Ramsey v. Ramsey , 96 Idaho 672 ( 1975 )

McQUADE, Chief Justice

(dissenting).

I am unable to agree with the majority’s position that Lloyd Ramsey’s military retirement pay should be treated as a community asset. This issue is one of first impression before this Court. I am aware that other community property states have wrestled with this issue and reached a contrary conclusion.¹ Although case law from our sister states is persuasive, it is by no means binding upon this Court.

This dissent is founded on the premise that the area of military retirement pay has been preempted by federal law, and under the supremacy clause of the United States Constitution,² state law which is inconsistent must yield.

The right of the defendant, a regular enlisted member of the Air Force, to receive military retirement pay is a federally created statutory right. (10 U.S.C. § 8914, § 8929, and § 8991). Thus federal law will govern the interpretation of the nature of this right.³ The rationale for this rule is that if the state law was paramount, the federal law would no longer be the supreme law of the land. This would be violative of the supremacy clause of the U. S. Constitution.

It is true that courts in construing federal statutes have in the past adopted and incorporated the community property laws of the several states.⁴ It is also true that as a general maxim,

“Rules relating to family relationships, . . . have traditionally been regarded as embodying strong state policies with which the federal courts should not interfere.” ⁵

But this has not been a unanimous posture.⁶ As a general rule, state law will be applied unless it would defeat or conflict with the federal legislative purpose.⁷ Thus the issue boils down to this: is the treatment of military retirement pay as community property consistent and compatible with the Congressional intent in establishing a military retirement system?

The federal statutes dealing with the retirement pay of enlisted Air Force personnel (10 U.S.C. § 8914, § 8929, and § 8991) are silent as to whether such statutes meant to incorporate existing state community property law. This is not untypical

“For every instance in which Congress has made the choice expressly there are dozens in which it has left it uncertain. In such cases the Court has come to recognize, with increasing candor in recent years, its duty to make the choice in Congress’ behalf.” ⁸

The U.S. Supreme Court, has not fashioned any governing rules in this area.⁹ The Court might very well find “reasons which . . . make state law . the appropriate federal rule”¹⁰ in this area. But until the United States Supreme Court renders a definitive ruling, this Court must attempt to ascertain the probable intent of Congress so far as it can be discerned from the statutes, their legislative history, and the interpretations given to them by the administering agencies.

In a recent definitive article on the issue of military retirement pay, Judge B. Abbott Goldberg had this to say,

“But nothing has been found to show that Congress ever conceived that retired pay would be treated as a species of partnership asset to be divided with a wife on divorce — a division converting the wife’s share to separate property and giving her an interest in the retired pay regardless of her need or remarriage, and possibly inheritable by her successors on her death. Such community property concepts cannot be read into the federal statutes, by showing that the federal statutes were ‘enacted in a community property context.’ Except for reference to the mode of computing the retirement income credit for federal income tax purposes in service retirement guides, no mention of community property has been found in the federal materials.” ¹¹

A look at the retirement pay statutes bears out this contention. The applicable Air Force retirement pay statutes (10 U. S.C. § 8914 et seq.) make no mention of community property. Nor is there any reference or provision made for the spouse of the retiree. In reference to military retirement pay, Congress has remarked,

“Historically, military retired pay has been a personal entitlement payable to the member himself as long as he lives.” ¹²

The defendant retired from the Air Force in 1968. The Air Force Guide which would presumably be applicable to him states:

“A member of the uniformed services retired from active duty receives retired pay as long as he lives. No part of his retirement pay (with the possible exception of arrears in pay) passes to his family when he dies.”¹³ [Emphasis in original]

The explanation as to why payment of arrears is only a possible exception and not an unqualified exception is because, “A retired member may designate whomever he desires as his beneficiary or beneficiaries.”¹⁴ If retirement pay was meant to be treated as community property, then it would be impossible under Idaho law for the retiree to summarily deprive his spouse of her one half vested interest in the arrearage.

“But it is not community, it is his personal entitlement so he can. The legislative history shows that Congress consciously superceded state laws conflicting with the result it desired.”¹⁵

There are other statutes dealing with retirement pay which demonstrate that state community property law has been preempted in this area. A disabled serviceman may waive all or part of his retired pay to receive a pension from the Veteran’s Administration.¹⁶ This provision which allows a disabled veteran such a choice is totally irreconciliable with the community property system of this state. By choosing a pension in lieu of disablement pay, the husband could deprive the wife of what would otherwise have been her vested interest in a community asset.

Congress has established plans whereby a serviceman can use a portion of his retirement pay to purchase an annuity to avoid leaving his survivors destitute. Under the 1968 amendment to the Retired Serviceman’s Family Protection Plan,¹⁷ when a wife can no longer qualify as a beneficiary, the reduction from the serviceman’s retirement pay for her annuity shall stop. The Department of Defense explained the purpose of the amendment, “To safeguard the participant’s future retired pay when ... a divorce occurs.¹⁸ If retired pay is treated as a community asset, it is not safeguarded to the retiree. To treat retirement pay as community property would compel a serviceman to share this pay with an ex-wife whom Congress deliberately rendered ineligible for voluntary coverage.

Another example of Congressional disregard of community property can be seen under the Armed Forces Survivor Benefit Plan.¹⁹ Under this plan a serviceman may use a portion of his retirement pay to purchase an annuity for his widow, i.e., the woman who survives as his wife, not his surviving ex-wife. “Divorce of the member will remove the former spouse as a prospective annuitant.” ²⁰

In the adoption of the Survivor Benefit Plan, it seems clear from the Congressional debate that the primary concern of the bill was the serviceman’s widow.²¹ The provisions in the version of the bill coming from the House of Representatives calling for protection of ex-wives were stricken by the Senate with the House accepting these changes.²² If retirement pay is community property then the ex-wife whom Congress deliberately neglected is in a better position than the widow, whom Congress explicitly preferred.

“ . . . [0]ne is forced to conclude either that the objects of Congress’ bounty are to be treated worse than those it neglected, or, perhaps more logically that those it neglected have no community property rights.” ²³

The conclusion is inescapable that Congress has meant to occupy the field of military retirement pay completely.

“But the point is not whether the state law coincides with the federal law, but whether Congress has left room for state law to operate. If it has not left such room, coincidence is as ineffective as opposition.’ (Cite omitted) Congress has operated on the premises that ‘military-retired pay is a personal entitlement payable to the member himself,’ and that the rights in retirement pay accrue to the retiree. These premises are wholly within the control of Congress. A state cannot of its own volition rewrite these Congressional declarations to say that retired pay is the entitlement not only of the member but also of his wife at retirement, and that it accrues not to him but to him and that wife. But that is what the cases have done.”²⁴

To the extent that state community property law is inconsistent with the administration of the federal military retirement pay scheme, it must yield.

“The relative importance to the State of its own law is not material when there is a conflict with a valid federal law, for the Framers of our Constitution provided that federal law must prevail.”²⁵

I would hold that because the area of military retirement has been preempted by federal law, state community property concepts can not operate in this area.

Until the issue of how to characterize military retirement pay is resolved by the U.S. Supreme Court,²⁶ I propose to treat the husband’s retirement pay as his separate ordinary income. This pay could be made available in the form of alimony and child support for the retiree’s former spouse and children until such time as she is able to support herself.²⁷

If the majority’s opinion is carried to its logical end, an anomolous result could occur. A wife could be awarded a percentage of her husband’s retirement pay upon a divorce which would then become her separate property. She could then remarry and possibly predecease her former husband. Her rights to the retirement pay would pass to her heirs if she died intestate, or to whomever she designated in her will. Thus the former husband would be saddled with paying out part of his retirement pay after his ex-wife died to an unknown beneficiary for as long as he lived. It is hard to imagine a situation more at odds with the purposes behind the community property system in Idaho.

2 . United States Constitution Article VI, Section 2.

3 . Free v. Bland, 369 U.S. 663, 669-70, 82 S.Ct. 1089, 1094, 8 L.Ed.2d 180, 185 (1962).

4 . See Estate of Perryman, 133 Cal.App.2d 1, 283 P.2d 298 (1955); Commissioner of Internal Revenue v. Wilkerson, 368 F.2d 552 (9th Cir. 1966), affirming 44 T.C. 718.

5 . Note, 82 Harv.L.Rev. 1512, 1518 (1969).

6 . Wissner v. Wissner, 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424 (1950) and Free v. Bland, supra note 3.

7 . See Metropolitan Life Insurance Company v. Thompson, 368 F.2d 791, 794 (3d Cir. 1966); Solberg v. Metropolitan Life Insurance Co., 50 Wis.2d 746, 185 N.W.2d 319, 321 (1971); but contra Prudential Insurance Co. v. Willis, 227 6a. 619, 182 S.E.2d 420 (1971), aff’d mem., 405 U.S. 318, 92 S.Ct. 1257, 31 L.Ed.2d 273 (1972).

8 . Hart, The Relations Between State and Federal Law, 54 Co.L.Rev. 489, 529 (1954).

9 . In Wissner v. Wissner, supra note 6, 338 U.S. at 657 n. 2, 70 S.Ct. at 399, 94 L.Ed. at 428, the U.S. Supreme Court expressly left this issue unresolved.

10 . Clearfield Trust Co. v. United States, 318 U.S. 363, 367, 63 S.Ct. 573, 575, 87 L.Ed. 838, 842 (1943).

11 . Goldberg, Is Armed Services Retired Pay Really Community Property? 48 Cal.State Bar J. 12, 15 (1973).

12 . S.Rep.No.1480, 90th Cong.2d Sess. (1968) ; 1968 qj.g.Code Cong. & Adm-News, 1968, pp. 3294, 3300.

13 . AFP 211-1-12 § 78 at 34 (1966).

14 . DA PAM 600-5, § 51 at 29 (1969). AR 87-104-1, § 1-13(e) (01., 1972), § 8-12(a), 8-13(d) (1971).

15 . Goldberg, supra n. 11, at 17.

16 . 38 U.S.C. § 3105 (1970).

18 . S.Rep.No.1480, supra n. 12, U.S.Code Cong. & Admin.News, at 3307.

19 . 10 U.S.C. §§ 1447-1455 (1972).

20 . 32 C.F.R. § 48-303 (1972); See also AFR 211-14, § 206(a) (1969).

21 . See 118 Cong.Ree.S. 14, 334 (daily ed. 9/8/72). Senator Bentsen, the Chairman of the Subcommittee dealing with the statute called it the “Widow’s Equity Bill.”

22 . 118 Cong.Rec.H. 8255 (daily ed. 9/12/72). .

23 . Goldberg, supra n. 11, at 89.

24 . Id.

25 . Free v. Bland, supra n. 3, 369 U.S. at 666, 82 S.Ct. at 1092, 8 L.Ed.2d at 183.

26 . The U.S. Supreme Court denied certiorari in Fithian v. Fithian, supra note 1. See 419 U.S. 825, 95 S.Ct. 41, 42 L.Ed.2d 48.

27 . Where there is insufficient community property to provide for the wife’s support, and the support and education of the children, the court may resort to the separate property of the husband. See I.O. § 32-708; Jolliffe v. Jolliffe, 76 Idaho 95, 278 P.2d 200 (1954); I.C. § 32-710; Voss v. Voss, 91 Idaho 17, 415 P.2d 303 (1966).