No. 2--02--0442

__________________________________________________________________

	IN THE

	APPELLATE COURT OF ILLINOIS

	SECOND DISTRICT

___________________________________________________________________

In re MARRIAGE OF			  )	Appeal from the Circuit Court 

SUSAN NIELSEN,				  )	of Du Page County.

f/k/a Susan Moller-Nielsen,	  )

f/nk/a Susan Magrini,				  )

						  )

	Petitioner-Appellee,  	  ) 	

						  )

and						  )	No. 86--MR--238

						  )

						  )	Honorable		

MARK LOUIS MAGRINI,			  ) 	Brian R. McKillip and

						  )	Hollis L. Webster,

	Respondent-Appellant.	  )	Judges, Presiding.	

___________________________________________________________________

	JUSTICE GILLERAN JOHNSON delivered the opinion of the court:

	The respondent, Mark Magrini, appeals from the November 3,

2000, and April 30, 2002, orders of the circuit court of Du Page 

County, awarding the petitioner, Susan Nielsen, a portion of his

military disability benefits.  We affirm in part and reverse in

part and remand the cause for additional proceedings.

		      The facts relevant to the disposition of this case are as follows.  The parties' judgment for dissolution of marriage was

entered on April 1, 1985, in Clarion County, Pennsylvania.   On May

8, 1986, the judgment for dissolution of marriage was enrolled in

the circuit court of Du Page County.   The judgment for dissolution

of marriage incorporated a marital settlement agreement dated

August 6, 1984.  The parties could not reach an agreement

concerning Mark's military pension at that time, however, and expressly reserved that issue for a future determination by the

trial court. 

	On November 25, 1987, the parties subsequently entered into an

agreed order concerning Mark's military pension.  The November 25,

1987, agreement provided as follows:

	"The military pension of Mark Louis Magrini shall be

distributed 25% to Susan Moller-Nielsen, 75% to Mark Louis

Magrini to be paid if and when said pension is received.  Said

25% shall be paid directly to Susan Moller-Nielsen pursuant to

the provisions of 71 U.S.C. 10, Section 1408 and shall be 25%

of the gross retired or retainer pay due Mark Louis Magrini

***, Susan Moller-Nielsen to include in her income and pay all

taxes on any sums received."

	Section 1408 of chapter 71 of Title 10 of the United States

Code, otherwise known as the Uniformed Services Former Spouses'

Protection Act (USFSPA) (10 U.S.C. §1408 (2000)), authorizes state

courts to treat as community property a party's "disposable retired

or retainer pay."  Disposable retired or retainer pay is defined by

the USFSPA as the total monthly retired pay to which a member is

entitled minus certain deductions.  10 U.S.C. §1408(a)(4) (2000). 

Among the amounts required to be deducted from the total pay are

those amounts which are waived by the retiree in order to receive

veterans' disability benefits under chapter 11 of Title 38 or

chapter 61 of Title 10 of the United States Code.  10 U.S.C.

§§1408(a)(4)(B), (a)(4)(C) (2000).  Additionally, the USFSPA creates

a payment mechanism under which the federal government will make

direct payments to the nonmilitary former spouse who presents, to the Secretary of the relevant military service, a state court order

granting her a portion of the military spouse's disposable retired

or retainer pay.  10 U.S.C. §1408(e)(1) (2000).	

	On May 1, 1993, Mark retired from the military, after 20 years

of service, at the rank of Major.  Mark would have been eligible to

receive retired or retainer pay in the amount of $2,185 per month. 

However, at the time of Mark's retirement, the Veteran's

Administration (VA) reviewed his medical records and determined that

he was 10% disabled.  This determination was based on Mark suffering

migraine headaches and having high blood pressure and back and knee

problems.  As such, Mark elected to receive monthly disability

benefits under Title 38, which reduced his monthly retired or

retainer pay by 10%, or to $1,966.50 per month.1  Pursuant to the parties' settlement agreement and in accordance with the USFSPA,

Susan started receiving her monthly payments.  The payments

reflected 25% of Mark's disposable retired or retainer pay of

$1,966.50.  

	On July 7, 1996, the Veteran's Administration reviewed Mark's

records again upon Mark's request and adjudged him 60% disabled. 

Consequently, Mark's monthly disability benefits increased, but his 

retirement pay was reduced another 50%.  Susan's monthly check

reflecting her 25% share of Mark's retired or retainer pay was

accordingly reduced.  On July 28, 1999, Susan filed a petition

seeking to enforce the November 25, 1987, agreement.  The petition

alleged that Susan was not receiving the full amount to which she

was entitled to under the parties' agreement. 

	On October 5, 2000, following a hearing, the trial court ruled

that Susan was entitled to an amount worth 25% of Mark's military

pension as it existed on the date he retired.  On November 3, 2000,

the trial court entered a written order reflecting its oral ruling

of October 5, 2000.  On April 30, 2002, the trial court assessed

Susan's damages to date as $14,515.80 and ordered that, going

forward, Mark should withhold and pay to Susan 22.5% of his monthly

retired or retainer pay and 22.5% of his disability pay.  Mark

thereafter filed a timely notice of appeal.  

	On appeal, Mark argues that the trial court erred in awarding

Susan a portion of his military disability benefits.  In order to

address the merits of Mark's argument, we must take a closer look

at the USFSPA, why it was enacted, and the progeny of cases that

have followed the USFSPA's enactment.

	Congress enacted the USFSPA in 1982, in direct response to the

United States Supreme Court's decision in McCarty v. McCarty, 453 U.S. 210, 69 L. Ed. 2d 589, 101 S. Ct. 2728 (1981).  The McCarty Court held that federal law preempted the application of state community property or equitable distribution laws to a military

serviceman's retirement pay.  McCarty, 453 U.S. at 233, 69104 L. Ed. 2d at 606, 101 S. Ct. at 2741-42.  It is clear that in enacting the

USFSPA, Congress intended to remove the federal preemption found to

exist by the McCarty Court and permit state and other courts of competent jurisdiction to apply their laws in determining whether

military retired or retainer pay should be divisible upon a

dissolution of marriage. 

	Several years later, despite the unambiguous language of the

USFSPA specifically prohibiting the division of a military

serviceman's disability benefits, the divisibility of such benefits

was called into question.  The Supreme Court in Mansell v. Mansell, 490 U.S. 581, 594-95, 104 L. Ed. 2d 675, 689, 109 S. Ct. 2023, 2031 

(1989), clarified this issue.  In Mansell, the husband retired from the Air Force prior to entering into a settlement agreement with his

wife.  Mansell, 490 U.S. at 585-86, 104 L. Ed. 2d at 683, 109 S. Ct. at 2027.  The ensuing settlement agreement entered into by the

parties provided that the wife would receive 50% of the husband's

total military retirement pay, including those portions waived so

that he could  receive veteran's disability benefits.  Mansell, 490 U.S. at 585-86, 104 L. Ed. 2d at 683, 109 S. Ct. at 2027.  After the

parties divorced, the husband filed a petition to modify that

portion of the judgment for dissolution that incorporated the

settlement agreement provision that required him to share his total

retirement pay.  Mansell, 490 U.S. at 586, 104 L. Ed. 2d at 683, 109 S. Ct. at 2027.  The trial court denied the motion, but the Supreme Court ultimately reversed, finding the plain language of the USFSPA

dispositive and holding:

	"The Former Spouses' Protection Act does not grant state

courts the power to treat as property divisible upon divorce

military retirement pay waived by the retiree in order to

receive veterans' disability benefits."  Mansell, 490 U.S. at 594-95, 104 L. Ed. 2d at 689, 109 S. Ct. at 2032.

In so ruling, however, the Supreme Court noted the harsh effect of

its ruling and expressed fear that its literal interpretation of the

USFSPA might inflict economic harm on many former spouses.  Mansell, 490 U.S. at 594, 104 L. Ed. 2d at 689, 109 S. Ct. at 2032.  It

invited Congress to pass new legislation.  Mansell, 490 U.S. at 594, 104 L. Ed. 2d at 689, 109 S. Ct. at 2032.

	Following Mansell, several jurisdictions, including Illinois, have conformably ruled that military disability pay is not subject

to division.  See In re Marriage of Strunck, 212 Ill. App. 3d 76, 77-78 (1991); see also In re Marriage of Franz, 831 P.2d 917, 918 (Colo. App. 1992); Fondren v. Fondren, 605 So. 2d 571, 572 (Fla. App. 1992); Jones v. Jones, 7 Haw. App. 496, 499, 780 P.2d 581, 584 (1989); Bewley v. Bewley, 116 Idaho 845, 846, 780 P.2d 596, 597 (1989); Davis v. Davis, 777 S.W.2d 230, 232 (Ky. 1989); Harmon v. Harmon, 617 So. 2d 1373, 1377 (La. App. 1993); Keen v. Keen, 194 Mich,. App. 72., 74, 486 N.W.2d 105, 106 (1992); In re Marriage of Murphy, 261 Mont. 363, 367, 862 P.2d 1143, 1145 (1993).  

	However, a growing number of courts have found Mansell to be inapplicable given certain language contained in the judgment for

dissolution.  For example, several courts have enforced judgments which provided that the military spouse would take no action to

diminish his or her retirement pay and would indemnify the

nonmilitary spouse for any such diminution.  See Abernethy v. Fishkin, 699 So. 2d 235, 239-240 (Fla. 1997); In re Marriage of Strassner, 895 S.W.2d 614, 617-18 (Mo. App. 1995); Owen v. Owen, 14 Va. App. 623, 626, 419 S.E.2d 267, 269 (1992).  These courts reason

that because the military spouse is free to satisfy the indemnity

obligation with assets other than the disability benefits, there is

no division of disability benefits in contravention of Mansell.  Abernethy, 699 So. 2d at 240; Strassner, 895 S.W.2d at 618; Owen, 14 Va. App. at 626, 419 S.E.2d at 269.  In Abernethy, the Florida Supreme Court explained:

	"[W]e hold that while federal law prohibits the division of

disability benefits, it does not prohibit spouses from entering

into a property settlement agreement that awards the non-

military spouse a set portion of the military spouse's

retirement pay.  Nor does it exclude indemnification provisions

ensuring such payments, so long as veteran's disability

payments are not the source of such payments."  Abernethy, 699 So. 2d at 240.

	This same result has been reached even where there was no

express indemnity agreement.  See McHugh v. McHugh, 124 Idaho 543, 545, 861 P.2d 113, 115 (App. 1993).  In McHugh, the parties had agreed that the husband's monthly retirement payments would not be

modified for any reason other than cost-of-living increases. 

McHugh, 124 Idaho at 54t43, 861 P.2d at 113.  The husband thereafter waived a portion of his retirement pay to obtain disability benefits.  McHugh, 124 Idaho at 544, 861 P.2d at 114.  The trial court granted, and the reviewing court affirmed, an increase in the wife's

percentage of the husband's disposable retired or retainer pay in

order to maintain the wife at her original level of payments. 

McHugh, 124 Idaho at 545, 861 P.2d at 115.       

	There are even several cases in this growing trend that 

closely parallel the facts of the case herein.  See In re Marriage of Gladdis, 191 Ariz. 467, 470, 957 P.2d 1010, 1013 (App. 1997); see also In re Marriage of Krempin, 70 Cal. App. 4th 1008, 1020-21, 83 Cal. Rptr. 2d 134, 142-43 (1999); Johnson v. Johnson, 37 S.W.3d 892, 897-88 (Tenn. 2001).  In the first of those cases, Gladdis, the judgment for dissolution awarded the wife "one half of [the

husband's] military retirement benefits as of February 1994." 

Gladdis, 191 Ariz. at 467, 957 P.2d at 1010.  The judgment did not contain any provision concerning indemnification, modification, or

direct responsibility on the part of the husband.  Gladdis, 191 Ariz. at 467, 957 P.2d at 1010.  The husband later obtained civil

service employment, which required him to waive a portion of his

retirement pay in order to avoid dual compensation.  Gladdis, 191 Ariz. at 468, 957 P.2d at 1011.  Such a waiver is comparable to the

waiver required to obtain disability benefits.  The wife's entitlement was thereby reduced and she petitioned the trial court. 

Gladdis, 191 Ariz. at 468, 957 P.2d at 1011.  

	The trial court ordered the husband to continue paying the wife

the same monthly sum he owed before the waiver.  Gladdis, 191 Ariz. at 468, 957 P.2d at 1011.  The reviewing court affirmed, reasoning

that at the time of the judgment for dissolution, there was no dual compensation offset because the husband had not yet obtained civil

service employment.  Gladdis, 191 Ariz. at 470, 957 P.2d at 1013.  When he subsequently did, the decree had already established the

wife's fixed interest in the military retirement benefits.  Gladdis, 191 Ariz. at 470, 957 P.2d at 1013.  By voluntarily waiving

retirement benefits, the husband deliberately frustrated the

judgment for dissolution.  Gladdis, 191 Ariz. at 470, 957 P.2d at 1013.  The reviewing court determined that the order need only avoid

specifying an improper source of funds for the payments to be in

conformity with Mansell.  Gladdis, 191 Ariz. at 470, 957 P.2d at 1013.

	The Johnson and Krempin courts reached a similar result.  In Johnson, the parties' judgment for dissolution provided that the wife would receive "one half of all retirement benefits due the

husband."  Johnson, 37 S.W.3d at 894.  One year after the dissolution had been entered, the husband elected to waive a portion

of his military retirement pay for disability benefits.  Johnson, 37 S.W.3d at 894.   The wife filed a petition to enforce the judgment

for dissolution, which the trial court denied.  Johnson, 37 S.W.3d at 894.  On appeal, the reviewing court reversed, reasoning that

when a judgment for dissolution divides military retirement

benefits, a nonmilitary spouse has a vested interest in his or her

portion of those benefits as of the date of the court's decree. 

Johnson, 37 S.W.3d at 897.  That vested interest cannot be unilaterally diminished by an act of the military spouse.  Johnson, 37 S.W.3d at 897. 

	Krempin, like Johnson, involved a situation where, pursuant to a judgment for dissolution, the wife had been receiving monthly

payments reflecting a certain percentage of the husband's military

pension.  Krempin, 70 Cal. App. 4th  at 1011, 83 Cal. Rptr. 2d at 136.  More than two years after the wife's payments had commenced,

the husband's disability rating was increased to 100% from 40%. 

Krempin, 70 Cal. App. 4th  at 1011, 83 Cal. Rptr. 2d at 137.  The husband therefore ceased receiving a monthly pension and,

accordingly, the wife ceased receiving monthly payments.  Krempin, 70 Cal. App. 4th  at 1011, 83 Cal. Rptr. 2d at 137.  The wife unsuccessfully petitioned the trial court for relief.  Krempin, 70  Cal. App. 4th  at 1011, 83 Cal. Rptr. 2d at 137.  On appeal, the  reviewing court reversed and remanded for a determination as to

whether the parties intended that the wife receive a share of the

husband's total retirement pay or just the disposable retired or

retainer pay.  Krempin, 70 Cal. App. 4th  at 1020-21, 83 Cal. Rptr. 2d at 142-43.  The reviewing court concluded that if the parties'

intent was that the wife receive a share of the husband's total

retirement pay, enforcing the divorce decree as it had been intended

would not offend Mansell so long as the husband would be able to satisfy his obligation with assets other than his disability

benefits.  Krempin, 70 Cal. App. 4th  at 1021, 83 Cal. Rptr. 2d at 143.

	Based on the foregoing persuasive authority, we believe that a

party's vested interest in a military pension cannot be unilaterally

diminished by an act of a military spouse, and we apply this

principle to the present case.  Here, the parties agreed that Susan would receive "25% of the gross retired or retainer pay due Mark." 

It is clear that the parties intended that Susan would receive a

percentage of Mark's total retirement pay and not just his

disposable retired or retainer pay.  The parties' intent was

incorporated into the judgment for dissolution.  Mark retired and

the judgment for dissolution was implemented.  However, Mark

thereafter decided to accept an increased amount of disability

benefits.  This resulted in a reduction of Mark's disposable retired

or retainer pay.  This accordingly reduced Susan's entitlement. 

Mark certainly had a legal right to receive disability benefits, but

his doing so caused a diminution in the amount of his retirement pay

that Susan had been receiving for over three years.  Mark's decision

frustrated the parties' intent and the trial court's judgment for

dissolution.  Indeed, to allow Mark to unilaterally diminish Susan's

interest in his military pension would constitute an impermissible

modification of a division of marital property.  As such, we affirm

the trial court's order of November 3, 2000, in which it ruled that

Susan was entitled to an amount equal to 25% of Mark's military

pension as it existed on the date he retired.   Because the trial

court's November 3, 2000, order does not directly assign Mark's

military disability pay, it does not offend the United States

Supreme Court's ruling in Mansell.

	However, we believe that the trial court's order of April 30,

2002, is in direct contravention of Mansell.  The trial court's April 30, 2002, order specifically orders Mark to withhold and pay

over to Susan 22.5% of his monthly disability benefits.  This was

improper.  Pursuant to Mansell, courts may not treat as divisible military disability pensions.  Mansell, 490 U.S. at 594-95, 104 L. Ed. 2d at 689, 109 S. Ct. at 2032.  Mark must be able to satisfy his

obligation with a source of funds other than his disability

benefits.  Accordingly, we reverse the trial court's order of April

30, 2002, and remand the cause for further proceedings.  On remand,

the trial court must determine if Mark is free to satisfy his

obligation with assets other than his disability benefits, and draft

a new order accordingly.  This will ensure conformity with Mansell.  Parenthetically, we note that the USFSPA allows a nonmilitary spouse

to receive up to 50% of a military spouse's disposable retired or

retainer pay.  10 U.S.C. §1408(e)(1) (2000).       

	For the foregoing reasons, the judgment of the circuit court of

Du Page County is affirmed in part and reversed in part, and the

cause is remanded for additional proceedings.	

	Affirmed in part and reversed in part; cause remanded.

	GROMETER and BYRNE, JJ., concur.