Marriage of Nice, In re

Citation281 Cal.Rptr. 415,230 Cal.App.3d 444
Decision Date23 May 1991
Docket NumberNo. B052240,B052240
CourtCalifornia Court of Appeals
Parties, 14 Employee Benefits Cas. 1443 In re the MARRIAGE OF Geraldine A. and Perry A. NICE. Geraldine A. NICE, Respondent, v. Perry A. NICE, Respondent. Board of Pension Commissioners of the City of Los Angeles, Claimant and Appellant.

John Wendell Hall, for petitioner.

Richard T. Smith, for respondent.

INTRODUCTION

HINZ, Associate Justice.

In this case, a pension plan challenges a judgment of dissolution on two grounds. Reversing the trial court's order that the pension plan make payments to the nonemployee former spouse, we hold that the husband, the pension plan member who wishes to continue working even though he is eligible to retire, must himself compensate his former wife for her portion of community contributions to the pension plan. We further hold that even though the pension plan does not provide "survivor benefits" to a nonemployee former wife, the judgment of dissolution must nevertheless compensate her fully for all contributions to the husband's retirement plan, and remand for reconsideration of that issue.

At a March 6, 1990, hearing, petitioner and respondent in a marital dissolution proceeding argued before the court as to the division of current pension benefits and survivorship rights due to the community because of the husband's employment with the Los Angeles city fire department. On March 26, 1990, the Los Angeles County Superior Court filed a judgment dissolving the marriage of Geraldine A. Nice ("Geraldine"), petitioner, and Perry A. Nice ("Perry"), respondent. Among other items, the judgment awarded Geraldine and Perry, as their sole and separate property, "an undivided one half interest in the pension plan administered by the City of Los Angeles Board of Pension Commissioners under the terms set forth" elsewhere in the judgment.

As to the division of the community property interest in Perry's pension plan administered by claimant City of Los Angeles Board of Pension Commissioners ("the Board"), the judgment reflected several findings concerning "division of current benefits." First, the pension plan was entirely community property. Second, Geraldine was entitled to an undivided one-half interest in the pension plan. Third, having completed 25 years of service, Perry was presently eligible to retire. He would be entitled to a pension benefit of $2,176.18 should he elect to retire, of which Geraldine is entitled to half, $1,088.09. Fourth, Perry elected not to retire, but Geraldine elected to commence receiving benefits.

Pursuant to Civil Code section 4800.8 and In re Marriage of Gillmore (1981) 29 Cal.3d 418, 174 Cal.Rptr. 493, 629 P.2d 1, the judgment stated that the Board may be ordered to commence paying Geraldine her community property share of pension benefits now owing and her distributive share of any survivor benefits that may become due under the plan. The judgment ordered the Board, 30 days after service of the order, to commence paying Geraldine $1,088.09 per month and to continue making payments until the death of Geraldine or of Perry, whichever occurs first, and to pay Geraldine her community property share of all cost of living adjustments due retired members under the plan.

Geraldine would not be entitled, however, to any pro rata share of benefit increases resulting from Perry's continued service after the date of the judgment. Those benefits would be Perry's sole, separate property, as would all other benefits due under the plan. The judgment ordered Perry to guarantee payment to Geraldine of all monthly benefits ordered under the judgment. If Perry has to pay any benefits later determined to be owed by the Board, he shall have a right of reimbursement against the Board. The court reserved jurisdiction over division of the pension plan to make further orders to interpret and enforce the judgment.

Although it received notice, the Board did not appear at the March 6, 1990, hearing. On April 27, 1990, the Board moved to set aside or modify the judgment. Geraldine and Perry opposed the motion. The record on appeal does not contain the ruling, but the parties on appeal agree that the trial court denied the motion. The Board filed a notice of appeal June 8, 1990.

ISSUES

The Board claims on appeal that a trial court in a marital dissolution cannot order a government pension plan:

1. To pay pension benefits to a plan member's former spouse before the member retires; or

2. To pay survivor benefits to a former spouse of a plan member where the plan provides neither a survivor benefit for a former spouse nor any other benefit payable upon or after the death of the member spouse.

DISCUSSION
1. Payment of Pension Benefits Before Member Retires

The Board claims on appeal that a pension system cannot be compelled to pay benefits before a member actually retires, citing In re Marriage of Gillmore, supra, 29 Cal.3d 418, 174 Cal.Rptr. 493, 629 P.2d 1. It argues that a pension system could not be forced to pay pension benefits to a nonemployee spouse prematurely, thereby destroying the employee spouse's future pension rights. The Board further contends that the employee can be required to compensate the nonemployee spouse in an amount equal to the pension share.

In Gillmore, a husband and wife dissolved their 14-year marriage. The wife had a community property interest in the monthly benefit the husband would receive when he became eligible to retire, less than four months after the dissolution. He was in his early 50's, intended to continue working, and was not required to retire until age 70. The trial court delayed distribution of benefits until the husband actually retired. (Id., at pp. 421-422, 174 Cal.Rptr. 493, 629 P.2d 1.)

Gillmore, however, reversed the trial court's denial of the wife's request for immediate distribution of her share of the husband's retirement benefit. The trial court's ruling had erroneously permitted the husband, by retaining control over the timing of his retirement, to retain control over a community property asset, part of which belonged to the wife. The trial court could order the immediate payment of a share of a husband's vested, matured pension benefit to his wife where the husband was eligible to retire but had not yet done so. (Id., at pp. 423-425, 174 Cal.Rptr. 493, 629 P.2d 1.)

Therefore Gillmore remanded to the trial court for immediate distribution to the wife of her vested, mature retirement benefit, whose value the trial court had already determined. If the husband continued employment, he had to reimburse his wife for the share of community property that she lost as a result of his decision. The trial court had jurisdiction to order him to make that reimbursement from his separate property, although that was only one of several ways the husband could compensate the wife. (Id., at pp. 427-429, 174 Cal.Rptr. 493, 629 P.2d 1.)

In the case at bench, the judgment acknowledged Gillmore. But the trial court ordered the pension plan, not the employed spouse, to compensate the former spouse; it required the Board, not Perry, to compensate Geraldine. The issue on appeal is not whether, how much, or even how soon Geraldine will be paid her community property interest in the monthly retirement benefit. The issue is who will pay it. 1

Gillmore stated: "In the past, this court has encouraged trial courts, if feasible, to award all pension rights to an employee spouse, compensating the nonemployee spouse with other community property of equal value. [Citations.]" (Id., at p. 428, 174 Cal.Rptr. 493, 629 P.2d 1.) Such an award was not possible in Gillmore because the community property had already been distributed when the retirement benefits were to be divided. That does not appear to be a problem in the case at bench, as retirement benefits have already vested and were part of the division and distribution of community property as reflected in the judgment of dissolution.

Gillmore makes two points clear. First, "if the nonemployee spouse chooses to receive immediate payments, ... he or she has a right to do so." (Id., at p. 428, 174 Cal.Rptr. 493, 629 P.2d 1.) Second, Gillmore speaks of "various ways" the employee spouse can compensate the nonemployee spouse. The husband in Gillmore could "buy out" the nonemployee wife's share of the retirement benefits, paying her the present value of her share of the pension plan. Or the husband could pay her a share of the retirement payments on a monthly basis. (Id., at pp. 428-429, 174 Cal.Rptr. 493, 629 P.2d 1.) 2

IGillmore, however, nowhere requires the pension plan to pay instead of the employee spouse. Instead, Gillmore 's sketch of the possibilities seems to make clear that the employee spouse--not the pension plan--must compensate the nonemployee spouse. The trial court retains discretion over the exact method of distribution. That discretion, however, does not appear to include shifting the responsibility for compensating the nonemployee spouse to a third party. While continuing employment, the employee spouse retains responsibility for compensating the nonemployee spouse whose community property interest has been impaired by the employee spouse's decision to continue employment. (Id., at pp. 422-423, 428-429, 174 Cal.Rptr. 493, 629 P.2d 1.)

"... [T]he employer is entitled to certainty concerning its obligations under its retirement program and must not be required to do more than is required by its contract with the employee spouse...." (In re Marriage of Becker (1984) 161 Cal.App.3d 65, 73, 207 Cal.Rptr. 392.) In the case at bench, the trial court's order required the pension plan to pay benefits earlier than it would...

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