Opinion ID: 2834586
Heading Depth: 1
Heading Rank: 3

Heading: Can Waived Retirement Pay Be Recovered?

Text: 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