Perez v. Perez

• Decision Date: 13 December 1978
• Docket Number: No. 16022,16022
• Citation: 576 S.W.2d 447
• Parties: Roberto D. PEREZ, Appellant, v. Marian S. PEREZ, Appellee.
• Court: Texas Court of Appeals

Page 447

576 S.W.2d 447

Roberto D. PEREZ, Appellant, v. Marian S. PEREZ, Appellee.

No. 16022.

Court of Civil Appeals of Texas, San Antonio.

Dec. 13, 1978.

Rehearing Denied Jan. 24, 1979.

M. M. Pena, Jr., San Antonio, for appellant.

Patrick K. Sheehan, Cox, Smith, Smith, Hale & Guenther, San Antonio, for appellee.

OPINION

CADENA, Chief Justice.

Roberto D. Perez, defendant below, appeals from a judgment ordering him to pay to his former wife, Marian S. Perez, plaintiff, a portion of the military readjustment pay "if, as and when" he receives such pay under the provisions of 10 U.S.C. § 687 (1975).

The parties were married on March 9, 1963, at which time defendant was a first lieutenant in the United States Army Reserve. On April 1, 1964, defendant was called to active duty. The parties were divorced on August 25, 1970, after being married for seven years and six months, but the divorce decree made no reference to the readjustment pay benefits.

Defendant, who had attained the rank of major, was involuntarily released, effective October 3, 1977, at which time he had been on active duty for 161/2 years. Six years and five months of such active duty were rendered by defendant while he and plaintiff were married. This suit was filed by plaintiff on September 13, 1977. Plaintiff claims that the defendant's right to readjustment pay was, in part, an asset of the community estate of the parties and that since such asset was not disposed of by the decree of divorce, she and defendant owned interests in the readjustment benefits as tenants in common.

Title 10 of U.S.C. § 687(a) provides that a reserve officer who is involuntarily released from active duty and who has completed, immediately prior to his release, at least five years of continuous active duty, "is entitled to a readjustment payment computed by multiplying his years of active service . . ., but not more than eighteen, by two months' basic pay of the grade in which he is serving at the time of his release." The statute then provides that such involuntarily released reserve officer may not be paid "more than two years' basic pay of the grade in which he is serving at the time of his release or $15,000.00, whichever amount is the lesser." The parties agree that the amount of readjustment pay receivable by defendant under the statute is $15,000.00.

Defendant claims that the trial court erred in awarding plaintiff an interest in the readjustment benefits because such benefits were never "vested" prior to the time that the parties were divorced, but, instead, were "contingent" because they were not due and payable until defendant was involuntarily released from active duty, and then only if he had completed five years of continuous active duty immediately prior to his involuntary release. For these reasons, defendant contends that the decisions holding that military retirement benefits are community property when the right to receive such benefits is derived from service during the marriage are not applicable. We disagree.

Defendant's reliance on In re Howe, 381 F.Supp. 1025 (N.D.Fla.1974), is misplaced. The court in that case was considering the propriety of an order of the bankruptcy court requiring the bankrupt to turn over to the trustee in bankruptcy military readjustment pay received by the bankrupt after the petition in bankruptcy was filed. Under the provisions of 11 U.S.C. § 110 (1953), as interpreted by the court in Howe, title to property of the bankrupt passes to the trustee only if the bankrupt's title was vested at the time the petition in bankruptcy was filed. We are not here concerned with the correctness of this interpretation, but need only point out that Howe held that the readjustment pay was not payable until the bankrupt was involuntarily released from the United States Marine Corps; because such release did not occur until after the filing of the petition in bankruptcy was filed, the bankrupt's right to readjustment pay was contingent at the time of filing of the petition, and therefore, remained the property of the bankrupt. 381 F.Supp. at 1026-27.

We need not evaluate the propriety of the conclusion reached in Howe which was that the right to receive readjustment pay is "contingent" and not "vested" prior to the date of the reservist's involuntary release. The esoteric distinctions between "vested" and "contingent" or "nonvested" rights are irrelevant to the determination of whether a right will be considered as part of the assets of the community estate. The argument that "contingent" or "inchoate" rights cannot be considered as part of the assets of the community estate until all events have occurred which irrevocably fix the liability of the government to pay the benefits was rejected by the Supreme Court of Texas in Cearley v. Cearley, 544 S.W.2d 661, 663-664 (Tex.1976). In rejecting the contention that only earned or vested rights can be considered community assets, the Supreme Court said: "We hold that such rights, prior to accrual and maturity, constitute a contingent interest in property and a community asset subject...