MARTIN VS. MARTIN C/W 82517

Statutes cited

Key holdings

Practitioner summary

The court reviewed de novo the questions of law presented: interpretation of caselaw, statutory construction, and federal preemption. See Liu v. Christopher Homes, LLC, 130 Nev. 147, 151, 321 P.3d 875, 877 (2014); Wyeth v. Rowatt, 126 Nev. 446, 460, 244 P.3d 765, 775 (2010); Leven v. Frey, 123 Nev. 399, 402, 168 P.3d 712, 714 (2007); Nanopierce Techs., Inc. v. Depository Tr. & Clearing Corp., 123 Nev. 362, 370, 168 P.3d 73, 79 (2007). The pendente lite attorney fees award was reviewed for abuse of discretion. Griffith v. Gonzales-Alpizar, 132 Nev. 392, 395, 373 P.3d 86, 89 (2016); Miller v. Wilfong, 121 Nev. 619, 622, 119 P.3d 727, 729 (2005). On the preemption issue, the court canvassed the Uniformed Services Former Spouses' Protection Act (USFSPA), 10 U.S.C. § 1408 (2018), which permits state courts to treat "disposable retired pay" as community property, 10 U.S.C. § 1408(c)(1), but excludes from "disposable retired pay" amounts waived to receive disability benefits, 10 U.S.C. § 1408(a)(4)(A)(ii); see also 38 U.S.C. § 5305 (2012). Under Mansell v. Mansell, 490 U.S. 581, 594-95 (1989), state courts may not treat as divisible community property the portion of military retirement pay waived to receive disability benefits. Under Howell v. Howell, 581 U.S. ___, 137 S. Ct. 1400, 1402 (2017), state courts may not order pro rata indemnification to make up for a post-decree disability election. The majority distinguished Mansell and Howell on the ground that neither involved enforcement of a negotiated indemnification provision agreed to by the parties. Adopting the reasoning of the Alaska Supreme Court in Jones v. Jones, 505 P.3d 224, 230 (Alaska 2022), the court held that Howell "does not preclude one spouse from agreeing to indemnify the other as part of a negotiated property settlement." On the preemption analysis under Nanopierce Technologies, the court found neither express, field, nor conflict preemption: 10 U.S.C. § 1408 contains no express bar against enforcement of decrees; family law is traditionally a matter of state concern (citing Hisquierdo v. Hisquierdo, 439 U.S. 572, 581 (1979)); and section 1408 limits only what state courts may impose under community property laws, not what contractual commitments a veteran may make in a negotiated settlement. The court relied on footnote 5 of Mansell, 490 U.S. at 586 n.5, recognizing that the application of res judicata to a divorce decree is a state law matter outside the Supreme Court's jurisdiction. It noted that, on remand in Mansell, the California Court of Appeal reached the same division on res judicata grounds and the U.S. Supreme Court denied certiorari. In re Marriage of Mansell, 265 Cal. Rptr. 227, 233-34 (Ct. App. 1989), cert. denied, 498 U.S. 806 (1990). The court reaffirmed Shelton v. Shelton, 119 Nev. 492, 496, 78 P.3d 507, 509 (2003), for the rule 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." It cited Foster v. Foster, 949 N.W.2d 102, 124 (Mich. 2020) (Viviano, J., concurring), for the proposition that a majority of state courts permit enforcement of military-benefit terms under res judicata. Applying Nevada law, the court treated the decree as incorporating contract principles. May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257 (2005); Grisham v. Grisham, 128 Nev. 679, 685, 289 P.3d 230, 234 (2012); Rivero v. Rivero, 125 Nev. 410, 429, 216 P.3d 213, 226 (2009). Applying the three-part claim-preclusion test from Five Star Capital Corp. v. Ruby, 124 Nev. 1048, 1054, 194 P.3d 709, 713 (2008), the court found identical parties, a valid final judgment, and an enforcement action grounded in the same claim. See also Univ. of Nev. v. Tarkanian, 110 Nev. 581, 599, 879 P.2d 1180, 1191 (1994); Willerton v. Bassham, 111 Nev. 10, 16, 889 P.2d 823, 826 (1995); Kuptz-Blinkinsop v. Blinkinsop, 136 Nev. 360, 364, 466 P.3d 1271, 1275 (2020). The court declined to address Erich's argument that he did not voluntarily sign the decree, citing NRAP 28(e)(1) and Edwards v. Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130 P.3d 1280, 1288 n.38 (2006). On pendente lite attorney fees under NRS 125.040(1)(c), the court emphasized that the statute authorizes prospective fee awards in ongoing divorce litigation and that the district court must consider the parties' financial situations under NRS 125.040(2), but a movant "need not show necessitous circumstances," quoting Griffith, 132 Nev. at 395, 373 P.3d at 89. The court held that the Brunzell factors from Brunzell v. Golden Gate National Bank, 85 Nev. 345, 349, 455 P.2d 31, 33 (1969), which evaluate "the work actually performed," are inapt for prospective awards. See also Levinson v. Levinson, 74 Nev. 160, 161, 325 P.2d 771, 771 (1958). The district court's finding that Erich's income was approximately three times Raina's and its consideration of her domestic partner's contributions to household expenses supported the award. Justice Cadish, joined by Justice Pickering, concurred separately. The concurrence agreed that res judicata bars Erich's challenge but disagreed with the majority's distinction of Mansell and Howell. Citing Mansell, 490 U.S. at 585-86, the concurrence noted that Mansell itself involved a property settlement containing an agreed-upon indemnification provision, which the Supreme Court nonetheless held preempted. The concurrence quoted Howell, 581 U.S. at ___, 137 S. Ct. at 1406, that the distinction between "reimburse" and "indemnify" and a division is "semantic and nothing more," and that "[a]ll such orders are thus pre-empted." The concurrence would overrule Shelton v. Shelton to the extent it conflicts with Mansell and Howell, citing State v. Lloyd, 129 Nev. 739, 750, 312 P.3d 467, 474 (2013), and Armenta-Carpio v. State, 129 Nev. 531, 535-36, 306 P.3d 395, 398-99 (2013). The concurrence would nonetheless affirm because, under Kramer v. Kramer, 96 Nev. 759, 761, 616 P.2d 395, 397 (1980), a final decree of divorce may not be modified except as permitted by rule or statute, and following Foster v. Foster, No. 161892, 2022 WL 1020390, at *6-7 (Mich. Apr. 5, 2022), res judicata applies even when a prior judgment rested on an invalid legal principle. The concurrence distinguished the alimony framework under NRS 125.150(1)(a) and (9) from the community-property division at issue under NRS 125.150(1)(b).

In plain language

Erich and Raina Martin divorced in 2015 after Erich had served in the military. As part of their divorce, they signed a settlement agreement, which the district court incorporated into the divorce decree. The decree gave Raina half of Erich's military retirement benefits. Critically, it also said that if Erich later chose to take military disability pay instead of retirement pay, he would have to reimburse Raina for any reduction in her share. That contingency mattered because of how federal law treats military pay. A veteran who wants tax-free disability benefits must give up an equal amount of taxable retirement pay - he cannot collect both for the same dollars. When Erich retired in 2019, Raina began receiving her share of his retirement pay directly from the Defense Finance and Accounting Service (DFAS). The next year, Erich elected full disability pay, which wiped out all of his retirement pay - and with it, Raina's share. When Raina asked him to make up the difference as the decree required, he refused, arguing that federal law forbade it. Raina asked the district court to enforce the decree. The court agreed and ordered Erich to pay her the monthly amounts she would have received absent his waiver. The court also awarded Raina $5000 toward her attorney fees for the appeal, citing the large income disparity between the parties. On appeal, the Nevada Supreme Court affirmed. The court explained that under U.S. Supreme Court decisions in Mansell v. Mansell and Howell v. Howell, a state court cannot, on its own authority, treat military disability pay as community property or order a veteran to "indemnify" a former spouse for the dollar amount of retirement pay the veteran chose to waive in favor of disability pay. But the Nevada court drew a distinction: those federal cases addressed what a state court can order on its own; they did not bar enforcement of an indemnification term that the divorcing spouses themselves negotiated and put into their property settlement. Because Erich and Raina expressly agreed to the reimbursement provision, and because the divorce decree had become a final judgment, the doctrine of res judicata (which prevents parties from relitigating matters already resolved in a final judgment) required enforcement. The court also held that the district court did not abuse its discretion by awarding $5000 in pendente lite (during-litigation) attorney fees under NRS 125.040 without analyzing the Brunzell factors. Those factors evaluate the quality of work already performed, whereas NRS 125.040 fees are designed to fund work yet to be done. A two-justice concurrence by Justice Cadish, joined by Justice Pickering, agreed the decree should be enforced - but only because res judicata bars Erich's collateral attack on the final judgment. The concurrence would have held that the reimbursement provision itself is preempted by federal law, even though the parties had agreed to it, and would overrule Shelton v. Shelton to that extent.