480 P.3d 626
Alaska2021Background
- Thomas and Cheryl Jordan married in 1993; Thomas is a career dentist with federal military retirement and VA disability; each party had substantial retirement accounts by 2017.
- The couple owned Sitka property (primary residence with a lower‑floor bed & breakfast and a separate rental) and a Ketchikan duplex; Cheryl operated the B&B from 2006 until she left Sitka in Sept. 2017 and moved to the Ketchikan unit.
- Thomas filed for divorce after Cheryl moved; he claimed Cheryl unreasonably depleted the marital asset (the B&B) by abandoning it; Cheryl said she left for safety and that Thomas effectively closed the B&B.
- At trial the court set earning capacities (Thomas $200,000/yr until age 60; Cheryl $50,000/yr until 65), valued the B&B at zero, awarded Cheryl the Ketchikan duplex (appraisal adjusted to $420,000), and made an uneven property division including an extra $175,000 for lifetime income disparity and $182,781.88 as 37.64% of projected VA disability receipts.
- Thomas appealed, arguing (1) the court should have found Cheryl committed marital waste and assigned the B&B value to her, (2) the court miscalculated future earning capacities and related adjustments, and (3) the court improperly awarded the cash equivalent of a marital portion of his VA disability pay.
Issues
| Issue | Thomas' Argument | Cheryl's Argument | Held |
|---|---|---|---|
| Whether Cheryl unreasonably depleted the B&B (marital waste) | Cheryl abandoned the B&B when marriage broke down; assign business value to her | Cheryl left for safety, did not intend to abandon, and Thomas closed/failed to operate it | Aff'd: no clear error in trial court's finding—insufficient evidence of intent/use to deprive (marital waste not proven) |
| Whether the court properly calculated future earning capacities and awarded $175,000 for income disparity | Court miscalculated remaining work months, ignored taxes and his retirement intent, and used flawed math | Court considered health/retirement testimony; award addressed Cheryl's transition and needs | Mixed: court considered retirement intent and Cheryl's needs, but remand required to correct the 10‑month timing error and to consider tax consequences; no need to reduce award to present value |
| Whether awarding the cash equivalent of a share of Thomas’ VA disability pay was permissible | Division or dollar‑for‑dollar equivalent of VA disability is preempted by federal law; award impermissibly mirrors nondivisible benefit | Court may consider VA disability when assessing financial condition and what the other spouse can afford | Reversed in part: vacated $182,781.88 award as an improper dollar‑for‑dollar equivalent of nondivisible VA disability; courts may consider disability benefits for context but not effectuate a direct offset |
Key Cases Cited
- Mansell v. Mansell, 490 U.S. 581 (U.S. 1989) (federal preemption: state courts may not treat waived military retired pay/VA disability as divisible marital property)
- Howell v. Howell, 137 S. Ct. 1400 (U.S. 2017) (state courts cannot order indemnification that effectively mirrors waived retirement pay dollar‑for‑dollar)
- Clauson v. Clauson, 831 P.2d 1257 (Alaska 1992) (state courts may consider economic consequences of a waiver but may not distribute VA disability as property)
- Guerrero v. Guerrero, 362 P.3d 432 (Alaska 2015) (courts must consider military disability benefits in equitable division analysis but avoid direct offsets of nondivisible benefits)
- Dunmore v. Dunmore, 420 P.3d 1187 (Alaska 2018) (Social Security analogy: nondivisible benefits may inform financial‑condition analysis but cannot be offset by shifting divisible property)
- Wiegers v. Richards‑Wiegers, 420 P.3d 1180 (Alaska 2018) (discusses coverture fraction and calculation of marital portion of federal retirement)