Erspan v. Badgett

• Citation: 659 F.2d 26
• Decision Date: 09 October 1981
• Docket Number: No. 79-4011,79-4011
• Parties: Mary Frances ERSPAN, Plaintiff-Appellee Cross-Appellant, v. Lloyd J. BADGETT, Defendant-Appellant Cross-Appellee. . Unit A *
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 26

659 F.2d 26

Mary Frances ERSPAN, Plaintiff-Appellee Cross-Appellant, v. Lloyd J. BADGETT, Defendant-Appellant Cross-Appellee.

No. 79-4011.

United States Court of Appeals, Fifth Circuit.

Unit A ^*

Oct. 9, 1981.

Stephen F. Hefner, Sherman, Tex., for defendant-appellant cross-appellee.

Colbert N. Coldwell, El Paso, Tex., for plaintiff-appellee cross-appellant.

Appeals from the United States District Court for the Western District of Texas.

ON SUGGESTION FOR REHEARING EN BANC

(Opinion June 10, 1981, 5th Cir., 1981, 647 F.2d 550.)

Before AINSWORTH and SAM D. JOHNSON, Circuit Judges, and HUNTER ^**, District Judge.

PER CURIAM:

Following the issuance of the panel opinion in this case, defendant Badgett filed a Suggestion for Rehearing En Banc, in which he now argues, inter alia, that under the authority of the Supreme Court's decision in Hisquierdo v. Hisquierdo, 439 U.S. 572, 99 S.Ct. 802, 59 L.Ed.2d 1 (1979), in which the Court held that Railroad Retirement Act benefits are not divisible as community property in state court divorce decrees, federal law likewise should be held to preclude state courts from dividing military retirement benefits in divorce proceedings pursuant to state community property laws. In his Suggestion, defendant also notes that the Supreme Court agreed to decide this precise question in McCarty v. McCarty, argued 49 U.S.L.W. 3661 (March 2, 1981). Defendant asserts that "(t)o the extent that the divorce decree conflicts with the decision of the Supreme Court of the United States in Hisquierdo, ... it should be reversed."

Two days after defendant filed his Suggestion in the case sub judice, the Supreme Court announced its opinion in McCarty v. McCarty, --- U.S. ----, 101 S.Ct. 2728, 69 L.Ed.2d --- (1981), in which the Court held that military retirement benefits, like railroad retirement benefits, are not divisible in state court decrees as community property, and accordingly reversed the judgment of the California Court of Appeal, which had affirmed the award. ¹ Unlike both McCarty and Hisquierdo, however, which were direct appeals from state court divorce decrees, the case sub judice is not: there is no divorce decree before this Court. Moreover, notwithstanding defendant's invitation for this Court to "reverse" the February 21, 1963 judgment of the 65th Judicial District Court of El Paso County, Texas, we have no such jurisdiction. Defendant advances no reason why that judgment should be denied its usual res judicata effect, and none is readily apparent: as a final judgment, it settles not only the issues actually litigated, but also any issues that could have been litigated in that proceeding. Federated Department Stores, Inc. v. Moitie, --- U.S. ----, 101 S.Ct. 2424, 2427, 69 L.Ed.2d 103 (1981). Furthermore, as the Supreme Court noted in Federated Department Stores, "the res judicata consequences of a final, unappealed judgment on the merits (are not) altered by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case." --- U.S. ----, 101 S.Ct. 2427 (citations omitted). Nothing in McCarty suggests that the Supreme Court therein intended to invalidate, or otherwise render unenforceable, prior valid and subsisting state court judgments. Absent some indication of such an intent, we decline to do so. ² Similarly, defendant's argument that 37 U.S.C. § 701(a) ³ evinces a congressional intent that military retirement benefits be exempt from division on divorce as community property is of no avail. For the reasons stated supra, this issue is not properly before this Court. Finally, we note that although it might be argued that, after McCarty, section 701(a) should be read to prevent "anticipation" of an officer's pay account by assignment, compare --- U.S. at ----, 101 S.Ct. at 2739 n.22 with id. at ----, 101 S.Ct. at 2746 (Rehnquist, J., dissenting), the district court's order requiring defendant to file an allotment order with the Army providing for the payment directly to plaintiff of her share of defendant's retirement benefits was based not upon section 701(a), but rather upon section 701(d), ⁴ which specifically authorizes the Secretary to allow a member of the Army or the Air Force to make such allotments "for the support of his relatives, or for any other purpose that the Secretary concerned considers proper." Id. As noted in the panel opinion in the present case, the Office of the Judge Advocate General, Department of the Army, informed counsel by letter that the Department of Defense Military Pay and Allowances Entitlements Manual was amended on December 19, 1977 to permit retired members of the military to authorize allotments to former spouses. Absent any argument that the Secretary exceeded his authority in authorizing such allotments, or that the district court's order requiring defendant to execute such an allotment was otherwise improper, ⁵ we decline to set that order aside.

No member of this panel nor Judge of this Administrative Unit in regular active service having requested that the Court be polled on rehearing en banc (Rule 35, Federal Rules of Appellate Procedure; Local Fifth Circuit Rule 16; Fifth Circuit Judicial Council Resolution of January 14, 1980), the Suggestion for Rehearing En Banc is

DENIED.

AINSWORTH, Circuit Judge, dissenting:

This case presents the important question of whether the Supreme Court's recent decision in McCarty v. McCarty, --- U.S. ----, 101 S.Ct. 2728, 69 L.Ed.2d --- (1981), applies where a state court's judgment dividing military retirement benefits pursuant to state community property laws antedates McCarty, but where the right to receive some or all of the benefits so divided does not accrue until after the date of that decision. Because the court's decision today would result in unequal treatment of similarly situated individuals, I would reverse the district court's judgment in part, and hold that plaintiff is entitled to share only those military retirement benefits payable before June 26, 1981.

I joined in the original panel opinion affirming the district court decision to enforce the terms of a 1963 divorce decree awarding plaintiff one-half of defendant's accumulated right under a United States Army retirement benefits program. Erspan v. Badgett, 647 F.2d 550 (5th Cir. 1981). Two weeks after that opinion was issued, the Supreme Court held in McCarty that federal law precludes a state court from dividing military retired pay pursuant to state community property laws. This court now holds that the 1963 state court judgment granting plaintiff one-half of defendant's military retirement benefits enjoys res judicata effect, ¹ even though the legal principle on which that judgment rested has been overruled.

The court correctly observes that, as a general rule, the res judicata consequences of a final, unappealed judgment on the merits are not altered by the fact that the judgment rested on a legal principle subsequently overruled in another case. Federated Department Stores, Inc. v. Moitie, --- U.S. ----, 101 S.Ct. 2424, 2427, 69 L.Ed.2d 103 (1981). This rule is not, however, inflexible. In Jackson v. DeSoto Parish School Board, 585 F.2d 726 (5th Cir. 1978) the Fifth Circuit stated:

It has long been established that res judicata is no defense where, between the first and second suits, there has been an intervening change in the law or modification of significant facts creating new legal conditions. See, e. g., Commissioner of Internal Revenue v. Sunnen, 1948, 333 U.S. 591, 599-602, 68 S.Ct. 715, 720-21, 92 L.Ed. 898, 906-08; State Farm Mutual Automobile Insurance Co. v. Duel, 1945, 324 U.S. 154, 162, 65 S.Ct. 573, 577, 89 L.Ed. 812, 819. In these cases, the operation of the preclusion doctrines would result in unequal treatment of similarly situated individuals, some of whom have the misfortune to have sought legal redress at an earlier phase of legal developments.

Id. at 729.

A subsequent change in the law has been held to negate the res judicata effect of a number of decisions adjudicating constitutional rights. See, e. g., Jackson v. DeSoto Parish School Board, supra; Parnell v. Rapides Parish School Board, 563 F.2d 180, 185 (5th Cir. 1977), cert. denied, 438 U.S. 915, 98 S.Ct. 3144, 57 L.Ed.2d 1160 (1978); Christian v. Jemison, 303 F.2d 52 (5th Cir.) cert. denied, 371 U.S. 920, 83 S.Ct. 287, 9 L.Ed.2d 229 (1962). A subsequent change in the law should also negate the res judicata effect of a decision where, and to the extent that, (1) the rights adjudicated in that decision do not accrue until after the intervening change in the law has occurred, and (2) the operation of res judicata would result in unequal treatment of similarly situated individuals. ² Both circumstances are present here. Many residents of community property states who will receive military retirement benefits after the date of McCarty have obtained or will obtain a judgment of divorce. Under the present ruling an essentially fortuitous circumstance whether their judgment of divorce was entered before or after the date of McCarty will determine whether those individuals may be compelled by state community property laws to pay, in the years following McCarty, part of their military retirement benefits to their former spouse. Because such unequal treatment is neither necessitated nor justified by the doctrine of res judicata, I am unable to join in the panel opinion herein.

* Former Fifth Circuit case, Section 9(1) of Public Law 96-452 October 14, 1980.

** District Judge in the Western District of Louisiana, sitting by designation.

1 Badgett subsequently filed a memorandum with this Court in which he expressly relies upon the Supreme Court's decision in McCarty.

2 In any event, defendant did not raise this issue in his brief. Indeed, in his original brief defendant argues that military retirement benefits are divisible as community property. Appellant's brief at 6, 16. We also note in...