At the recent Summer Seminar, one of the published decisions Scott Bassett summarized during his presentation was Megee v Carmine, 290 Mich.App. 551
802 N.W.2d 669. It dealt with the consequences of the husband's post-divorce waiver of retirement pay in favor of collecting combat-related special compensation (CRSC).
The parties' judgment of divorce was entered in September 1989. In the judgment, defendant Carmine [f/k/a Megee] was awarded 50 percent of plaintiff’s Navy disposable retirement pay as part of the property division. The judgment incorporated a Qualified Domestic Relations Order (QDRO) to enforce that provision. The QDRO acknowledged the 50-percent division of plaintiff’s disposable retirement pay, also referred to therein as his pension, and it prevented plaintiff from making another benefit election “that would otherwise reduce the monthly pension allotment without the written consent [of defendant].”
According to defendant, she began receiving her share of plaintiff’s retirement pay in January 2008, although plaintiff claims that defendant had been receiving her share of his retirement pay since 1994. In 2008, plaintiff was officially diagnosed by the government, for purposes of entitlement to disability benefits, as being disabled as a result of combat-related activities and exposure to Agent Orange in Vietnam. He was declared eligible to elect CRSC. That election required plaintiff to waive further receipt of his retirement pay. Plaintiff elected to receive CRSC, resulting in termination of his retirement pay. As a direct consequence, his former wife's receipt of benefits immediately stopped. She filed a motion to enforce the judgment and the QDRO. The trial court ordered Megee to start paying his former wife 50% of his CRSC and he appealed.
The Michigan Court of Appeals held as follows:
"We hold that a military spouse remains financially responsible to compensate his or her former spouse in an amount equal to the share of retirement pay ordered to be distributed to the former spouse as part of a divorce judgment's property division, where the military spouse makes a unilateral and voluntary postjudgment election to waive the retirement pay in favor of disability benefits contrary to the terms of the divorce judgment. Conceptually, and consistent with extensive case law from other jurisdictions, we are dividing "waived" retirement pay in order to honor the terms and intent of the divorce judgment. Importantly, we are not ruling that a state court has the authority to divide a military spouse's CRSC, nor that the military spouse can be ordered by a court to pay the former spouse using CRSC funds. Rather, the compensation to be paid the former spouse as his or her share of the property division in lieu of the waived retirement pay can come from any source the military spouse chooses, but it must be paid to avoid contempt of court. To be clear, nothing in this opinion should be construed as precluding a military spouse from using CRSC funds to satisfy the spouse's obligation if desired. In these situations, because the ordered "replacement" compensation must relate to the military spouse's retirement-pay obligation and not the disability pay now being received, and because the military spouse, having made the election, will no longer actually be receiving the retirement pay, it may be necessary on occasion to determine/review whether any adjustments to the retirement pay would have been made had the military spouse continued receiving the retirement pay."
Scott Bassett pointed out today that the current issue of the Journal of the American Academy of Matrimonial Lawyers contains an article by Mark Sullivan and another lawyer in his office addressing this and several other issues related to the division of military pensions. The article is available on-line for those who want more information about this sometimes murky subject. I've reviewed the article and the concrete examples given are very helpful.
Another case dealing with similar issues is Bachran v Bachran. It went to the appellate courts four times. appellate decision is difficult to find, so I've assembled them in a portfolio. The assembled cases are here. Download The Bachran cases
See also, Mark E. Sullivan & Charles R. Rapuhn, Dividing Military Retired Pay: Disability Payments and the Puzzle of the Parachute Pension, Vol 24, 2011, pp 147-215, J. AAML, https://www.aaml.org/sites/default/files/MAT104_3.pdf
Thanks to Scott Bassett, Esq., Bradenton, FL, email@example.com [Licensed in Michigan Only] for this valuable information.