1272 (Ind. Ct. App. 2011), trans. denied. To that end, we note the
decision of the District Court of Appeal of Florida in Wise v. Wise, 25 Fla. L.
Weekly D2107, 765 So. 2d 898 (Fla. Dist. Ct. App. 2000). There, husband
retired from the military while he and wife were still married. They elected to
participate in the SBP and designate their then minor daughter as the
beneficiary. When husband and wife later divorced, the final judgment of
dissolution required husband to elect wife as beneficiary of his SBP. Despite
wife’s repeated requests, husband failed to comply with this requirement, and,
six years later, wife filed a motion for contempt and enforcement of the final
judgment of dissolution. Following a hearing, the trial court ordered husband
to complete the necessary paperwork for designation of wife as beneficiary of
his SBP.
[8] Husband appealed the decision of the trial court, and the Florida court of
appeals reversed, stating it was “compelled to reverse” because the applicable
federal law prevented the enforcement of the trial court’s order. Id. at 899. The
appellate court explained that the language of the federal statutes concerning
SBPs as well as the comments in their legislative history do not permit a
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revocation of child-only SBP coverage to provide an annuity for a former
spouse. The court stated further that even if the court-ordered change of
beneficiary could have been accomplished at the time of dissolution, such a
change was no longer possible because it was past the one-year time limit for
both an election of the former spouse as beneficiary by the service member and
a request by the former spouse that an election be deemed to have been made
under 10 United States Code sections 1448(b)(3)(A)(iii) and 1450(f)(3),
respectively. Consequently, despite the requirement in the dissolution decree,
wife could not obtain SBP coverage. See also King v. King, 225 Ga. App. 298,
483 S.E.2d 379 (1997) (holding that, although generally state law rather than
federal law controls domestic relations matters, federal law preempted state law
where Congress enacted specific conditions under which former spouse
awarded SBP benefits in state court divorce decree may be elected beneficiary
of annuity under SBP); Silva, 509 S.E.2d 483 (finding reasoning in King
persuasive and affirming trial court’s refusal to impose constructive trust on
SBP proceeds where former husband failed to complete paperwork necessary to
designate former wife as beneficiary pursuant to agreement in divorce decree
and former wife did not take necessary steps to insure she was deemed
beneficiary).
[9] Notably, the Florida appellate court stated that its reversal of the trial court’s
order did not end the matter:
Like other retirement plans, military retirement benefits,
including a Survivor Benefit Plan, are considered marital assets
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subject to equitable distribution. As has been shown, federal law
expressly empowers state courts to order a spouse to maintain a
Survivor Benefit Plan for a former spouse, and that was done in
this case in the 1993 dissolution judgment. In the instant case, it
is apparent that an annuity was awarded to the former wife as
part of the overall scheme of equitable distribution in the final
judgment. Accordingly, the lower court has authority to revisit
the equitable distribution in this case or otherwise effect the terms
of the dissolution judgment.
Wise, 765 So. 2d at 901 (citations omitted).
[10] In the present case, Russell voluntarily entered into the Agreement to designate
Angela as the beneficiary of his SBP. At the hearing on Angela’s motion for
rule to show cause, Russell testified that upon signing the Agreement on
November 15, 2011, he then submitted paperwork the next day designating
Angela as the beneficiary of his SBP. Angela testified that her attorney at the
time apparently received some paperwork and told her there was nothing more
she needed to do. At the time of the designation on November 16, however,
Russell and Angela were still married. Their divorce was not finalized until
December 2, 2011, after which Russell failed to comply with the court’s order
and execute the necessary forms to ensure that Angela, as a now former spouse,
was designated as beneficiary. Nonetheless, Angela remained listed as the
beneficiary of Russell’s SBP.
[11] In December 2012, Russell remarried, and, in June 2013, he changed the SBP
beneficiary designation from Angela to his current wife. Russell’s action of
removing Angela as beneficiary is a clear violation of the terms of the parties’
Agreement. In addition, no evidence was presented that Russell made any
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attempt to inform Angela that she was no longer the designated beneficiary on
his SBP. In fact, it was not until three years later, in May 2016, that Angela
received information from a third party that she was not the designated
beneficiary on Russell’s SBP.
[12] We find the holdings in Wise and King to be sound. Accordingly, we conclude
that based on the facts of this case and the specific provisions of the SBP
enacted by Congress, the trial court’s order directing Russell to reinstate Angela
as the beneficiary of his SBP cannot be enforced despite Russell’s violation of
the terms of the Agreement. Thus, because Russell failed to comply with the
divorce decree and the SBP statutory deadline of one year for election of a
former spouse as beneficiary and Angela did not request within one year that an
election be deemed, Angela cannot now obtain beneficiary status with regard to
Russell’s SBP.
[13] Having determined that the trial court’s order cannot be carried out, we further
acknowledge that the SBP annuity was awarded to Angela as part of an agreed
upon distribution of the parties’ assets. Accordingly, it is necessary to remand
to the trial court for a determination of the value of Angela’s portion of
Russell’s SBP, and we grant the trial court the authority to reconsider the
distribution of the parties’ assets in order to fashion an alternative remedy to
compensate Angela for the loss of her portion of Russell’s SBP. See Heldmyer v.
Heldmyer, 15 Fla. L. Weekly D330, 555 So. 2d 1324 (Fla. Dist. Ct. App. 1990)
(remanding to trial court for determination of value of former wife’s portion of
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military pension and for complete reevaluation of property distribution in order
to compensate former wife for loss of her portion of pension).
2. Finding of Contempt
[14] Russell argues the trial court abused its discretion by finding him in contempt.
Whether a party is in contempt of a court order is a matter left to the trial
court’s discretion. Akiwumi v. Akiwumi, 23 N.E.3d 734 (Ind. Ct. App. 2014).
On appeal, we will reverse the trial court’s finding of contempt only for an
abuse of that discretion—that is, when the decision is against the logic and
effect of the facts and circumstances before it. Id. Further, upon review of a
finding of contempt, we neither reweigh the evidence nor judge the credibility
of the witnesses., and we consider only the evidence and reasonable inferences
in support thereof. Bandini v. Bandini, 935 N.E.2d 253 (Ind. Ct. App. 2010).
[15] To be held in contempt for failing to comply with a court order, a party must
have willfully disobeyed the order. Id. The court order must be so clear and
certain that there could be no question as to what the party must do or not do,
such that there could be no question regarding its violation. Id. Accordingly, a
party may not be held in contempt for failing to comply with an ambiguous or
indefinite order; if such were the case, a party could be held in contempt for
obeying an ambiguous order in good faith. Id.
[16] Here, the trial court’s basis for finding Russell in contempt is his failure to
designate Angela as the beneficiary of his SBP. The unambiguous language of
the parties’ Agreement required Russell to designate Angela as his beneficiary
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under his SBP and to execute all necessary paperwork and provide
documentation that he had done so. Russell acknowledged that he failed to file
the proper documentation following the finalization of the parties’ divorce in
December 2011. Furthermore, he admitted that in June 2013, when Angela
was still listed as the beneficiary of his SBP, he replaced her with his current
wife.
[17] Russell claims that he was confused by the use of the term “Wife” in the
Agreement such that he did not know if it referred to his former wife, Angela,
or his current wife. He argues to this Court that “The Agreement did not . . .
explicitly provide that Husband shall elect ‘former spouse’ coverage. Given the
resulting implications of the ‘spouse’ versus ‘former spouse’ distinction,
Paragraph 19 of the Agreement is evidently ambiguous, and it would violate the
spirit of the law to hold Husband in contempt ‘for obeying an ambiguous order
in good faith.’” Appellant’s Br. p. 15.
[18] We reject this disingenuous argument. Under the heading “RECITATIONS,”
the first page of the Agreement states that “The Husband is RUSSELL E.
McCALLISTER. The Wife is ANGELA K. McCALLISTER.” Appellant’s
App. Vol. 2, p. 47. In addition, Russell clearly knew the Agreement distributed
the property of his marriage to Angela to whom he was married at the time he
signed it. Moreover, not only did Russell fail to do what he was obligated to do
under the Agreement, but also he intentionally neglected to notify Angela when
he removed her as the beneficiary and replaced her with his current wife. The
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evidence unequivocally shows that Russell willfully disobeyed the court’s
unambiguous order. Therefore, we find no abuse of the trial court’s discretion.
3. Attorney Fees
[19] Trial courts in this state have inherent authority to award attorney fees for civil
contempt. Reynolds v. Reynolds, 64 N.E.3d 829 (Ind. 2016). This authority
stems from the court’s power to enforce compliance with its orders and decrees.
In re Paternity of Pickett, 44 N.E.3d 756 (Ind. Ct. App. 2015). Further, once a
party is found in contempt, the trial court has the authority to compensate the
aggrieved party for losses and damages resulting from another’s contemptuous
actions, including the award of attorney fees. Id.
[20] The trial court ordered Russell to pay $3,000.00 of Angela’s attorney fees as
sanctions for his contempt. At the hearing, an affidavit of Angela’s attorney
setting forth her attorney fees in this matter was admitted without objection.
Having determined that Russell willfully failed to abide by the parties’
Agreement, thereby causing Angela to file a motion for rule to show cause and
incur attorney fees, we find the trial court did not abuse its discretion in
ordering Russell to pay $3,000.00 of Angela’s attorney fees.
[21] For the reasons stated, we conclude the action of reinstating Angela as
beneficiary of Russell’s SBP as ordered by the trial court cannot be
accomplished under the applicable federal law; therefore, we reverse and
remand with instructions for the trial court to fashion an appropriate remedy to
compensate Angela for the loss of her portion of Russell’s SBP. In addition, we
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affirm the trial court’s finding of contempt against Russell and its imposition of
sanctions for such.
[22] Judgment reversed and remanded in part and affirmed in part.
May, J., and Altice, J., concur.
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