Maria-Teresa Nicholson v Ronald L. Nicholson

COURT OF APPEALS OF VIRGINIA
Present: 	Judges Benton, Coleman and Fitzpatrick
Argued at Alexandria, Virginia
MARIA-TERESA NICHOLSON
v. 	Record No. 1249-94-4 	OPINION BY
JUDGE SAM W. COLEMAN III
RONALD L. NICHOLSON 	OCTOBER 31, 1995
FROM THE CIRCUIT COURT OF ARLINGTON COUNTY
Benjamin N.A. Kendrick, Judge
Lauren E. Shea (Sherman, Meehan & Curtin, P.C.,
on briefs), for appellant.
Yvonne DeBruyn Weight (Eric Michael Weight; Weight
& Weight, on brief), for appellee.
This domestic relations case involves the statutory right of
entitlement of a former spouse in her former husband's retirement
annuity under the Foreign Service Act of 1980, as amended, 22
U.S.C. § 3901 et seq.1 The trial court held that, when
Maria-Teresa Nicholson signed the parties' 1981 property
settlement agreement relinquishing and releasing all rights to
which she may have been entitled in property thereafter acquired
by her former husband, Ronald L. Nicholson, she expressly waived
her entitlement to a share of her former spouse's retirement
annuity under the Foreign Service Act (Act). 	We find that the
terms of the Nicholsons' property settlement agreement are
1 Although the ultimate issue in this case involves the
rights of parties under a federal statute to retirement benefits
of a foreign service employee, the Court of Appeals has
jurisdiction of this appeal pursuant to Code § 17-116.05(3)(b)
and (f) because the proceeding involves the construction of a
property settlement agreement incorporated into a divorce decree.

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insufficient to support the trial court's finding of an express
waiver. 	Accordingly, we reverse the trial court's ruling. 	We
remand the case for the trial court to enter an order holding
that Maria-Teresa Nicholson did not, in the May 4, 1981, property
settlement agreement, expressly waive her statutory right to a
share of her former spouse's retirement annuity.
The Nicholsons were married in 1968 and separated in 1980.
Throughout the marriage, Ronald Nicholson was employed by the
United States Foreign Service. 	Effective February 15, 1981,
Congress enacted The Foreign Service Act of 1980, 22 U.S.C.
§ 3901 et seq., which conferred upon former spouses of members of
the foreign service entitlement to a retirement annuity of up to
fifty percent of the participant's annuity, depending upon the
duration of the participant's service and marriage, "[u]nless
otherwise expressly provided by [a] spousal agreement or court
order."2
2 22 U.S.C. § 4054(a)(1) states in part: 	"Unless otherwise
expressly provided by any spousal agreement or court order under
Section 4060(b)(1) of this title, a former spouse of a
participant or former participant is entitled to an annuity."
(Emphasis added).
22 U.S.C. § 4060(b)(1)(A) further provides:
In the case of any participant or annuitant
who has a former spouse who is covered by a
court order or who is a party to a spousal
agreement . . .
(i) any right of the former spouse to any
annuity under Section 4054(a) of this title
. . . shall be determined in accordance with
that spousal agreement or court order, if and
to the extent expressly provided for in the

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On May 4, 1981, two and one-half months after the effective
date of the Foreign Service Act of 1980, the Nicholsons executed
a property settlement agreement.3 The pertinent provisions of
their property settlement agreement, which Ronald Nicholson
contends constitute an express waiver of Mrs. Nicholson's rights
under the Act, are as follows:
[The parties] desire to effect a full and complete
settlement of their respective property rights.
* 	* 	* 	* 	* 	* 	*
5. 	It is further understood and agreed that
both parties shall have the right to sell or
otherwise dispose of any and all property,
which he or she may now or in the future own
personally (and not listed herein) without
demand being made upon either of them. . . .
6. 	Each of the parties does hereby
relinquish and release to the other all
rights and curtesy or dower that he or she
may have in the property hereinafter acquired
by either of them . . . .
The parties were divorced in 1985, and the decree "affirmed
terms of that spousal agreement or court
order.
3 At the time the Nicholsons entered into their property
settlement agreement, the Virginia General Assembly had not
enacted the equitable distribution statute, Code § 20-107.3. 	The
statute did not become effective until July 1, 1982. 	Therefore,
when the Nicholsons contemplated the terms of their property
settlement agreement neither spouse had a basis under Virginia
law to claim or expect a share in the other's retirement
benefits. 	Thus, although Maria-Teresa Nicholson's claim is one
of statutory entitlement under the federal Foreign Service Act,
rather than a claim for equitable distribution, the state of the
law in Virginia as to equitable distribution at the time of their
agreement is relevant to an understanding of the terms of their
agreement.

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ratified and incorporated by reference" the property settlement
agreement. 	In 1994 when Ronald Nicholson retired from the
foreign service, Maria-Teresa Nicholson filed a claim with the
Department of State for a former spouse's annuity under 22 U.S.C.
§ 4054(a)(1). 	In response, pursuant to Code § 20-121.1, Ronald
Nicholson filed a petition in the Arlington County Circuit Court
to have their divorce case reinstated on the docket in order to
have the court construe whether the terms of the property
settlement agreement "expressly waived" Maria-Teresa Nicholson's
right to a share of his retirement annuity.4 See also
Code § 20-107.3(K)(4) (conferring authority and jurisdiction on a
divorce court to enforce or modify a divorce decree in such a
manner as to affect or divide a pension or retirement benefits
pursuant to federal laws "so as to effectuate the expressed
4 At a hearing for reconsideration of the trial court's
ruling, Maria-Teresa Nicholson presented a letter from the United
States Department of State which stated that the Department had
reviewed the Nicholsons' property settlement agreement and
determined that the spousal agreement and divorce order did not
expressly waive her statutory entitlement to an annuity.
Although the trial judge viewed and considered the letter at the
reconsideration hearing, he did not mark the letter as an exhibit
and formally admit it into evidence. 	See Rules 5A:7 and 5:10.
Consequently, Ronald Nicholson has requested on appeal that it be
stricken from the record and not considered. 	However, because
the trial court viewed and considered the letter, but did not
receive it as an exhibit, we deny Mr. Nicholson's motion to
strike the letter from the record. 	See Mueller v. Commonwealth,
15 Va. App. 649, 652, 426 S.E.2d 339, 341 (1993); see also Martin
v. Winston, 181 Va. 94, 105, 23 S.E.2d 873, 877, cert. denied,
319 U.S. 766 (1943). 	Nevertheless, the letter is irrelevant to
our determination because we decide whether the spousal agreement
or court order expressly waives the former spouse's statutory
entitlement to a retirement annuity based upon the law and facts
independent of the State Department's administrative decision.

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intent" of a prior decree). 	The trial court held that "by the
terms of said Property Agreement," Maria-Teresa Nicholson "has
waived any property rights" or "any entitlement that she may have
had . . . to any portion of the pension or other retirement
benefits" of Ronald L. Nicholson. 	This appeal followed.
ANALYSIS
Under 22 U.S.C. § 4054(a) a former spouse, who was married
to a foreign service member for a requisite number of years of
creditable service, is entitled to a share of the member's
retirement annuity, unless or until the former spouse of the
member remarries before age 60. 	When Congress enacted the
provisions of the Foreign Service Act that established the right
of a former spouse to a share of a foreign service retiree's
annuity, Congress preempted the right of states to determine the
property rights of a former spouse according to the state's
respective family law principles.5 In doing so, however,
5 By enacting the former spouse provisions of the Foreign
Service Act, Congress determined not to grant to the states the
deference traditionally shown by the federal government in the
area of a state's family and domestic relations law. 	In
explaining the reasons for its action, Congress stated, "[w]idely
varying divorce laws from state to state would result in
different awards of a Federal benefit for the same deprivations.
Furthermore, there is little or no awareness among the legal
community of the special problems faced by Foreign Service
spouses." 	Congress recognized the need for a former spouse
annuity due to the fact that spouses of Foreign Service members
could rarely establish their own independent careers or
retirement pensions due to frequent transfers to various posts.
S. Rep. No. 913, 96 Cong. 2d Sess. 67 (1980), reprinted in 1980
U.S.C.C.A.N. 4419, 4485. 	Cf. Hisquierdo v. Hisquierdo, 439 U.S.
572, 581 (1979).

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Congress limited its federal preemption by recognizing that the
parties and state courts have a superior right under their
domestic relations law to determine those marital or property
rights when "expressly provided by any spousal agreement or court
order." 	(Emphasis added). 	22 U.S.C. § 4054(a)(1). 	Thus, 22
U.S.C. § 4054 recognizes that divorcing parties in a spousal
agreement or divorce courts in their decrees may (1) vary the
amount of the retirement annuity payable to a former spouse from
the amount set by statute, subject to the maximum limitation
provided by the Act, or (2) may release, relinquish, or waive any
or all rights a former spouse may have in a member's retirement
annuity under the Act. 	Id. 	However, in order for a spousal
agreement or court decree to affect a former spouse's statutory
right to the federal pension, 22 U.S.C. § 4060(b)(1)(A) provides
that the spousal agreement controls only "if and to the extent
expressly provided for in the terms of that spousal agreement."
See Wilkinson v. Wilkinson, 785 F. Supp. 1037 (D.D.C. 1992),
aff'd 986 F.2d 546 (1993) (holding that general waiver or release
of "all . . . claims . . . or demands" was not sufficient to
satisfy the "express waiver" provision).
Therefore, we look to the Nicholsons' 1981 property
settlement agreement to determine if and to what extent the
agreement "expressly provides" for a waiver or relinquishment of
Maria-Teresa Nicholson's rights to her share of Ronald
Nicholson's foreign service retirement annuity. 	If the

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provisions of the Nicholsons' spousal agreement can be reasonably
construed to "expressly" waive Maria-Teresa Nicholson's
entitlement to a share of her former spouse's retirement annuity,
the trial court's judgment must be affirmed. 	Code § 8.01-680;
see Galloway Corp. v. Wise, 244 Va. 344, 346, 421 S.E.2d 431, 433
(1992).
When a judgment is based upon the construction or
interpretation of a contract, an appellate court is not bound by
the trial court's construction of the contract's provisions.
Smith v. Smith, 3 Va. App. 510, 513, 351 S.E.2d 593, 595 (1986).
An appellate court is equally able to construe the meaning of
the provisions of an unambiguous contract. 	Wilson v. Holyfield,
227 Va. 184, 188, 313 S.E.2d 396, 398 (1984).
Ronald Nicholson contends that the holding in Himes v.
Himes, 12 Va. App. 966, 407 S.E.2d 694 (1991), controls our
decision in this case. 	We disagree. 	Himes dealt with whether,
under Virginia law, a general waiver of property rights in a
property settlement became a vested right that prevented one
spouse from making a claim against the other spouse's retirement
benefits when the equitable distribution statute was subsequently
enacted. 	The Nicholsons' case involves the interpretation and
application of a federal statute, which has a requirement of
"express" waiver by a spousal agreement or court order.
The terms of the Nicholsons' spousal agreement are not
ambiguous. 	Interpretation of this contract does not require the

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admission of parol evidence in order to understand it. 	The sole
question for our consideration is whether the terms of paragraphs
5 and 6, when considered with the general purpose of the
agreement stated in the preamble, satisfy the requirements of 22
U.S.C. §§ 4054(a)(1) and 4060(b)(1)(A) that before a former
spouse may be denied her federal statutory entitlement, the
spousal agreement must "expressly" provide for a waiver or
relinquishment. 	Accordingly, while we construe the Nicholsons'
agreement according to Virginia principles of contract
construction, the statutory requirement that the rights of the
parties "shall be determined in accordance with that spousal
agreement . . . if and to the extent expressly provided for in
the terms of that spousal agreement" is a standard established by
federal statute. 	In determining whether the spousal agreement
"expressly" waives a federal statutory right, the purpose of the
federal statute and what is required in order to establish an
express waiver are questions of federal law, and the intent of
Congress in enacting the Foreign Act will control. 	Wilkinson,
785 F. Supp. at 1039-40.
In the absence of federal court decisions construing this
statute, we must determine what Congress intended when it
provided that the spousal agreement will control the federal
pension right "if and to the extent expressly provided for in the
terms of that agreement." 	Considering the legislative history of
22 U.S.C. §§ 4054 and 4060, see n.5, supra, we believe that

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Congress clearly intended that the statutory entitlement of a
former spouse under the Foreign Service Act cannot be waived or
released by a general waiver or release. 	See id. at 1040.
Given the language of the federal statute, particularly when
considered with its legislative history, Congress clearly
intended that in order to waive, release or vary the terms of the
statutory entitlement, more would be required than a general
waiver of property rights. 	Id. 	The intent of the parties or
court to waive or vary this federal statutory right must be
manifest from the "express" terms of the agreement or decree.
We do not, by this holding, necessarily construe 22 U.S.C.
§§ 4054 and 4060 to require that a spousal agreement or court
decree, in order to constitute an "express waiver," specifically
mention retirement benefits or an annuity under the Foreign
Service Act. 	See generally Bragan v. Bragan, 4 Va. App. 516, 358
S.E.2d 757 (1987). 	A general waiver or release may be sufficient
if, from the terms of the agreement, the parties' intent to
include pension or retirement benefits is clear and unambiguous.
Although a general waiver of all property rights that one spouse
may presently have in a property interest acquired by the other
might satisfy the requirements of an "express waiver," the
provisions in paragraphs 5 and 6 of the Nicholsons' agreement do
not in our opinion meet the federal standard of an "express"
waiver of the statutory entitlement to the former spouse's
annuity.

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Although the Nicholsons' expressed intention for entering
the agreement was to resolve "all their property rights," that
general statement of purpose, in the absence of provisions that
expressly address their property rights, cannot be construed as
an express release or waiver of property rights. 	The general
statement of purpose does not satisfy the requirement of 22
U.S.C. §§ 4054(a)(1) and 4060 that the spousal agreement must
"expressly" provide for terms that vary the statutory benefits or
which release or relinquish the former spouse's retirement
annuity.
The provisions of the Nicholsons' spousal agreement do not
mention Mr. Nicholson's entitlement under the Foreign Services
Act. 	The parties' agreement does not even mention retirement
rights or pension benefits generally. 	See Dean v. Dean, 8 Va.
App. 143, 379 S.E.2d 742 (1989) (holding that a broad categorical
waiver of equitable distribution, spousal support and attorney's
fees did not waive all of a spouse's property rights). 	At most,
paragraphs 5 and 6 constitute general waivers of rights of
inheritance or relinquishment of rights to make a claim on
property acquired after the agreement.
In paragraph 5, the Nicholsons covenanted that each had the
right to sell or alienate his or her property without the other
making any demand upon the after-acquired property. 	This
provision did no more than recognize the right of each party to
dispose of his or her property without "demand" from the other.

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Paragraph 6 of the Nicholsons' agreement is even more
limited in scope than is paragraph 5. 	When read in conjunction
with paragraph 5, paragraph 6 accomplishes somewhat the same
result as does paragraph 5. 	However, it applies only to
"property hereinafter acquired by either" party and, thus, has no
application to Maria-Teresa Nicholson's annuity under 22 U.S.C.
§ 4054, an inchoate entitlement Maria-Teresa Nicholson possessed
at the time the agreement was executed. 	Thus, we hold that
paragraphs 5 and 6 did not "expressly" provide for a waiver,
release, or relinquishment of Maria-Teresa Nicholson's benefits
under the Foreign Services Act.
We hold, therefore, that the terms of the Nicholsons'
property settlement agreement are insufficient to support the
trial court's finding that Maria-Teresa Nicholson "expressly"
waived her right to her former spouse's annuity under the Foreign
Service Act. 	Accordingly, we remand the case for the trial court
to enter a final order in the case in accordance with the holding
herein.
Reversed and remanded.