Marriage of Kittleson, In re, 5407-I

• Decision Date: 25 September 1978
• Docket Number: No. 5407-I,5407-I
• Citation: 585 P.2d 167,21 Wn.App. 344
• Parties: In re the MARRIAGE OF Kathryn B. KITTLESON, Respondent, and James P. Kittleson, Appellant.
• Court: Washington Court of Appeals

Page 344

21 Wn.App. 344

585 P.2d 167

In re the MARRIAGE OF Kathryn B. KITTLESON, Respondent,

and

James P. Kittleson, Appellant.

No. 5407-I.

Court of Appeals of Washington, Division 1.

Sept. 25, 1978.

Frederick C. Peterson, Seattle, for appellant.

Lewis S. Armstrong, Seattle, for respondent.

CALLOW, Judge.

The marriage of James and Kathryn Kittleson was dissolved by decree on December 13, 1976. The husband appeals from that portion of the property division awarding the wife a percentage of the military disability payments he receives.

The husband enlisted in the United States Air Force in October 1942. He and his wife were married on January 9, 1944. He spent the next 24 years in the Air Force, either on active or reserve duty, and suffered a non-service-connected back injury while on active duty in 1968. He was placed on a temporary disability retired list until 1971, when he was placed on a permanent disability retirement list pursuant to 10 U.S.C. § 1201. 10 U.S.C. § 1201 provides that the Secretary of the military branch concerned may retire a permanently disabled serviceman, with right to "retired pay," if (a) he has served at least 20 years, or (b) his disability rates at 30 percent or higher and he has served at least 8 years, as computed under 10 U.S.C. § 1208, or (c) his disability rates at 30 percent or higher and was incurred on active duty, or his disability was incurred in the line of duty during wartime. 10 U.S.C. § 1212. The husband qualified under category (b).

James Kittleson has received monthly disability payments since 1971. An actuary testified at trial that the present value of his retirement award was $202,411. The trial court found that 85 percent of his years of service accrued during his marriage to Kathryn Kittleson, and therefore found 85 percent or $171,050, of the present value of the award to be community property. It awarded one-half of this sum to her, to be paid in monthly installments of $375.

In an action for divorce all property, both community and separate, is before the trial court for distribution. Friedlander v. Friedlander, 80 Wash.2d 293, 305, 494 P.2d 208 (1972); Patrick v. Patrick,43 Wash.2d 139, 260 P.2d 878 (1953). The Dissolution Act of 1973 ¹ continues this rule. Rieke, The Dissolution Act of 1973: From Status to Contract?, 48 Wash.L.Rev. 375, 403 (1974).

It is the trial court's duty to characterize the property of the parties as community or separate, Blood v. Blood, 69 Wash.2d 680, 419 P.2d 1006 (1966), and to dispose of all of the property of the parties which is brought to its attention. Shaffer v. Shaffer, 43 Wash.2d 629, 262 P.2d 763 (1953); Biehn v. Lyon, 29 Wash.2d 750, 189 P.2d 482 (1948); Beam v. Beam, 18 Wash.App. 444, 569 P.2d 719 (1977); DeRevere v. DeRevere, 5 Wash.App. 741, 491 P.2d 249 (1971). The characterization of property as community or separate is not necessarily controlling in the distribution of property under a divorce decree, Patrick v. Patrick, supra; Folsom v. Folsom, 106 Wash. 315, 179 P. 847 (1919), and the essential consideration is whether the final division of property is fair, just and equitable under all the circumstances. In re Marriage of Hadley, 88 Wash.2d 649, 565 P.2d 790 (1977); Baker v. Baker, 80 Wash.2d 736, 498 P.2d 315 (1972). However, as stated in Blood v. Blood, supra, 69 Wash. at 682, 419 P.2d at 1007 The trial court in a divorce action is not bound to award all the separate property to the party acquiring it or to divide the community property equally; but in any disposition of the property of the parties, . . . the court must have in mind the correct character and status of the property as community or separate before any theory of division is ordered.

We must apply these enunciated principles to the issue of whether the military disability award received by the husband upon his discharge is to be classified as community or as separate property, and is to be subject to division in this dissolution proceeding.

Congress may determine the community or separate character of a federally created benefit. Free v. Bland, 369 U.S. 663, 668, 82 S.Ct. 1089, 8 L.Ed.2d 180 (1962); Wissner v. Wissner, 338 U.S. 655, 660-61, 70 S.Ct. 398, 94 L.Ed. 424 (1950). However, the federal statutes providing for military disability pay do not suggest that Congress intended to determine whether the right of a married veteran, resident in a community property state, to disability pay was a community or separate asset. See 10 U.S.C. § 1201 Et seq.; In re Marriage of Jones, 13 Cal.3d 457, 119 Cal.Rptr. 108, 531 P.2d 420 (1975). ² Therefore, at present, the states may resolve the problem of characterization and distribution under state law.

The nature of military disability pay under 10 U.S.C. § 1201 Et seq. has been described as follows:

Disability pay, however, does not serve primarily as a form of deferred compensation for past services. Although longevity of service plays a role, the veteran's right to disability payments, and the amount of the payments, depend primarily on the existence and extent of the disability. Such payments serve to compensate the disabled veteran for the loss of military pay caused by his premature retirement and for his diminished ability to compete for civilian employment. (See Note (1973) 27 JAG J. 392, 400.) Disability payments serve a second purpose. We have suggested Supra that they compensate the veteran for the pain, suffering, disfigurement and the misfortune caused by his disability.

In re Marriage of Jones, supra at 462, 119 Cal.Rptr. at 111, 531 P.2d at 423. Military disability pay is received in monthly installments terminating at the death of the recipient, and eligibility is determined in part by longevity of service. These factors are characteristic of regular retirement pay, which is community property to the extent that the right to it accrued during marriage. Payne v. Payne, 82 Wash.2d 573, 512 P.2d 736 (1973).

A similarity also exists between disability pay and personal injury recovery. This similarity arises from the view of disability pay as compensation for loss rather than compensation for past services. The recovery of damages by either spouse for personal injury inflicted by a third party tort-feasor is treated as community property under Washington law. Clark v. Beggs, 138 Wash. 62, 244 P. 121 (1926); Perez v. Perez, 11 Wash.App. 429, 523 P.2d 455 (1974). A limitation of the rule to third party tort-feasors flows from Freehe v. Freehe, 81 Wash.2d 183, 500 P.2d 771 (1972), which held that in interspousal tort suits one-half of the amount of general damages for loss of future earnings is recoverable by the injured spouse as his or her separate property, and general damages for pain and suffering are fully recoverable as that spouse's separate property. The Freehe opinion reiterated the rule in this state that recovery for injuries to a married person by a third party tort-feasor is community property.

The courts of Texas and California have previously considered the question of the characterization of disability pay as separate or community property. Both states characterize regular military retirement pay as community property. Mora v. Mora, 429 S.W.2d 660 (Tex.Civ.App.1968); In re Marriage of Fithian, 10 Cal.3d 592, 111 Cal.Rptr. 369, 517 P.2d 449, Cert. denied, 419 U.S. 825, 95 S.Ct. 41, 42 L.Ed.2d 48 (1974). The state statutes overcast the consideration of the problem by the courts.

Texas Family Code § 5.01 provides:

(a) A spouse's separate property consists of:

(1) the property owned or claimed by the spouse before marriage;

(2) the property acquired by the spouse during marriage by gift, devise, or descent; and

(3) the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.

On the other hand, California Civil Code § 5126 provides:

(a) All money or other property received by a married person in satisfaction of a judgment for damages for personal injuries or pursuant to an agreement for the settlement or compromise of a claim for such damages is the separate property of the injured person if such money or other property is received as follows:

(1) After the rendition of a decree of legal separation or a final judgment of dissolution of a marriage.

(2) While either spouse, if he or she is the injured person, is living separate from the other spouse.

(3) After the rendition of an interlocutory decree of dissolution of a marriage.

The Texas rule is that all military disability payments, even those received after dissolution of the marriage, are community property. Busby v. Busby, 457 S.W.2d 551 (Tex.1970); Marshall v. Marshall, 511 S.W.2d 72 (Tex.Civ.App.1974); Dominey v. Dominey, 481 S.W.2d 473 (Tex.Civ.App.), Cert. denied, 409 U.S. 1028, 93 S.Ct. 462, 34 L.Ed.2d 321 (1972). The Texas rule makes an exception where a veteran receives a pension from the Veterans Administration for a service-connected disability. In such cases, all such payments, whether received during the marriage or after dissolution, are the separate property of the disabled spouse. In re Marriage of Butler, 543 S.W.2d 147 (Tex.Civ.App.1976) ³; Ramsey v. Ramsey, 474 S.W.2d 939 (Tex.Civ.App.1971). The basis for this distinction was that such payments were not the result of an earned property right accrued by reason of years of military service, but were for personal injury or disease which was service-connected.

In California it was first held that a serviceman's right to disability pay, acquired before such serviceman had earned by longevity of service a vested right to retirement pay, was his separate property. In re Marriage of Jones, supra. The opinion states at 462-63, 119 Cal.Rptr. at 111, 531 P.2d at 423:

So long as the marriage subsists, the veteran's reduced earnings work a loss to the community. But such community loss does not continue after dissolution; at that point the earnings or...