Naydan v. Naydan

• Decision Date: 20 November 1990
• Docket Number: No. 05-90-00434-CV,05-90-00434-CV
• Parties: Walter E. NAYDAN, Appellant, v. Connie Jo NAYDAN, Appellee.
• Court: Texas Court of Appeals

Page 637

800 S.W.2d 637

Walter E. NAYDAN, Appellant, v. Connie Jo NAYDAN, Appellee.

No. 05-90-00434-CV.

Court of Appeals of Texas Dallas.

Nov. 20, 1990.

Rehearing Denied Dec. 20, 1990.

Roger Turner, Dallas, for appellant.

Paul T. Fanning, John Alan Goren, Dallas, for appellee.

Before WHITHAM, ROWE and THOMAS, JJ.

OPINION

WHITHAM, Justice.

In this post-divorce action for partition of federal civil service retirement benefits, the ex-husband-appellant, Walter E. Naydan, appeals from a judgment in favor of the ex-wife-appellee, Connie Jo Naydan. The trial court determined that Connie had a twenty-four percent interest in the benefits, rendered a money judgment against Walter for the sum of $13,586.31 as Connie's share of benefits paid to Walter prior to judgment, ordered Walter to deposit future benefits into a trust bank account and that twenty-four percent of those deposits be disbursed to Connie. In addition, the trial court awarded attorney's fees to Connie. The issues focus on (1) whether federal statutes and regulations prohibit a state court from making the division of the benefits, (2) whether the evidence conclusively proved that the benefits had a value of $11,751.00 on the date of the divorce, (3) whether the trial court awarded excessive attorney's fees and abused its discretion in awarding attorney's fees, (4) whether the trial court erred in excluding testimony, and (5) whether the trial court had jurisdiction to make the award. Because we find no merit in any of Walter's points of error, we affirm. We conclude, however, that this appeal has been taken for delay and without sufficient cause. Consequently, we assess damages against Walter pursuant to TEX.R.APP.P. 84 and render judgment in favor of Connie for the amount of those damages.

The parties were married on April 5, 1952. In August 1962, they moved to Dallas, Texas, when Walter began employment with the Veterans' Administration of the federal government. He remained continuously employed by the VA until his retirement. The parties were divorced on October 16, 1974. Thus, at the time of the divorce, Walter had twelve years of service. The divorce decree did not award Walter's civil service retirement benefits nor did it address the issue. In August 1987, Walter retired and commenced receiving civil service retirement benefits. Subsequent to Walter's retirement Connie made several demands on him to pay her share of those benefits to her. Walter, however, failed to make any such payment. At trial, Walter testified that at the time of the divorce he was not eligible to retire and receive immediate payment of any benefits, but that he was entitled to payment of benefits should he retire when he attained a certain age. Walter also testified that he had already received retirement benefit payments totalling $56,609.64, none of which he had shared with Connie.

The trial court's "Post Divorce Judgment of Partition of Retirement Benefits" ordered Walter to assign to and pay Connie twenty-four percent of each and every retirement benefit received by him after October 31, 1989, to open a separate checking account into which his retirement benefit payments are to be deposited, to direct the bank to pay twenty-four percent of each payment so deposited to Connie, and further ordered that Walter be constituted trustee of the funds for the benefit of Connie. The judgment also ordered that Connie recover $13,586.31 as twenty-four percent of the amount of retirement benefits received by Walter from the date of his retirement to October 1989.

In his first and second points of error, Walter contends that the trial court erred in entering judgment against him (1) because 5 U.S.C. § 8345(j) prohibits a state court from dividing civil service retirement benefits, and (2) because 5 C.F.R. 831.1704(b) and (d) defining "qualifying court orders" prohibits a state court from dividing civil service retirement benefits. Subsection (j) was added to section 8345 of the Civil Service Retirement Act on September 15, 1978. Act of Sept. 15, 1978, P.L. 95-366, 92 Stat. 600. That section reads in pertinent part:

(j)(1) Payments under this subchapter which would otherwise be made to an employee, Member, or annuitant based upon his service shall be paid (in whole or in part) by the Commission to another person if and to the extent expressly provided for in the terms of any court decree of divorce, annulment, or legal separation, or the terms of any court order or court-approved property settlement agreement incident to any court decree of divorce, annulment, or legal separation. Any payment under this paragraph to a person bars recovery by any other person.

Retirement benefits are subject to division as vested contingent community property rights even though the present right has not fully matured. Taggart v. Taggart, 552 S.W.2d 422, 423 (Tex.1977). Generally, civil service retirement benefits earned during marriage are community property subject to division or partition in a divorce proceeding. Hoppe v. Godeke, 774 S.W.2d 368, 370 (Tex.App.--Austin 1989, writ denied). In the present case, we conclude that section 8345(j) does not prohibit division of civil service retirement benefits, but instead, specifically permits division.

Under 5 U.S.C. § 8345(j)(1), United States civil service retirement benefits as community property can be divided by the court in a divorce decree and required to be paid directly to the party awarded same. Cowan v. Plsek, 592 S.W.2d 422, 423 (Tex.Civ.App.--Waco 1979, no writ). Section 8345(j)(1) specifically permits award of a fractional portion to wife. See Adams v. Adams, 623 S.W.2d 500, 501 (Tex.App.--Fort Worth 1981, no writ). Indeed, the civil service amendments require the United States to recognize the community property division of civil service retirement benefits by a state court. See Adams, 623 S.W.2d at 501 (citing McCarty v. McCarty, 453 U.S. 210, 230-31, 101 S.Ct. 2728, 2740, 69 L.Ed.2d 589 (1981)). Where vested retirement benefits, as here, are not partitioned or taken into account in dividing community property in a divorce decree, the husband and wife become tenants in common or joint owners thereof, and such may be partitioned thereafter. Cowan, 592 S.W.2d at 423. The obvious purpose of section 8345(j) is to permit division of civil service retirement annuities if that is necessary to effectuate state marital property law. Heisterberg v. Standridge, 656 S.W.2d 138, 144 (Tex.App.--Austin 1983, no writ). The Federal Civil Service Retirement Act provides that retirement annuity benefits may be divided in accordance with state law. Hoppe, 774 S.W.2d at 371 (citing 5 U.S.C. § 8345(j)(1)). Moreover, it makes no difference that federal law did not permit division of civil service retirement benefits at the time of divorce. See Boniface v. Boniface, 656 S.W.2d 131, 133 (Tex.App.--Austin 1983, no writ). Indeed, section 8345(j)(1) authorizes such division and can be applied retroactively in a suit for partition. See Boniface, 656 S.W.2d at 134-35. Section 8345(j)(1) created no new substantive rights between the parties. It merely instituted a procedure by which the federal government was to recognize existing rights and cooperate with state courts in distributing benefits accordingly. See Boniface, 656 S.W.2d at 133. The legislative history of the 1978 amendment [§ 8345(j)(1) ] specifically recognized the pre-existing authority of state courts to regard civil service retirement benefits as community property and to deal with them as such. Boniface, 656 S.W.2d at 133. The 1978 amendments did not affect the nature of civil service retirement benefits that accrued and vested during marriage. Such benefits were and are community property under the law of this state both before and after the amendments. Boniface, 656 S.W.2d at 134. It was only after adoption of these amendments that federal authorities could be bound by state court decisions in their future payment of benefits pursuant to the division of property incident to or arising out of a divorce. Boniface, 656 S.W.2d at 134. A partition judgment dividing community assets because an earlier divorce decree failed to address such property in any manner is, obviously, a court order incident to and arising out of the earlier divorce proceedings. Boniface, 656 S.W.2d at 134-35. We conclude, therefore, that in the present case the trial court properly granted partition to Connie of what the trial court determined was her community share of benefits previously paid to Walter, and granted partition to Connie of what the trial court found to be her community share of all future benefit payments. Hence, it follows that section 8345(j) does not prohibit a state court from dividing civil service retirement benefits. We overrule Walter's first point of error.

At oral argument, Walter conceded that if we were to decide that section 8345(j) does not prohibit a state court from dividing civil service retirement benefits, then we must overrule his second point of error. Indeed, we must. A partition judgment dividing community assets because an earlier divorce decree failed to address such property in any manner is a "qualifying court order" within the meaning of 5 C.F.R. 831.1704(b) and (d) as applicable in the present case. (In the present case, we do not deal with a survivorship annuity.) See Boniface, 656 S.W.2d at 134-35. We overrule Walter's second point of error.

In his sixth point of error, Walter contends that the trial court erred in partitioning his retirement benefits as undivided assets because the prior trial court lacked jurisdiction to divide such property pursuant to section 3.92 of the Texas Family Code. TEX.FAM.CODE ANN. § 3.92 (Vernon Supp.1990). Walter grounds this contention on the assertion that section 3.92 did not become effective until November 1, 1987, and only applies to orders, decrees or judgments rendered after that date. (The parties were divorced October 16,...