Majority
Opinion
Robert Monroe Sheldon appeals an interlocutory judgment dissolving his 13-year marriage.
The principal issue concerns the retroactivity of the United States Supreme Court’s recent decision in McCarty v. McCarty (1981) 453 U.S. 210 [ 69 L.Ed.2d 589 , 101 S.Ct. 2728 ] and its applicability to cases not final on appeal as of the date McCarty was filed. We stress our decision is not meant to be a holding for all seasons resolving all the issues precipitated by McCarty. We only answer the narrow issue before us, concluding (1) the principles enunciated by the Supreme Court which govern the retroactivity of high court decisions mandate McCarty not be accorded full retroactivity, and (2) McCarty should not be applied to cases not final on appeal unless the military spouse requested the trial court reserve jurisdiction on the character of the property interest in the pension or timely raised and briefed the federal preemption issue on appeal.[1]
Factual and Procedural Background
The principal assets at issue in this dissolution proceeding were the family residence and Robert’s United States Navy pension.[2] The trial court found the value of the residence to be $65,750 and the value of the pension to be $116,996. It awarded all the benefits due under the pension to Robert and the entire interest in the residence to Laura. Laura waived any difference in value of the respective properties.
1 An unarticulated, but sensitive issue permeating this case is the effect of our holding on the practicing bar. Other than indicating we have carefully considered the fallout aspect of this case and speculated on the fallout in cases which may follow, we feel it inappropriate to comment further on issues which are not before us.
2 Robert admitted at trial, both personally and through his attorney, that his military pension rights constituted community property.
On June 8, 1981, we filed our unpublished opinion in this case, upholding the valuation of the pension and the distribution scheme. On June 26, the United States Supreme Court filed its decision in McCarty v. McCarty, supra, 453 U.S. 210 , holding that federal law precludes a state from characterizing a military pension as community property in order to divide it between the parties on dissolution of the marriage.
Robert then filed a petition for rehearing, arguing McCarty compels us to reverse the interlocutory judgment and remand for a new division of the community property and a recharacterization of Robert’s pension rights as his separate property. Laura countered that the stipulation at trial coupled with Robert’s express failure to contest the community nature of the pension rights on appeal rendered the McCarty holding inapplicable to the instant case.[3] We granted a rehearing to address several problems inherent in the application of McCarty to California dissolution proceedings.
Retroactivity of McCarty
We must first concern ourselves with the degree of retroactivity to be accorded the McCarty decision. If McCarty is fully retroactive, Robert is entitled to receive the benefits of the decision, and the effect of the stipulation and failure to raise the issue on appeal become irrelevant.
The United States Supreme Court has had numerous occasions to review the question of prospective versus retroactive application of a judicial decision. (See, e.g., England v. Medical Examiners (1964) 375 U.S. 411 , 422 [ 1 L.Ed.2d 440 , 449-450, 84 S.Ct. 461 ]; Linkletter v. Walker (1965) 381 U.S. 618 [ 14 L.Ed.2d 601 , 85 S.Ct. 1731 ]; Stovall v. Denno (1967) 388 U.S. 293 , 296-301 [ 18 L.Ed.2d 1199 , 1203-1206, 87 S.Ct. 1967 ].) Most recently, in Chevron Oil Company v. Huson (1971) 404 U.S. 97 [ 30 L.Ed.2d 296 , 92 S.Ct. 349 ] (hereinafter Hu
3 Appellant’s opening brief, filed in this court on March 20, 1981, contained the following statements: “Military retirement pay constitutes community property to the extent earned during the marriage. [Citation.] [11] Appellant herein does not contest the fact that petitioner is entitled to a portion of his retirement pay. Said fact was stipulated at trial____” On October 20, 1980, the United States Supreme Court announced it had postponed consideration of jurisdiction in McCarty pending a full hearing of the case on the merits. (See 449 U.S. 917 [ 66 L.Ed.2d 145 , 101 S.Ct. 314 ].)
(1) whether “the decision to be applied nonretroactively ... establishes] a new principle of law, either by overruling clear past precedent on which litigants may have relied, [citation] or by deciding an issue of first impression whose resolution was not clearly foreshadowed, [citation]”;
(2) whether the “history ... purpose and effect” of the rule mandates restrospective operation; and
(3) whether retroactive application of the rule “‘could produce substantial inequitable results .. ., “injustice or hardship” .... ’ [Citation.]” {Id., at pp. 106-107 [30 L.Ed.2d at p. 306].)[5]
Applying this standard to the McCarty decision, we are convinced that McCarty should not be accorded fully retroactive effect. McCarty presented an issue of first impression for the United States Supreme Court. Although the majority opinion relied on the two-year-old decision in Hisquierdo v. Hisquierdo (1979) 439 U.S. 572 [ 59 L.Ed.2d 1 , 99 S.Ct. 802 ] for support, Hisquierdo involved an entirely different statutory scheme and clearly did not mandate the McCarty holding. (See In re Marriage of Milhan (Milhan II) (1980) 27 Cal.3d 765 , 772-777 [ 166 Cal.Rptr. 533 , 613 P.2d 812 ]; Gorman v. Gorman (1979) 90 Cal.App.3d 454 , 460-462 [ 153 Cal.Rptr. 479 ].) Moreover, McCarty effectively overrules consistent and well-settled California precedent holding a military pension constitutes community property, the divisibility of which on dissolution is not preempted by federal statute. (See, e.g., French v. French (1941) 17 Cal.2d 775 , 778 [ 112 P.2d 235 ,
4 Huson involved the retroactivity of the court’s decision in Rodrigue v. Aetna Casualty Co. (1969) 395 U.S. 352 [ 23 L.Ed.2d 360 , 89 S.Ct. 1835 ], holding that a state’s applicable statute of limitations, rather than the admiralty doctrine of laches, governed an action for injuries sustained while plaintiff was working on an oil drilling rig operating on the Outer Continental Shelf of Louisiana’s Gulf Coast.
5 In Stovall v. Denno, supra, 388 U.S. 293 , 297 [ 18 L.Ed.2d 1199 , 1203], the court set out a similar test for application to retroactivity questions involving constitutional rules of criminal procedure: “The criteria guiding resolution of the question implicates (a) the purpose to be served by the new standards, (b) the extent of the reliance by law enforcement authorities on the old standards, and (c) the effect on the administration of justice of a retroactive application of the new standards.” The similarity of this test to the factors enunciated by the court in Huson strongly suggests that retroactivity questions in all areas involve like considerations.
Similarly, our review of the rationale underlying the McCarty decision does not convince us that retroactive application is mandated. The majority opinion notes two primary purposes of the military pension plans which community property division threatened to undermine. First, Congress has sought “to provide for the retired service member, and to meet the personnel management needs of the active military forces.” (453 U.S. at pp. 232-233 [69 L.Ed.2d at p. 606, 101 S.Ct. at p. 2741].) In discussing this objective of providing for the retired service member,[6] the majority emphasizes that “the community property division of retired pay may disrupt the carefully balanced scheme Congress has devised to encourage a service member to set aside a portion of his
6 Without discussion, the court also summarily remarked, “[s]tate courts are not free to reduce the amounts that Congress has determined are necessary for the retired member.” (453 U.S. at p. 233 [69 L.Ed.2d at p. 606, 101 S.Ct. at p. 2741].) It is difficult to accept and apply the proposition that the amount of a retiree’s pension is in ariy sense based on a congressional determination of his “need.” Pension amounts are calculated on a percentage of active duty pay, which is in turn dependent on the service member’s rank and grade. These amounts have little or no relationship to need, being compensation for past services rendered. In all probability, Congress intended both active duty pay and military pensions as compensation entitlements. (Cf. Estate of Worley (1948) 87 Cal.App.2d 760 , 764-765 [ 197 P.2d 773 ].)
While review of the first two factors identified in Huson’s discussion of retroactivity does not indicate McCarty should be accorded retroactive effect, examination of the third factor—the potential for injustice and hardship—convinces us the court’s decision should not be applied to judgments which were final before McCarty was filed. In perhaps no other area of law is the need for stability and finality greater than mar
7 Even a purely prospective reading of McCarty will apply to all service members not yet divorced. Those members already divorced who have already retired are ineligible to elect to fund an annuity (see 10 U.S.C. §§ 1431 (b) and 1448(a)); thus, any congressionally ordained incentive will have no effect as to them.
Application of McCarty to Cases Not Final on Appeal
Having concluded McCarty is not fully retroactive, we must now concern ourselves with Robert’s contention that the principle of limited retroactivity should be invoked to apply the McCarty holding to
8 As we noted previously (fn. 4, ante), the United States Supreme Court has indicated that recognition of this burden is an appropriate consideration in determining the degree of retrospectivity to be accorded a court decision.
We have no quarrel with applying McCarty to cases not final on appeal where the federal preemption issue was argued by the service member-spouse in the trial court and where the issue was raised on appeal.[9] That is not the case here. As we noted previously (fn. 1, ante), Robert stipulated to the community nature of the pension rights in the trial court and expressly reaffirmed that stipulation on appeal, some five months after the United States Supreme Court announced a hearing in McCarty. (See fn. 2, ante.)
We begin our analysis with the well-settled proposition that an appellate court may consider as waived any issues not raised in the appellant’s opening brief. (E.g., Title G. & T. Co. v. Fraternal Finance Co. (1934) 220 Cal. 362 , 363 [ 30 P.2d 515 ]; People ex rel. D. of P. Wks. v. McCullough (1950) 100 Cal.App.2d 101 , 106 [ 223 P.2d 37 ]; Universal Ins. Co. v. Manhattan M. Line (1947) 82 Cal.App.2d 425 , 428 [ 186 P.2d 437 ].) An equally important corollary to this rule states that a petition for rehearing is an inappropriate occasion to raise arguments not pursued in the original appeal. (E.g., People ex rel. Dept. of Public Works v. Mascotti (1962) 206 Cal.App.2d 772 , 779-780 [ 23
9 We thus anticipate that the service member-spouse in Milhan v. Milhan (1981) 453 U.S. 918 [ 69 L.Ed.2d 1000 , 101 S.Ct. 3152 ], in which the United States Supreme Court granted certiorari and remanded to the California Supreme Court for reconsideration in light of McCarty, will be accorded the benefits of the new rule since the federal preemption issue was raised on appeal. (See In re Marriage of Milhan (Milhan II), supra, 27 Cal.3d 765 .)
The issue thus presented is not one which has frequently appeared in reported California decisions. Consideration of arguments not timely raised has generally been thought to lie within the discretion of the appellate court. Such discretion appears to have been exercised in Rayner v. Ramirez (1958) 159 Cal.App.2d 372 [ 324 P.2d 83 ], when an issue raised by letter after the filing of briefs was based on a just-filed Supreme Court case which overruled well-settled precedent. The Rayner court concluded, “Under the circumstances there appears to be good reason for the failure of plaintiffs to raise the point in their opening brief.” {Id., at p. 375.)
On the facts of the instant case, we are unable to reach a similar conclusion. Our view is based on several separate considerations.
First, the Supreme Court’s decision to hear McCarty preceded the filing of Robert’s opening brief by five months. (See 449 U.S. 917 [ 66 L.Ed.2d 145 , 101 S.Ct. 314 ].) His brief, however, expressly reaffirmed his previous stipulation to the community nature of his pension rights. Since the original stipulation was entered into before the hearing was announced it may be that such action was excusable. After the October 20 announcement, however, Robert should have argued on appeal or in a separate motion to the trial court that continued enforcement of the stipulation would be unjust in light of the United States Supreme Court’s action. Having failed to pursue either of these alternatives, it is not unfair that Robert continue to be bound by his original agreement.
Second, the unique nature of the marital institution and the community property concept suggests that the finding of a community interest in the pension rights not be disturbed at this point in the litigation.[10] As
10 Community property is a concept of considerable fluidity and flexibility, recognizing the unique nature of each marital combination. It thus differs considerably from other legal characterizations of property interests. Separate property of the spouses is readily convertible to community property and vice versa. (See 7 Witkin, Summary of Cal. Law (8th ed. 1974) Community Property, § 71, p. 5159.) No particular formali *383 ties are required for such a conversion, which may be accomplished by simple oral agreement. (Beam v. Bank of America (1971) 6 Cal.3d 12 , 25 [ 98 Cal.Rptr. 137 , 490 P.2d 257 ]; Haseltine v. Haseltine (1962) 203 Cal.App.2d 48 , 58 [ 21 Cal.Rptr. 238 ].) No consideration independent of the consent of the parties is needed. (Civ. Code, § 4802; Estate of Wilson (1976) 64 Cal.App.3d 786 , 798 [ 134 Cal.Rptr. 749 ].) The same factors which argue in favor of a flexible community property concept also make it difficult to evaluate Robert’s failure to contest the community nature of his military pension rights. Litigants often stipulate to conclusions or fail to pursue technically meritorious legal arguments due to personal values and attitudes toward equity or responsibility. This is particularly true in dissolution proceedings where the parties may have many reasons to attempt to limit the animosity engendered by the litigation process. We thus may only evaluate the validity of a stipulation or decision not to contest based on what the party should have known regarding the state of the law.
Finally, we note that additional support for our conclusion is provided by the recent decision of the Second District Court of Appeal in In re Marriage of Mahone (1981) 123 Cal.App.3d 17 [ 176 Cal.Rptr. 274 ].[11] On facts virtually identical to those of the instant case, the Mahone court indicated, “The stipulation was in accordance with the law as it then stood, and husband is not entitled to relief from the stipulation
11 We note that a petition for hearing, filed October 5, 1981, is pending before the California Supreme Court. Nevertheless, Mahone and the instant case will hopefully provide some consistent guidance for the family law bar of the state.
Accordingly, we conclude that the holding in McCarty is inapplicable to cases where a service member-spouse stipulates to the community nature of his or her pension rights at trial and does not timely contest such characterization on appeal.
Alleged Abuse of Discretion by the Trial Court
Robert’s additional contentions do not require extensive discussion. He first claims the court abused its discretion in awarding all of his retirement benefits to him and the entire community interest in the family residence to his wife instead of equally dividing those assets in kind.
At trial, William F. Marples, a consulting actuary, testified the community interest in Robert’s naval pension was $116,996. In reaching his conclusion he used an interest rate of 6 percent and an increase in cost of living of 5 percent. Robert says the use of these factors amounts to speculation and accordingly the valuation reached was wrong. Admittedly, all actuarial determinations involve some uncertainty. Nevertheless, a trial court has the ability to determine the credibility of an expert’s opinion including the reasonableness of underlying factors used in forming that opinion. The court’s acceptance of Marple’s testimony was within its discretion. (See In re Marriage of Skaden (1977) 19 Cal.3d 679 , 688-689 [ 139 Cal.Rptr. 615 , 566 P.2d 249 ].)
As noted previously, the court awarded Robert all the benefits due under his naval pension ($116,996), and awarded Laura the entire interest in the family residence ($65,750 net). A court is not required to divide community property equally in kind. {In re Marriage of Connolly (1979) 23 Cal.3d 590 , 603 [ 153 Cal.Rptr. 423 , 591 P.2d 911 ].) “[T]he asset distribution method of dividing community property is a permissible means of complying with the mandate of [Civil Code] section 4800. [Citations.]” (In re Marriage of Fink (1979) 25 Cal.3d 877 , 886 [ 160 Cal.Rptr. 516 , 603 P.2d 881 ].) In light of the circumstances of the parties and the effect of uprooting children, ages 12 and 8, the court was well within its discretion in awarding her the house, particularly here, where Laura was willing to pay a premium for that division.
Disposition
Judgment affirmed.
Brown (Gerald), P. J., and Work, J., concurred.
On November 4, 1981, the opinion was modified to read as printed above. Appellant’s petition for a hearing by the Supreme Court was denied December 2, 1981.
Cases cited
- McCarty v. McCarty 453 U.S. 210 p. 375, p. 376
- England v. Louisiana State Board of Medical Examiners 375 U.S. 411 at 422 p. 376
- Linkletter v. Walker 381 U.S. 618 p. 376
- Stovall v. Denno 388 U.S. 293 at 296-301 p. 376
- Chevron Oil Co. v. Huson 404 U.S. 97 p. 376
- Hisquierdo v. Hisquierdo 439 U.S. 572 p. 377
- Milhan v. Milhan 27 Cal.3d 765 at 772-777 p. 377
- Gorman v. Gorman 90 Cal.App.3d 454 at 460-462 p. 377
- French v. French 17 Cal.2d 775 at 778 p. 377
- Brown v. Brown 15 Cal.3d 838 at 851 p. 378, p. 380
- Fithian v. Fithian 10 Cal.3d 592 p. 378
- Milhan v. Milhan 13 Cal.3d 129 at 131 p. 378
- Stenquist v. Stenquist 21 Cal.3d 779 at 782 p. 378
- Rohr Aircraft Corp. v. County of San Diego 51 Cal.2d 759 at 764-765 p. 378
- Rohr Aircraft Corp. v. County of San Diego 362 U.S. 628 p. 378
- People v. Estrada 234 Cal.App.2d 136 at 145 p. 378
- Marvin v. Marvin 18 Cal.3d 660 p. 380
- Kuppinger v. Kuppinger 48 Cal.App.3d 628 at 633 p. 380
- Verner v. Verner 77 Cal.App.3d 718 at 727 p. 380
- Cobb v. Cobb 68 Cal.App.3d 855 at 860-861 p. 380
- Tittle Guarantee & Tr. Co. v. Fraternal Fin. Co. 220 Cal. 362 at 363 p. 381
- People ex rel. Department of Public Works v. McCullough 100 Cal.App.2d 101 at 106 p. 381
- Universal Insurance v. Manhattan Motor Line, Inc. 82 Cal.App.2d 425 at 428 p. 381
- People ex rel. Department of Public Works v. Mascotti 206 Cal.App.2d 772 at 779-780 p. 381
- Sanders v. Howard Park Co. 86 Cal.App.2d 721 at 723 p. 382
- Merchants' Ice & Cold Storage Co. v. Globe Brewing Co. 73 Cal.App.2d 828 at 838 p. 382
- Rayner v. Ramirez 159 Cal.App.2d 372 p. 382
- Middlesex County Sewerage Authority v. National Sea Clammers Ass'n 449 U.S. 917 p. 382
- Harrold v. Harrold 43 Cal.2d 77 p. 383
- Steinberg v. Steinberg 66 Cal.App.3d 815 at 820-821 p. 383
- Mahone v. Mahone 123 Cal.App.3d 17 p. 383
- Skaden v. Skaden 19 Cal.3d 679 at 688-689 p. 384
- Connolly v. Connolly 23 Cal.3d 590 at 603 p. 384
- Fink v. Fink 25 Cal.3d 877 at 886 p. 384
- Morrison v. Morrison 20 Cal.3d 437 p. 385