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In re Marriage of Smith

California Court of Appeals, Fifth District
Mar 19, 2010
No. F058012 (Cal. Ct. App. Mar. 19, 2010)

Opinion

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Tuolumne County Super. Ct. No. FL2313. James A. Boscoe, Judge.

Steven G. Mikelich, for Appellant.

Hal B. Channell, for Respondent.


OPINION

Ardaiz, P.J.

Cecelia Smith (Cecilia) appeals from a decision of the superior court to use a certain apportionment rule to determine the community share of her former husband’s, Warren Smith’s, pension. For the following reasons, we affirm.

We use the parties’ first name to avoid confusion and intend no disrespect.

FACTUAL AND PROCEDURAL BACKGROUND

On June 3, 2002, in Tuolumne County Superior Court, Cecilia filed a petition for legal separation from Warren. On January 20, 2004, Cecilia amended her petition to dissolution of the marriage. Warren filed his response on February 3, 2004.

A stipulated Judgment was entered into between the two parties on May 13, 2005. In the judgment, the parties agreed that each party was awarded one-half of the community share of the husband’s pension. On retirement, Warren had taken a cash lump sum settlement of the pension, which totaled $530,326.

Warren received the pension from his employer, Chevron Corporation (Chevron). Warren had worked for Chevron for 28 years and five months, from March 1971 until August 1999. He was married to Cecilia from July 1993 and legally separated in June 2002, a period of 9 years and 1 month. However, the length of time during the marriage that Warren worked for Chevron was only 73 months.

The parties disputed what method was needed to calculate the community share of the pension. Cecilia sought $90,000 of the pension. Warren asked the superior court to use the “time rule.” Under the time rule, the community is allocated a fraction of retirement benefits, with the numerator representing the length of service during the marriage but before separation, and the denominator representing the employee’s total length of service. (See In re Marriage of Henkle (1987) 189 Cal.App.3d 97, 99, fn. 3.) In this case, Warren asserts that the community share of Warren’s pension would be 73 months/677 months, which would result in Cecilia receiving one-half that amount or approximately $27,789.

Cecilia wanted the Chevron pension to be apportioned under a different rule. She asserted that the apportionment of the pension should be based upon contributions and not years of service. One apportionment method that she suggested was to deduct the amount of retirement benefits as of the date of marriage, July 10, 1993 (which was approximately $143,999) from the final pension amount ($530,326). The community property would then be approximately $386,333. Under the calculation, Cecilia would be entitled to approximately $193,167.

On March 16, 2009, the superior court issued its decision dividing the Chevron pension using the time rule. The superior court calculated that Warren worked for Chevron for 341 months (instead of the 677 months that Warren had initially calculated). Using the time rule, Cecilia would receive approximately $56,798 plus accrued interest. Cecilia timely filed a notice of appeal.

DISCUSSION

A. Standard of Review

As an initial matter, we must first determine the standard of review. According to Cecilia, because the facts in this case are undisputed, we should review the superior court’s decision de novo. Warren disagrees, arguing that the superior court’s decision to use the time rule is subject to deferential review under the abuse of discretion standard. We agree with Warren.

In In re Marriage of Lehman (1998) 18 Cal.4th 169, the California Supreme Court held that the superior court has “discretion in the choice of methods” (id. at p. 187) that it uses to “apportion an employee spouse’s retirement benefits between the community property interest of the employee spouse and the nonemployee spouse and any separate property interest of the employee spouse alone. [Citation.” (Ibid.) The Supreme Court held the review is for abuse of discretion and noted that the time rule is the most commonly employed. (Ibid.) According to the Supreme Court, “[t]he use of the time rule is not unreasonable when the ‘amount of the retirement benefits is substantially related to the number of years of service.’ [Citation.]” (Ibid.) “Moreover, the result of the time rule is not unreasonable when the ‘relative contributions of the community and separate estates’ are accounted for. [Citation.]” (Ibid.)

B. Time Rule

Cecilia contends that the superior court abused its discretion in using the time rule because the time rule does not take into account the relative contributions of the community and separate estates. As Cecilia notes in her opening brief, the time rule treats each year equal to every other year in Warren’s work cycle. However, the pension benefits accrued at a greater rate in the later years of Warren’s employment, when Warren was married to Cecilia. Cecilia thus contends that a different apportionment rule would correctly recognize that the accrual of benefits in the pension “had to do with the amount of money that was being placed in there by Chevron and by Warren through his increased income and wages, which is community property.”

We disagree that the superior court abused its discretion when it chose to use the time rule to apportion Warren’s pension. First, the time rule was substantially related to the number of years of service. Here, Warren’s pension was based upon the total years of his service with Chevron. The rejection of the time rule in In re Marriage of Poppe (1979) 97 Cal.App.3d 1 (Poppe) is not to the contrary. In Poppe, after citing the time rule with general approval, the appellate court noted that the pension in that case was based upon points earned instead of qualifying years. A pensioner could earn between 1 to 364 points each year. Although a pensioner must first have served a minimum number of qualifying years (where he earned at least 50 points), once that condition is met, all points earned, whether in a qualifying year or not, counted towards the amount of the pension. Thus, according to the Poppe court, the amount of the pension is not substantially related to years served but to points earned, and therefore, it was an abuse of discretion to use the time rule. (Id. at p. 9.) There is no evidence in the record that Warren’s pension was based upon a point system or some other system that was not substantially related to the years of service.

Moreover, the result of the time rule in this case accounted for the relative contributions of the community and separate estates. Cecilia contends that it does not because the community contributions (during those years that Warren worked when they were married) exceeded the separate contributions (during those years that Warren worked when he was not married to Cecilia). However, “the fact that the plan of payment is reflective of an employee’s subsequent salary increases cannot alter or diminish the stature of the community’s interest in those rights.” (In re Marriage of Judd (1977) 68 Cal.App.3d 515, 523 citing In re Marriage of Freiberg (1976) 57 Cal.App.3d 304, overruled in part on other grounds in In re Marriage of Gillmore (1981) 29 Cal.3d 418.) The appellate court noted that “an employee’s contributions in the early years of employment …, even though based on a smaller salary, may actually be worth more than contributions during the [later] years, due to the longer period of accumulated interest and investment income prior to the commencement of benefit payments.” (In re Marriage of Judd, supra, 68 Cal.App.3d at p. 523.) Finally, the court agreed with the argument that the first few years of service … must be given just as much weight in computing total service as the last few years.… (Ibid.)

Here, there is no evidence in the record that Warren’s work for Chevron changed substantially from before he married Cecilia to after he married Cecilia. There is no evidence that Warren was promoted to a different job with greater responsibility and greater pay. Rather, he appears to have done the same job for Chevron, but his pay increased as his seniority increased. Furthermore, the amount of community property was based upon the amount of the pension at the time that Warren retired and not on any increase in that amount after his retirement. On this record, we conclude that the time rule properly accounted for the relative contributions between the community estate and the separate estate.

Therefore, the superior court did not abuse its discretion when it chose to use the time rule to apportion the pension between the community and separate estates.

C. Sanctions

Finally, Warren requests this Court to sanction Cecilia for filing a meritless appeal. He asserts that Cecilia has filed a frivolous or dilatory appeal. In In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650, the California Supreme Court held that “an appeal should be held to be frivolous only when it is prosecuted for an improper motive -- to harass the respondent or delay the effect of an adverse judgment -- or when it indisputably has no merit -- when any reasonable attorney would agree that the appeal is totally and completely without merit. [Citation.] [¶] However, any definition must be read so as to avoid a serious chilling effect on the assertion of litigants’ rights on appeal. Counsel and their clients have a right to present issues that are arguably correct, even if it is extremely unlikely that they will win on appeal. An appeal that is simply without merit is not by definition frivolous and should not incur sanctions.”

Here, we can glean no evidence of improper motive from the pleadings and it is not indisputable that the appeal is without merit. This is Cecilia’s first appeal from the decision, and she appears to believe that the superior court erred by choosing to use the time rule instead of another apportionment rule. As discussed previously, the time rule, although the most commonly used apportionment rule, is not the only apportionment method that the superior court could have used. If the superior court’s decision to choose the time rule is not supported by the record, there would be an abuse of discretion. It is also plausible for a reasonable attorney to believe there is some merit to the argument that a community share of a pension plan should be greater if the employee’s contribution, in terms of dollar amount, to a pension plan is greater than when the employee was not married. We hesitate to impose sanctions in this case because it may discourage an appellant from ever contesting the use of an apportionment method which is arguably not supported by the evidence. Thus, we reject Warren’s request to sanction Cecilia or her attorney.

DISPOSITION

The judgment is affirmed. Costs to respondent.

WE CONCUR: Hill, J. Poochigian, J.


Summaries of

In re Marriage of Smith

California Court of Appeals, Fifth District
Mar 19, 2010
No. F058012 (Cal. Ct. App. Mar. 19, 2010)
Case details for

In re Marriage of Smith

Case Details

Full title:In re the Marriage of CECELIA and WARREN SMITH. CECELIA SMITH, Appellant…

Court:California Court of Appeals, Fifth District

Date published: Mar 19, 2010

Citations

No. F058012 (Cal. Ct. App. Mar. 19, 2010)