ROBERT C.O. GROSS Appellant,
v.
DAWN ALEXIA WILSON, Appellee.
Appeal
from the Superior Court No. 1JU-12-00783 CI of the State of
Alaska, First Judicial District, Juneau, Louis J. Menendez,
Judge.
Joseph
W. Geldhof, Law Office of Joseph W. Geldhof, Juneau, for
Appellant.
Dawn
Alexia Wilson, pro se, Juneau, Appellee.
Before: Stowers, Chief Justice, Winfree, Maassen, Bolger, and
Carney, Justices.
OPINION
STOWERS, CHIEF JUSTICE.
I.
INTRODUCTION
Robert
Gross and Dawn Wilson married in August 1992, and Gross filed
for divorce in August 2012. The parties resolved the issues
raised in the divorce action in a written settlement
agreement incorporated into a divorce decree in March 2014.
The final agreement provided that Wilson was to receive an
amount equal to 50% of the military retirement and Veterans
Administration (VA) disability pay that Gross received for
his service in the United States Coast Guard (USCG). A little
over a year later Gross reduced his monthly payment to Wilson
by an amount equal to 50% of his disability payments, and
Wilson filed a motion for enforcement of the terms of the
settlement agreement. Gross opposed the motion, arguing that
the Uniformed Services Former Spouses' Protection Act
(USFSPA)[1] exempts VA payments from allocation during
divorce as marital property; he also argued that he had
misunderstood the agreement. The superior court ordered Gross
to resume payments pursuant to the agreement and to pay
arrearages. Gross appeals. We affirm the superior court's
order because Gross had no procedural basis for bringing a
collateral attack on his divorce decree.
II.
FACTS AND PROCEEDINGS
A.
Facts
Gross
enlisted in the USCG in February 1987. Gross and Wilson
married in August 1992, and they have four children. Gross
filed for divorce in August 2012. In a November 2013 hearing
before a magistrate, after a full day of mediation with
retired Superior Court Judge Patricia A. Collins, the parties
and their attorneys reached an agreement; both attorneys and
Judge Collins described on record how the parties planned to
address Gross's military retirement benefits. Both
attorneys explained that Gross's retirement payments,
including disability payments, would be divided 50/50 between
the parties. Judge Collins also articulated the parties'
understanding and agreement:
[T]he final language of the agreement that the parties
anticipate submitting to the court will provide that, in the
future, should Mr. Gross elect to take any action that might
reduce what would otherwise be retirement benefits for which
Ms. Wilson would have a claim, he will be responsible for
reimbursing her. As Your Honor may know, disability payments
are viewed as separate, not marital property, by the federal
government; but [the] divorce court, in its equitable
jurisdiction, can ensure that there's fairness. The
parties today tried to reach a fair result, such that they
have, in essence, agreed to divide the retirement, which
includes disability, which is received in lieu of what would
have otherwise been retirement, on a 50-50 basis.
At a
second hearing, held in December 2013, Gross indicated
through his attorney that he was prepared to go forward as
long as the property settlement agreement reached with Judge
Collins's assistance in November was not reopened. When
Gross was given an opportunity to comment, he responded,
"I'm good."
The
court issued a Judgment and Decree of Divorce in March 2014.
The divorce decree incorporated the parties' Child
Custody, Child Support and Property Settlement Agreement
signed on the same day. When the settlement agreement was
placed on the record, both Gross and Wilson testified that
they were familiar with the terms of the agreement and were
satisfied with it. Paragraph 11 of the settlement agreement
required Gross to pay Wilson $888.22 per month based on his
USCG retirement program:
[Wilson] shall receive 50% of the total USCG military
retirement monthly pay (sometimes referred to as the
aggregate of the retirement and disability pay) that [Gross]
receives from the USCG after the SBP premium for the survivor
benefit covering [Wilson] has been paid .... The parties
understand that the USCG will directly pay [Wilson] 50% of
what it defines as the "disposable retirement pay
(DRP)." However, this DRP figure does not include the VA
compensation/disability monies received by [Gross]. [Gross]
therefore agrees to pay to [Wilson] on the first day of each
and every month throughout his lifetime an amount, over and
above the 50% portion of the DRP paid to her by the USCG,
sufficient to accomplish [Wilson's] receipt of fifty
percent (50%) of the total USCG monthly military retirement
pay (including the VA Comp. and/ or disability portions)
reduced only by payment of the SBP premium. ... If [Gross] or
the USCG does anything that results in a reduction of
[Wilson's] above-described share of the military
retirement, [Gross] will reimburse [Wilson] for the
reduction.[2]
B.
Proceedings
In May
2015 Wilson, now proceeding pro se, filed a motion for
enforcement of the terms of the March 2014 settlement
agreement. She stated that Gross had made appropriate
retirement payments pursuant to the parties' settlement
agreement until May 2015, but that he then unilaterally
reduced the amount of monthly retirement benefits by $170,
citing statutes pertaining to the division of disability pay.
Gross opposed the motion and filed a cross-motion for an
order denying enforcement of the "claim" for
disability, stating that it would be a violation of the
USFSPA because that statute "exempts [VA] payments from
allocation during divorce as marital property." Gross
also attached an affidavit declaring that he did not know how
paragraph 11 was included in the settlement agreement and
that he had not understood the settlement agreement to divide
disability payments.
The
court referred the cross-motions to a superior court special
master. Neither party requested an evidentiary hearing, and
after oral argument the master issued his report and
recommendation to the superior court. The master recommended
that Wilson's motion be granted and Gross's denied.
Gross filed objections to the report, and the superior court
issued an order granting Wilson's motion to enforce.
First,
the superior court found that "[n]owhere in
[Wilson's] motion or in the record of the case is it
stated [Gross] was required to make payments from his
disability retirement pay to [Wilson]." The court
explained that what it "understood from what is
contained in the record of the hearings ... is that the
parties negotiated a settlement agreement that did not
include [Gross's] disability retirement pay as a direct
source for [Gross's] monthly payments to [Wilson]."
The court also found there was no order directing that the
USCG pay Wilson from Gross's disability pay, nor was
there any statement that Wilson was to receive any portion of
Gross's disability pay. The court reasoned that
Gross's aggregate disability and retirement pay was but a
means through which the parties arrived at a fair payment
amount as part of what they agreed was a fair and equitable
allocation of assets and debt.
Second,
the superior court found that the United States Supreme
Court's decision in Mansell v. Manse[3] regarding
the USFSPA and our decision in Clauson v.
Clauson[4] did not preclude enforcement of the
retirement provision in the parties' settlement
agreement. While acknowledging that those cases hold that
state courts do not have any power to "equitably divide
veterans' disability benefits received in place of waived
retirement pay, "[5] the court reasoned that the master's
recommendation simply enforced a contractual obligation
requiring Gross to pay Wilson a specific amount from any of
his resources. Moreover, the court concluded that, even if
the payments originated from Gross's disability pay,
nothing in the USFSPA or Mansell prevents a veteran
from voluntarily contracting to pay a former spouse a sum of
money that may originate from disability payments.
Third,
the court found Gross's assertions that he was taken by
surprise when he learned the contents of paragraph 11
"both hard to accept and inconsistent with the
settlement agreement," on-record affirmations by the
parties, clear statements by both counsel and Judge Collins
at the November 2013 hearing, and Gross's attorney's
reaffirmation of the settlement agreement at the December
2013 hearing. Thus, the court concluded that Gross was well
aware of the contents of paragraph 11, including its
indemnification provision requiring him to reimburse Wilson
if he took any action that would reduce payments to Wilson.
Finally,
the court noted that Gross had offered no basis under Alaska
Civil Rule 60(b) for bringing a collateral attack seeking to
set aside the property settlement more than a year after it
was filed and after both parties testified affirming the
agreement. The superior court ordered Gross to resume monthly
payments to Wilson pursuant to the agreement, and it ordered
the parties to submit further briefing on the amount of
arrearages owed to Wilson. Gross appeals.
III.
STANDARD OF REVIEW
We
review a trial court's response to a motion to enforce a
divorce decree, as well as most decisions on a request for
relief from final judgments, under the abuse of discretion
standard.[6] "We will find an abuse of discretion
only if the trial court's decision was 'manifestly
unreasonable.' "[7] However, we review de novo whether a
party is entitled to relief from judgment under Alaska Civil
Rule 60(b)(4) "because the validity of a judgment is
strictly a question of law."[8] "[T]he intent of the
parties when entering a contract is a question of fact and is
thus reviewed under the clearly erroneous
standard."[9] But "[w]e review a trial court's
rulings on questions of law, and the application of law to
fact, de novo and adopt the rule of law that is most
persuasive in light of precedent, reason, and
policy."[10]
IV.
DISCUSSION
The
USFSPA governs how state courts may treat military retirement
and disability payments received by veterans.[11] The statute
was passed in response to the Supreme Court's decision in
McCarty v. McCarty, which held that federal statutes
then governing military retirement pay prevented state courts
from treating military retirement pay as community
property.[12] The USFSPA grants some, but not all,
power back to the states, and it provides that a state may
treat as community property, and divide at divorce, a
military veteran's disposable retirement
pay.[13] But the act exempts from this grant of
authority any amount the government deducts as a result of a
waiver that the veteran must make to receive disability
benefits.[14] In other words, an eligible veteran can
voluntarily shift a portion of retirement pay to disability
pay, and this portion is not divisible upon divorce. Because
disability pay, in contrast to retirement pay, is not taxed,
[15]
many veterans choose to do so.[16] Gross was receiving
nondivisible disability benefits from the VA at the time of
his divorce.
In
Mansell v. Mansell the Supreme Court held that "the
[USFSPA] does not grant state courts the power to treat as
property divisible upon divorce military retirement pay that
has been waived to receive veterans' disability
benefits."[17] We applied Mansell in
Clauson v. Clauson, holding that "state courts
[do not] have any power ... to equitably divide veterans'
disability benefits received in place of waived retirement
pay."[18] But we subsequently held that superior
courts are permitted to order indemnification for any
reduction caused by a service member in divisible retirement
payments to a former spouse, such as a reduction due to
voluntary waiver of retirement pay in exchange for disability
pay.[19]
Gross
argues that the superior court's decision ordering him to
pay Wilson a portion of his disability payments was erroneous
for three reasons. First, he did not believe he was agreeing
to divide his disability payments or indemnify Wilson for a
reduction in payments caused by something other than waiving
retirement benefits in exchange for disability benefits.
Second, the USFSPA precluded the court's division of
disability payments in his divorce, and the division of those
payments is therefore unenforceable. And third, the superior
court was allowed to require indemnification only for a
reduction in Wilson's portion of his retirement pay
caused by voluntarily waiving retirement pay in exchange for
disability benefits, which he did not do.
Gross
does not address the superior court's conclusion that he
had no procedural basis under Rule 60(b) for seeking to set
aside the settlement agreement. Because we find no legal or
factual error or abuse of discretion in the superior
court's reasoning on this issue, we affirm the
court's enforcement order.
A.
The Superior Court Did Not Abuse Its Discretion By Denying
Gross's Cross-Motion To Deny Enforcement.
In a
divorce proceeding where marital property has been divided, a
divorce decree incorporating a property division constitutes
a final judgment.[20] "Other than a Civil Rule 77(k)
motion for reconsideration, which must be made within ten
days of the court's order, an Alaska Civil Rule 60(b)
motion provides the only available means for seeking relief
from a final judgment of property
division."[21] In this case Gross filed a
"cross-motion for order denying enforcement of claim for
disability payments," which the superior court treated
as a Rule 60(b) motion for relief. Because a Rule 60(b)
motion was the only available means for seeking relief from
the property division, the superior court was correct in
doing so. Rule 60(b) permits relief only for specified
reasons:
(1) mistake, inadvertence, surprise or excusable neglect;
(2) newly discovered evidence which by due diligence could
not have been discovered in time to move for a new trial
under Rule 59(b);
(3) fraud (whether heretofore denominated intrinsic or
extrinsic), misrepresentation, or other misconduct of an
adverse party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged,
or a prior judgment upon which it is based has been reversed
or otherwise vacated, or it is no longer equitable that the
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