Marriage of Stephens, In re

• Decision Date: 19 August 1986
• Citation: 184 Cal.App.3d 616,229 Cal.Rptr. 238
• Court: California Court of Appeals Court of Appeals
• Parties: In re MARRIAGE OF Lahoma and Clarence K. STEPHENS. Clarence K. STEPHENS, Respondent, v. Lahoma STEPHENS, Appellant. F004956.

Page 238

229 Cal.Rptr. 238

184 Cal.App.3d 616

In re MARRIAGE OF Lahoma and Clarence K. STEPHENS Clarence K. STEPHENS, Respondent, v. Lahoma STEPHENS, Appellant.

F004956.

Court of Appeal, Fifth District, California.

Aug. 19, 1986.

Certified for Partial Publication ^*

Cardoza, Nickerson, Martelli, Curtis & Arata and Hugh E. Brereton, Modesto, for appellant.

Brian C. Davis, Modesto, for respondent.

OPINION

MARTIN, Associate Justice.

Clarence K. Stephens (hereinafter Husband) filed a petition for dissolution of marriage on March 30, 1981, in the Superior Court of California, County of Stanislaus. The petition indicated a date of marriage of June 14, 1952, and a date of separation of February 20, 1981.

Lahoma Stephens (hereinafter Wife) filed her response dated March 31, 1981. Said response listed as a community asset, inter alia, Husband's "Retirement benefits from the U.S. Air Force...."

On June 4, 1981, a marriage settlement agreement was filed by the parties, in which they stipulated, among other things, to the following: (1) Husband agreed to pay to Wife as spousal support the sum of $500 per month until Wife remarried; ¹ (2) Wife does not own any separate property; (3) Husband does not own any separate property; (4) an agreement regarding Husband's federal pension rights as follows:

"At this time, Husband receives Federal Retirement Benefits deriving from his prior employment by Department of the Air Force United States Government.

"At the time of execution of this agreement, husband and wife agree that the United States Supreme Court in re Marriage of McCarty [Oct. 16, 1980, cert. granted] is reviewing the issue of military retired pay and states' rights to divide such pay upon dissolution of marriage. Husband and wife agree that the Stanislaus County Superior Court shall retain jurisdiction of the issue of divisibility of such military pay in the event that the United States Supreme Court decides that California Courts may Order a division of such military pay.

"If the United States Supreme Court decides that such military pay may be Ordered divided by a State Court of competent jurisdiction, then husband agrees to execute and deliver all necessary papers and documents to the appropriate veterans retirement agency or department in order to allow wife to share in such payment benefits using the following equation multiplied by husband's monthly entitlement:

619"[ ]

"[ No. of months of husband's military ]

"1/2 X "[ service while married to wife / total ]

"[ no. of months of husband's military ]

"[ service ]

"[ ]

"If wife shall become entitled to receive a portion of husband's military retirement pay as hereinabove set forth, wife agrees to reduce spousal support as set forth hereinabove, or otherwise ordered by an equal amount of such shared military retirement pay.

"If the United States Supreme Court decides that such military retirement pay is not divisible, then wife agrees she shall not be entitled to share in such retir[e]ment pay."

The interlocutory judgment of dissolution of marriage was entered August 17, 1981, and a final judgment was entered on January 13, 1982.

On March 8, 1984, an order to show cause regarding Husband's military pension was filed. An order to show cause hearing was held and the court found the matter should proceed to trial. The matter was submitted after trial and the trial court ultimately denied Wife's request for modification. This appeal followed.

FACTS

Husband entered the military service on February 2, 1947. He married Wife on June 14, 1952. He left the service on June 1, 1967, after completing over 20 years of honorable service. Husband and Wife separated February 20, 1981, after a marriage of 28 years, 8 months.

After 20 years in the service, Husband applied for retirement benefits and initiated the necessary procedure. Wife testified she and Husband made a joint decision for him to seek retirement in that they had been "away from family and friends for many years; hardly ever home; we thought it would be a good time to get Husband received a permanent disability rating of 20 percent from the Department of the United States Air Force and retired pursuant to 10 United States Code ² section 1201, effective May 31, 1967, after completing 20 years and 16 days of military service. His monthly retirement is based upon 20 years of service. The 20 percent disability affects taxable income and is computed by using the base pay at date of retirement times 20 percent. This figure is then subtracted from the monthly retired pay and the remaining amount is the permanent taxable income as shown below:

                out."   Husband was subjected to a routine physical and a medical evaluation board made the determination as to the type of retirement Husband would receive
                

Husband's current gross monthly pay on his pension was at the time of trial $746.04 which included a permanent taxable income of $447.61. Husband testified he pays income taxes on his disability pay and "as far as he knows" the amount he would receive from a disability pension is the same he would have received with a regular longevity pension based upon 20 years in the service.

Wife's income and expense declaration indicated an income of her present husband as approximately $800 to $1,200 per month gross, $600 to $900 net with expenses of approximately $1,400 per month. Husband filed a financial declaration in 1981 showing an income of $1,830 gross with a net of $1,565 and expenses of $1,068.35. At trial, Wife testified she had been employed for the past few months at a department store on a parttime basis and received minimum wage.

DISCUSSION

I. ARE THE PARTIES BOUND BY THE McCARTY DECISION?

On June 26, 1981, the United States Supreme Court filed its opinion in McCarty v. McCarty (1981) 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589, holding federal law precludes a state court from dividing military retired pay pursuant to state community property law. Thus, California community property law was preempted by federal law on this issue.

Congress responded by enacting the Federal Uniformed Services Former Spouses' Protection Act (FUSFSPA), ³ an amendment to title 10 which became effective in relevant part on February 1, 1983. The retroactive effect of this act and the context of the disposition of military retirement pensions upon dissolution Husband has been stated to be as follows:

"The act overrules McCarty stating '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.' (10 U.S.C. § 1408(c)(1).) California law treating military retirement pensions as community property is no longer preempted. The act's legislative history clearly indicates Congress' intent to abrogate all applications of the McCarty decision (see J. Explanatory Statement of the Com. of Conf. on Pub.L. No. 97-252 from House Conf.Rep. No. 97-749, Aug. 16, 1982, pp. 166-168, 128 Cong. Rec. (1982))." (In re Marriage of Buikema (1983) 139 Cal.App.3d 689, 691, 188 Cal.Rptr. 856.)

This court construed FUSFSPA as indicating Congress' intent that courts divide retirement pensions upon dissolution as though McCarty did not exist, stating, "[T]here is no longer any McCarty rule to be retroactively applied...." (In re Marriage of Frederick (1983) 141 Cal.App.3d 876, 880, 190 Cal.Rptr. 588.) FUSFSPA, by its retroactive application, returned California law regarding division of military retirement pensions upon dissolution to the standard applicable prior to June 26, 1981, to wit: In re Marriage of Brown (1976) 15 Cal.3d 838, 851, 126 Cal.Rptr. 633, 544 P.2d 561 (nonvested federal retirement benefits) and In re Marriage of Fithian (1974) 10 Cal.3d 592, 596, 111 Cal.Rptr. 369, 517 P.2d 449, disapproved on other grounds in In re Marriage of Brown, supra, 15 Cal.3d at page 851, 126 Cal.Rptr. 633, 544 P.2d 561 (vested federal retirement benefits).

" '[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.... The result is that, for most purposes, McCarty not only is not the law but never really was.' " (Brunson v. Brunson (1985) 168 Cal.App.3d 786, 788, 214 Cal.Rptr. 378, quoting Aloy v. Mash (1985) 38 Cal.3d 413, 421-422, 212 Cal.Rptr. 162, 696 P.2d 656.)

The first question is whether this court will find the parties have bound themselves to a ruling of the United States Supreme Court which for most purposes does not exist.

It appears the parties, by entering into the property settlement agreement, intended to avoid further litigation regarding community property interests, if any, in Husband's military retirement and agreed to be bound by the United States Supreme Court's determination of the issue. However, it also appears from the parties' agreement they did not intend to be bound by a particular decision, such as McCarty, but rather to be bound by the state of law as reflected after resolution of the question presented in McCarty. In other words, the parties realized the question of community property interest in the military retirement benefits was in a state of flux and agreed to be bound by the ultimate resolution of that issue. To ignore the passage of FUSFSPA and subsequent decisions of California courts on this issue would be unfair and inequitable.

In the case of In re Marriage of Fairfull (1984) 161 Cal.App.3d 532, 207 Cal.Rptr. 523, the court stated:

"[I]t is now authoritatively held that the Act's 'legislative history clearly indicates Congress' intent to abrogate all applications of the McCarty decision.' (See In re Marriage of Sarles (1983) 143...