RAOUL HAGEN v. DORIS J. HAGEN (Majority)

SUPREME COURT CASES

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State: Texas

Court: Supreme Court

Docket No: 07-1065

Case Date: 05/01/2009

Judge: Scott Brister

Plaintiff: RAOUL HAGEN

Defendant: DORIS J. HAGEN (Majority)

Preview:RAOUL HAGEN v. DORIS J. HAGEN (Majority)
MAJORITY | DISSENTING
IN THE SUPREME COURT OF TEXAS
No. 07-1065
Raoul Hagen, Petitioner,
v.
Doris J. Hagen, Respondent
On Petition for Review from the
Court of Appeals for the Fourth District of Texas
Argued January 14, 2009
Justice Brister, joined by Justice O Neill and Justice Medina, dissenting.
The Court says this divorce decree did not divide VA disability pay, and even if it did it is binding because it was
voidable rather than void. I disagree on both counts.
I would also try a little harder to find an alternative to today s judgment, which allows an ex-husband to cut off a
community asset awarded to his ex-wife. We should remand for Doris Hagen to pursue further proceedings; because
the Court instead renders judgment against her, I respectfully dissent.
I. Did This Decree Divide VA Disability Pay?
Military retirement pay and Veterans Administration disability pay have different purposes and pedigrees.[1] Were we
writing on a clean slate, I might agree that this decree dividing retirement pay did not divide VA disability pay. But we
are not writing on a clean slate.
This Court held in 1990 in Berry v. Berry that a decree dividing military retirement pay did divide VA disability pay
that arose later.[2] In Berry, we required a veteran to keep paying 25 percent of his total benefits to his ex-wife even
after most of those benefits were converted to VA disability pay. The Court says that decree did not divide VA
disability pay, but merely required that the wife was to be paid an amount computed on the husband s gross retirement
pay before deductions. [3] That is not what we said at the time, explicitly stating that the lower courts erred by refusing
to enforce the final divorce decree with respect to Veterans Administration disability benefits. [4] And to avoid
admitting that Berry divided VA disability pay, the Court reinterprets it as a provision for alimony, which Texas courts
cannot award.[5] The Berry decree effectively divided VA disability pay, no matter how hard the Court tries to deny it.
The decree in Berry divided Air Force disability retirement pay while the decree here divided Army Retirement Pay,
[6] but disability retirement pay is defined as retirement pay, [7] and the statute providing for it applies to all branches
of the armed forces.[8] Because both decrees divided retirement pay, it is hard to see why the decree in Berry divided
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VA disability pay but the decree here did not. Indeed, that was the precise conclusion of the court of appeals.[9]
The Court says the decree here is different because it did not divide gross retirement pay, as the Berry decree did. But
this decree awarded Doris Hagen a portion of all Army Retirement Pay. How can all retirement pay mean something
less than gross retirement pay ? Does all income mean less than gross income ? Or all sales less than gross sales ? The
Court s hypertechnical distinction between all and gross may lead to problems in many areas of the law.
The Court finds it significant that in Berry a monthly pay stub included figures for gross retirement pay and then a
deduction for VA disability pay. But this observation depends on an anachronism: the statute deducting VA disability
pay from gross retirement pay was enacted in 1982,[10] several years after the divorce decrees in Berry and this case.
Whatever was meant by gross or all retirement pay in either decree, it did not include a statutory construct that existed
only in the future.
At the time these decrees were signed, any military retirement pay (whether standard retirement pay or disability
retirement pay) had to be waived dollar-for-dollar to receive VA disability pay.[11] If the Berry decree dividing
retirement pay included amounts later waived to receive VA disability pay, then so did this decree. We must either
follow Berry or overrule it. For the reasons stated next, we should overrule it.
II. Can a Court Divide Disability Pay Before Disability Occurs?
Federal law prohibits division of VA disability pay upon divorce.[12] But because we construed the Berry decree to
apply to VA disability pay and that decree was not appealed, we held the decree could not be collaterally attacked as it
was voidable rather than void.[13]
It is generally true that a divorce decree cannot be collaterally attacked on the ground that it improperly divided
community property.[14] But any decree can be collaterally attacked if the court issuing it had no jurisdiction.[15] The
decree in Berry falls under both rules.
Many cases discuss whether a judgment is void or voidable, but in fact a judgment can be both. If a plaintiff with no
standing obtains a judgment for negligent infliction of emotional distress, the decree is both voidable (negligent
infliction is not a valid claim) and void (standing is jurisdictional). If a defendant fails to appeal a default judgment by
a court with neither personal jurisdiction nor proper venue, the judgment is again both void and voidable. If an
appellate court issues an advisory opinion that misinterprets the law, its judgment is both void and voidable. In all
these cases, the judgment can be collaterally attacked because it is void, even if the ground that renders it voidable
cannot be reached.
I agree the Berry decree was voidable because it divided VA disability pay in violation of federal law. But it was also
void because it divided VA disability pay before any disability existed, or anyone knew whether one ever would. Res
judicata applies to issues that were raised or could have been raised in the first action. [16] When a veteran s disability
arises 27 years after divorce (as was the case here), it could not possibly have been raised in the divorce because no
one knew then if any disability would ever occur, much less when it would begin or how extensive it would be.
Courts cannot decide hypothetical claims.[17] Doing so violates the constitutional provisions for separation of powers
and open courts.[18] A judgment dividing VA disability pay when no disability has yet occurred is void under the
rules of both ripeness and standing.[19] Ripeness prohibits suits involving uncertain or contingent future events that
may not occur as anticipated, or indeed may not occur at all. [20] Standing prohibits suits by those who are not
personally aggrieved,[21] as would be true when a person s ex-spouse suffers a disability after divorce.[22] Both
ripeness and standing are components of subject-matter jurisdiction,[23] and thus can be raised in a collateral
attack.[24]
Of course, divorce decrees often divide future retirement benefits if, as, and when received, including military
retirement pay.[25] But pensions are a form of deferred compensation earned during marriage, and at the time of
divorce constitute a contingent interest in property.[26] By contrast, post-divorce VA disability payments are not
earned during marriage and are not property. [27]
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Neither this Court, nor the trial court, has the power to counsel a legal conclusion on a hypothetical or contingent set
of facts. [28] At the time of the divorce here and in Berry, the prerequisite for VA disability pay a disability was
hypothetical. Other branches of government may decree that disability pay arising after divorce should be shared with
a former spouse, but the courts cannot.[29] Accordingly, Berry incorrectly held that such a decree was voidable rather
than void.
III. Can Waived Retirement Pay Be Recovered?
In most states, a divorce court can order alimony or child support paid from VA disability benefits.[30] But in
community-property states like Texas (as already noted), a divorce court cannot divide VA disability pay because it is
not assignable property.[31] This problem can be mitigated when disability occurs before divorce by considering VA
disability pay in dividing all the other property between the spouses in a manner that is just and right.[32] But when
disability occurs after divorce, a just-and-right division of retirement benefits may be rendered neither just nor right by
allowing one party to cut off the other s share of those benefits.[33]
In most states, if a former service member unilaterally waives retired pay to receive VA disability pay, the courts will
not stand idly by. [34] Surely that should be the rule in Texas too. The decree here did not just award Doris part of
Raoul s retirement pay; it also appointed him trustee of those funds for her use and benefit. As a result, it is hard to see
how his decision to waive those funds did not breach his fiduciary duty as her trustee.[35] Nor is it clear why
converting retirement pay to VA disability pay did not constitute conversion; while money can be converted only if it
is specifically identified and held in trust, [36] this money was.
Of course, any judgment against Raoul could not be collected from his disability payments because they are
exempt.[37] And they remain exempt after receipt so long as they are held in a form readily available as needed for
support and maintenance . . . and have not been converted into permanent investments. [38] But if Raoul has other
assets or funds from which such a judgment could be collected, there is no reason to prevent Doris from trying.[39]
While Doris pleaded conversion and breach of fiduciary duty in the trial court, she briefed neither when she appealed
the trial court s dismissal of her case. But she was relying on the continued validity of Berry v. Berry, under which she
should prevail unless we overrule it. When, as here, a party presents her case in reliance on precedent that has been
recently overruled, remand is appropriate. [40] Accordingly, rather than rendering judgment against Doris, I would
overrule Berry and remand in the interest of justice for her to pursue alternate means.[41]
Scott Brister
Justice
OPINION DELIVERED: May 1, 2009
[1] See McCarty v. McCarty, 453 U.S. 210, 211-12 (1981).
[2] 786 S.W.2d 672, 674 (Tex. 1990).
[3] ___ S.W.3d___,___.
[4] Id. at 672.
[5] See Stubbe v. Stubbe, 733 S.W.2d 132, 133 (Tex. 1987) ( Court ordered alimony, available in most other
jurisdictions, is not available in Texas as it contravenes Texas public policy. ).
[6] The decree here awarded Doris Hagen:
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One-half of 18/20ths of all Army Retirement Pay or Military Retirement Pay, IF, AS, AND WHEN RECEIVED, and
the Petitioner RAOUL HAGEN shall be a Trustee of the One-half of 18/20ths of all Army Retirement Pay or Military
Retirement Pay, for the use and benefit of DORIS J. HAGEN, and shall pay the same immediately upon each receipt
of the same, to DORIS J. HAGEN.
The decree in Berry v. Berry provided:
The parties agree that husband s Air Force Disability Pay ( Retirement Pay ) is Community Property of husband and
wife . . . . Husband shall . . . disburse to Wife monthly, as received, at a bank or other address of her choice, twenty-
five percent (25%) of said Retirement Pay computed on the gross amount thereof before any deductions.
[7] See 10 U.S.C. 1201(a) ( Retirement.--Upon a determination by the Secretary concerned that a member described
in subsection (c) is unfit to perform the duties of the member s office, grade, rank, or rating because of physical
disability incurred while entitled to basic pay or while absent as described in subsection (c)(3), the Secretary may retire
the member, with retired pay computed under section 1401 of this title . . . . ) (emphasis added); see also Ex parte
Burson, 615 S.W.2d 192, 193 (Tex. 1981) (referring to Air Force disability retirement pay as military retirement pay );
Busby v. Busby, 457 S.W.2d 551, 554 (Tex. 1970) (holding military disability pay should be treated as military
retirement pay).
[8] See 10 U.S.C. 1201(c).
[9] ___ S.W.3d___,___.
[10] See Uniformed Services Former Spouses Protection Act, Pub. L. No. 97-252, 96 Stat. 730 (1982).
[11] See Veterans Benefits Act, Pub. L. No. 85 857, 72 Stat. 1231 (1958) (codified at 38 U.S.C. 5305).
[12] 38 U.S.C. 5301(a)(1); McCarty v. McCarty, 453 U.S. 210, 211-12 (1981); Ex Parte Burson, 615 S.W.2d 192, 196
(Tex. 1981).
[13] 786 S.W.2d 672, 673.
[14] Reiss v. Reiss, 118 S.W.3d 439, 443 (Tex. 2003); Baxter v. Ruddle, 794 S.W.2d 761, 762 63 (Tex. 1990).
[15] Reiss, 118 S.W.3d at 443.
[16] Igal v. Brightstar Info. Tech. Group, Inc., 250 S.W.3d 78, 86 (Tex. 2008).
[17] DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 304 (Tex. 2008).
[18] Texas Dep t of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 646 (Tex. 2004); Brown v. Todd, 53 S.W.3d
297, 302 (Tex. 2001); see Tex. Const. art. I, 13 & art. II, 1.
[19] See Inman, 252 S.W.3d at 304-05 (noting that, for standing, the claimant s alleged injury must not be hypothetical
); McAllen Med. Ctr., Inc. v. Cortez, 66 S.W.3d 227, 232 (Tex. 2001) ( The ripeness doctrine avoids premature
adjudication on a hypothetical set of facts. ).
[20] Perry v. Del Rio, 66 S.W.3d 239, 250 (Tex. 2001) (quoting 13 Charles Alan Wright, Arthur R. Miller, & Edward
H. Cooper, Federal Practice and Procedure 3532, at 104 (2001 Supp.)); see also Waco Indep. Sch. Dist. v. Gibson, 22
S.W.3d 849, 851-52 (Tex. 2000).
[21] Inman, 252 S.W.3d at 304-05.
[22] Cf. Tex. Fam. Code 3.101 ( Each spouse has the sole management, control, and disposition of that spouse s
separate property. ); Chu v. Hong, 249 S.W.3d 441, 444 (Tex. 2008) (stating that personal injury claims are the
separate property of each spouse ).
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[23] McAllen Med. Ctr., 66 S.W.3d at 231 (noting the constitutional requirement that the court of appeals have
subject-matter jurisdiction, and both ripeness and standing are necessary components of that jurisdiction ).
[24] See Alfonso v. Skadden, 251 S.W.3d 52, 55 (Tex. 2008); Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76 (Tex.
2000).
[25] Shanks v. Treadway, 110 S.W.3d 444, 446 (Tex. 2003); Cearley v. Cearley, 544 S.W.2d 661, 663 (Tex. 1976).
[26] Cearley, 544 S.W.2d at 665.
[27] Ex parte Burson, 615 S.W.2d 192, 194 (Tex. 1981) ( Veterans Administration benefits . . . are not property. ); see
38 U.S.C. 5301.
[28] Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 853 (Tex. 2000).
[29] See, e.g., Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998) ( Under the separation of powers
doctrine, courts are without jurisdiction to issue advisory opinions because such is the function of the executive
department, not the judiciary. ).
[30] See Rose v. Rose, 481 U.S. 619, 630-32 (1987); Murphy v. Murphy, 787 S.W.2d 684, 685 (Ark. 1990); Allen v.
Allen, 650 So. 2d 1019, 1020 (Fla. Dist. Ct. App. 1994); In re Marriage of Anderson, 522 N.W.2d 99, 102 (Iowa Ct.
App. 1994); Wingard v. Wingard, 11 Pa. D. & C.4th 343, 345 (1991).
[31] See 38 U.S.C. 5301(a)(1).
[32] See Tex. Fam. Code 7.001; U.S. v. Stelter, 567 S.W.2d 797, 798 (Tex. 1978); Limbaugh v. Limbaugh, 71 S.W.3d
1, 17 n.14 (Tex. App. Waco 2002, no pet.); Rothwell v. Rothwell, 775 S.W.2d 888, 892 (Tex. App. El Paso 1989, no
writ); see also Maj. Mary J. Bradley, Calling for a Truce on the Military Divorce Battlefield: A Proposal to Amend the
USFSPA, 168 Mil. L. Rev. 40, 116 (2001) (noting that when disability exists at time of divorce, courts grant former
spouses a form of support or property in lieu of what their share of the retired pay would have been if not for the
disability determination ).
[33] See Michael T. Flannery, Military Disability Election and the Distribution of Marital Property Upon Divorce, 56
Cath. U. L. Rev. 297, 302 (2007); Brad M. LaMorgese & Robert E. Holmes, Jr., Division of Retirement Benefits: The
Impact of Federal Preemption on Women in Texas, 7 Tex. J. Women & L. 207, 226 (1998) (describing this as yet
another inequity women in Texas are asked to bear ).
[34] Bradley, supra note 32, at 116.
[35] Tex. Prop. Code 114.001; see, e.g., Brownsville-Valley Reg l Med. Ctr., Inc. v. Gamez, 894 S.W.2d 753, 756
(Tex. 1995); Henry I. Siegel Co., Inc. v. Holliday, 663 S.W.2d 824, 831 (Tex. 1984); Hamm v. Drew, 18 S.W. 434, 436
(Tex. 1892); Votzmeyer v. Votzmeyer, 964 S.W.2d 315, 325 (Tex. App. Corpus Christi 1998, no pet.); Ex parte
Rodriguez, 636 S.W.2d 844, 846 (Tex. App. San Antonio 1981, no writ).
[36] Chu v. Hong, 249 S.W.3d 441, 444 (Tex. 2008).
[37] 38 U.S.C. 5301(a)(1).
[38] Porter v. Aetna Cas. & Sur. Co., 370 U.S. 159, 162 (1962).
[39] See Bradley, supra note 32, at 117-22.
[40] Twyman v. Twyman, 855 S.W.2d 619, 626 (Tex. 1993).
[41] See Tex. R. App. P. 60.3.
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