Rhone v. McDonough

53 F.4th 656
CourtCourt of Appeals for the Federal Circuit
DecidedNovember 17, 2022
Docket22-1360
StatusPublished
Cited by1 cases

This text of 53 F.4th 656 (Rhone v. McDonough) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rhone v. McDonough, 53 F.4th 656 (Fed. Cir. 2022).

Opinion

Case: 22-1360 Document: 26 Page: 1 Filed: 11/17/2022

United States Court of Appeals for the Federal Circuit ______________________

GUY C. RHONE, Claimant-Appellant

v.

DENIS MCDONOUGH, SECRETARY OF VETERANS AFFAIRS, Respondent-Appellee ______________________

2022-1360 ______________________

Appeal from the United States Court of Appeals for Veterans Claims in No. 20-2370, Chief Judge Margaret C. Bartley. ______________________

Decided: November 17, 2022 ______________________

GUY C. RHONE, Granite Falls, NC, pro se.

BORISLAV KUSHNIR, Commercial Litigation Branch, Civil Division, United States Department of Justice, Wash- ington, DC, for respondent-appellee. Also represented by BRIAN M. BOYNTON, ELIZABETH MARIE HOSFORD, PATRICIA M. MCCARTHY; AMANDA BLACKMON, Y. KEN LEE, Office of General Counsel, United States Department of Veterans Affairs, Washington, DC. Case: 22-1360 Document: 26 Page: 2 Filed: 11/17/2022

______________________

Before CHEN, BRYSON, and HUGHES, Circuit Judges. PER CURIAM. Plaintiff-Appellant Guy C. Rhone appeals the decision of the Court of Appeals for Veterans Claims (Veterans Court) affirming a decision of the Board of Veterans’ Ap- peals (Board) determining that the Department of Veter- ans Affairs (VA) lawfully withheld a portion of his disability compensation payments pursuant to a state court order for alimony payments. On appeal, Mr. Rhone argues the Veterans Court erred for two reasons: (1) fed- eral statutes do not allow withholding of disability compen- sation for alimony payments; and (2) the VA’s denial of substantive review of state court garnishment orders vio- lates his right to due process within the VA adjudication system. Because the Veterans Court correctly interpreted the relevant statutes and the VA’s denial of review of state garnishment orders does not violate due process, we affirm. BACKGROUND Mr. Rhone served in the United States Navy from Feb- ruary 1950 to December 1953 and in the United States Air Force from November 1959 to August 1988. Rhone v. McDonough, No. 20-2370, 2021 WL 2678674, at *1 (Vet. App. June 30, 2021) (Veterans Court Decision). In Febru- ary 1986, Mr. Rhone and his former spouse, Jo Anne Rhone, divorced upon entry of a Final Judgment of Disso- lution of Marriage (Divorce Decree) by the Circuit Court for Hillsborough County, Florida (State Court). Appx. 251, 255. 1 Recognizing that Mr. Rhone would be eligible for mil- itary retirement within two years, the Divorce Decree stated that Mrs. Rhone would receive 40% of Mr. Rhone’s

1 All Appx. citations refer to the appendix filed con- currently with Respondent-Appellee’s brief. Case: 22-1360 Document: 26 Page: 3 Filed: 11/17/2022

RHONE V. MCDONOUGH 3

military retirement benefits. Appx. 252, 254–55. Mr. Rhone appealed, and the District Court of Appeals for the 2nd District of Florida (State Appellate Court) upheld the Divorce Decree. Appx. 249–50. In 1988, Mr. Rhone separated from military service due to physical disability. Appx. 39, 245. Effective August 10, 1988, he had a combined disability rating of 60%. Appx. 248. This disability rating was subsequently in- creased to 70%, effective April 18, 1989. Appx. 242. To re- ceive his disability compensation, Mr. Rhone elected to waive a portion of his military retirement pay on July 27, 1990. Appx. 224. Such a waiver is required under 38 U.S.C. § 5305 to receive VA disability compensation. 2 As the Board found, it is undisputed that Mr. Rhone made such a waiver. Appx. 48. Mr. Rhone moved to modify his payment obligation un- der the Divorce Decree, which the State Court denied in an April 1990 order. Appx. 230–39. In doing so, the State Court clarified that the provision regarding Mrs. Rhone re- ceiving 40% of Mr. Rhone’s military retirement benefits

2 Section 5305 provides that any person who is receiving pay pursuant to any provision of law providing retired or retirement pay to persons in the Armed Forces . . . and who would be eligible to receive pension or compensation un- der the laws administered by the Secretary [of the VA] if such person were not receiving such retired or retirement pay, shall be entitled to receive such pension or compensation upon the filing by such person with the department by which such retired or retirement pay is paid of a waiver of so much of such person’s retired or retirement pay as is equal in amount to such pension or compensation. 38 U.S.C. § 5305. Case: 22-1360 Document: 26 Page: 4 Filed: 11/17/2022

“constitute[s] a provision for the payment from the Former Husband to the Former Wife of permanent periodic ali- mony and do[es] not constitute a property division.” Appx. 230–31; see also Appx. 254–55. Thus, “[t]he Former Wife is and was, therefore, entitled to an amount equal to forty percent (40%) of the gross military retirement as per- manent periodic alimony.” Appx. 231. Mr. Rhone ap- pealed, and the State Appellate Court affirmed the April 1990 order. Appx. 228–29. In August 1991, the State Court issued a Continuing Writ of Garnishment directing the Air Force to withhold from Mr. Rhone’s military retirement pay the alimony pay- ment due to Mrs. Rhone. Appx. 226–27. In November 1991, the State Court issued an order to the VA indicating that the Continuing Writ of Garnishment also applied to the VA. Appx. 221–22. In December 1991, the VA’s Office of District Counsel determined that the State Court’s No- vember 1991 order obliged the VA to make payments from Mr. Rhone’s disability compensation to Mrs. Rhone. Appx. 219–220. Mr. Rhone was notified that the VA would begin withholding a percentage of his disability compensa- tion effective February 1, 1992. Appx. 218, 214–16. In June 1996, Mr. Rhone notified the VA of his intent to renounce his rights to VA benefits. Appx. 202. He sub- sequently filed a claim for individual unemployability, but did not receive those benefits due to his renouncement. Appx. 41; see also Appx. 178–202 (seeking individual un- employability benefits in 1996–1997). Despite renouncing his VA benefits, between 1998 and 2001, he repeatedly elected to receive disability compensation in lieu of retired pay, but withdrew his election upon being informed by the VA that it would be subject to garnishment. Appx. 41–42; Appx. 173–76 (seeking disability compensation in 1998, but only if no garnishment was paid to his ex-wife); Appx. 150–66 (seeking disability compensation in 2000 and then renouncing); Appx. 148–49 (seeking disability com- pensation in 2001 but failing to pursue benefits). Case: 22-1360 Document: 26 Page: 5 Filed: 11/17/2022

RHONE V. MCDONOUGH 5

In 2002, Mr. Rhone again sought to receive disability compensation. Appx. 145–47. This time, he received a dif- ferent answer from the VA on the garnishment question. In January 2003, Regional Counsel at the VA determined that Mr. Rhone’s VA compensation benefits were not sub- ject to garnishment. Veterans Court Decision, 2021 WL 2678674, at *2; Appx. 143–44. As a result, in August 2003, a VA regional office (RO) issued a decision determining that Mr. Rhone’s “compensation benefits were erroneously withheld,” Appx. 138, and that Mr. Rhone would be reim- bursed for “all benefits previously withheld,” Appx. 140. Mr. Rhone was reimbursed for $27,664 in August 2003. Appx. 117. The conflicting decisions on garnishment led to further consideration by the VA. In January 2005, the VA’s Office of Regional Counsel ultimately determined that “[the] VA must comply with the validly served Order awarding Jo Anne Rhone permanent alimony of 40% of the veteran’s military retirement pay.” Appx. 122. A VA RO notified Mr.

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