809 S.E.2d 890
N.C. Ct. App.2018Background
- Timothy Lesh (husband) and Margaret Lesh (wife) divorced; trial court entered an Equitable Distribution Order awarding the wife a $31,590.59 distributive award to be paid in monthly installments of $877.22.
- The trial court expressly treated the husband’s military disability retirement as separate property not subject to division.
- Husband appealed the Equitable Distribution Order, later dismissed that appeal, then filed a Rule 60(b) motion seeking to set aside the monthly payment obligation on grounds that federal law preempts using his military disability benefits to satisfy the award.
- Wife moved to hold husband in civil contempt for failing to make any distributive payments; the trial court found him in contempt and denied his Rule 60(b) motion.
- On appeal husband argued (1) federal preemption barred treating his disability benefits as income for distributive payments and (2) contempt was improper; the Court of Appeals treated the appeal as certiorari and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal law preempts treating military disability benefits as income for satisfying distributive award | Lesh: Federal law preempts state court orders that require use of military disability benefits to pay distributive awards; the Equitable Distribution Order is irregular/void | Lesh’s waiver of appeal waived collateral attack; trial court may consider disability pay as income for payments (not as divisible marital property) | Court: Federal law (Mansell/Howell) prevents treating disability benefits as divisible property but does not bar considering them as income for satisfying distributive awards; Rule 60(b)(6) not the correct vehicle for a void-judgment claim but claim fails on the merits |
| Whether Howell changed Rose’s rule allowing courts to consider disability benefits as income for support/distributive payments | Lesh: Howell altered the law to bar using disability benefits to satisfy former-spouse payments | Wife: Howell reaffirmed Mansell’s bar on distribution but did not overrule Rose; courts may still consider disability benefits as income to determine ability to pay | Court: Howell reinforces Mansell (no distribution of waived retirement/disability benefits) but does not disturb Rose; courts may consider disability benefits as income for payment obligations |
| Whether the trial court abused discretion by denying Rule 60(b)(6) relief | Lesh: The Equitable Distribution Order is irregular/void because it forces use of exempt disability benefits | Wife: Rule 60(b)(6) cannot substitute for appeal; judgment not irregular and federal law does not render it void | Court: Rule 60(b)(6) was mis-invoked for a voidness claim (should be Rule 60(b)(4)), but substantively federal preemption does not void the order; no abuse of discretion |
| Whether husband’s contempt finding was improper (willfulness and present ability to pay) | Lesh: He lacks ability and cannot be held willful because payments would come from protected benefits | Wife: Court found husband had means and willfully failed to pay; contempt proper | Court: Findings that husband had present ability and willfully failed to pay are supported by evidence (unchallenged); contempt affirmed |
Key Cases Cited
- Mansell v. Mansell, 490 U.S. 581 (federal statute precludes state courts from treating military disability-reduced retirement pay as divisible marital property)
- Rose v. Rose, 481 U.S. 619 (state courts may treat veterans’ disability benefits as income when setting support obligations)
- Howell v. Howell, 137 S. Ct. 1400 (clarifies that reimbursement/indemnification for retirement pay waived in favor of disability benefits is preempted; cannot vest what federal law forbids)
- Comstock v. Comstock, 240 N.C. 304 (North Carolina Supreme Court: separate/liquid assets may be considered as a source to satisfy distributive awards even if not divisible marital property)