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IN RE: MARRIAGE OF JONES.

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Court of Appeal, First District, Division 4, California.

IN RE: MARRIAGE OF JONES. Sumiko JONES, Appellant, v. Herschel Ralph JONES, Respondent.

Civ. 32901.

Decided: May 28, 1974

Dewar, Romig & Anton, Monterey, for appellant. Meheen & Poyner, Monterey, for respondent.

Respondent husband entered military service in December 1957. He and appellant wife were married November 5, 1964. Due to loss of a leg while serving in Vietnam, husband was permanently retired by reason of physical disability in September 1969. He receives each month disability retirement benefits from the United States government. An interlocutory judgment of dissolution of the marriage was entered December 15, 1972. Wife appeals from the portion of the judgment which determined that husband's disability benefits are separate property.

All property acquired by either spouse during marriage is, under California law, community property unless specifically exempted by statute (see Civ.Code, §§ 687, 5107, 5108, 5126; 4 Witkin, Summary of California Law (7th ed. 1960) p. 2706). Husband cites Ramsey v. Ramsey (Tex. Civ.App.1971), 474 S.W.2d 939, to support his contention that monthly payments for service-connected disability are nevertheless separate property. But Ramsey relies on Texas Family Code section 5.01, subdivision (a)(3), V.T.C.A. (id. at p. 941), which states: ‘A spouse's separate property consists of the recovery for personal injuries sustained by the spouse during marriage, . . .’ (Emphasis added.) Ramsey is distinguished by reference to the analogous California provision, Civil Code section 5126, subdivision (a): ‘All money or other property received by a married person in satisfaction of a judgment for damages for his personal injuries or pursuant to an agreement for the settlement or compromise of a claim for such damages is the separate property of the injured person . . .’ (Emphasis added.) Civil Code section 5126, subdivision (a), only exempts personal injury ‘judgments,’ while the Texas statute more broadly exempts all personal injury ‘recovery’ from treatment as community property.

Husband claims that Civil Code section 5126, subdivision (a), expresses a state policy that money received by a married person for personal injuries is separate property. But the applicability of section 5126 is limited by its own terms to judgments or other proceeds of tort claims. Therefore retirement benefits fall within the general definition of community property (In re Marriage of Fithian (1974), 10 Cal.3d 592, 517 P.2d 449; 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).

Husband claims that military disability payments should be treated differently. He contends that as compensation for the serviceman's personal loss such payments are not in the nature of an earned pension or other community property interest. Husband's separation from military service and receipt of disability payments was effected under 10 U.S.C., section 1201, which permits the retirement of members of the armed forces who are physically disabled.1 The purpose of the statute is to establish a compensation pattern which will attract and retain personnel (Sen.Rep. No. 733 (1949) 81st Cong., 1st Sess. 1; 2 U.S.Code Cong.Serv. (1949), p. 2089). The amount of disability retirement pay bears no relation to the loss suffered by husband due to pain and suffering or to reduced future earning capacity; thus it is not an award for personal loss.2 Military retirement benefits are termed by the statutes retirement pay whether based on longevity of service or disability. Military longevity retirement pay is community property in California (In re Marriage of Fithian, supra, 10 Cal.3d 592, 517 P.2d 449). Both types of retirement pay are calculated according to formulas which reflect two variables: longevity retirement is governed by the rank of the individual and the number of years of service;3 disability by the rank of the individual and the degree of disability (see 10 U.S.C. § 1401 [fn. 2, supra,]). The amount of payment for both types of retirement is related to rank. The only respect in which the types of retirement are differentiated is that longevity is related to number of years of service, while disability is related to degree of disability incurred while in military service. That difference relates solely to the reason for the retirement; no other intent in enacting the two separate types of retirement from military service is inferable from the legislative history. Since there is no evidence of congressional intent that longevity and disability are to be treated differently by the states in characterizing community and separate property, it follows from Fithian that disability retirement pay is to be treated in California as community property.4

Husband also contends that his receipt of disability retirement payments is a conditional right, or a gratuity, and that the payments are therefore separate property.5 Wife rejoins that the right of husband to receive disability retirement payment vested in 1969 upon respondent's disability retirement (citing Bensing v. Bensing (1972), 25 Cal.App.3d 889, 102 Cal.Rptr. 255; In re Marriage of Karlin (1972), 24 Cal.App.3d 25, 101 Cal.Rptr. 240). Karlin, while referring to longevity retirement benefits, is dispositive of the issue: ‘The fact that the federal government may increase, diminish, or completely abolish appellant's retirement payments does not change the nature of those payments from community to separate property’ once the payments have commenced (24 Cal.App.3d at p. 30, 101 Cal.Rptr. 240; see also In re Marriage of Fithian, supra, 10 Cal.3d 592, 602, 517 P.2d 449). The disability retirement payments are vested, and are community property.

Wife's community property interest in the disability retirement payments is one half the portion attributable to the period of the marriage:

1/2 x (58/141 x $379.12) =

1/2 x ($155.95) =

$77.98 per month.6

The judgment is reversed with directions to recompute the division of community property consistent with the views expressed in this opinion, reconsider the award of spousal support, and thereupon to enter a new judgment.

FOOTNOTES

1.  10 U.S.C. § 1201:Upon a determination by the Secretary concerned that a member of a regular component of the armed forces entitled to basic pay, or any other member of the armed forces entitled to basic pay who has been called or ordered to active duty (other than for training) under section 270(b) of this title for a period of more than 30 days, is unfit to perform the duties of his office, grade, rank, or rating because of physical disability incurred while entitled to basic pay, the Secretary may retire the member, with retired pay computed under section 1401 of this title, if the Secretary also determines that—(1) based upon accepted medical principles, the disability is of a permanent nature;(2) the disability is not the result of the member's intentional misconduct or willful neglect, and was not incurred during a period of unauthorized absence; and(3) either—(A) the member has at least 20 years of service computed under section 1208 of this title; or(B) the disability is at least 30 percent under the standard schedule of rating disabilities in use by the Veterans' Administration at the time of the determination; and either—(i) the member has at least eight years of service computed under section 1208 of this title;(ii) the disability is the proximate result of performing active duty; or(iii) the disability was incurred in line of duty in time of war or national emergency.

2.  10 U.S.C. § 1401:The monthly retired pay of a person entitled thereto under this subtitle is computed according to the following table. For each case covered by a section this title named in the column headed ‘For sections', retired pay is computed by taking, in order, the steps plicable footnotes. However, if a person would otherwise be entitled to retired pay computed under more than one pay formula of this table or of any other provision of law, he is entitled to be paid under the applicable formula that is most favorable to him. Section references below are to sections of this title.Formula No.For sectionsC3Column 1 TakeC4Column 2 Multiply byColumn 3 AddC6Column 4 Subtract11201Monthly basic pay1 of grade to which member is entitled under section 1372 or to which he was entitled on day before retirement or placement on temporary disability retired list, whichever is higher, increased, for members credited with two or less years of service for basic pay purposes, by 6%.4As member elects—Excess over 75% of pay upon wputation is based.1204  (1) 2 1/2% of years of service credited to him under section 1208;3 or  (2) the percentage of disability on date when retired.

3.  10 U.S.C. § 6323, subd. (e): ‘Unless otherwise entitled to higher pay, an officer retired under this section is entitled to retired pay at the rate of 2 1/2 percent of the basic pay . . . in the grade in which retired multiplied by the number of years of service that may be credited to him . . .’10 U.S.C. § 1331, is another section under which a member of the armed forces may be retired for longevity of service. Retirement pay for members of the military retired under this section is calculated by one of the formulas of 10 U.S.C. § 1401 (fn. 2, supra), which provides virtually the same results as 10 U.S.C. § 6323, subd. (e).

4.  Congress specifically provided that the proceeds of National Service Life Insurance should go to the beneficiary designated by the serviceman; hence such proceeds must be treated as his separate property (Wissner v. Wissner (1950), 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424). No such intent is discernible in the case of military retirement benefits (see In re Marriage of Fithian, supra, 10 Cal.3d 592 at pp. 601–602, 517 P.2d 449). Military retirement benefits are properly distinguishable for treatment as community property.

5.  10 U.S.C. § 1201, provides: ‘The Secretary may retire the member, . . .’ (Emphasis added.)

6.  The ‘58’ in the fraction represents the number of months between marriage and husband's discharge (Nov. 1964–Sept. 1969), and the ‘141’ represents the total number of months of husband's military service (Dec. 1958–Sept. 1969). The $379.12 is the amount of the monthly disability retirement check. (This method of computation was used in In re Marriage of Fithian, supra, 10 Cal.3d 592, 595, 517 P.2d 449, and in In re Marriage of Wilson (1974), 10 Cal.3d 851, 854, 519 P.2d 165.)

CHRISTIAN, Associate Justice.

CALDECOTT, P. J., and RATTIGAN, J., concur.

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