LOCATION: Supreme Court of Arizona
DOCKET NO.: 15-1031
LOWER COURT: Arizona Supreme Court
CITATION: US ()
GRANTED: Dec 02, 2016
Facts of the case
John Howell, a veteran, and his ex-wife Sarah Howell divorced in 1991. The Arizona Superior Court granted Sarah half of John’s Military Retirement Plan (MRP) funds when the payments were to begin. John retired from the Air Force in 1992 and began receiving his retirement funds soon after. In 2005, the Department of Veterans’ Affairs determined that John suffered from degenerative joint disease in his shoulder, that the cause of the disease was directly related to his service, and that it caused him a net loss of 20% in his earnings. Because of this, he was entitled to tax-exempt military disability payments. To receive the disability payments, John had to waive an equal portion of his MRP benefits, which he did in July of 2004.
In 2013, Sarah sued John and claimed that she was still entitled to a full 50% of the MRP benefits John received, regardless of his waiver of a portion of his benefits due to disability. Both the Arizona Superior Court and the Arizona Court of Appeals affirmed in Sarah’s favor. John appealed and cited the Arizona Supreme Court’s ruling in Mansell v. Mansell, which held that the Uniformed Services Former Spouses’ Protection Act (USFSPA) preempted state courts from allowing the former spouses of veterans to claim interest in the waived portion of the veteran’s MRP. The Arizona Supreme Court affirmed the appellate court’s decision and stated that, while the Mansell standard was applicable before divorce proceedings were finalized and during the proceedings, courts were split regarding the rules after a divorce had been granted. The Court found that, because the lower court did not grant Sarah an interest in the disability sum itself, but rather an interest in John’s overall assets in an equal sum, then Sarah was free to require payment from John to make up for the losses she would suffer due to his waiver of a portion of the benefits shared between them.
Does the Uniformed Services Former Spouses’ Protection Act preempt a state court’s order directing a veteran to pay a former spouse that spouse’s full portion of the veteran’s military retirement pay despite a reduction, when that reduction results from the veteran’s post-divorce waiver of retirement pay in order to receive compensation for a service-connected disability?