Marriage of Nizenkoff, In re

• Citation: 135 Cal.Rptr. 189,65 Cal.App.3d 136
• Court: California Court of Appeals
• Decision Date: 21 December 1976
• Parties: In re the MARRIAGE OF Theodore C. and Desi Marie NIZENKOFF. Theodore C. NIZENKOFF, Appellant, v. Desi Marie NIZENKOFF, Respondent. Civ. 38183.

Page 189

135 Cal.Rptr. 189

65 Cal.App.3d 136

In re the MARRIAGE OF Theodore C. and Desi Marie NIZENKOFF Theodore C. NIZENKOFF, Appellant, v. Desi Marie NIZENKOFF, Respondent.

Civ. 38183.

Court of Appeal, First District, Division 2, California.

Dec. 21, 1976.

As Modified Dec. 30, 1976.

As Modified Jan. 5, 1977.

Hearing Denied Feb. 17, 1977.

Golden & Weinstein, Richard B. Weinstein, San Francisco, for appellant.

Bianchi, Hoskins & Rosenberg, John P. McCall, San Rafael, Allen R. Erickson, Hayward, for respondent.

TAYLOR, Presiding Justice.

On this appeal by the husband ¹ from a portion of an interlocutory decree of dissolution, ² the only question is whether the trial court properly concluded that the wife's interest in her federal social security old age and survivor's benefits was her separate property. The question is one of first impression. We have concluded that an affirmance is mandated by 42 United States Code Annotated, section 1304, as interpreted in Flemming v. Nestor, 363 U.S. 603, 80 S.Ct. 1367, 4 L.Ed.2d 1435, and the fact that any other result would interfere with the statutory scheme of the federal Social Security Act, in violation of the supremacy clause of the federal Constitution (art. VI, cl. 2).

The appeal is on a settled statement that sets forth the following pertinent facts, as found by the court: The parties were married in December 1954, and separated in June 1973. During the almost 20-year duration of the marriage, both worked for the Garland Company. At the time of dissolution, the wife was 69 years old and collecting her federal social security old age and retirement benefits; the husband, who was then 41, claimed that these benefits were, in part, a community asset.

Relying in In re Marriage of Brown, 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561, In re Marriage of Fithian, 10 Cal.3d 592, 111 Cal.Rptr. 369, 517 P.2d 449, In re Marriage of Sommers, 53 Cal.App.3d 509, 126 Cal.Rptr. 220, In re Marriage of Martin, 50 Cal.App.3d 581, 123 Cal.Rptr. 634, and other similar and more recent authorities, ³ the husband argues that federal social security old age benefits are analogous to the contractual or property rights to insurance and other benefits acquired by one spouse resulting from the employment of the other during marriage. He contends that here, therefore, the wife's benefits should have been treated as community property ⁴ and appropriately divided. ⁵

It is now well settled in this state that in order to qualify as a divisible community asset, an interest must be a contractual right or property interest. A pension right becomes a property interest when the employer cannot unilaterally repudiate the right (Brown, supra, 15 Cal.3d p. 842, 126 Cal.Rptr. 633, 544 P.2d 561). In 1960, in Flemming v. Nestor, supra, 363 U.S., pages 603, 611, 80 S.Ct. 1367, the U.S. Supreme Court rejected the argument that the Social Security Act created either property or contract rights. The court held that the Social Security Act created only a public benefit that could be reduced or altered so long as there was a rational basis for doing so. The court based its reasoning on its characterization of the system as a tax and on 42 United States Code Annotated section 1304, that expressly reserves to Congress the 'right to alter, amend, or repeal any provision' of the Social Security Act, so long as that action is not arbitrary. The court in Flemming indicated that section 1304 was essential to insure the flexibility of the social security system. All rights depend on the statutory scheme involved (Guarino v. Celebrezze (3rd Cir. 1964) 336 F.2d 336, 338, citing Bernstein v. Ribicoff (3rd Cir. 1962) 299 F.2d 248).

Although the identical arguments made by the husband here, namely, that social security benefits are not a gratuity but an earned right based upon earnings and therefore analogous to annuities and insurance policies, were made initially by the four dissenters in Flemming, supra, the U.S. Supreme Court in 1971 reaffirmed its position. In Richardson v. Belcher, 404 U.S. 78, 92 S.Ct. 254, 30 L.Ed.2d 231, the court said, at pages 80 and 81, 92 S.Ct. at page 257: 'The fact that social security benefits are financed in part by taxes on an employee's wages does not in itself limit the power of Congress to fix the levels of benefits under the Act or the conditions upon which they may be paid. Nor does an expectation of public benefits confer a contractual right to receive the expected amounts. Our decision in Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287, upon which the District Court relied, held that as a matter of procedural due process the interest of a welfare recipient in the continued payment of benefits is sufficiently fundamental to prohibit the termination of those benefits without a prior evidentiary hearing. But there is no controversy over procedure in the present case, and the analogy drawn in Goldberg between social welfare and 'property,' 397 U.S., at 262 n. 8, 90 S.Ct., at 1017, cannot be stretched to impose a constitutional limitation on the power of Congress to make substantive changes in the law of entitlement to public benefits.' More recently in Weinberger v. Wiesenfeld, 420 U.S. 636, 95 S.Ct. 1225, 43 L.Ed.2d 514, the court reaffirmed the non-contractual nature of social security benefits. Further, Congress, which has recognized the need for vested pension rights in the private sector, ⁶ has, in the intervening 26 years since Flemming, retained section 1304 of the Social Security Act. This inaction, in the face of legal trends toward vested rights, only serves to confirm the court's view that the social security system is essentially different from other benefit and insurance programs and still needs the flexibility provided by section 1304. ⁷

In addition, in 1965, Congress added to the Social Security Act specific provisions for benefits to be paid directly to a 'divorced wife' or 'surviving divorced wife' ⁸ (§ 402(b), (e), Pub.L. 89--97, § 308, 79 Stats. 375 (1965)); these benefits do not affect the benefits received by the former husband and his present dependents (42 U.S.C.A., § 403(a)(3)). These provisions demonstrate that in the statutory scheme of the Social Security Act, Congress has considered the termination of marital relationships by divorce and expressly set forth a method for protecting the interests of the divorced wife. In Adair v. Finch (10th Cir. 1970) 421 F.2d 652, the court, at page 654, rejected a contention that the denial of social security benefits to a divorced wife constituted deprivation of community property without due process of law, in violation of the Fifth Amendment of the U.S. Constitution.

The sweep of the Social Security Act is not to be interpreted by the variations and idiosyncrasies of local law (Wissner v. Wissner, 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424; O'Leary v. Social Security Board (3rd Cir. 1946) 153 F.2d 704, 707). As Congress expressly provided for the interests of a divorced wife in the social security system, it did not intend that they rely on state family law concepts of support, alimony and community property.

However, as the parties agree, pursuant to the mandate of Wissner v. Wissner, 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424, this court must also examine the extent to which the characterization of the wife's old age and retirement benefits would interfere with the social security system. All of the husband's 'tests' here based on Wissner were rejected as applicable general propositions by our Supreme Court (In re Marriage of Fithian, supra, 10 Cal.3d 592, at pp. 598--599, 111 Cal.Rptr. 369, 517 P.2d 449) and need not be rediscussed. We merely note that our Supreme Court indicated in Fithian, at page 598, 111 Cal.Rptr. 369, 517 P.2d 449, that Wissner did not establish a general rule that federal employment benefits cannot be treated as community property, but merely requires us to examine the goals of the social security system. One of these has been characterized as a redistributable minimum income welfare program based on tax transfer (89 Harv.L.Rev. 833, fn. 17, at p. 838). This is compatible with the fact that social security benefits 'are not necessarily related directly to tax contributions . . . (but are provided) in part according to presumed need' (Weinberger v. Wiesenfeld, supra, 420 U.S. p. 647, 95 S.Ct. p. 1233).

We also note that in Fithian, supra, our Supreme Court (10 Cal.3d at pp. 597--600, 111 Cal.Rptr. 369, 517 P.2d 449) was unable to find any express intent of Congress to provide for the divorced spouse and reasoned that since the military retirement benefits did not survive the serviceman, Congress intended to provide only for surviving spouses and leave surviving exspouses to state family law concepts of support, alimony and community property. The contrary is true here. A ruling that social security benefits are divisible...