In Re Marriage of White

Citations: 192 Cal. App. 3d 1022; 237 Cal. Rptr. 764; 1987 Cal. App. LEXIS 1833Docket: B017912

Court: California Court of Appeal; June 17, 1987; California; State Appellate Court

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Appellant Bernice White challenges a trial court order that reduced her spousal support from Dewitt White. The Court of Appeals of California reversed the order due to the trial court's failure to consider Dewitt's pension income in the modification process. The couple married in 1954, with Dewitt working for the City of Los Angeles for 17 years while accruing pension benefits, and Bernice operating a beauty shop. They separated in 1977, and during dissolution proceedings, the court ordered a sale of the family home and stipulated that Bernice would receive a monthly spousal support of $287.50.

After Dewitt retired on disability in 1983 and began receiving a pension of $1,540 monthly, he stopped paying spousal support in 1985. Bernice sought a writ for payment of arrears, leading Dewitt to request termination of spousal support, arguing that Bernice had waived rights to his retirement benefits in their property settlement. Bernice, relying on Social Security as her only income, requested an increase in spousal support. At a hearing, both parties acknowledged Dewitt’s net income had increased, yet the court still reduced Bernice's support to $150 and ordered Dewitt to contribute $250 toward her attorney's fees. The appellate court found that the trial court's oversight of Dewitt's pension income warranted a reversal and remand for reconsideration.

Bernice argues that the trial court improperly disregarded Dewitt's pension benefits when evaluating his capacity to pay spousal support. She asserts that the evidence presented indicated a need for an increase in support rather than a decrease. The discussion clarifies that separate property pension benefits can be relevant for spousal support determinations, distinguishing between property division and support obligations. Both parties acknowledge that Dewitt's pension is his separate property, meaning Bernice does not claim co-ownership but argues that these monthly payments should be considered his income for support calculations.

Spousal support is granted under the Family Law Act, allowing the court broad discretion to order payments based on various factors, including each spouse's earning capacity, needs, obligations, and the length of the marriage. Unlike property rights, which are finalized at divorce, spousal support can be modified later, especially after long marriages. Dewitt’s claim that the property division agreement excludes the pension from consideration for support is labeled a 'double-counting' fallacy. The excerpt explains that 'double counting' occurs when pension benefits are divided in kind, making both spouses part-owners. However, if the pension is awarded solely to one spouse, it is appropriate to consider those benefits as income for alimony purposes, and the potential for 'double dipping' does not apply in this context.

Implicit rejection of Dewitt's 'double-counting' theory is found in existing case law, particularly highlighted in In re Marriage of Epstein (1979). The Supreme Court rejected an argument similar to Dewitt's regarding spousal support conflicting with the equal division of community property, affirming that former community property can be utilized for spousal support. The Court of Appeal noted that permanent spousal support typically derives from the paying spouse's separate property, which may include earnings or property once classified as community property.

In Verner v. Verner (1978), the appellate court upheld that a trial court's judgment indicating that a community property retirement fund would contribute to spousal support did not imply that support payments liquidated the fund. Similarly, In re Marriage of Olivarez (1986) allowed spousal support from a spouse's share of a pension, confirming the dual allocation of pensions as valid for both community property and support calculations.

Consequently, it is concluded that income from Dewitt's separate property pension should be factored into assessing his ability to pay spousal support. Not accounting for this income amounts to an abuse of discretion by the trial court.

Regarding modification of the support award, a change in circumstances allows for such modifications, considering alterations in the parties' financial situations. Although Bernice's financial needs remained unchanged, Dewitt's net income increased from $1,700 to $2,348, which includes $1,540 from the pension. Thus, the court's decision to reduce Bernice's support was erroneous, as an increase in the paying spouse's ability to contribute warrants reevaluation of the support amount.

Dewitt's reliance on the cases of Sammut and In re Marriage of Rabkin to support his 'double dipping' theory is found to be misplaced. Both cases involved a supported spouse receiving payments from the liquidation of community property, which were treated as capital assets and not considered in the calculation of the supported spouse's need. In Sammut, the supported spouse received $400 monthly from a buyout of community property stock, while in Rabkin, the income derived from $1,800 mortgage payments from the sale of the family residence, a major asset awarded to the wife. In both instances, the supporting spouses had sufficient income to provide support independent of the community property payments. Furthermore, in Rabkin, there was an explicit agreement that the sale of the residence would not justify a modification of spousal support. 

The current case differs as there is no such agreement and the supporting spouse lacks sufficient income to pay support without considering the community property. Thus, the cited cases do not apply. Additionally, the court emphasizes that Dewitt's pension income must be included in the support calculation. Unlike fixed community property payments, a pension's actual value is uncertain until payments cease, presenting a unique risk for Dewitt when he opted to retain the pension instead of dividing it. As a result, excluding the pension from income considerations would unfairly alter the parties' agreement. The trial court's reduction of Bernice's spousal support award was deemed improper, leading to a reversal of that order, and the matter is remanded for further proceedings consistent with these findings, with Bernice entitled to costs on appeal.

Jurisdiction over pension property is retained for administrative purposes only after establishing distribution percentages for payments and, if needed, creating a formula that considers post-separation contributions. The court referenced a prior case, In re Marriage of Bergman, noting its reliability for facts stated, while also emphasizing the prohibition against citing vacated opinions as legal precedent. Additionally, it highlighted that a husband's pension can be considered a resource when determining alimony. Despite a stipulation focusing solely on Dewitt's income, a comparison of his financial declarations shows minimal expense changes post-remarriage and acquisition of assets, excluding the spousal support obligation. The court also remarked that an inheritance in another case was treated similarly to Dewitt's pension, indicating no exemption from support considerations.