ROBB, Judge.
Victor Bandini ("Husband") appeals the trial court's order granting the show cause petition filed by JoAnn Bandini ("Wife") in this post-dissolution proceeding. For our review, Husband raises the following consolidated and restated issues: 1) whether the trial court properly concluded the parties' settlement agreement incorporated into the dissolution decree entitles Wife to fifty percent of Husband's gross military retirement pay, including amounts waived by Husband in order to receive Veterans' Administration' ("VA") disability benefits and Combat-Related Special Compensation ("CRSC"); 2) whether the trial court abused its discretion by finding Husband in contempt; and 3) whether the trial court abused its discretion by ordering Husband to pay part of Wife's attorney fees and declining to order Wife to pay part of Husband's attorney fees.
We conclude the parties' settlement agreement contemplates an equal division of Husband's gross military retirement pay, but pursuant to federal law, amounts previously waived by Husband as deductions from gross retirement pay were not properly divisible in the dissolution decree. We further hold that, consistent with Indiana and federal law, a military spouse may not, by a post-decree waiver of retirement pay in favor of disability benefits or CRSC, unilaterally and voluntarily reduce the benefits awarded the former spouse in a dissolution decree. Thus, Husband must compensate Wife for the reduction in her amount of retirement pay caused by Husband's post-decree waiver and election of CRSC. Finally, we conclude the trial court did not abuse its discretion by finding Husband in contempt nor in its award of attorney fees to Wife. Accordingly, we affirm in part, reverse in part, and remand.
The relevant facts are largely undisputed. Husband and Wife married on August 14, 1971. Husband's military career spanned twenty-eight years in the Army and Army Reserve until his discharge in 1995. In 1997, Husband was awarded VA disability benefits for tinnitus and thirty-percent hearing loss. In 2003, Husband applied for additional disability benefits for post-traumatic stress disorder ("PTSD").
Husband and Wife separated on March 22, 2004, and the following day, Husband filed a petition for dissolution of marriage. On March 28, 2005, Husband and Wife filed their settlement agreement, which the
In November 2005, Husband was awarded disability benefits for PTSD. On December 1, 2007, the Defense Finance and Accounting Service ("DFAS") mailed Wife a letter stating she would begin receiving a portion of Husband's retirement pay within ninety days after the date Husband would begin receiving retirement pay. Husband turned sixty years old on January 5, 2008, and thus became eligible to begin receiving retirement pay. In February 2008, Husband received his first payment of retirement pay, without any deduction for Wife's share. DFAS also issued Husband an account statement providing that as of March 3, 2008, his retirement pay would be computed as follows: gross pay of $2,238.00, less VA Waiver of $240.71 and SBP Costs of $145.47, for taxable income of $1,851.82; less federal income tax withheld of $60.15, for net pay of $1,791.67. Exh. E. The "VA Waiver" was a deduction against gross pay for Husband's VA disability benefits, and the "SBP Costs" were a premium for a survivor benefit of which Wife was the beneficiary. On March 3, 2008, DFAS mailed Husband an account statement providing that as of April 1, 2008, his retirement pay would be computed as follows: gross pay of $2,238.00, less VA Waiver of $240.71, SBP Costs of $145.47, and a "former spouse deduction" of $925.91, for net pay of $925.91. Exh. 7. Thus, Wife would begin receiving payments of $925.91, and pursuant to the former spouse deduction, Husband's net pay would also be $925.91.
In March 2008, Husband applied for CRSC, following a change in the law that made Husband eligible for CRSC starting on January 1, 2008. Husband's eligibility for CRSC was based on his "[r]eceiv[ing] VA compensation for combat-related disabilities that result in offset to military retired pay." Exh. 23. On April 1, 2008, Wife received her first payment from DFAS in the amount of $925.91, and received that same amount in each of the following three months. On May 14, 2008, the Army mailed Husband a letter informing him of his initial approval for CRSC for a combat-related disability of sixty percent. On June 11, 2008, DFAS mailed Husband a letter that informed him his CRSC payment would be $921 per month, retroactive to February 2008, and an election form that stated "CRSC is nontaxable and is not subject [sic] the provisions of the Uniformed Services Former Spouse Protection Act." Exh. D. Husband then made an election, on June 24, 2008, to "authorize DFAS to recoup all CRDP [concurrent retirement and disability] payments previous [sic] paid from my retroactive CRSC payment." Id. In effect, in order to receive CRSC, Husband elected to waive a larger amount of his retirement pay than he had previously waived in favor of VA disability benefits.
On July 15, 2008, DFAS mailed Husband an account statement providing that as of August 1, 2008, his retirement pay would be computed as follows: gross pay of $2,249.00, less VA Waiver of $1,006.00, SBP Costs of $146.19, and a former spouse deduction of $548.40, for net pay of $548.41. Thus, as of August 2008, Husband's and Wife's net shares of retirement pay were reduced to $548 each per month. However, Husband began receiving a CRSC payment of $1,006 monthly, as reflected in a CRSC pay statement issued by
On April 23, 2009, Wife filed her petition for rule to show cause, arguing Husband was in contempt for depriving Wife of her share of military retirement pay as divided in the parties' dissolution settlement agreement. Wife argued she was entitled to fifty percent of Husband's "gross military retirement with no VA waivers, no disabilities, [or] anything taken out," transcript at 63, and requested the trial court order Husband to pay her the difference between that amount and the amount payable to her by DFAS. Husband filed a request for specific findings of fact and conclusions of law.
The trial court held an evidentiary hearing and, on December 29, 2009, entered its findings of fact, conclusions of law, and judgment. The trial court found and concluded in relevant part:
Appellant's Appendix at 10-15.
Thus, the trial court entered judgment in favor of Wife for $11,369.71, the arrearage it found Husband owed Wife as of September 2009, calculated as the difference between half of Husband's gross retirement pay up to that point and the amounts of retirement pay received by Wife from DFAS. The trial court also ordered Husband prospectively to "either pay [Wife] 50% of his CSRC [sic] benefit within ten (10) days of his monthly receipt of same, or convert his benefits back to CRDP payments during the next Open Enrollment period offered by DFAS." Id. at 15. In addition, the trial court ordered Husband to pay $3,500 of Wife's $6,466.79 in attorney fees incurred to prosecute the contempt action, and denied Husband's request for attorney fees. Husband now appeals.
Pursuant to Husband's written request, the trial court entered specific findings of fact and conclusions of law. We therefore employ a two-tiered standard of review, first determining whether the evidence supports the findings, and second, whether the findings support the judgment. Mueller v. Karns, 873 N.E.2d 652, 657 (Ind.Ct. App.2007). We will not reverse the trial court's findings and judgment unless they are clearly erroneous. Id. Findings of fact are clearly erroneous where, without reweighing the evidence or judging witness credibility, the record lacks any facts or reasonable inferences from the evidence to support them. Id. The judgment is clearly erroneous when it is unsupported by the findings of fact and conclusions entered on the findings, id., or where it relies upon an incorrect legal standard, Menard Inc. v. Dage-MTI, Inc., 726 N.E.2d 1206, 1210 (Ind.2000). While we defer substantially to findings of fact, we do not do so for conclusions of law, which we review de novo. Mueller, 873 N.E.2d at 657.
Before turning to Husband's claims, we review the pertinent legal background. In Griffin v. Griffin, 872 N.E.2d 653 (Ind.Ct. App.2007), this court explained:
Mansell [], 490 U.S. at 583-584 [109 S.Ct. 2023] (internal citations and footnote omitted).
Id. at 657-58 (footnote and parallel citations omitted).
Legislation creating CRSC as a new type of disability benefit was enacted by Congress and became effective in 2003. The statute governing CRSC provides for a military retiree "who elects benefits under this section" to receive "a monthly amount for the combat-related disability of the retiree." 10 U.S.C. § 1413A(a). Such amount "may not exceed the amount of the reduction in retired pay that is applicable to the retiree for that month under [38 U.S.C. §§ 5304 & 5305]." 10 U.S.C. § 1413A(b)(2). The statute provides that CRSC payments "are not retired pay." 10 U.S.C. § 1413A(g).
Husband argues the trial court erred when it interpreted the parties' property settlement agreement to conclude the parties agreed to evenly split Husband's gross military retirement pay rather than fifty percent of the net or disposable portion of his retirement pay. In general, a dissolution court "retains jurisdiction to interpret the terms of its decree and decide questions emanating from its decree pertaining to its enforcement." Fackler v. Powell, 839 N.E.2d 165, 169 (Ind.2005). "Settlement agreements become binding contracts when incorporated into the dissolution decree and are interpreted according to the general rules for contract construction." Bailey v. Mann, 895 N.E.2d 1215, 1217 (Ind.2008). Unless the terms of a contract are ambiguous, courts will merely apply the terms, giving them their plain and ordinary meaning, and will not construe the contract or look at extrinsic evidence. Overholtzer v. Overholtzer, 884 N.E.2d 358, 361 (Ind.Ct.App. 2008). Terms are ambiguous if a reasonable person would find them subject to more than one interpretation, but are not ambiguous merely because the parties disagree concerning their proper interpretation. Fackler v. Powell, 891 N.E.2d 1091, 1096 (Ind.Ct.App.2008), trans. denied. "Interpretation of a settlement agreement, as with any other contract, presents a question of law and is reviewed de novo." Bailey, 895 N.E.2d at 1217.
Here, the parties' property settlement agreement provided Wife would receive fifty percent of Husband's "USAR military retirement/pension plan by QDRO, including survivor benefits." Exh. 1, at 5. The settlement agreement does not define "military retirement/pension plan" and makes no reference to disability benefits, even though Husband had been awarded VA disability benefits at the time of the agreement. The agreement is likewise silent as to any other amounts deducted from Husband's gross retirement pay. The agreement does not refer to disposable retirement pay or to the limitations on direct payments from the military to a former spouse under the Former Spouses' Protection Act, 10 U.S.C. § 1408. Neither is there any reference to anything outside of the agreement as controlling the meaning of the term "military retirement/pension plan." Accordingly, this term is not ambiguous, and we give it its plain and ordinary meaning without looking to extrinsic evidence.
The term "military retirement/pension plan" is broad and refers to Husband's retirement benefits as one unit. In the absence of any limiting language, we conclude this term encompasses Husband's gross retirement pay, before any deductions for SBP costs or amounts waived to receive VA disability benefits. See Allen v. Allen, 178 Md.App. 145, 941 A.2d 510, 516 (Md.Ct.Spec.App.2008) (concluding
Husband argues that even if the trial court was correct, as we have concluded it was, to interpret the parties' settlement agreement as referring to an equal division of Husband's gross rather than net or disposable retirement pay, the trial court still erred by ordering Husband to pay Wife half of his gross retirement pay, including amounts waived by Husband in order to receive VA disability benefits and CRSC or deducted from gross retirement pay as SBP costs. For the reasons stated below, we agree with Husband as regards his pre-decree waivers and deductions from retirement pay but disagree as regards his post-decree waiver and election of CRSC benefits.
The U.S. Supreme Court in Mansell addressed a pre-decree waiver and held that state courts may not "treat as property divisible upon divorce military retirement pay that has been waived to receive veterans' disability benefits." 490 U.S. at 594-95, 109 S.Ct. 2023. Mansell involved a property settlement agreement, and the lower court judgment that Mansell reversed affirmed a denial of a request to modify the dissolution decree incorporating that settlement. Id. at 585-86, 109 S.Ct. 2023. Mansell also held more broadly that pursuant to the Former Spouses' Protection Act, 10 U.S.C. § 1408, state courts may treat "disposable retired pay" but not "total retired pay" as property divisible upon divorce. Mansell, 490 U.S. at 589, 109 S.Ct. 2023.
In Griffin, this court applied Mansell's holding to a post-dissolution contempt petition
Pursuant to Mansell and Griffin, Indiana trial courts lack authority to enforce even an agreed-upon division of property insofar as it divides amounts of gross military retirement pay that were, previously to the decree, waived to receive disability benefits or elected to be deducted from gross pay as SBP costs to benefit the former spouse. Here, the trial court ordered Husband to pay Wife an amount equal to half of his gross retirement pay, prior to any deductions for his VA waiver and SBP costs. This was error because Husband's election to receive VA disability benefits, as well as his election of a SBP annuity of which Wife was the beneficiary, preceded the parties' dissolution decree.
The question of post-decree waivers of retirement pay was not addressed in Griffin, where this court explicitly reserved the issue of whether, in future cases, "equitable remedies" could be used to "prevent a spouse from unilaterally and voluntarily diminishing," by a post-decree waiver of retirement pay, "military retirement benefits awarded to the other spouse in the dissolution decree." 872 N.E.2d at 658 n. 2. This court noted the "majority view" holding in the affirmative, but because "neither party raised or briefed this issue,"
Initially we note that a number of states' courts have concluded Mansell and the Former Spouses' Protection Act do not preclude state courts from requiring a military spouse to compensate a former spouse when the latter's share of retirement pay is reduced by the military spouse's unilateral post-dissolution waiver of retirement pay in favor of disability benefits. E.g., In re Marriage of Krempin, 70 Cal.App.4th 1008, 83 Cal.Rptr.2d 134, 143 (1999); In re Marriage of Warkocz, 141 P.3d 926, 929-30 (Colo.Ct.App. 2006); Black v. Black, 842 A.2d 1280, 1285 (Me.2004); Shelton v. Shelton, 119 Nev. 492, 78 P.3d 507, 509-10 (2003); Whitfield v. Whitfield, 373 N.J.Super. 573, 862 A.2d 1187, 1192 (2004); Hadrych v. Hadrych, 140 N.M. 829, 149 P.3d 593, 597 (N.M.Ct. App.2006); Resare v. Resare, 908 A.2d 1006, 1009-10 (R.I.2006).
Further, Indiana law prohibits Husband's election of CRSC from defeating the finality of the dissolution decree and the intent of the parties' settlement agreement incorporated therein. The parties' agreement provided that "[n]o modification or waiver of any of the terms of this Agreement shall be valid, unless in writing and executed by both parties hereto." Exh. 1, at 7. However, by reducing the amount of retirement pay Wife was receiving, and was permitted to receive, directly from DFAS, Husband's election upset the delicate balance of property rights in which Wife acquired a vested interest when the agreement was incorporated into the final dissolution decree. See Dusenberry v. Dusenberry, 625 N.E.2d 458, 461 (Ind.Ct.App. 1993) (noting a partial modification of a property settlement agreement will likely upset the entire division of property, in which both assets and liabilities must be considered, and cause an inequitable result); see also Ind.Code §§ 31-15-2-17, 31-15-7-9.1 (providing that a final division of marital property may not be modified, except as prescribed by the agreement itself or subsequent consent of the
For the foregoing reasons, we hold that a military spouse may not, by a post-decree waiver of retirement pay in favor of disability benefits or CRSC, unilaterally and voluntarily reduce the benefits awarded the former spouse in a dissolution decree. The trial court properly ordered Husband to compensate Wife for the reduction in her share of retirement pay caused by his March 2008 election of CRSC, a reduction that became effective in July 2008.
Husband argues the trial court abused its discretion by finding him in contempt. The trial court's finding regarding whether a party is in contempt is a matter within the trial court's discretion and will be reversed only for an abuse of discretion. Williamson v. Creamer, 722 N.E.2d 863, 865 (Ind.Ct.App.2000). When reviewing a contempt order, we neither reweigh the evidence nor judge the credibility of witnesses, and we consider only the evidence and reasonable inferences supporting the trial court's judgment. Id.
"In order to be held in contempt for failing to comply with a court order, a party must have willfully disobeyed the order." Deel v. Deel, 909 N.E.2d 1028, 1032 (Ind.Ct.App.2009). "The order must have been so clear and certain that there could be no question as to what the party must do, or not do, and so there could be no question regarding whether the order is violated." Id. (quotation omitted). "A party may not be held in contempt for failing to comply with an ambiguous
Here, the trial court's basis for finding Husband in contempt was his failure to pay Wife any part of his military retirement pay for February and March 2008, the time in between when Husband began receiving retirement pay and when PFAS began deducting amounts from Husband's retirement pay and issuing corresponding checks to Wife.
Husband argues that at the hearing on the show cause petition, "Wife's counsel made a binding judicial admission that Husband complied with his obligations under the Decree from February 2008 through July or August 2008." Brief of Appellant at 41. Wife's counsel stated the following in opening argument:
Tr. at 15. Generally, counsel's opening statement is not evidence; rather, it acquaints the court with the facts counsel intends to prove. Luphahla v. Marion County Sheriff's Dep't, 868 N.E.2d 1155, 1158-59 (Ind.Ct.App.2007). However, a clear and unequivocal admission of fact, or a formal stipulation that concedes any element of a claim or defense, is a binding judicial admission. Id. at 1159. Husband relies upon this court's recent decision in Heyser v. Noble Roman's, Inc., 933 N.E.2d 16
Husband challenges the trial court's award of attorney fees to Wife and denial of his request for attorney fees. Pursuant to statute, a trial court "may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding" under the article governing dissolution of marriage, including attorney fees. Ind.Code § 31-15-10-1. The trial court's decision to grant or deny attorney fees under this statutory provision will not be disturbed absent an abuse of discretion. Stratton v. Stratton, 834 N.E.2d 1146, 1152 (Ind.Ct.App.2005). An abuse of discretion occurs where the trial court's decision is clearly against the logic and effect of the facts and circumstances before the trial court. Daugherty v. Daugherty, 816 N.E.2d 1180, 1187 (Ind.Ct. App.2004).
Husband does not dispute that the trial court's award of attorney fees to Wife is supported by its finding Husband in contempt. See Appellant's App. at 16 ("This Court, having found [Husband] in contempt for violation of the Decree, now awards attorney fees to [Wife]...."). Because we have concluded the trial court did not abuse its discretion by finding Husband in contempt, we also conclude the trial court did not abuse its discretion in its award of attorney fees to Wife and denial of Husband's request for attorney fees.
The trial court's judgment is affirmed insofar as it requires Husband to compensate Wife for the reduction in her share of retirement pay caused by his post-decree election of CRSC, but is reversed insofar as it divides those amounts of Husband's gross retirement pay that are required to be deducted as SBP costs or were, previous to the decree, waived to receive VA disability benefits. Because Husband does not challenge the trial court's order that he pay Wife her share of retirement pay, so calculated, for February and March 2008, and because the trial court did not abuse its discretion by finding Husband in contempt nor in its award of attorney fees to Wife, the judgment is affirmed in all other respects and this cause remanded for entry of an order consistent with this opinion.
Affirmed in part, reversed in part, and remanded.
MAY, J., and VAIDIK, J., concur.