Marriage of Reinauer, Matter of

• Decision Date: 13 March 1997
• Docket Number: No. 07-96-0013-CV,07-96-0013-CV
• Citation: 946 S.W.2d 853
• Parties: In the Matter of the MARRIAGE OF James Richard REINAUER and Margaret Ann Reinauer.
• Court: Texas Court of Appeals

Page 853

946 S.W.2d 853

In the Matter of the MARRIAGE OF James Richard REINAUER and

Margaret Ann Reinauer.

No. 07-96-0013-CV.

Court of Appeals of Texas,

Amarillo.

March 13, 1997.

Order GrantingRehearing in Part

May 22, 1997.

SecondRehearing Overruled July 8, 1997.

Thomas J. Purdom, Lubbock, Rex W. Easterwood, Hereford, for appellant.

Underwood Wilson Berry Stein & Johnson, P.C., James E. Wester, Ginger P. Nelson, Amarillo, for appellee.

Underwood, Wilson, Berry, Stein & Johnson, James W. Wester, Ginger P. Nelson, Amarillo, Bass, Higdon & Hardy, Inc., James N. Higdon, San Antonio, for appellant on motion for rehearing.

Law Offices of Thomas J. Purdom, Thomas J. Purdom, Lubbock, Law Offices of Rex Easterwood, Rex Easterwood, Hereford, for appellee on motion for rehearing.

Before BOYD, C.J., and DODSON and QUINN, JJ.

QUINN, Justice.

James Reinauer (Reinauer) appealed from a "Final Judgment" enforcing a prior divorce decree and awarding Margaret Ann Reinauer Cowan (Cowan) a portion of his military retirement benefits. Through four points of error he asked whether the trial court erred in 1) actually dividing disability as opposed to retirement benefits, 2) failing to grant his plea to jurisdiction, 3) failing to deny recovery since same was barred by the statute of limitations, and 4) modifying a final divorce decree. We affirm in part and reverse and remand in part.

Background

Reinauer and Cowan were divorced on August 20, 1979. In the decree terminating their marriage, Cowan was awarded a portion of Reinauer's military retirement benefits. ¹ The applicable provision read:

It is the finding of the Court that ... Reinauer ... is an officer on active service in the United States Navy, and that as such, he accrues potential retirement income benefits, which may, or may not ripen into actual retirement income, since the completion of twenty ... years of service is a prerequisite to such actual vesting of retirement pay benefits. The Court finds and decrees that the accrual and entitlements under such military retirement plan which relate to Petitioner's service during the marriage of the parties is Community Property, and that the parties are each entitled to one-half of such benefits, if and when paid, as are attributable to such service-years during marriage, the court finds that Petitioner completed eleven ... service years during marriage.

If, therefore, the said [Reinauer] shall continue in the military service until he accrues actual retirement pay benefits, it is Decreed that such retirement pay shall be paid to the parties hereto as follows:

(1) One-half of the 'Community Interest' ... shall be paid to ... [Cowan] and the balance of such pay shall be paid to ... [Reinauer].

(2) The 'Community Interest' is, and shall be, that fraction of the retirement pay in which the denominator of the fraction is [Reinauer's] total service years at retirement and the numerator is eleven....

'It is not intended hereby to require Petitioner to remain on active military duty, and if he shall fail to complete 20 service years, then this provision of the Judgment shall impose no duty on him with respect to military retirement pay, but if he completes 20 or more service years, and receives actual retirement pay, then he shall be, and is hereby Ordered to receive, for the benefit of [Cowan] and in order to effectuate the terms of this Judgment, [Cowan's] community interest in such retirement benefits. [Reinauer] is further Ordered to deliver to [Cowan] within ten days of his receipt of such actual retirement pay, her community interest in such retirement payments.'

(Emphasis added).

Some years after the divorce, Reinauer began to experience physical ailments and underwent medical examination. As a result of same, he was found to be 20% disabled, and the Navy placed him on temporary disability retirement. ² Thereafter, he received a letter from the "Retired Pay Department" of the Navy welcoming him "to the retired roll" and informing him that his "disability retired pay account" had been established. Additionally, several options were extended with regard to the pay he could receive during his temporary retirement. While one option included a percentage of his disability as an element in the overall formula, he selected a method founded solely upon the number of years he served in the military.

Apparently, Reinauer's condition deteriorated. In April of 1992, he was assigned a 40% disability. Moreover, the Secretary of the Navy "approved the recommendation of the Physical Evaluation Board that [he] be permanently retired because of physical disability." He again was given several options concerning the manner in which his post-service pay could be calculated. And, he selected "the nondisability" formula which, like before, calculated his future benefits solely upon the number of years he served.

Incidentally, the nondisability formula was offered him because he had accrued a sufficient number of years in the military to voluntarily retire. ³ But before he could execute the requisite papers to voluntarily end his relationship with the Navy, the latter placed him on permanent disability retirement under 10 U.S.C. § 1201 et. seq. ⁴ Indeed, had he had a choice, he would have opted to serve for a full 28 years, as allowed by federal law.

As a result of being characterized as disabled, Reinauer was directed to apply for disability benefits from the Department of Veteran Affairs (VA). He did so. But to receive same, the law required him to waive a portion of his naval benefits. He did that as well. Consequently, his gross disability retirement compensation consisted of monies from the Navy computed under 10 U.S.C. §§ 1201 and 1401 and from the VA as per 38 U.S.C. §§ 3101 et. seq.

Upon discovering that her ex-husband had "retired," Cowan moved the trial court to award her a percentage of Reinauer's benefits. The primary dispute below lay in whether the Navy and VA payments came within the scope of "retirement pay" as contemplated in the 1979 divorce decree. That is, the trial court was asked to determine whether his disability retirement compensation was "retirement pay" under the decree, and therefore, payable in part to Cowan. It held that it was.

Point of Error One

In his first point of error, Reinauer asserted that the trial court erred in granting judgment which apportioned both his disability retired pay and Veterans Affairs disability compensation. We overrule the point as to the monies from the Navy but sustain it as to the VA funds.

First, to the extent Reinauer suggested that McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981) nullified the provision of the divorce decree apportioning military retirement, he was mistaken. Though the United States Supreme Court held in McCarty that military retirement was not subject to division as a community asset, the decision lacked retroactive application. Segrest v. Segrest, 649 S.W.2d 610, 613 (Tex.1983), cert. denied, 464 U.S. 894, 104 S.Ct. 242, 78 L.Ed.2d 232 (1983). That is, it had no affect upon judgments which were final and non-appealable before McCarty issued. Id. So, that part of the divorce decree at bar which divided Reinauer's retirement benefits was, and is, enforceable since the decree became final and nonappealable several years before McCarty.

Second, though the United States Congress attempted to overrule McCarty via the Uniformed Services Former Spouses' Protection Act (USFSPA) ⁵, Richard v. Richard, 659 S.W.2d 746, 748 (Tex.App.--Tyler 1983, no writ), that statute also lacked retroactive application. According to the Texas Supreme Court, it too could not be invoked to collaterally attack a judgment which had become final and non-appealable before its passage. Berry v. Berry, 786 S.W.2d 672, 673 (Tex.1990); Jones v. Jones, 900 S.W.2d 786, 787-88 (Tex.App.--San Antonio 1995, writ denied). And, again, because the decree at bar became final years before the USFSPA went into effect, that statute was, and is, not controlling. ⁶ Third, before McCarty, Texas recognized prospective military retirement benefits as a community asset subject to division. Cearley v. Cearley, 544 S.W.2d 661, 665-66 (Tex.1976); Busby v. Busby, 457 S.W.2d 551, 553-54 (Tex.1970) (dealing with disability retirement payments). It did so because they were tantamount to contingent property rights. Id. Thus, the trial court acted lawfully when, in 1979, it awarded Cowan a percentage of Reinauer's eventual military retirement.

Fourth, whether the government payments received by Reinauer were properly divided depended upon the construction given the phrase "retirement pay" in the 1979 decree. Thus, we must decide what was meant by the court in using the aforementioned phrase. This, in turn, obligates us to interpret the term in reference to the entire judgment and with the purpose of "giving effect to all the court has written." Point Lookout West, Inc. v. Whorton, 742 S.W.2d 277, 278 (Tex.1987). So too must we declare its effect in accordance with the literal language used. Barnard v. Barnard, 863 S.W.2d 770, 772 (Tex.App.--Fort Worth 1993, no writ). Lastly, and most importantly, the construction derived must comport with the law; that is, the term cannot be read in a manner achieving an illegal result. See id. at 774 (holding that a construction which correctly applies the law must be adopted).

In applying the foregoing rules to the situation at hand, we are not without guidance. For instance, retirement pay, as per Busby and Cearley, connotes an earned property right that accrued by reason of years of service or deferred compensation earned during each month of service. Acosta v. Acosta, 836 S.W.2d 652, 654 (Tex.App.--El Paso 1992, writ denied); Whorrall v. Whorrall, 691 S.W.2d 32, 37 (Tex.App.--Austin 1985, writ dism'd); see Cearley v. Cearley, 544 S.W.2d at 665 (holding the payments to be community property and divisible because they were a form of deferred...