Straiton v. Office of Personnel Management ( 2006 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
06-3325
JOHN H. STRAITON,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
___________________________
DECIDED: December 8, 2006
___________________________
Before RADER and DYK, Circuit Judges, and WHYTE, District Judge.*
RADER, Circuit Judge.
John H Straiton petitions for review of the final decision of the Merit
Systems Protection Board (Board) that affirmed the decision of the Office of
Personnel Management (OPM). OPM based Mr. Straiton’s share of his
retirement annuity on Mr. Straiton’s actual monthly annuity payment at the time of
retirement rather than on a hypothetical monthly annuity payment based on his
salary at the time of his divorce. Straiton v. Office of Pers. Mgmt., No. AT-0831-
05-0798-I-1 (MSPB Nov. 18, 2005)(Final Decision). Discerning no error, this
court affirms.
I
*
Honorable Ronald Whyte, District Judge, United States District Court for the
Northern District of California, sitting by designation.
John and Esther Straiton divorced on April 10, 1987 after approximately
sixteen and one-half years of marriage. On September 3, 2000, Mr. Straiton
retired from the federal government after thirty-three years of federal service.
Upon his retirement, OPM calculated the division of his retirement annuity based
on a hypothetical annuity using an “average pay” of $50,354 - the pay Mr.
Straiton expected to receive at the time of the divorce under the couple’s
marriage settlement agreement (MSA).
More than three years after Mr. Straiton retired, OPM reconsidered its
interpretation of the divorce judgment. OPM concluded that the divorce judgment
did not contain express language limiting Mrs. Straiton’s portion of Mr. Straiton’s
annuity to the annuitant’s pay level at the time of the divorce. OPM further
concluded the express language of the divorce judgment did not limit the “total
years of service” in the annuity formula to the length of service at the time of the
divorce. Additionally, OPM granted Mrs. Straiton annual cost-of-living
adjustments.
Based on its revised interpretation of the divorce judgment, OPM
determined it had underpaid Mrs. Straiton and overpaid Mr. Straiton a total of
$24,123.31. On July 1, 2004, OPM notified Mr. Straiton of OPM’s intent to
recover these funds. Mr. Staiton appeals.
II
This court must affirm the Board’s decision unless it is arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law;
obtained without procedures required by law, rule, or regulation having been
06-3325 2
followed; or unsupported by substantial evidence. 5 U.S.C. § 7703(c); Kewley v.
Dep’t of Health & Human Servs., 153 F.3d 1357, 1361 (Fed. Cir. 1998).
A former spouse receives that portion of an employee's retirement benefits
expressly provided in a divorce order. 5 C.F.R. § 838.1004(a) (2006). Further,
[u]nless the court order directly and unequivocally orders otherwise,
a court order that awards a former spouse a portion of an employee
annuity either on a percentage basis or by use of a fraction or
formula provides that the former spouse's share of the employee
annuity will be adjusted to maintain the same percentage or fraction
whenever the employee annuity changes as a result of--
(i) Salary adjustments occurring after the date of the decree and
before the employee retires; and
(ii) Cost-of-living adjustments occurring after the date of the
decree and after the date of the employee's retirement.
5 C.F.R. § 838.622(b)(1) (2006).
The After Acquired Property and Retirement Rights sections of the MSA
are as follows:
10. AFTER ACQUIRED PROPERTY: All income, earnings,
or other property received or acquired by either party to this
agreement on or after the date of separation shall be the sole and
separate property of the receiving or acquiring party. Each party as
of the effective date of this agreement, does hereby and forever
waive, release and relinquish all right, title, and interest in and to
such income, earnings, or other properties so received or so
acquired by the other party.
22. RETIREMENT RIGHTS:
For 16½ years during the marriage of the parties, Husband
was employed as a civil servant in the United STates [sic]
government (NASA), and is to be rated GS 14, Step 5, at a salary
rate of $50,354 to commence upon his entering into work at
Kennedy Space Center, Florida. (The parties acknowledge that in
California they enjoyed a higher income from husband’s
employment, due to special pay reflecting California’s higher cost of
living).
The parties agree that based on the 16½ years as set forth
above, the community property equation as to wife’s rights in said
06-3325 3
retirement, is ½ x 16½ over total years of service, x monthly
income.
The parties further agree that, upon Husband’s retirement
from the employment giving rise to retirement rights recited herein,
the income then received shall be divided between the parties
according to the formula above-cited; and that husband will do
nothing to prevent such income from being divided at the source, to
the extent that such division is available from the paying source at
that time. (Emphasis added)
In addition to the MSA, the divorce judgment includes an “Attachment to
Judgment of Dissolution of Marriage,” reciting, inter alia,
IT IS FURTHER ORDERED that petitioner is entitled to a
community property share of Respondent’s NASA retirement
income as follows: ½ x 16½ over total years of service x monthly
income. Upon Respondent’s retirement from NASA employment,
the income then received shall be divided according to the above
formula and Respondent shall do nothing to prevent such income
from being divided at the source. (Emphasis added.)
Mr. Straiton argues the phrase “as set forth above” in section 22 of the
MSA refers to the $50,354 salary recited in the preceding paragraph. OPM,
however, suggests a more natural reading of section 22 in which “as set forth
above” refers to, and emphasizes the “16½ years” recited in the preceding
paragraph and repeated just before to “as set forth above.” Further, although
MSA refers to Mr. Straiton’s expected salary at the time of the divorce, it does not
expressly require use of this salary in the calculation of the division of the
annuity.
Regarding Mr. Straiton’s argument that OPM’s revised interpretation
creates an inconsistency between sections 10 and 22 of the MSA, this argument
necessarily requires equating retirement income as an after acquired income,
earnings, or other property. The Board, however, explicitly found retirement
benefits are not income, earnings, or property and that section 10 does not apply.
06-3325 4
Indeed, Mr. Straiton’s reading of a conflict between sections 10 and 22 would
completely render section 22 ineffective.
Additionally, Mr. Straiton’s relies on In re Marriage of Brown, 15 Cal.3d
838, (1976) for the proposition that division of his retirement annuity must be
based on his salary at the time of his divorce. His reliance on Brown is
misplaced. In overruling French v. French 17 Cal.2d 775 (1941), the California
Supreme Court merely held that non-vested pension rights are community
property. 15 Cal.3d at 842. Brown enunciates only the unremarkable proposition
that community property, including rights to community assets not yet vested,
must be divided equally at the time of divorce. Id. at 847-48. Brown says
nothing regarding the actual determination of the community property or its
division.
For the foregoing reasons, this court affirms the final decision of the
Board.
06-3325 5