Marriage of Miller ( 1980 )

Nos. 14636 & 14726
IN THE SUPREME COURT OF THE STATE OF MONTANA
1979
IN RE THE MARRIAGE OF:
RONALD D. MILLER,
Petitioner and Appellant,
VS .
JANET C. MILLER,
Respondent and Respondent.
Appeal from: ~istrictCourt of the Eighth Judicial ~istrict,
Honorable Joel G. Roth, Judge presiding.
Counsel of Record:
For Appellant:
Smith, Emmons, Baillie and Walsh, Great Falls, Montana
Robert J. Emmons argued, Great Falls, Montana
For Respondent:
Marra, Wenz, Iwen and Johnson, Great Falls, Montana
David Hopkins argued, Great Falls, Montana
Submitted: November 5, 1979
Decided : MAR 2 7 1980
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Filed: . ' i
Mr. Justice Daniel J. Shea delivered the Opinion of the Court.
Husband, Ronald C. Miller, appeals the orders of the
Cascade County District Court which granted the wife a 38.5
percent share in the husband's military pension and temporary
maintenance during the pendency of this appeal.
The husband asserts that his military retirement pay
is not a marital asset under Montana's Uniform Marriage and
Divorce Act and in any event, that 10 U.S.C.A. g1401, et
seq., which authorizes payment of his pension, preempts any
state law which would permit distribution of a property
interest in military retirement pay to the retiree's spouse.
The primary issue in this appeal concerns the husband's
military retirement pay. A United States Code provision
provides that an officer of the armed forces who completes
20 years of service is entitled to retirement pay based upon
the number of years he serves in the armed forces, and his
rank at retirement. See 10 U.S.C.A. 51401, et seq. See
also Cose v. Cose (Alaska 1979), 592 P.2d 1230; In Re Marriage
of Fithian (Cal. 1974), 111 Cal. Rptr. 369, 517 P.2d 449.
Benefits are paid monthly and terminate upon the serviceman's
death. As of October 1, 1978, the husband here received
$1,279.02 monthly retirement pay. The amount of his retirement
pay is adjusted for changes in the cost of living.
The husband commenced this action on November 22, 1977
by filing a petition for divorce. The trial court granted the
parties a divorce on February 8, 1978 and the following November
entered its judgment granting custody of the parties' minor
child to the husband, and distributing their property. The
court's order further provided that neither party was entitled
to maintenance or attorney fees. The court amended its judgment
on November 29, 1978 to allow the husband thirty days to
purchase the wife's interest in their home. The husband
filed his notice of appeal of the amended judgment on December
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28, 1978. The husband also appealed the court's order of
February 26, 1979 which granted the wife's motion for temporary
maintenance pending the husband's appeal.
The husband and wife were married in 1959 and now are
both in their middle to late forties. The husband served
for 20 years in the United States Air Force and retired in
1974 with the rank of lieutenant colonel. Since his retirement,
he has worked at Northwestern Bank in Great Falls, Montana,
where he presently earns approximately $12,000 per year. The
wife worked intermittently as a teacher during their marriage.
Immediately prior to her divorce she was employed by the
University Extension Service where she earned a gross of
$361 a month. Presently she is a full time student at the
University of Montana where she is completing courses toward
a sociology degree. The parties at the time of the divorce
decree had one minor child but custody and support are not
at issue. The primary issues involve the disposition of
the husband's military pension.
The pension is by far the greatest asset of the parties.
According to evidence submitted by the wife, it has a
present worth of $442,307. The trial court valued the
parties net equity in the family home at $38,988 and the
remainder of their real and personal property at approximately
$20,000.
The court's order distributed half of the net equity of
the home to each of the parties, divided the remainder of
their real and personal property, and provided that the wife
should have a 38.5 percent share in the husband's military
pension. The decree provided that the wife's share in the
pension should be paid monthly as it was received by the
husband. Furthermore, it provided that in the event the
wife predeceased her husband, that the pension should pass
to her estate. At the time of this appeal, the wife's share
in the husband's pension amounted to $492 per month.
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The husband,contends that his right to receive the
pension is not a vested right and therefore the wife has
no right to receive a share of his pension as part of a
marital property division. Courts cannot reach agreement
as to whether a military pension is income or, on the other
hand, a vested property right. See Cose v. Cose, supra.
Courts finding that a military pension is income have analogized
retirement payments to salary because retirement payments
are paid monthly and are earned in the sense that the retiree
remains a member of the armed forces and is subject to
recall to active duty. In Re Marriage of Ellis (Colo. C.A.
1975), 36 Colo. App. 234, 538 P.2d 1347, affd. 191 Colo. 317,
552 P.2d 506; Watson v. Watson (E.D. N.C. 1976), 424 F. Supp.
866. Viewed realistically, however, the better view is that
the retiree has "earned" his pension by his years of active
duty in the service. See In Re Marriage of Musser (111.
C.A. 1979), 70 Ill.App.3d 706, 388 N.E.2d 1289; Kruger v.
Kruger (N.J. 1977), 73 N.J. 46q, 375 A.2d 659; In Re Marriage
of Ellis (dissenting opinion), supra; In Re Marriage of
Fithian (Cal. 1974), 517 P.2d 449, 111 Cal. Rptr. 369.
After 20 years of active duty a person desiring to retire
from the military is entitled to a pension. Under normal
circumstances, a retiree does not have to perform any significant
duties as a condition to receiving his monthly retirement check.
In the present case, at his retirement in 1974, the
husband had the opportunity to enjoy a leisurely retirement
or assume a second career. He chose to become a full time
employee at Northwestern Bank of Great Falls. He therefore,
has two sources of income, one from his retirement pay, and
another from his salary as a bank employee. Unless an
extraordinary chain of events should arise, the husband will
not be recalled to active duty. The husband's military
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retirement pay resembles an ordinary private pension, and
just as a private pension, it should be treated as a vested
property right which can be distributed as part of a court's
property division.
The husband's second contention is that 10 U.S.C.A. S1401,
et seq. preempts Montana's Uniform Marriage and Divorce Act
insofar as it permits distribution of a property interest in his
retirement pay. He relies on Hisquierdo v. Hisquierdo
(1979), 439 U.S. 572, 99 S. Ct. 802, 59 L. Ed. 2d 1. There, the
United States Supreme Court held that treatment of a railroad
pension receivable under the Railroad Retirement Act, 45
U.S.C. 5231, et seq, as community property, violated the
purpose of the Act and was prohibited by the supremacy
clause. See also Knudson v. Knudson (1980)~ Mont .
- P.2d , 37 St.Rep. 147. The husband argues
that the relevant portions of 10 U.S.C.A. S1401, et seq.
governing military pensions are analogous to the Railroad
Retirement Act and therefore that the rationale of the
Supreme Court's decision in Hisquierdo applies to the present
case. The Railroad Retirement Act is however, explicit as
to what happens to a railroad pension upon an absolute divorce.
The Hisquierdo decision was based on the broad language of
5231m of the Railroad Retirement Act which protects the pensioner's
benefits from "legal process under any circumstances whatsoever."
The Court noted that Congress had carefully targeted its benefits
towards the working spouse by providing that the nonworking
spouse's "entitlement ... to an annuity . .. shall end on the
last day of the month preceding the month in which . .. the
spouse and the individual are absolutely divorced." 45
U.S.C. §231d(d) (3). The Court stated that its decision might
well have been different if Congress had not explicitly
terminated a spouse's benefits upon absolute divorce. On the
other hand, Chapter 71, 10 U.S.C.A. 51401, et seq., which
governs the husband's military pension does not contain
any section similar to the provisions deemed controlling
in the Hisquierdo decision. Chapter 71 does not protect
a pensioner from attachment or other legal process, nor does
it expressly provide that a wife's interest in her husband's
pension shall terminate upon divorce. We cannot say that
federal statutes directly or indirectly prevent the distri-
bution made here. Czarnecki v. Czarnecki (Ariz. 1979), 600
P.2d 1098. Furthermore, we do not believe that the trial
court's distribution to the wife goes contrary to the intent
of Congress to promote continued service in the armed services
by means of its military retirement plan. See In Re Marriage
of Musser, supra; see also Gorman v. Gorman (Cal. C.A. 1979),
90 Cal. App. 3d 454, 153 Cal. Rptr. 479. Congress must certainly
have contemplated that the service people of this country
would get married and therefore assume the duties and obli-
gations of marriage.
Finally, the husband argues that it was error for the
trial court to rule that heirs of the wife could inherit her
interest in the military pension. We find no basis to
distinguish the wife's interest from other marital assets
which may be distributed by a trial court. See Kruger v.
Kruger, supra. The court order provides the wife's share in
the husband's retirement will be taken out of his monthly
payments as he receives them. The husband's obligation lasts
only so long as he continues to receive government retirement
benefits. Thus the heirs of the wife can share in these
benefits only while the husband is living. We affirm the
trial court's order in this respect.
We note here that the trial court awarded the wife $500
per month as temporary maintenance pending the husband's
appeal. The amount of temporary maintenance order by the court
is almost equal to the wife's share in the pension which she
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would have received had there been no appeal here. Since
we affirmed the amended judgment, the wife will receive
payment for her share of the pension which has accrued since
the date of the amended judgment. In order to avoid a double
payment to the wife, the trial court's award of temporary
maintenance is vacated.
As modified, the amended judgment of the District Court
is affirmed.
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Justice
We Concur:
7
C h e f Justice
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Justices