Marriage of Hillerman, In re

• Decision Date: 19 August 1980
• Citation: 109 Cal.App.3d 334,167 Cal.Rptr. 240
• Court: California Court of Appeals Court of Appeals
• Parties: In re Marriage of Alan E. and Tyna Kay HILLERMAN. Alan E. HILLERMAN, Respondent, v. Tyna Kay HILLERMAN, Appellant. Civ. 16669.

Page 240

167 Cal.Rptr. 240

109 Cal.App.3d 334

In re Marriage of Alan E. and Tyna Kay HILLERMAN.

Alan E. HILLERMAN, Respondent, v. Tyna Kay HILLERMAN, Appellant.

Civ. 16669.

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

Aug. 19, 1980.

Feist, Vetter, Knauf & Loy, Oceanside and Charles L. Currier, San Diego, and Gerry L. Curtis, Oceanside, for appellant.

Jones, Hatfield, Penfield & Garrett and James R. Penfield and Thomas E. Polakiewicz, Escondido, for respondent.

James E. Sutherland, Long Beach, as amicus curiae.

HARELSON, ^* Associate Justice.

The sole question on this appeal from an interlocutory judgment of dissolution of marriage is whether the trial court's refusal to reserve jurisdiction for the purpose of dividing future Old Age, Survivors and Disability Insurance (OASDI) was proper.

The parties to this action were married February 1, 1959, and separated on July 20, 1976. During that period Alan contributed, or had deducted from his pay, sums deposited to Social Security. At the interlocutory hearing, argument was presented as to whether the trial court should reserve jurisdiction for the purpose of dividing any community property interest in Alan's future OASDI benefits. The trial court refused to reserve jurisdiction on the basis that under present California law, Social Security benefits are not community property (see In re Marriage of Nizenkoff, 65 Cal.App.3d 136, 135 Cal.Rptr. 189; In re Marriage of Kelley, 64 Cal.App.3d 82, 134 Cal.Rptr. 259; and recently, In re Marriage of Cohen, 105 Cal.App.3d 836, 164 Cal.Rptr. 672).

Community Property

California community property law is based on a partnership model in which each spouse contributes to and shares in the prosperity of the marriage (In re Marriage of Brigden, 80 Cal.App.3d 380, 389, 145 Cal.Rptr. 716). The community property concept recognizes the important role of each spouse in the success of the community and places husband and wife on an equal footing with respect to property accumulated during marriage (Meyer v. Kinzer and Wife, 12 Cal. 247, 251). Each spouse's effort, time and skill are community assets (In re Marriage of Lopez, 38 Cal.App.3d 93, 105, 113 Cal.Rptr. 58; Somps v. Somps, 250 Cal.App.2d 328, 332, 58 Cal.Rptr. 304; Strohm v. Strohm, 182 Cal.App.2d 53, 62, 5 Cal.Rptr. 884), and any benefit derived therefrom belongs to both (Estate of Gold, 170 Cal. 621, 623, 151 P. 12).

Retirement benefits attributable to employment have been accorded community property treatment upon dissolution regardless of their source (Smith v. Lewis, 13 Cal.3d 349, 355, 118 Cal.Rptr. 621, 530 P.2d 589). Future benefits from private retirement plans are subject to division (In re Marriage of Brown, 15 Cal.3d 838, 849, 126 Cal.Rptr. 633, 544 P.2d 561). Pension rights created by act of state Legislature have also been determined to be community property (Cheney v. City & County of San Francisco, 7 Cal.2d 565, 569, 61 P.2d 754), as have federal military pension benefits (In re Marriage of Fithian, 10 Cal.3d 592, 601, 111 Cal.Rptr. 369, 517 P.2d 449; Henn v. Henn, 26 Cal.3d 323, 328) and benefits afforded by the federal civil service retirement plan (In re Marriage of Peterson, 41 Cal.App.3d 642, 649, 115 Cal.Rptr. 184).

Social Security is legally analogous to these other pension plans. The obligation to pay the Social Security taxes used to fund the benefits is based upon the earnings of the employee-spouse (§ 3101 of the Int.Rev. Code). Eligibility for and the amount of the benefits paid is determined by the number of "quarters" of covered employment credited to the employee-spouse (42 U.S.C., § 414(a)). It is also common for OASDI benefits to be integrated with private retirement plans and insurance coverage, in which the nonemployee-spouse has a community interest.

California courts, however, have refused to recognize any community interest in OASDI benefits (In re Marriage of Nizenkoff, supra, 65 Cal.App.3d 136, 140, 135 Cal.Rptr. 189; In re Marriage of Kelley, supra, 64 Cal.App.3d 82, 96, 134 Cal.Rptr. 259; In re Marriage of Cohen, supra, 105 Cal.App.3d 836, 843, 164 Cal.Rptr. 672). These decisions have been based chiefly on federal cases which, for purposes of federal law, characterized Social Security as a general public benefit, creating no legally recognized property or contract right (see Flemming v. Nestor, 363 U.S. 603, 610, 80 S.Ct. 1367, 1372, 4 L.Ed.2d 1435; Richardson v. Belcher, 404 U.S. 78, 81, 92 S.Ct. 254, 257, 30 L.Ed.2d 231; Weinberger v. Wiesenfeld, 420 U.S. 636, 647, 95 S.Ct. 1225, 1233, 43 L.Ed.2d 514).

Social Security was first treated as a noncontractual right by the United States Supreme Court to uphold the program's constitutionality against charges that the federal government was improperly engaging in the pension business by requiring workers to enter into retirement contracts (see Helvering v. Davis, 301 U.S. 619, 57 S.Ct. 904, 81 L.Ed. 1307 as mod., 301 U.S. 672, 57 S.Ct. 904, 81 L.Ed. 1307). ¹ In so holding, the Court focused on the formalistic system separating the taxing and spending features of Social Security devised by Congress to avoid the constitutional pitfalls of a federal pension based on a contractual model. It was noted that contributions to the program are labeled a "tax" imposed on both employees and employers (Federal Insurance Contribution Act (FICA), § 3101 et seq. of the Int.Rev. Code). FICA taxes become part of the general revenue (§ 3101 of the Int.Rev. Code), but then an amount exactly equal to the contributions collected is appropriated each year for the OASDI trust fund, from which benefits are paid (§ 401(a) of the Int.Rev. Code). Social Security was held to be a valid exercise of Congress' taxing and spending power because FICA taxes become part of the general revenue from which Congress in its complete discretion may spend for the "general welfare" (Helvering v. Davis, supra, 301 U.S. 619, 635, 640, 57 S.Ct. 904, 906, 908, 81 L.Ed. 1307).

The earlier California state court decisions denying any community interest in OASDI benefits have simply acquiesced to the federal judiciary's characterization of Social Security as a public largesse, without any independent evaluation of the matter. For the purpose of dividing this asset during dissolution proceedings, we deem it not only permissible (see Herb v. Pitcairn, 342 U.S. 117, 125, 65 S.Ct. 459, 463, 89 L.Ed. 789), but also necessary, that such an analysis be conducted by this court. Although the scope of the right to these benefits is a federal question, such an issue may also come before state courts in the context of the family relationship and to that extent it should be resolved in light of applicable state law (DeSylva v. Ballentine, 351 U.S. 570, 580, 76 S.Ct. 974, 979, 100 L.Ed. 1415). The whole subject of domestic relations has traditionally been dealt with by local authorities (Buechold v. Ortiz (9th Cir. 1968) 401 F.2d 371, 372). The power to make rules to establish, protect and strengthen family life is committed to the state Legislature by the Constitution of the United States (Labine v. Vincent, 401 U.S. 532, 538, 91 S.Ct. 1017, 1020, 28 L.Ed.2d 288).

California has a substantial interest in the equitable division of marital property upon the dissolution of the marriage of its citizens (In re Marriage of Freiberg, 57 Cal.App.3d 304, 310, 127 Cal.Rptr. 792). The community property concept is an integral part of California's domestic relations laws (Stone v. Stone (D.C.Cal.) 450 F.Supp. 919, 930). Such laws embody the intense local interest in the protection of a married woman's right to family property (United States v. Yazell, 382 U.S. 341, 349, 86 S.Ct. 500, 505, 15 L.Ed.2d 404). The interest of each spouse in the assets of the marital community are "present, existing and equal" during the continuance of the marriage (Civ.Code, § 5105). Upon dissolution each spouse possesses an equal and absolute right to one-half of the community property (Civ.Code, § 4800; Meyer v. Kinzer and Wife, supra, 12 Cal. 247, 252; In re Marriage of Brown, supra, 15 Cal.3d 838, 848, 126 Cal.Rptr. 633, 544 P.2d 561). The division of community property by the court merely distributes that which each party already owns by virtue of the marriage relationship (In re Marriage of Pilatti, 96 Cal.App.3d 63, 67, 157 Cal.Rptr. 594).

Despite federal court decisions characterizing OASDI as a social welfare type of program, the fact remains that the statutory right to OASDI benefits is directly related to the years worked and the amounts earned by the covered employee, rather than to his or her need (Weinberger v. Wiesenfeld, supra, 420 U.S. 636, 647, 95 S.Ct. 1225, 1232, 43 L.Ed.2d 514). Social Security is obviously more than an expectancy in some future beneficence. Although Congress may have the power to terminate OASDI benefits (see 42 U.S.C., § 1304), no one expects it to be exercised. The California Supreme Court held military retirement pensions subject to California property law in Fithian, supra, 10 Cal.3d 592, 604, 111 Cal.Rptr. 369, 517 P.2d 449, despite the fact "the federal government may increase, diminish, or completely abolish" the plan (In re Marriage of Karlan, 24 Cal.App.3d 25, 30, 101 Cal.Rptr. 240, 243). The fact that Congress, in its discretion, may withdraw benefits at any time has no impact on the state's ability to characterize them for its own purposes under local principles of property law (In re Marriage of Fithian, supra, 10 Cal.3d 592, 602, fn. 14, 111 Cal.Rptr. 369, 517 P.2d 449).

Other aspects of the noncontractual nature of OASDI have yet to be discussed by our state courts in the community property context. While there are numerous similarities between Social Security and private pension plans, there are also peculiarities in the statutory plan which make it impossible to characterize and divide the benefits as community property. For example, unlike other retirement systems, OASDI benefits are not...