IN THE COURT OF APPEALS OF TENNESSEE
WESTERN SECTION AT JACKSON
GLORIA F. STANLEY GILLILAND, )
)
Plaintiff/Appellee, ) Tipton General Sessions No. 3258
)
VS. ) Appeal No. 02A01-9603-GS-00056
)
GARY DON STANLEY, )
)
Defendant/Appellant. )
APPEAL FROM THE GENERAL SESSIONS COURT OF TIPTON COUNTY
AT COVINGTON, TENNESSEE
THE HONORABLE WILLIAM A. PEELER, JUDGE
FILED
April 16, 1997
JEFFERY L. STIMPSON Cecil Crowson, Jr.
Appellate C ourt Clerk
Munford, Tennessee
Attorney for Appellant
JOHN R. BRANSON
BRANSON & BEARMAN
Memphis, Tennessee
Attorney for Appellee
AFFIRMED
ALAN E. HIGHERS, J.
CONCUR:
W. FRANK CRAWFORD, P.J., W.S.
DAVID R. FARMER, J.
Defendant Gary Don Stanley (the Husband) appeals the trial court’s order enforcing
the provisions of a final divorce decree previously entered by the court in July 1989. In
enforcing the decree, the trial court ordered the Husband to make payments to Plaintiff
Gloria F. Stanley Gilliland (the Wife) for her share of the proceeds from the sale of the
parties’ real property in Douglassville, Texas. The Wife cross-appeals, contending that the
trial court erred in refusing to increase the Wife’s interest in the Husband’s military
retirement benefits. For the reasons hereinafter stated, we affirm the trial court’s judgment.
As pertinent, the final divorce decree provided that the Wife “shall remain an equal
tenant in common in [the parties’] real property located in Douglassville, Texas.” In the
event the property was sold, the final decree entitled the Wife to “one-fourth (1/4) of the net
proceeds” from such sale. The final decree also ordered the Husband “to pay by allotment
to [the Wife] THIRTY FIVE PERCENT (35%) of his retirement benefits from the military
when the same vests as long as [the Husband receives] the same.”
After the parties’ divorce became final, the Husband took two actions which affected
the equitable distribution scheme of the final divorce decree. First, the Husband signed
a power of attorney which authorized his parents, who owned a one-half interest in the
Texas property, to sell, lease, or otherwise dispose of the property. After obtaining the
power of attorney, the Husband’s parents proceeded to enter into a Lease with Option to
Purchase contract with a third party. Under the terms of the lease, the lessees were
required to pay $700 for the option, plus a monthly rental of $200. If the lessees elected
to purchase the property for a total price of $22,500, all monthly rents previously paid
would be applied toward the purchase price.
The second action taken by the Husband affected the Wife’s interest in the
Husband’s military retirement benefits. When the Husband retired in 1990, the Wife began
receiving her share of the retirement benefits in accordance with the final divorce decree.
Subsequently, however, the Husband caused his military retirement benefits to be
decreased when he elected to waive a portion of the retirement pay so that he instead
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could receive Veteran’s Administration disability payments. While this election may have
provided the Husband with certain tax benefits,1 the decrease in the Husband’s military
retirement benefits resulted in a corresponding reduction in the amount of retirement
benefits being paid to the Wife as her division of marital property.
When the Wife discovered the Husband’s actions, she filed a petition for writ of scire
facias and complaint for damages in the trial court, seeking to enforce the provisions of the
final divorce decree. After conducting an evidentiary hearing, the trial court found the
Lease with Option to Purchase contract to be a de facto sales contract which effected a
“sale of the property and/or totally frustrat[ed] the intention of the [prior] orders of the court.”
Accordingly, the trial court awarded the Wife a judgment for her one-fourth interest in the
proceeds from the sale of the Texas property, in the total amount of $775, which included
one-fourth of the original option price plus $50 per month since the date of the contract.
The trial court also ordered the Husband to begin paying to the Wife the sum of $50 per
month “as and for her share of the proceeds on said property” for so long as the contract
remained in effect. As for the reduction in the Husband’s military retirement benefits, the
trial court denied the relief sought by the Wife, finding the action taken by the Husband “to
be within the rights of [the Husband], as set [forth] in 10 U.S.C. Section 1408, and 38
U.S.C. Section 3105, as interpreted by the U.S. Supreme Court in its decision [in] Mansell
v. Mansell, [490 U.S. 581, 109 S. Ct. 2023, 104 L. Ed. 2d 675 (1989)].”
On appeal, the Husband contends that the trial court erred in awarding the Wife a
judgment for her interest in the Texas property because the court did not have jurisdiction
or authority to affect title to foreign property or to construe any conveyance of such land.
On cross-appeal, the Wife contends that the trial court erred in ruling that it lacked the
1
In Mansell v. M ansell, 490 U.S. 581 (1989), the Un ited Sta tes Suprem e C ourt explained why a
military retiree might make such an election:
In order to prevent double dipping, a m ilitary retiree may receive
disability benefits only to the extent that he waives a corresponding amount
of his m ilitary retirem ent p ay. [38 U .S.C . § 3105 (1 982 ed. & Sup p. V)].
Because disability benefits are exempt from federal, state, and local
taxation, [38 U .S.C . § 3101(a) (1982 ed. & Supp. V)], military retirees who
waive their retirement pay in favor of disability benefits increase their after-
tax income. Not surprisingly, waivers of retirement pay are comm on.
Mansell, 490 U.S. at 583-84 (foo tnote om itted).
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authority to increase the percentage of the Wife’s interest in the Husband’s military
retirement benefits after the Husband converted a portion of the retirement benefits to
disability payments.
I. The Douglassville, Texas, Property
Contrary to the Husband’s contention on appeal, the trial court did not lack
jurisdiction to enter a judgment affecting title to the parties’ real property in Texas. It is true
that “a court of one state is without jurisdiction to pass title to lands lying wholly in another
state” and, thus, that “[t]he local court cannot by its decree bind [such] land.” Cory v.
Olmstead, 290 S.W. 31, 32 (Tenn. 1926). The law is equally well-established, however,
that, “in a proper case, with the necessary parties before the court, a decree in personam
may be properly passed requiring a party defendant holding the legal title in trust, or
otherwise, to transfer such title in accordance with the decree of the court.” Id. As the
Supreme Court of Tennessee has explained:
In such case, although the court cannot bind the land itself by
the decree, it can bind the conscience of the party in regard to
the land, and enforce him, by process against his person, to
perform his agreement. But the decree is merely in personam,
and not in rem. Still, the want of power to act upon the land,
or to enforce the decree in rem, is no objection to the
jurisdiction to act upon the person, . . . .
Id. (quoting Johnson v. Kimbro, 40 Tenn. (3 Head) 557, 559 (1859)); accord Boals v. Boals,
519 S.W.2d 594, 597 (Tenn. App. 1973).
In the present case, the trial court’s order did not attempt to pass title to the parties’
real property in Texas. Instead, the court’s order simply enforced against the Husband the
provisions of the final divorce decree which entitled the Wife, in the event of a sale of the
real property, to one-fourth of the proceeds. Significantly, the Husband has not contended
that the trial court lacked personal jurisdiction over him, or that the court lacked subject
matter jurisdiction over the proceedings to enforce the final divorce decree. We conclude,
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therefore, that the trial court had jurisdiction to enter an order binding the Husband to pay
to the Wife a portion of the proceeds from the de facto sale of the property.2
II. The Husband’s Military Retirement Benefits
We also affirm the trial court’s refusal to increase the Wife’s interest in the
Husband’s military retirement benefits. In Mansell v. Mansell, 490 U.S. 581, 594-95
(1989), the United States Supreme Court held that, under the Former Spouses’ Protection
Act,3 state courts do not have “the power to treat as property divisible upon divorce military
retirement pay that has been waived to receive veterans’ disability benefits.” In so holding,
the Court explained:
Section 1408(c)(1) of the [Former Spouses’ Protection] Act
affirmatively grants state courts the power to divide military
retirement pay, yet its language is both precise and limited. It
provides that “a court may treat disposable retired or retainer
pay . . . either as property solely of the member or as property
of the member and his spouse in accordance with the law of
the jurisdiction of such court.” [10 U.S.C. § 1408(c)(1) (1982
ed. & Supp. V)]. The Act’s definitional section specifically
defines the term “disposable retired or retainer pay” to exclude,
inter alia, military retirement pay waived in order to receive
veterans’ disability payments. [10 U.S.C. § 1408(a)(4)(B)
(1982 ed. & Supp. V)]. Thus, under the Act’s plain and precise
language, state courts have been granted the authority to treat
disposable retired pay as community property; they have not
2
On app eal, the Husba nd h as n ot challenged the trial court’s ruling that the Le ase with O ption to
Purchase con tract was a de facto sales contract. (Husband’s brief, pp. 1-14). The only possible basis for
reversal, there fore, is the H usb and ’s jurisd iction argum ent, which we have co ncluded is without m erit.
(Husband’s brief, pp. 7-13). In any event, although the Lease with Option to Purchase contract did not include
the W ife’s name or signature, it appears that the contract executed by the W ife’s cotenants, which purported
to con vey an und ivided interes t in the prope rty, eventually could result in the lessees obtaining good title,
provided the les see s’ pos ses sion con tinues for the requ ired statutory period . See Hines v. Pointer, 523
S.W .2d 733, 740 (T ex. C iv. App . 1975); Jones v. Siler, 100 S.W .2d 352, 353 (T ex. Com m ’n App. 1937).
3
See 10 U.S.C.A. § 1408 (W est 1983 & Supp. 1996). Congress enacted the Former Spouses’
Protection Act in direct response to Mc Ca rty v. Mc Ca rty, 453 U.S. 210 (1981), in which the United States
S uprem e Co urt held that “the federal statutes then g overning m ilitary retirem ent pay prevented state courts
from treating military retiremen t pay as com m unity property.” Mansell, 490 U.S. at 584. The Act
authorizes state courts to treat “disposable retired or retainer pay” as
com m unity property. [10 U.S.C . § 1408(c)(1) (1982 ed. & Sup p. V)].
“‘Disposable retired or retainer pay’” is defined as “the total monthly retired
or retainer pay to which a m ilitary m em ber is entitle d,” m inus certain
deductions. [10 U.S.C. § 1408(a)(4) (1982 ed. & Supp. V)]. Among the
am oun ts required to be deducte d from tota l pay are any am ounts waived in
order to rec eive disability ben efits. [10 U.S .C. § 140 8(a)(4)(B ) (1982 e d. &
Supp. V )].
Mansell, 490 U.S. at 584-85. Subsequent to the Act’s passage, Tennessee courts again began treating
vested and nonvested military pension rights as marital property subject to equitable distribution. Kendrick v.
Kendrick, 902 S.W .2d 918, 926 (T enn. App. 199 4).
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been granted the authority to treat total retired pay as
community property.
Mansell, 490 U.S. at 588-89 (footnote omitted).
In her dissent, Justice O’Connor, joined by Justice Blackmun, commented on the
harsh results of the majority’s ruling in Mansell:
The harsh reality of this holding is that former spouses . . . can,
without their consent, be denied a fair share of their ex-
spouse’s military retirement pay simply because he elects to
increase his after-tax income by converting a portion of that
pay into disability benefits.
Mansell, 490 U.S. at 595 (O’Connor, J., dissenting).
At the hearing below, the Wife in the present case urged the trial court to avoid the
harsh effects of the Mansell ruling by increasing the Wife’s interest in the Husband’s
military retirement benefits from thirty-five percent (35%) to forty-nine and one-half
percent (49.5%). In support of this argument, the Wife cited the Former Spouses’
Protection Act, which authorizes state courts to award to former spouses up to fifty
percent (50%) of a military retiree’s disposable retired pay. See 10 U.S.C.A. § 1408(e)(1)
(West 1983 & Supp. 1996).
Notwithstanding the Act’s authorization, we conclude that the trial court did not err
in refusing to increase the percentage of the Wife’s interest in the Husband’s military
retirement benefits. The Husband’s military retirement benefits, which accumulated during
the parties’ marriage, constituted marital property available for equitable distribution,
subject to the limitations imposed by the Former Spouses’ Protection Act. Towner v.
Towner, 858 S.W.2d 888, 891 (Tenn. 1993). Thus, the payments to the Wife in this case
are, in effect, a distribution to her of a portion of the Husband’s military retirement benefits.
Id. Inasmuch as the payments represent the division of marital property, the payments are
not subject to modification by the court. Id. at 892.4
4
In this regard, we re ject the W ife’s ch arac terization of the periodic pa ym ents as alimo ny subjec t to
m odifica tion. See Towner, 858 S.W .2d at 891.
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We recognize that this type of post-decretal action by military retirees has caused
problems for courts and litigants across the nation in divorce cases where a percentage
of military retirement benefits has been distributed as marital property. See, e.g.,
Clauson v. Clauson, 831 P.2d 1257 (Alaska 1992); Abernethy v. Abernethy, 670 So. 2d
1027 (Fla. Dist. Ct. App.), review granted, 680 So. 2d 421 (Fla. 1996); McHugh v. McHugh,
861 P.2d 113 (Idaho Ct. App. 1993); Torwich v. Torwich, 660 A.2d 1214 (N.J. Super. Ct.
App. Div. 1995); Price v. Price, 480 S.E.2d 92 (S.C. Ct. App. 1996). A military retiree may
be entitled to convert a portion of his retirement pay to disability pay, thereby reducing his
tax liability. See Mansell, 490 U.S. at 583-84 (citing 38 U.S.C. §§ 3101(a), 3105 (1982 ed.
& Supp. V)). By doing so, however, the military retiree unilaterally alters the equitable
distribution scheme fashioned by the trial court and, in some cases, by the parties
themselves. See Mansell, 490 U.S. at 595 (O’Connor, J., dissenting); see also Clauson,
831 P.2d at 1261 (concluding that husband unilaterally and extrajudicially modified divorce
decree when he decided to waive his retirement pension in order to collect disability
benefits); Price, 480 S.E.2d at 94 (holding that husband breached his obligations under
property settlement agreement by waiving portion of military retirement pay in order to
receive increased disability pay and thereby unilaterally reducing wife’s equitable
apportionment of benefits acquired during marriage).
Despite the Supreme Court’s ruling in Mansell, where the military retirement benefits
were distributed pursuant to the terms of a property settlement agreement, some state
courts have enforced the agreement against the military retiree, usually on the ground that
the retiree should not be permitted to unilaterally modify the terms of the agreement. See
Clauson, 831 P.2d at 1261; Abernethy, 670 So. 2d at 1029-31; McHugh, 861 P.2d at 115;
Price, 480 S.E.2d at 94.5 Courts also have held, even in the absence of a property
settlement agreement, that such post-decretal action by the military retiree may entitle the
former spouse to relief from the divorce decree. See Torwich, 660 A.2d at 1216 (holding
that husband’s action in obtaining disability payments in lieu of military retirement pay
5
W e also note that, on remand from Mansell v. M ansell, 490 U.S. 581 (198 9), the California appe llate
court enforced the parties’ property settlement agreement under which the husband agreed to the distribution
of both m ilitary retirem ent bene fits and disa bility benefits. See In re M arriage of M ansell, 265 Cal. Rptr. 227
(Ca l. Ct. App. 1989), cert. denied, 498 U.S. 806 (19 90).
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constituted “exceptional and compelling” circumstance entitling wife to relief from judgment
of divorce); see also Clauson, 831 P.2d at 1261 (holding that husband’s action in waiving
his retirement pension in order to collect disability benefits constituted sufficiently
extraordinary circumstance to support relief from judgment under catch-all provision of Civil
Rule 60(b)(6)).
In Tennessee, however, the law is clear: unlike alimony, the division of marital
property is not subject to subsequent modification by the courts. Towner v. Towner, 858
S.W.2d 888, 892 (Tenn. 1993); Jones v. Jones, 784 S.W.2d 349, 351 (Tenn. App. 1989). 6
Moreover, Tennessee law does not appear to afford relief from judgment under the
circumstances of this case. See, e.g., Duncan v. Duncan, 789 S.W.2d 557, 564 (Tenn.
App. 1990) (denying wife’s motion for relief from judgment under “catch-all” provision of
T.R.C.P. 60.02(5) where, based on testimony of husband’s accountants, trial court valued
husband’s business at $400,000 but, pending appeal of final divorce decree, husband sold
business for $2.5 million); but see Clauson v. Clauson, 831 P.2d 1257, 1261 (Alaska 1992)
(holding that husband’s action in waiving his retirement pension in order to collect disability
benefits constituted sufficiently extraordinary circumstance to support relief from judgment
under catch-all provision of Civil Rule 60(b)(6)). Accordingly, we are constrained to
conclude that the trial court in this case correctly declined to modify the property provisions
of the final divorce decree relative to the Wife’s interest in the Husband’s military retirement
benefits.
The trial court’s judgment is hereby affirmed. Costs on appeal are adjudged equally
against the parties, for which execution may issue if necessary.
6
Com pare McH ugh v. McHugh, 861 P.2d 113 (Idah o Ct. App. 1993 ), in which the cou rt granted the
relief req ueste d in this case by increasing the percentage of the husband’s military retirement benefits to which
the wife was entitled. In order to ensure that the wife continued to receive the same monthly amount, even
after the husband reduced his retirement benefits by accepting increased disability payments, the court
increased the wife’s pe rcentag e intere st from 18% to 40.37% . Id. at 115 . W e co nclude that McHugh is
disting uishable from the present case because, in McHugh, the court specifically retained jurisdiction for the
limited purpose of modifying its order, if necessary, to carry out the intent of the parties’ settlement agreement
that the wife re ceive a set m onth ly am oun t of the hus ban d’s m ilitary retirem ent bene fits. Id.
8
HIGHERS, J.
CONCUR:
CRAWFORD, P.J., W.S.
FARMER, J.
9