Source: http://www.kscourts.org/cases-and-opinions/opinions/supct/2002/20021206/86791.htm
Timestamp: 2015-11-30 09:49:35
Document Index: 329466130

Matched Legal Cases: ['§1401', '§1408', '§ 1408', '§ 3105', '§ 5301', '§\n3101', '§ 1408', '§ 1408', '§ 1201', '§ 1203', '§ 1201', '§ 1408', '§ 1201', '§ 1210', '§ 1210', '§ 1210', '§ 1203', '§ 1206', '§ 1210', '§ 1201', '§ 1204', '§ 1210', '§ 1210', '§ 4403', '§ 1293', '§ 4403', '§ 571', '§ 1293', '§\n1202', '§ 1205', '§ 1202', '§ 1205', '§ 1201', '§ 1204', '§ 5305', '§ 1212', '§ 1210', '§ 1212', '§ 1203', '§ 1201', '§ 104', '§ 1203', '§ 1212', '§ 104', '§ 1408', '§ 1408', '§ 1408', '§\n1408', '§ 1408', '§\n1408', '§ 1408', '§ 1408', '§ 1408']

86791 -- In re Marriage of Wherrell -- Lockett -- Kansas Supreme Court
No. 86,791
DEBORAH S. WHERRELL,
WESLEY R. WHERRELL,
1. The question of whether a payment is divisible military retirement or indivisible military
disability determines whether a court has jurisdiction to order the division of the payment.
2. The existence of jurisdiction is a question of law over which this court's scope of review is
3. Where a court reviews a mixed question of law and fact, it applies the substantial
competent evidence test to the factual findings and determines by unlimited review
whether the findings support the legal conclusions.
Review of the judgment of the Court of Appeals in 30 Kan. App. 2d ___, 38 P.3d 753
(2002). Appeal
from Shawnee district court, RICHARD D. ANDERSON, judge. Judgment of the Court of
Appeals reversing the
district court is reversed. Judgment of the district court is reversed and remanded with directions.
December 6, 2002. Frank D. Taff, of Topeka, argued the cause and was on the brief for appellant.
Chris R. Davis, of Phelps, Chartered, of Topeka, argued the cause and was on
LOCKETT, J.: This case comes before the court on a petition for review pursuant to
K.S.A. 20-3018(c). Based upon the terms of the journal entry of divorce, the district court
awarded ex-wife 50 percent of the military severance pay received by her ex-husband, plus
prejudgment interest. Ex-husband appealed, contending the military severance pay was a
disability benefit, not a retirement benefit subject to division. Ex-wife asserted the district court
was correct in finding she (1) was entitled to 50 percent of the military severance pay; (2) was
entitled to prejudgment interest; and (3) was entitled to relief under K.S.A. 60-260(b)(6). The
Court of Appeals determined the severance pay was an indivisible disability benefit and reversed
In 1976, appellant Wesley Wherrell enlisted in the United States Navy. Appellee Deborah
Wherrell and Wesley were married in October of 1976. In July 1994, Wesley was found fit for
only limited duty as a result of interstitial pneumonitis (a respiratory disease), which was directly
related to his military service. After a review by the Record Review Panel of the Navy Physical
Evaluation Board in March 1995, Wesley was placed on the "Temporary Disability Retired List"
(TDRL). Wesley had been diagnosed with desquamative interstitial pneumonitis and given a 30
percent disability rating. In July 1995 and in response to Wesley's compensation claim, the
Department of Veterans' Affairs (VA) assigned Wesley a 10 percent disability rating because of
his condition. The VA informed Wesley that he was entitled to $89 per month as compensation
After nearly 22 years of marriage, Deborah filed for divorce in May 1998. The divorce
was finalized on August 18, 1998. The agreed-upon journal entry of divorce contained the
following provision regarding Wesley's military retirement:
"6. That petitioner [Deborah] should be awarded fifty percent (50%) of the disposable
retainer pay otherwise payable to respondent due to his military service; and that a qualified
domestic relations order should be issued to the payor of such retired or retainer pay pursuant to
the Uniformed Services Former Spouses' Protection Act, 10 U.S.C. [§1401 et
seq.], as amended,
to effect such award."
The journal entry of divorce also provided that Deborah waived any potential right to
maintenance. The waiver of maintenance was the result of Wesley agreeing to give Deborah 50
percent of his retirement or retainer pay. From the record, it appears that at the time of the
divorce Wesley was receiving $795.51 per month in military retirement and $94 per month in
disability. From August 1998 until October 1999, Wesley paid Deborah 50 percent of his
By letter dated October 12, 1999, Wesley was notified that he had been removed from the
TDRL and "discharged from the naval service by reason of physical disability with severance pay
effective 28 September 1999." Wesley then informed Deborah that she would not receive
additional payments because he was no longer receiving military retirement pay. In August 2000, Deborah discovered a 1099-R addressed to Wesley from the Defense
Finance and Accounting Center dated December 16, 1999. The 1099-R reported a gross
distribution of $60,910.15. Federal income tax withheld was reported as $15,100.39.
On August 25, 2001, Deborah filed a motion to enforce paragraph six of the journal entry
of divorce. Deborah alleged she was entitled to 50 percent of the $60,910.15. Wesley
responded, contending Deborah was not entitled to this money because it was indivisible disability
After a hearing, the district court found that Wesley had received a lump sum retirement
benefit totaling $57,000 rather than $60,910.15 as Deborah alleged. The district court awarded
Deborah $21,435 plus prejudgment interest at 10 percent per annum from November 1999.
Wesley filed a motion for amendment of the judgment or for additional findings and
amendment of the judgment, contending the district court's award of prejudgment interest was
erroneous and that the specific grounds for awarding prejudgment interest were required to be
stated. The district court denied the motion. Wesley filed a timely notice of appeal. Deborah did
not file a cross-appeal; therefore, the district court's determination as to the amount of the lump
sum stands.
The Court of Appeals found that because Wesley was not eligible to retire from the Navy,
the district court had incorrectly decided that the lump sum received by Wesley was a divisible
military retirement benefit. It then determined that the payment was a disability severance benefit
and reversed the district court. In the Matter of the Marriage of Wherrell, 30 Kan.
App. 2d __,
38 P.3d 753 (2002). This court granted Deborah's petition for review.
We note that the district court is vested with broad discretion in adjusting the property
rights of parties involved in divorce actions and that the exercise of that discretion will not be
disturbed on appeal absent a clear showing of abuse. In re Marriage of Sadecki, 250
Kan. 5, 8,
825 P.2d 108 (1992); Powell v. Powell, 231 Kan. 456, 459, 648 P.2d 218 (1982). The Court of
Appeals cited and used this standard in reviewing the district court's decision. Wherrell, 30 Kan.
App. 2d at ___.
The question of whether the lump sum payment to Wesley was divisible military
retirement or indivisible military disability determines whether the district court had jurisdiction to
order the division of the payment pursuant to the journal entry of divorce. The existence of
jurisdiction is a question of law over which this court's scope of review is unlimited. Cypress
Media, Inc. v. City of Overland Park, 268 Kan. 407, 414, 997 P.2d 681 (2000). Thus, the
answer involves a mixed question of law and fact. Where a court reviews a mixed question of law
and fact, it applies the substantial competent evidence test to the factual findings and determines
by unlimited review whether the findings support the legal conclusions. State Bd. of
Nursing v.
Ruebke, 259 Kan. 599, 611, 913 P.2d 142 (1996). In 1982, Congress enacted the Uniformed Services Former Spouses' Protection Act
(USFSPA), 10 U.S.C. §1408 (2000). The USFSPA was enacted in response to the
McCarty v. McCarty, 453 U.S. 210, 69 L. Ed. 2d 589, 101 S. Ct. 2728 (1981), in
United States Supreme Court precluded state courts from ordering the distribution of any military
retirement pay to a former spouse. Mansell v. Mansell, 490 U.S. 581, 584, 104 L.
Ed. 2d 675,
109 S. Ct. 2023 (1989). The USFSPA authorizes state courts to treat "disposable retired" or
"retainer" pay as either the sole property of the member or former member of the armed forces or
the joint property of the member and his spouse in accordance with the law of the jurisdiction. See 10 U.S.C. § 1408(a)(7) and (c)(1). In Mansell, the United States Supreme Court was faced with determining
state courts had the authority under the USFSPA to divide up total military retired pay when the
retiree waived a portion of the retired pay in order to receive veterans' disability benefits. The
Court decided in the negative, relying upon the USFSPA's specific exemption of amounts
deducted from retired pay in order to receive compensation under Title 38 of the United States
Code (Veterans' Benefits) from the definition of "disposable retired pay." 490 U.S. at 589. In arriving at its decision, the Mansell Court noted that for the purpose of
avoiding double
payment, a military retiree is required to waive a corresponding amount of his or her military
retirement in order to receive veterans' disability benefits. 490 U.S. at 583. See 38 U.S.C.
(2000) (previously 38 U.S.C. § 3105). Because disability benefits are exempt from taxation
resulting in higher after-tax income for retirees, the Court also noted that waivers are common. 490 U.S. at 583-84. See 38 U.S.C. § 5301(a) (2000) (previously 38 U.S.C. §
3101[a]). Our Court of Appeals addressed a similar issue in In the Matter of the Marriage of
26 Kan. App. 2d 236, 982 P.2d 995, rev. denied 268 Kan. 887 (1999). The
Pierce court was
faced with determining whether the petitioner was entitled to a share of her ex-husband's military
retirement benefits under a divorce settlement agreement when the benefits were subsequently
converted into disability benefits. The petitioner requested that the district court either compel
her ex-husband to reinstate his military retirement or order him to pay the amount she would have
received if the benefits were still classified as retirement benefits. The district court refused to
grant the petitioner's request. The ex-wife appealed.
The Pierce court, relying upon the United States Supreme Court's decision in
"Mansell makes it perfectly clear that the state trial courts have no
disability benefits received by a veteran. The trial court in this case cannot order [respondent] to
change the payments back to retirement benefits, and it cannot order him to pay his disability
benefits to [petitioner]. We conclude the court may not do indirectly what it cannot do directly." 26 Kan. App. 2d at 240. In this action, the district court noted In re Marriage of Pierce and determined
did not apply because Pierce involved the division of veterans' disability benefits and
Wesley had
not received veterans' disability benefits. The district court concluded:
"In this instance, Mr. Wherrell has not waived military retirement pay in order to receive
veterans disability benefits. He received severance pay relating to his separation from naval
service. As he was initially informed when placed on TDRL, this severance pay was available
because of his eligibility under the Temporary Early Retirement Authority. The nature of the
benefits paid were defined by the terms of his placement on the Temporary Early Retired List
(sic) on March 29, 1995 and the election he made when faced with returning to active service or
retiring with separation severance pay. . . ."
. . . . "[I]t is clear that based upon initial placement on TDRL status that Mr. Wherrell
have certain options if he were subsequently removed from the TDRL and separated from service. In this regard, he elected separation severance pay." The district court found that the lump sum was a divisible military retirement benefit and that
Deborah was entitled to 50 percent of the lump sum payment.
The Court of Appeals found the district court's decision unreasonable and reversed the
district court. In reaching its decision, the court noted that Congress specifically excluded
disability benefits deducted from the retired member's pay from inclusion in the definition of
"disposable retired pay," citing 10 U.S.C. § 1408(a)(2)(C) as authority for this exclusion. In re
Marriage of Wherrell, 30 Kan. App. 2d ___. It is important to note that the provision
is included in the definition of what constitutes a "court order" but does not define what is
excluded from "disposable retired pay." The Court of Appeals appears to have been referring to
10 U.S.C. § 1408(a)(4)(C), later set forth in this opinion. The Court of Appeals further
that Wesley had not met the requirements for retirement because he did not have either 20 years
in the service or a 30 percent disability rating. Relying upon 10 U.S.C. § 1201 (2000), the
concluded that Wesley received an indivisible disability benefit under 10 U.S.C. § 1203
(2000). In re Marriage of Wherrell, 30 Kan. App. 2d at __.
Judge Knudson dissented, noting that Mansell dealt only with the waiver of
disability benefits under Title 38 of the United States Code, Wesley's lump sum payment was not
a veterans' disability benefit under Title 38, and Wesley did not waive a portion of his retirement
pay. Relying upon the fact Wesley received a 1099-R form indicating the distribution was not tax
exempt, Judge Knudson found the district court's opinion to be well-reasoned and opined that he
would have affirmed the district court and addressed the remaining issues on their merits. In
Marriage of Wherrell, 30 Kan. App. 2d at __.
As he did before the Court of Appeals, Wesley asserts the district court erred in finding
that In re Marriage of Pierce did not control; therefore, he contends the district
court's award of
50 percent of the lump sum to Deborah was clearly erroneous. To support his assertion, Wesley
points out that the USFSPA excludes Chapter 61, 10 U.S.C. § 1201 et seq.,
from "disposable retired pay," under 10 U.S.C. § 1408(a)(4)(C).
Deborah argues that the district court correctly distinguished In re Marriage of
from this case. To support her argument that the Court of Appeals erred in finding that the
district judge abused his discretion in determining the benefits were divisible, and to demonstrate
that Wesley's benefits were divisible retirement benefits, Deborah relies upon the evidence before
the district court and the statutes governing retirement and separation for physical disability, 10
U.S.C. § 1201 et seq.
The USFSPA defines disposable retired pay:
"The term 'disposable retired' pay means the total monthly retired pay to which a
member is entitled less amounts which --
. . . . (B) are deducted from the retired pay of such member . . . as a result of a waiver
retired pay required by law in order to receive compensation under title 5 or title 38;
(C) in the case of a member entitled to retired pay under chapter 61 of this title,
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 place on the temporary disability retired list)." 10 U.S.C. §
As provided in the notice to Wesley, the TDRL was to be administered in accordance with
10 U.S.C. § 1210 (2000). This section provides for a physical examination to be
every 18 months and for a final determination to be made in the case of each member on the list
after the passage of 5 years. See 10 U.S.C. § 1210(a) and (b). If the disability still exists at
expiration of the 5 years, as it did in this case, the disability is considered permanent and stable. See 10 U.S.C. § 1210(b). If the member's permanent disability is less than 30 percent, as it
this case, or if the member has less than 20 years of service, the member's name is removed from
the list and the member is "separated" under either § 1203 or § 1206. See 10 U.S.C.
§ 1210(e). If the member has at least 30 percent disability or 20 years of service, his or her name is removed
from the list and he or she is retired under either § 1201 or § 1204. See 10 U.S.C.
§ 1210(c) and
(d). In applying 10 U.S.C. § 1210(c), (d), and (e), the Court of Appeals' reversal of the
court was controlled by its belief that Wesley was ineligible to retire because he had not served 20
years in the Navy. Neither party briefed the issue of whether Wesley was eligible for retirement. Although
the fact Wesley did not serve 20 years might be relevant to the determination of whether the
benefits are retirement or disability, it is not controlling. The appropriateness of the Navy
granting Wesley retirement is not an issue. Rather, the issue is whether the benefits received by
Wesley constituted retirement or disability benefits. We further note that the Court of Appeals' finding that Wesley was ineligible for
retirement may also have been inaccurate. Wesley was advised by the Department of the Navy
that he was placed on the TDRL during a period in which he "may have been eligible to request
retirement under the Temporary Early Retirement Authority (TERA)." The TERA was also
referred to in a handwritten note on a form that accompanied notification of Wesley's placement
The TERA was enacted in 1992 for the purpose of providing "the Secretary of Defense a
temporary additional force management tool with which to effect the drawdown of military forces
during the active force drawdown period." National Defense Authorization Act for Fiscal Year
1993, Pub. L. No. 102-484 § 4403(a) (codified at note to 10 U.S.C. § 1293). The
TERA, among
other things, gave the Secretaries of the military branches the authority to lower the number of
years of service required for retirement in certain circumstances to 15 rather than 20 years. See
Pub. L. No. 102-484 § 4403(b); Clary v. United States, 52 Fed. Cl. 390, 393
(2002). The "active
force drawdown period" was in effect from the Act's enactment until December 31, 2001. See
Departments of Defense and Energy Appropriations, Pub. L. No. 106-398 § 571(a)
(codified at
note 10 U.S.C. § 1293). Neither party nor the Court of Appeals addressed the possibility of Wesley's eligibility for
retirement under the TERA. The district court referred to the TERA, noting that Wesley was
placed on the TDRL because of his "eligibility" under the TERA. The record does not support a
finding that Wesley was eligible for retirement under the TERA; however, it infers that he might
have been. We note that the provisions of the TERA cast doubt upon the Court of Appeals'
decision that Wesley was not eligible for retirement benefits because he had not served 20 years in
the Navy. Because there are not sufficient facts in the record, we cannot determine whether
Wesley was retired or eligible for retirement under the TERA. We can determine, however, that
the Court of Appeals erred in relying upon this fact in reversing the district court.
Wesley was notified that while he was on the TDRL he "shall be accorded disability
benefits in a temporary retired status as prescribed in 10 U.S.C. 1202 or 1205, as appropriate." Those sections provide:
"Upon a determination by the Secretary concerned that a member described in
1201(c) of this title would be qualified for retirement under section 1201 of this title but for the
fact that his disability is not determined to be of a permanent nature and stable, the Secretary
shall, if he also determines that accepted medical principles indicate that the disability may be of
a permanent nature, place the member's name on the temporary disability retired list, with
pay computed under section 1401 of this title." (Emphasis added.) 10 U.S.C. §
1202 (2000).
"Upon a determination by the Secretary concerned that a member of the armed
not covered by section 1201, 1202, or 1203 of this title would be qualified for retirement under
section 1204 of this title but for the fact that his disability is not determined to be of a permanent
nature and stable, the Secretary shall, if he also determines that accepted medical principles
indicate that the disability may be of a permanent nature, place the member's name on the
temporary disability retired list, with retired pay computed under section 1401 of this
title." (Emphasis added.) 10 U.S.C. § 1205 (2000).
From the plain language of the provisions, it appears that Wesley was on the TDRL and
receiving "retirement pay." It also appears that the only method of being placed on the TDRL is
through either § 1202 or § 1205, both of which require that the member be eligible
under § 1201 or § 1204. This conclusion is reasonable, due to the fact that the list is
"Temporary Disability Retired List." (Emphasis added.) Deborah testified that when Wesley informed her that he would no longer be receiving
retirement benefits, Wesley also stated that he had the choice to either serve the final 2 years of
service that he had left remaining or to receive a settlement. Wesley testified that he had no
choice and that the Navy had made the choice for him. He also testified that he did not intend to
file a claim for veterans' benefits because the amount of his severance pay would be offset by the
amount of veterans' benefits he was entitled to receive upon application to the VA for such
benefits. See 38 U.S.C. § 5305 (2000).
Wesley's notification of his honorable discharge and removal from the TDRL stated that
he was being "discharged from the naval service by reason of physical disability with severance
pay." Included with this notification was an enclosure entitled "INFORMATION
SHEET--SEPARATION FROM TDRL." The enclosure contained the following provisions of
"1. The following information is intended to help you understand the preliminary
finding of the Physical Evaluation Board (PEB) and to assist you with your decision whether to
accept the finding.
"2. The PEB made a preliminary finding that you remain unfit for military service
by reason of physical disability. Because your combined percentage of disability is not less than
30%, you are ineligible to remain on the TDRL and are to be separated and paid disability.
(2) You will receive a disability severance check from the
Accounting Center AFTER YOU ARE DISCHARGED. Severance pay is
BASE PAY MULTIPLIED BY YEARS OF TOTAL ACTIVE SERVICE. NOT TO EXTEND
12 YEARS [sic] an individual with less than six months creditable
active service is not eligible
"3. If you have not already done so, you may apply to the Department of
Affairs (VA) for disability benefits. Any VA eligibility already established or which may be
established will not be affected by the disposition of your case by the Navy. HOWEVER,
SEVERANCE PAY WILL BE DEDUCTED FROM ANY VA COMPENSATION FOR
WHICH YOU MIGHT BE ELIGIBLE." The formula set forth for computing Wesley's severance pay is similar to the formula set
forth in 10 U.S.C. § 1212 (2000). Pursuant to 10 U.S.C. § 1210(c),(d) and (e),
after removal from the TDRL is only computed under § 1212 (disability severance pay) if
disability is determined to be less than 30 percent and the years of service are less than 20. See 10
U.S.C. §§ 1203 and 1206. If Wesley would have had a 30 percent or greater
disability or been in
the service for at least 20 years, his payment should have been calculated under 10 U.S.C. §
(2000) (computation of retired pay). See 10 U.S.C. §§ 1201, 1204, and 1210(c) and
(d). This
evidence points toward the lump sum payment constituting disability rather than retirement pay.
The inclusion of the lump sum payment on Wesley's 1099-R form may be dispositive. A
1099-R form is the Internal Revenue Service form upon which distributions from pensions,
annuities, retirement or profit-sharing plans, IRAs, insurance contracts, etc., are reported. The
instructions for filing a 1099-R form specify that amounts that are totally exempt from tax, such
as workers compensation and VA benefits, should not be reported on the form. However,
payments to military retirees are to be reported on the form. The instructions also indicate that if
part of a distribution is taxable and part is tax exempt, the entire distribution should be reported
on the 1099-R. See 2001 Instructions for Forms 1099-R and 5498. Military disability benefits
are tax exempt pursuant to 26 U.S.C. § 104(a)(4) (2000).
At the hearing before the district court, Wesley stated that he planned to challenge the
withholding of federal taxes as indicated on his 1099-R form, relying upon the holding in St.
v. United States, 778 F. Supp. 894 (E.D. Va. 1991). The result of Wesley's challenge, if
the tax withheld is unknown. In St. Clair, the plaintiff was discharged with
pay under 10 U.S.C. §§ 1203, 1208, and 1212. The plaintiff received a lump
sum disability
severance payment upon his discharge under § 1212. Subsequently, the plaintiff applied for
benefits. The VA determined that the plaintiff was 10 percent disabled and deducted the amount
of disability severance pay from future VA benefits. The St. Clair Court was faced
determining whether the entire lump sum amount should be included in the plaintiff's gross income
for the year. The court noted that documentation of the plaintiff's discharge from the Air Force
clearly indicated that the plaintiff was discharged due to physical disability and that the resulting
severance payment was for the purpose of compensating the plaintiff for that disability. Thus, the
court held that the entire lump sum should have been excluded from the plaintiff's gross income
because under 26 U.S.C. § 104(a)(4), amounts received as a pension, annuity, or similar
allowance for personal injuries or sickness resulting from active service in the armed forces are
excluded from gross income. 778 F. Supp. 896. Compare Russell v. Russell, 520 So.
2d 435,
438 (La. App. 1987), cert. denied 490 U.S. 1097 (1989) ("Therefore, because part of
payments defendant received were treated as taxable income by the federal government, it is
unlikely that the entire amount paid to defendant consisted of disability retirement pay."). Prior to 1986, Congress completely excluded any retired pay of a member retired for
disability under Chapter 61 of Title 10 to the United States Code from being considered
"disposable retired pay." See 10 U.S.C. § 1408(a)(4) (1982). The present definition of
"disposable retired pay," however, seems to consider Chapter 61 benefits received by those
members eligible for retirement as potentially including both disability and retirement
while only recognizing the disability portion of the benefit to be excluded from "disposable retired
pay." See 10 U.S.C. § 1408(a)(4)(C). Thus, it is easily inferred that all benefits received
to Chapter 61 are not necessarily disability benefits and that some, if not all benefits, received
pursuant to Chapter 61 are capable of being considered "disposable retired pay." In Bullis v. Bullis, 22 Va. App. 24, 36, 467 S.E.2d 830 (1996), the Virginia
Appeals, sitting en banc, applied the current definition of "disposable retired pay" to determine
that of all the military benefits received under Chapter 61, the only benefits that are excluded from
the definition of "disposable retired pay" are the benefits which correspond to the retiree's
disability percentage at the time of retirement. This result seems reasonable under the plain
language of 10 U.S.C. § 1408(a)(4)(C). If the member is not entitled to retired pay,
would not be appropriate to allow only a portion of his severance pay to be excluded from
division under USFSPA. Under that circumstance, the entire Chapter 61 benefit would be
excluded from the definition of "disposable retired pay." Furthermore, Wesley contends that Deborah should have been aware something was not
right in terms of the journal entry of divorce when her attempt to set up a qualified domestic
relations order (QDRO), as provided for under the USFSPA, failed. See 10 U.S.C. §
1408(d). Deborah testified that her request for the establishment of the QDRO had been denied by the
military because Wesley was not permanently retired at the time of the request.
Unfortunately, there are serious factual issues that remain. The district court correctly
recognized that the resolution of this issue depends upon whether the benefits were retirement or
disability. The district court erred, however, in relying solely upon the fact that these benefits
were not veterans' disability benefits in finding that the benefits were divisible retirement benefits. The district court failed to recognize the existence of 10 U.S.C. § 1408(a)(4)(C), which
this distribution. It is not surprising the district court did not address 10 U.S.C. §
1408(a)(4)(C)
in rendering its finding, because the arguments before the district court did not include specific
references to the applicable statutes. It was not until his appeal that Wesley referred specifically
to 10 U.S.C. § 1408(a)(4)(C). The district court's decision that the benefits constituted retirement and not disability was
erroneous because the court applied the wrong statutory provision in evaluating the benefits, 10
U.S.C. § 1408(a)(4)(B) instead of 10 U.S.C. § 1408(a)(4)(C). Therefore, we
remand the case to
the district court. On remand, the district court should examine the facts and the statutory
provisions applicable to the lump sum payment Wesley received as military severance pay. The
outcome of Wesley's challenge to the withholding of federal taxes on the lump sum, if actually
pursued, determines the nature of the benefit received. In the absence of such challenge, Wesley
has the burden to come forward with evidence establishing that the lump sum was disability rather
than retirement pay. The 1099-R form introduced in the district court demonstrated that at least a
portion of the lump sum was believed to be taxable. Under the circumstances, Deborah has met
her initial burden of proof.
Although the district court briefly addressed Deborah's contention that she was also
entitled to relief under K.S.A. 60-260(b)(6) and seemed to agree that relief would also be
available to Deborah under this provision, the district court did not set aside the judgment under
K.S.A. 60-260(b)(6), specifically noting that its decision was based upon construction of the
journal entry of divorce and other instruments and not upon setting aside the judgment. Therefore, we decline to address the issue. We also decline to address whether the district court
erred in awarding prejudgment interest.
The Court of Appeals' decision reversing the district court is reversed. The judgment of
the district court is also reversed and the case is remanded for further proceedings.
URL: http://www.kscourts.org/kscases/supct/2002/20021206/86791.htm.