IN RE: the MARRIAGE OF Frances M. and Robert D. FLOWEREE.

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Court of Appeal, Fourth District, Division 1, California.

IN RE: the MARRIAGE OF Frances M. and Robert D. FLOWEREE. Frances M. FLOWEREE, Appellant, v. Robert D. FLOWEREE, Respondent.

D005591.

Decided: October 21, 1987

Bauer & Schultz and Jack M. Sleeth, Jr., Bonita, for appellant. Plourd, Blume, Scoville & Breeze and David A. Blume, El Centro, for respondent.

Frances M. Floweree appeals an order denying her request to divide the military pension of her former spouse, Robert D. Floweree, under Civil Code 1 section 5124.   Frances also appeals the court's alternative order conditioning division of the pension on the reopening of the entire property settlement agreement.

FACTUAL AND PROCEDURAL BACKGROUND

Frances and Robert were married in 1957 and divorced in 1982.   As part of the interlocutory judgment of dissolution of marriage, they entered into a marital settlement agreement.   The agreement stated its purpose was to make a final and complete settlement of all rights and obligations between the parties including their respective property rights.   Frances and Robert agreed the division of their community property was fair and equitable, waiving any right to an absolutely equal division.   The agreement also contained the following provision:

“14.  Each of us hereby warrants to the other that neither of us is now possessed of any community property of any kind or description whatsoever other than the property specifically listed in this agreement, and that neither of us has made, without the knowledge or consent of the other, any gift, or transfer of community property within the period of the statute of limitations.   If it shall hereafter be determined by a court of competent jurisdiction that either of us is now possessed of any community property not set forth above or that one of us had made, without the consent of the other, any gift or transfer of community property other than as set forth above, each of us hereby covenants and agrees to pay to the other on demand an amount equal to one-half of the fair market value of said property at the time the gift or transfer was made.   Either of us may have a future claim against only those undisclosed assets which, at the time of execution of this agreement, are considered community or quasi-community property, and neither of us will have a claim based on any assets whether disclosed or undisclosed which are only subsequently declared to be community or quasi-community property by any court or legislature.”

Final judgment of dissolution was entered November 30, 1982.

On October 4, 1985, Frances filed a motion under section 5124 2 to divide Robert's military retirement benefits payable after February 1, 1983.3  Frances requested one-half of 23 out of 30 years of military service as her share of the military pension.   Robert opposed the motion, arguing even though the pension was never mentioned in the agreement the parties had considered it at the time of the property division.   Robert claimed he received his military pension in lieu of an equal division of the community property.   However, Frances argued the pension was never considered and the property division was equal.   After hearing, the court granted Frances' motion to divide the military pension payable after February 1, 1983 under section 5124 without reopening the entire judgment.

Robert filed a motion for reconsideration, arguing paragraph 14 of the marital settlement agreement was a waiver of section 5124.   The court agreed, finding the parties had not discussed and bargained for the military pension in drafting paragraph 14 (the waiver provision) of the agreement.   The court further found that Frances, in signing the agreement, waived any future legislation changing the status of the parties' property.   Because section 5124 was passed after the parties signed the agreement and that section changed the character of the military pension to benefit Frances, she waived any right which may have been afforded her by section 5124.

As an alternative ruling, the court found even if Frances did not waive her rights under section 5124, she received more than 50 percent of the community property.   Thus, any entitlement Frances has to the military pension would be conditioned on the court reopening the entire property division to allow a more equal distribution of the parties' community property.

DISCUSSION

I

 Frances contends she did not waive the benefits of section 5124 in signing the marital settlement agreement.   She asserts the waiver provision of paragraph 14 does not apply to the military pension because the pension was always community property and was not “only subsequently declared to be community or quasi-community property by any court or legislature.”   Thus, she argues, she is entitled to have the pension divided.   We agree.

At the time Frances and Robert signed the marital settlement agreement, McCarty v. McCarty (1981) 453 U.S. 210, 223–236, 101 S.Ct. 2728, 2736–2743, 69 L.Ed.2d 589, held that federal law precluded a state court from dividing military nondisability retirement pay pursuant to community property laws.   Contrary to Robert's assertion, McCarty did not change the character of military retirement benefits from community to separate property.4  McCarty is a preemption case;  its holding was based on a perceived conflict between community property principles and the federal military retirement scheme.  (McCarty v. McCarty, supra, 453 U.S. at p. 223, 101 S.Ct. at p. 2736.)   From the time McCarty was decided until February 1, 1983, military pensions were simply “not divisible” community property.  (See § 5124.)

“Starting with the last paragraph of the McCarty opinion itself, the judicial and legislative branches, state and federal, cooperated in a massive and largely successful drive to make McCarty disappear—prospectively, presently and retroactively.  ․ The result is that, for most purposes, McCarty not only is not the law but never really was.”  (Aloy v. Mash (1985) 38 Cal.3d 413, 421–422, 212 Cal.Rptr. 162, 696 P.2d 656;  see also Casas v. Thompson (1986) 42 Cal.3d 131, 142, 228 Cal.Rptr. 33, 720 P.2d 921.)

Even during McCarty 's brief life, California courts consistently held that pre-McCarty judgments treating military pensions as community property were not affected by McCarty, including those cases still pending on appeal at the time McCarty was decided.  (See, e.g., In re Marriage of Camp (1983) 142 Cal.App.3d 217, 219–221, 191 Cal.Rptr. 45;  In re Marriage of Sheldon (1981) 124 Cal.App.3d 371, 380–384, 177 Cal.Rptr. 380.)

Three months after Frances and Robert signed the marital settlement agreement, Congress enacted the Federal Uniformed Services Former Spouses' Protection Act (FUSFSPA).  (10 U.S.C. § 1401 et seq.)   FUSFSPA allows courts to treat disposable retired or retainer pay payable to a member for pay periods beginning after June 25, 1981, 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.   This section became effective February 1, 1983.

The California Legislature then enacted section 5124 to allow modification of judgments, decrees, or property settlement agreements that became final during the window period between the date of McCarty and the effective date of FUSFSPA.   Thus, to the extent military pensions could not be divided according to community property law, the courts and the Legislature have since “seized on FUSFSPA to obliterate all traces of McCarty.  [Citations].”  (Aloy v. Mash, supra, 38 Cal.3d at p. 421, fn. 7, 212 Cal.Rptr. 162, 696 P.2d 656.)

Here, Frances and Robert agreed if a court were later to determine either of them possessed community property not mentioned in the agreement, they would pay on demand an amount equal to one-half of the property's fair market value.   Under the agreement, this claim to later discovered community assets applies only to those assets which, at the time the parties signed the agreement, were considered community or quasi-community property.   Because Robert's military pension was not mentioned in the agreement and was a community property asset in spite of McCarty, Frances did not waive the right to have the pension divided under section 5124.

II

Having determined section 5124 applies here, our next inquiry is whether the entire property settlement should be reopened to equalize the property division.   In deciding whether to divide the military pension under section 5124, the court found the property division had been unequal and therefore the entire property division would have to be reopened, relying in part on In re Marriage of Downes (1986) 177 Cal.App.3d 205, 222 Cal.Rptr. 776.5

In Downes, the parties had stipulated that the husband's military pension was to be awarded to him as his separate property.   After the judgment had become final, the wife successfully filed a motion under section 5124 to obtain her proportionate share of the pension.   In support of her motion, the wife claimed she considered her husband's military pension his separate property because of McCarty.   However, the husband claimed they treated the pension as if it were community property.  (Id. at p. 208, 222 Cal.Rptr. 776.)

On appeal, the court held “when a motion is made pursuant to Civil Code section 5124 to award the moving party a community interest in a military pension awarded to the other party as his separate property in a stipulated judgment of dissolution which has become final, and there is a factual conflict whether the parties bargained to eliminate this risk as part of entering into their settlement agreement, the court must conduct an evidentiary hearing and resolve this factual issue before it can act on the motion.”  (Id. at p. 207, 222 Cal.Rptr. 776.)   Because of the factual conflict, the court remanded the case to allow the trial court to conduct such a hearing.   (Id. at p. 212, 222 Cal.Rptr. 776.)

Unlike the parties in Downes, Frances and Robert did not stipulate in their agreement that Robert's military pension was his separate property.   Rather, the pension was completely omitted from the agreement and Frances and Robert agreed all their community property was divided equally.   There is no evidence in the record Frances and Robert assumed that McCarty required the award of the pension as Robert's separate property.   Thus, Downes is not dispositive here.

Further, the court specifically found Frances and Robert had not discussed and bargained for the military pension in their marital settlement agreement.   The court then found Robert must have considered the pension to be his separate property and therefore “he was somewhat more than generous than he would have been if the pension had been community property at the time that he entered into the negotiations for the agreement.”   The court erroneously assumed the pension had been Robert's separate property at the time of the property settlement agreement and based its decision to reopen the entire property division on its finding the parties' property division was “unequal.”   However, this finding ignores the clear language of the parties' property settlement agreement:  “The parties feel that the division of their community property has been fair and equitable and as nearly as possible is an equal division of their community property based upon its fair market value.   Each of the parties waives any right which he or she may have to an absolutely equal division of said community property.”

 A husband and wife may divide their property as they choose pursuant to a property settlement agreement.  (§§ 5103, subd. (a), 4800, subd. (a);  Adams v. Adams (1947) 29 Cal.2d 621, 624, 177 P.2d 265;  In re Marriage of Doud (1986) 181 Cal.App.3d 510, 519, 226 Cal.Rptr. 423.)   In the absence of fraud, such agreements are valid and binding on the court and cannot be modified without the consent of the parties.  (Adams v. Adams, supra, 29 Cal.2d at pp. 624–625, 177 P.2d 265.)   Here, Frances and Robert agreed, for whatever reason,6 that the division of their community property listed in the marital settlement agreement was fair and equitable.   They further agreed to divide all community property not mentioned in the agreement.   Thus, under that agreement, Frances received approximately one-half of the listed community property and Robert received approximately one-half of the listed community property plus his unmentioned military pension.   To now award Frances her proportionate share of the pension would merely result in an equal division of all their community property.   Accordingly, the court improperly conditioned modification of the judgment regarding the military pension on the reopening of the entire property settlement.

III

 Robert contends the appeal should be dismissed because Frances failed to file a timely notice of appeal.  Rule 2(a) of the California Rules of Court 7 provides in part:

“Except as otherwise specifically provided by law, notice of appeal shall be filed within 60 days after the date of mailing notice of entry of judgment by the clerk of the court pursuant to section 664.5 of the Code of Civil Procedure, or within 60 days after the date of service of written notice of entry of judgment by any party upon the party filing the notice of appeal, or within 180 days after the date of entry of the judgment, whichever is earliest, unless the time is extended as provided in rule 3.”

Here the order was filed on June 13, 1986.   Robert argues he served “written notice” on that date and thus, Frances was required to file her notice of appeal within 60 days, August 13.

The parties agree the clerk did not mail a notice of entry of judgment.   The record shows that on June 13, 1986, Robert served a copy of the court's “Findings and Order After Hearing” on Frances.   However, this document was not a “notice of entry of judgment” for purposes of the 60–day provision of rule 2(a).  (See Call v. Los Angeles County Gen. Hosp. (1978) 77 Cal.App.3d 911, 915, 143 Cal.Rptr. 845 [defendant's notice to plaintiff of court's ruling not considered “written notice of entry of judgment” to start 60–day period of rule 2(a) running].)  Thus, Frances was required to file her notice of appeal within 180 days after the June 13 order was filed—by December 13—and timely did so on December 4.

DISPOSITION

The order is reversed and the matter is remanded to allow the trial court to divide the military pension under section 5124 without reopening the entire property settlement.

FOOTNOTES

FOOTNOTE.  

FN1. All statutory references are to the Civil Code..  FN1. All statutory references are to the Civil Code.

2.   Section 5124 provides:“(a) Community property settlements, judgments, or decrees that became final on or after June 25, 1981, and before February 1, 1983, may be modified to include a division of military retirement benefits payable on or after February 1, 1983, in a manner consistent with federal law and the law of this state as it existed before June 26, 1981, and as it has existed since February 1, 1983.“(b) Modification of community property settlements, judgments, or decrees under this section may be granted whether or not the property settlement, judgment, or decree expressly reserved the pension issue for further determination, omitted any reference to a military pension, or assumed in any manner, implicitly or otherwise, that a pension divisible as community property before June 25, 1981, and on or after February 1, 1983, was not, as of the date the property settlement, judgment, or decree became final, divisible community property.“(c) Any proceeding brought pursuant to this section shall be brought before January 1, 1986.“(d) This section shall remain in effect only until January 1, 1986, and on that date is repealed unless a later enacted statute which is chaptered before that date deletes or extends that date.”

3.   This is the operative date on which community property settlements may be modified under section 5124.   On that date, the Federal Uniformed Services Former Spouses' Protection Act became effective.  (See Discussion I, infra.)

4.   In its Findings and Order After Hearing, the court incorrectly concluded section 5124 changed the character of the military pension from separate to community property to the benefit of Frances.  Section 5124 allows modification of a community property settlement, judgment or decree which became final between June 25, 1981 and February 1, 1983 to include division of a military pension payable on or after the latter date.   Nothing in that statute changed the nature or characterization of military pensions.

5.   The court admitted Downes was distinguishable “on its precise facts and on its precise holding” and therefore the case was not “determinative.”   Nevertheless, the court found the language and discussion in that case to be persuasive.

6.   In her points and authorities filed in the trial court, Frances claims Robert drafted the marital settlement agreement.   Robert does not dispute this claim.   Thus, in interpreting the agreement, we construe it strictly against Robert.  (§ 1654;  Howe v. American Baptist Homes of the West, Inc. (1980) 112 Cal.App.3d 622, 628, 169 Cal.Rptr. 418.)

7.   All rule references are to California Rules of Court.

HUFFMAN *, Associate Justice. FN* Assigned by the Chairperson of the Judicial Council.

KREMER, P.J., and WORK, J., concur.