Marriage of Potter, In re

• Decision Date: 25 March 1986
• Citation: 224 Cal.Rptr. 312,179 Cal.App.3d 73
• Court: California Court of Appeals Court of Appeals
• Parties: In re the MARRIAGE OF Betty L. and James A. POTTER. Betty L. ABSHIRE, Appellant, v. James A. POTTER, Respondent. Civ. F004298.

Page 312

224 Cal.Rptr. 312

179 Cal.App.3d 73

In re the MARRIAGE OF Betty L. and James A. POTTER Betty L. ABSHIRE, Appellant, v. James A. POTTER, Respondent.

Civ. F004298.

Court of Appeal, Fifth District, California.

March 25, 1986.

Review Denied July 9, 1986.

Neil A. Helding, Hanford, for appellant

Julienne L. Rynda, Hanford, for respondent.

OPINION

BEST, Associate Justice.

Respondent (husband) commenced service with the United States Navy in July 1953 and married appellant (wife) on April 7, 1961. Husband retired on February 1, 1978, with 25 years total military service, 17 years of which were completed while the parties were married. The parties separated on April 28, 1981, and wife filed a petition for dissolution of the marriage on April 29, 1981.

The United States Supreme Court decision in McCarty v. McCarty (1981) 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 was filed on June 26, 1981.

A stipulated interlocutory judgment was entered on November 16, 1981, providing, among other things: "The U.S. Navy Retirement benefits presently received by [husband] is confirmed to him as his separate property." Also contained in the interlocutory judgment was a waiver by each party of his and her rights to appeal or to ask for a new trial in the matter. A final judgment of dissolution of the marriage was entered on November 24, 1981.

Congress enacted the Uniform Services Former Spouses' Protection Act on September 8, 1982, to take effect on February 1, 1983. (Pub.L. No. 97-252, tit. X.)

The California Legislature enacted CIVIL CODE SECTION 5124¹ in 1983 (Stats.1983, ch. 775, § 1, p. 4255), to be effective January 1, 1984, and repealed on January 1, 1986.

On December 5, 1983, wife filed an order to show cause for modification seeking a community property determination and division of the military retirement benefits pursuant to section 5124. At a hearing held on March 29, 1984, the parties stipulated that the community property interest sought by wife amounted to 34 percent of the military retirement net income of $1,867 per month. On May 31, 1984, the trial court rendered its decision denying wife's motion and declaring section 5124 unconstitutional in that it was "an ex post facto impairment of contract and on the further basis of the doctrine of res judicata."

DISCUSSION

Did the trial court err in ruling section 5124 unconstitutional?

A. Procedural history.

Prior to the United States Supreme Court decision of McCarty v. McCarty, supra, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589, California community property law had established that federal military retirement pay was divisible community property to the extent it was earned during the marriage. (Henn v. Henn (1980) 26 Cal.3d 323, 328, 161 Cal.Rptr. 502, 605 P.2d 10.) On June 26, 1981, the court in McCarty held that federal law prohibits division of military pensions and preempts state community property law. (McCarty v. McCarty, supra, at pp. 223-236, 101 S.Ct. at pp. 2736-2743.)

On April 29, 1981, wife filed a petition for dissolution of marriage, listing the U.S. Navy retirement as a community asset. Husband filed a response on May 13, 1981 (a month prior to the McCarty decision), listing the U.S. Navy retirement benefits as community property for postmarriage service time and as separate property for premarriage service time. Husband filed an amended response on September 24, 1981 (post-McCarty ), listing the U.S. Navy retirement benefits as entirely his separate property.

On October 29, 1981, husband and wife stipulated in open court that the military retirement benefits were confirmed to husband as his separate property. A final judgment of dissolution of marriage was entered on November 24, 1981.

When the judgment of dissolution of marriage became final, the McCarty decision expressed the controlling law as to military retirement pay. The United States Congress, however, quickly responded to the McCarty decision by enacting the Federal Uniform Services Former Spouses' Protection Act (FUSFSPA) on September 8, 1982. (10 U.S.C. § 1408.) FUSFSPA became effective February 1, 1983, and provides: "Subject to the limitations of this section, a court may treat disposable retired or retainer pay payable to a member for pay periods beginning after June 25, 1981 either as property solely of the member or as property of the member and his spouse in accordance with the law of the jurisdiction of such court."

FUSFSPA has been held to overrule McCarty. (Brunson v. Brunson (1985) 168 Cal.App.3d 786, 787, 214 Cal.Rptr. 378.) "The act's legislative history clearly indicates Congress' intent to abrogate all applications of the McCarty decision [citation]." (In re Marriage of Buikema (1983) 139 Cal.App.3d 689, 691, 188 Cal.Rptr. 856.)

"Although effective February 1, 1983, and containing certain provisions which were not operative until that date, the use of the date McCarty was decided as a reference in 10 United States Code section 1408(C)(1) ... evidences a legislative intent that the law relative to community property treatment of military retirement pensions be as though McCarty did not exist, i.e., that such pensions would be subject to division as community property both before and after June 25, 1981." (In re Marriage of Frederick (1983) 141 Cal.App.3d 876, 879, fns. omitted, 190 Cal.Rptr. 588.)

In Aloy v. Mash (1985) 38 Cal.3d 413, 421, 212 Cal.Rptr. 162, 696 P.2d 656, the California Supreme Court stated:

"[N]o case within our memory has received less retroactive application than McCarty. Starting with the last paragraph of the McCarty opinion itself, the judicial and legislative branches, state and federal, cooperated in a massive and largely successful drive to make McCarty disappear--prospectively, presently and retroactively."

Even though the intention FUSFSPA be applied retroactively in order to abrogate all application of the McCarty decision is clear, FUSFSPA has been held applicable only to those cases not yet final as of its effective date of February 1, 1983. (See In re Marriage of Hopkins (1983) 142 Cal.App.3d 350, 356-360, 191 Cal.Rptr. 70; In re Marriage of Fairfull (1984) 161 Cal.App.3d 532, 535, 207 Cal.Rptr. 523.) In the instant case, the judgment dissolving the parties' marriage became final before the effective date of FUSFSPA. Thus, FUSFSPA, standing alone, does not have retroactive application to allow reopening of the final judgment.

In general, the trial court loses jurisdiction to modify or alter the division of property after the judgment has become final. (Bodle v. Bodle (1978) 76 Cal.App.3d 758, 143 Cal.Rptr. 115.) There is an exception to this general rule, however, in cases where the court expressly reserved jurisidiction to modify a property award. (In re Marriage of Brown (1976) 15 Cal.3d 838, 851, 126 Cal.Rptr. 633, 544 P.2d 561; see also § 4800, subd. (a).) Here, there was no reservation of jurisdiction.

However, in the similar case of Mueller v. Walker (1985) 167 Cal.App.3d 600, 606-607, 213 Cal.Rptr. 442, the court stated:

"Due to the application of res judicata principles, the McCarty decision continued to state the controlling law as to those judgment decrees which became final during the 18-month hiatus created by the enactment of FUSFSPA.

"To bridge the hiatus, the California Legislature enacted Civil Code section 5124 (eff. Jan. 1, 1984) permitting modification of a community property settlement, judgment or decree which became final on or after June 25, 1981, and before February 1, 1983--the l8-month hiatus period--to include a division of military retirement benefits. Modification is authorized regardless whether the settlement, judgment or decree reserved jurisdiction over the pension or treated the pension as other than community property. Thus, by positive act the Legislature has superseded and modified the preclusive effect of the doctrine of res judicata or collateral estoppel as applied to military retirement benefits in decrees or judgments or settlements which became final in the specified time frame. Civil Code section 5124 in most clear and explicit language authorizes the remedy sought here by wife." (Fns. omitted.)

B. Does section 5124 interfere with vested property rights in violation of the due process provisions of the state and federal Constitutions?

Husband argues that section 5124 ² violates due process, since it authorizes a taking of property without due process when applied to judgments which became final before February 1, 1983, and which did not reserve jurisdiction over the military pension. Our Supreme Court has long held that the retroactive application of a statute may be unconstitutional if it is an ex post facto law, if it deprives a person of a vested right without due process of law, or if it impairs the obligation of a contract. (In re Marriage of Buol (1985) 39 Cal.3d 751, 756, 218 Cal.Rptr. 31, 705 P.2d 354.)

In In re Marriage of Buol, supra, the California Supreme Court recently reaffirmed the rules governing retroactive application of statutes and the factors to be considered as stated in In re Marriage of Bouquet (1976) 16 Cal.3d 583, 128 Cal.Rptr. 427, 546 P.2d 1371 as follows:

"Vested rights are not immutable; the state, exercising its police power may impair such rights when considered reasonably necessary to protect the health, safety, morals and general welfare of the people. (Bouquet, supra, 16 Cal.3d at p. 592 [128 Cal.Rptr. 427, 546 P.2d 1371] ). In determining whether a given provision contravenes the due process clause we look to 'the significance of the state interest served by the law, the importance of the retroactive application of the law to the effectuation of that interest, the extent of reliance upon the former law, the legitimacy of that reliance, the extent of actions taken on the basis of that reliance, and the extent to which the retroactive application of the new law would disrupt those actions.' (Ibid.)

"Where 'retroactive...