MARTIN VS. MARTIN C/W 82517

Statutes cited

Key holdings

Practitioner summary

The court reviewed questions of law - interpretation of caselaw, statutory construction, federal preemption, and application of res judicata - de novo, citing Liu v. Christopher Homes, LLC, 130 Nev. 147, 321 P.3d 875 (2014); Wyeth v. Rowatt, 126 Nev. 446, 244 P.3d 765 (2010); Leven v. Frey, 123 Nev. 399, 168 P.3d 712 (2007); Nanopierce Techs., Inc. v. Depository Tr. & Clearing Corp., 123 Nev. 362, 168 P.3d 73 (2007); and Kuptz-Blinkinsop v. Blinkinsop, 136 Nev. 360, 466 P.3d 1271 (2020). The pendente lite attorney fee award was reviewed for abuse of discretion under Griffith v. Gonzales-Alpizar, 132 Nev. 392, 373 P.3d 86 (2016), and Miller v. Wilfong, 121 Nev. 619, 119 P.3d 727 (2005). On the merits, the majority framed the issue as whether the USFSPA, 10 U.S.C. § 1408 (2018), as construed by Mansell v. Mansell, 490 U.S. 581 (1989), and Howell v. Howell, 581 U.S. ___, 137 S. Ct. 1400 (2017), preempts state-court enforcement of an indemnification provision contained in a negotiated property settlement incorporated into a divorce decree. Section 1408(c)(1) authorizes state courts to treat "disposable retired pay" as community property; "disposable retired pay" excludes amounts waived to receive disability benefits, 10 U.S.C. § 1408(a)(4)(A)(ii); see also 38 U.S.C. § 5305 (2012). Mansell held § 1408 does not authorize state courts to divide as community property retirement pay waived for disability benefits, and Howell extended that holding to bar state courts from ordering pro rata reimbursement to indemnify a former spouse for the loss caused by such a waiver. The majority distinguished Mansell and Howell on the ground that neither involved enforcement of a negotiated indemnification provision agreed to by the parties. It adopted the reasoning of Jones v. Jones, 505 P.3d 224 (Alaska 2022), which read Howell to bar court-imposed indemnification orders but not enforcement of a contractually agreed indemnification provision. The court found neither express preemption nor field preemption applicable because § 1408 contains no bar against state enforcement of divorce decrees and family law is traditionally a matter of state concern, citing Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979). On conflict preemption, the court held § 1408 limits what divisions a state court may impose under community property law but does not address what contractual commitments a veteran may make. The court relied on Mansell's footnote 5, 490 U.S. at 586 n.5, recognizing that res judicata as applied to divorce decrees is a matter of state law, and on the post-remand history of Mansell, where the California Court of Appeal reaffirmed the original disposition on res judicata grounds and the Supreme Court denied certiorari, In re Marriage of Mansell, 265 Cal. Rptr. 227 (Ct. App. 1989), cert. denied, 498 U.S. 806 (1990). Applying Nevada law, the court reaffirmed Shelton v. Shelton, 119 Nev. 492, 78 P.3d 507 (2003), which held that "states are not preempted from enforcing orders that are res judicata or from enforcing contracts or from reconsidering divorce decrees, even when disability pay is involved." Divorce decrees incorporating settlements are interpreted under contract principles, May v. Anderson, 121 Nev. 668, 119 P.3d 1254 (2005); Grisham v. Grisham, 128 Nev. 679, 289 P.3d 230 (2012); and parties may freely contract, Rivero v. Rivero, 125 Nev. 410, 216 P.3d 213 (2009). The court applied the three-part res judicata test from Five Star Capital Corp. v. Ruby, 124 Nev. 1048, 194 P.3d 709 (2008): same parties or privies, valid final judgment, and same claims that were or could have been brought. See also Univ. of Nev. v. Tarkanian, 110 Nev. 581, 879 P.2d 1180 (1994); Willerton v. Bassham, 111 Nev. 10, 889 P.2d 823 (1995). Each element was satisfied, and the court noted accord with In re Marriage of Weiser, 475 P.3d 237 (Wash. Ct. App. 2020). On attorney fees, the court applied NRS 125.040(1)(c) and (2). Under Griffith, 132 Nev. at 395, 373 P.3d at 89, a movant need not show necessitous circumstances. The court held the Brunzell factors from Brunzell v. Golden Gate Nat'l Bank, 85 Nev. 345, 455 P.2d 31 (1969), do not apply to NRS 125.040 awards because Brunzell measures past work, while pendente lite fees are prospective, citing Levinson v. Levinson, 74 Nev. 160, 325 P.2d 771 (1958). The district court considered the parties' financial circumstances and the income disparity, and the record supported the award. The court declined to address Erich's claim that he did not voluntarily sign the decree, citing NRAP 28(e)(1) and Edwards v. Emperor's Garden Rest., 122 Nev. 317, 130 P.3d 1280 (2006).

In plain language

Erich and Raina Martin married in 2002 while Erich served in the military. When they divorced in 2015, they negotiated a marital settlement agreement that the district court incorporated into the divorce decree. The decree gave Raina half of Erich's military retirement benefits. It also included a key promise: if Erich later chose to receive military disability pay instead of retirement pay (which would shrink Raina's share, because federal law requires veterans to waive retirement pay dollar-for-dollar to receive disability pay), Erich would reimburse Raina for the reduction. Erich retired in 2019, and Raina began receiving her share. In 2020, Erich elected full disability pay, waiving all retirement pay. The federal pay agency stopped sending Raina checks, and Erich refused to pay her himself, arguing federal law forbade it. Raina asked the district court to enforce the decree. The district court agreed with Raina and ordered Erich to pay her monthly installments equal to what she would have received absent the waiver. On appeal, Erich argued that federal law - specifically the Uniformed Services Former Spouses' Protection Act and two U.S. Supreme Court cases, Mansell v. Mansell and Howell v. Howell - bars state courts from ordering a veteran to make up the difference when disability pay reduces a former spouse's share of retirement pay. The Nevada Supreme Court affirmed. The majority drew a distinction: federal law does prevent state courts from dividing disability pay as community property or unilaterally ordering a veteran to indemnify a former spouse. But here, the parties themselves negotiated and agreed to the reimbursement provision, the district court entered that agreement as part of the divorce decree, and that decree became final. The court held that enforcing a final, agreed-upon decree under Nevada's res judicata (claim preclusion) doctrine and ordinary contract principles is different from a state court imposing such a division on its own. Under Nevada precedent, particularly Shelton v. Shelton, courts may enforce such agreements, and Erich may satisfy the obligation from any source of money he chooses, including his disability pay. The court also affirmed the $5000 attorney-fee award. Under NRS 125.040, a court in a divorce suit may require one party to pay money to enable the other to carry on or defend the suit, after considering each party's financial situation. The district court found Erich's income was about three times Raina's and tailored the award accordingly. The Nevada Supreme Court held that the four-factor Brunzell test for the reasonableness of attorney fees does not apply to such pendente lite awards because Brunzell evaluates work already performed, while NRS 125.040 fees cover prospective work - here, defending the appeal. Two justices concurred in the result. They would have held that the decree's indemnification provision is in fact preempted by federal law under Mansell and Howell, but agreed that under Nevada law, the decree had become a final judgment that Erich could not collaterally attack, so res judicata required affirmance.