Marriage of Cohen, In re

• Decision Date: 16 May 1980
• Citation: 164 Cal.Rptr. 672,105 Cal.App.3d 836
• Court: California Court of Appeals Court of Appeals
• Parties: In re the MARRIAGE of Philip Laurence and Sheila May COHEN. Philip Lawrence COHEN, Petitioner and Respondent, v. Sheila May COHEN, Respondent and Appellant. Civ. 55303.

Page 672

164 Cal.Rptr. 672

105 Cal.App.3d 836

In re the MARRIAGE of Philip Laurence and Sheila May COHEN Philip Lawrence COHEN, Petitioner and Respondent, v. Sheila May COHEN, Respondent and Appellant.

Civ. 55303.

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

May 16, 1980.

Rehearing Denied May 22, 1980.

Rehearing Denied June 5, 1980.

Hearing Denied July 16, 1980.

Martin E. Shucart, Encino, for respondent and appellant.

Southwestern Clinical Law Center and Anslyene A. Abraham, Rodney Jones, Richard C. Solomon and Mark Burstein, Los Angeles, for petitioner and respondent.

JEFFERSON, ^* Associate Justice.

This is a case in which petitioner Philip Cohen sought dissolution of his 12-year marriage to respondent Sheila Cohen. The trial court awarded an interlocutory judgment of dissolution to Philip. Sheila has appealed from certain provisions of that judgment; we affirm the judgment.

The case comes to us by means of a settled statement in lieu of a reporter's and clerk's transcripts. (Cal.Rules of Court, rule 7(b).) From that statement we summarize the pertinent facts.

I A Summary of the Facts

Philip and Sheila married on October 4, 1964. Two children were born of the marriage: Scott, on January 26, 1967, and Craig, on July 9, 1969. Family support was provided by Philip, employed as a bus driver for the Rapid Transit District. The couple separated November 17, 1976. Philip's petition was heard on November 16, 1977.

At time of trial, Philip, aged 31, was employed as a salesman, grossing $500 per month. Sheila, aged 30, and the children, respectively 10 and 8 years of age, were receiving welfare support of $375 per month. In addition, Sheila's mother had assisted with a substantial loan. Both children were requiring medical attention for heart problems; the extent of their disability, if any, is unknown.

The community indebtedness of the Cohens far exceeded community assets; the only asset listed by Philip was a 1968 Plymouth automobile which he valued at $50. Sheila, however, sought disposition of community furniture and furnishings, "petitioner's retirement rights" and "petitioner's social security benefits."

The parties stipulated at trial that, during the marriage, Philip had had certain sums withheld from his wages and paid to the federal government pursuant to the Federal Insurance Contributions Act (F.I.C.A.) which conceivably could, at some future time, entitle Philip to a variety of social security benefits.

It also developed at trial that, after the separation of the parties, Philip, listing $10,418 in indebtedness (a substantial portion of which was owed to Sheila's mother) had obtained a discharge in bankruptcy for himself only. In addition, during the separation, Philip left his employment as a bus driver and "cashed out" his pension rights, obtaining $550. He also sold some furniture for $470, obtained $56 from a bank account and cashed federal and state income tax refund checks totalling $300.

II The Trial Court's Findings, Conclusions and Judgment

The trial court granted the dissolution; no spousal support was awarded Sheila, although the court expressly retained jurisdiction over this issue for six years. Custody of the minors was awarded to Sheila; Philip was ordered to pay child support of $150 per month through the office of the Court Trustee. He was also ordered to obtain medical insurance for the children, and to pay $200 in attorney's fees to Sheila's attorney in monthly installments of $50.

The trial court further determined that there were no community assets subject to disposition except for the Plymouth automobile which was valueless and awarded to Philip as his sole and separate property.

Pursuant to Code of Civil Procedure section 632 and rule 232(b) of the California Rules of Court, Sheila requested that the court make findings of fact and conclusions of law. The trial court made a finding that Philip's social security benefits were his separate property, declaring that "(t)o hold otherwise, the court finds, would frustrate the intent of the Federal Social Security Act and thus violate the supremacy clause of the United States Constitution."

The trial court declined to reassign to Philip his share of the community debts or to offset that share by ordering Philip to reimburse Sheila in full or in part, finding that such orders would, if made, "frustrate the intent and purpose of the Federal Bankruptcy Act and thus violate the supremacy clause of the U. S. Constitution."

The trial court also declined to take cognizance of Philip's acquisitions of claimed community assets during separation; these assets were determined to be not subject to disposition "in that such property was expended between the time of separation and trial on the petitioner's necessities of life . . . ."

Sheila filed objections to the findings of fact and conclusions of law. The trial court rejected the objections, and this appeal from the judgment followed. The issues raised by Sheila below have been preserved for review here; the record on appeal has been properly prepared and is complete, pursuant to California Rules of Court, rule 7(b).

III Social Security Benefits

There has been considerable litigation in recent years concerning the proper characterization of federally created retirement benefits by state family law courts. Two Court of Appeal opinions have analyzed the issue with respect to social security benefits, and have rejected the contention that such benefits constitute community assets subject to disposition by state courts at the time of dissolution. In In re Marriage of Kelley (1976) 64 Cal.App.3d 82, 96, 134 Cal.Rptr. 259, 267, the court determined that the state power to dispose of such assets rested upon "(1) the characterization of the 'contributions' and benefits as akin to a community property right; and (2) the impact of the supremacy clause of the United States Constitution. (Art. VI, cl. 2.)" The Kelley court analyzed the various OASDI benefits, and concluded that, while some have similarity to private pensions, the statutory scheme designed by Congress is "one of social insurance designed to provide financial security to covered workers and their families rather than one of deferred compensation for past labor." (Id. at p. 98, 134 Cal.Rptr. at p. 268.) Kelley relied upon a similar characterization of social security benefits made in Flemming v. Nestor (1960) 363 U.S. 603, 80 S.Ct. 1367, 4 L.Ed.2d 1435, by the United States Supreme Court. The Kelley court declined to find that social security benefits were community assets and noted that a state trial court's attempted evaluation and disposition of such benefits would conflict with federal law, disrupting a "uniform federal scheme of benefits" by producing results which would vary "depending upon the community property law of various states." (Id. 64 Cal.App.3d at p. 99, 134 Cal.Rptr. at p. 268.)

A conclusion similar to that reached in Kelley was reached in In re Marriage of Nizenkoff (1976) 65 Cal.App.3d 136, 135 Cal.Rptr. 189. The Nizenkoff court declared that the standard for determining whether a federal statute had created cognizable property interests divisible in state marital dissolution proceedings was ascertainment of Congressional intent in enacting the particular federal statute in question; the court concluded that, with respect to social security benefits, Congress had expressly provided certain benefits (under certain circumstances) for divorced spouses, and thus did not intend "that they rely on state family law concepts of support, alimony and community property." (Nizenkoff, supra, 65 Cal.App.3d 136, 140, 135 Cal.Rptr. 189, 191.)

The Nizenkoff court also found it to be significant that Congress had retained the right to alter, amend or repeal any provision of the Social Security Act (42 U.S.Code, § 1304); that there was a demonstrated Congressional intention to preserve the federal character of the social security system in the face of "variations and idiosyncrasies of local law." (Nizenkoff, supra, 65 Cal.App.3d 136, 140, 135 Cal.Rptr. 189, 191.) Thus, social security benefits were found not subject to disposition as part of the community.

In 1977, however, the California Supreme Court decided In re Marriage of Hisquierdo (1977) 19 Cal.3d 613, 139 Cal.Rptr. 590, 566 P.2d 224. The issue in that case was whether the benefits payable to a worker pursuant to the federal Railroad Retirement Act (45 U.S.C. § 231, et seq.) constituted assets subject to division as community property upon dissolution of the worker's marriage. The Hisquierdo court noted that there had been a number of recent decisions of the court upholding the divisibility of federally created retirement benefits (e. g., In re Marriage of Fithian (1974) 10 Cal.3d 592, 111 Cal.Rptr. 369, 517 P.2d 449) and rejected contentions made concerning Congressional intent to preclude state division. It was concluded that the railroad retirement benefits involved were community assets subject to division under California's community property laws.

In 1979, however, the United States Supreme Court reversed this decision. (Hisquierdo v. Hisquierdo (1979) 439 U.S. 572, 99 S.Ct. 802, 59 L.Ed.2d 1.) The majority of the court expressed the view that "(t)he pertinent questions are whether the right as asserted conflicts with the express terms of federal law and whether its consequences sufficiently injure the objectives of the federal program to require nonrecognition." (Id. at p. 583, 99 S.Ct. at 809.)

Analyzing the Railroad Retirement Act, the United States Supreme Court emphasized the provisions of section 231m, which set forth sweeping protection of the benefits conferred by the act from attachment of any kind, demonstrating Congressional intent to preclude claims based upon marital and family obligations as well as those of ordinary creditors. The high court noted that Congress could, if it so desired, provide suitable benefits or...