* In the Matter of the Marriage of: Justin David Townley & Kellie Lynne Townley

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
In re the Marriage of:
JUSTIN DAVID TOWNLEY,
Appellant,
and
KELLIE LYNNE TOWNLEY,
Respondent.
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No. 39265-1-III
OPINION PUBLISHED
IN PART
LAWRENCE-BERREY, J. — The Uniformed Services Former Spouses’ Protection
Act (USFSPA), 10 U.S.C. § 1408, prohibits courts in dissolution actions from awarding
any portion of a military retiree’s disability pay to a former spouse. The question we
decide today is whether this also precludes a court from incorporating into the decree an
agreement made by the parties that provides for such an award. Bound by Mansell v.
Mansell, 490 U.S. 581, 109 S. Ct. 2023, 104 L. Ed. 2d 675 (1989), we conclude it does.
FACTS
Justin and Kellie Townley married in September 2003. For years, Justin served in
the United States Army and Washington National Guard. In June 2018, Justin was
FILED
MARCH 7, 2024
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
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permanently retired from service with a 70 percent disability rating due to posttraumatic
stress disorder. His monthly gross military disability retirement (MDR) pay was
$4,951.00.
In March 2020, the parties agreed to separate. On March 25, they entered into a
written agreement to divide their assets and liabilities. In the agreement, Justin
committed to giving Kellie 50 percent of his MDR pay. The two signed the agreement
and had it notarized.
In August 2020, Justin petitioned for dissolution. He argued federal law
preempted the trial court from awarding Kellie any of his MDR pay. He testified he did
not know when he signed the agreement that his disability pay could not be divided.
Kellie conceded that a court could not divide Justin’s MDR pay but argued that parties
could agree to do so and a court could enforce the agreement. The trial court agreed with
Kellie and awarded her 50 percent of Justin’s MDR pay in accordance with the parties’
written agreement. Justin appealed.
ANALYSIS
A. MILITARY DISABILITY RETIREMENT PAY
Justin contends the trial court erred when it enforced the written agreement by
giving Kellie 50 percent of his MDR pay. We agree.
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Standard of review
We generally review a trial court’s division of marital property for abuse of
discretion. In re Marriage of Muhammad, 153 Wn.2d 795, 803, 108 P.3d 779 (2005).
However, federal preemption is a question of law that we review de novo. McKee v.
AT&T Corp., 164 Wn.2d 372, 387, 191 P.3d 845 (2008) (citing Axess Int’l Ltd. v.
Intercargo Ins. Co., 107 Wn. App. 713, 722, 30 P.3d 1 (2001)).
Federal preemption and military retirement pay
In McCarty v. McCarty, 453 U.S. 210, 235, 101 S. Ct. 2728, 69 L. Ed. 2d 589
(1981), the United States Supreme Court precluded state dissolution courts from dividing
military retirement pay. There, military retirement disability pay was not at issue. See id.
at 213. The Court reasoned that Congress intended military retirement pay to reach the
veteran and no one else, and any treatment of military retirement pay as community
property damages important military personnel objectives. See In re Marriage of Kraft,
119 Wn.2d 438, 443, 832 P.2d 871 (1992) (citing McCarty, 453 U.S. at 232-35).
In 1982, Congress responded to McCarty by enacting the USFSPA, which
authorizes state courts to treat “disposable retired pay” as community property subject to
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division upon dissolution of a marriage. 10 U.S.C. § 1408(c)(1).1 “Disposable retired
pay” is defined in the USFSPA to exclude, as relevant here, retirement pay due to
disability. 10 U.S.C. § 1408(a)(4)(A)(iii). Thus, although state courts were empowered to
treat military retirement pay as community property, they could not treat certain other
types of pay—such as retirement pay due to disability—as community property.
In Mansell, the United State Supreme Court framed the issue before it as:
“[W]hether state courts, consistent with the [USFSPA], may treat as property divisible
upon divorce military retirement pay waived by the retiree in order to receive veterans’
disability benefits.” 490 U.S. at 583. There, Major Gerald Mansell had received both Air
Force retirement pay and, pursuant to a waiver of a portion of that pay, disability
benefits.2 Id. at 585. The parties’ divorce decree included a property settlement
agreement in which the Major had agreed to pay his former spouse 50 percent of his total
military retirement, including his disability pay. Id. at 585-86. Four years later, the
Major asked a trial court to modify the divorce decree by removing the provision that
1 10 U.S.C § 1408(c)(1) provides in relevant part: “Subject to the limitations of
this section, a court may treat disposable retired pay payable to a member . . . either as
property solely of the member or as property of the member and his spouse in accordance
with the law of the jurisdiction of such court.”
2 A portion of military retirement pay often is waived to receive nontaxable
disability benefits. Mansell, 490 U.S. at 583-84. This form of disability pay also is
excluded from “disposable retired pay.” 10 U.S.C. § 1408(a)(4)(A)(iii).
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required him to pay 50 percent of his total retirement pay to his former spouse. Id. at
586. The trial court declined his request. Id. Ultimately, the United States Supreme
Court ruled in favor of Major Mansell. Id. at 594-95.
In its ruling, the Court reasoned, “[U]nder the [USFSPA’s] plain and precise
language, state courts have been granted the authority to treat disposable retired pay as
community property; they have not been granted the authority to treat total retired pay as
community property.” Id. at 589. The Court held, “the [USFSPA] does not grant state
courts the power to treat as property divisible upon divorce military retirement pay that
has been waived to receive veterans’ disability benefits.” Id. at 594-95. The Supreme
Court provided no direction to the lower court on remand. See id. at 595.
As noted in the Mansell Court’s statement of the issue, it treated the Major’s
agreement to share his disability benefits with his former spouse as a “waiver,” even
though there was no evidence the Major knew that dissolution courts could not apportion
any of his disability benefits to his former spouse. As explained below, the Mansell
Court’s application of waiver is how Washington courts apply the waiver doctrine.
Waiver requires an intentional relinquishment of a known right, either express or
implied. Doe v. Gonzaga Univ., 143 Wn.2d 687, 711, 24 P.3d 390 (2001). Knowledge
of the right can be actual or constructive. See Yakima County (W. Valley) Fire Prot. Dist.
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No. 12 v. City of Yakima, 122 Wn.2d 371, 388, 858 P.2d 245 (1993). All parties are
charged with constructive knowledge of the law. Id.
Here, Justin’s lack of knowledge that dissolution courts could not apportion his
disability benefits to Kellie is immaterial. He had constructive knowledge of the law and
thus waived his right to those benefits. Even so, Mansell instructs us that dissolution
courts may not divide waived military disability retirement pay.
But unlike Mansell, we deem it prudent to give the lower court remand
instructions. Kellie might have a remedy. When signing their agreement, both Justin and
Kellie undoubtedly believed that Justin would pay, and Kellie would receive, 50 percent
of Justin’s MDR pay. If Kellie proves by clear, cogent, and convincing evidence that this
mutual mistake was material and was a basic assumption on which the agreement was
formed, she is entitled to rescind the agreement. See Paopao v. Dep’t of Soc. & Health
Servs., 145 Wn. App. 40, 50, 185 P.3d 640 (2008). In that event, the trial court must
enter its own property award in accordance with RCW 26.09.080 and perhaps its own
maintenance award in accordance with RCW 26.09.090.3 We reverse and remand for
proceedings consistent with this opinion.
3 The property and maintenance awards must also be consistent with Kraft:
[W]hen making property distributions or awarding spousal support in
a dissolution proceeding, the court may regard military disability
retirement pay as future income to the retiree spouse and, so regarded,
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A majority of the panel having determined that only the foregoing portion of this
opinion will be printed in the Washington Appellate Reports and that the remainder,
having no precedential value, shall be filed for public record pursuant to RCW 2.06.040,
it is so ordered.
B. THE SURVIVOR BENEFIT PLAN
The trial court additionally awarded Kellie the Survivor Benefit Plan (SBP),
conditioned on Kellie paying the monthly premium. With one exception not applicable
here,4 a veteran’s former spouse is eligible for continuing coverage under the SBP, either
voluntarily, by agreement, or by court order. See 10 U.S.C. § 1448(b)(3).
consider it as an economic circumstance of the parties. In particular,
the court may consider the pay as a basis for awarding the nonretiree
spouse a proportionately larger share of the community property [or
spousal support] where equity so requires. The court may not,
however, divide or distribute the military disability retirement pay as
an asset. It is improper under Mansell for the trial court to reduce
military disability pay to present value where the purpose of
ascertaining present value is to serve as a basis to award the nonretiree
spouse a proportionately greater share of the community property as a
direct offset of assets.
119 Wn.2d at 447-48.
4 The one exception is that a veteran may not make an election to provide SBP
coverage to a former spouse whom the veteran married after being eligible for retired
pay, unless the veteran and former spouse were married for at least one year or have a
child together. 10 U.S.C. § 1448(b)(3)(B)(i), (ii). This limitation does not apply here
because Justin was eligible for the SBP during his marriage to Kellie and had elected to
cover Kellie and their children during the marriage.
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Justin does not dispute that the SBP is an asset that the trial court was permitted to
divide. Rather, he argues the trial court abused its discretion when awarding the asset to
Kellie because the trial court’s reason for awarding the asset was erroneous. Specifically,
the trial court awarded the asset to Kellie so she could receive the benefit of the property
agreement, which reflected an agreement by Justin to pay Kellie 50 percent of his MDR
pay for her life. We disagree with Justin’s argument.
In the event the trial court determines that Kellie may not rescind the written
agreement (notwithstanding her inability to receive 50 percent of Justin’s MDR pay), the
reasoning the court gave for awarding the SBP to Kellie still remains—the parties
intended for Kellie to receive 50 percent of Justin’s MDR for life.
But in the event the trial court determines that Kellie may rescind the written
agreement, the SBP still is a marital asset that the trial court must divide. In that event,
the trial court must determine whether, and on what terms, allocation of the asset to
Kellie is consistent with RCW 26.09.080.
C. SPOUSAL MAINTENANCE
The trial court ordered Justin to pay Kellie 10 years of diminishing maintenance
even if she remarries. The diminishing maintenance applies only to income earned, not to
Justin’s Social Security or MDR payments. The trial court’s order was based on its
construction of the following language in the parties’ written agreement:
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See Clerk’s Papers at 148.
Justin contends the trial court abused its discretion because its construction of the
written agreement was erroneous. Kellie did not respond to this argument. Even had she
responded, we would agree with Justin.
Preliminarily, we have reviewed the record and are of the opinion that neither side
presented any evidence of what their intent was with respect to this particular issue. The
sole evidence is the written agreement itself.
We recognize the common practice of courts and settling parties to terminate
maintenance when the party receiving maintenance remarries. Here, the parties crafting
the written agreement are not lawyers. The mere fact that the written agreement can be
construed one way as easily as the other is an insufficient reason, in our view, to construe
it in a manner that would defeat the common practice and reasonable expectations of
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divorcing parties. In the event the trial court determines that Kellie may not rescind the
written agreement, we direct it to order Justin's limited maintenance obligation to end
upon Kellie's remarriage.
But in the event the trial court determines that Kellie may rescind the written
agreement, we remind the trial court it must award maintenance, if any, in accordance
with RCW 26.09.090 and Kraft, 119 Wn.2d at 447-48.
Lawrence-Berrey, J.
WE CONCUR:
Fearing, C. 	) 	Staab, J.
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