Gorman v. Gorman

• Decision Date: 14 March 1979
• Citation: 90 Cal.App.3d 454,153 Cal.Rptr. 479
• Court: California Court of Appeals Court of Appeals
• Parties: Helen L. GORMAN, Plaintiff, Respondent and Cross-Appellant, v. Harold J. GORMAN, Defendant and Appellant, Gordon T. Shepard, Defendant, Respondent and Cross-Respondent. Civ. 19232.

Page 479

153 Cal.Rptr. 479

90 Cal.App.3d 454

Helen L. GORMAN, Plaintiff, Respondent and Cross-Appellant, v. Harold J. GORMAN, Defendant and Appellant Gordon T. Shepard, Defendant, Respondent and Cross-Respondent.

Civ. 19232.

Court of Appeal, Fourth District, Division 2, California.

March 14, 1979.

Hearing Denied May 10, 1979.

Paul M. Bell and Kathleen E. Endres, Anaheim, for defendant and appellant.

Bush, Bush & Larsen and K. Dale Bush, Fountain Valley, for plaintiff, respondent and cross-appellant.

Gordon T. Shepard, in pro. per.

OPINION

KAUFMAN, Associate Justice.

Plaintiff Helen L. Gorman and defendant Harold J. Gorman were formerly married to each other and will be referred to in this opinion as former wife and former husband. In 1972, former wife employed defendant Gordon T. Shepard, an attorney, to represent her in an action to secure a dissolution of the marriage. Default proceedings were had and the marriage was dissolved in 1972 by an interlocutory judgment entered May 3 and a final judgment entered October 26 in the Orange County Superior Court. Prior to the separation of the parties on March 22, 1972, former husband had retired from the military service, and at the time of the dissolution was receiving monthly payments on account of longevity retirement from the military service, payable for life. ¹ The interest in the military retirement was not included in the property listed in former wife's petition for dissolution of marriage and, although the fact that former husband was receiving military retirement pay was expressly mentioned in the default hearing in connection with spousal and child support, ² the petition was not amended and the interest in the retirement benefits was neither mentioned nor disposed of in either the interlocutory or final judgments of dissolution.

On May 28, 1975, former wife instituted the instant action against Shepard for damages, alleging his professional negligence in representing her in the dissolution proceeding based on his failure to assert a community property interest in the military retirement benefits. On June 18, 1975, former wife filed a motion in the dissolution action apparently under Code of Civil Procedure section 473, requesting the court to determine and divide the community property interest in the retirement benefits and modify the judgment in the dissolution action accordingly. Former husband opposed the motion primarily on the ground that the court lacked jurisdiction under Code of Civil Procedure section 473 inasmuch as more than six months had passed since the entry of the final judgment of dissolution. On July 23, 1975, former wife's motion was denied. On March 24, 1976, former wife filed in the instant action a motion for leave to amend her original complaint to add a second cause of action against former husband for division of the interest in the retirement benefits. The motion was granted and the complaint was so amended.

Trial was to the court. Although no party requested findings of fact and conclusions of law and, thus, none were made, the court issued a formal, detailed memorandum of intended decision that fully disclosed its findings and conclusions. It found that at the time of the separation of the parties, the community property interest in the military retirement amounted to 17.5/21.5; that defendant Shepard was negligent in failing to advise former wife that this interest constituted community property and in failing to see that this community property asset was divided in the dissolution proceeding; that from May 3, 1972 to June 1, 1977, former husband received $21,047.14 in retirement pay and on the basis of that sum, plus a sum computed on the basis of former husband's 221/2 year life expectancy and anticipated future cost-of-living increases averaging 6 percent per year, former wife's interest in past and future retirement benefits had a present value of $56,062.64; that Shepard's negligence was the proximate cause of damages to former wife in that sum in addition to "further detriment to plaintiff in not having the use of her share of the military retirement pension for several years last past." The court concluded, however, that by reason of its intended decision to render judgment against former husband for the payment of most of these sums, ³ "the $56,062.64 in damages is completely offset." The court then assessed damages for the previously mentioned "further detriment" together with nominal damages for Shepard's negligence at $1.00. The court also concluded that inasmuch as the military retirement benefits were 17.5/21.5 community property, there was no alternative but to apportion one-half of that fraction of this asset to former husband and one-half to former wife. Accordingly, the court announced its intention to enter judgment against former husband "for the sum of money equal to 1/2 times 17.5/21.5 times $280.00 times the number of months from May 9, 1972, to date of formal judgment herein, together with judgment for 1/2 times 17.5/21.5 times the amount of each monthly military retirement pension payment received by defendant (former husband) after the date of formal judgment herein payable by defendant to plaintiff within 10 days of defendant's receipt of each such payment. The Court retains jurisdiction to require an accounting by defendant as to all such future payments." (See fn. 3, Ante.)

On October 7, 1977, judgment was entered in favor of former wife against defendant Shepard in the amount of $1.00 and against former husband in language identical to that quoted above from the notice of intended decision.

Former husband appeals from the judgment against him contending that (1) military retirement benefits do not constitute community property divisible upon dissolution and (2) former wife is precluded by res judicata from seeking relief against him in the present action. Former wife cross-appeals from the judgment against defendant Shepard contending that it was error for the court to render judgment against Shepard for only $1.00 when it found the damages proximately caused by him amounted to $56,062.64 and that the judgment against Shepard should have been for the full amount of damages. Shepard has filed a brief in which he asserts that plaintiff's recovery against him was barred by the statute of limitations, by plaintiff's failure to plead his negligence subsequent to the original negligence in failing to list an interest in the retirement benefits as community property in the dissolution petition and by her failure to prove that she suffered any loss caused by his negligence.

Former Husband's Appeal

Community Property

It is of course established California law that military retirement pay constitutes community property divisible upon dissolution of a marriage to the extent earned during the marriage. (In re Marriage of Fithian, 10 Cal.3d 592, 596, 604, 111 Cal.Rptr. 369, 517 P.2d 449 (language distinguishing "vested" from "nonvested" rights disapproved in In re Marriage of Brown, 15 Cal.3d 838, 851, fn. 14, 126 Cal.Rptr. 633, 544 P.2d 561).) Former husband contends, however, that the Fithian decision has been overruled in effect by the recent United States Supreme Court decision in Hisquierdo v. Hisquierdo, --- U.S. ----, 99 S.Ct. 802, 59 L.Ed.2d 1. We do not agree.

Hisquierdo involved an employee spouse's right to retirement benefits under the Railroad Retirement Act of 1974 (45 U.S.C. § 231, et seq.). Reversing a decision of the California Supreme Court holding such retirement rights earned during marriage to be community property divisible upon dissolution of the marriage (In re Marriage of Hisquierdo, 19 Cal.3d 613, 139 Cal.Rptr. 590, 566 P.2d 224), the United States Supreme Court held that the intent of Congress in providing such benefits was clearly inconsistent with their division upon dissolution of the marriage of the employee spouse and that the community property principles of the State of California must give way under the supremacy clause (U.S.Const., art. VI, cl. 2). The high court's conclusions, however, were based upon the unique history and structure of the Railroad Retirement Act and specific provisions of the Act which were felt to be indicative of the Congressional intent. The court pointed out that the statutory scheme resembles both a private pension program and a social welfare plan, is funded by a special tax paid both by employees and employers in the railroad industry, is substantially related to and correlated with the Social Security system, and, like Social Security benefits, are not contractual and may be altered or even eliminated by Congress at any time. (99 S.Ct. at pp. 804-805.)

The statutory scheme contains an express provision prohibiting assignment or anticipation of the payment of benefits under the Act: "Notwithstanding any other law of the United States, or of any State, . . . no annuity or supplemental annuity shall be assignable or be subject to any tax or to garnishment, attachment, or other legal process under any circumstances whatsoever, Nor shall the payment thereof be anticipated . . . ." (45 U.S.C. § 231m; emphasis added.)

In addition, the Act specifically provides benefits for a spouse of a covered employee (45 U.S.C. § 231a(c)) but specifically provides that those benefits " . . . shall end on the last day of the month preceding the month in which . . . the spouse and the individual are absolutely divorced . . . ." (45 U.S.C. § 231d(c)(3).) Referring to this quoted provision, the court in Hisquierdo stated: "The choice was deliberate. When the Act was revised in 1974, a proposal was made to award a divorced spouse a benefit like that available to a divorced spouse under the Social Security Act. The labor-management negotiation committee, however, rejected that proposal, and Congress ratified its decision. It based its conclusion on the perilous financial state of the Railroad Retirement Account, and the need to devote funds to...