Supreme Court to hear case on division of retirement, disability pay in military divorces

The U.S. Supreme Court has agreed to consider a case that challenges whether divorce settlements are enforceable if they agree to protect a former spouse’s share of military retirement pay and the amount is later affected by disability compensation. Under federal law, former spouses may receive up to half a service member’s time-based military retirement pay. But medical-based military retirement pay and any Veterans Affairs disability pay is protected and not divisible. In Marschner v. Marschner, which was accepted by the high court earlier this month, Roxane Marschner, who married North Dakota Army National Guard soldier Richard Marschner, is seeking to enforce a clause in her divorce settlement in which Richard agreed to pay her the equivalent of her portion of military retirement pay if any of it was offset by disability compensation. The couple married in 1994 and divorced 22 years later. In their settlement, Roxane was to receive a percentage of Richard’s military and federal civilian benefits when he retired. But Richard later was medically retired as a result of service-connected injuries and received medical retirement pay and VA disability compensation — neither of which is divisible under the Uniformed Services Former Spouses Protection Act. Roxane then took Richard to court, arguing that he had agreed to pay her if she did not receive her share of benefits. The lower court ruled in her favor. Richard then petitioned the North Dakota Supreme Court, which said the provision was unenforceable. Roxane Marschner then asked the U.S. Supreme Court to consider the case, saying that the law and a previous Supreme Court ruling only limited courts from instating provisions that divided disability compensation and did not apply to private agreements negotiated by spouses. She also argued that other states, including Virginia, Illinois, Nevada and Alaska, have allowed enforcement of such agreements, known as indemnification provisions, in divorce settlements, and a decision by the U.S. Supreme Court was necessary to ensure equity across the legal system. Richard Marschner’s attorneys have said the state courts don’t have the authority to divide federally protected benefits and the North Dakota district courts order to Richard to pay Roxane is invalid as a result. Marschner’s attorney, Johanna Clyborne of Minnesota-based Brekke, Clyborne and Ribich, told Military Times that divorce agreements such as the Marschners’ happen “more than people realize” because veterans — and attorneys — often don’t understand federal protections of disability benefits and medical retirement payments. “Congress has spoken on this issue, right, and it is non-divisible. There’s going to be different sorts of interpretations, but Congress thought that the veterans were entitled to disability benefits and basically prioritized, and to allow them to be stripped by a state court in very narrow circumstances is not what was intended,” Clyborne said in an interview. Several previous cases have addressed the division of retirement pay and disability benefits in military divorces. In Howell v. Howell, the Supreme Court ruled in 2017 that state courts cannot require a veteran to compensate his spouse half his retirement pay when he waived a portion of it to receive non-taxable VA disability compensation. The Court has not scheduled a date for Marschner v. Marschner, although the case could be heard as early as January. Clyborne said the case has the potential to affect divorce agreements for veterans who receive Combat-Related Specialty Compensation, Concurrent Retirement Disability Pay and other benefits. “Hopefully it will settle a lot of questions folks have been wrestling with,” Clyborne said.