DeRevere v. DeRevere

• Decision Date: 18 November 1971
• Docket Number: No. 327--II,327--II
• Citation: 5 Wn.App. 741,491 P.2d 249
• Parties: Clifford F. DeREVERE, Appellant, v. Jean W. DeREVERE, Respondent.
• Court: Washington Court of Appeals

Page 741

5 Wn.App. 741

491 P.2d 249

Clifford F. DeREVERE, Appellant, v. Jean W. DeREVERE, Respondent.

No. 327--II.

Court of Appeals of Washington, Division 2.

Nov. 18, 1971.

George W. Christnacht, of Troup, Christnacht & Herron, Tacoma, for appellant.

Thomas G. Krilich, of Lee, Krilich, Lowry & Thompson, Tacoma, for respondent.

PETRIE, Chief Judge.

A prior opinion of this court in this case, filed July 28, 1971, had been reported in 5 Wash.App. 446, 488 P.2d 763 (1971). We granted respondent's petition for rehearing, and now replace our prior opinion with the following. The primary issue presented by this appeal from a decree of divorce is whether or not the husband's interest in a company retirement plan constituted 'property' divisible as such by the court; and, if it did, whether or not the trial court abused its discretion in the distribution thereof.

The detailed specifications of the retirement plan have not been placed in the record. Accordingly, we made no definitive determination of the rights, in general, of parties to such plan. However, sufficient information does appear in the record to dispose of the issue presented by this appeal.

At the time of trial and entry of the decree, Mr. DeRevere was 58 years of age and had been employed by the American Telephone and Telegraph Company continuously for more than 40 years. His employer had established a nonconstributory retirement plan under which, assuming his continuing employment with this company, he will have the option of retiring at or after age 60, but will be required to retire at age 65. The annual amount of his pension is determined by multiplying his years of service by one per cent of the average of his five highest annual salaries. It was agreed that at the time of the divorce, one per cent of the average of his five highest annual salaries multiplied by his years of service produced a figure of $518 per month. If he should quit work or be fired before age 60, apparently he would receive no pension. If he should become disabled, however, he would be entitled to a pension. Should he pass away before age 60, his widow would receive a benefit under the plan, but this latter provision, however, is terminated upon divorce. Mr. DeRevere testified, and such testimony is not controverted, that his interest in the retirement plan has neither cash value nor cash surrender value. When asked if it had any market value, he replied, merely: 'It is noncontributory.'

The trial court considered Mr. DeRevere's potential retirement benefits as 'property', and awarded him all right, title and interest in the retirement benefits. He has appealed, assigning error to the court's finding of fact awarding Mrs. DeRevere the sum of $400 per month for a period of five years, effective May 10, 1970, in lieu of her community interest in the retirement plan, and 'as further property division.' In other words, Mrs. DeRevere was awarded an additional $24,000 in property, payable over a five-year period.

We start with the proposition that it is the duty of the trial court, in an action for divorce, to dispose, with finality, of All property of the parties which is brought to its attention. Shaffer v. Shaffer, 43 Wash.2d 629, 262 P.2d 763 (1953). Further, it is not firmly established in this jurisdiction that retirement provisions are in the nature of deferred compensation; and, as such, the employee has a Vested right in the system which cannot be altered to his detriment, whether such system be a public plan, Bakenhus v. Seattle, 48 Wash.2d 695, 296 P.2d 536 (1956); a private, employee contributory plan negotiated through the collective bargaining process, Dorward v. ILWU-PMA Pension Plan, 75 Wash.2d 478, 452 P.2d 258 (1969); or a voluntary, noncontributory (employer financed) plan, Jacoby v. Grays Harbor Chair & Mfg. Co., 77 Wash.2d 911, 468 P.2d 666 (1970).

Although the employee has a vested right in the system or plan from the date of its inception, he has no enforceable monetary right unless and until the contractual terms for Payment of accrued benefits, at present or at some time in the furture, have been met. Jacoby v. Grays Harbor Chair & Mfg. Co., Supra. In the case at bar, the record indicates that Mr. DeRevere's interest in the retirement plan will not ripen into a vested right to payment of specifically accrued benefits unless and until he continues in employment with the company and he reaches age 60 (or until he is determined to be disabled pursuant to the terms of the contract). Upon the happening of this critical event, his interest becomes matured to the point that he then has a Fully vested ¹ interest in the future payment of those benefits. Until that critical event occurs, his interest, although vested in the system, amounts to something less than a vested right to payment. Our concern is whether or not such interest constitutes 'property' divisible by the court.

In discussing the precise problem with which we are confronted, two noted authorities summarize the situation as follows:

Problems sometimes arise where the spouse was employed while single and then later married. Many cases have held that the sums later received are considered both community property in part and separate property in part in the proportion to the amounts of wages or salary while single and while married that went into the securing of the right or benefit. It has otherwise been expressed as in proportion to the number of years worked while single and while married. It has sometimes been argued that the employee actually had no contract or property right in the fund involved and that the right cannot accrue until the happening of an event upon which payment is contingent. Thus, upon division of property upon divorce, is there a right or interest to be considered? The answer has been that there is a valuable right which has been purchased with the community funds or community labor and the right or interest is community property and is to be valued by what went into earning it.

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