2017 COA 151
Colo. Ct. App.2017Background
- Parties divorced in 2008; permanent orders awarded Wife a portion of Husband's military retirement pay and three years maintenance; court reserved jurisdiction to offset military retirement exchanged for VA disability benefits.
- Husband later was placed on Chapter 61 disability retirement (military-initiated retirement for service-connected disability) and elected to receive disability payments in lieu of regular retired pay; he also received VA disability benefits.
- Wife moved (2014) to enforce the permanent order for division of Husband’s military retirement pay, alleging Husband had reduced the divisible retirement by electing disability benefits; district court denied, holding disability benefits not divisible under federal law.
- Wife made a second motion seeking equitable relief (indemnification/compensation) for the loss of her share caused by Husband’s election; an agreed expert testified disability pay was not divisible.
- The district court denied equitable relief and refused to adjust maintenance (Wife had remarried); Wife appealed.
Issues
| Issue | Wife's Argument | Husband's Argument | Held |
|---|---|---|---|
| Whether Wife’s equitable claim is barred by claim preclusion | Wife: Her equitable enforcement motion was part of the original dissolution proceeding, so not barred | Husband: Prior denial that disability benefits are non-divisible bars relitigation | Court: Claim preclusion does not apply because the request for equitable relief was made within the same dissolution proceeding, not a later independent suit |
| Whether Husband’s Chapter 61 disability retirement or VA benefits are divisible or subject to state equitable indemnification | Wife: Court should use equitable powers to award her an equivalent share or indemnify her against Husband’s election converting retirement to disability | Husband: Federal law excludes disability retirement from divisible "disposable retired pay" and preempts state remedies to indemnify former spouse | Court: Chapter 61 disability retirement and VA disability benefits are excluded from disposable retired pay under USFSPA and, per Howell, federal law preempts state-law equitable indemnification; therefore no division or indemnification allowed |
Key Cases Cited
- Mansell v. Mansell, 490 U.S. 581 (U.S. 1989) (federal law limits state division of certain military retired pay)
- Howell v. Howell, 581 U.S. (U.S. 2017) (state courts may not order indemnification restoring a former spouse’s share lost by veteran’s postdecree waiver in favor of disability benefits)
- Argus Real Estate, Inc. v. E-470 Pub. Highway Auth., 109 P.3d 604 (Colo. 2005) (claim preclusion bars relitigation of decided matters and those that could have been raised earlier)
- In re Marriage of Mallon, 956 P.2d 642 (Colo. App. 1998) (claim preclusion does not bar later assertions made in same litigation)
- In re Marriage of Poland, 264 P.3d 647 (Colo. App. 2011) (temporary disability retirement pay excluded from marital property)
- In re Marriage of Lodeski, 107 P.3d 1097 (Colo. App. 2004) (earlier division applying equitable theories to prevent unilateral defeat of spouse’s interest in divisible retirement pay)