Pelts v. Pelts
2017 Ark. 98
| Ark. | 2017Background
- Gregory and Shelly Pelts divorced in 2014 after a 23-year marriage; Gregory has long military service including reserve and some active-duty time.
- At divorce, Gregory was vested in the reserve (non-regular) retirement that pays at age 60; if he serves ~4 more active years he would qualify for active-duty (regular) retirement payable immediately.
- The Lonoke County Circuit Court awarded Shelly one-half of the marital portion of Gregory’s military retirement and ordered Gregory to elect and pay a survivor-benefit option for Shelly, applying the award to whichever retirement Gregory ultimately receives.
- The Arkansas Court of Appeals affirmed; the Supreme Court granted review and treated the appeal as original.
- The Supreme Court reversed the circuit court on two grounds: (1) the active-duty retirement interest was not vested at divorce and thus not divisible, and (2) requiring Gregory to elect/pay a survivor benefit for Shelly without adequate justification produced an unequal property division.
Issues
| Issue | Plaintiff's Argument (Shelly) | Defendant's Argument (Gregory) | Held |
|---|---|---|---|
| Whether an expectation of active-duty (regular) retirement that depends on future service is divisible as marital property when the spouse is only vested in reserve retirement at divorce | The military retirement schemes are facets of a unified retirement interest; a vested entitlement to retirement allows division of future enhancements regardless of form | Reserve and active-duty retirements are distinct statutory schemes; Gregory was vested only in the reserve retirement at divorce, so the contingent active-duty interest is unvested and not divisible | The Court held the active-duty interest was unvested and distinct from the vested reserve interest, so treating contingent active-duty pay as divisible was legal error (reversed) |
| Whether the circuit court could require Gregory to elect and pay a survivor-benefit plan for Shelly | The survivor benefit cost will be borne proportionally from both parties’ shares and the court acted within discretion | Forcing Gregory to pay for a survivor benefit that solely benefits Shelly (without adequate justification) creates an unequal property division | The Court held the order requiring Gregory to elect/pay the survivor benefit lacked sufficient justification and produced an unequal division; reversal and remand required |
Key Cases Cited
- Day v. Day, 281 Ark. 261 (vesting test for retirement interests)
- Hackett v. Hackett, 278 Ark. 82 (whether interest is fully distributive at divorce)
- Christopher v. Christopher, 316 Ark. 215 (divisibility of vested military retirement entitlement)
- Askins v. Askins, 288 Ark. 333 (spouse entitled to post-divorce enhancements to a vested retirement interest)
- Brown v. Brown, 332 Ark. 235 (postmarital enhancement in pension benefits may be marital)