Marriage of Vinson, Matter of

• Decision Date: 12 May 1982
• Docket Number: No. 25216,25216
• Citation: 644 P.2d 635,57 Or.App. 355
• Parties: In the Matter of the MARRIAGE OF Frances Ann VINSON, Appellant, and Billy Ray Vinson, Respondent. ; CA A22656.
• Court: Oregon Court of Appeals

Page 635

644 P.2d 635

57 Or.App. 355

In the Matter of the MARRIAGE OF Frances Ann VINSON, Appellant,

and

Billy Ray Vinson, Respondent.

No. 25216; CA A22656.

Court of Appeals of Oregon.

Argued and Submitted Feb. 26, 1982.

Decided May 12, 1982.

Robert P. Van Natta, St. Helens, argued the cause for appellant. With him on the brief was Van Natta & Petersen, St. Helens.

Jack A. Billings, Eugene, argued the cause for respondent. With him on the brief was Diment & Billings, Eugene.

Before BUTTLER, P. J., and WARDEN and WARREN, JJ.

WARREN, Judge.

Wife appeals from an order modifying a dissolution decree. The trial court granted husband's motion to modify because of the United States Supreme Court's decision that military pension benefits are not community property subject to property division in dissolution cases. McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981). The central question is whether and to what extent McCarty may be applied retroactively to a final decree dividing marital property. We reverse.

At the time of the original decree, husband had a vested, matured military pension and could have retired then and received the benefits. He did not plan to retire, however, until 1988. The original trial court decree awarded husband his military retirement benefits, which would have been $1248 per month had he retired at that time. The decree also awarded wife $620 per month in permanent spousal support, almost exactly one-half husband's military retirement entitlement at that time.

Both parties appealed. Vinson and Vinson, 48 Or.App. 283, 616 P.2d 1180 (1980). After argument, but before our opinion in that case, we decided that retirement benefits are a marital asset to be considered in formulating financial aspects of dissolution decrees and in appropriate cases be divided in kind as and when received. Rogers and Rogers, 45 Or.App. 885, 609 P.2d 877, modified 47 Or.App. 963, 615 P.2d 412, rev. den. 289 Or. 659 (1980), modified 50 Or.App. 511, 623 P.2d 1108, rev. den. 290 Or. 853 (1981). We modified the property division aspects of the Vinson decree in light of Rogers to award wife half the benefits husband was eligible to receive had he retired at the time of dissolution, or $646 per month less taxes on her half, payable as and when husband receives payment. We also increased her spousal support for three years to allow wife to complete her education, reduced it for two more, and terminated it thereafter, or earlier if wife were to begin to receive her share of the retirement benefits within that five years.

Our decision in Vinson was issued July 25, 1980. Neither party petitioned for review. Our mandate issued November 7, 1980. The trial court entered its order on the mandate December 31, 1980. The decree was final.

Six months later, the Supreme Court decided in McCarty that military pensions are not community property subject to property division in dissolution cases. The Court did not decide that those pensions cannot be considered in making equitable property distributions, but only that the pensions are indivisible property awardable only to the pensioner. The Court noted that the pensions are subject to spousal and child support obligations. Accordingly, contrary to husband's contention, McCarty does not affect the trial court's subject matter jurisdiction. Although Oregon is not a community property state, we have found that McCarty applies in Oregon, and remanded several cases pending on appeal when McCarty was decided for reconsideration of both property division and spousal support. See Pearce and Pearce, 53 Or.App. 521, 632 P.2d 501, rev. den. 292 Or. 108 (1981); Hawks and Hawks, 53 Or.App. 742, 633 P.2d 34 (1981). To the extent that we have applied McCarty to cases not final on appeal, we have given it limited retroactive application. We will not go farther and apply it to cases in which the property rights of the parties have been settled by a judgment which became final before the Supreme Court's opinion in McCarty was handed down. The important considerations why McCarty should not be applied retroactively are well stated in In Re Marriage of Sheldon, 124 Cal.App.3d 371, 177 Cal.Rptr. 380 (1981). ¹ The trial court had no statutory authority to modify the property division. See ORS 107.135(1)(a) (power to modify support provision). This was not a default decree subject to relief under former ORS 18.160 ² (repealed Or. Laws 1981, ch. 898, § 53), which followed FRCP 60(b), or under ORCP 71B or C, which follow the amended FRCP 60(b) and incorporate the equitable power inherent to relieve parties from fraudulent judgments. See Harder v. Harder, 26 Or.App. 337, 552 P.2d 852 (1976). That inherent power is within the court's discretion but does not arise absent extraordinary circumstances such as fraud. See Ackermann v. United States, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207 (1950) (court found no "extraordinary circumstances" justifying relief under FRCP 60(b) where petitioner made considered choice not to appeal).

The few courts that have considered whether to reopen dissolution decrees that divided military pensions and were final before McCarty are split in favor of limited retroactivity. Compare Erspan v. Badgett, 659 F.2d 26 (5th Cir. 1981) (1963 Texas decree was res judicata ) and In Re Marriage of Sheldon, supra, (McCarty not retroactive) with Ex parte Acree, 623 S.W.2d 810 (Tex.App.1981) (full retroactivity). We have independently reviewed the cases and literature to determine what, if any, rule the Supreme Court would have us follow had it considered the question.

We conclude, as did the court in Erspan, that nothing in McCarty suggests an intent to invalidate prior, valid state court judgments especially in light of the Supreme Court's forceful invocation of res judicata only 11 days before McCarty in Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 2427, 69 L.Ed.2d 103, 109 (1981).

"Nor are the res judicata consequences of a final, unappealed judgment on the merits altered by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case. (Citations omitted.) As this Court explained in Baltimore Steamship Co. v. Phillips, 274 U.S. 316, 325, (47 S.Ct. 600, 604), 71 L.Ed. 1069 (1927) an 'erroneous conclusion' reached by the court in the first suit does not deprive the defendants in the second action 'of their right to rely upon the plea of res judicata.... A judgment merely voidable because based upon an erroneous view of the law is not open to collateral attack, but can be corrected only by a direct review and not by bringing another action upon the same cause of action.' We have observed that 'the indulgence of a contrary view would result in creating elements of uncertainty and confusion and in undermining the conclusive character of judgments, consequences which it was the very purpose of the doctrine of res judicata to avert.' Reed v. Allen, 286 U.S. 191, 201, (52 S.Ct. 532, 534), 76 L.Ed. 1054, 81 A.L.R. 703 (1932)." ³

Here, respondent did not seek direct review beyond this court and now has no direct review available. He did not keep his direct appeal alive until McCarty was decided, as was the situation in both Hawks and Pearce, which we remanded for reconsideration in light of McCarty. Respondent here is attacking a final decree on the merits. To succeed he must avoid res judicata.

The trial court apparently presumed that the McCarty holding was an extraordinary circumstance that allowed the court to exercise its discretion and inherent power to relieve a party from a final judgment. However, in light of Federated Department Stores and Ackerman, such discretion and power may not be exercised as a substitute for an appeal, unless the appellant shows that extraordinary circumstances prevented his appeal. We hold that this rule applies to motions made under ORCP 71B and 71C to overcome the res judicata effect of a final judgment. We also hold that a United States Supreme Court decision that indicates that a prior final judgment of this court was erroneous is not such a circumstance.

Respondent has not alleged or shown fraud or any extraordinary excuse for failure to appeal further. The decree as we had modified it was and is final.

Reversed and remanded with instructions to reinstate the decree as amended under the previous mandate. Costs to appellant.

1 In Sheldon, the court noted that prospective versus retroactive application of judicial decisions turns on three...