Divorce proceedings can be more complex when they involve active members of the military. Divorcing couples when one or both spouses are members of the military often involve some unique issues surrounding the classification and equitable distribution of military marital assets and there are additional regulations regarding how military assets are treated. In a recent case, the Circuit Court for the City of Hampton determined whether or not to enforce a separation agreement between former spouses that held the divorced military husband would indemnify his divorced spouse for losses if he took action to defeat or reduce his former spouse’s share of his military retirement pay. The court upheld the agreement, including the indemnification provision.

Ellis v. Sutton-Ellis

Darrell Ellis and Talisha Sutton-Ellis separated in April 2014 and signed a Stipulation and Separation Agreement, which addressed how Darrell’s military retirement was to be divided after the divorce. Under the Agreement, Talisha was to receive 47.48% of Darrell’s military retirement. Additionally, under the Agreement, Darrell guaranteed that he would take no action to defeat or reduce Talisha’s share of his retirement pay, including waivers for disability. Darrell also agreed to indemnify Talisha for any losses if he breached the agreement.

The U.S. Supreme Court previously held in Howell v. Howell that a state court cannot order a veteran to indemnify his divorced spouse for the loss in the divorced spouse’s portion of the veteran’s retirement pay caused by the veteran’s waiver of retirement pay to receive disability benefits. The federal government has preempted state courts from ordering parties to indemnify another regarding military retirement pay and benefits.

However, here, the court did not aim to order Darrell to indemnify Talisha. Instead, the matter in this case is whether the court can enforce an agreed-upon contract the parties voluntarily entered into whereby Darrell agreed to indemnify Talisha. The court noted that “parties are free to contract for provisions that aid in determining how property and assets will be divided following a divorce.” If issues arise under the agreement, rules of contract law will govern how the agreement is interpreted and enforced. While federal law precludes state courts from ordering a military service member to indemnify another, the court here concluded that federal law does not preclude spouses from indemnifying one another in a negotiated settlement agreement.

Lessons Learned From Ellis v. Sutton-Ellis

The key takeaway from this case is to ensure you have a carefully drafted separation agreement after a divorce. It is always a good idea to consult with a family law attorney when involved in divorce proceedings. However, especially for couples with at least one military spouse, it’s important to consult a family law attorney experienced in military divorces and familiar with the types of issues that may arise.

A spouse’s military pension is considered property during a divorce and the non-military spouse will typically receive 50% of the marital share of the military pension. However, parties are free to contract for provisions that aid in determining how property and assets, including military pensions, will be divided. While federal law precludes state courts from ordering a military service member to indemnify another, the court here concluded that federal law does not preclude spouses from indemnifying one another in a negotiated settlement agreement. Parties with similar provisions in their settlement agreements should take this finding as guidance that those provisions will likely be enforced.

Led by Joanna Foard, General Counsel, P.C.’s family / divorce practice can help you. Divorce and related matters can be complex and because of their importance, it is beneficial to consult with an attorney experienced in family law matters. Our family law attorneys are well versed in divorce matters, including matters specific to couples where one or both are members of the military, and can help you navigate the process and protect your rights. Email us at intake@gcpc.com or call us at 703-991-7973 and see how we can help you.