            If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.




                          STATE OF MICHIGAN

                           COURT OF APPEALS


DEBORAH LYNN FOSTER,                                                 UNPUBLISHED
                                                                     July 30, 2020
              Plaintiff/Counterdefendant-Appellee,

v                                                                    No. 324853
                                                                     Dickinson Circuit Court
RAY JAMES FOSTER,                                                    LC No. 07-015064-DM

              Defendant/Counterplaintiff-Appellant.


                                    ON SECOND REMAND

Before: MARKEY, P.J., and BORRELLO and RONAYNE KRAUSE, JJ.

PER CURIAM.

        Our Supreme Court has again remanded this case to us to “address the effect of [its]
holdings on defendant’s ability to challenge the terms of the consent judgment.” Foster v Foster,
__ Mich __, __; __ NW2d __ (2020); slip op at 3. We reverse the trial court’s order requiring
defendant, under the offset provision in the consent judgment, to make payments to plaintiff to
cover the reduction in his retirement pay.

       The following introductory paragraphs of the Michigan Supreme Court’s opinion provide
a concise setup for our analysis:

               This case involves a dispute between former spouses who entered into a
       consent judgment of divorce (the consent judgment), which provided that defendant
       would pay plaintiff 50% of his military retirement benefits. Beyond that, the parties
       agreed that if defendant waived a portion of his military retirement benefits in order
       to receive military disability benefits, he would continue to pay plaintiff an amount
       equal to what she would have received had defendant not elected to receive such
       supplemental disability benefits. Defendant elected to increase his disability
       benefits when he applied for Combat-Related Special Compensation (CRSC), a
       form of military disability benefits, pursuant to 10 USC 1413a. He started receiving
       CRSC shortly after the divorce. As a result, defendant’s retirement benefits
       decreased, which in turn decreased the share of the retirement benefits payable to



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       plaintiff. When defendant failed to reimburse plaintiff for the reduced payment she
       received in connection with defendant’s lowered military retirement benefits,
       plaintiff sought relief in the Dickinson Circuit Court, asking that the consent
       judgment be enforced. The trial court and the Court of Appeals enforced the plain
       terms of the consent judgment and required defendant to reimburse plaintiff for the
       reduction in her interest in defendant’s retirement benefits. Defendant argues that
       federal law preempts state law in regard to the division of veteran benefits and,
       thus, the consent judgment is unenforceable.

               We conclude that federal law preempts state law such that the consent
       judgment is unenforceable to the extent that it required defendant to reimburse
       plaintiff for the reduction in the amount payable to her due to his election to receive
       CRSC. Although the Court of Appeals indicated its agreement with plaintiff’s
       assertion that defendant was engaging in an improper collateral attack against the
       consent judgment, the panel did not discuss the effect of federal preemption on the
       trial court’s subject-matter jurisdiction or defendant’s ability to challenge the terms
       of the consent judgment outside of direct appeal. Because these questions remain
       important, we vacate that portion of the Court of Appeals’ opinion agreeing with
       plaintiff that defendant was engaging in an improper collateral attack and reverse
       the balance of the Court of Appeals’ opinion in this case. . . . This case is remanded
       to the Court of Appeals so that the panel may address the effect of our holdings on
       defendant’s ability to challenge the terms of the consent judgment. [Foster, __
       Mich at __; slip op at 1-3,]

        State courts are deprived of subject-matter jurisdiction when principles of federal
preemption are applicable. Ryan v Brunswick Corp, 454 Mich 20, 27; 557 NW2d 541 (1997),
abrogated in part on other grounds in Sprietsma v Mercury Marine, 537 US 51, 63-64; 123 S Ct
518; 154 L Ed 2d 466 (2002); People v Kanaan, 278 Mich App 594, 602; 751 NW2d 57 (2008);
Konynenbelt v Flagstar Bank, FSB, 242 Mich App 21, 25; 617 NW2d 706 (2000). And an error
in the exercise of a court’s subject-matter jurisdiction can be collaterally attacked. Bowie v Arder,
441 Mich 23, 56; 490 NW2d 568 (1992); Workers’ Compensation Agency Dir v MacDonald’s
Indus Prod, Inc (On Reconsideration), 305 Mich App 460, 477; 853 NW2d 467 (2014) (a collateral
attack is allowed if the court never acquired jurisdiction over the subject matter). Moreover,
“[s]ubject-matter jurisdiction cannot be granted by implied or express stipulation of the litigants.”
Harris v Vernier, 242 Mich App 306, 316; 617 NW2d 306 (2000); see also Teddy 23, LLC v Mich
Film Office, 313 Mich App 557, 564; 884 NW2d 799 (2015) (“Nor can subject-matter jurisdiction
be conferred by the consent of the parties”). Accordingly, in the instant case, defendant did not
engage in an improper collateral attack on the consent judgment and the trial court lacked subject-
matter jurisdiction to enforce the consent judgment with respect to the offset provision due to the
principle of federal preemption.




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       We reverse and remand for further proceedings or actions, if any, as the trial court may
deem necessary. We do not retain jurisdiction. We decline to award taxable costs under MCR
7.219.



                                                          /s/ Jane E. Markey
                                                          /s/ Stephen L. Borrello
                                                          /s/ Amy Ronayne Krause




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