Virginia Lawyers Weekly VA Lawyers Weekly
Where the trial court’s order dividing a husband’s military pension was contrary to federal law, the order is void ab initio and can be attacked beyond Rule 1:1’s 21-day window.
Overview
“Michael Yourko (‘husband’) appeals from the trial court’s dismissal of his motion for modification of a final decree and equitable distribution order, and a military pension division order. Husband assigns error to the circuit court’s refusal to modify these orders.
“The parties to this divorce negotiated an agreement regarding the division of husband’s military retirement pay. A year later husband challenged the orders complaining that aspects of the agreement to divide his military retirement pay were violative of federal law.
“Husband accurately depicts the orders’ improper terms, and federal law’s preemption and repudiation of these terms, but Lee Ann Yourko (‘wife’) claims the collateral attack came long after the circuit court lost jurisdiction over the orders under Rule 1:1.
“Husband argued that the orders could be challenged at this juncture as the product of a mutual mistake or clerical error, or, in the alternative, he contended that the orders were void ab initio or non-final. The circuit court refused to set aside the challenged orders. We reverse.”
The order
The court entered a final decree, an equitable distribution order and a military pension division order on Jan. 28, 2020. At issue is the military pension order. The order provided that wife was to receive $1,202.70 per month from husband’s military pension. It also provided that if husband took any action to reduce wife’s share, including a waiver of retired pay for disability pay, husband would “indemnify” her for the reduction.
“At the time the parties negotiated wife’s share of the military benefits, they genuinely believed husband would receive $4,009 per month in disposable retirement pay.
“However, sometime after the final decree, the military’s Defense Finance Accounting Service (‘DFAS’) computed husband’s disposable retirement pay to be only $844 per month, the remainder being disability pay which is not divisible in divorce proceedings.
“Therefore, DFAS calculated wife’s 30% share of disposable retirement pay to be $253.20 per month rather than the $1,202.70 per month agreed to in paragraph 9. The ‘indemnification’ and ‘guarantee’ language in paragraph 9, accordingly, required husband to pay almost $1,000 per month more in military benefit based pay to wife than DFAS calculated was due.”
Modification sought
More than a year after entry of the military pension order and final decree, husband filed a motion to reinstate the case and modify the pension order.
“Husband argued that at the time the parties negotiated wife’s share of his military retirement pay, they believed husband would receive $4,009 per month in disposable retirement pay, resulting in their calculation of wife’s share at $1,202.70 per month.
“Husband now contended that since DFAS calculated his disposable retirement pay at a total of only $844 per month (the remainder being disability pay) the original calculation and agreement were hopelessly flawed.
“Since disability pay is not divisible in divorce proceedings under federal law, husband argued that the parties’ mistaken calculation in the final order effectively gave wife 140% of his divisible disposable retirement pay – plainly in violation of the 50% maximum allowed by federal law.”
The circuit court found that Rule 1:1, which sets a 21-day period in which a court can modify a final order, barred a reopening of the case. The court dismissed husband’s motion for modification. He appealed.
Analysis
“[T]he circuit court had subject matter jurisdiction to issue the challenged orders – even if it reached an erroneous conclusion. However, in examining whether the orders are void, Virginia law looks beyond jurisdiction and also directs that an order is void if the circuit court was without power to render the order. … It is this mandate of Virginia law that requires us to strike down the orders at issue. …
“Just as a state court’s action is void if it exceeds the power conferred by Virginia statutes, so too is a state court’s action void if it exceeds the limits imposed on it by the federal government because it ‘transcend[s] the power conferred by law.’ …
“The [Uniformed Services Former Spouses Protection Act] and case law from the United States Supreme Court interpreting the statute [Howell v. Howell, 137 S. Ct. 1400 (2017)], have granted state courts the power to divide a veteran’s military pay in divorce proceedings, with several key limitations: (1) a state court cannot order that a former spouse receive any amount beyond 50% of the veteran’s disposable retirement pay[,] … and (2) a state court cannot order a veteran to indemnify a former spouse for any loss caused by a veteran’s acceptance of disability pay which reduces retirement pay. …
“The net result of this impermissible indemnification is that, after DFAS’ allocation of benefits, husband is required to pay 140% of his retirement benefits to his former spouse. This outcome is flatly prohibited under Howell and the character of the circuit court judgment was such that the court ‘had no power to render it.’ …
“Accordingly, the orders are void ab initio for lack of power – and because they are void ab initio, wife’s reliance on Rule 1:1 and res judicata is of no help to her.”
Reversed and remanded for further proceedings.
Yourko v. Yourko, Record No. 0363-21-1, Dec. 21, 2021. CAV (Friedman) From the Circuit Court of the City of Williamsburg and County of James City (McGinty). Charles E. Haden for appellant; Kyle J. Burcham for appellee. VLW 021-7-182, 19 pp. Published.
