Sandra Howell v. John Howell
361 P.3d 936
Ariz.2015Background
- John and Sandra Howell divorced in 1991; the decree awarded Sandra 50% of John’s military retirement pay (MRP) via direct pay order.
- John retired from the Air Force in 1992; DFAS paid monthly MRP shares to both parties until John obtained VA disability benefits in 2005 and executed a VA waiver that reduced his MRP (and thus Sandra’s share).
- After the VA waiver, Sandra received less MRP; she moved in 2013 to enforce the decree and recover arrearages for the reduction caused by John’s post-decree waiver.
- The family court awarded Sandra arrearages dating from December 1, 2011, and ordered John to ensure Sandra receives her full 50% of MRP, treating the relief as indemnification for the reduced payments.
- The court of appeals affirmed on the ground that A.R.S. § 25-318.01 did not apply to post-decree enforcement; the Arizona Supreme Court granted review to resolve federal preemption and statutory-application issues.
Issues
| Issue | Plaintiff's Argument (Sandra) | Defendant's Argument (John) | Held |
|---|---|---|---|
| Whether federal law (USFSPA/Mansell) preempts a state court order requiring a veteran to indemnify an ex-spouse for MRP reduced by a post-decree VA waiver | Mansell/USFSPA do not bar state courts from ordering indemnification for a post-decree unilateral VA waiver | Mansell/USFSPA preempt any state remedy that effectively treats waived MRP as divisible or compensate the ex-spouse | Court: No preemption — USFSPA/Mansell prohibit dividing waived MRP but do not directly prohibit state courts from ordering indemnification restoring the ex-spouse’s vested share. |
| Whether A.R.S. § 25-318.01 bars a court from indemnifying an ex-spouse for pre- or postjudgment VA waivers when relief is sought after the statute’s 2010 enactment | §25-318.01 cannot be applied to bar relief because Sandra’s 50% MRP share vested in 1991; retroactive application would violate due process | §25-318.01 applies to modifications under §25-327 and thus prohibits indemnification now because relief was sought post-enactment | Court: §25-318.01 applies to modifications, but cannot be applied to bar indemnification here because doing so would impair Sandra’s vested property right, violating due process. |
| Whether the 2014 order was enforcement of the decree or modification (triggering §25-318.01) | Relief was enforcement of the decree to obtain the vested 50% share | The ruling altered the decree (added an indemnity obligation) and therefore modified property disposition | Court: The 2014 order was a modification (thus §25-318.01 applies) but the statute could not constitutionally be applied to divest Sandra’s pre-2010 vested right. |
Key Cases Cited
- Mansell v. Mansell, 490 U.S. 581 (1989) (federal law precludes state division of MRP that has been waived for VA disability benefits)
- McCarty v. McCarty, 453 U.S. 210 (1981) (federal law precluded state division of military retirement pay prior to USFSPA)
- Koelsch v. Koelsch, 148 Ariz. 176 (1986) (community property division at dissolution creates immediate, vested separate property interests)
- Van Loan v. Van Loan, 116 Ariz. 272 (1977) (military retirement pay characterized as deferred compensation and divisible community property)
- Harris v. Harris, 195 Ariz. 559 (App. 1999) (state appellate decision permitting equitable remedies to reimburse ex-spouse for post-decree VA waiver reductions)
- Danielson v. Evans, 201 Ariz. 401 (App. 2001) (appellate analysis of relief when veteran elects VA waiver after decree)
- San Carlos Apache Tribe v. Superior Court, 193 Ariz. 195 (1999) (limitations on retroactive application of statutes that disturb vested substantive rights)