Marriage of Karlin, In re

• Court: California Court of Appeals
• Writing for the Court: GABBERT; GARDNER, P.J., and TAMURA
• Citation: 24 Cal.App.3d 25,101 Cal.Rptr. 240
• Parties: In re the Marriage of Cathryn M. KARLIN, Respondent and Cross-Appellant, and Francis J. KARLIN, Appellant and Cross-Respondent. Civ. 10999.
• Decision Date: 14 March 1972

Page 240

101 Cal.Rptr. 240 24 Cal.App.3d 25 In re the Marriage of Cathryn M. KARLIN, Respondent and Cross-Appellant,
and Francis J. KARLIN, Appellant and Cross-Respondent. Civ. 10999. Court of Appeal, Fourth District, Division 2, California. March 14, 1972.

Page 242

[24 Cal.App.3d 28] Francis J. Karlin, in pro per.

Eric A. Rose, P.C., and Robert B. White, Long Beach, for respondent and cross-appellant.

OPINION

GABBERT, Associate Justice.

From an interlocutory judgment decreeing a dissolution of marriage, Francis J. Karlin appeals; Cathryn M. Karlin also cross-appeals from the same judgment. Both the appeal and the cross-appeal concern only the trial court's division of property. Appellant contends the trial court improperly concluded a portion of his military pension was community property; he also contends the trial court erred in concluding the Karlin family residence was a community asset. Finally, he asserts the trial court erred in awarding Cathryn one-half of $16,000 in U.S. Government bonds and one-half of a $30,000 note receivable. Cross-Appellant, on the other hand, concludes the court inadvertently failed to include within the divided community assets the amount within a savings plan and 131 shares of McDonnell-Douglas common stock.

As we shall explain below, we confirm the trial court's determination appellant's retired military pay is, in part, a community assets. As we shall also explain, the court did not err in concluding the family residence was community property, since respondent's petition had alleged and appellant's answer had admitted its community property nature. Moreover, we are [24 Cal.App.3d 29] persuaded the court's determination the bonds and note receivable were community property was not erroneous, since appellant's attempt to trace the funds responsible therefor to separate property assets was insufficient to overcome the presumption of a community property nature adhering to assets purchased during a marriage. Finally, as we shall discuss, the court inadvertently failed to include certain definite community assets within those divided by the interlocutory decree. Accordingly, we modify the judgment to include the omitted assets, and, as modified, affirm the judgment.

The court awarded respondent a 25% Interest in appellant's military retirement pay, and ordered appellant to pay her 25% Of the payments as he received them. The 25% Figure was calculated on the basis of a 50% Community interest in the pension since the parties had been married for 11 years of appellant's 22 years of active duty.

While the parties were still married, appellant was retired under the authority of 10 U.S.C. § 8911, as an active duty Air Force officer after 22 years of service; he then became entitled to retirement pay under 10 U.S.C. § 8889. His pension is computed by the provisions of 10 U.S.C. § 8991, and involved no contributions to a retirement or pension fund from his active duty pay.

The rights to retirement pay or to a pension become community property, subject to division in a dissolution proceeding, only when and to the extent a party becomes certain, during the course of the marriage, to receive some payment. To the extent that payment is, at the time of the dissolution of the marriage, subject to conditions which may or may not occur, retirement pay or a pension is an expectancy, not subject to division as community property. (Phillipson v. Board of Administration, 3 Cal.3d 32, 40--41, 89 Cal.Rptr. 61, 473 P.2d 765; French v. French, 17 Cal.2d 775, 778, 112 P.2d 235; Williamson v. Williamson, 203 Cal.App.2d 8, 11, 21 Cal.Rptr. 164.) When, however, a party possesses an unconditional and vested right to a pension or retirement pay, such a matured

Page 243

right is properly subject to division in a dissolution proceeding. (Waite v. Waite, 6 Cal.3d 461, 469--470, 99 Cal.Rptr. 325, 492 P.2d 13; Phillipson v. Board of Administration, Supra, 3 Cal.3d 41, 89 Cal.Rptr. 61, 473 P.2d 765.)

Appellant asserts his right to a military pension is a mere gratuity and, as such, is a conditional right and thus separate property. Accordingly, appellant contends, he has no vested rights, only an expectancy of future payments and not a property interest which could properly be divided by the trial court. Appellant's position finds support in the language of federal [24 Cal.App.3d 30] cases. 'Pensions, compensation allowances and privileges are gratuities. They involve . . . no vested right. The benefits conferred by gratuities may be redistributed or withdrawn at any time in the discretion of Congress.' (Lynch v. United States, 292 U.S. 571, 577, 54 S.Ct. 840, 842, 78 L.Ed. 1434; United States ex rel. Burnett v. Teller, 107 U.S. 64, 2 S.Ct. 39, 27 L.Ed. 352; Walton v. Cotton, 19 How. 355, 60 U.S. 355, 15 L.Ed. 658; United States v. McDonald, 128 U.S. 471, 9 S.Ct. 117, 32 L.Ed. 506; Crenshaw v. United States, 134 U.S. 99, 10 S.Ct. 431, 33 L.Ed. 825; Norman v. United States, 392 F.2d 255, 183 Ct.Cl. 41; see Bell v. United States, 366 U.S. 393, 81 S.Ct. 1230, 6 L.Ed.2d 365.) The question is evidently one of first impression. We do not read French v. French, Supra, 17 Cal.2d 775, 112 P.2d 235, as controlling authority for the proposition a pension payable to a retired member of the Armed Forces is community property. Although Phillipson v. Board of Administration, Supra, 3 Cal.3d 32, 40, 89 Cal.Rptr. 61, 473 P.2d 765, so characterizes French, the opinion therein reveals the only asset determined to be community property was pay actually received during the course of the marriage for services actually rendered. (17 Cal.2d 775, 777, 112 P.2d 235.) The Naval Reserve pay involved in French was held Not to be community property (as retirement pay) since the husband had not yet completed sufficient years of service to qualify therefor. (17 Cal.2d 775, 778, 112 P.2d 235.)

To so conclude in the case at bench, however, would be simply to exalt nomenclature over substance. Under 10 U.S.C. §§ 8911, 8889 and 8991 appellant is entitled to, and is receiving a pension based upon his 22 years of military service; he is entitled to the pension because of services rendered, in part, during the marriage. As our high court pointed out, albeit in the context of the California Judge's Retirement Law, appellant's retirement pay flows, in part, from services rendered during the marriage. '(T)he basic point remains that the pension payment serves as a remuneration for services rendered by the employee; if these services were discharged during the marriage, that remuneration must compose a community asset.' (Waite v. Waite, Supra, 6 Cal.3d 461, 471, 99 Cal.Rptr. 325, 332, 492 P.2d 13, 20.) The fact the Federal government may increase, diminish, or completely abolish appellant's retirement payments does not change the nature of those payments from community to separate property. Appellant became entitle...