Marriage of Fithian, In re

Decision Date03 January 1974
Citation10 Cal.3d 592,517 P.2d 449,111 Cal.Rptr. 369
CourtCalifornia Supreme Court
Parties, 517 P.2d 449 In re the MARRIAGE of James E. and Camille J. FITHIAN, Jr. James E. FITHIAN, Jr., Appellant, v. Camille J. FITHIAN, Respondent. L.A. 30165.

Lawton, Christensen, Fazio, McDonnell, Briggs & Ward and Steven E. Briggs, La Habra, for appellant.

Schlegel, Friedmann & Menke, David L. Price and John K. York, Orange, for respondent.

Marilyn Hall Patel, Sausalito, as amicus curiae on behalf of respondent.

MOSK, Justice.

James E. Fithian, Jr., appeals from an interlocutory judgment ordering the dissolution of his marriage to Camille J. Fithian and establishing the community property rights of the respective parties. Husband specifically challenges the trial court's characterization of a portion of his federal military retirement pay as community property, contending such a determination is forbidden to the states by the supremacy clause (art. VI, cl. 2) of the United States Constitution. We conclude federal military retirement pay is properly the subject of California community property law and therefore affirm the judgment.

After serving 22 years in the United States Marine Corps, husband retired with the rank of lieutenant colonel under the authority of title 10, United States Code, section 6323. 1 Pursuant to the provisions of that section, husband began to draw retirement pay, referred to in the statute as 'retired pay,' on a monthly basis and remains eligible to do so for the duration of his life. Two years subsequent to his retirement, husband commenced the instant dissolution proceeding. The trial court found the parties had been married for 16 of husband's 22 years in the Marine Corps and had become residents of California prior to husband's retirement. Therefore, the trial court concluded 71 percent of husband's retirement pay is part community property and part quasi-community property subject to the jurisdiction of California courts, and directed husband to pay 35 1/2 percent of his post-dissolution retirement benefits to wife as he receives them.

The law is settled in California that retirement benefits which flow from the employment relationship, to the extent they have vested, 2 are community property subject to equal division between the spouses in the event the marriage is dissolved. (Waite v. Waite (1972), 6 Cal.3d 461, 99 Cal.Rptr. 325, 492 P.2d 13; Phillipson v. Board of Administration (1970), 3 Cal.3d 32, 89 Cal.Rptr. 61, 473 P.2d 765; Benson v. City of Los Angeles (1963), 60 Cal.2d 355, 33 Cal.Rptr. 257, 384 P.2d 649; French v. French (1941), 17 Cal.2d 775, 112 P.2d 235; Crossan v. Crossan (1939), 35 Cal.App.2d 39, 94 P.2d 609.) Underlying the community treatment of retirement benefits is the concept that they do not derive from the beneficence of the employer, but are properly part of the consideration earned by the employee. Thus whether an employee is required to make contributions to the retirement fund is irrelevant to the ultimate characterization of the benefits as community property. (Phillipson v. Board of Administration (1970), supra; Sweesy v. Los Angeles etc. Retirement Bd. (1941), 17 Cal.2d 356, 110 P.2d 37.) Furthermore, the principle that retirement benefits are community property has been held to apply whether the source of the retirement fund lies in a state, federal, military, or private employment relationship. (Waite v. Waite (1972), supra; Phillipson v. Board of Administration (1970), supra; Estate of Perryman (1955), 133 Cal.App.2d 1, 283 P.2d 298; French v. French (1941), supra.)

The conclusion follows that husband's federal military retirement pay must be considered community property in accordance with established principles of California law. Although the retirement fund was noncontributory, husband's rights to the benefits vested during marriage and constituted an integral part of his compensation for service in the military.

Husband contends, however, the treatment of federal military retirement pay as community property frustrates the specific purpose of Congress in enacting the federal military retirement pay system, and therefore is beyond the jurisdiction of the California courts by virtue of the supremacy clause of the United States Constitution. 3 It is asserted that the several cases in California and other community property states holding federal military retirement pay to be community property have failed to explore the crucial issue whether federal law permits the states to make such a determination. (In re Marriage of Karlin (1972), 24 Cal.App.3d 25, 101 Cal.Rptr. 240; Bensing v. Bensing (1972), 25 Cal.App.3d 889, 102 Cal.Rptr. 255; In re Marriage of Brown (1972), 27 Cal.App.3d 188, 103 Cal.Rptr. 510; Dominey v. Dominey (Tex.Civ.App.1972), 481 S.W.2d 473; Busby v. Busby (Tex.1970), 457 S.W.2d 551; Mora v. Mora (Tex.Civ.App.1968), 429 S.W.2d 660; Kirkham v. Kirkham (Tex.Civ.App.1960), 335 S.W.2d 393; LeClert v. LeClert (1969), 80 N.M. 235, 453 P.2d 755; Morris v. Morris (1966), 69 Wash.2d 506, 419 P.2d 129 (dictum).)

When there have been questions of property law involving a conflict between a state decision and a valid federal statute, the United States Supreme Court has determined that the supremacy clause requires the state law to yield no matter how clearly the subject matter otherwise falls within the state's acknowledged sphere of power. (Free v. Bland (1962), 369 U.S. 663, 82 S.Ct. 1089, 8 L.Ed.2d 180; Wissner v. Wissner (1950), 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424.) Our task, therefore, is to ascertain whether the application of California community property law to husband's federal military retirement pay interferes in any way with the accomplishment of the goals of Congress in creating the current military retirement scheme. 4

The contention that Congress intended federal military pay to be the separate property of the recipient is based in large measure on Wissner v. Wissner (1950), supra, 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424. In Wissner, the trial court ordered the beneficiary of life insurance proceeds under the National Service Life Insurance Act (38 U.S.C. § 701 et seq.) to pay half the proceeds, as community property, to the deceased soldier's widow. The United States Supreme Court held the order invalid under the supremacy clause on the ground that the specific language of the act, 5 construed in the light of congressional intent, gave the serviceman the absolute right to choose the beneficiary of the policy and hence was invulnerable to the application of state community property law.

Wissner does not require community property states to classify the proceeds of National Service Life Insurance policies as separate property, but only to refrain from administering those incidents of community property law which would frustrate the congressional plan. In Estate of Allie (1958), 50 Cal.2d 794, 329 P.2d 903, we held that insurance proceeds payable to the serviceman's estate may be considered community property since such a classification does not hinder the insured's free choice of beneficiaries. It is clear, therefore, Wissner did not establish a general rule that federal employment benefits cannot be treated as community property, but merely construed a specific statute in view of the congressional intent it embodied. 6 Wissner has no controlling impact on the case at bar except to mandate us to examine the legislative goals behind the federal military retirement pay system.

Nevertheless we are asked to measure the property involved herein against a five-part Wissner 'test' which purportedly determines whether Congress intended a federally created property right to be immune from community property characterization by the states. According to this asserted yardstick, federal benefits must be the separate property of the recipient if (1) they were intended to directly enhance morale; (2) they were intended to be paid from congressional appropriations; (3) their administration costs were intended to be borne by the United States; (4) premiums or contributions to the system were intended to be low; and (5) they were intended to afford as much material protection as possible to the recipient. Although the federal military retirement pay system doubtless satisfies each of the asserted criteria, the source of these purported standards is a tortured reading of the Wissner opinion. No precise language in Wissner is quoted in the formulation of this 'test' of congressional intent; rather the standard is devised by paraphrasing a series of statements by the court taken out of context text and artificially grouped together. 7 Aside from the vacuous content of the asserted 'tests,' which are so broad as to embrace virtually all federally created benefit plans, Wissner makes plain that it is embarking on the task of specific statutory construction, and not setting forth general propositions by which to evaluate the goals of Congress in other legislative enactments.

We have studied Senate reports and congressional hearings concerned with the adoption of the federal military retirement pay system in an effort to ascertain any legislative intent to preserve the benefits of the system as the separate property of the recipient. We fail to find in the legislative background any indication that Congress intended military retirement pay to be separate property, or, conversely, that treating the pay as community property circumvents the congressional scheme. There is considerable evidence that Congress enacted the federal military retirement pay system in order to bolster the morale of the serviceman and to provide him with an incentive to remain in the armed services, as well as to afford him material protection in his later years. It does not follow therefrom that applying community property law to retirement pay creates a disincentive to establishing a career in the military, or detracts from a serviceman's spirit or...

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