Perry Edward Jones v. Lori Gates Jones

COURT OF APPEALS OF VIRGINIA
Present: Judges Beales, Russell and AtLee
UNPUBLISHED
Argued at Richmond, Virginia
PERRY EDWARD JONES
MEMORANDUM OPINION* BY
v. Record No. 0062-15-2 JUDGE RICHARD Y. ATLEE, JR.
FEBRUARY 2, 2016
LORI GATES JONES
FROM THE CIRCUIT COURT OF HENRICO COUNTY
Richard S. Wallerstein, Jr., Judge
John P. Walsh (Denbigh Law Center, on briefs), for appellant.
Brandy M. Poss (DeFazio Bal, P.C., on brief), for appellee.
This appeal concerns a Military Retired Pay Qualifying Division Order (“Order”) entered
by the Circuit Court of Henrico County (“trial court”) following the parties’ divorce. Appellant
Perry Edward Jones (“husband”1) assigns four errors: (1) the Order conflicted with the
provisions of the parties’ written property settlement agreement which was incorporated into the
final decree of divorce; (2) the trial court should instead have entered the Military Qualifying
Court Order husband drafted; (3) the trial court should have awarded husband attorney’s fees and
costs; and (4) the trial court should have prohibited Leslie Shaner from testifying as an expert
witness for appellee Lori Gates Jones (“wife”). For the following reasons, we affirm in part,
reverse in part, dismiss in part, and remand.
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
1
Although the more accurate designations would be “former husband” and “former
wife,” we use less cumbersome titles in this memorandum opinion for ease of reference and
comprehension.
I. BACKGROUND
In December 2013, the parties entered into a Property Settlement Agreement
(“Agreement”) settling the issues of support and equitable distribution following their divorce.
The Agreement was incorporated into the final decree of divorce entered on February 12, 2014.
A few months later, wife moved for the entry of a proposed order addressing the division
of husband’s military retirement. Her proposed order contained different language than the
Agreement. Because of this, husband objected to wife’s proposed order on the grounds that
certain paragraphs created substantive rights not granted in the Agreement. Wife argued that her
proposed order made only administrative or ministerial changes, and the additional language
only effectuated the terms of the Agreement. Husband submitted an alternative proposed order.
After a hearing, the trial court continued the matter and requested that the parties present
evidence from expert witnesses to assist the court in resolving the matter. At the later hearing,
wife presented the expert testimony of Leslie Shaner to explain the provisions of the proposed
orders in the context of dividing military retirement benefits. Shaner formerly worked as an
attorney with the law firm representing wife in the proceedings, and had drafted some provisions
in wife’s proposed order. The trial court, after making some modifications not pertinent to this
appeal, entered wife’s proposed order (the Order appealed here).
The portions of the Agreement relevant to this appeal are:
3. ENTIRE AGREEMENT: Husband and Wife acknowledge that
this agreement contains the entire understanding between Husband
and Wife and that there are no representations, warranties, covenants
or undertakings other than those expressly set forth herein.
....
21. RETIREMENT BENEFITS: (a) Wife shall receive one-half of
the marital share of Husband’s military retirement accounts/plans.
Such division shall be done by QDRO, ADRO, or other required
mechanism. The costs of preparing the paperwork shall be at Wife’s
expense. The Marital Share shall be a fraction, the numerator of
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which is the number of reserve retirement points earned during the
marriage and the denominator is the Husband’s total number of
reserve retirement points. If Husband has a further retirement
component based upon creditable months of service, the Wife will
also receive a similar one-half marital share of that benefit (with the
numerator and denominator expressed in months of creditable
service rather than reserve retirement points). Husband shall elect
(or cause to be selected) participation in the Survivor Benefit Plan
(SBP) of at least a 50% survivor benefit.
The Agreement contains no express indemnification clause.
II. CHALLENGED PROVISIONS IN THE ORDER
“[O]n appeal, our standard of review for property settlement agreements is the same as for
other contracts.” Craig v. Craig, 59 Va. App. 527, 537, 721 S.E.2d 24, 28 (2012). “If the terms of
the agreement are unambiguous, their meaning and effect are questions of law,” id. at 537, 721
S.E.2d at 28-29, which we review de novo.
“[A]lthough ‘Code § 20-109(A) empowers trial courts to modify a spousal support award,
. . . Code § 20-109(C) expressly limits the court’s authority . . . according to the terms of a
stipulation or contract signed by the parties.’” Rutledge v. Rutledge, 45 Va. App. 56, 61-62, 608
S.E.2d 504, 507 (2005) (omissions in original) (quoting Blackburn v. Michael, 30 Va. App. 95,
100, 515 S.E.2d 780, 783 (1999)). An order “must be consistent with the substantive provisions of
the original decree . . . .” Craig, 59 Va. App. at 539, 721 S.E.2d at 29 (quoting Williams v.
Williams, 32 Va. App. 72, 75, 526 S.E.2d 301, 303 (2000)).
“[I]t is the function of the court to construe the contract made by the parties, not to make
a contract for them.” Id. at 536, 721 S.E.2d at 28 (quoting Irwin v. Irwin, 47 Va. App. 287, 293,
623 S.E.2d 438, 441 (2005)). “The guiding light in the construction of a contract is the intention
of the parties as expressed by them in the words they have used, and courts are bound to say that
the parties intended what the written instrument plainly declares.” Id. “In determining the intent
of the parties, courts will generally not infer covenants and promises which are not contained in the
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written provisions.” Boedeker v. Larson, 44 Va. App. 508, 519, 605 S.E.2d 764, 769 (2004)
(quoting Pellegrin v. Pellegrin, 31 Va. App. 753, 759, 525 S.E.2d 611, 614 (2000)).
A. Anti-circumvention provisions
Husband objects to numerous terms in the Order. He argues that some provisions facially
conflict with the Agreement, and others amount to additional “representations, warranties,
covenants or undertakings” that violate paragraph three of the Agreement. Husband’s most
substantive challenges concern “anti-circumvention” provisions (paragraphs 15,2 16,3 17,4
2
15. Merger of Benefits and Indemnification: The Member agrees
not to merge the Member’s disposable military retired pay with
any other pension and not to pursue any course of action that
would defeat the Former Spouse’s right to receive a portion of the
disposable military retired pay of the Member. The Member
agrees not to take any action by merger of the military retirement
pension so as to cause a limitation in the amount of the total retired
pay in which the Member has a vested interest and, therefore, the
Member will not cause a limitation of the Former Spouse’s
monthly payments as set forth above. If the Member becomes
employed or otherwise has his military pension merged, which
employment or other condition causes a merger of the Member’s
disposable military retired pay, the Member will pay to the Former
Spouse directly the monthly amount provided in Paragraph 6,
under the same terms and conditions as if those payments were
made pursuant to the terms of this order.
3
16. Direct Payment by Member: If in any month, direct payment
is not made to Former Spouse by DFAS [Defense Finance and
Accounting Services] (or the appropriate military pay center)
pursuant to the terms of this Order, Member shall pay the amounts
called for above directly to Former Spouse within fourteen (14)
days of notification from Former Spouse that she has not received
direct payment from DFAS (or the appropriate military pay
center). This includes any amounts received by the Member in lieu
of disposable retired pay, including but not limited to, any amounts
waived by Member in order to receive Veterans Administration
(i.e., disability) benefits or any amounts received by Member as a
result of an early-out provision, such as VSI [Voluntary Separation
Initiative] or SSB [Special Separation Benefit] benefits.
4
17. Actions by Member: If Member takes any action that
prevents, decreases, or limits the collection by Former Spouse of
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19,5 and 226 of the Order). These provisions address actions husband must take and must not take
because they purportedly would defeat wife’s vested7 right, under the Agreement, to one-half of the
the sums to be paid hereunder, he shall make payments to Former
Spouse directly in an amount sufficient to neutralize, as to Former
Spouse, the effects of the actions taken by Member.
5
19. Continued Jurisdiction: The Court shall retain jurisdiction to
enter such further orders as are necessary to enforce the award to
spouse of the military retirement benefits awarded herein,
including the recharacterization thereof as a division of Civil
Service or other retirement benefits, to comply with the provisions
contained above requiring said payments to Former Spouse by any
means, including the application for a disability award or filing of
bankruptcy, or if military or government regulations or other
restrictions interfere with payments to Former Spouse as set forth
herein.
6
22. Definition of Military Retirement: For the purposes of
interpreting this Court’s intention in making the division set out in
this Order, “military retirement” includes retired pay paid or to
which Member 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 of the United States Code, before any statutory, regulatory, or
elective deductions are applied. For purposes of calculating the
Former Spouse’s share of the benefits awarded to her by the Court,
the marital property interests of the Former Spouse shall also
include a pro-rata share of all amounts the Member actually or
constructively waives or forfeits in any manner and for any reason
or purpose, including, but not limited to, any waiver made in order
to qualify for Veterans Administration or disability benefits. It
also includes a pro-rata share of any sum taken by member in lieu
of or in addition to his disposable retired pay, including, but not
limited to, exit bonuses, voluntary separation incentive pay (VSI),
special separation benefit (SSB), or any other form of retirement
benefits attributable to separation from military service. Such
pro-rata share shall be based on the same formula, percentage or
amounts specified in Section 6 above, as applicable. In the event
that the DFAS will not pay the Former Spouse directly all or a
portion of the benefits awarded to her herein, then Member shall be
required to pay her directly in accordance with the terms and
provisions set forth in Section 16 above.
7
As this Court has stated, “property rights and interests [become] vested in the parties when
they [agree] upon them, set them forth in a valid separation agreement, and [have] them
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marital share of husband’s military retirement accounts and plans. Wife maintains that these
provisions merely effectuate the provision of the Agreement requiring that she receive one half
of husband’s military retirement pay. We disagree. Although we appreciate the unique issues
raised by military retirement pay, and see the equities in preventing one party from undermining
the contemplated terms of a property settlement agreement, binding husband to all of the
anti-circumvention provisions in the Order does more than effectuate the terms of the parties’
Agreement.
1. Background: Reduction of Military Retirement through Waiver or Merger
There are several mechanisms by which individuals with military retirement benefits can
reduce retirement pay. Two are relevant here. First, military retirees can waive retirement
benefits in order to receive other benefits, such as Veteran’s Administration disability benefits.
Second, military retirees can merge, or “roll over,” their military retirement into a non-military
retirement plan. The anti-circumvention provisions husband challenges attempt to prevent
husband from waiving or merging benefits,8 and provide wife with remedies in the event of
incorporated into their final divorce decree.” Irwin, 47 Va. App. at 294, 623 S.E.2d at 441
(alterations in original) (quoting Himes v. Himes, 12 Va. App. 966, 970, 407 S.E.2d 694, 697
(1991)). Accordingly, wife has a vested right to one-half of the marital share of husband’s military
retirement accounts and plans under the Agreement.
8
Both parties describe the Order as prohibiting both merger and waiver of retirement
benefits. For several reasons, so shall this Court. However, we note that the anti-circumvention
language appears to have been drafted to only prohibit merger. Specifically, in paragraph 15,
husband “agrees” not to “pursue any course of action that would defeat the Former Spouse’s right to
receive a portion of the disposable military retired pay . . . .” Viewed in isolation, this would
prohibit waiver for disability or other benefits, and thus, as explained below, could contravene
federal law. However, paragraph 22 of the Order defines military retirement to exclude those
benefits waived or forfeited for disability benefits. It instead defines those waived benefits as
“marital property interests,” a term the Agreement provides no default method for allocating. The
anti-circumvention provisions are form language found in other sources, see, e.g., Blythe v. Blythe,
2004-Ohio-575 (Ct. App. February 4, 2004), perhaps explaining the discrepancy. Regardless,
because we find the trial court erred in including injunctive language, whatever its scope, we need
not resolve this issue.
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waiver or merger. In our analysis, we differentiate between those anti-circumvention provisions
which prohibit husband from waiving or merging benefits (injunctive) from those requiring him
to compensate wife in the event of waiver or merger (indemnifying).
2. Injunctive Provisions
Paragraph 15, in part, prohibits husband from merging or waiving his retirement benefits.
Understandably, wife prefers the administrative ease of prohibiting husband from taking these
actions, as opposed to attempting to recover from him after the fact, should it be necessary.
However, the Agreement provides her no right to do so. The parties could have foreseen the
possibility of either ex-spouse attempting to reduce the amount owed to the other, regardless of
their understanding the specific means by which one could do so. Although the absence of
specific clauses in the Agreement addressing “merger” or “waiver” of retirement benefits is not
dispositive, the parties failed even to include any broader provisions that might cover such
actions. For example, in Owen v. Owen, 14 Va. App. 623, 419 S.E.2d 267 (1992), the parties’
property settlement agreement provided not only that the husband would not merge his military
retirement with any possible future government pension, but also that he would not “take any
action so as to defeat the Wife’s right to share in the monthly retirement benefits as set forth in
this Agreement.” Id. at 627, 419 S.E.2d at 269. Clearly, even without any knowledge of the
intricacies of military retirement, the parties here could have anticipated the risk of
circumvention and included a comparable clause in the Agreement. They did not; instead, wife
seeks to tack on such a provision after the fact. We will not “infer covenants and promises which
are not contained in the written provisions.” Boedeker, 44 Va. App. at 519, 605 S.E.2d at 769
(quoting Pellegrin, 31 Va. App. at 759, 525 S.E.2d at 614). Wife is not entitled to receive remedies
for which she failed to contract.
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Moreover, although the parties could have agreed to anti-circumvention provisions, see
Owen, 14 Va. App. at 627, 419 S.E.2d at 269, there are grave problems with the trial court
ordering husband not to waive his retirement for disability benefits in the absence of such an
agreement. “[A] state court [likely] cannot actually order a service member not to waive his
military retirement benefits in favor of disability or other replacement benefits. Such an order
probably violates federal law.”9 2 Brett R. Turner, Equitable Distribution § 6.10, at 67-68 (3d
ed. 2005 & Supp. 2015-2016) (citing Cunningham v. Cunningham, 615 S.E.2d 675, 681-82
(N.C. Ct. App. 2005); Freeman v. Freeman, 133 S.W.3d 277, 280 (Tex. App. 2003)). The court
may “order the service member to compensate the former spouse for any harm caused by the
election,” but may not “order the service member not to make the election in the first place.” Id.
at 68. For these reasons, the trial court erred in including injunctive provisions in the Order.
3. Indemnification
Paragraphs 15, 16, and 17 all contain language that serves to indemnify wife in the event
she fails to receive her share of husband’s retirement benefits. The parties, however, included no
indemnification clause in their Agreement. States differ in their treatment of a former spouse
whose share of military retirement benefits is reduced by the other spouse’s waiver of retirement
in favor of disability payments when the property settlement agreement does not expressly
prohibit such a waiver and contains no indemnification provision. Many allow relief; some do
not. See Merrill v. Merrill, 284 P.3d 880, 884 n.2 (Ariz. Ct. App. 2012) (listing cases).
9
This is one of many vital issues the parties failed either to recognize or raise both on
appeal and before the trial court. Military retirement pensions are subject to federal statute, see 10
U.S.C. § 1408 (“Former Spouses’ Protection Act”), and controlled by United States Supreme
Court authority, see Mansell v. Mansell, 490 U.S. 581 (1989). Under this authority, “when
military disability benefits are received in lieu of retirement pay, or veterans’ disability benefits
administered by the V.A. are received according to the required waiver of an equal amount of
military retirement pay, the benefits are not subject to division by the state courts under the Act.”
Owen, 14 Va. App. at 626, 419 S.E.2d at 269 (quoting Lambert v. Lambert, 10 Va. App. 623,
627, 395 S.E.2d 207, 209 (1990)).
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Although we have not addressed the exact issue here, whether implied indemnification is
appropriate prior to one party’s acting to reduce their retirement benefit, case law provides some
guidance. For example, this Court has previously held that one party should recover when their
former spouse reduced his retirement benefit (by accepting a career status bonus) prior to the
property settlement agreement being incorporated into a divorce decree. See Boedeker, 44
Va. App. at 526, 605 S.E.2d at 773. In an unpublished opinion,10 we have also upheld a trial
court’s order that an ex-husband, who waived retirement benefits to receive disability benefits,
pay his ex-wife the amount by which his waiver reduced her 50% share (pursuant to an
incorporated property settlement agreement) in his retirement benefits. Hubble v. Hubble,
No. 2015-01-4, 2002 Va. App. LEXIS 459 (Va. Ct. App. Aug. 6, 2002). Although these
holdings do not control the outcome here, their reasoning is applicable. Wife would be able to
recover the difference were husband to merge or waive benefits.
The trial court correctly found that the Agreement plainly manifests the intent for wife to
receive one-half of husband’s military retirement benefits.11 Wife’s interest in such benefits
vested once the Agreement was incorporated into the final decree of divorce. Accordingly, were
she to receive a reduced sum on account of husband’s actions, it would amount to a unilateral
modification of the agreement, and she would be entitled to relief. See Higgins v. McFarland,
196 Va. 889, 895, 86 S.E.2d 168, 172 (1955). Under the Agreement, and further conceded by
10
“Unpublished opinions of this Court, while having no precedential value, are
nevertheless persuasive authority.” Otey v. Commonwealth, 61 Va. App. 346, 351 n.3, 735
S.E.2d 255, 258 n.3 (2012).
11
We are not determining the parties’ intent at the time they entered the agreement (a
question of fact requiring the review of parol evidence, only appropriate if the Agreement was
first deemed ambiguous, see Shoup v. Shoup, 31 Va. App. 621, 625, 525 S.E.2d 61, 63 (2000),
but rather the intent manifested within the four corners of the Agreement. See Code
§ 20-107.3(K)(4) (granting the court “the authority to . . . [m]odify any order . . . to revise or
conform its terms so as to effectuate the expressed intent of the order”). This inquiry is thus a
question of law we review de novo.
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wife, husband would not be held responsible for making such payments unless he first received
them, so his concerns that the Order requires him to serve as a “guarantor” to the government in
the event of a shut-down or other event are unfounded. Accordingly, the trial court did not err in
including language in the Order providing that husband would indemnify wife in the event of
merger or waiver.
B. Other Challenged Provisions
Husband challenges two final provisions that serve a purpose other than preventing husband
from merging or waiving retirement benefits. Paragraph 7 of the Order states in pertinent part, “The
level of [Survivor Benefit Plan] coverage required for the Former Spouse shall be that which will
provide her with the same benefit payments after the Member’s death that she was eligible to
receive or receiving before his death.” Husband argues that this “directly conflicts” with the
Agreement, which states that “Husband shall elect (or cause to be selected) participation in the
Survivor Benefit Plan (SBP) of at least a 50% survivor benefit.”
Husband does not explain how these terms conflict. “Rule 5A:20(e) requires that an
appellant’s opening brief contain ‘[t]he principles of law, the argument, and the authorities relating
to each question presented.’ Unsupported assertions of error ‘do not merit appellate
consideration.’” Jones v. Commonwealth, 51 Va. App. 730, 734, 660 S.E.2d 343, 345 (2008)
(quoting Buchanan v. Buchanan, 14 Va. App. 53, 56, 415 S.E.2d 237, 239 (1992)). “The Supreme
Court concluded that ‘when a party’s ‘failure to strictly adhere to the requirements of Rule
5A:20(e)’ is significant, ‘the Court of Appeals may . . . treat a question presented [now assignment
of error] as waived.’” Atkins v. Commonwealth, 57 Va. App. 2, 20, 698 S.E.2d 249, 258 (2010)
(quoting Parks v. Parks, 52 Va. App. 663, 664, 666 S.E.2d 547, 548 (2008)). Accordingly, because
husband’s conclusory arguments fail to satisfy Rule 5A:20(e), we affirm the trial court’s including
paragraph 7 in the Order.
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Second, paragraph 23 states that husband will provide thirty days’ notice to wife when he
retires. He argues that this is a specific undertaking not provided for in the Agreement. We see no
merit in this argument. This provision is a reasonable and minimally burdensome way to address a
foreseeable logistical issue, given that it could be a decade or more before husband retires.
Furthermore, the Agreement states that the parties would execute and deliver documents “which
may reasonably be required to give full force and effect” to the Agreement. Accordingly, we find
no error in the trial court including paragraph 23.
C. Husband’s Proposed Order
Husband also argues that the trial court should have entered the alternative order he
submitted. Even if we were to conclude that husband’s proposed order did not conflict with the
Agreement, husband offers no argument as to why a trial court must enter a proposed order
simply because it is harmonious. Again, husband’s argument fails to satisfy Rule 5A:20(e), as
described above. See Jones, 51 Va. App. at 734, 660 S.E.2d at 345. Because he includes no
principles of law or authorities to support his contention, we have no basis for which to conclude
the trial court should have entered husband’s proposed order. Thus, husband has waived the
issue.
III. ATTORNEY’S FEES AND COSTS
We have no jurisdiction to review husband’s third assignment of error, as the trial court had
not entered a final order resolving the dispute over attorney’s fees and costs at the time of appeal.
As pertinent to this matter, “this Court has appellate jurisdiction over final decrees [and orders] of a
circuit court in domestic relations matters arising under Titles 16.1 or 20, and any interlocutory
decree or order involving the granting, dissolving, or denying of an injunction or ‘adjudicating the
principles of a cause.[’]” Horn v. Horn, 28 Va. App. 688, 692, 508 S.E.2d 347, 349 (1998)
(emphasis added) (quoting Code § 17.1-405(3)(f) and (4)). The parties concede that the trial court
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never ruled upon or issued a final order on the issue of attorney’s fees and costs. Accordingly, the
issue is not properly before us.
IV. EXPERT WITNESS TESTIMONY
Husband argues that the trial court’s admission of Shaner’s expert testimony was
“unnecessary and improper,” but cites no rule of law to support his argument. Yet again, Rule
5A:20(e) precludes our considering this argument. See Jones, 51 Va. App. at 734, 660 S.E.2d at
345. Because husband provides no supporting legal argument or authority to support his position
that the trial court erred in admitting Shaner’s expert testimony, and because we find that this
omission is significant, we conclude that this argument is waived pursuant to Rule 5A:20(e).12
V. CONCLUSION
We affirm the trial court’s refusal to enter husband’s proposed order, and its
consideration of Shaner’s expert testimony. We dismiss the assignment of error regarding
attorney’s fees and costs. We deny wife’s request for an award of attorneys’ fees and costs
incurred in litigating this appeal. See O’Loughlin v. O’Loughlin, 23 Va. App. 690, 695, 479
S.E.2d 98, 100 (1996). The matter is reversed for the reasons stated in Part II.A, and remanded
for entry of a revised order that comports with this memorandum opinion.
Affirmed in part,
reversed and remanded in part, and
dismissed in part.
12
Husband’s argument also fails on the merits. “The standard of review on appeal where
the admissibility of expert testimony is challenged is whether the trial court abused its discretion.”
Kern v. Commonwealth, 2 Va. App. 84, 86, 341 S.E.2d 397, 398 (1986). In this matter, the trial
court ordered the parties to present expert testimony to explain the nuances of military retirement
and anti-circumvention provisions. Only wife did so. The testimony was relevant and presumably
helpful to the court. The trier of fact was best situated to evaluate Shaner’s credibility and any bias
she may have had. In addition, husband conceded at oral argument before this Court that, even if
this Court were to adopt his view, it would not affect the ultimate outcome of the case. For these
reasons, the trial court did not abuse its discretion.
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