IN RE: the MARRIAGE OF Gene and Marie G. HARMON. Gene HARMON, Respondent, v. Marie G. HARMON, Appellant.
Marie G. Harmon (Wife) appeals an order granting her an interest in Gene Harmon's (Husband's) “disposable” military retirement pay, modifying her spousal support and denying her attorney fees. She contends: (1) Under the Federal Uniformed Services Former Spouses' Protection Act (FUSFSPA),1 the court should have awarded her an interest in Husband's “gross” retirement pay; (2) the court improperly reduced spousal support; and (3) the court abused its discretion in denying her attorney fees.
The parties were married in 1961 and separated in 1981. Husband was in the United States Navy during part of the marriage. The parties stipulated 50.9 percent of Husband's military service occurred during the marriage.2
In June 1981, the Supreme Court decided McCarty v. McCarty (1981) 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589, holding federal law prohibits division of military retirement pensions and preempts state community property law. Recognizing McCarty, the parties' December 1982 interlocutory judgment of dissolution reserves jurisdiction to characterize and divide the community property interest in Husband's military retirement pay. Additionally, the court ordered Husband to pay Wife $550 per month spousal support beginning October 1982. The court also awarded to Wife as spousal support the exclusive use and possession of the family house pending its sale. At this time Wife reported $625 net monthly income, no liquid assets and $1,411 monthly expenses. Husband reported $3,074 gross and $2,104 net monthly income, $571 liquid assets and $2,403 monthly expenses. Husband's gross income included $1,043 military retired pay. After withholding for income tax and a survivor benefit plan, he received a net amount of $832 in military retired pay. Husband was living with an unrelated friend and her two minor daughters.
On February 1, 1983, FUSFSPA became effective, authorizing courts to “treat disposable retired or retainer pay ․ as property of the member and his spouse in accordance with the law of the jurisdiction of such court.” (§ 1408(c)(1).)
In May 1983, Wife filed an order to show cause requesting the court exercise the jurisdiction retained in the interlocutory judgment to characterize and divide the community property interest in Husband's military retirement benefits. Because the parties had stipulated to the 50.9 percent community interest, Wife requested the court order Husband to pay 25.45 percent “of his gross military entitlement” to Wife. Wife also requested the court increase spousal support and award her attorney fees. At this time Wife reported $775 net monthly income (including $274 as her estimated share of Husband's retirement pay), $10,400 liquid assets from the sale of the family residence and $1,423 monthly expenses. Husband reported $1,587 net monthly income (excluding any retirement pay), $120 liquid assets and $2,537 monthly expenses.
The court ordered Husband to pay Wife 25.45 percent of his disposable retired pay pursuant to FUSFSPA. The court also reduced Wife's spousal support, ordering Husband to pay Wife as spousal support a sum such that when added to the amount of Wife's entitlement to 25.45 percent of Husband's disposable retirement pay equals $550 per month. The court denied Wife's request for an award of attorney fees.
Under California law before McCarty, supra, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589, military retirement benefits were community property to the extent acquired during marriage. (In re Marriage of Fithian (1974) 10 Cal.3d 592, 596, 111 Cal.Rptr. 369, 517 P.2d 449.) Courts equally divided the community's interest by ordering payment of one-half the community's gross amount. (See In re Marriage of Wilson (1974) 10 Cal.3d 851, 856, 112 Cal.Rptr. 405, 519 P.2d 165.) McCarty changes all this.
In McCarty, the court found military retirement pay was a “personal entitlement” of the service member. (453 U.S. at p. 226, 101 S.Ct. at p. 2738.) Community property division frustrated Congress' goals to provide for the retired service member and to meet the personnel management needs of the active military forces. (Id., at pp. 232–233, 101 S.Ct. at p. 2741.) The court concluded “Congress has weighed the matter, and ‘[i]t is not the province of state courts to strike a balance different from the one Congress has struck.’ ” (Id. at p. 236, 101 S.Ct. at p. 2743, quoting Hisquierdo v. Hisquierdo (1979) 439 U.S. 572, 590, 99 S.Ct. 802, 812, 59 L.Ed.2d 1.)
Congress has reweighed the matter and struck a new balance in FUSFSPA, which makes specific entitlement as well as enforcement provisions with respect to military retirement pay. The extent to which the impact of McCarty was eliminated by FUSFSPA is controlled by FUSFSPA itself. This is a function of the federal preemption found in McCarty. (See Coates v. Coates (Mo.1983) 650 S.W.2d 307, 311.) Despite broad statements in some cases that FUSFSPA “overrules McCarty” (see, e.g., In re Marriage of Buikema (1983) 139 Cal.App.3d 689, 691, 188 Cal.Rptr. 856), a more accurate description is FUSFSPA was enacted to ameliorate the holding of McCarty. (In re Marriage of Costo (1984) 156 Cal.App.3d 781, 786, 203 Cal.Rptr. 85.) 3
Thus, the state law premise—military retirement pay is a community asset subject to equal division—is inapplicable here. Instead, bound by the Supremacy Clause requiring “Judges in every State” be bound by “the laws of the United States,” McCarty and FUSFSPA, our starting point is military retirement pay is divisible only to the extent permitted by FUSFSPA.
Section 1408(c)(1), states in part: “Subject to the limitations of this section, a court may treat disposable retired or retainer pay ․ either as property solely of the member or as property of the member and his spouse in accordance with the law of the jurisdiction of such court.” (Emphasis added.) Unlike pre-McCarty California law permitting division of a service member's gross retirement pay, here Congress granted to the states the limited right to divide “disposable retired pay.”
Section 1408(a)(4) expressly defines “disposable retired or retainer pay.” There is no ambiguity. Section 1408(a)(4) states, in part:
“ ‘Disposable retired or retainer pay’ means the total monthly retired or retainer pay to which a member is entitled ․ less amounts which—
“(C) are properly withheld for Federal, State, or local income tax purposes, if the withholding of such amounts is authorized or required by law and to the extent such amounts withheld are not greater than would be authorized if such member claimed all dependents to which he was entitled.”
Therefore, FUSFSPA operates only on “disposable” pay, which is the gross amount less certain deductions including income tax withholding. Here, Husband's total monthly retirement pay is about $1,075. From this amount, about $152 is withheld for taxes. FUSFSPA requires this amount be subtracted from the total retirement pay before the states can divide the remaining “disposable retirement pay.” (See In re Marriage of Costo, supra, 156 Cal.App.3d 781, 786, 203 Cal.Rptr. 85.)
FUSFSPA also includes enforcement provisions, permitting direct payment by the military to the former spouse in certain circumstances. Under section 1408, subdivisions (d)(1) and (d)(2), a nonmember spouse who was married to the service member for at least 10 years during which the member performed service creditable toward retirement pay may enforce a pension award by serving a copy of the order on the appropriate military Secretary. However, the amount of disposable retired or retainer pay which can be paid directly to the former spouse generally is limited to 50 percent of disposable pay. (§ 1408(e)(1).) 4 Thus, a court wishing to award a former spouse more than 50 percent of disposable retired pay must order direct government payments and payments by the member to the former spouse. (See Deliduka v. Deliduka (Minn.1984) 347 N.W.2d 52, 55.) It must be emphasized that the extent of the power of division granted by Congress is limited by its definition of what is “disposable retired or retainer pay.”
Citing various FUSFSPA provisions relating to the federal enforcement scheme, Wife contends section 1408(c)(1)'s limitation to “disposable” retired pay should not be interpreted to prevent state courts from dividing the “gross” retired pay. Instead, Wife contends the limitation to disposable pay is a limit only upon the amount that can be paid directly by the government to the former spouse. Specifically, Wife cites section 1408(e)(6).5 This provision prevents a service member from defending an action for ordered payments on the ground “that payments made out of disposable retired or retainer pay under this section  have been made in the maximum amount permitted under paragraph (1) [i.e., 50 percent of disposable retired or retainer pay] or subparagraph (B) of paragraph (4) [i.e., 65 percent of the disposable retired or retainer pay, where there is a combination of court orders for direct payment under section 1408 and section 459 of the Social Security Act (42 U.S.C. § 659) relating to direct enforcement of child support of alimony orders].” (§ 1408(e)(6).) Wife correctly notes section 1408(e)(6) implicitly recognizes the court's ability to order “alimony, child support, or other payments” in an amount greater than the percentage directly enforceable against the member's disposable retired pay. However, as we have seen, consistent with the plain language of section 1408(c)(1), which authorizes courts to treat “disposable” pay as marital property, a court could conceivably order the former spouse receive more than a 50 percent share of the disposable retirement pay though it could not order the payment in excess of 50 percent to be made directly by the government. (See Deliduka, supra, 347 N.W.2d 52, 55.) In such cases, section 1408(e)(6) prohibits the service member from escaping liability for amounts exceeding the 50 percent direct payment. The thrust of section 1408(e)(6) solely is to eliminate the possibility of a service member asserting a defense based on there having been direct payments in the amount of the maximum limits specified. It thus is clear section 1408(e)(6) has nothing to do with modifying the basic entitlement definition of “disposable retired or retainer pay” so as to permit division of a gross amount rather than the amount defined in section 1408(a)(4).
By way of example, we note in some circumstances, court orders requiring direct government payment might be submitted by more than one former spouse. (See § 1408(e)(2).) 6 The total of such multiple orders might exceed 50 percent of the disposable retired pay. If the first order awards direct payment of the maximum 50 percent amount of disposable retired pay, no additional direct payments could be made on any later order submitted by a different former spouse. (See § 1408(e)(2).) Nevertheless, under section 1408(e)(6), the member is not relieved from his obligation to this later spouse. This later nonmember spouse is only barred from direct enforcement. In this light, we conclude that although section 1408(e)(6) contemplates award(s) exceeding 50 percent of disposable retired pay, it does not necessarily or logically require or authorize the court to divide a service member's gross retired pay.
Wife similarly cites section 1408(d)(5).7 This section provides for direct enforcement of orders providing for both a division of property, including community property, and an amount of “disposable retired or retainer pay.” However, this section does not imply that the court may divide gross retirement pay in addition to disposable retired or retainer pay. FUSFSPA's legislative history, attached by Wife to her brief, states in part: “The amendment also would authorize the service Secretaries to pay to a former spouse a portion of disposable military retired pay to satisfy a court order garnishing retired pay for non-payment of property settlements other than retired pay.” (Emphasis added.) Section 1408(d)(5) pertains only to payments from “disposable retired or retainer pay” as defined, and does not pertain to payments of or from a gross amount of retired pay.
Citing In re Marriage of Scott (1984) 156 Cal.App.3d 251, 202 Cal.Rptr. 716, Wife contends this court has previously held FUSFSPA requires application of the community's percentage interest to gross retirement pay. However, the holding of Scott is that In re Marriage of Gillmore (1981) 29 Cal.3d 418, 174 Cal.Rptr. 493, 629 P.2d 1, applies to military pension pay so as to permit division and payment of military retirement to the nonmember spouse before the service member actually retires. In Scott, the service member spouse argued any preretirement division was impossible because the court could not determine the dollar amount of his future withholding. Thus, the court could not determine the “disposable retired or retainer pay.” On these facts, the Scott court applied Gillmore, granting the nonmember spouse an interest in his vested and matured military pension even though the member spouse chose to remain on active duty. Here, however, Husband presently receives his retired pay. The amount of his tax withholding is known. Scott does not hold and does not compel a holding here that FUSFSPA permits a court to divide gross retired or retainer pay.
Wife contends our holding violates the principle of equal division of community property. (See Civ.Code, § 4800, subd. (a).) It does. If the premise is Wife is entitled to her one-half of the community, then a portion of Wife's share is being skimmed off the top to pay some of Husband's tax liability. Moreover, Wife will be taxed on amounts she actually receives. (See Scott, supra, 156 Cal.App.3d 251, 254, 202 Cal.Rptr. 716.) This occurs because FUSFSPA requires subtraction of amounts stated in section 1408(a)(4)(A)–(F) before dividing the remaining “disposable retired or retainer pay.” 8
Congress, however, did not give California the unlimited right to treat military retirement pay in accordance with its general community property laws. (In re Marriage of Costo, supra, 156 Cal.App.3d 781, 786, 203 Cal.Rptr. 85.) Congress provided only for the division of “disposable” retired pay rather than “gross” retired pay. FUSFSPA adds other rules limiting California's traditional community property treatment of military retired pay. For example, state court subject matter jurisdiction over military retired pay is restricted. (§ 1408(c)(4); see In re Marriage of Jacobson (1984) 161 Cal.App.3d 465, 469–470, 207 Cal.Rptr. 512.) Thus, the premise that Wife is “entitled” to her one-half of the community is erroneous in this context. Here, under the Supremacy Clause, “anything in the ․ laws of any State to the contrary notwithstanding,” Wife is entitled only to what FUSFSPA plainly gives her. Wife is entitled to her one-half of the community share in Husband's disposable retired or retainer pay.
As part of the interlocutory judgment, the court ordered Husband to pay Wife $550 per month as spousal support beginning October 1, 1982. The court based this amount on the parties' income and expense declarations.
The court modified spousal support as part of its order granting Wife her share of the retired pay. The court ordered Husband to pay Wife “a sum such that when added to the amount of [W]ife's entitlement to 25.45 percent of [H]usband's disposable pay, shall equal $550.” Anticipating the amount of retired pay will increase from cost-of-living adjustments, Wife characterizes the order as a prospective step-down modification. As the amount of retired pay increases, the amount of spousal support decreases to maintain the constant sum of $550. Wife contends the court improperly modified support without evidence regarding the parties' future circumstances. Wife also contends the court should have ordered spousal support without regard to Husband's expenses attributable to his current residence with an unrelated woman and her two minor children.
The court has broad discretion in modifying spousal support; “an order modifying an award for support constitutes an abuse of discretion only where it must be concluded no judge reasonably could have made such an order.” (In re Marriage of Clements (1982) 134 Cal.App.3d 737, 746, 184 Cal.Rptr. 756.) A court may modify spousal support only where there has been a material change of circumstances since the last order. (See In re Marriage of Kuppinger (1975) 48 Cal.App.3d 628, 633, 120 Cal.Rptr. 654.) Determining the proper amount of support, the court should consider the parties' respective needs and ability to meet such needs, the property owned and the obligations to be met, as well as the ability to earn and actual earnings. (See In re Marriage of Davis (1983) 141 Cal.App.3d 71, 77–78, 190 Cal.Rptr. 104.) Orders for changes in support to take effect in the future must be based upon reasonable inferences drawn from the evidence, not mere hopes or speculative expectations. (In re Marriage of Smith (1978) 79 Cal.App.3d 725, 740, 145 Cal.Rptr. 205.)
Here, the spousal support order is proper. At the time of the interlocutory judgment, Husband was receiving the entire military retirement pay as his separate property. Now, requiring Husband to pay Wife a portion of this asset is a change in economic circumstances decreasing both Wife's need for support and Husband's ability to pay. The income and expense declarations filed at the time of the interlocutory judgment and nine months later at the time of Wife's order to show cause show little change in the parties' expenses. In August 1982, Wife reported $1,411 in monthly expenses. In May 1983, Wife reported $1,423 in monthly expenses. Conversely, because of an increase in Wife's salary and her award of a portion of the military retired pay, her net monthly income increased. The court could reasonably find Wife needed a total of $550 per month to supplement her income based on her income and expense declaration and Husband's income and expense statements. Just nine months before a court had found this amount reasonable under the circumstances. From this evidence, the court could reasonably infer Wife's need and Husband's ability to pay would not significantly change in the future. Therefore, the court did not abuse its discretion in awarding Wife this amount of spousal support.
Incorporated in Husband's income and expense declarations are expenses attributable to his living with an unrelated woman and her two minor children. Husband pays the monthly mortgage payment, insurance and taxes for this residence. Husband has included the income generated by his roommate. Contrary to Wife's assertion, this is not analogous to deliberate reduction of income to avoid support obligations. The court could properly consider any economic effect if Husband married his companion. (See Levitt v. Levitt (1965) 62 Cal.2d 477, 484, 42 Cal.Rptr. 577, 399 P.2d 33; Gammell v. Gammell (1979) 90 Cal.App.3d 90, 93, 153 Cal.Rptr. 169.) “The mores of the society have indeed changed so radically in regard to cohabitation that we cannot impose a standard based on alleged moral considerations that have apparently been so widely abandoned.” (Marvin v. Marvin (1976) 18 Cal.3d 660, 684, 134 Cal.Rptr. 815, 557 P.2d 106.) The court properly considered Husband's expenses attributable to his current living arrangement.
The court ordered the parties to pay their own attorney fees. Wife contends the court abused its discretion in not awarding her attorney fees. However, an appellate court will interfere with the court's discretion to award attorney fees under Civil Code section 4370 only if no judge reasonably could have made the challenged order. (See County of Kern v. Ginn (1983) 146 Cal.App.3d 1107, 1114–1115, 194 Cal.Rptr. 512.) Under Civil Code section 4370, subdivision (a), awarding attorney fees is proper only upon a showing of necessity. (In re Marriage of Mulhern (1973) 29 Cal.App.3d 988, 996, 106 Cal.Rptr. 78.) Here, Wife has over $10,000 in liquid assets and receives over $700 per month net income. The court reasonably found she has no need under Civil Code section 4370.
I respectfully dissent to sections I, II and III of the majority opinion. As to section IV, I concur but would modify the trial court's language in its spousal support order by striking the word “disposable” and inserting the word “gross.” I concur with section V.
As explained in my majority opinion in Casas v. Thompson, 171 Cal.App.3d 458, 217 Cal.Rptr. 471, (1985), the federal statutory scheme governing military retirement, as modified by the Federal Uniformed Services Former Spouse Protection Act (FUSFSPA),1 does not preempt the California courts' power to award an ex-spouse an interest in the military retiree's pension. Moreover, FUSFSPA does not expressly prohibit applying state marital property laws to divide the gross amount of a military retiree's pension.
The majority here views McCarty's 2 holding of preemption as an immutable given, believing any power the states now possess to characterize military pensions as community property can derive only from an express authorization in FUSFSPA, an approach similar to the one followed in In re Marriage of Costo, 156 Cal.App.3d 781, 786, 203 Cal.Rptr. 85. This view rests on a misunderstanding of the holding in McCarty, supra, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589. Finding no express statement by Congress that state community property laws were preempted in regard to military pensions (see id., at pp. 236–237, 101 S.Ct. at p. 2743 (dis. opn.)), the Court instead considered a variety of circumstantial evidence, including related statutory schemes and its perceived congressional objectives for the military retirement system, in determining whether applying state community property laws to military pensions would do such “major damage” to “clear and substantial” federal interests as to require a finding of implied preemption under the Supremacy Clause. (See id., at p. 220, 101 S.Ct. at p. 2735; Hisquierdo v. Hisquierdo (1979) 439 U.S. 572, 581, 99 S.Ct. 802, 808, 59 L.Ed.2d 1.)
The McCarty finding of implied preemption is thus a contextual one, taking into account all relevant facts and circumstances. Those facts and circumstances have changed with the enactment of FUSFSPA. Accordingly, the present question is not whether FUSFSPA expressly grants to the states the power to divide the gross amount of military pensions, but whether under the present federal scheme there is still a conflict between the federal retirement statutes and California community property rights which threatens clear and substantial federal interests with grave harm. Stated differently, were McCarty to be decided after FUSFSPA, would the Supreme Court imply preemption?
I note a basic proposition: “The whole subject of the domestic relations of husband and wife, parent and child, belongs to the laws of the states and not to the laws of the United States.” (Ex Parte Burrus (1890) 136 U.S. 586, 593–594, 10 S.Ct. 850, 853, 34 L.Ed. 1500.) That Congress was aware of this principle and intended that state laws apply to the characterization of military pensions as community property is made abundantly clear by the legislative history surrounding the enactment of FUSFSPA.
Senate Report No. 97–502, expressly details the legislative intent and purpose underlying FUSFSPA. For instance, its stated primary purpose “is to remove the effect of the United States Supreme Court decision in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981) ․ by permitting ․ courts, consistent with the appropriate laws, to once again consider military retired pay when fixing the property rights between the parties to a divorce, dissolution, annulment or legal separation․” (Sen.Rept. No. 97–502, 2d Sess. (1982) p. 1; 1982 U.S.Code Cong. & Admin.News p. 1555, 1596.)
Any doubt as to the intended scope of the foregoing sweeping language is dispelled at page 5 of the Report; 1982 U.S.Code Cong. & Admin.News p. 1555, 1599): “[T]he committee intends the legislation to restore the law to what it was when the courts were permitted to apply State divorce laws to military retired pay.” (Italics added.) Thus, it is clear FUSFSPA's primary purpose is to remove obstacles the state courts may encounter in applying their divorce laws to military retired pay as those laws were being applied before the decision in McCarty v. McCarty, and as if that decision never existed. Pre-McCarty California decisions treated military retirement benefits like all other community property, dividing the total (gross) benefits.3 (See In re Marriage of Fithian, 10 Cal.3d 592, 595, 604, 111 Cal.Rptr. 369, 517 P.2d 449.)
Not only does the legislative history of FUSFSPA document Congress' understanding that state laws characterizing military pensions as community property would apply in the same way as they did before McCarty, but even the McCarty analysis, applied after the enactment of FUSFSPA, yields the conclusion there is no longer any implicit conflict between state laws and the federal scheme.
The grave harm to “clear and substantial” federal interests found in McCarty was premised on the belief “Congress has enacted a military retirement system designed to accomplish two major goals: to provide for the retired service member, and to meet the personnel management needs of the active military forces. The community property division of retired pay has the potential to frustrate each of these objectives.” (McCarty v. McCarty, supra, 453 U.S. 210, 232–233, 101 S.Ct. 2728, 2741, 69 L.Ed.2d 589.)
McCarty first reasoned that any community property division of retired pay could disrupt the carefully balanced scheme Congress had devised to encourage service members to set aside a portion of their retired pay as an annuity for surviving spouses or dependent children. (McCarty v. McCarty, supra, 453 U.S. 210, 233, 101 S.Ct. 2728, 2741, 69 L.Ed.2d 589.) The Supreme Court speculated that by diminishing the amount available to the retiree, a community property division would make it less likely the retired service member would choose to reduce his or her retired pay still further by purchasing such an annuity. Now, by defining disposable pay in FUSFSPA to exclude all annuity disbursements for beneficiaries other than the ex-spouse, Congress must be deemed to have expressly rejected this concern for disruption.
Second, McCarty suggests community property interests “ ‘diminish that portion of the benefit Congress had said should go to the retired [service member] alone.’ ” (McCarty v. McCarty, supra, 453 U.S. 210, 233, 101 S.Ct. 2728, 2741, 69 L.Ed.2d 589.) This thought is based on language in Hisquierdo, supra, 439 U.S. at page 590, 99 S.Ct. at page 812, a case involving the Railroad Retirement Act which, unlike FUSFSPA, expressly states “notwithstanding any other law of the United States or of any State ․ no annuity or supplemental annuity shall be assignable or be subject to any tax or garnishment, attachment, or other legal process under any circumstances whatsoever, nor shall the payment thereof be anticipated.” (45 U.S.C. § 231m.) (As the court noted in Hisquierdo, Congress had expressly granted a separate spouse's benefit which terminated upon absolute divorce.) Conversely, FUSFSPA specifically allows garnishment under the same conditions to which garnishments of active military duty pay have always been subject. (See discussion, infra.)
Third, the McCarty majority found the value of retired pay to induce enlistment or reenlistment is diminished to the extent the service member recognizes he or she may be involuntarily transferred to a state which would divide that pay upon divorce. It found a direct “interference with the goals of encouraging orderly promotion and a youthful military․” (McCarty v. McCarty, supra, 453 U.S. 201, 235, 101 S.Ct. 2728, 2742, 69 L.Ed.2d 589.) On the contrary, by enacting FUSFSPA, Congress is expressly stating the extent of that interference is not found to be sufficient to preclude the states from applying their community property/family laws to military retired pay.4
Thus, each of McCarty's factual predicates for finding implied preemption disappeared when FUSFSPA was enacted. The majority cites no other adverse impact, substantial or otherwise, on congressional military goals to justify a finding the Supremacy Clause demands subordination of state laws solely because they would treat gross military retirement pay as community property.
Our fundamental differences in analysis continue. By finding no implied preemption, I have essentially concluded it is unnecessary to find an express authorization in FUSFSPA for California courts to divide the “gross” amount of a military retiree's pay. However, FUSFSPA must be scrutinized to see whether there exists an express, limited prohibition against state courts dividing more than the retiree's “disposable” pay. Again, I differ from the majority's analysis, finding rather that FUSFSPA is not inconsistent with the division of “gross” military retired pay when considered in light of its legislative intent and operation. I conclude FUSFSPA's intended limitations only restrict the garnishment of and direct payment from the retiree's disposable pay. Characterization of retirement pay remains a state law question and thus in California the military retiree's gross pay is a community asset subject to equal division.5
Section 1408(c)(1) 6 is aimed at an entirely different proposition than relied upon by the majority. Direct payments were not available to ex-spouses for judgments awarding marital property interests against military retirement pay before the enactment of FUSFSPA. Section 1408 is primarily devoted to establishing a scheme to permit the ex-spouse to “garnish” retirement pay and, at the same time, to afford the military retiree similar protections previously given other retired federal employees by limiting the amount of funds subject to garnishment.7 (See 22 U.S.C. § 4044 et seq., but compare 5 U.S.C. § 8345(j).) Thus, only “disposable” pay is garnishable. (See 42 U.S.C. § 659, amended in 1975 to permit direct enforcement of court orders for child support and alimony from the net (disposable) retired pay of present or former federal employees, including members of the armed services.) By a 1977 amendment to 15 United States Code section 1673(b), Congress specifically limited garnishments to a percentage of disposable earnings. Under these federal garnishment statutes, the disposable earnings limitation does not affect the size of the retiree's legal obligation to the ex-spouse, but only places limitations on monies that can be directly collected from the government employer in a pay period. (See Evans v. Evans (W.D.Okla.1976) 429 F.Supp. 580.)
That FUSFSPA is primarily concerned with the garnishment of military retired pay is further revealed in its statutory title: Payment of retired and retainer pay in compliance with court orders. Given this focus, the provisions of section 1408 define the manner and extent to which a state court can order the Service Secretary to direct the military retiree's pay. Section 1408(a)(2) identifies the class of court orders to which FUSFSPA applies as those specifically providing for the payment of an amount from the disposable retired or retainer pay of a retiree, this amount being expressed in dollars or as a percentage of the disposable pay. (§ 1408(a)(2)(C).) These need not, and normally would not, be judgments or decrees, but garnishments or other court orders issued to enforce awards in judgments or decrees. After service of a court order providing for payment from the retired pay, the Service Secretary is limited to complying with the order by diverting funds only from the retiree's disposable pay. (§ 1408(d)(1).) This is without regard to whether the judgment underlying the served court order was for child support, alimony, attorneys fees or to satisfy a division of community property. (§ 1408(a)(2).) Further, the Service Secretary typically may not pay out more than fifty percent of the disposable pay to satisfy the obligations to be enforced by the court order. (§ 1408(e)(1).)
Significantly, Congress recognized the 50 percent cap placed upon the Service Secretary's authority to comply with court orders could leave portions of a retiree's obligations for community property divisions unsatisfied. The Senate Report emphasizes: “Moreover, [FUSFSPA] makes it clear that the mere attainment of that [50 percent] ceiling in no way absolves the former member of still outstanding legal obligations for alimony, child support or other payments. Any such unsatisfied obligation may be enforced by any means available under law․” (Sen.Rept. No. 97–502, supra, p. 11; 1982 U.S.Code Cong. & Admin.News p. 1555, 1606; italics added.) To this end, section 1408(d)(5) provides: “If a court order ․ provides for a division ․ of community property ․ in addition to an amount of disposable retired or retainer pay, the Secretary concerned shall ․ pay ․ [any amount payable to the former spouse from the retiree's disposable pay.]” Section 1408(e)(6) further provides:
“Nothing in this section shall be construed to relieve a member of liability for the payment of alimony, child support, or other payments required by a court order on the grounds that payments made out of disposable retired or retainer pay under this section have been made in the maximum amount permitted under paragraph (1) or subparagraph (B) of paragraph (4). Any such unsatisfied obligation of a member may be enforced by any means available under law other than the means provided under this section in any case in which the maximum amount permitted under paragraph (1) has been paid and under section 459 of the Social Security Act (42 U.S.C. 659) in any case in which the maximum amount permitted under subparagraph (B) of paragraph (4) has been paid.” (Italics added.)
Congress thus expressly anticipated court orders would reflect obligations from community property divisions in excess of disposable pay (§ 1408(d)(5)) and emphasized the limitations on the Service Secretary's ability to reach the retiree's gross pay was not to be deemed a limitation on the state court's ability to define the community property interests at the time of dissolution. (§ 1408(e)(6).)
Contrary to the majority's interpretation of section 1408(c)(1) being a congressional expression of intent to preclude the states from considering the gross military retirement pay as property subject to state family property laws, we find the legislative history supports an opposite conclusion. In considering FUSFSPA's effect, we recognize the fundamental principle of statutory interpretation is to ascertain legislative intent. (Pollack v. Department of Motor Vehicles, 38 Cal.3d 367, 372, 211 Cal.Rptr. 748, 696 P.2d 141.) This is so even when, after determining the legislative objective, to interpret the law to further that objective may require an interpretation appearing to be at odds with the literal construction of the statutory language. (Ibid.) To this end, I look to Senate Report No. 97–502, supra, page 4, 1982 U.S.Code Cong. & Admin.News. p. 1598, which declares the states' ability to create community property interests extends to “the military retired pay,” subject to only certain identified limitations. The report states that after FUSFSPA, marital assets would again be treated according to divorce and property laws of the respective states, subject only to the express limitations imposed by FUSFSPA. (Ibid.) Only three tangential limitations are set forth,8 and they apply solely to the enforcement of court orders through direct payments by the appropriate Service Secretary to the ex-spouse.
Further, had Congress intended to preempt the states' jurisdiction in this miniscule area, it would have stated so plainly as it did when it expressly preempted the states' power in other aspects of family property law.9
For the above reasons, there is neither express nor implied federal preemption here.
1. (10 U.S.C. § 1408.) All statutory references are to title 10 of United States Code unless otherwise specified.
2. The parties stipulated Husband entered the service on October 26, 1951, and retired January 25, 1971 (19 years, 2 months and 29 days). The parties married April 8, 1961, and separated April 2, 1981.
3. In Aloy v. Mash (1985) 38 Cal.3d 413, 421, fn. 7, 212 Cal.Rptr. 162, 696 P.2d 656, the California Supreme Court noted Buikema and other cases state that FUSFSPA “obliterate[s] all traces of McCarty.” However, the Aloy court continued “our purpose in referring to the various authorities is not to present them as immutably correct, but as indicative of general dissatisfaction of McCarty.”
4. FUSFSPA also includes a provision regarding procedures when a court order is submitted for direct payment and legal process is also served under the garnishment statute, 42 United States Code section 659, for alimony or child support. Under these circumstances, the limitation on the total amount payable from the disposable retired pay is 65 percent (§ 1408(e)(4)(B)).
5. Section 1408(e)(6): “Nothing in this section shall be construed to relieve a member of liability for the payment of alimony, child support, or other payments required by a court order on the grounds that payments made out of disposable retired or retainer pay under this section have been made in the maximum amount permitted under paragraph (1) or subparagraph (B) of paragraph (4). Any such unsatisfied obligation of a member may be enforced by any means available under law other than the means provided under this section in any case in which the maximum amount permitted under paragraph (1) has been paid and under section 459 of the Social Security Act (42 U.S.C. 659) in any case in which the maximum amount permitted under subparagraph (B) of paragraph (4) has been paid.”
6. Section 1408(e)(2): “In the event of effective service of more than one court order which provide for payment to a spouse and one or more former spouses or to more than one former spouse from the disposable retired or retainer pay of a member, such pay shall be used to satisfy (subject to the limitations of paragraph (1)) such court orders on a first-come, first-served basis. Such court orders shall be satisfied (subject to the limitations of paragraph (1)) out of that amount of disposable retired or retainer pay which remains after the satisfaction of all court orders which have been previously served.”
7. Section 1408(d)(5): “If a court order described in paragraph (1) provides for a division of property (including a division of community property) in addition to an amount of disposable retired or retainer pay, the Secretary concerned shall, subject to the limitations of this section, pay to the spouse or former spouse of the member, from the disposable retired or retainer pay of the member, any part of the amount payable to the spouse or former spouse under the division of property upon effective service of a final court order of garnishment of such amount from such retired or retainer pay.”
8. Section 1408(a)(4)(C), which defines “disposable retired” pay as the total monthly pay less amounts withheld for income tax, might be interpreted as requiring subtraction from the gross of only the amount of tax withholding attributable to the member spouse's share of the pension. This interpretation seems foreclosed, however, by the analysis of a similar issue by the Comptroller General which concludes the projected effective tax rate should be “the maximum limit on combined Federal income tax withholding deductions which may be allowed from gross retired pay in the computation of net ‘disposable retired or retainer pay’ under 10 U.S.C. § 1408(a)(4)(C) and (D).” “Projected effective tax rate” is defined as the ratio of anticipated total income taxes to anticipated total gross income (ibid). (See 63 Op.Comp.Gen. 323, 328 (1984).)
1. (10 U.S.C. § 1408.) All statutory references are to title 10 of the United States Code unless otherwise specified.
2. McCarty v. McCarty, (1984) 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589.
3. In a post-McCarty decision, this court found the divisible community property interest is in the total military retirement benefits earned during the course of the marriage, and not in a reduced sum derived by treating the disposable retired pay as the only part which may be treated as a community property asset. Although our treatment of this issue in In re Marriage of Scott, 156 Cal.App.3d 251, 202 Cal.Rptr. 716, was recognizably summary, an alternative result is inconsistent with the express congressional intent to restore the state court's ability to apply the law to military retired pay as it was applied pre-McCarty. That this was Scott's express holding has been recognized by the authors of the California Family Law Practice. (See Adams and Sevitch, 1985 California Family Law Practice (6th ed), § 220.127.116.11.)
4. This basis for McCarty's holding was disputed by contrary findings of the Senate Committee. (Sen.Rept. No. 97–502, supra, pp. 7–8; 1982 U.S.Code Cong. & Admin.News pp. 1602–1603.)
5. Applying its own marital property laws, the Minnesota Court of Appeals reached, without lengthy discussion, a similar conclusion in Deliduka v. Deliduka (Minn.1984) 347 N.W.2d 52.
6. Section 1408(c)(1) provides: “Subject to the limitations of this section, a court may treat disposable retired or retainer pay ․ as property of the member and his spouse in accordance with the law of the jurisdiction of such court.” (Italics added.)
7. “The Act does not limit the total amount of a service member's indebtedness but rather limits collecting indebtedness from the service member's retired pay. In this regard, the Act essentially does no more than most garnishment laws in establishing a collection ceiling. The clear intent of the Act is to protect retired members from financial deprivation.” (Hauserman and Fethke, Military Pensions as Divisible Assets: The Uniformed Services Former Spouses' Protection Act (1984) 11 J. of Legislation 27, 37; italics added.)
8. Senate Report No. 97–502, supra, p. 4, 1982 U.S.Code Cong. & Admin.News p. 1555, 1599, states: “S. 1814 imposes three distinct limits on the division or enforcement of court orders against military retired pay in divorce cases. First, the total amount of the disposable retired or retainer pay of a member which the Service Secretary could pay out to satisfy a court order for prospective obligations could not exceed 50 percent of such pay. Second, this bill would not create in the spouse or former spouse any right, title or interest which could be sold, assigned, transferred or disposed of by will or inheritance. Third, the courts could not direct that a service member retire at a particular time in order to effectuate any payment out of retired pay to a spouse or former spouse․” (See also Horkovich, Uniformed Services Former Spouses' Protection Act: Congress' Answer to McCarty v. McCarty Goes Beyond the Fundamental Question (1982) Air Force L.Rev. 287, 298–299.)
9. See section 1408(c)(2) specifically prohibiting enforcement of state laws which allow an ex-spouse's community property interest to be transferred and section 1408(c)(4) expressly precluding the exercise of jurisdiction in the absence of certain minimum territorial contacts.
LEWIS, Associate Justice.
ADAMS, J.,* concurs.