Grier v. Grier

731 S.W.2d 931, 30 Tex. Sup. Ct. J. 416, 1987 Tex. LEXIS 412

• Court: Texas Supreme Court
• Decided: May 6, 1987
• Docket: C-5736
• Status: Published

Opinions

ON MOTION FOR REHEARING

WALLACE, Justice.

We grant the Motion for Rehearing, withdraw the judgment and opinion of April 15, 1987 and substitute this opinion.

This post-divorce declaratory judgment action presents a question as to the proper characterization and division of military retirement benefits. The Griers were divorced in 1975. At the time of the divorce Edward was a major in the United States Army. The divorce decree did not dispose of Edward’s military retirement benefits, as these benefits were not divisible community property at the time of the decree. Eight months after the divorce, Edward was promoted to the rank of lieutenant colonel.

In 1983 Elsie Grier filed suit in a California court seeking partition of Edward’s retirement benefits. Edward brought this action for a declaratory judgment that his retirement benefits had been declared non-community property under the divorce decree of 1975. The trial court rendered judgment that Edward’s military retirement benefits were subject to partition as community property and awarded Elsie Grier a 37.45% interest in Edward’s future gross retirement benefits based upon the rank of lieutenant colonel. The court of appeals reversed and rendered judgment awarding Elsie 37.45% of Edward’s “disposable retired pay” payable to a major who would have retired on the date of the Grier’s divorce. 713 S.W.2d 213. We affirm the judgment of the court of appeals as modified herein.

Elsie Grier contends that the court of appeals erred in reversing the trial court and in awarding a portion of Edward’s retirement benefits based on the rank of major, rather than on the rank of lieutenant colonel. We disagree with this contention. At the time of the Grier’s divorce in 1975, Edward held the rank of major, but had been placed on a promotion list by the 1975 AUS Lieutenant Colonel’s Promotion Board. Edward was not actually promoted to the rank of lieutenant colonel until May 2, 1976, some eight months after the divorce. It is undisputed that Edward did not become entitled to any of the increased pay or retirement benefits accompanying his elevation in rank until after his divorce from Elsie Grier.

In Berry v. Berry, 647 S.W.2d 945 (Tex.1983), we settled the question of the valuation and apportionment of the community’s interest in retirement benefits. Such benefits are to be apportioned to the spouses based on the value of the community’s interest at the time of divorce. Since Edward did not become entitled to the increase in his military retirement pay resulting from his, promotion until after his divorce, an order awarding Elsie a share of Edward's retirement benefits based on the rank of lieutenant colonel would impermis-sibly invade Edward’s separate property. We hold that in apportioning military retirement benefits upon the dissolution of a marriage, the valuation of the community’s interest in such benefits is to be based on the retirement pay which corresponds to the rank actually held by the service spouse on the date of the divorce.

We must next consider the question of whether Elsie’s share of the community interest in Edward’s retirement pay is limited to 50% of disposable net pay under the Federal Uniformed Services Former Spouses’ Protection Act, 10 U.S.C. § 1408 (FUSFSPA), as the court of appeals has held.

Before the decision of the U.S. Supreme Court in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981), Texas courts apportioned the community property interest in retirement benefits earned during marriage according to the formula established in Taggart v. Taggart, 552 S.W.2d 422 (Tex.1977) and Cearley v. Cearley, 544 S.W.2d 661 (Tex.1976). In McCarty, the Supreme Court determined that military retirement benefits could not be treated by the states as marital property subject to division upon divorce. Congress enacted FUSFSPA with the intent to “restore the law to what it was when the courts were permitted to apply State divorce laws to military retired pay.” S.Rep. No. 502, 97th Cong., 2d Sess. 5, reprinted in 1982 U.S.Code Cong. & Ad.News 1555, 1596, 1599. We now address the court of appeals’ holding that FUSFSPA also had the effect of prohibiting state courts from apportioning more than 50% of the service spouse’s “disposable pay.”

The court of appeals based its holding that Congress intended to limit the states’ ability to characterize and divide military retirement pay on section 1408(c)(1) of FUSFSPA which reads:

[ sjubject 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).

“Disposable retired pay” is defined in the statute as gross pay less certain statutory deductions which may be elected at the option of the service spouse. 10 U.S.C. § 1408(a)(4).

An examination of this statute convinces us that it was not intended to limit the states’ power to characterize only “disposable” military retired pay as a marital asset. This section of FUSFSPA is not concerned with limiting the amount of retired pay available for division by state courts, but is instead designed to limit the amount of retired pay which can be garnished and paid out by the service secretaries pursuant to court orders for child support, alimony, property division and the like. This purpose is revealed by this section’s statutory title: “Payment of Retired Retainer Pay in Compliance With Court Orders.” When the maximum amount of 50% of disposable retired pay has been garnished by the service secretaries pursuant to court orders, any further obligation of the service spouse may be “enforced by any means available under law.” 10 U.S.C. § 1408(e)(6). As the statute makes clear:

[ n]othing 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 the Act].

10 U.S.C. § 1408(e)(6).

We note that our construction of the effect of FUSFSPA is one which has been adopted by other courts which have had an opportunity to consider the issue. See, Casas v. Thompson, 42 Cal.3d 131, 228 Cal.Rptr. 33, 720 P.2d 921 (1986), cert. denied, - U.S. -, 107 S.Ct. 659, 93 L.Ed.2d 713 (1987); Deliduka v. Deliduka, 347 N.W.2d 52 (Minn.App.1984).

We hold that the Federal Uniformed Services Former Spouses’ Protection Act, 10 U.S.C. § 1408, does not limit the amount of military retirement pay which may be characterized and apportioned as a community asset under our marital property system. We conclude that the FUSFSPA provisions are intended only as a limit on the amount of disposable retired pay which can be garnished and paid out by the service secretaries pursuant to court orders.

The judgment of the court of appeals is modified to the extent that Elsie Grier is awarded 37.45% of Edward Grier’s gross retired or retainer pay based on the rank of major which is currently payable to such officer who would have retired with 20 years service in September 1975 together with increases which may occur other than increases attributable to elevation in rank or services rendered by the military spouse after the date of divorce. As modified, the judgment of the court of appeals is affirmed.

MAUZY, J., concurring and dissenting.