DIVORCE AND MILITARY DISABILTY RETIREMENT PAY

 BC v. MC, 2022 NY Slip Op 22266 - NY: Supreme Court, Richmond 2022:

"Defendant seeks an Order directing that the Plaintiff's military disability retirement pay, and VA financial compensation are subject to equitable distribution for the purpose of calculating offsets to Plaintiff's interest in Defendant's retirement assets.

Defendant provided NYSCEF Document No. 185, Motion Sequence #005, an exhibit entitled, "Findings of Medical Evaluation Board." This document describes in specific detail the extent of the Plaintiff's disability and the Coast Guard's determination to grant "Permanent Disability Retirement." In NYSCEF Document No. 189, Defendant further espouses his perceived seriousness of the Plaintiff's disability and seeks this court to order an immediate change in the legal and physical custody of the parties' children.

Based upon the credible evidence provided to the Court, Plaintiff has medical issues that have rendered her permanently disabled, entitling her to disability retirement benefits from the United States Coast Guard. This finding is acknowledged by the Defendant. This is not an instance where a party to a matrimonial action sought retirement benefits calculated on the percentage of a disability in lieu of calculation of years of service, to simply shelter assets from the grasp of a spouse.

Defendant exhibit NYSCEF Document No. 185, a Coast Guard memorandum to the Plaintiff dated January 7, 2021, states, "The Commander, Coast Guard Personnel Service Center, approved the findings of the Informal Physical Evaluation Board that your [Plaintiff's] current conditions are unfitting and that you shall be permanently retired with a 70% disability rating . . ."

"Department of Defense Financial Management Regulation, Volume 7B . . . addresses and explains the retired pay system[.] Pursuant to § 290701(C)(5) if the percentage of disability is chosen, then it is not part of disposable retirement pay. (see also Defendant's Memorandum of Law, NYSCEF Document No. 183).

The Uniformed Services Former Spouse's Protection Act (10 USC § 1408(a)(4)(iii)) defines disposable retired pay as "the total monthly retired pay to which a member is entitled less amounts which in the case of a member entitled to retired pay under chapter 61 of this title [10 USCS §§ 1201 et seq.], are equal to the amount of retired pay of the member under that chapter computed using the percentage of the member's disability on the date when the member was retired (or the date on which the member's name was placed on the temporary disability retired list)."

In 1982 Congress passed "the Uniformed Services Former Spouses' Protection Act, 10 U.S.C. §1408. Congress wrote that a State may treat veterans' "disposable retired pay" as divisible property, i.e., community property divisible upon divorce. However, the new Act expressly excluded from its definition of "disposable retired pay" amounts deducted from that pay "as a result of a waiver . . . required by law in order to receive" disability benefits." (see Howell v Howell, 137 S Ct 1400 [United States Supreme Court 2017]).

The Appellate Division, Second Department, has not yet ruled regarding veteran's disability retirement pay or VA financial compensation as subject to equitable distribution. Nevertheless, the issue has been addressed to the same result by the Appellate Division, Third Department and the Appellate Division, Fourth Department. In the absence of contradictory Second Department precedent, the Third and Fourth Department holdings are binding on this Court. (see Mountain View Coach Lines, Inc. v Storms, 102 AD2d 663 [2d Dept 1984]).

The Third Department acknowledged "that a court in an action for divorce or separation cannot order as spousal maintenance the allocation of compensation received by a veteran derived from military pay waived in order for the retiree to receive veterans' disability benefits." (see Hoskins v Skojec, 265 AD2d 706 [3d Dept 1999]; Mills v Mills, 22 AD3d 1003 [3d Dept 2005]).

VA benefits are awarded based solely on a disability that has resulted from injury or disease contracted in the line of duty and as such these benefits are separate property and are "not subject to equitable distribution[.]" (see Murphy v Murphy, 126 AD3d 1443 [4th Dept 2015]).

Congress has chosen in its legislative discretion to omit disability income from the definition of disposable income in the Uniformed Services Former Spouse's Protection Act. This court will not find an inclusion where Congress has in its prerogative chosen not to include one.

Based upon the foregoing, Defendant's request for an Order determining that the Plaintiff's military disability retirement pay, and VA financial compensation are subject to equitable distribution for the purpose of calculating offsets to Plaintiff's interest in Defendant's retirement assets is DENIED."