Bodle v. Bodle

• Decision Date: 11 January 1978
• Court: California Court of Appeals Court of Appeals
• Parties: In re MARRIAGE OF Lois J. and Harold Delbert BODLE. Lois J. BODLE, Petitioner, Appellant and Respondent, v. Harold Delbert BODLE, Respondent, Respondent and Appellant. Civ. 14821.

Page 115

143 Cal.Rptr. 115

76 Cal.App.3d 758

In re MARRIAGE OF Lois J. and Harold Delbert BODLE.

Lois J. BODLE, Petitioner, Appellant and Respondent, v. Harold Delbert BODLE, Respondent, Respondent and Appellant.

Civ. 14821.

Court of Appeal, Fourth District, Division 1, California.

Jan. 11, 1978.

Hearing Denied March 9, 1978.

George S. Marinos, San Diego, for petitioner.

Robert A. Bowler, San Diego, for respondent.

STANIFORTH, Associate Justice.

Lois J. Bodle appeals from an order denying her claim to the United States Navy retirement pension being paid to her former husband, Harold Delbert Bodle. The trial court found (1) the retirement was not vested at the time of the execution of their marital settlement agreement in May 1968 and (2) did not constitute a property interest controlled by that agreement. Mrs. Bodle asserts In re Marriage of Brown, 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561, mandates a reversal.

The parties were married June 10, 1943. Mr. Bodle entered the military service October 19, 1944 and retired therefrom September 1, 1971, approximately three years after their interlocutory and final decrees of divorce. Seventeen years of this marriage were congruent with Mr. Bodle's approximate twenty years of active military service.

In connection with their divorce proceedings the parties executed a marital settlement agreement (May 1, 1968), which included the following provision:

"Each of us hereby warrants to the other that neither of us is now possessed of any property of any kind or description whatsoever other than the property specifically listed in this agreement and that neither of us has made, without the knowledge and consent of the other, any gift, or transfer of community property within the period of the statute of limitations. If it shall hereafter be determined by a Court of competent jurisdiction that either of us is now possessed of any property not set forth above or that one of us had made, without the consent of the other, any gift or transfer of community property other than as set forth above each of us hereby covenants and agrees to pay to the other on demand an amount equal to one-half of the fair market value of such property." (Emphasis added.) ¹

The retirement pension was not mentioned in the pleadings as community property nor was it listed as an asset in the agreement. The divorce record is silent as to its existence. The interlocutory decree of divorce attached a copy of the marital settlement agreement and "(is) by such attachment incorporated herein, is hereby approved and performance of each and every term therein is hereby ordered."

In August 1975 Mrs. Bodle brought an order to show cause proceeding, in the original divorce action, seeking to enforce paragraph five of the marital settlement agreement. She contends the military pension is community property which was not "set forth" in their agreement and therefore she is entitled to one-half thereof. The trial court denied her request upon the grounds noted.

Five weeks after the trial court ruled against Mrs. Bodle the California Supreme Court in In re Marriage of Brown, supra, 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561, overruled French v. French, 17 Cal.2d 775, 112 P.2d 235, the case authority relied upon by the trial court. Hence it is now the law:

"Pension rights, whether or not vested, represent a property interest; to the extent that such rights derive from employment during coverture, they comprise a community asset subject to division in a dissolution proceeding." (In re Marriage of Brown, supra, 15 Cal.3d 838, 842, 126 Cal.Rptr. 633, 634, 544 P.2d 561, 562.)

Mr. Bodle, however, argues the Brown rule that "nonvested" (now termed "nonmatured") pension rights constitute divisible community property is not retroactive and therefore not applicable to this case. Concerning the retroactivity of the rule announced, Brown declares:

"We conclude that our decision today should not apply retroactively to permit a nonemployee spouse to assert an interest in nonvested pension rights when the property rights of the marriage have already been adjudicated by a decree of dissolution or separation which has become final as to such adjudication, unless the decree expressly reserved jurisdiction to divide such pension rights at a later date (see Civ.Code, § 4800). Our decision will apply retroactively, however, to any case in which the property rights arising from the marriage have not yet been adjudicated, to such rights if such adjudication is still subject to appellate review, or if in such adjudication the trial court has expressly reserved jurisdiction to divide pension rights." (In re Marriage of Brown, supra, 15 Cal.3d 838, 851, 126 Cal.Rptr. 633, 641, 544 P.2d 561, 569.)

The Supreme Court reasoned:

". . . if we accord complete retroactivity to our decision today we might reopen controversies long settled by final judgment. Undoubtedly in the 35 years since the rendition of French v. French, counsel, relying on that decision, have often failed to list nonvested pension rights as among the community assets of the marriage. In some cases the inability of the nonemployee spouse to assert an interest in nonvested pension rights may have induced the court to award additional alimony. Yet under settled principles of California community property law, 'property which is not mentioned in the pleadings as community property is left unadjudicated by decree of divorce, and is subject to future litigation, the parties being tenants in common meanwhile.' (Citation.) Consequently full retroactivity poses the danger that a nonemployee spouse might upset a settled property distribution by a belated assertion of an interest as a tenant in common in the employee's nonvested pension rights." (In re Marriage of Brown, supra, 15 Cal.3d 838, 850-851, 126 Cal.Rptr. 633, 641, 544 P.2d 561, 569.)

Whether the 1968 "nonvested" pension rights were a bargaining counter in the division of property actually made or may have induced Mr. Bodle to agree to a larger alimony or child support award does not appear. We are certain the pension rights were not mentioned in the pleadings and were left unadjudicated by the decree of divorce. Further, the language of Brown, "or if in such adjudication the trial court has expressly reserved jurisdiction to divide pensions," may exempt from the nonretroactivity rule either a general or specific express reservation of jurisdiction in a court of competent jurisdiction over pension rights.

However, we are not required to rely upon an interpretation of the language of Brown to arrive at the conclusion the Bodle pension rights are yet subject to Mrs. Bodle's claim. These parties, with the aid of their respective attorneys, chose language they deemed appropriate to reserve for future disposition their "property" rights not mentioned in their agreement; thereupon contractual rights and obligations vested in these parties.

Long ago, in McCracken v. Hayward, 2 How. 608, 611 (43 U.S. 397, 399), 11 L.Ed. 397, the United States Supreme Court enunciated these fundamentals:

" 'The obligation of a contract,' said the Court, 'consists in its binding force on the party who makes it. This depends on the laws in existence when it is made; these are necessarily referred to in all contracts, and forming a part of them as the measure of the obligation to perform them by the one party and the right acquired by the other. There can be no other standard by which to ascertain the extent of either than that which the terms of the contract indicate, according to their settled legal meaning; when it becomes consummated, the law defines the duty and the right, compels one party to perform the thing contracted for, and gives the other a right to enforce the performance by the remedies then in force. . . .' " (Cited with approval in McCauley v. Brooks, 16 Cal. 11, 31-32.)

It is axiomatic that this court is required to construe and to enforce a lawful contract in accordance with the disclosed intent of the parties. To that end we must seek the intent of the Bodles in paragraph five of their agreement with these familiar rules of construction in mind. The contract must be construed as a whole; detached words or clauses standing alone are not controlling on the question of interpretations. Each must be viewed in relation to the agreement as an entity. (Civ.Code § 1641.)

Applicable law becomes part of the contract as fully as if incorporated by reference. (Calpetro P. Syndicate v. C. M. Woods Co., 206 Cal. 246, 256, 274 P. 65.) Where a formal contract has been prepared by persons learned in the law, the words should be given their ordinary legal significance. (Miller v. Weller, 3 Civ., 288 F.2d 438 (cert. den., 368 U.S. 829, 82 S.Ct. 51, 7 L.Ed.2d 32).)

The language of paragraph five is, in pertinent part:

"If it shall hereafter be determined by a Court of competent jurisdiction that either of us is now possessed of any property not set forth above . . . each of us hereby covenants and agrees to pay to the other on demand an amount equal to one-half of the fair market value of such property."

The law in existence at the time the Bodles' contract is evidenced by a long, unbroken line of decisions correctly defining the point at which a pension right becomes a property interest. In O'Dea v. Cook (1917), 176 Cal. 659, 661-662, 169 P. 366, 367, the Supreme Court stated:

". . . pension provisions become a part of the contemplated compensation for those services, and so in a sense a part of the contract of employment itself. (Citations.)"

Aitken v. Roche, 48 Cal.App. 753, 755, 192 P. 464, held:

". . . the right to pension is a vested...