Wednesday, September 28, 2016
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C.A. Rejects Veteran’s Bid to Deny Payments to Ex-Spouse
Panel Says His Decision to Take Combat Benefits Instead of Pension Did Not Relieve Him of Agreed Obligation
By KENNETH OFGANG, Staff Writer
A military retiree’s election to receive special compensation offered to combat veterans did not relieve him of the obligation to pay his ex-wife an agreed upon sum for her share of his previously earned retirement benefits, the Third District Court of Appeal ruled yesterday.
The court affirmed Sacramento Superior Court Judge Steven M. Gevercer’s ruling that Philip K. Chapman must continue to pay ex-wife Judy Kay Chapman $475 per month, as set forth in the parties’ marital settlement agreement and divorce judgment.
The panel did, however, reverse Gevercer’s imposition of a constructive trust in order to secure the payment. Because a constructive trust is a remedy for misconduct, and there was no misconduct in making an election that Chapman was entitled to make, the court said the case will be remanded and the trial judge may grant additional equitable relief in order to protect the ex-wife’s right to the payments.
Philip Chapman served in the Navy from July 1971 to July 1991, including in the Vietnam War and the Persian Gulf War. He and his wife separated in 1991 after 17 years of marriage.
They settled their divorce in 2003, with Judy Chapman agreeing to take the $475 per month as her share of the military retirement benefits and waiving any interest in her husband’s “social security and disability accounts” and “[a]ny and all work related benefits.”
Special Compensation
Philip Chapman was subsequently found eligible by the Department of Veterans Affairs for combat-related special compensation benefits in lieu of his military retirement benefits, as he had been diagnosed with posttraumatic stress disorder because of his active combat roles. The benefit amount was the same, however the special benefits were tax-free.
He continued the $475 monthly disbursements to his ex-wife until March 2014, after which she sought a court order compelling him to reinstate the payments. Gevercer ruled that it was the intent of the parties when they made the agreement that the amount be paid regardless of any voluntary act of the ex-husband to change the characterization of the benefits.
Imposition of a constructive trust, he said, was appropriate “in order to remedy the monthly financial impact on [the ex-wife] of [the ex-husband’s] post-judgment election to receive disability benefits in lieu of military retirement.”
C.A. Opinion
Justice Ronald Robie, writing for the Court of Appeal, said the court had “no disagreement” with the argument that the special benefits were not “retired pay,” but that this did not dispose of the issue.
“The problem for Philip…is that his unilateral election of combat-related special compensation benefits could not defeat Judy’s community property interest set forth in the marital settlement agreement,” the jurist wrote.
The justice cited In re Marriage of Gillmore (1981) 29 Cal.3d 418, holding that a former wife who had been awarded a community property share of her ex-husband’s pension benefits was entitled to receive the money when the ex-husband reached retirement age, even if he decided to continue working. The court said he had no right to unilaterally defeat her community property interest, as would have been the case under the trial court’s ruling that she was not entitled to collect until he actually retired.
Nothing in federal law compels a different result with respect to military benefits, Robie added.
Attorneys on appeal in In re Marriage of Chapman, 16 S.O.S. 4836, were Steven K. Yoda and Christopher C. Melcher of Walzer Melcher in Woodland Hills for the ex-husband and Michael R. Locks of Rancho Cordova for the ex-wife.
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