Flynn v. Rogers

• Citation: 834 P.2d 148,172 Ariz. 62
• Decision Date: 16 July 1992
• Docket Number: No. CV-91-0125-PR,CV-91-0125-PR
• Parties: In re the Marriage of Audrey Marie FLYNN, Petitioner-Appellee, v. Burnace L. ROGERS, Jr., Respondent-Appellant.
• Court: Supreme Court of Arizona

Page 148

834 P.2d 148

172 Ariz. 62

In re the Marriage of Audrey Marie FLYNN, Petitioner-Appellee, v. Burnace L. ROGERS, Jr., Respondent-Appellant.

No. CV-91-0125-PR.

Supreme Court of Arizona, In Banc.

July 16, 1992.

[172 Ariz. 63] David H. Lieberthal, Tucson, for petitioner-appellee.

Curtis & Cunningham, Marjorie F. Cunningham, Tucson, for respondent-appellant.

OPINION

LEVI RAY HAIRE, Judge, Court of Appeals (Retired).

We granted review of an opinion filed by Division 2 of the court of appeals in order to consider issues surrounding the disposition of military pension proceeds upon the reopening of a dissolution decree that became final in September of 1981.

At the time of the dissolution, the former husband was receiving a military retirement pension. Approximately three months before the dissolution decree was filed, the United States Supreme Court had issued its opinion in McCarty v. McCarty 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981), holding that federal law precluded state courts from dividing military retirement benefits in property dispositions resulting from marital dissolutions. The McCarty opinion overruled prior Arizona law holding that to the extent military retirement benefits had been earned by community effort, they were community property subject to division by the court upon dissolution. See Van Loan v. Van Loan, 116 Ariz. 272, 569 P.2d 214 (1977); Neal v. Neal, 116 Ariz. 590, 570 P.2d 758 (1977). Because McCarty was the law at the time of the dissolution, both parties correctly believed that the pension benefits were the husband's sole and separate property. The dissolution decree contained no mention of pension benefits.

After the decree was filed, however, Congress passed the Uniformed Services Former Spouses' Protection Act (FSPA) ¹, which again made military retirement benefits subject to state community property law. In essence, the Act legislatively overruled McCarty. Furthermore, in order to eliminate inequities that might otherwise have arisen in cases where state court decrees had been filed during the period between the issuance of the McCarty decision (June 26, 1981) and the effective date of the FSPA (February 1, 1983), the substantive provisions of the FSPA were made retroactive to the filing date of McCarty. The Act's retroactivity provisions effectively authorized state courts to reconsider dissolution decrees entered during the "window period" between June 26, 1981, and February 1, 1983, and to dispose of military retirement benefits in accordance with state law.

The decree of dissolution in this case was filed during that "window period," approximately three months after McCarty was filed and sixteen months before the FSPA became effective. However, the former wife did not seek to reopen the decree until August of 1989, approximately six and one-half years later. In opposition to the wife's reopening request, the husband contended that: (1) the wife was not legally entitled to any share of the retirement benefits; (2) in any event, principles of finality and res judicata should preclude reopening of the dissolution decree; and (3) the wife's delay in asserting her rights constituted laches and should preclude any claim that she might once have had.

After an evidentiary hearing, the trial court rejected the husband's defenses and granted the wife's petition to reopen. The court awarded the wife a one-half share of the community's interest in the pension benefits, both prospectively from the date of the reopening request and retrospectively to the date of the original decree. ² The amount of the retrospective award was $35,834.37. The wife's requests for interest and for attorney's fees pursuant to A.R.S. section 25-324 were denied.

On appeal to Division 2 of the court of appeals, the husband abandoned his claim that the wife was not entitled to a prospective share of the pension benefits. He contended only that the trial court had abused its discretion by not applying the doctrine of laches to defeat the wife's claim for retrospective benefits. The court of appeals agreed, stating:

The facts of this case mandate the application of the doctrine of laches and the trial court abused its discretion in awarding appellee retirement pension received by the husband prior to the date of her petition and order to show cause requesting a division of the military retirement pension.

In prior decisions of this court, we have considered the problems created by the McCarty decision and the subsequent enactment of the FSPA with its retroactivity provisions. In De Gryse v. De Gryse, 135 Ariz. 335, 661 P.2d 185 (1983), a decree of dissolution awarding the wife a portion of the husband's military retirement pension had become final before the filing of McCarty. The husband sought to reopen the final decree, urging that McCarty had overruled the state court decisions that had formed the basis for the award of benefits to the wife. The trial court denied relief to the husband, concluding that the effect of McCarty should be prospective only; it could not be used to upset judgments that had become final before its filing date.

When the husband appealed to this court, we noted that in view of the subsequent passage of the FSPA, the basic premise for his claim no longer existed. Accordingly, we refused to give McCarty retrospective application. See also Rodriguez v. Rodriguez, 133 Ariz. 88, 649 P.2d 291 (App.), approved, 133 Ariz. 87, 649 P.2d 290 (1981) (holding that McCarty did not alter the res judicata consequences of a divorce decree that had become final before McCarty was filed).

In De Gryse, we observed that the need for finality and stability in marriage and family law is great and that absent express authorization, such as the retroactivity clause contained in the FSPA, or a finding of "extraordinary circumstances," as contemplated by Rule 60(c)(6), Arizona Rules of Civil Procedure, a final decree should not be disturbed. We concluded that under the circumstances presented in De Gryse, the trial court acted within its discretion in denying the husband relief from the prior final decree.

Edsall v. Superior Court, 143 Ariz. 240, 693 P.2d 895 (1984), presented us with our first opportunity to consider an issue involving a decree that had become final during the period between the filing of McCarty and the effective date of the FSPA. The decree in Edsall, consistent with McCarty and the parties' separation agreement, provided that the wife was not entitled to any portion of the military retirement pension that the husband would eventually receive. Three months after the effective date of the FSPA, the wife filed a successful petition to reopen the divorce decree for the purpose of reconsidering her interest in the retirement benefits.

The husband sought special action relief from Division 2 of the court of appeals, which reversed the trial court's order, stating that res judicata precluded a reopening of the divorce decree, even though the decree had become final during the "window period" between the filing of McCarty and the effective date of the FSPA. The wife then filed a petition for review, which we granted in order to consider whether the court of appeals had erred in holding that res judicata principles precluded the reopening of such "window period" decrees. Upon thorough consideration of the FSPA's retroactivity provisions and the Act's obvious intent to nullify the effects that McCarty might have had on interim state court judgments, we concluded that principles of finality did not preclude the reopening of such "window period" decrees. ³

Division 1 of the court of appeals subsequently followed and reemphasized the "window period" reopening principles that we set forth in Edsall in Thorlin v. Thorlin, 155 Ariz. 357, 746 P.2d 929 (App.1987). In Thorlin, the wife had moved for modification of the parties' "window period" decree slightly over one month after the effective date of the FSPA. After delays totalling more than two years, the trial court entered its order modifying the decree of dissolution so as to award the wife her one-half share of the community's interest in the husband's military retirement benefits, not only prospectively from the date of the order, but also retrospectively to the date the husband had begun receiving such benefits.

Our prior decisions have thus clearly established that a trial court may reopen and modify final decrees entered during the McCarty interim period in order to make proper disposition of military retirement benefits. However, we have not previously considered any case in which one spouse has asserted an equitable defense, such as laches, in an attempt to defeat the other spouse's claim to a retrospective share of benefits.

In Beltran v. Razo, 163 Ariz. 505, 788 P.2d 1256 (App.1990), Division 2 of the court of appeals held that the defense of laches was not available to defeat a claim of the spouse to a prospective division of the community's interest in military pension benefits. Whether laches could preclude a spouse's right to a retrospective division of pension benefits was not an issue on appeal in Beltran, but the court stated in dicta:

However, the equitable defense of laches is available to prevent unfairness to a spouse who may have spent the money in reliance on the judgment. In such instances, the court may deny complete retroactivity and then proceed to divide the funds from the date of the petition to divide.

163 Ariz. at 507, 788 P.2d at 1258.

Against this background, we now consider whether the court of appeals erred in reversing the trial court's award of retrospective benefits to the wife in this case. As a legal proposition, we agree with the court of appeals' conclusion in Beltran that upon the reopening of a "window period" dissolution decree, the court may consider the equitable defense of laches in reaching its determinations concerning an award of retrospective benefits....