Boniface v. Boniface

GAMMAGE, Justice.

This is an appeal from judgment of the 169th District Court of Bell County, Texas, partitioning the civil service retirement benefits earned through federal employment of appellant, Edwin C. Boniface.

We will affirm the judgment of the trial court.

The parties were married on October 1, 1943. On January 2, 1947, appellant began working for the United States Civil Service. The parties were divorced March 24, 1972, at which time the retirement benefits in dispute were accrued and vested. No consideration was given to these benefits in the division of property in the divorce proceeding. Appellant retired from civil service on February 3, 1978 and began receiving retirement benefits. On June 5, 1981, ap-pellee filed suit to partition the retirement benefits. The trial court granted the partition and entered judgment awarding appel-*133lee $19,875.73 (40.05% of benefits already received by appellant), and 40.05% of all future benefit payments.

Appellant raises five points of error. The first four points argue, essentially, that the civil service retirement benefits are not community property and not subject to partition, that federal law did not permit division of civil service retirement benefits at the time of the divorce, and that subsequent federal amendments authorizing such division could not be applied retroactively in a suit for partition. Appellant’s fifth and final point of error argues there was factually insufficient evidence for the trial court to find that $12,000 of community income was contributed to the payment of the retirement benefits program.

We turn initially to appellant’s first four points of error.

Generally, vested interests in retirement benefits accrued during marriage are community property subject to division or partition at divorce. Herring v. Blakely, 385 S.W.2d 843 (Tex.1965); Thibodeaux v. Thibodeaux, 546 S.W.2d 662 (Tex.Civ.App.1977, no writ).

Texas courts have traditionally held that civil service retirement benefits are community property subject to division and partition in a divorce proceeding. Bonar v. Bonar, 614 S.W.2d 472 (Tex.Civ.App.1981, writ ref’d n.r.e.); Cowan v. Plsek, 592 S.W.2d 422 (Tex.Civ.App.1979, no writ); Matter of Marriage of Butler, 543 S.W.2d 147 (Tex.Civ.App.1976, writ dism’d).

Where vested retirement benefits are not partitioned or taken into account in dividing community property in a divorce decree, the husband and wife become tenants in common or joint owners thereof, and such may be partitioned thereafter. Cowan v. Plsek, supra, and cases cited therein.

As to appellant’s argument that federal law did not permit division of civil service benefits at the time of the divorce, we note that prior to amendment in 1978, 5 U.S.C. § 8346 provided that benefits payable under civil service retirement were “not assignable, either in law or equity, or subject to execution, levy, attachment, garnishment, or other legal process.” This provision created a barrier which prevented the Civil Service Commission from being subject to any legal processes for purposes of making benefit payments to anyone other than the retiree. However, it did not have the effect of classifying civil service retirement benefits as separate property which, as between the parties, could not be divided or partitioned in a divorce proceeding. But its practical effect was to impose the burden that, if, as, and when benefits were received, payment must be made by the recipient to the divorced spouse of a community share as determined by the judgment of the court.

In 1978, the Code was amended to permit direct payment of benefits to persons other than the retiree to the extent provided for in “any court decree of divorce, annulment, or legal separation, or the terms of any court order or court-approved property settlement agreement incident to any court decree of divorce, annulment, or legal separation.” 5 U.S.C. § 8345(j)(l) (1980). [emphasis added]

This amendment simply relieved the parties of the burden of making and receiving payments between themselves and permitted the future convenience of direct payment by the Commission (Office of Personnel Management) to the divorced spouse of that portion of the benefits provided for in the court’s order. The amendment created no new substantive property rights between the parties. It merely instituted a procedure by' which the Commission was to recognize existing rights and cooperate with state courts in distributing benefits accordingly.

The legislative history of the 1978 amendment specifically recognized the pre-exist-ing authority of state courts to regard civil service retirement benefits as community property and to deal with them as such:

In recent years, many State courts have ruled that future retirement benefits earned during a marriage should be considered an asset of the marriage to be *134apportioned in the event of a legal separation, divorce, or annulment. [The amendment] will authorize the Civil Service Commission to recognize such court rulings and comply with court determinations.
In the [House Post Office and Civil Service, and Senate Governmental Affairs] committee’s view, the enactment of legislation which permits Federal cooperation with State law and court orders is clearly needed. The committee shares the opinion of the Civil Service Commission that [the amendment] is the proper approach to the problem of benefits for former spouses.
* * * ⅜ * ⅜
[The amendment] provides that [it] shall only apply to payments made from the civil service retirement fund after the date of the enactment of this legislation. Thus, the amendments could apply to divorces or legal separations which took place before the date of enactment, but the amendments will not affect any payments of annuities or lump-sum refunds made prior to such enactment date.

S.Rep. No. 1084, 95th Cong., 2d Sess. 2, 4, reprinted in 1978 U.S.Code Cong. & Ad. News 1379, 1380-1382. [emphasis added]

In the regulations implementing these amendments, at 5 C.F.R. § 831.1701 (1983), we find the following:

This subpart implements portions of Pub.L. 95-366 that require the Office of Personnel Management to comply with a provision for the apportionment of retirement benefits in a State court order, decree, or court-approved settlement in connection with the divorce, annulment of marriage, or legal separation of a Federal employee or retiree.

At § 831.1709, the implementing regulations state:

(a) The provisions of this subpart apply to any refund payable on or after September 15, 1978, and apply to any employee annuity which commenced before, on, or after September 15, 1978. The Associate Director for Compensation will not increase the amount apportioned from current retirement benefits in order to satisfy an arrearage due the former spouse unless the court otherwise directs. However, the Associate Director for Compensation will honor the terms of a new or revised court order which either increases or decreases an apportionment. These changes will be prospective only.
(b) The provisions of this subpart apply to any court order issued before, on, or after September 15, 1978; .... [emphasis added]

Thus, the procedure for making benefit payments could not be applied retroactively; payments made before the amendments must be disposed of between the parties pursuant to state court orders. But post-amendment benefits would be paid directly to the parties pursuant to those court orders. In other words, the 1978 amendments did not affect the nature of civil service retirement benefits accrued and vested during marriage. Such benefits were and are community property under the law of this state both before and after the amendments. But it was only after the adoption of these amendments that federal authorities could be bound by state court decisions in their future payment of benefits pursuant to the division of property incident to or arising out of a divorce.

As stated by the Chairman of the Civil Service Commission:

[In the view of the Commission] State laws and State courts have always controlled in matters of domestic relations and property rights. These courts are specifically geared to determine such questions as an individual’s obligation to a former spouse on an individual case basis after considering many factors such as the financial status of both parties, property settlements, children involved, and the reasons for the divorce.

S.Rep. No. 1084, supra, at 1383. [emphasis added]

A partition judgment dividing community assets because an earlier divorce decree failed to address such property in any manner is, obviously, a court order inci*135dent to and arising out of the earlier court divorce proceeding. Cowan v. Plsek, supra. As such, it is a court order within the meaning of the 1978 amendments to the Code.

In the case at bar, the trial court properly granted partition to appellee of what the court determined was her community share ($19,875.73) of benefits previously paid to appellant, and granted partition to appellee of what it found to be her community share of all future benefit payments.

Appellant’s first four points of error are overruled.

We turn next to appellant’s final point of error — that there was factually insufficient evidence for the trial court to find that $12,000 of community income was contributed to the payment of the retirement benefits program.

Appellant contends that the only evidence presented at the time of trial to support this finding was the following exchange between appellant and appellee’s counsel:

Q. Now, also, at the time of your divorce, you, — at the time of your retirement, you got back about sixteen thousand dollars in money that had been contributed from your earnings. When [sic] you say approximately twelve thousand of that had been contributed by the time of your divorce in 1972, somewhere around that figure.
A. I guess so.

It should be noted here that appellee was not required to establish a total dollar figure of the value of her interest in contributions to the retirement program. Appellee was required only to establish a vested community interest in the retirement benefits which existed at the time of the divorce. Since no disposition was made of the property in the divorce decree, the parties became tenants in common of the benefits at that time, and their interests were presumptively equal. Dessommes v. Dessommes, 505 S.W.2d 673, 678 (Tex.Civ.App.1973, writ ref’d n.r.e.), and authorities cited therein.

Their interests, however, did not remain equal because contributions to the retirement program were continued after the divorce. And, although appellee might not have established the exact extent of her interest in the retirement benefits program, she has established a substantial, if undetermined, interest based on the contributions made during the marriage. Since the parties were presumed to have equal interests in the benefits at the time of divorce, and appellant made additional contributions to the retirement program after the divorce, it was incumbent upon him to show what portion of the commingled contributions was attributable to his separate earnings. Id., 679, 680.

As stated by the Dallas Court of Civil Appeals in Dessommes, id., at 680:

The commingling of funds was the result of his acts rather than hers. He chose to remain in the same employment and so earned additional contributions to the fund. Although that course was not wrongful, it was certainly beyond plaintiff’s control.... Also, proof of the essential facts is more accessible to him than to her.

The record in the case at bar shows that appellant offered no evidence as to what sums were contributions from either community or separate earnings. However, in addition to appellant’s previously indicated response to examination by appellee’s counsel, we believe there is other evidence in the record of this case sufficient to support a finding by the trial court that $12,000 of community income was contributed to the retirement benefits program.

Appellant’s answers to appellee’s requests - for admissions and his testimony at trial establish that the parties were married for 27 years, four months and 27 days of appellant’s total credited service for retirement benefits of 34 years, two months and 16 days, and that appellant’s total contribution from all earnings to the retirement program was $16,179.00. Calculated at the total community interest of 80.1% deter*136mined by the trial court (40.05% attributable to each party), the community portion of the total contribution would be $12,-959.38, a figure well in excess of that found by the court to be the community contribution.

Appellant cites us to no evidence that a lesser figure would be appropriate, and we find no contravening evidence in our examination of the record. Therefore, viewing the record as a whole, we do not find the trial court’s finding of $12,000 community contribution to the retirement benefits program to be so against the great weight and preponderance of the evidence as to be manifestly unjust. In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951).

Appellant’s fifth point of error is overruled.

Accordingly, for the reasons stated herein, the judgment of the trial court is in all things affirmed.