Thomas Morrow Bates v. Eloise Bradley Bates--Appeal from 52nd District Court of Coryell County

IN THE

TENTH COURT OF APPEALS

No. 10-00-381-CV

THOMAS MORROW BATES,

Appellant

v.

ELOISE BRADLEY BATES,

Appellee

From the 52nd District Court

Coryell County, Texas

Trial Court # 85-20501

O P I N I O N

In February 2000, Eloise Bradley Bates moved for Clarification and Enforcement of her 1985 divorce decree from Thomas Morrow Bates. The trial court granted her motion. Mr. Bates appeals from the trial court s August 2000 Clarifying Order and Judgment for Arrearage. He raises four issues on appeal: 1) the trial court erred in clarifying the divorce decree by making substantive changes in the division of retirement benefits; 2) the trial court erred in clarifying the divorce decree by changing the character of a separate property asset to a community property asset; 3) the trial court erred in applying 5 U.S.C. 8422, which was enacted after the date of the divorce decree; and 4) the trial court erred by entering a qualified domestic relations order.

Background Facts

Thomas Morrow Bates and Eloise Bradley Bates were married on August 31, 1960. During the course of the marriage, Mr. Bates served in the United States Armed Forces. In November of 1973, he received $15,000 in separation pay from the U.S. Armed Forces Reduction in Force Program (RIF). In 1976, he became a Civil Service employee through the Department of the Army, with employment lasting until and beyond the divorce. A final decree of divorce was entered on September 4, 1985. As part of the divorce decree, the court apportioned the retirement benefits earned during the marriage. The divorce decree states that Mrs. Bates s interest in the monthly retirement benefit will be one-half of such retirement as it relates to 13 years and 7 months of active military service and 8 years and 8 months of service to the United States Department of the Army. The decree added that Mr. Bates must act as constructive trustee for this asset, and directly pay the benefit to Mrs. Bates within three days of receipt.

Mr. Bates retired from civil service in January 1999. In November 1998, Mr. Bates paid $18,949.27 to the Federal government to purchase back his military service time as credit towards his civil service retirement. This payment allowed him to add the years of military service to his years of civil service in calculating retirement benefits. // Following his retirement, Mrs. Bates moved for clarification of the divorce decree. In an August 1999 Clarifying Order, the trial court awarded Mrs. Bates thirty-one percent (31%) of Mr. Bates s civil service retirement pay and benefits, to be paid monthly. // The court calculated Mrs. Bates s share using the following formula: ( ) x (months of military and civil service during marriage / total months of military and civil service upon which retirement is based). // Mr. Bates appeals the order.

Division of Property Under Clarifying Order

In his first point, Mr. Bates asserts that the trial court erred in clarifying the divorce decree by making substantive changes in the division of retirement benefits. Specifically, he argues that the Clarifying Order altered the divorce decree division of property in violation of sections 9.007(a) and (b) of the Texas Family Code. Mr. Bates also claims that the $15,000 separation pay he received in 1973 was in lieu of military service retirement, and that pay was already used as community property during the marriage. Therefore, Mr. Bates argues his apportionment under the divorce decree should include only the 8 years and 8 months of civil service during the marriage, instead of the 22 years and 3 months that includes his years of military service. He contends that the court s apportionment substantively changes the divorce decree.

The Family Code provides that [a]n order under this section that amends, modifies, alters, or changes the actual substantive division of property made or approved in a final decree of divorce or annulment is beyond the power of the divorce court and is unenforceable. Tex. Fam. Code 9.007(b) (Vernon 1997). The trial court s enforcement orders are limited to aid or clarification of the divorce decree and may only specify more precisely the manner of effecting it. See Beach v. Beach, 912 S.W.2d 345, 348 (Tex. App. Houston [14th Dist.] 1995, no writ). If the property division in the original divorce decree is ambiguous or not specific enough to be enforceable by contempt, the court may enter a clarifying order to enforce compliance with the original division of property. See Kimsey v. Kimsey, 965 S.W.2d 690, 694-95 (Tex. App. El Paso 1998, pet. denied); Harvey v. Harvey, 905 S.W.2d 760, 764 (Tex. App. Austin 1995, no writ).

If the court determines the language in a divorce decree is ambiguous, the interpretation is a fact issue to be determined by the fact-finder. See Chandler v. Chandler, 991 S.W.2d 367, 396 (Tex. App. El Paso 1993, pet. denied). Here, Mr. Bates did not request findings of fact or conclusions of law. In the absence of findings of fact, the judgment implies all necessary findings of fact to support it, provided that the implied findings are raised by the pleadings and supported by the evidence. See Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990). In considering whether the judgment and implied findings are supported by the evidence it is proper to consider only the evidence favorable to the judgment and disregard all contrary evidence. Id. Therefore, we will affirm the judgment if any evidence supports it. See Kline v. Kline, 17 S.W.3d 445, 446-47 (Tex. App. Houston [1st Dist.] 2001, pet. denied).

We disagree with Mr. Bates s assertion that the clarifying order substantively changed, modified, or altered the division in the divorce decree. We find that the trial court s order does not change the original property division set forth in the divorce decree. See Echols v. Echols, 900 S.W.2d 160, 163 (Tex. App. Beaumont 1995, pet. denied); Boaz v. Boaz, 708 S.W.2d 901, 903 (Tex. App. Houston [14th Dist.] 1986, pet. dism d). The record reflects that the original divorce decree states that Mrs. Bates s share will be one-half of such retirement as it relates to 13 years and 7 months of active military service and 8 years and 8 months of service to the United States Department of the Army. The trial court impliedly found an ambiguity and issued an order clarifying the decree to specify the exact percentage of the actual benefits being paid. //

We hold that the trial court could clarify the decree to provide that Mrs. Bates s proportional share of all retirement benefits set forth in the decree would be payable to her upon any distribution to Mr. Bates. See Echols, 900 S.W.2d at 163. Here, the order merely aided in enforcing the original division of property. Thus, we do not find that the trial court s actions amended, modified, altered, or changed the substantive division of property made in the decree. Id.

However, Mr. Bates further argues that his $15,000 separation pay in 1973 was early retirement benefits, therefore, the order changes the decree. This argument is without merit. We find nothing in the record to indicate that the $15,000 was early retirement pay. The payment was simply separation pay under the Reduction in Force (RIF) program. Thus, the court s clarifying order merely enforced the division of property set forth in the existing divorce decree.

We must also address another issue raised in point one of this appeal. Mr. Bates mentions within point one that the clarifying order makes no allowance for a date of divorce pay grade assessment. As we noted, absent a written agreement to the contrary, a spouse's interest in the employee spouse's retirement plan is generally valued as of the date of divorce, not the date of receipt. See Berry v. Berry, 647 S.W.2d 945, 946-47 (Tex.1983); Grier v. Grier, 731 S.W.2d 931, 932 (Tex. 1987). This is because increases in retirement benefits accruing as compensation for services rendered after divorce are the employee spouse's separate property, which cannot be divested and given to the non-employee spouse. Id.

Mr. Bates presents this court with no record evidence indicating that the clarifying order improperly valued his retirement plan on the date of his retirement. // Further, Mr. Bates never asserts in this appeal that his employment level on the date of his retirement was used in the clarifying order instead of the proper employment level at the date of divorce. Bare assertions of error, without citations to the record or to authority, waive any error. See Thedford v. Union Oil Co. of California, 3 S.W.3d 609, 615 (Tex. App. Dallas 1999, pet. denied). With a record devoid of any evidence to the contrary, we cannot conclude that the clarifying order made no allowance for the date of divorce pay grade assessment.

Accordingly, point one is overruled.Changing the Character of an Asset

In his second point, Mr. Bates contends that the trial court erred in clarifying the divorce decree by changing the character of a separate property asset into a community property asset. He argues that, although the years of military service counted towards his civil service retirement, no military retired pay existed at the time of divorce. Further, he contends that his separate funds purchased back the years of service, and the principle of tracing proves that the court altered his separate property purchase back into community property. We disagree. Again, because Mr. Bates did not request findings of fact or conclusions of law, we will affirm the judgment if any evidence supports it. See Kline, 17 S.W.3d at 446-47.

Despite Mr. Bates s assertion to the contrary, military retired pay is not the issue here. Instead, at issue is the civil service retirement pay, which includes years of service in the military during the marriage. The divorce decree recognized the potential for future retirement benefits when it specified, 13 years and 7 months of active military service. The courts have held that community interests, such as retirement benefits earned during the marriage, are contingent earnings of the community which may or may not bloom into full maturity until a future date. See Cearly v. Cearly, 544 S.W.2d 661, 665-66 (Tex. 1976); see also Reiss v. Reiss, 40 S.W.3d 605, 609 (Tex. App. Houston [1st Dist.] 2001, pet. denied). Such rights, prior to accrual and maturity, constitute a contingent interest in property and a community asset subject to consideration along with other property in the division of the estate of the parties. Id; see also Kline, 17 S.W.3d at 446 (unvested stock options are a community interest). Similar to our facts, the facts of Cearley show the husband was ineligible for any military retirement benefits on the date of the parties divorce because he had not yet completed 20 years service in the military. Nonetheless, the Supreme Court affirmed the trial court's judgment in Cearly, stating:

We approve this method of apportionment and award of contingent interests in military retirement benefits because of the uncertainties affecting the accrual and maturity of such benefits. This method will forego the difficulty of computing a present value and will fairly divide the risk that the pension may fail to mature...The administration of justice will best be served if contingent interests in retirement benefits are settled at the time of divorce, even though it may be necessary in many instances for the judgment to make the apportionment of the nonretiring spouse effective if, as, and when the benefits are received by the retiring spouse.

Cearly, 544 S.W.2d at 666.

The court s order found the language of the Bates divorce decree contemplated the uncertainty regarding whether or not these retirement benefits would vest in the future and the uncertainty of what event, if any, might trigger the vesting of the interest. Mr. Bates cannot escape the fact that a potential retirement benefit existed as a community interest earned during the marriage and was properly taken into account in the divorce decree. See Cearly, 544 S.W.2d at 666. Nor can he now characterize his military retirement as separate property. It is too late for Mr. Bates to collaterally attack the characterization of property under the divorce decree, despite his attempts here to argue principles of tracing under the clarifying order. // See Reiss, 40 S.W.3d at 614-15. Accordingly, we find the clarifying order merely specified a more precise method of effecting the divorce decree. See Beach, 912 S.W.2d at 348. It did not change the character of any retirement benefits from separate to community.

Mr. Bates next asserts that principles of tracing will lead us to conclude that because the purchase back of military retirement time was made with separate funds, we should find that the military retirement time is now separate property or did not exist until the purchase back. We disagree with Mr. Bates s contention. The principle of tracing applies to rebut the presumption that property acquired during marriage is community property. See Cockerham v. Cockerham, 527 S.W.2d 162, 167 (Tex.1975); Scott v. Scott, 805 S.W.2d 835, 837 (Tex. App. Waco 1991, writ denied). This community presumption may be rebutted by clear and convincing evidence tracing the property and its mutations back to a spouse's separate estate. Id.

Mr. Bates misapplies the principle of tracing to this case. The property at issue is the civil service retirement benefits resulting from years of military and civil service, not the actual purchase back which triggered the vesting of that benefit. Any benefit based on Mr. Bates s military service was presumptively a community asset earned during the marriage. Despite his assertion to the contrary, the separate property characterization of the funds enabling the purchase back does not affect the characterization of the benefits from the years of military service. The nature of Mrs. Bates s interest in the retirement benefits earned during the marriage has not changed simply because Mr. Bates purchased back the military service years with separate funds after the divorce. Mrs. Bates s interest in benefits from the 13 years and 7 months of military service and 8 years and 8 months of civil service exists under the divorce decree because the parties were married during the time the community earned the potential retirement interest.

It should also be noted that the trial court s clarifying order considered Mr. Bates s purchase back of his years of military service and adjusted the clarifying order. The order also required Mrs. Bates to pay for one-half of the purchase because she benefits from the community interest in the retirement asset. Mr. Bates paid $18,949.27 to the government to purchase his military service time toward his civil service retirement. The court ordered Mrs. Bates to contribute one-half, or $9,474.64, in the interest of justice.

Accordingly, point two is overruled.

Application of the Federal Statute

In point three, Mr. Bates asserts that the trial court erred in applying 5 U.S.C. 8422, which was enacted after the date of the divorce decree. However, the applicable statute allowing Mr. Bates to credit his years of military service towards his civil service retirement is 5 U.S.C. 8332, which was correctly applied here. Point three is overruled.

Qualified Domestic Relations Order

In point number four, Mr. Bates argues that the trial court erred by entering a qualified domestic relations order ( QDRO ). It is true that clarification is a remedy here, but it is in fact a prerequisite to enforcement rather than a method of enforcement. See Dechon v. Dechon, 909 S.W.2d 950, 961 (Tex. App. El Paso 1995, no writ). The Family Code specifically allows the court to render further orders to enforce the division of property made in the decree. Tex. Fam. Code 9.006(a) (Vernon 1997); see also McPherren v. McPherren, 967 S.W.2d 485, 490 (Tex. App. El Paso 1998, no pet.); Dechon, 909 S.W.2d at 961. Because Mrs. Bates s motion resulted in a clarifying order, we cannot find that the trial court erred by entering a QDRO as the method to enforce the order. Point four is overruled.

The judgment is affirmed.

REX D. DAVIS

Chief Justice

Before Chief Justice Davis,

Justice Vance, and

Justice Gray

Affirmed

Opinion delivered and filed February 13, 2002

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