Court Opinion

ID: 9548145
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:58:16.583103+00
Date Added: 2024-06-11T15:18:32.077102
License: Public Domain

JACOBSON, Judge,
specially concurring:
This specially concurring opinion deals solely with the result reached by the majority on the issue of the community property status of the husband’s disability benefits. On all other issues dealt with by the majority opinion, I concur wholeheartedly.
On the disability benefit issue, my concurrence is on a very narrow ground—the failure of the husband to prove the nature of his disability benefits. Because of this failure of proof, I must assume by virtue of the presumptive community nature of property acquired during the marriage that the trial court could have properly determined that this was a community asset. A.R.S. § 25-211; See Guerrero v. Guerrero, 18 Ariz.App. 400, 502 P.2d 1077 (1972); Musker v. Gil Haskins Auto Leasing, Inc., 18 Ariz.App. 104, 500 P.2d 635 (1972).
However, there are several types of “disability” payments which, in my opinion, may or may not be community assets subject to division upon termination of the marriage by divorce. The four most common types of “disability payments” are:
(1) The “disability retirement” benefits based upon longevity of service. An example of this type of benefit is the military service retirement benefit offered under 10 U.S.C. § 1201, which provides that if the recipient has 20 years or more of service and suffers a disability rendering him unfit to perform his duties, he may be “involuntarily” retired. (Normally, upon completion of 20 years of service, a serviceman may “voluntarily” retire. See, 10 U.S.C. §§ 1293, 3911, 6323, and 8911.)
(2) The “semi-retirement disability” benefit based in part on length of service and in part on type or percentage of disability. An example of this type of benefit is again the military service benefit offered under 10 U.S.C. § 1201, where the recipient has at least eight years of service plus 30% or more disability.
(3) The “pure disability” benefit based solely on disability. Under this type of benefit, regardless of length of service, where the .recipient suffers a disability causally related to his employment, the recipient is entitled to benefits. An example of this benefit is the armed forces service-connected disability payment or, on the civilian side, the payment of benefits under workmen’s compensation statutes.
(4) The “insurance disability benefit.” This type of benefit normally entails a contract of insurance maintained by periodic *581premium payments which pays the insured upon the contracted disability contingency occurring.
In determining whether these several types of disability benefits are community assets, subject to being divided upon the termination of the marriage, it is necessary to re-examine some basic principles of community property law. Spanish law, upon which our community property laws are based, made a distinction between property acquired by onerous title, that is, property acquired by the husband or wife during the marriage through their labors and industry or other valuable consideration; and property acquired by lucrative title, that is, property acquired by gift, succession, inheritance, or the like. Property acquired by onerous title is always community property.1 Property acquired by lucrative title is generally separate property. deFuniak & Vaughn, Principles of Community Property, § 62 at 127 (2d Ed. 1971); Azo and Manuel, Institutes of the Civil Law of Spain, Book I, Title VII, Cap. 5, § 1 (1 J. M. White, New Recopilación of the Laws of Spain and the Indies, and of the Colonial Charters and Local Ordinances of Great Britain, France and Spain, 1839).
It is therefore important in determining whether disability benefits are a community asset subject to division after dissolution of the marriage, to determine whether that asset was created by the labor and industry of the community member or with community valuable consideration or whether it was created from some other source. As was stated in Van Loan v. Van Loan, 116 Ariz. 272, 569 P.2d 214 (Sup.Ct.1977):
“The touchstone of the solution [is] . whether his rights in the pension constitute a property interest or right purchased with community funds or labor.” Id. at 273, 569 P.2d at 215.
Applying this test, it is generally conceded that the “disability retirement benefit” (based on sufficient years to retire voluntarily) is “part of the bundle of benefits . earned by service” and is a community asset subject to division upon divorce. Dominey v. Dominey, 481 S.W.2d 473 (Tex.Civ.App.1972); Busby v. Busby, 457 S.W.2d 551 (Tex.Sup.Ct.1970); See also, In re Marriage of Jones, 13 Cal.3d 457, 119 Cal.Rptr. 108, 531 P.2d 420 (1975), declining to determine whether a disability pension granted after the serviceman has earned by longevity of service a vested right to retirement pay may constitute a community asset.
Likewise, there doesn’t appear to be much doubt that insurance disability benefits purchased with community funds are to be considered as community assets. (See cases cited in majority opinion.)
The problem in Arizona centers on the semi-retirement disability benefit and the pure disability benefit.
While treating pure disability benefits (e. g., workmen’s compensation) as community property during the term of the marriage, both California and Texas treat these benefits as separate property upon the termination of the marriage. See, In Re Marriage of McDonald, 52 Cal.App.3d 509, 125 Cal.Rptr. 160 (1975); Ramsey v. Ramsey, 474 S.W.2d 939 (Tex.Civ.App.1971).
It is true, as pointed out by the majority opinion, that the rationale of these cases is based upon the analogy between these types of disability payments and payments for personal injuries, which in Texas and California are separate property. Arizona does not follow this rule.2
*582While a strong argument can be made that the Arizona rule on personal injury payments is wrong, such an argument is more properly addressed by our Supreme Court which created the rule and by which we are bound. McKay v. Industrial Commission, 103 Ariz. 191, 438 P.2d 757 (1968).
In my opinion, the holding that pure disability benefits, after divorce, are the separate property of the disabled party can be sustained on grounds other than their similarity to personal injury payment, that is, they are not the result of onerous title. Rather, workmen’s compensation benefits and service-connected disability payments are received, not as the result of past labors, and thus “earned”, but rather by society’s decision, through the legislative process, that work related injuries and their results are a societal responsibility, rather than an individual responsibility. In this sense they are acquired by lucrative title rather than onerous title and as such are separate property. During the term of the marriage, since these payments represent earning capacity and loss of wages (labor) they are properly considered community property. See Dawson v. McNaney, 71 Ariz. 79, 223 P.2d 907 (1950); Guerrero v. Guerrero, supra. However, once the marriage is terminated, the right of the community to share in the labors of the parties is likewise terminated and since one spouse has no right to the future earnings of the other after divorce, so no right should exist to payments representing those earnings, provided the entitlement to those payments is based on lucrative rather than onerous title. Being acquired by lucrative title, after divorce, I would hold such payments to be separate property.
As to the semi-retirement disability payments (payments based on both service and disability and what is apparently involved here) a serious question can arise based on the prior reasoning, as to whether these should be considered a community asset subject to division upon divorce. California would hold them separate property after divorce. In Re Marriage of Jones, supra. Depending upon the conditions to the entitlement to disability payments, a valid argument can be made that at least a portion of the payment can be considered a community asset. However, as previously pointed out, since the husband failed to prove the conditions under which he was receiving the particular disability payments involved here, I concur in the result reached by the majority that these be treated as a community asset.

. The only exception is where the valuable consideration is itself separate property, property acquired by that separate property is likewise separate. Nace v. Nace, 104 Ariz. 20, 448 P.2d 76 (1968); Lincoln Fire Ins. Co. v. Barnes, 53 Ariz. 264, 88 P.2d 533 (1939); Noble v. Noble, 26 Ariz.App. 89, 546 P.2d 358 (1976); See generally, deFuniak and Vaughn, Principles of Community Property, §§ 62, 77 (2d Ed. 1971).

. The rule in Arizona that payments for personal injuries are community property had its genesis in 1926 in Pacific Construction Co. v. Cochran, 29 Ariz. 554, 243 P. 405 (1926) at which time according to that case, this was the rule “in this state and community property states generally.” Because of the dissatisfaction with the rule, only Arizona, Washington and Idaho now adhere to it. See generally, deFuniak & Vaughn, supra, § 82, et seq. at 197-204.