DEAN J. BAER, APPELLANT,
v.
DEBORAH S. BAER, APPELLEE
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Dean Baer appealed a dissolution of marriage judgment, challenging the trial court's determination that his wife's military voluntary separation incentive (VSI) payments were her sole and separate property rather than marital assets subject to equitable distribution. The First District Court of Appeal affirmed, holding that VSI payments function as severance compensation for future lost wages rather than retirement benefits earned during the marriage.
The trial court did not err. VSI payments are analogous to severance benefits that compensate a service member for future lost wages, not compensation for past services rendered during the marriage. Therefore, VSI payments are the separate property of the service member and not subject to equitable distribution as marital property.
[1] Voluntary Separation Incentive (VSI) payments are analogous to severance benefits, intended to compensate a service member for future lost wages, rather than retirement b…
[2] Severance pay received during the marriage is marital property to the same extent that wages paid during the marriage are marital property.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Like severance payments, VSI benefits attempt to compensate a separated service member for future lost wages. The mere fact that the amount of the payments is determined according to the number of years of service does not necessarily render these payments compensation for past services.”
Establishes the key distinction that VSI payments compensate for future lost wages, not past service, making them severance benefits rather than retirement benefits.
Previewing 1 of 2 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceThe wife requested voluntary separation from the Army in January 1993 under the VSI program, which provides annual payments for 20 years upon agreemen…
The full statement of facts, procedural history, and disposition for this case are member content.
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WOLF, Judge.
Appellant, Dean J. Baer, challenges an amended judgment of dissolution of marriage. Finding no reversible error, we affirm the judgment of the trial court. We do, however, find that one issue merits discussion: Whether the trial court erred in awarding the wife her military voluntary separation incentive payments (VSI) as her sole and separate property.
The wife requested voluntary separation from the army in January 1993, pursuant to the voluntary separation incentive program provided by the United States military. According to testimony received by the trial court, the request was irreversible once submitted, and provides benefits in the form of annual payments for 20 years upon agreement to serve in the ready reserves. In February 1993, one month after the 'wife requested voluntary separation from the army, the husband filed a petition for dissolution of marriage. On November 3, 1993, during the pendency of the dissolution proceedings, the husband filed a motion for determination of the wife’s VSI payments and accrued annual leave benefits as marital assets. In December 1993, following a hearing on the motion, the lower court adjudged that neither the wife’s VSI payments nor her accrued annual leave were marital assets subject to distribution.
Appellant argues that VSI payments are analogous to retirement benefits, and that the portion of appellee’s VSI pay which accrued during the marriage is marital property. Appellee argues that VSI payments are more closely related to disability pay which takes the place of future compensation rather than compensation for past service.
In McClure v. McClure, 1994 WL 543193 (Ohio App.2d Dist.1994), an Ohio court examined the legislative history of the act which created the VSI program and concluded that “[gjiven the congressional intent behind the VSI program, VSI payments are more closely analogous to severance benefits than retirement benefits.” Id. at WL p. 8 (citing Polchek, Recent Property Settlement Issues for Legal Assistance Attorneys (December 1992), Army Lawyer 4). The McClure court continued as follows:
Like severance payments, VSI benefits attempt to compensate a separated service member for future lost wages. The mere fact that the amount of the payments is determined according to the number of years of service does not necessarily render these payments compensation for past services. Rather, severance pay is frequently calculated according to the number of years of employment. Although severance pay received during the marriage is marital property to the same extent that wages paid during the marriage are marital property, severance payments intended to compensate for wages lost after the divorce cannot be characterized as marital property. Accordingly, the trial court did not abuse its discretion when it determined that [McClure’s] VSI payments were his separate income and not marital property.
Id. at WL p. 8, citations omitted.
More recently, this court stated as to VSI payments:
Separation pay is the personal property of the service member, for its purpose is to ease the transition to civilian life. Retired pay, on the other hand, is a contractual obligation designed to constitute compensation for past services rendered.
Kelson v. Kelson, 647 So. 2d 959 (Fla. 1st DCA 1994).
As in Kelson, we recognize here that the fifth district in dictum in Abenethy v. Fishkin, 638 So. 2d 160 (Fla. 5th DCA 1994), stated that VSI payments may be considered to be analogous to retirement pay. Nevertheless, we reject the fifth district’s interpretation. We find no error in the trial court’s interpretation that the VSI payments are not marital property subject to equitable distribution. We affirm.
WEBSTER and MICKLE, JJ., concur.
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Citator
Cited By
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White v. White, 710 So. 2d 208 (Fla. 1st DCA 1998)…r wife was involuntarily discharged from the Navy, and the divorce became final less than a year after the discharge. In support of its decision to exclude the involuntary separation payment • from marital assets, the trial court cited Baer v. Baer, 657 So. 2d 899 (Fla. 1st DCA 1995) (voluntary separation incentive payments from United States Army are not marital assets subject to equitable distribution). Although we conclude that the lower court reached the legally correct result, we note that the decision o…
Authorities Cited
- Abernethy v. Fishkin, 638 So. 2d 160 (Fla. 5th DCA 1994)
- Donnelly v. Adel T. Fahmy, M.D. & Adel T. Fahmy, M.D., P.A., 647 So. 2d 959 (Fla. 5th DCA 1994)
- Kelson v. Kelson, 647 So. 2d 959 (Fla. 1st DCA 1994)