Marriage of Hisquierdo, In re

Decision Date12 July 1977
Citation19 Cal.3d 613,139 Cal.Rptr. 590,566 P.2d 224
CourtCalifornia Supreme Court
Parties, 566 P.2d 224 In re the MARRIAGE OF Angela and Jess H. HISQUIERDO. Jess H. HISQUIERDO, Respondent, v. Angela HISQUIERDO, Appellant. L.A. 30712.

Howard M. Fields, for appellant.

James D. Endman, Los Angeles, for respondent.

MOSK, Justice.

We are called upon to decide whether benefits afforded by the Railroad Retirement Act (45 U.S.C. § 231 et seq.) are community property. 1

Jess and Angela Hisquierdo were married in 1958 and separated in 1972. Wife was employed throughout the period of the marriage; they had no children. At the time of the dissolution of marriage hearing in 1975, she was 53 years old and husband was 55. He had been employed by the Atchison, Topeka & Santa Fe Railroad from 1942 to 1975, and thereafter by the Los Angeles Union Passenger Terminal. Both of these employments entitle him to retirement benefits under the act when he reaches the age of 60.

In January 1975, husband filed a petition for dissolution of the marriage. The trial court's interlocutory judgment divided the community property by awarding him the residence of the parties, in which there was an equity of $12,828, and furniture and fixtures which had a value of $500. Wife was awarded $100 in a mutual fund, and a 1965 automobile. In order to equalize distribution, husband was ordered to pay wife $6,364, plus interest, in monthly installments. The court refused to grant wife any interest in husband's railroad retirement benefits, or the equivalent thereof, on the ground that she had no community interest in those funds. Wife appeals, contending that the retirement benefits which accrued to husband during the 13 years of marriage constitute community property, and that the trial court erred in refusing to award her one-half of such benefits.

The United States Supreme Court in Wissner v. Wissner (1950) 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424, held that California's community property law could not be applied to the proceeds of a policy for National Service Life Insurance, claimed by a widow who was not the beneficiary of the policy, because Congress had made it plain, by providing for the insured serviceman's right to change the beneficiary, that the proceeds belong to the beneficiary designated by the insured. In California, retirement benefits resulting from employment during marriage are community property, subject to division in the event of dissolution of the marriage. (Waite v. Waite (1972) 6 Cal.2d 461, 470, 99 Cal.Rptr. 325, 492 P.2d 13 (overruled on other grounds in In re Marriage of Brown (1976) 15 Cal.3d 838, 851 fn. 14, 126 Cal.Rptr. 633, 544 P.2d 561).) Several recent decisions have held that pension rights created under federal law constitute community property to the extent that they are attributable to employment during marriage. (E.g., In re Marriage of Fithian (1974) 10 Cal.3d 592, 111 Cal.Rptr. 369, 517 P.2d 449; Bensing v. Bensing (1972) 25 Cal.App.3d 889, 102 Cal.Rptr. 255; In re Marriage of Karlin (1972) 24 Cal.App.3d 25, 101 Cal.Rptr. 240; but see In re Marriage of Brown (1976) 15 Cal.3d 838, 851 fn. 14, 126 Cal.Rptr. 633, 544 P.2d 561.

The principle that has emerged from these decisions is that whenever there is a conflict between a federal statute affording annuity or insurance benefits and state community property laws the federal statute must prevail. However, if the intent of Congress in creating the federal right is not violated by application of California's community property laws, then the status of such rights is governed by California law. (See e.g., Fithian, 10 Cal.3d at p. 598, 111 Cal.Rptr. 369, 517 P.2d 449; In re Marriage of Milhan (1974) 13 Cal.3d 129, 132, 117 Cal.Rptr. 809, 528 P.2d 1145.) Our task, then, is to determine whether Congress intended that railroad retirement benefits remain the separate property of the employee.

Husband relies upon various provisions of the act as indicating an intent by Congress to tender annuities payable thereunder the separate property of the spouse whose employment is covered by the act. He first quotes the following provision contained in section 231m: 'Notwithstanding any other law of the United States, or of any State, territory, or the District of Columbia, no annuity or supplemental annuity shall be assignable or be subject to any tax or to garnishment, attachment, or other legal process under any circumstances whatsoever, Nor shall the payment thereof be anticipated . . ..' (Italics added.)

This provision, with the exception of the clause italicized, is substantially similar to other statutes placing federal and state retirement or insurance benefits beyond the grasp of creditors. (E.g., 10 U.S.C. § 1440 (military annuities); 38 U.S.C. § 3101 (veteran's benefits); Gov.Code, § 21201 (retirement annuities for state employees).) Such statutes do not prevent a pension from being treated as community property, for as was said in Phillipson v. Board of Administration (1970) 3 Cal.3d 32, 44, 89 Cal.Rptr. 61, 68, 473 P.2d 765, 772, 'Plaintiff (wife) . . . claims not as a creditor, but as an owner with a 'present, existing, and equal interest.' 1 (Citations omitted.) The recognition of an ownership claim cannot be described as the levy of execution, garnishment, attachment or assignment of property.' 2

The prohibition against anticipation of payment of railroad retirement benefits in section 231m does not alter this conclusion. The purpose of that provision is to assure that railroad annuities not yet paid to the beneficiary are exempt from the claims of creditors. The clause is the functional equivalent of the prohibition against attachment of veteran's benefits 'either before or after receipt by the beneficiary' (38 U.S.C. § 3101(a)), and was not designed to alter the essential purpose of section 231m, i.e., to bar creditors of the beneficiary from reaching annuity payments, rather than to prevent a spouse from vindicating her ownership interest in the pension.

Husband next asserts that the act provides a spouse (or widow/widower) with a right to benefits which are separate and distinct from the benefits accorded to the railroad employee, and that the intent of Congress in granting separate benefits would be frustrated by treating the employee's pension as community property. He points to provisions of the act which grant a separate annuity to a spouse who reaches a certain age and meets other qualifications. (45 U.S.C. § 231a(c)(1) and (3).) The spouse's annuity terminates upon divorce. (45 U.S.C. § 231d(c)(3)(B).) 3 A widow or widower is also entitled to an annuity. (45 U.S.C. § 231a(d)(1)(i).)

In circumstances in which the surviving spouse of a deceased employee is entitled to a separate annuity, our holding in Fithian provides the answer. There, in reply to an assertion of the husband that Congress did not intend a military retirement pension to constitute community property because it had created an annuity plan for widows but not ex-wives, we stated, 'The point is not persuasive. Congress' concern for the welfare of soldiers' widows sheds little light on Congress' attitude toward the community treatment of retirement benefits, particularly since those benefits do not survive the serviceman regardless of his marital status at death. It is not incongruous for Congress to supply a program to aid widows, who no longer have husbands to provide sustenance, and omit to do so for ex-wives who can rely on state family law concepts of support, alimony, and community property for a source of income.' (10 Cal.3d at p. 600, 111 Cal.Rptr. at p. 374, 517 P.2d at p. 454.)

The mere fact that distinct benefits are provided by the act for the retired employee and his spouse (or widow/widower) does not indicate an intention that the employee's annuity should be separate property. To accede to such proposition would imply Congress intended that although a spouse is entitled to both a separate annuity and the support of the railroad employee during marriage, both of these benefits are withdrawn upon divorce. It seems unlikely that Congress proposed to leave a divorced spouse without any assistance whatever stemming from the employee's entitlement to a pension during marriage. Rather, as in Fithian, the fact that Congress made no provision for a former spouse in the act...

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