Can Utah courts divide military disability retirement pay in divorce proceedings? Chlarson v. Chlarson Explained

The Utah Court of Appeals recently clarified that Chapter 61 disability retirement pay cannot be divided in divorce proceedings, even when a military member receives concurrent disability compensation. In Chlarson v. Chlarson, the court reversed a district court order that would have divided such benefits between divorcing spouses.

Background and Facts

Justin and Jacqueline Chlarson divorced in 2021 after nine years of marriage. The divorce decree awarded equal shares of the “marital portions” of all retirement funds. Shortly after the decree, Justin was retired from the military with a 100% disability rating and nearly 21 years of service. He began receiving two types of payments: disability compensation under 38 U.S.C. § 1110 and disability retirement pay under Chapter 61. When Justin refused to pay Jacqueline her share of the retirement pay, she filed a motion to enforce the award.

Key Legal Issues

The central issue was whether Justin’s Chapter 61 disability retirement pay qualified as “disposable retired pay” under the Uniformed Services Former Spouses’ Protection Act (10 U.S.C. § 1408). The district court relied on a Defense Office of Hearings and Appeals decision concluding that concurrent receipt of disability benefits under § 1414 transformed Chapter 61 pay into divisible retirement benefits.

Court’s Analysis and Holding

The Court of Appeals applied statutory interpretation principles to analyze the federal statutes governing military retirement pay. The court found that Section 1408 specifically excludes from “disposable retired pay” any retirement pay received by members entitled to retired pay under Chapter 61. Crucially, the court determined that Section 1414’s authorization for concurrent receipt of disability compensation and retirement pay does not change the underlying character of Chapter 61 benefits. The court rejected the DOHACAB’s reasoning, finding it neither binding nor persuasive, and followed the Alaska Supreme Court’s decision in Guerrero v. Guerrero.

Practice Implications

This decision emphasizes the importance of precisely identifying the source of military retirement benefits in divorce proceedings. Practitioners must distinguish between different types of military retirement pay, as federal law strictly limits state court authority to divide certain benefits. The court acknowledged the apparent inequity but noted that policy changes must come from Congress, not the courts. Divorce attorneys should carefully investigate the specific statutory basis for any military retirement benefits when drafting property division orders.