Marriage of Freiberg, In re

• Decision Date: 15 April 1976
• Court: California Court of Appeals Court of Appeals
• Parties: In re MARRIAGE OF Roy E. and Patricia A. FREIBERG. Roy E. FREIBERG, Appellant, v. Patricia A. FREIBERG, Respondent. Civ. 14150.

Page 792

127 Cal.Rptr. 792

57 Cal.App.3d 304

In re MARRIAGE OF Roy E. and Patricia A. FREIBERG Roy E. FREIBERG, Appellant, v. Patricia A. FREIBERG, Respondent.

Civ. 14150.

Court of Appeal, Fourth District, Division 1, California.

April 15, 1976.

Jack Galen Whitney, San Diego, for appellant.

Robert A. Bowler, San Diego, for respondent.

COUGHLIN, ^* Associate Justice.

On appeal to this court the judgment in this case was reversed in part and affirmed in part by our decision and opinion October 6, 1975. The Supreme Court granted a petition for hearing; transferred the cause to that court; and, thereafter, retransferred the cause to this court for reconsideration in the light of In re Marriage of Brown, 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561.

Roy E. Freiberg and Patricia A. Freiberg respectively were husband and wife; had been married for 12 years prior to their separation; and are the subjects of an interlocutory judgment of dissolution of marriage from which the husband has appealed.

Commencing five years before marriage the husband became and ever since has been an active member of the United States Navy. Upon the expiration of 20 years of service, he may, in the discretion of the President of the United States, be retired under Title 10 U.S.Code, section 6323, with entitlement to retirement pay; or he may delay his retirement; and has expressed his intention to remain in active service until he has served at least 30 years in the Navy.

The court concluded the wife had a community interest in the husband's retirement benefits and provided a method for payment of a share thereof to the wife when received by the husband.

At the time of separation the husband's retirement rights were non-vested, but would become vested within three years if he remained in the Navy, i.e., upon the expiration of 20 years of active service.

In discussing the issues involved in this case we use the terms vested, non-vested and matured retirement rights in the sense those terms are used in In re Marriage of Brown, supra, 15 Cal.3d 838, 842, 126 Cal.Rptr. 633, 544 P.2d 561.

The issues on appeal concern the non-vested retirement rights of the husband ¹ under a retirement plan in which he was a participant before, during and after marriage. Under the decision in Brown the rights acquired during marriage were community property and subject to disposition by the court in the dissolution proceedings. The husband's contention non-vested retirement rights are not community property is foreclosed by Brown. Nevertheless, he contends the judgment should be reversed because the court erred in the division and distribution of the benefits payable under these rights. That part of the judgment dividing them provides:

'Based upon the parties' twelve-year marriage during the Petitioner's military service and the Petitioner's continuing military service, the community property interest earned during the marriage in the Petitioner's monthly retirement payments as a result of said military service is twelve years, and the Petitioner shall pay to the Respondent her proportionate share as long as she lives when and as said monthly retirement benefit is paid to the Petitioner. Respondent shall pay taxes due on any sums she receives from said retirement. Petitioner shall not be obligated to pay taxes on any sums paid to Respondent. Petitioner, then, shall pay to Respondent as long as she lives, that portion of the total monthly retirement payment before taxes and deductions, which equals one-half of the ratio of twelve years to the total number of years the Petitioner has in military service at the time of his retirement . . ..'

Under the present law, the husband, upon retirement, 'is entitled to retired pay at the rate of 2 1/2 per cent of the basic pay of the grade in which retired multiplied by the number of years of service that may be credited to him . . .' (Title 10, U.S.Code § 6323(e).)

At the time of separation the husband's basic pay was $918.90 per month. He contends the formula used by the court to divide and distribute the community share of the retirement benefits effects a division and distribution of a part of his separate share as well as the community share therein. This contention is based on the claim the payments to the wife pursuant to the judgment will include retirement benefits he will have earned after he and his wife separated, because the amount of the payments he will receive upon retirement will be fixed not only by the number of years of his service but also by the amount of his basic pay at the time of retirement which, he claims, will be considerably higher than the amount of his basic pay at the time of separation; and, for this reason, the formula used by the court should be applied to assumed retirement payments premised on the number of years of his service at the time of retirement and the amount of his basic pay at the time of separation, i.e., $918.90, rather than the amount of his basic pay at the time of retirement.

Upon dissolution of a marriage during which a husband continues to participate in a retirement plan in which he had participated before marriage, it is the duty of the court to determine what part of the retirement rights under that plan is community and what part is separate property; to divide the community part; and to distribute the parts thus divided. The decision discharging each duty involves a consideration of overlapping factors. A review of the total effect thereof requires an analysis of the judgment in the light of the effect of each decision upon and its relationship to the total effect which, in substance, constitutes the judgment.

To determine what part of the retirement rights is community the court is governed by the rule such rights are part of the consideration earned by the participant for services rendered (In re Marriage of Wilson, 10 Cal.3d 851, 854, 112 Cal.Rptr. 405, 519 P.2d 165; In re Marriage of Fithian, 10 Cal.3d 592, 596, 111 Cal.Rptr. 369, 517 P.2d 449). When the participant is a member of the Armed Services, as in the case at bench, his retirement rights are part of the consideration earned by him for his services as such member (In re Marriage of Wilson, supra, 10 Cal.3d 851, 854, 112 Cal.Rptr. 405, 519 P.2d 165; In re Marriage of Fithian, supra, 10 Cal.3d 592, 595, 111 Cal.Rptr. 369, 517 P.2d 449), or stated otherwise, are part of his earnings from military service (Benson v. City of Los Angeles, 60 Cal.2d 355, 359, 33 Cal.Rptr. 257, 384 P.2d 649).

The retirement rights over which the court has jurisdiction in a dissolution proceeding are the rights to which a participant is entitled under a particular retirement plan. In some cases these rights are referred to as pension rights (Phillipson v. Board of Administration, 3 Cal.3d 32, 40, 89 Cal.Rptr. 61, 473 P.2d 765), retirement pay (In re Marriage of Wilson, supra, 10 Cal.3d 851, 854, 112 Cal.Rptr. 405, 519 P.2d 165), or retirement benefits (In re Marriage of Fithian, supra, 10 Cal.3d 592, 596, 111 Cal.Rptr. 369, 517 P.2d 449; Phillipson v. Board of Administration, supra, 3 Cal.3d 32, 38, 89 Cal.Rptr. 61, 473 P.2d 765).

These references must be viewed in the context of the circumstances of the case in which they appear. By whatever nomenclature they may be identified the retirement rights under a particular retirement plan are defined by the plan (Benson v. City of Los Angeles, supra, 60 Cal.2d 355, 360--361, 33 Cal.Rptr. 257, 384 P.2d 649). In the case at bench the retirement rights of the husband are defined by an Act of Congress, i.e., Title 10, U.S.Code, section 6323(e), which directs, upon retirement, he shall be entitled to retired pay at the rate of 2 1/2 per cent of the basic pay he received when retired multiplied by the number of years of service credited to him. As to these rights, that part thereof earned before marriage was separate property, that part thereof during marriage and before separation was community property and that part earned after separation was separate property (Civ.Code § 5118; In re Marriage of Ward, 50 Cal.App.3d 150, 154, 123 Cal.Rptr. 234; In re Marriage of Imperato, 45 Cal.App.3d 432, 437, 119 Cal.Rptr. 590).

The apportionment of retirement rights between separate and community estates may be made upon the basis of the number of years of service during marriage, on the one hand, and the number of years of service before marriage and after separation, on the other (In re Marriage of Wilson, supra, 10 Cal.3d 851, 855, 112 Cal.Rptr. 405, 519 P.2d 165; Waite v. Waite, 6 Cal.3d 461, 469, 99 Cal.Rptr. 325, 492 P.2d 13; In re Marriage of Martin, 50 Cal.App.3d 581, 123 Cal.Rptr. 234; Bensing v. Bensing, 25 Cal.App.3d 889, 892--893, 102 Cal.Rptr. 255). The trial court followed this rule and decreed that part of the retirement rights were community property as twelve years bears to the total number of years of the husband's service in the Navy at the time of retirement.

By its judgment the court divided the community retirement rights equally between the parties. Its decision conformed to the governing rule (Civ.Code § 4800(a); Smith v. Lewis, 13 Cal.3d 349, 355, 118 Cal.Rptr. 621, 530 P.2d 589; In re Marriage of Fithian, supra, 10 Cal.3d 592, 596, 111 Cal.Rptr. 369, 517 P.2d 449; In re Marriage of Ward, supra, 50 Cal.App.3d 150, 154, 123 Cal.Rptr. 234). Thus, in substance, upon and at the time of dissolution the husband was the owner of that part of the retirement rights earned before marriage plus 1/2 of the part earned during marriage, while the wife was the owner of 1/2 of the part earned during marriage. In each instance the rights were the same although the quantitative interest of the husband therein was greater than the quantitative interest of the wife. By virtue of the judgment the same rights qualitatively were shared by the husband and the wife; in effect, although not actually, they became joint owners or joint participants qualitatively in the...