#25850-a-JKK

2011 S.D. 83

                            IN THE SUPREME COURT
                                    OF THE
                           STATE OF SOUTH DAKOTA

                                   ****
JULIE A. URBANIAK,                          Plaintiff and Appellee,

      v.

ROBERT I. URBANIAK,                         Defendant and Appellant.


                                   ****

                  APPEAL FROM THE CIRCUIT COURT OF
                    THE SEVENTH JUDICIAL CIRCUIT
                  PENNINGTON COUNTY, SOUTH DAKOTA

                                   ****

                    THE HONORABLE JOHN J. DELANEY
                               Judge

                                   ****

PATRICIA A. MEYERS
Rapid City, South Dakota                    Attorney for plaintiff
                                            and appellee.

RENA M. HYMANS
Sturgis, South Dakota                       Attorney for defendant
                                            and appellant.

                                   ****

                                            CONSIDERED ON BRIEFS
                                            ON OCTOBER 03, 2011

                                            OPINION FILED 12/07/11
#25850

KONENKAMP, Justice

[¶1.]        Upon issuing a divorce decree, the trial court awarded Julie A.

Urbaniak $500 per month in alimony for eight years and attorney’s fees. In

granting the alimony, the court considered Robert I. “Ike” Urbaniak’s social security

and military disability payments, but did not order attachment of those benefits.

Ike appeals, arguing that the trial court erred in considering his disability benefits

in determining alimony. He also contends that the court abused its discretion in

awarding Julie alimony and attorney’s fees and costs. We affirm.

                                     Background

[¶2.]        Ike joined the Army in 1989. In a motor vehicle accident while

stationed in Egypt, he suffered a wrist injury and post-traumatic stress disorder.

He was honorably discharged in 1996. Julie and Ike married in 2002. During the

first year, both worked and contributed all their earnings to the marriage.

Thereafter, Ike was unemployed and Julie supported the couple with her earnings.

Throughout the marriage, Ike periodically struggled with drug and alcohol abuse.

[¶3.]        Ike and Julie purchased and remodeled a home in 2003. Julie paid for

most of the remodeling costs with money she inherited from her family. Ike and

Julie attempted to have children for two or three years. But Julie eventually

discovered that Ike was unable to have children. She was not aware of this when

they married.

[¶4.]        Ike has a high school education. He attended college but never

obtained a degree. In 2006, the Department of Veterans Affairs (VA) designated Ike




                                          -1-
#25850

as one-hundred percent disabled. Julie had assisted him in applying for VA

disability benefits, hiring an attorney, and serving as Ike’s protective payee.

[¶5.]        Ike receives $984 per month in social security disability benefits and

$2,823 per month in VA disability benefits. He also received $20,000 in social

security back pay, which the couple used to pay credit card and other debts in order

to qualify for a loan. Ike was not eligible for military retirement benefits because he

served less than twenty years. As protective payee, Julie managed all household

finances and monitored Ike’s medication intake. Toward the end of the marriage,

Julie also performed most of the household chores.

[¶6.]        Ike has several mental and physical health problems. He twice

overdosed on pain medications. His family, including Julie, suspected that Ike was

frequently overmedicating. Ike was obsessive compulsive, constantly monitoring

Julie’s location when she was not at home. Without informing Julie, Ike often

cancelled or failed to attend therapy sessions, medical appointments, and individual

counseling. Julie tried to introduce Ike to new hobbies and common interests

without success.

[¶7.]        Julie has a high school education and is employed as a cafeteria

worker, earning $12.42 per hour, forty hours per week. She also has a retirement

fund currently worth $18,053.26. Julie is in good health.

[¶8.]        After seven years of marriage, Julie sued for divorce in 2009. Their

relationship had deteriorated. Both Ike and Julie had become verbally abusive to

each other. Julie discovered that Ike had an online girlfriend. He insisted that

Julie was mishandling his money as protective payee. Ike continuously threatened


                                          -2-
#25850

to lock Julie out of the house and, on one occasion, choked her during an argument.

He also threatened to kill her on several occasions.

[¶9.]        At the time of the divorce, Julie was forty years old and Ike was thirty-

nine. They had no children. Julie earned about $1,500 per month and Ike received

$3,807 per month in disability payments. He had no other income, and his

disability benefits would decrease by about $150 per month after the divorce

became final.

[¶10.]       Following a trial, the circuit court divided the marital property and

debt. Julie was awarded $500 per month in alimony for eight years, subject to

termination on her death or remarriage. The court considered Ike’s receipt of

disability benefits in making this decision, but noted that the alimony award was

not to be construed as an attachment of any disability payments. The court also

awarded Julie $5,792.12 in costs and attorney’s fees, considering the complex

nature of the legal issues and Ike’s misconduct during the marriage. Ike appeals,

arguing that the trial court erroneously considered his disability benefits in

determining alimony. He also asserts that the court abused its discretion in

awarding Julie alimony and costs and attorney’s fees.

                               VA Disability Benefits

[¶11.]       Ike maintains that the trial court erred in considering his VA disability

benefits in awarding alimony. He contends that the United States Supreme Court’s

decision in Mansell v. Mansell, 490 U.S. 581, 109 S. Ct. 2023, 104 L. Ed. 2d 675

(1989) controls this legal question. He points out that he served in the military and

incurred his service-connected disability before he married Julie. Ike does not have


                                          -3-
#25850

direct access to the bank account where his disability benefits are deposited. Only

his current payee (Jeff Denison of U.S. Bank) has direct control of the benefits.

[¶12.]       Julie concedes that the benefits may not be levied, seized, or attached,

but notes that the circuit court merely considered Ike’s receipt of military disability

benefits. Julie contends that federal law does not preclude a court’s consideration of

such benefits as a source of income relevant to Ike’s ability to pay alimony.

[¶13.]       We review decisions on alimony for an abuse of discretion. Billion v.

Billion, 1996 S.D. 101, ¶ 14, 553 N.W.2d 226, 230. But we review questions of law

bearing on an alimony award de novo. Oman v. Oman, 2005 S.D. 88, ¶ 4, 702

N.W.2d 11, 12. Military retirement pay and military disability benefits have

significant differences. Retirement benefits are for military service members who

serve for a specific period, usually twenty years or more. See., e.g., 10 U.S.C. § 3911

(Army); 10 U.S.C. § 6323 (Navy and Marine Corps). The amount of retirement pay

a veteran is eligible for is determined according to the number of years served and

the rank achieved. 10 U.S.C. § 1401.

[¶14.]       On the other hand, a military service member who becomes disabled as

a result of military service is eligible for disability benefits. 38 U.S.C. § 1131

(peacetime disability benefits). The amount of disability benefits a veteran is

eligible for is determined according to the seriousness of the disability and the

degree to which the veteran’s ability to earn a living has been impaired. 38 U.S.C.

§§ 1134 and1114. Disability benefits are not assignable and are exempt from

attachment, levy, seizure, and taxation. 38 U.S.C. § 5301(a)(1) (emphasis added). A

military retiree who is also disabled may receive disability benefits (and incur tax-


                                           -4-
#25850

exempt status) only if he or she waives a corresponding amount of military

retirement pay. 38 U.S.C. § 5304; 38 C.F.R. § 3.750.

[¶15.]       In 1981, the United States Supreme Court held that federal law

precluded state courts from treating military retirement pay as community property

in divorce proceedings. McCarty v. McCarty, 453 U.S. 210, 223, 101 S. Ct. 2728,

2736, 69 L. Ed. 2d 589 (1981) (emphasis added), superseded by statute, 10 U.S.C. §

1408. According to the McCarty Court, Congress intended all military retirement

benefits to go directly to military service members and not to their former spouses.

Id. at 228 (emphasis added). In direct response to the McCarty decision, Congress

passed the Uniform Services Former Spouses’ Protection Act (USFSPA), which

authorizes state courts to treat retirement pay as community property. 10 U.S.C. §

1408(c)(1). The USFSPA did not include disability benefits in the definition of

disposable retirement benefits. See 10 U.S.C. § 1408(a)(4)(B).

[¶16.]       In 1989 the United States Supreme Court interpreted the USFSPA.

See Mansell, 490 U.S. 581, 109 S. Ct. 2023. The Mansell decision acknowledged the

USFSPA’s affirmative grant of authority to treat retirement pay as community

property. Id. at 588. But the Court held that state courts may not treat military

retirement pay waived by retirees in order to receive veterans’ disability benefits as

divisible property. Id. at 594-95. The Court did not extend its holding to military

disability benefits received by service members who are not also eligible for

retirement pay. See id. Furthermore, the Mansell Court addressed the division of

benefits as marital property subject to division and not specifically the use or

consideration of benefits for spousal support. See id. at 588-90, 594-95.


                                          -5-
#25850

[¶17.]         In this case, Ike receives $2,823 in VA disability benefits each month.

He was not eligible for military retirement pay (and therefore had not waived

retirement pay in order to receive disability benefits) because Ike served less than

twenty years in the Army. Thus, despite Ike’s argument otherwise, the Mansell

decision does not apply here.1

[¶18.]         Ike’s disability benefits are exempt from attachment, levy, seizure, and

taxation. 38 U.S.C. § 5301(a)(1). The trial court was therefore unable to attach

Ike’s disability benefits to pay an alimony award. Yet the court did not attach Ike’s

benefits but instead considered them in determining alimony. In both its

conclusions of law and its order, the court specifically indicated that the alimony

award should not be construed as an attachment of any disability benefits. The

court reasoned that although federal law prohibits attachment of Ike’s military

disability benefits, the law does not dictate what happens to the money once it is in

Ike’s possession and does not prevent a court from ordering a service member to

make alimony payments (without ordering that the payments come from a specific

source).




1.       Ike also claims that this Court’s decision in Hisgen v. Hisgen, 1996 S.D. 122,
         554 N.W.2d 494 is applicable. However, like the Mansell decision, Hisgen
         addressed the divisibility of military disability benefits received after waiving
         a corresponding portion of retirement pay (i.e., the service member in that
         case was eligible for both retirement pay and disability benefits). Hisgen,
         1996 S.D. 122, ¶¶ 2, 6, 554 N.W.2d at 495-96. Furthermore, the husband and
         wife in Hisgen signed a property settlement agreement, and this agreement
         affected this Court’s analysis of the case. Id. ¶ 10. Thus, the Hisgen decision
         does not directly answer the issue before us here.

                                            -6-
#25850

[¶19.]         An “overwhelming majority of courts” have held that VA disability

payments may be considered as income in awarding spousal support. In re

Marriage of Morales, 214 P.3d 81, 85 (Or. Ct. App. 2009). These courts conclude

that federal law does not prohibit an award of alimony against a spouse receiving

military disability pay and, once alimony is awarded, federal law will not relieve the

paying spouse from paying such alimony obligations, even if most of the veteran’s

income consists of military disability benefits.2 In contrast, one court has found

that the Mansell decision and 10 U.S.C. § 1408 protect VA disability benefits from

consideration in an alimony determination. See Ex parte Billeck, 777 So. 2d 105,

108-09 (Ala. 2000). In Billeck, the Alabama Supreme Court acknowledged the

substantial disagreement with its position, but concluded that “other state courts

have circumvented the mandates of the Mansell decision and § 1408 by allowing

trial courts to consider veteran’s disability benefits in awarding alimony.” Id at

108.3




2.       See, e.g., Clauson v. Clauson, 831 P.2d 1257, 1263 n.9, 1264 (Alaska 1992);
         Murphy v. Murphy, 787 S.W.2d 684, 685 (Ark. 1990); Allen v. Allen, 650 So.
         2d 1019, 1020 (Fla. Dist. Ct. App. 1994); Jones v. Jones, 780 P.2d 581, 584
         (Haw. 1989); In re Marriage of Howell, 434 N.W.2d 629, 632-33 (Iowa 1989);
         Davis v. Davis, 777 S.W.2d 230, 232 (Ky. 1989); Riley v. Riley, 571 A.2d 1261,
         1266 (Md. 1990); Steiner v. Steiner, 788 So. 2d 771, 778-79 (Miss. 2001);
         Morales, 214 P.3d at 85-86; Parker v. Parker, 484 A.2d 168, 169-70 (Pa.
         Super Ct. 1984); Repash v. Repash, 528 A.2d 744, 746 (Vt. 1987); Weberg v.
         Weberg, 463 N.W.2d 382, 384 (Wis. Ct. App. 1990).

3.       But even Billeck gives no succor to Ike’s position. That case is
         distinguishable because Billeck, like Mansell and unlike this case, involved a
         retired member of the armed services actually receiving veteran’s disability
         benefits in lieu of military-retirement pay. Cf. Miller v. Miller, 10 So. 3d 570,
         575 (Ala. Civ. App. 2008).

                                            -7-
#25850

[¶20.]       Billeck takes a broad reading of Mansell. But a narrow interpretation

is more in step with the criterion the United States Supreme Court uses in

reviewing whether federal law preempts state domestic relations law. The Supreme

Court in Mansell noted its reluctance to find federal preemption of state domestic

relations law, stating, “[b]ecause domestic relations are preeminently matters of

state law, we have consistently recognized that Congress, when it passes general

legislation, rarely intends to displace state authority in this area.” Mansell, 490

U.S. at 587, 109 S. Ct. at 2028 (citations omitted). “Thus we have held that we will

not find preemption absent evidence that it is ‘positively required by direct

enactment.’” Id. (quotation omitted). To date there has been no direct enactment

prohibiting what the circuit court did here. Accordingly, we concur with the better

view and adopt the rationale from the majority of jurisdictions that have found that

no federal law demonstrates a clear intent to prohibit state courts from considering

VA disability benefits when deciding alimony.

                          Social Security Disability Benefits

[¶21.]       Ike argues that the trial court erred in considering his social security

disability benefits in awarding alimony. He asserts that federal law prohibits the

levy, attachment, or seizure of social security benefits, yet concedes that there is

also an exception for alimony and child support. Ike believes it is significant that

his social security benefits are placed with a payee who testified that Ike may be

financially unable to cover an alimony award. He also contends that Julie already

benefited from his social security payments because the couple spent a substantial




                                          -8-
#25850

amount of back-pay in a very short time with little to show for it. Ike claims Julie

did not account for where this money went.

[¶22.]       In response, Julie maintains that federal law provides an exception

that allows attachment of social security benefits for alimony. Julie also contends

that she accounted for the social security back-pay when she testified that they used

the money to pay off credit cards and other debts so that they could qualify for a VA

loan for a new home.

[¶23.]       Generally, social security benefits are not assignable or “subject to

execution, levy, attachment, garnishment, or other legal process[.]” 42 U.S.C. §

407(a). Notwithstanding this rule, however, social security benefits are subject to

“any . . . legal process brought[] by a State agency . . . to provide child support or

alimony.” 42 U.S.C. § 659(a).

[¶24.]       Ike receives $984 per month in social security disability benefits. The

circuit court did not attach the benefits but merely considered them in determining

whether Julie was entitled to alimony. Given that Ike’s social security disability

benefits are subject to garnishment for alimony under federal law, the court did not

err in merely considering the benefits in determining whether an alimony award

was appropriate.

                                        Alimony

[¶25.]       Ike argues that the trial court abused its discretion when it granted

Julie $500 per month in alimony for eight years because Julie did not demonstrate

her need for alimony or Ike’s ability to pay it. Ike contends that the marriage was

relatively short, that he is disabled and unable to earn a living, and that he received


                                           -9-
#25850

much of the marital debt under the court’s property distribution. Ike also contends

that Julie is healthy, able to earn a living, and received little debt in the property

distribution. Ike acknowledges that he was found to be at fault in the termination

of the marriage, but points out that the divorce was granted upon the ground of

irreconcilable differences.

[¶26.]       Julie responds that she earns approximately $1,500 per month while

Ike receives $3,807 per month in VA and social security disability payments. She

also points out that Ike received the marital home and that she received debt under

the court’s property distribution. In addition, Julie notes that Ike was at fault in

the termination of the marriage because Ike deceived Julie regarding his inability

to have children, initiated a relationship with another woman before they were

divorced, and was verbally and emotionally abusive.

[¶27.]       “Where a divorce is granted, the court may compel one party to make

such suitable allowance to the other party for support during the life of that other

party or for a shorter period . . . having regard to the circumstances of the parties

represented[.]” SDCL 25-4-41. “General alimony is intended to assist the recipient

in providing for food, clothing, housing, and other necessities.” Lovejoy v. Lovejoy,

2010 S.D. 39, ¶ 7, 782 N.W.2d 669, 672. Trial courts consider the following factors

when determining whether alimony is warranted:

             (1) the length of the marriage; (2) each party’s earning capacity;
             (3) their financial conditions after the property division; (4) each
             party’s age, health, and physical condition; (5) their station in
             life or social standing; and (6) the relative fault in the
             termination of the marriage.




                                          -10-
#25850

Id. “A party requesting alimony has the burden of proving a need for support and

that a former spouse has sufficient means and abilities to provide for part or all of

that need.” Schabauer v. Schabauer, 2003 S.D. 146, ¶ 6, 673 N.W.2d 274, 276.

[¶28.]       The circuit court entered detailed findings and conclusions on the

factors relevant to an alimony award. Both Ike and Julie are similar in age and

social standing. The marriage was relatively short. Julie is able bodied and

currently earns about $1,500 per month. Ike is disabled but receives $3,807 per

month in VA and social security disability payments. During the marriage, Julie

contributed all her earnings and performed many of the household duties and

carried out all financial responsibilities. Ike conceded his fault in the termination of

the marriage. Julie had frequently attempted to save the marriage. Considering

these facts, we cannot say that the circuit court abused its discretion in finding that

Julie demonstrated a need for and Ike’s ability to pay alimony.

                                   Attorney’s Fees

[¶29.]       Ike argues that the trial court abused its discretion when it ordered

him to pay Julie’s attorney’s fees and costs in the amount of $5,792.12. Ike points

out that the trial lasted only one day and that, other than the disability benefits

question, the legal issues were not complex.

[¶30.]       Julie maintains that the question whether Ike’s disability benefits may

be considered was a challenging legal issue that required briefing. Julie also argues

that Ike’s monthly income through disability payments is more than Julie’s monthly

income. Julie concedes, however, that the value of the property was small, the

pleadings were standard, and the trial was one day.


                                          -11-
#25850

[¶31.]       A trial court may award attorney’s fees in cases involving divorce,

support, or alimony. SDCL 15-17-38. We generally use a two-step analysis in

reviewing an award of attorney’s fees:

             First, the court must determine what constitutes a reasonable
             attorney’s fee. This requires consideration of (1) the amount and
             value of the property involved, (2) the intricacy and importance
             of the litigation, (3) the labor and time involved, (4) the skill
             required to draw the pleadings and try the case, (5) the
             discovery utilized, (6) whether there were complicated legal
             problems, (7) the time required for the trial, and (8) whether
             briefs were required. Second, it must determine the necessity
             for such fee. That is, what portion of that fee, if any, should be
             allowed as costs to be paid by the opposing party. This requires
             consideration of the parties’ relative worth, income, liquidity,
             and whether either party unreasonably increased the time spent
             on the case.

Edinger v. Edinger, 2006 S.D. 103, ¶ 17, 724 N.W.2d 852, 858.

[¶32.]       The trial court found that Julie incurred substantial attorney’s fees.

As to the reasonableness of those fees, the court also found that the case involved

complex legal issues that required briefing. In addition, the court found that Julie

had few resources and less income to cover her attorney’s fees. The court also noted

Ike’s misconduct and its impact on the marriage. On this record, we cannot say

that the trial court abused its discretion in awarding Julie attorney’s fees.

[¶33.]       Julie also seeks an award of appellate attorney’s fees and expenses in

the amount of $6,694.32. Considering the above factors, we award $3,000.

[¶34.]       Affirmed.

[¶35.]       GILBERTSON, Chief Justice, and ZINTER, SEVERSON, and

WILBUR, Justices, concur.




                                         -12-
