ROBERT J. PARISH, APPELLEE, V. KATHLEEN M. PARISH, NOW KNOWN AS KATHLEEN M. SPENCE, APPELLANT.
No. S-22-066
Nebraska Supreme Court
June 2, 2023
314 Neb. 370
Nеbraska Supreme Court Online Library. www.nebraska.gov/apps-courts-epub/ 06/02/2023 09:07 AM CDT
Modification of Decree: Appeal and Error. Modification of a dissolution decree is a matter entrusted to the discretion of the trial court, whose order is reviewed de novo on the record, and will be affirmed absent an abuse of discretion by the trial court. - Judges: Words and Phrases. A judicial abuse of discretion exists if the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.
- Divorce: Property Division: Armed Forces: Pensions. Federal law does not preеmpt the power of a state court to treat a future nondisability veteran‘s pension entitlement as a marital asset in a dissolution proceeding.
- ____: ____: ____: ____. Disposable retired military pay is divisible property in a divorce under the Uniformed Services Former Spouses’ Protection Act,
10 U.S.C. § 1408(c)(1) (2018). - ____: ____: ____: ____. If disposable retired pay is reduced by the veteran‘s election of disability benefits, the state court may not order a veteran to indemnify a former spouse for the loss of a former spouse‘s share of the veteran‘s retirement pay caused by the veteran‘s election to separately receive disability benefits.
- Divorce: Property Division: Armed Forces: Final Orders. Where a state court enters a judgment of divorce dividing military benefits, and no appeal is taken therefrom, such division becomes a final order.
- Judgments: Collateral Attack. Only a void judgment may be collaterally attacked.
- Judgments: Jurisdiction. When considering whether a previous order is void, it is critical to differentiate between a judgment entered
without jurisdiction and an erroneous judgment that may nevertheless be enforceable. - Divorce: Property Division: Armed Forces: Claim Preclusion. When a divorce decree erroneously divides military benefits, the state law of claim preclusion, also known as res judicata, applies to determine whether relitigation of the issue may occur.
- Judgments: Jurisdiction: Collateral Attack. Judgments entered without personal jurisdiction or subject matter jurisdiction are void and subject to collateral attack.
- Actions: Jurisdiction. The lack of subject matter jurisdiction can be raised at any time by any party or by the court sua sponte.
- Modification of Decree: Alimony: Good Cause: Words and Phrases. “Good cause” for modifying an alimony award means a material and substantial change in circumstances and depends upon the circumstances of each case.
- Modification of Decree: Alimony: Armed Forces: Pensions: Waiver. While a Nebraska court may not include service-connected disability benefits awarded to a military retiree as a part of a marital estate, it may consider such benefits and the corresponding waiver of retirement pension benefits required by federаl law in determining whether there has been a material change in circumstances which would justify modification of an alimony award to a former spouse.
Appeal from the District Court for Sarpy County: STEFANIE A. MARTINEZ, Judge. Reversed and remanded for further proceedings.
Aimee S. Melton and Megan E. Shupe, of Reagan, Melton & Delaney, L.L.P., for appellant.
Van A. Schroeder, of Bertolini, Schroeder & Blount, for appellee.
HEAVICAN, C.J., MILLER-LERMAN, CASSEL, STACY, FUNKE, PAPIK, and FREUDENBERG, JJ.
MILLER-LERMAN, J.
NATURE OF CASE
Kathleen M. Parish, now known as Kathleen M. Spence, filed a motion to modify alimony. The district court for Sarpy County dismissed the motion for lack of subject matter
STATEMENT OF FACTS
The parties were divorced in 2011 by consent decree. As part of the property settlement, Robert received 50 percent of Kathleen‘s retirement account. The Decree further provided that Kathleen was entitled to an interest in Robert‘s military pension under the Uniformed Services Former Spouses’ Protection Act (USFSPA),
In 2012, Robert filed for and was given a disability rating and was then awarded a veteran‘s disability pension, which he received separately; that award resulted in a waiver of a portion of his retirement pension. Robert‘s disposable retired pay changed from $971.36 to $679.40 per month. The decrease in Robert‘s disposable retired pay rеduced the amount that Kathleen received under the Decree to a smaller figure.
On May 18, 2018, Kathleen filed a complaint for modification in which she alleged that there had been a material and substantial change in circumstances that warranted modification of the special alimony to accommodate for the reduction in Robert‘s pension because he had converted retirement benefits to disability veteran‘s benefits. Robert was served with the complaint but failed to file an answer or appear for a hearing, and defaulted. In its September 5 order, the district court found there had been a material change in circumstances because Robert was now receiving disability that reduced the amount he received in nondisability pension funds, which in turn negatively impacted Kathleen. The district court ordered that Kathleen receive as alimony an amount equal to 48 percent of Robert‘s disability and ordered Robert to pay $13,034.76 to Kathleen, representing the amount she would have received since the commencement of the disability offset to Robert‘s pension in 2012.
Robert failed to make monthly payments under the order for modification. On October 8, 2019, the court issued an order to show cause. Robert filed a motion to dismiss and alleged that the court “lacks jurisdiction over” Robert. The court denied the motion to dismiss.
On February 21, 2020, Robert moved to vacate the order that had modified alimony. The court granted the motion, and this order hаs not been challenged. The case proceeded on the merits of the modification wherein Kathleen generally
Trial was held on Kathlеen‘s complaint for modification on December 13, 2021. Both parties testified and evidence was adduced, although evidence of the parties’ present relative income and wealth was limited. On January 7, 2022, the district court filed an order that dismissed Kathleen‘s complaint for modification. The trial court characterized Kathleen‘s complaint, inter alia, as a request to divide Robert‘s disability pension, which it determined was preempted under federal law. The order stated that thе district court “lacks subject matter jurisdiction to entertain the division of a VA disability waiver pension due to federal preemption of that disability pay.”
Kathleen appeals.
ASSIGNMENTS OF ERROR
On appeal, Kathleen claims that the district court erred when it dismissed her complaint to modify alimony. Kathleen specifically assigns, restated, that the district court erred when it determined that (1) it was preempted from implementing the alimony provisions of the Decree and (2) it lacked subject matter jurisdiction.
STANDARDS OF REVIEW
[1,2] Modification of a dissolution decree is a matter entrusted to the discretion of the trial court, whose order is reviewed de novo on the record, and will be affirmed absent an abuse of discretion by the trial court. Grothen v. Grothen, 308 Neb. 28, 952 N.W.2d 650 (2020). A judicial abuse of discretion exists if the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial
ANALYSIS
The district court dismissed Kathleen‘s motion to modify alimony on the basis that it lacked subject matter jurisdiction. We conclude this ruling was in error, and we reverse, and remand for further proceedings.
As explained below, as an initial matter we address Robert‘s assertion, endorsed by the district court, that the provision of the Decree which permitted a modification of alimony if Robert‘s military pension was reduced by receipt of disability benefits was preempted and improper. The alimony provision was not improper nor void. As further explained below, whether or not the initial alimony award provision was erroneous, the award bеcame final, subject to principles of res judicata, and enforceable. Upon Kathleen‘s request, the district court had subject matter jurisdiction of the motion to modify alimony and should have adhered to the customary exercise of jurisdiction and standards applicable to a request to modify alimony. See Longo v. Longo, 266 Neb. 171, 663 N.W.2d 604 (2003).
Division of Military Benefits: The Alimony Provision in the Decree Is Not Void.
Robert and the district court have indicated their belief that the original alimony provision is void. Robert assertеd that the alimony provision is “undeniably a subterfuge to get around federal preemption in hopes that the state court could divide a veteran‘s disability pension contrary to the [USFSPA], and the Mansell and Howell decisions.” Brief for appellee at 13. We reject this assertion.
[3-5] It is well settled that federal law does not preempt the power of a state court to treat a future nondisability veteran‘s pension entitlement as a marital asset in a dissolution proceeding. See Longo v. Longo, supra. Disposable retirеd military pay is divisible property in a divorce under
Our examination of the special alimony provision in the Decree shows that it does not indemnify Kathleen for the reduction of her share of veteran‘s retirement pay. It does not require division of Robert‘s disability benefits. It merely provides that if Robert‘s retired pay is reduced by his election of disability benefits, Kathleen may seek a modification of alimony. The reduction of the value of Kathleen‘s share of retirement pay would be a relevant consideration in a modification of alimony analysis. See Kramer v. Kramer, 252 Neb. 526, 567 N.W.2d 100 (1997). The district court was not being asked to enforce a preempted оr otherwise void provision.
We do not read Mansell and Howell as prohibiting a provision that permits a court to take into consideration the receipt of disability benefits when calculating awards in family law. See Rose v. Rose, 481 U.S. 619, 107 S. Ct. 2029, 95 L. Ed. 2d 599 (1987). The district court had jurisdiction over the request to modify alimony, and the alimony provision in the Decree was enforceable and not void. See, Longo v. Longo, supra; Kramer v. Kramer, supra.
Claim Preclusion: The Special Alimony Provision Has Become Res Judicata.
[6-8] Where a state court enters a judgment of divorce dividing military benefits, and no appeal is taken therefrom, such division becomes a final order. See Ryan v. Ryan, 257 Neb. 682, 600 N.W.2d 739 (1999). Collateral attacks on previous proceedings are impermissible unless the attack is
[9] When a divorсe decree erroneously divides military benefits, the U.S. Supreme Court has held that the state law of claim preclusion, also known as res judicata, applies to determine whether relitigation of the issue may occur. Mansell v. Mansell, 490 U.S. 581, 586 n.5, 109 S. Ct. 2023, 104 L. Ed. 2d 675 (1989). See Mansell v. Mansell, 498 U.S. 806, 111 S. Ct. 237, 112 L. Ed. 2d 197 (1990) (denying certiorari after California Court of Appeals held that decree was immune from collateral attack under theory of res judicata).
In this regard, a majority of state courts have permitted the previously unchallenged division of military benefits to stand basеd on application of the state‘s doctrine of claim preclusion or res judicata. 2 Brett R. Turner, Equitable Distribution of Property § 6:9 (4th ed. 2023) (collecting cases). Several courts examining federal preemption under the USFSPA have persuasively reasoned, and we agree, that because federal law does not have the exclusive federal forum for dividing military benefits in divorce actions, states are not deprived of subject matter jurisdiction over a divorce involving the division of military pension property. See Foster v. Foster, supra (stating no exclusive federal forum under
It has been widely held, and we agree, that if the military benefits are initially divided by a state court in violation of federal preemption, but the service member fails to file a proper appeal, the decision is final and the benefits at issue are divided in accordance with the initial award. See, e.g., Martin v. Martin, ____ Nev. ____, 520 P.3d 813 (2022); Foster v. Foster, supra; Matter of Marriage of Kaufman, 17 Wash. App. 2d 497, 485 P.3d 991 (2021); Shelton v. Shelton, 119 Nev. 492, 78 P.3d 507 (2003); In re Marriage of Mansell, 217 Cal. App. 3d 219, 265 Cal. Rptr. 227 (1989). To the extent this reasoning conflicts with our reasoning in Ryan v. Ryan, 257 Neb. 682, 600 N.W.2d 739 (1999), we disapprove of Ryan. Applying principles of claim preclusion in the instant case, the initial award of alimony was directly addressed and resolved in previous proceedings and may not be relitigated.
Subject Matter Jurisdiction and Erroneous Exercise of Jurisdiction Distinguished: The District Court Was Not Asked to Divide Disability Benefits and Had Jurisdiction.
As an adjunct to his earlier assertion that the alimony provision is void, which we have rejected, Robert contends: (1) Kathleen‘s request asks the court to divide disability benefits, (2) the alimony provision is unenforceable, and (3) the district court lacks subject matter jurisdiction. In line with these contentions, the district court found that because of federal preemption, it lacked subject matter jurisdiction to modify the award of alimony, which it understood to be а request to “entertain the division of a VA disability.” The district court misperceived the nature of the request, and this ruling was erroneous.
[10,11] We begin by reciting familiar propositions of subject matter jurisdiction. Judgments entered without personal
However, we must clarify that lack of subject matter jurisdiction differs from an erroneous exercise of jurisdiction. The Supreme Court of Michigan recently explained this distinction in a dissolution proceeding to enforce a judgment that had divided a veteran‘s disability benefits. The court noted that “[t]he loose practice has grown up . . . of saying that a court had no ‘jurisdiction’ to take certain legal action when what is actually meant is that the court had no legal ‘right’ to take the action . . . .” Foster v. Foster, 509 Mich. 109, 124, 983 N.W.2d 373, 381 (2022) amended 509 Mich. 988, 974 N.W.2d 185. The Foster court explained that
“[t]here is a wide difference between a want of jurisdiction, in which сase the court has no power to adjudicate at all, and a mistake in the exercise of undoubted jurisdiction, in which case the action of the trial court is not void although it may be subject to direct attack on appeal. . . .”
509 Mich. at 125, 983 N.W.2d at 381 (quoting Jackson City Bank & Trust Co. v. Fredrick, 271 Mich. 538, 260 N.W. 908 (1935)). It has been observed that failing to distinguish between “the erroneous exercise of jurisdiction” and “the want of jurisdiction”
is a fruitful source of confusion and errancy of decision. In the first case the errors of the trial court can only be corrected by aрpeal or writ of error. In the last case its judgments are void and may be assailed by indirect as well as direct attack.
Id. at 124, 949 N.W.2d at 381 (internal quotation marks omitted).
Alimony.
Kathleen appeals from the order that dismissed her complaint for modification of alimony. As we explained above, the alimony provision in the Decree did not divide preempted federal benefits and is properly understood under the customary Nebraska law of alimony. See Longo v. Longo, 266 Neb. 171, 663 N.W.2d 604 (2003).
[12] The complaint alleged that since entry of the Decree, there has been a substantial change in circumstances that warrants modification of alimony. The Decree provides in part as follows:
P. Special Alimony. [Robert] shall pay as specific alimony to [Kathleen] the sum of $1.00 per year beginning on the first day of the first month following the entry of this Decree and each year thereafter for the life of either party. This alimony shall not terminate upon the remarriage of [Kathleen], but only upon the death of either party. This alimony provision shall be subject to modification only in the circumstance that there be a
disability offset against [Robert‘s] net disposable, nondisability pension and for no other reason.
Nebraska‘s statute for the awarding of alimony,
When dissolution of a marriage is decreed, the court may order payment of such alimony by one party to the other and division of property as may be reasonable, having regard for the circumstances of the parties, duration of the marriage, a history of the contributions to the marriage by each party, including сontributions to the care and education of the children, and interruption of personal careers or educational opportunities, and the ability of the supported party to engage in gainful employment without interfering with the interests of any minor children in the custody of such party.
Section 42-365 also provides the basis for which alimony awards entered pursuant to a consent decree may be modified for good cause. “Good cause” means a material and substantial change in circumstances and depends upon the circumstances of each case. Grothen v. Grothen, 308 Neb. 28, 952 N.W.2d 650 (2020).
The award of alimony in this case is a nominal award that is subject to modification for good cause under the court‘s authority found in
[13] We have previously explained that a trial court may reserve jurisdiction to award alimony in cases where the
while a Nebraska court may not include service-connected disability benefits awarded to a military retiree as a part of a marital estate under Mansell v. Mansell, 490 U.S. 581, 109 S. Ct. 2023, 104 L. Ed. 2d 675 (1989), it may consider such benefits and the corresponding waiver of retirement pension benefits required by federal law in determining whether there has been a material change in circumstances which would justify modification of an alimony award to a former spouse . . . .
252 Neb. at 546, 567 N.W.2d at 113. Any question of the dominion of state courts over alimony was answered by the U.S. Supreme Court in Howell v. Howell, 581 U.S. 214, 222, 137 S. Ct. 1400, 197 L. Ed. 2d 781 (2017), which stated that “a family court, when it first determines the value of a family‘s assets, remains free to take account of the contingency that some military retirement pay might be waived, or . . . take account of reductions in value when it calculates or recalculates the need for spousal support.” See, similarly, Rose v. Rose, 481 U.S. 619, 107 S. Ct. 2029, 95 L. Ed. 2d 599 (1987) (stating that veteran‘s disability benefits can be considered in setting child support).
As in Longo, the Decree in this case required Robert to pay Kathleen nominal alimony, which could be modified upon a change in the nature of Robert‘s future pension benefits. Such an award of alimony under state law merely considers how that award would be affected by future disability or other preempted federal benefits but is not a property division in conflict with Mansell v. Mansell, 490 U.S. 581, 109 S. Ct. 2023, 104 L. Ed. 2d 675 (1989), or Howell v. Howell, supra.
Based on the foregoing, the nominal award of alimony in this case is subject to modification under
The record before us does not contain sufficient evidence of the rеlative current economic circumstances of the parties, and we are unable to resolve the matter of modification of the award of alimony on appeal. Accordingly, we remand the cause to the district court for further proceedings consistent with this opinion. On remand, we instruct the district court to consider Robert‘s military disability benefits to the extent receipt of the benefits affect the relative financial
CONCLUSION
The district court erred as a matter of law when it dismissed Kathleen‘s complaint for modification for lack of subject matter jurisdiction. We reverse, and remand for further proceedings consistent with this opinion.
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.