

                                                           COURT OF
APPEALS
                                                   EIGHTH DISTRICT OF
TEXAS
                                                              EL
PASO, TEXAS
 



 
 
STANLEY FREEMAN, SR.,
 
                                   
  Appellant,
 
v.
 
SUMIKO A. FREEMAN,
 
                                    Appellee.
  
 


 
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                  No. 08-10-00202-CV
 
                         Appeal from
 
 285th District Court
 
of Bexar County,
  Texas
 
(TC # 98-CI-13915)




 
 


 
 


 
 



                                                                  O
P I N I O N
 
            Stanley Freeman appeals from a
Domestic Relations Order (DRO) entered in clarification of a prior divorce
decree.  For the reasons that follow, we
reverse.
FACTUAL SUMMARY
Stanley Freeman entered active duty military service on July 24, 1979 and
married Sumiko Freeman on February 8, 1980. 
A divorce was rendered on September 14, 2000, although the decree was
not signed until October 21, 2002.  The decree
divided the parties' community property including Stanley’s military retirement
benefits.  At the time of divorce,
Stanley was a Senior Master Sergeant (E-8) and had served 247 months in the
United States Air Force during marriage. 
After the divorce, Stanley continued on active duty and retired on
August 1, 2007, with a total of 28 years of service (336 months).  His total monthly retired pay is $3293.
When Stanley retired, he was notified by DFAS, the Department of
Financial and Accounting Services, that it would pay Sumiko 44% of his fully
accumulated disposable retired pay.  It
refused to calculate a proper percentage which would take into account
Stanley’s service post-divorce.  Stanley
blocked payment and Sumiko filed a motion to clarify and enforce the division
of those benefits.  On March 29, 2010,
the trial court signed a DRO.  Stanley
now complains on appeal that the DRO improperly modified the decree of divorce.  
LANGUAGE OF THE ORDERS
The Divorce Decree
            The decree divided the military
retirement benefits and awarded Sumiko the following benefits:
All right, title
and interest in and to 44% percent [sic] of the United States Air Force disposable
retired pay to be paid as a result of STANLEY FREEMAN SR.’S service in the
United States Air Force, at the grade and time in service that exists as to the
date of the divorce and 44% percent [sic] of all increases in the United States
Air Force disposable retired pay due to cost of all increases in the United
States Air Force disposable retired pay due to cost of living or other reasons,
if, as, and when received. 
 
The decree
also ordered Stanley to designate Sumiko as the former spouse beneficiary of
his Survivor Benefit Plan (SBP).  
The cost of the
Survivor Benefit Plan is to be paid by SUMIKO FREEMAN.  SUMIKO FREEMAN is ORDERED TO set up an
allotment from her portion of the military retirement to be paid to STANLEY
FREEMAN on the 1st day of the 1st month that STANLEY FREEMAN notifies her that
he has retired.  
 
Although Stanley did not notify Sumiko of his retirement, DFAS did.  At the time of trial, Stanley had not yet
applied for the survivor benefits for Sumiko.
We pause here to mention the controversy over the 44% award.  Sumiko argues in her brief that the community
estate owned 88% of the benefits at the time of divorce, thus explaining that
her half interest was calculated to be 44%. 
In support of this argument, she mentions that Stanley served in the
military before marriage and that the decree of divorce was not signed until
two years after rendition.  Calculating
Stanley’s 199 days [nearly seven months] of service before marriage, and 25
months of service between rendition and entry of the decree, the parties were
married 247 months during Stanley’s 279 months of service.  Dividing 247 by 279 does result in an 88.53%
ownership.  Yet the associate judge
entered his findings differently.  In
notes from September 8, 2000, he states:
            7.  Van to
Pet[itioner] and truck to Resp[ondent] with respective debt.
 
The very next entries read:
 
8.  On 9/14/00 -- Court renders on remaining
property; find property division made based on evidence presented and on award
to Pet[itioner] of paid van and debt assigned to Resp[ondent].
 
9.  Pet[itioner] awarded 44% of Resp[ondent]’s
military ret[ired] pay at rank and pay on date [of] divorce.
 
These
findings form the basis for the division of the retirement benefits.  And of course Sumiko’s argument begs the question
how the associate judge would know that the decree would not be signed until
two years later.  The decree itself
reflects Sumiko received a vehicle without any corresponding debt.  
The Domestic Relations Order
 
IT IS THEREFORE
ORDERED that Former Spouse have judgment against and recover from Service
Member 50 percent multiplied by 247/336 or 36.75% multiplied by Service
Member’s monthly disposable retired pay. 

 
.          .          .
 
IT IS FURTHER
ORDERED that the foregoing calculated percentage awarded Former Spouse shall
further be reduced, as necessary, to provide for Former Spouse’s payment of all
of the monthly Survivor Benefit Plan premium cost.  This percentage is calculated at a reduction
of 6.5% leaving the former spouse with a percentage of retired disposable pay
of 30.26%.
 
 
CALCULATION OF COMMUNITY INTEREST
 
            Generally speaking, military
retirement benefits earned during marriage are community property.  Courts have grappled throughout the years over
the proper formula for apportioning the
extent of the community property interest when the service member joined the
military prior to marriage.  Courts have
also struggled with valuing the
community property interest when the service member is still on active duty at
the time of divorce.  
Apportionment of Community Interest
The Cearley/Taggart formula was
created to address the apportionment issue. 
See Cearley v. Cearley, 544
S.W.2d 661 (Tex. 1976)(holding that military retirement benefits were community
property even though the benefits at the time of the divorce “had not matured
and were not at that time subject to possession and enjoyment”); Taggart v. Taggart, 552 S.W.2d 422, 424
(Tex. 1977)(holding that where the parties were married for 246 months of
Husband’s 360 months of service, the correct computation of Wife’s vested
interest was one-half of 246/360th’s of the retirement pay).  The Taggart
formula thus involves a fraction, the numerator of which is the number of
months the military member served during marriage and the denominator of which
is the total number of months the member has served in the military at the time
of retirement.  The record before us is
abundantly clear that applying this fraction to Stanley’s service record
reveals a numerator of 247 months of service during marriage and a denominator
of 336 months’ accumulated service, nearly identical to the facts in Taggart. 
For many years, case law has stated the formula as follows:     
50% X months of
service during marriage X service member’s retirement benefit
                                 total months
of service
 
The fifty percent figure, of course,
envisions that the trial court intends to divide the community interest equally
between the parties.  But, as here, the
division may be disproportionate based on the circumstances presented.  Sumiko received an unencumbered van and 44%
of the military retirement benefits.  In
other circumstances, the military member may be awarded all of the retirement
benefits with the non-service member receiving a larger share of another asset,
such as equity in the homestead.  
The Taggart formula did not address the valuation of the community interest, nor did it recognize that
post-divorce military service belonged to the member spouse’s separate
estate.  That changed six years later.
Valuation of Community Interest
Since the Supreme Court’s decision in Berry
v. Berry, Texas law has clearly mandated that the community interest be valued
as of the date of divorce:
Taggart only held that the divorced
wife ‘owned as her part of the community estate a share in the contingent right
to military benefits even though that right had not matured at the time of the
divorce.’  Id. at 423.  It is true that this Court did apply a formula
based on the number of months in which marriage coincided with employment,
divided by the number of months Taggart was in the Navy. We did not, however,
determine whether the community's interest in retirement benefits should be
valued as of the date of divorce, as opposed to the time the benefits were
actually received.  Thus, the courts of
appeals' reliance on Taggart was misplaced.
 
Berry
v. Berry, 647 S.W.2d 945, 946 (Tex. 1983).  This is a simple matter when the military
member has already retired and is in pay status.  Where the military member continues on active
duty, however, there must be some methodology for recognizing post-marital
service which belongs to the member’s separate estate.  Most divorce decrees provide, as did the
Freemans’, that the percentage awarded to the former spouse will be multiplied
by the benefit earned at the grade and time in service that exists as of the
date of divorce, plus an equal percentage of cost of living increases, if, as,
and when received.  Thus, the plain
reading of the divorce decree indicates that Sumiko received the following
share of the community interest:
44% X months of
service during marriage X benefit of Senior Master Sergeant (E-8)
                        
       total months of service
 
Stanley is
currently entitled to disposable retired pay of $3293 which is predicated on a
service member classified E-8 with 28 years of service.  
IMPACT OF DRO
            The parties do not disagree on the
amount of disposable retired pay in the amount of $3293.[1]
 Nor do they disagree on the proper
fraction of 247/336 [247 divided by 336 equals .7352].  From this, we can calculate that the full
community interest is 73.52% of the retired pay or $2421. [.7352 X $3293 =
$2421.01].  At issue is the percentage of
the community portion which Sumiko is entitled to receive.  At 44%, as stated in the decree, Sumiko should
receive $1065.24 per month.  But based on
the methodology expressed in the DRO, Sumiko will receive 50% of the community
interest or monthly benefits of $1210.50: 

DFAS Calculation
.44 X $3293 =
$1448.92
 
 
Decree Calculation
 
.44 X (247
X $3293)  =  $1065.24
                                                             336
DRO Calculation
.50 X (247
X $3293)  =  $1210.50
                                                              336
The
parenthetical calculates the community portion of the retirement benefit, which
is then multiplied by the percentage awarded. 
The DRO increases Sumiko’s monthly benefit by $125.26.
CLARIFICATION OR MODIFICATION?
            In two issues for review, Stanley
complains that the DRO impermissibly awards Sumiko 6% more of his disposable
retired pay than did the divorce decree such that the order is not merely an
order of clarification but a modification which is clearly prohibited by the
Family Code.  We agree.  A trial court may enter orders in aid or
clarification of the prior order to precisely specify the manner of carrying
out the property division previously ordered so long as the substantive
division of the property is not altered. 
Tex.Fam.Code
Ann. § 9.007 (West 2006).
We recognize that this case was transferred to this court from the Fourth
Court of Appeals in San Antonio pursuant to the Supreme Court’s docket
equalization program.  Tex.Gov’t Code Ann.
§ 73.001 (West 2005).  We must decide the
case in accordance with the precedent of the transferor court.  Tex.R.App.P. 41.3.  Sumiko directs us to Contreras v. Contreras, 974 S.W.2d 155 (Tex.App.--San Antonio 1998,
no pet.).  There the trial court awarded Irma
Contreras 50% of Eduardo’s military retirement benefits using a Taggart formula specifying the numerator
as 133 months of service during marriage and the denominator as the total
number of years Eduardo served in the Army:
Eduardo’s                   X         total no. of years during          X         50%
    =          Irma’s
Share
Monthly                                  marriage
in military                                                     of
Eduardo’s
Retirement Pay                       total
no. of years in                                                     Military

                                                military
service at                                                        Retirement
                                                retirement                                                                    Benefits
 
When Eduardo retired, Irma sought to enforce and clarify the decree.  The trial court entered an order awarding Irma
a “sum equal to 34.1% of the disposable retired pay of an E-7 with 16 years, 3
months of creditable service pay.”  Id.  As
the appellate court explained, the 34.1% could only have resulted from the
trial court using a Taggart formula
of 133 months of service during marriage divided by the number of months in the
military at the time of divorce.  Id.  As a result, the court held, the
clarification order “impermissibly changed
the formula for apportioning Eduardo’s retirement benefits, rather than
clarifying the decree.”  Id. at 158 [Emphasis in original].  This was error.  The court also found that the trial court had
improperly computed the credit for time served in the reserves and reversed and
remanded.
From this scenario, Sumiko argues that the trial court below used the Contreras calculations.  This is only partially true.  The trial court used the correct Taggart formula.  It used the wrong percentage award.  As we have noted, case law and formbooks are
replete with expressing the community interest in terms of an equal
division.  Irma Contreras was awarded 50%
of the retirement benefits in the divorce decree.  Sumiko Freeman was not.  She was awarded 44%.  The trial court’s order thus constitutes
reversible error because it modified the decree.  We sustain Issues One and Two.  We reverse and remand the Domestic Relations
Order for calculations consistent with this opinion.
 
 
April 4, 2012                                                   __________________________________________
ANN CRAWFORD
McCLURE, Chief Justice
 
Before McClure, C.J., Rivera, and Antcliff, JJ.
 




[1]  Because the parties do not dispute the cost
of the SBP premium and because Sumiko will have to pay the premium under either
the divorce decree or the DRO, we need not address the alternative language in
the DRO which calls for a reduction in the percentage award if DFAS deems it
necessary.


