Sutherland v. Sutherland

• Decision Date: 05 April 1983
• Docket Number: No. S-79-7-CA.,S-79-7-CA.
• Citation: 563 F. Supp. 442
• Parties: Barbara SUTHERLAND and husband, Vernon Sutherland v. Hazel SUTHERLAND.
• Court: U.S. District Court — Eastern District of Texas

563 F. Supp. 442

Barbara SUTHERLAND and husband, Vernon Sutherland v. Hazel SUTHERLAND.

No. S-79-7-CA.

United States District Court, E.D. Texas, Sherman Division.

April 5, 1983.

Charles H. Robertson, Robertson & Wilkinson, Dallas, Tex., for plaintiffs.

W. Laurence Evans, Kennedy, Minshew, Evans, Campbell & Cain, Sherman, Tex., for defendant.

MEMORANDUM OPINION

JUSTICE, Chief Judge.

The plaintiffs in this civil action, one of whom is Vernon Sutherland ("Vernon"), seek to set aside or enjoin that portion of an August 31, 1971, state court divorce decree that awarded his ex-wife, defendant Hazel Sutherland ("Hazel"), one-half of his United States Naval Fleet Reserve retainer pay. See 10 U.S.C. § 6330. Vernon contends that that portion of the divorce decree violates the Supremacy Clause of the federal Constitution, Art. VI, cl. 2, relying principally upon the recent Supreme Court holding in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981). In McCarty, the Court, reviewing on appeal a California divorce decree, held that Congress intended military retirement pay pursuant to 10 U.S.C. §§ 3911 and 3929 to be a "personal entitlement." 453 U.S. at 224, 101 S.Ct. at 2737. It was further held that application of community property principles to military retirement pay would threaten "grave harm" to "clear and substantial federal interests," 453 U.S. at 232, 101 S.Ct. at 2741, and that, accordingly, such a decree violated the Supremacy Clause.

I. Facts

The facts of this case are not in substantial dispute.

On August 31, 1971, Vernon and Hazel were divorced, pursuant to a judgment entered by the District Court of Fannin County, Sixth Judicial District of Texas. In dividing certain real and personal property between the parties, and in making provisions for the support of the minor children, that court treated Vernon's Naval Fleet Reserve retainer payments, to which he had become entitled on July 15, 1970, 10 U.S.C. § 6330, as community property, and granted Hazel a one-half interest in all past and future payments thereunder. Although Vernon was represented by counsel, he did not perfect an appeal from the judgment.

Vernon paid half of the retainer pay he had received at the time of the entry of judgment; but he did not make any further payments, until the state district court adjudged him to be in contempt, for failure to make such payments, on June 19, 1974.

Vernon—then in confinement pursuant to the contempt order—applied for the writ of habeas corpus to the Court of Civil Appeals for the Seventh Supreme Judicial District of Texas. That court denied the application, on the grounds that an unappealed final judgment, even if erroneous, could not be collaterally attacked in a habeas corpus proceeding. Ex parte Sutherland, 515 S.W.2d 137 (Tex.Civ.App.—Texarkana 1974, reh. den.)

Vernon then filed an original application for the writ of habeas corpus in the Supreme Court of Texas. That court held that the unappealed final divorce judgment was not a "void" judgment; hence, whether or not it was "erroneous," the judgment was not susceptible to collateral attack. Ex parte Sutherland, 526 S.W.2d 536 (Tex. 1975).

On September 1, 1976, Vernon filed suit in the District Court of Fannin County to vacate, annul, or hold void the retainer payments portion of the August 31, 1971, divorce decree, pursuant to the Texas Uniform Declaratory Judgment Act. Vernon's new wife, Barbara Sutherland ("Barbara"), who had married Vernon on January 20, 1972, intervened as a party plaintiff in Vernon's action. The trial court denied the requested relief based on the doctrines of res judicata, collateral estoppel, and laches.

The Court of Civil Appeals affirmed the judgment of the trial court, on the grounds that the unappealed divorce decree was a final judgment, and, therefore, entitled to res judicata effect, unless it could be attacked upon a bill of review, pursuant to Rule 329b(5), Tex.R.Civ.P. Furthermore, it held that, even if Vernon's suit were construed to be a bill of review, it failed upon the merits, because Vernon had not alleged that he was prevented from making his then-current contentions in the original divorce proceedings by reason of fraud, accident, or wrongful act of defendant Hazel. Finally, it was held that Vernon's suit, even if deemed a bill of review, would be barred by the four-year statute of limitations. Tex.Rev.Civ.Stat.Ann. art. 5529. Sutherland v. Sutherland, 560 S.W.2d 531 (Tex. Civ.App.—Texarkana 1978, writ ref'd n.r. e.). Barbara was also precluded by the doctrine of res judicata from collaterally attacking the divorce judgment, because she was in privity with Vernon. 560 S.W.2d at 533.

Vernon and Hazel applied for writ of error to the Texas Supreme Court, but the application was refused.

Plaintiffs Vernon and Barbara filed the instant civil action on January 15, 1979, again seeking to set aside that portion of the 1971 divorce decree that awarded Hazel half of Vernon's Fleet Reserve retainer payments.

II. The Legal Issue

Although neither the Supreme Court of Texas nor the United States Supreme Court has determined whether or not Naval Fleet Retainer payments may be considered community property, it is arguable that the 1971 divorce decree would now, if it could be subjected to appellate review, be reversed as a matter of both state and federal law. Sprott v. Sprott, 576 S.W.2d 653 (Tex. Civ.App.—Beaumont 1978, writ dismissed) (Naval Fleet Reserve Retainer payments not community property as matter of state law); Hisquierdo v. Hisquierdo, 439 U.S. 572, 99 S.Ct. 802, 59 L.Ed.2d 1 (1979) (Railroad Retirement Act benefits not divisible as community property as matter of federal law); McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981) (military retirement benefits not divisible as community property as matter of federal law). Nevertheless, before this court can proceed to any such holding, it must address the narrow threshold question of whether it is empowered to entertain a challenge to an unappealed 1971 Texas divorce judgment, a judgment the Texas courts are honoring, and, further, a judgment the Texas Supreme Court has determined to be final, not void, and not susceptible to collateral attack. The decisions of the Court of Appeals for the Fifth Circuit leave little latitude for discretion in answering this question.

In Erspan v. Badgett, 659 F.2d 26 (5th Cir.1981) ("Erspan II"), the Court of Appeals gave consideration to a diversity suit brought by an ex-wife to enforce a 1963 final, unappealed Texas divorce judgment, which had treated military retirement benefits as community property. The defendant husband challenged the validity of the Texas judgment under the Supremacy Clause. There, although cognizant of the McCarty decision—the definitive determination of the meritoriousness of the husband's federal challenge—the court refused to set aside the state judgment.

Retiree advances no reason why that judgment should be denied its usual res judicata effect, and none is readily apparent: as a final judgment it settles not only the issues actually litigated, but also any issues that could have been litigated in that proceeding. Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981).

Erspan II, 659 F.2d at 28. The Court of Appeals relied in part upon the Supreme Court's articulation, in Moitie, of the general rule that "the res judicata consequences of a final, unappealed judgment on the merits are not altered by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case." Moitie, 452 U.S. at 398, 101 S.Ct. at 2427; Erspan II, 659 F.2d at 28.

The Court of Appeals buttressed its position on the rationale that partial invalidation of an equitable divorce judgment, conceived and issued as a whole, would constitute an injustice to one ex-spouse, and a windfall to the other. 659 F.2d at 28-29, n. 2. In so concluding, the court was mindful that

under the scheme of the Texas Family Code, a divorce court is authorized to divide the separate and community property in a just and equitable manner, and that

factors which the Texas courts may take into account "include the disparity of the earning power of the parties as well as their business opportunities .... the physical conditions of the parties, probable future need for support, and educational background; ... the fault in breaking up the marriage and the benefits the innocent spouse would have received from a continuation of the marriage....

In re Nunnally 506 F.2d 1024 at 1026, ... quoting Cooper v. Cooper, 513 S.W.2d 229, 233-34 (Tex.Civ.App.—Houston 1st Dist. 1974, no writ).

Erspan v. Badgett, 647 F.2d 550, 554 (5th Cir.1981) ("Erspan I"). See also, Erspan II, 659 F.2d at 28, n. 2. Thus, despite the fact that Texas law formally forbids "alimony," Francis v. Francis, 412 S.W.2d 29, 32 (Tex. 1967), Erspan I, 647 F.2d at 554, the Fifth Circuit concluded that Texas divorce decrees "in fact ... contain a substantial element of alimony-substitute, support or maintenance, however termed." Erspan I, 647 F.2d at 554, quoting In re Nunnally, 506 F.2d at 1024. The court, therefore, reasoned that a state judge, in equitably fashioning a divorce judgment after McCarty, could achieve a substantially similar total distribution of property as he could have achieved prior to McCarty, albeit through a different apportionment of specific available assets. From that perspective, the court felt that it would be more inequitable to allow partial invalidation of a total divorce decree than to permit that totality to remain in effect, despite its concededly improper distribution of a single non-community asset.

In Wilson v. Wilson, 667 F.2d 497 (5th Cir.1982), the Court of Appeals considered another ex-wife's diversity suit brought to enforce an unappealed 1970 Texas divorce decree, which had awarded her a portion of her...