Marriage of Campa, In re

• Decision Date: 02 February 1979
• Citation: 89 Cal.App.3d 113,152 Cal.Rptr. 362
• Court: California Court of Appeals Court of Appeals
• Parties: In re the MARRIAGE of Christine and Fernando S. CAMPA. Christine CAMPA, Appellant, v. Fernando S. CAMPA, Respondent, Carpenters Pension Trust Fund for Northern California, Respondent. In re the MARRIAGE of Joan Clare and James Patrick DURKIN. Joan Clare DURKIN, Respondent, v. James Patrick DURKIN, Respondent, Appeal of CARPENTERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA. Carolyn J. BRYANT, Plaintiff and Respondent, v. CARPENTERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA, Defendant and Appellant. Civ. 42946, Civ. 42506 and Civ. 43538.

Page 362

152 Cal.Rptr. 362

89 Cal.App.3d 113

In re the MARRIAGE of Christine and Fernando S. CAMPA.

Christine CAMPA, Appellant, v. Fernando S. CAMPA, Respondent, Carpenters Pension Trust Fund for Northern California, Respondent.

In re the MARRIAGE of Joan Clare and James Patrick DURKIN.

Joan Clare DURKIN, Respondent, v. James Patrick DURKIN, Respondent,

Appeal of CARPENTERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA.

Carolyn J. BRYANT, Plaintiff and Respondent, v. CARPENTERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA, Defendant and Appellant.

Civ. 42946, Civ. 42506 and Civ. 43538.

Court of Appeal, First District, Division 4, California.

Feb. 2, 1979.

As Modified on Denial of Rehearing March 1, 1979.

Hearing Denied April 12, 1979.

Sims, Lipton & D'Anna by Mark Hanley Lipton, San Jose, for Christine campa.

Wycoff & Miller by Nicholas P. Barthel, Santa Cruz, for Joan Clare Durkin.

Harold W. Martin, San Mateo, for James Patrick Durkin.

Schapiro & Thorn by Suzie S. Thorn, San Francisco, for Carolyn J. Bryant.

Johnson & Stanton by Thomas E. Stanton, Jr., Clay P. Bradley, Van Bourg, Allen, Weinberg & Roger by Victor J. Van Bourg, San Francisco, for Carpenters Pension Trust Fund for Northern California.

BRUNN, Associate Justice. ^*

These three cases present the question whether the Employee Retirement Income Security Act of 1974, 29 United States Code, section 1001 et seq. (hereafter ERISA) precludes California courts from joining pension funds in marriage dissolution proceedings and from ordering such funds to divide pension payments between the employee and his or her former spouse. We conclude that ERISA has no such effect for the reasons we discuss below.

As a preliminary question we also decide that a spouse may join the pension plan here involved without first submitting a claim to the plan.

I

A. In 1975 Christine Campa (hereafter Christine) petitioned for dissolution of her 21 year marriage. She and her husband entered into a written property settlement agreement. As part of the division of the community property the agreement provided that Christine would receive a specified portion of her husband's monthly retirement benefits from the Carpenters Pension Trust Fund for Northern California (hereafter Fund). Christine also waived spousal support. The Fund was not a party at this stage.

Christine obtained an interlocutory judgment of dissolution which incorporated the agreement and, shortly thereafter, a final judgment. The Fund at first assured Christine that it would pay her her portion of her ex-husband's benefits. The Fund changed its mind and notified Christine that it would make all pension payments directly to her husband. As a result Christine successfully moved for an order setting aside the portion of the judgment relating to retirement pay and ordering the Fund to be joined as a party.

The Fund removed the action to the United States District Court (N.D.Cal.) on the basis of its preemption claim. The District Court remanded. It concluded that the action was "a simple domestic relations matter founded solely upon state law" and that the mere existence of a disputed issue of federal law did not give the court jurisdiction.

After remand the Fund answered. As defenses it pled lack of jurisdiction, failure of the joinder petition to state facts sufficient to constitute a cause of action and ERISA's preemption of "any and all State laws insofar as they may now or hereafter relate to" the Fund. Cross-motions for summary judgment ultimately followed. In its motion the Fund for the first time contended that Christine had not complied with provisions of the Trust Agreement and Pension Plan (hereafter Trust Agreement) which require that any claim for benefits be submitted to the trustees of the Fund.

The trial court denied Christine's summary judgment motion, and entered a judgment dismissing the Fund. Christine appeals. We reverse.

B. Joan Durkin (hereafter Joan) petitioned for dissolution of her ten year marriage in 1976. On her motion early in the proceedings the Fund was joined as a party. The Fund's answer avers that the court lacks subject matter jurisdiction, that Joan had not complied with the provisions of the Trust Agreement purporting to require her to file a claim with the trustee and that ERISA preempts applicable California law.

The Fund unsuccessfully sought a summary judgment. Ultimately the trial court entered an interlocutory judgment of dissolution. The judgment included a provision ordering the Fund to pay Joan a specified portion of her husband's pension when he received pension payments.

The Fund appeals from the interlocutory judgment. (Code Civ.Proc., § 904.1, subd. (j).) We affirm.

C. The third case comes to us not directly from a marriage dissolution proceeding but from a declaratory relief action that followed in its wake. Carolyn Bryant (hereafter Carolyn) brought that action against her former husband, William, and against the Fund. Carolyn alleged that she had been divorced from William in 1973 and that she and William owned a community property asset which the dissolution judgment had failed to divide, namely William's pension "in said" Fund. She sought a declaration that she owned a half-interest in the pension and an order requiring the Fund to show her ownership on its records.

Following abortive efforts by William and the Fund to remove the action to the United States District Court and to obtain a summary judgment in the state court, the case went to trial. The Fund's defenses were the same as in Durkin. The court found in favor of Carolyn, fixed her interest in accordance with a formula based on the pension credits acquired during the marriage and ordered the Fund to pay directly to Carolyn her share of the pension when Williams starts to receive it.

The Fund appeals from the judgment. We affirm. ¹

II

The contention that the wives in the three cases first had to present their claims to the trustees of the Fund need not detain us long.

A. The issue may not properly be before us in Campa. The Fund first raised it in connection with the cross-motions for summary judgment, almost a year after the Fund had been made a party. The Fund did not plead it as a defense in its answer. Under those circumstances the defense may well have been waived. (Compare Gunderson v. Superior Court (1975) 46 Cal.App.3d 138, 143-145, 120 Cal.Rptr. 35.) However, since the issue is clearly present in the other two cases, we shall decide it on its merits as to all three.

B. There is no doubt that the Trust Agreement sets forth the procedure which the Fund contends that the wives should have used. ² It is, of course, familiar law that normally such internal remedies must be exhausted before resort to the courts will be allowed. (2 Witkin, Cal.Procedure (2d ed. 1970) Actions, § 177, p. 1041.) "Such internal remedies are designed not only to promote the settlement of grievances but also to promote more harmonious relationships, and the courts look with favor upon them." (Holderby v. Internat. Union etc. Engrs. (1955) 45 Cal.2d 843, 846, 291 P.2d 463, 466.)

The principle requiring exhaustion of private administrative remedies has a number of exceptions. One of the better known of these covers situations where the decision of the administrative body is certain to be adverse. (Ogo Associates v. City of Torrance (1974) 37 Cal.App.3d 830, 834, 112 Cal.Rptr. 761; 2 Witkin, Op. cit. supra, § 177, p. 1044.)

Application to the Fund by the wives would have been the essence of futility. Christine tried it informally with the noted results. The Fund's position throughout the litigation of these cases has been that it would not and could not divide the pension checks between the covered husbands and their ex-wives. Indeed, in December 1975 the Trust Agreement was amended to explicitly limit spouses of retired employees "to a community property share of the pension actually received by a Retired Employee, after such receipt. . . ." Under this provision, which antedates all proceedings against the Fund in the cases before us, the trustees of the Fund would have no alternative but to turn down the wives' claims.

Under these circumstances, we will not require the empty ritual of first going to the trustees of the Fund. Such a step would certainly not "promote the settlement of grievances" or "more harmonious relationships" (Holderby, supra, 45 Cal.2d at p. 846, 291 P.2d 463) or any other purpose of the exhaustion of remedies rule.

III

We turn to the main issue. As indicated earlier, we are required to decide whether ERISA precludes our courts from making pension plans parties to marriage dissolution proceedings and from ordering them to divide pension payments between the employee and his or her ex-spouse. ³

Our inquiry is delineated by Jones v. Rath Packing Co. (1977) 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604:

"Our prior decisions have clearly laid out the path we must follow to answer this question. The first inquiry is whether Congress, pursuant to its power to regulate commerce, U.S.Const., Art. 1, § 8, has prohibited state regulation of the particular aspects of commerce involved in this case. Where, as here, the field which Congress is said to have pre-empted has been traditionally occupied by the States, see, E. g., U.S.Const., Art. I, § 10; Patapsco Guano Co. v. North Carolina, 171 U.S. 345, 358, 18 S.Ct. 862, 867, 43 L.Ed. 191 (1898), " we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress. " Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947). This assumption provides assurance that "the federal-state balance," United States v. Bass, 404 U.S. 336, 349, 92 S.Ct. 515, 523, 30 L.Ed.2d 488 (1971), will not be disturbed unintentionally by Congress or unnecessarily by the courts. But when Congress has "...