Lack v. Lack

ROBERTSON, Justice,

dissenting.

I respectfully dissent for two reasons. First, the majority opinion, in refusing to hold that the death benefits are community property, ignores the rule of community property law that spouses share in property earned during marriage. Second, the majority’s reliance on City of Dallas v. Trammell, 129 Tex. 150, 101 S.W.2d 1009 (1937), is misplaced and does not support its holding.

The majority opinion is confusing because it does not classify the death benefits according to traditional notions of community property law. Tex.Fam.Code Ann. § 5.01 (Vernon 1975) states that property must either be separate or community. Although the majority states that these benefits are not community property, it fails to classify *901them as separate property and, apparently, it has created a new classification of property not defined in the Texas Family Code. Texas case law, however, compels me to conclude that these death benefits are community property.

As the majority opinion points out, both Lee v. Lee, 112 Tex. 392, 247 S.W. 828 (1923), and Grost v. Grost, 561 S.W.2d 223 (Tex.Civ.App.—Tyler 1977, writ dism’d), held that death benefits earned during marriage and paid as part of the employee’s compensation were community property. I am unable to understand why the majority states that the death benefits here, but for the statute, would also be community property. The death benefits were earned in part during Ralph Lack’s marriage to appellant and were purchased with community funds through salary deductions from Ralph Lack’s paycheck and, therefore, are community property. In addition, Collida v. Collida, 546 S.W.2d 708, 709 (Tex.Civ.App.—Beaumont 1977, writ dism’d), explicitly held that pension payments from a statutory pension plan were community property. In discussing a divorced wife’s right to receive pension payments directly from the pension plan, the court stated that her “interest in the fund is community property". 546 S.W.2d at 710. Likewise, appellant’s “interest in the fund ”, i. e., death benefits, is also community property.

The majority opinion states that appellant’s community property rights in the death benefits never vested and, therefore, she has not been divested of anything. This argument ignores a crucial premise of community property law, that is, benefits earned during marriage belong to the community estate. Tex.Const. art. XVI, sec. 15. As the court in Perez v. Perez, 576 S.W.2d 447, 449 (Tex.Civ.App.—San Antonio), rev’d on other grounds, 22 Tex.Sup.Ct.J. 553 (Sept. 25,1979) stated:

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 to consideration along with other property in the division of the estate of the parties Id. at 666.
The decisive factor is that, whatever the nature of the benefits involved, the right to receive them has been earned, in whole or in part, by rendition of services during coverture. To the extent that the right rests on services rendered during cover-ture, that right is the fruit of what must be considered as community effort.

Clearly, the right to receive these benefits was earned during marriage and constituted a community asset.

In addition, the majority has misconstrued the holding in City of Dallas v. Trammell, 129 Tex. 150, 101 S.W.2d 1009 (1937). That case does not concern the problem of whether the legislature could divest a wife of her community property rights in a statutory pension fund. The Supreme Court held that the legislature had the right to diminish the amount of the pension payable or to completely abolish the pension fund. Contrary to the majority’s interpretation, the court also held that the right to participate in such fund could not be abolished. The court stated:

[A]n employee . . . acquires by virtue of his contract with the city . the right to participate in the pension fund. ... It may be conceded that this right to participate in the pension fund, so long as there is such a fund, is one which cannot be destroyed. [Emphasis added] 101 S.W.2d at 1011.

Trammell, contrary to the majority’s position, does not stand for the proposition that the legislature has the right to cut off the community property rights of an ex-wife. Nowhere in the statute itself or in the ease *902law of this state can authority be found for the proposition that the legislature, in enacting article 6243a, intended to deprive a wife of her community property rights in a statutory pension plan. The majority attempts to ascribe an intent to the legislature that simply does not exist. Appellant made significant contributions of community property to the pension fund, but the majority holds that the legislature intended that all of appellant’s contributions go to appellee. I simply cannot agree that the legislature intended such an inequitable result.

The majority’s explanation for its holding is analogous to the explanation given for the holding in Benson v. City of Los Angeles, 60 Cal.2d 355, 33 Cal.Rptr. 257, 384 P.2d 649 (1963). Under circumstances similar to those in this case, the California Supreme Court denied statutory pension benefits to an ex-wife of a fireman. The court reasoned that the legislature intended to exclude ex-wives from pension benefits in order to retain flexibility in the pension plan. 60 Cal.2d at 361-62, 33 Cal.Rptr. at 260, 384 P.2d at 652. In criticizing the holding in Benson, one commentator has stated that the reasoning underlying that decision and other California cases that have followed it is unsound because the California statutory pension plans show:

the absence of any evidence of legislative intent to deprive the wife of her community property rights both in the statutory language and in the legislative history documents. It is, purely and simply, a product of the supreme court’s fancy. The mere provision for a widow’s pension does not mean the legislature intended to take the first wife’s property when she was not the widow. More likely, the legislature, assuming the “widow” would be the same spouse whose community funds have been used to acquire rights in the program, intended to expand her rights rather than cut off payments on her husband’s death. There is just no suggestion that by providing for a widow’s pension, the legislature had in mind the case where fifty percent of a second wife’s benefits were purchased with the first wife’s property .

Reppy, Community and Separate Interests in Pensions and Social Security Benefits After Marriage of Brown and Erisa, 25 U.C.L.A.L.Rev. 417, 468 (1978). I believe that the majority has made the same mistake in construing the statutory pension plan here as Professor Reppy states the California courts have made.

Appellant was married to Ralph Lack for almost one-half of the period that he made contributions to the pension plan. It is simply inequitable that appellant receive nothing here, not even her pro rata share of the contributions made with community funds. At the very least, appellant should be entitled to reimbursement for her share of the community funds paid into the pension plan during her marriage to Ralph Lack.

In conclusion, the simple solution to this controversy is to apply the principles of community property law to the death benefits. To do so would merely entitle appellant to what is rightfully hers. Since appellant was married to Ralph Lack for a total of 127 months, and he made contributions to the plan for 276 months, appellant, as long as she remains single, should be entitled to one-half of 127/276 times the actual amount of death benefits payable.