Mullarkey opinion utilizes S.C. Code Ann. § 63-3-530(A)(30) to allow clarification of equitable distribution award

Posted Thursday, January 26th, 2012 by Gregory Forman
Filed under Equitable Distribution/Property Division, Family Court Procedure, Of Interest to Family Court Litigants, Of Interest to Family Law Attorneys, South Carolina Appellate Decisions, South Carolina Specific

The January 25, 2012 Court of Appeals opinion in Mullarkey v. Mullarkey, 397 S.C. 182, 723 S.E.2d 249 (Ct. App. 2012), provides valuable guidance on how to obtain clarification of an unclear “final” final order (“final” in the sense that all allowable post-trial motions and appeals have already been resolved or the time period to file such motions or appeals has passed).  Prior to Mullarkey, the procedural method of resolving disputes over vague or ambiguous family court orders, especially equitable distribution orders, hasn’t been clear.  Mullarkey holds that S.C. Code § 63-3-530(A)(30), which gives the family court exclusive jurisdiction “to make any order necessary to carry out and enforce the provisions of this title,” authorizes supplemental proceedings to clarify and interpret equitable distribution orders (and, presumably, all “final” final orders).

Such problems frequently develop because South Carolina’s equitable distribution statute, § 20-3-620, states, “[t]he court’s order as it affects distribution of marital property shall be a final order not subject to modification except by appeal or remand following proper appeal.” § 20-3-620(C).  Thus the family court cannot modify such “final” final equitable distribution orders.  Further, it is hard to enforce a vague or ambiguous provision of a equitable distribution order because, “[t]he language of the commands must be clear and certain rather than implied” in order to support a finding of contempt for violation of a court order. Welchel v. Boyter, 260 S.C. 418, 421, 196 S.E.2d 496, 498 (1973).  Thus, rules to show cause are ineffective tools to enforce an unclear order.

The Mullarkey case involved interpretation of a final order dividing Husband’s military retirement.  The case has a lengthy procedural history that is necessary to understand the issue on appeal.  In 1999 the family court issued a final order that ordered in part:

14. [Wife] shall receive 43.80% of [Husband’s] disposable monthly military retirement pay and any cost of living increases attributable to [Wife’s] portion of retirement pay.  Payment to [Wife] shall commence at the time [Husband] begins receiving the retirement benefits and shall be by direct payment from the military finance center.  Each party shall pay the income taxes attributable to his or her portion of the retire[ment] pay.  This division of retirement benefits is part of the parties’ property division.  It is the intention of both parties as well as the Court that this Final Decree has the effect of a QDRO [qualified domestic relations order].

. . . .

18. It is the intent of this Court that this order has the effect of [a] Qualified Domestic Relations Order with regard to the distribution of [Husband’s] military retire[ment] pay.  Upon the date of [Husband’s] retirement, [Wife] shall receive 43.8% of the [Husband’s] monthly retirement benefit.  Each party is responsible for payment of the income tax attributable to his or her respective percentage. . . .  [Husband] is an O-3 in the United States Navy.  He enlisted on June 16, 1977.  Said benefits shall be sent directly to [Wife] from the U.S. Government.  The Plan [A]dministrator shall immediately notify counsel for [Wife] in the event this Order does not meet the necessary qualifications of acceptance and counsel for [Wife] shall prepare an appropriate supplemental Order which meets the Plan Administrator’s guidelines.

When the family court issued this order, Husband had accumulated a total of twenty-one years of military service, eighteen years and five months of which the parties were married.  According to the briefs submitted in this appeal, the award to Wife of 43.8% of Husband’s military retirement was equivalent to awarding Wife 50% of the marital portion of the 252 months of military service that Husband had accumulated when the support order was issued.

Husband moved for reconsideration of the support order, requesting among other relief that the family court clarify that Wife’s 43.8% share of his military retirement was to be based only on the portion he earned during the marriage.  The family court held a hearing on the motion and later issued an order denying reconsideration.  As to Husband’s concern about Wife’s allocation of his military retirement benefits, the family court stated as follows:

2. As to [Husband’s] request to amend the Order of Separate Support and Maintenance with regard to the wording of those portions of the Order setting forth [Wife’s] allocation of retirement benefits, I find that, pursuant to the case of Ball v. Ball, 314 S.C. 445, 445 S.E.2d 449 (1994) (Military retirement pay, whether vested or nonvested, is essentially compensation for past services and accordingly, is property subject to equitable distribution), that my award of 43.8% of [Husband’s] disposable military retirement benefits as whole [sic] is proper[,] and accordingly, I deny [Husband’s] request to amend the portion of the Decree with regard to the retirement benefits awarded.

Neither party appealed the 1999 support order.

Husband retired from the Navy on August 1, 2009.  By then, he accumulated an additional 125 months of service after the entry of the 1999 support order.  When Husband notified the Department of Defense Finance and Accounting Service (DFAS) to process his retirement pay, the DFAS calculated Wife’s 43.8% share based on Husband’s entire time of service, including the 125 months he accumulated after the issuance of the 1999 order.  Husband’s attorney then drafted a supplemental decree clarifying that Wife’s share was to be based on only the military retirement benefits he had accrued when the family court issued the 1999 support order; however, Wife refused to consent to it, claiming she was entitled to 43.8% of Husband’s entire monthly benefits.

Husband then filed a motion in the family court to enforce the 1999 support order, or in the alternative, to modify it pursuant to Rule 60(b)(5), SCRCP, so that Wife’s share of his military retirement would be limited to 50% of the portion he accrued during the parties’ marriage.  After counsel argued the motion before the family court, Wife filed a return in which she expressed her opposition to the motion, arguing (1) the family court lacked jurisdiction to modify the property division, (2) Husband was essentially re-litigating an issue that he should have raised in an appeal, and (3) Husband’s decision to remain in the military delayed her receipt of the benefits to which she was entitled and prolonged the period that she received a reduced amount of alimony.  Subsequently, the family court issued the appealed order, in which it denied Husband’s motion to enforce or modify the 1999 order and awarded Wife $1,500 in attorney’s fees.  Specifically, the court held (1) Husband should have appealed the 1999 support order and (2) under Ball, the family court had the discretion to award nonvested as well as vested retirement benefits.  Husband moved for reconsideration of this order, arguing (1) the family court erroneously relied on Ball; (2) the court erroneously exercised jurisdiction over his nonmarital military retirement benefits earned after the dissolution of the parties’ marriage;  (3) the court failed to consider his argument that Rule 60(b)(5), SCRCP, should be applied to this case on the ground that prospective application of the 1999 order was no longer equitable; and (4) the court failed to address the requisite factors in awarding attorney’s fees to Wife.  The family court declined to alter or amend its order, and Husband filed this appeal.

The Court of Appeals first held that Husband wasn’t required to appeal the 1999 order, noting:

In the 1999 support order, the family court expressly ruled that the division of Husband’s military retirement benefits was “part of the parties’ property division” rather than in the nature of spousal support.  Furthermore, in its order on Husband’s motion for reconsideration, the family court, referencing Ball, stated that “[m]ilitary retirement pay, whether vested or nonvested, is essentially compensation for past services.” (emphasis added).  The family court correctly omitted from this discussion any treatment of unearned retirement benefits that would result from future service by a military employee.

Moreover, in her return to Husband’s motion for reconsideration, Wife responded as follows:

In the instant case, [Husband] had previously agreed that [Wife] was entitled to 50% of his disposable pay calculated at the rank of Lt. with 18 years, 5 months of service . . . . [Husband] then went on to calculate the proportion [Wife] was entitled to using the formula which divided the length of the marriage (parties are still married, however as of date of filing, they lived together for 221 months) over the number of years in the service (252 months) and multiplied that amount by .50 to come up with 43.75%.  Using the same formula, [Wife] came up with 43.85% of the retirement benefits.  The Court awarded [Wife] 43.8% of [Husband’s] military retirement benefits.  The formula already takes into account and “discounts” [Wife’s] portion of entitlement by the length of the parties’ marriage.

(emphasis added).  It is apparent from these statements that both parties correctly understood Wife’s benefits were to be based on only that portion of Husband’s military retirement that he had accrued as of the time the 1999 order was issued.  Because Husband was not aggrieved by this order, he could not have appealed it.  See Rule 201(b), SCACR.  We therefore reverse the family court’s ruling that Husband’s failure to appeal the 1999 separate support and maintenance order bars him from seeking further relief.

The Court of Appeals next considered Husband’s entitlement to a supplemental order to correct DFAS’s interpretation of the 1999 order, holding that while Rule 60(b)(5), SCRCP, was not the correct procedure to bring such a request, such a request could be granted under the authority of § 63-3-530(A)(30):

Husband further contends that under Rule 60(b)(5), SCRCP, he is entitled to a supplemental order to avoid the inequitable effect of the DFAS’s interpretation of the 1999 orders.  We agree with Wife that relief under Rule 60(b)(5) is available only in cases of fraud upon the court or “rare, special, exceptional or unusual circumstances that may warrant equitable relief, including accident or mistake.”  Mr. T v. Ms. T, 378 S.C. 127, 135, 662 S.E.2d 413, 417 (Ct. App. 2008) (citing 11 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 2868 (2d ed. 1995)).  Nevertheless, although Husband cannot obtain “relief” from the 1999 support order under Rule 60(b)(5), we hold he is entitled by statute to a supplemental order clarifying the terms of that order.  See S.C. Code Ann. § 63-3-530(A)(30) (2010) (giving the family court exclusive jurisdiction “to make any order necessary to carry out and enforce the provisions of this title”).

Finally, because the Court of Appeals reversed the family court’s ruling on the division of Husband’s military retirement benefits earned after the 1999 order, it reversed and remanded the family court’s award of attorney’s fees to Wife.

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