Marriage of Hopkins, In re

• Decision Date: 26 April 1983
• Citation: 142 Cal.App.3d 350,191 Cal.Rptr. 70
• Court: California Court of Appeals Court of Appeals
• Parties: In re the MARRIAGE OF Patricia HOPKINS, Petitioner and Respondent, and MacMillan Hopkins, Respondent and Appellant. Civ. 65783.

Page 70

191 Cal.Rptr. 70

142 Cal.App.3d 350

In re the MARRIAGE OF Patricia HOPKINS, Petitioner and Respondent,

and

MacMillan Hopkins, Respondent and Appellant.

Civ. 65783.

Court of Appeal, Second District, Division 3, California.

April 26, 1983.

As Modified May 25, 1983.

Mackey & Mansfield and Larry M. Hoffman, Los Angeles, for respondent and appellant.

Gassner & Gassner and Lawrence M. Gassner, Ontario, for petitioner and respondent.

ROSS, Associate Justice. ^*

MacMillan Hopkins (hereinafter Husband) appeals from a judgment entered by the trial court in characterizing and evaluating certain items of property as community property and in dividing the community property of the parties appropriately.

We disagree with Husband's contentions and affirm the judgment.

PROCEDURAL AND FACTUAL BACKGROUND

Patricia Hopkins (hereinafter Wife) filed a Petition for Dissolution on October 19, 1978. A response was filed by Husband and the matter was bifurcated for trial. An interlocutory judgment as to status only was entered on February 19, 1980, and the matter proceeded to trial on the property issues on October 6 and 8, 1980, Honorable Richard Montes, Judge presiding. Judgment was entered by the trial court on December 22, 1980. At time of trial, Wife introduced evidence as to the valuation of various items of community property, including the actuarial-computed value of Husband's military retirement. Husband was a retired Army Warrant Officer and was receiving a military retirement pension at time of the trial. Husband introduced no evidence to rebut the valuations that were introduced by Wife at time of trial. No transcript of the trial proceedings held the first day was prepared for the use by this court. After filing of judgment, Husband moved for reconsideration of the judgment and offered, for the first time, to introduce evidence as to the true valuation of the items theretofore determined by the trial court. The motion was heard and denied on March 21, 1981.

CONTENTIONS ON APPEAL

1. Did the trial court commit error in evaluating and dividing a military pension as a part of the community assets of the parties.

2. Did the trial court commit error in its findings on the valuation of the community assets.

DISCUSSION

Although the status of the Husband's military pension as community property was clearly delineated at the time of the dissolution proceedings, a series of decisions and Congressional enactments since that time have raised a great deal of doubt as to the treatment of military pensions since the date of entry of the judgment in this matter.

Trial in this matter was bifurcated and an interlocutory judgment as to status only was entered in February 1980. The trial relative to the division of the community assets was held on October 6 and 8, 1980, and a decision entered on the reserved property and support issues on December 22, 1980. The Husband's motion for reconsideration was heard and denied on March 12, 1981. It is clear, therefore, that the trial judge applied the law as it existed prior to the decision of the United States Supreme Court in McCarty v. McCarty (1981) 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589, which was argued March 2, 1981, and decided June 26, 1981. The question squarely presented to this court therefore is the effect of the McCarty holding on cases not yet final and which were pending when Congress passed the Uniformed Services Former Spouses' Protection Act, Public Law No. 97-252, Title X, sections 1001-1006, 96 Stat. 718 (September 8, 1982) (to be codified as 10 U.S.C.).

STATUS OF COMMUNITY PROPERTY LAW PRIOR TO MC CARTY

In a series of cases starting with French v. French (1941) 17 Cal.2d 775, 112 P.2d 235, the position of the California courts has evolved from the holding that non-vested pension rights are not property but a mere expectancy and thus not a community asset subject to division upon dissolution of a marriage, to the pre-McCarty position that not only are military pensions a community asset subject to division upon dissolution of the marriage, (In re Marriage of Fithian (1974) 10 Cal.3d 592, 111 Cal.Rptr. 369, 517 P.2d 449, cert. den. 419 U.S. 825, 95 S.Ct. 41, 42 L.Ed.2d 48 (1974)) ¹ but that even non-vested pension rights are a community asset subject to division in a dissolution proceeding. (In re Marriage of Brown (1976) 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561; see also, In re Marriage of Milhan (Milhan I) (1974) 13 Cal.3d 129, 131, 117 Cal.Rptr. 809, 528 P.2d 1145; In re Marriage of Stenquist (1978) 21 Cal.3d 779, 782, 148 Cal.Rptr. 9, 582 P.2d 96.)

While the right to the military pension in the Fithian case, supra, was vested at the time of the dissolution, our California Supreme Court considered the question of Congressional intent and held, despite the contentions of the husband therein, that Congress did not intend federal military pay to be the separate property of the recipient. The court determined that federal law did not preempt the right of the state courts to classify and divide these pension rights and California law did not interfere in any way with the accomplishment of the goals of Congress in creating the federal retirement pay system, Fithian, supra, 10 Cal.3d at 597, 111 Cal.Rptr. 369, 517 P.2d 449.

The principle of Fithian was extended in Brown by the holding that the wife was entitled to share in the husband's non-vested pension rights to the extent that such rights were attributable to his work during the period when the parties were married and living together; specifically overruling French and a series of cases that had theretofore cited French as controlling non-vested pension rights, Brown, 15 Cal.3d 838, 847, 126 Cal.Rptr. 633, 544 P.2d 561.

It would have appeared well-settled therefore prior to June 26, 1981, that military pensions, whether vested or non-vested, were community assets and subject to the jurisdiction of the California courts upon dissolution of the marriage.

EFFECT OF MC CARTY v. MC CARTY

McCarty involved a regular army Colonel who filed a petition for dissolution in California. At the time of the petition, he had served 18 of the 20 years required for retirement with pay ² at various locations both within and without the State of California. The superior court entered a judgment in 1977 finding, among other items, that his military pension and retirement rights were subject to division as quasi-community property. The court then divided the pension as quasi-community property. Husband sought review of that portion of the superior court's decree that awarded his former wife an interest in the retired pay. The California Court of Appeal affirmed the award; the California Supreme Court denied husband's petition for a hearing and the United States Supreme Court granted a hearing.

The United States Supreme Court agreed with husband's argument that the application of community property law conflicts with the federal military retirement schemes ³ regardless of the classification of the compensation as current or deferred. The Court further held that the application of community property principles to military retired pay "threatens grave harm to 'clear and substantial' federal interests." (McCarty, supra, 453 U.S. at 232, 101 S.Ct. at 2741.) While relying heavily on its decision in Hisquierdo v. Hisquierdo (1979) 439 U.S. 572, which involved non-recognition of community property rights under the Railroad Retirement Law, The Court resolved that the congressional motives and goals in establishing a retirement system for military personnel had preempted the field of community property classification by the state courts. McCarty, supra, 453 U.S. at 223, 101 S.Ct. at 2736. The Court then concluded that inasmuch as the community property division of retired pay has the potential to frustrate (congressional) objectives, (McCarty, supra, at 233, 101 S.Ct. at 2741) it thus reversed the judgment of the California Court of Appeal. ⁴

Although subject to a vigorous, and well-reasoned dissent, it is clear that under the supremacy clause, state law must 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. The holding of the United States Supreme Court in McCarty invalidated the holding of Fithian and those other cases which had held that our state courts could divide military pensions during a dissolution of the marriage.

UNIFORMED SERVICES FORMER SPOUSES' PROTECTION ACT

Congress responded to the McCarty decision by introducing legislation ⁵ that led to the passage of the "Uniformed Services Former Spouses Protection Act" (the Act) as a part of Public Law 97-252, Title X, thereof. That Act amended Chapter 71 of title 10, United States Code by adding section 1408, among others. The effect of section 1408 clearly and unequivocally is to allow state courts to treat disposable retired or retainer pay of a retired member as community property. ⁶ The law allows To the extent that McCarty is based upon the Court's holding that Congress did intend to and did preempt the law of community property, Congress has now spoken and clearly allows states to determine the divisibility and character of military pensions. The impediment to the enforcement of the Fithian doctrine now being removed, it once again is the law of this state. ⁸

courts to make orders for the payment of a portion of such retired pay directly to a spouse and that order is enforceable upon and recognizable by the military service. ⁷

Of concern to the decision in the case at bar, and to the many family law practitioners in this state is the effect of the Act upon cases not final upon the effective date of the Act. ⁹

RETROACTIVITY OF THE ACT

Cases final when McCarty was decided.

The progeny of McCarty were quick to appear. McCarty was decided on June 26, 1981. On November 4, 1981, a decision was entered in In re Fellers (1981) 125...