Merrill v. Merrill
284 P.3d 880
Ariz. Ct. App.2012Background
- Diane and Robert Merrill married in 1963; Husband is a disabled military retiree with a dissolution decree from 1993 granting Wife 50% of Husband's retirement pay as her sole and separate property.
- Husband later elected Combat-Related Special Compensation (CRSC) in 2004, reducing his retirement pay due to tax-free CRSC benefits; Wife's share was effectively diminished.
- In 2010 Wife petitioned for arrearages and a modified retirement award, arguing Husband's CRSC election violated the decree and equity.
- Trial facts showed Husband’s gross retirement pay was about $3,262/month; after waiving, CRSC tax-free payments of about $2,823/month remained; Wife’s share dropped from $1,116 to a nominal amount.
- Superior Court denied relief; Wife appealed; the Arizona appellate court reverses and remands for further proceedings consistent with the opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May a former spouse recover when a retiree waives retirement pay for CRSC? | Wife’s sole-and-separate share was reduced by waiver. | Decree did not expressly protect against post-judgment waivers. | Yes; indemnification required to restore loss. |
| Is express indemnity in the decree required for relief? | Decree grants a half-share; no express indemnity needed. | Without express provision, relief is unavailable. | Indemnification available even without express language. |
| Does § 25-318.01 bar relief when CRSC is Title 10 benefits? | Statute bars consideration of federal disability benefits; relief barred. | CRSC is not a Title 38 benefit; statute inapplicable. | Statute does not apply; relief not barred. |
| What remedy is appropriate on remand? | Husband must indemnify from eligible assets. | Disability/CRSC funds cannot be used for indemnification. | Remand to determine whether indemnification can be satisfied from assets other than CRSC; court to enter appropriate order. |
| Should appellate fees be addressed on remand? | Wife entitled to fees given the equities. | No clear basis for fees at this stage. | Remand to reconsider attorney’s fees; costs awarded on appeal conditioned on Rule 21 compliance. |
Key Cases Cited
- In re Marriage of Gaddis, 191 Ariz. 467 (App. 1997) (disability waiver cannot defeat former spouse's share)
- Danielson v. Evans, 201 Ariz. 401 (App. 2001) (payments-in-kind to reimburse loss due to waiver)
- Harris v. Harris, 195 Ariz. 559 (App. 1999) (federal disability benefits cannot be used to bar relief; equity possible)
- Priessman, In re Marriage of, 228 Ariz. 336 (App. 2011) (CRSC/title-10 benefits; distinguish from Title 38)
- Bandini v. Bandini, 935 N.E.2d 253 (Ind. App. 2010) (military retirement pay before deductions; indemnity possible)
- Millennium: In re Marriage of Neilsen, 341 Ill. App.3d 863 (App. 2003) (waiver impermissible to modify decree)
- Warkocz v. Warkocz, 141 P.3d 926 (Colo. App. 2006) (non-military spouse entitlement when retirement is divided)
- Megee v. Carmine, 802 N.W.2d 669 (Mich. App. 2010) (retiree may satisfy indemnity from other assets)