Marriage of Stier, In re

• Court: California Court of Appeals
• Writing for the Court: KREMER; MITCHELL; LEWIS
• Citation: Marriage of Stier, In re, 223 Cal.Rptr. 599, 178 Cal.App.3d 42 (Cal. App. 1986)
• Decision Date: 27 February 1986
• Parties: In re the MARRIAGE OF Darlene Clara and Larry Carl STIER. Darlene Clara STIER, Appellant, v. Larry Carl STIER, Appellant. D002015.

Page 599

223 Cal.Rptr. 599

178 Cal.App.3d 42

In re the MARRIAGE OF Darlene Clara and Larry Carl STIER Darlene Clara STIER, Appellant, v. Larry Carl STIER, Appellant.

D002015.

Court of Appeal, Fourth District, Division 1, California.

Feb. 27, 1986.

As Modified March 24, 1986.

Review Denied June 4, 1986.

Ellman & Stein and Melvyn B. Stein, San Diego, for appellant darlene.

Knoll, Corr & Pfeifer and John P. Knoll, San Diego, for appellant Larry.

KREMER, Presiding Justice.

Nine years after her divorce, Darlene Clara Stier brought an action against her former husband, Larry Carl Stier, to reduce underpayment of her interest in his military retired pay to judgment. The trial court determined Darlene did have a one-half community property interest in Larry's retired pay, but applied the federal Uniformed Services Former Spouses' Protection Act (FUSFSPA) to limit Darlene's interest in a part of the retirement benefits. Both Darlene and Larry appeal, respectively arguing the rule of In re Marriage of Stenquist (Stenquist I) (1978) 21 Cal.3d 779, 148 Cal.Rptr. 9, 582 P.2d 96, and the mandate of FUSFSPA should apply to all of Larry's military retired pay. We find applying either authority retroactively affects long-settled property rights and, for the reasons discussed herein, is unwarranted. We affirm in part and reverse in part.

FACTUAL AND PROCEDURAL BACKGROUND

On June 15, 1973, the dissolution of Larry and Darlene's marriage was tried. The next day, the United States Marine Corps, in accord with 10 UNITED STATES CODE SECTION 1202¹, transferred Larry from active duty to a 40 percent temporary disability retirement. At that time, he had already completed over 20 years of active military service.

The interlocutory dissolution judgment was filed on July 9, 1973, and provided, inter alia, "petitioner LARRY CARL STIER shall pay to respondent the sum of $211.65 per month which represents one-half of the petitioner's retirement benefits received from the United States Marine Corps which is deemed to be community property. Should these retirement benefits increase or decrease in the future there is to be an adjustment accordingly." (Italics added.) The final judgment incorporating this passage by reference was entered on October 4, 1973, and was never appealed. After the judgment, Larry began paying Darlene, but consistently underpaid the community property share due. Arrears accrued. In July 1975, after a periodic physical evaluation, Larry was found to be suffering a congenital heart defect and bilaterial hearing loss and was placed on 80 percent permanent disability retirement.

Shortly after the United States Supreme Court's 1981 decision in McCarty v. McCarty (1981) 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589, Larry stopped paying his retirement benefits to Darlene entirely. On June 11, 1982, Darlene filed an order to show cause to reduce Larry's arrears to judgment. After a hearing, the trial court decided in Darlene's favor and ordered Larry to pay arrears of $15,180.68 and to continue paying one-half of his gross military retired pay. However, on February 3, 1983, two days after the enactment of FUSFSPA, ² Larry moved for and was granted reconsideration. The court modified its previous decision and awarded Darlene arrears computed on a 50 percent share of Larry's retirement benefits before June 26, 1981, the day after FUSFSPA's operative date. In computing the amount owed to Darlene after June 26, 1981, the court determined FUSFSPA preempted state court jurisdiction over all but "disposable retired and retainer pay." ³ Having thus ruled, the court then determined that since Larry received 80 percent permanent disability retirement pay, Darlene was entitled to one-half of the remaining disposable retired pay, that is, one-half of the remaining 20 percent of Larry's retirement pay less the statutorily prescribed deductions of section 1408(a)(4). ⁴ Both Larry and Darlene appeal from the trial court's order.

DISCUSSION

I

On appeal, both parties challenge the trial court's calculation of arrears: Darlene claims a one-half community property interest in Larry's disability retirement benefits under the rule of In re Marriage of Stenquist (Stenquist I), supra, 21 Cal.3d 779, 148 Cal.Rptr. 9, 582 P.2d 96, and Larry asserts after FUSFSPA the trial court lacked subject matter jurisdiction to award Darlene any of his disability retired pay. ⁵

Larry begins by averring the July 9, 1973, dissolution judgment did not distinguish between disability and longevity retired pay and is now subject to collateral attack on that issue. Larry is mistaken. Under the well-settled principles of res judicata, a final judgment by a court of competent jurisdiction is presumptively valid and immune from collateral attack. (Code Civ.Proc., §§ 1908, 1909, 1910, 1911; Armstrong v. Armstrong (1976) 15 Cal.3d 942, 950-951, 126 Cal.Rptr. 805, 544 P.2d 941; In re Marriage of Thomas, supra, 156 Cal.App.3d at p. 638, 203 Cal.Rptr. 58.) In analyzing a challenge to res judicata, "three questions are pertinent: Was the issue decided in the prior adjudication identical with the one presented in the action in question? Was there a final judgment on the merits? Was the party against whom the plea is asserted a party or in privity with the party to the prior adjudication?" (Bernhard v. Bank of America (1942) 19 Cal.2d 807, 813, 122 P.2d 892; accord Dakins v. Board of Pension Commissioners (1982) 134 Cal.App.3d 374, 382, 184 Cal.Rptr. 576.)

Here, Larry challenges only the identity of the issues. However, in the final judgment, for which Larry himself petitioned, the trial court unequivocally awarded Darlene one-half of Larry's "retirement benefits received from the United States Marine Corps...." Clearly, the courts at that time regarded retirement benefits arising from employment as community property subject to equal division. ⁶ (Waite v. Waite (1972) 6 Cal.3d 461, 99 Cal.Rptr. 325, 492 P.2d 13; Phillipson v. Board of Administration (1970) 3 Cal.3d 32, 89 Cal.Rptr. 61, 473 P.2d 765; French v. French (1941) 17 Cal.2d 775, 112 P.2d 235.) Whatever challenge Larry could have brought regarding the division of his disability retired pay he should have brought at that time. A collateral attack now is neither warranted nor justified. (See Smith v. Smith (1981) 127 Cal.App.3d 203, 207-209, 179 Cal.Rptr. 492.) Moreover, Larry may not have originally viewed the distinction between his disability and longevity pay as significant since, as he presently concedes, at the time he retired the amount he would have received under either retirement program was identical. In sum, the division of community property effected in the underlying final judgment must stand.

In 1978 the California Supreme Court more thoroughly addressed the disability-longevity retirement distinction in In re Marriage of Stenquist (Stenquist I), supra, 21 Cal.3d 779, 148 Cal.Rptr. 9, 582 P.2d 96. In that case, the husband retired on disability pay, apparently under chapter 61 of title 10 of the United States Code, after serving 26 years in the military. Given his disability rating, the husband qualified for disability pay at 75 percent of his basic service pay. His longevity retired pay at that time would have been 65 percent of his basic pay. "Assuming the husband desired the higher amount, the Army began making 'disability' payments to him." (Id. at p. 783, 148 Cal.Rptr. 9, 582 P.2d 96.) Husband argued disability pay was his separate property. In analyzing the case, the Supreme Court first found the purported transmutation effected by husband electing disability retired pay was unjust. "[S]uch a result would violate the settled principle that one spouse cannot, by invoking a condition wholly within his control, defeat the community interest of the other spouse." (Id. at p. 786, 148 Cal.Rptr. 9, 582 P.2d 96.) Looking beneath the "disability" label, the Supreme Court next found a military disability pension did more than compensate the pensioner for lost wages resulting from a compelled and premature retirement. "Because [disability retired pay] replaces a 'retirement' pension, and is computed in part on the basis of longevity of service and rank at retirement, it also serves the objective of providing support for the serviceman and his spouse after he leaves the service. Moreover, as the veteran approaches normal retirement age, this latter purpose may become the predominant function served by the 'disability' pension." (Id. at p. 787, 148 Cal.Rptr. 9, 582 P.2d 96.) Thus, the court concluded "military retired pay based on disability contains two components: (a) compensation to the serviceman for loss of earning power and personal suffering, and (b) retirement support. The latter component, to the extent that it is attributable to employment during marriage, is community property." (Id. at p. 791, 148 Cal.Rptr. 9, 582 P.2d 96, fn. omitted.)

Darlene asserts Stenquist I reaffirms her community property interest in Larry's retired pay, whether denominated as either "longevity" or "disability", and establishes the formula by which arrears should be computed. However, the dissolution judgment in this case was final some five years before Stenquist I. Thus, the application of Stenquist I which Darlene seeks is, in effect, retroactive and, as such, is specifically prohibited ⁷ by the Supreme Court in the Stenquist I opinion. ⁸

Resolving the parties' respective challenges to this point, we find Darlene has a community property interest in one-half of Larry's gross retirement benefits at the time of judgment and subsequent increases or adjustments directly related thereto. Such increases did not contemplate and consequently do not include the increased benefits Larry received for the postdissolution aggravation of his disability. Thus, the formula to calculate Larry's community property arrearage must be stated in two parts. The first covers the period between October 4, 1973, the day of...