Court Opinion

ID: 9727908
Source: CourtListenerOpinion
Date Created: 2023-08-26 13:52:38.579881+00
Date Added: 2024-06-11T18:25:44.274624
License: Public Domain

*370JEFFERSON (Bernard), J.
I concur in part and dissent in part.
I agree with the majority that the trial court’s rendition of a personal judgment against defendant was invalid. I agree that the judgment against defendant must be limited to a judgment which imposes liability against the community property of defendant and her deceased husband. I disagree with the view of the majority that Civil Code section 5116, which became effective January 1, 1975, can be applied retroactively so as to permit plaintiff to collect the judgment by levying execution against the community property interest of defendant which has as its source defendant’s earnings obtained during the course of the marriage.
In my view the retroactive application of Civil Code section 5116 to the community earnings of defendant constitutes a violation of the due process and equal protection rights of defendant under both the federal and state Constitutions.
At the time that plaintiff became a creditor of defendant’s husband, the earnings of defendant, though community property, were exempt from execution by virtue of Civil Code section 5117. That section provided in pertinent part that “[t]he earnings and community property personal injury damages of the wife are not liable for the debts of the husband; . . .” Section 5117 was repealed in 1974. (Stats. 1974, ch. 1206, § 3, p. 2609.) Civil Code section 5116, as amended and made effective January 1, 1975, provided that “[t]he property of the community is liable for the contracts of either spouse which are made after marriage and prior to or on or after January 1, 1975.” (Italics added.)
The earnings of defendant, accumulated after the marriage and prior to the repeal of Civil Code section 5117 in 1974, were free from liability for the debt of the husband to his creditor, the plaintiff, which was converted into a judgment against defendant in the instant case.
I cannot accept the majority’s view that the legislative actions—the repeal of Civil Code section 5117 and the enactment of the retroactive provisions of section 5116—which subjected the defendant’s community earnings to the husband’s debt involved in the case at bench, are constitutionally permissible. It is true that in In re Marriage of Bouquet (1976) 16 Cal.3d 583, 592 [128 Cal.Rptr. 427, 546 P.2d 1371], the court remarked that “[retroactive legislation, though frequently disfavored, is not absolutely proscribed. The vesting of property rights, consequently, does not render them immutable.” (Fns. omitted.)
*371In Addison v. Addison (1965) 62 Cal.2d 558 [43 Cal.Rptr. 97, 399 P.2d 897, 14 A.L.RJd 391], our Supreme Court upheld as constitutional and not a violation of due process rights, the application of California’s quasi-community property legislation to property acquired before the effective date of the legislation, even though such application clearly impaired a husband’s vested property rights. In Addison, the court concluded that the retroactive application of that legislation was a proper exercise of the police power. In explaining Addison, the Supreme Court in Marriage of Bouquet, stated: “The state’s paramount interest in the equitable distribution of marital property upon dissolution of the marriage . . . justified the impairment of the husband’s vested property rights.” (In re Marriage of Bouquet, supra, 16 Cal.3d 583, 593.) In the In re Marriage of Bouquet case itself, the Supreme Court upheld the retroactive application of Civil Code section 5118, which changed the status of a husband’s earnings after separation from the previous status of community property to his separate property, thus placing the earnings of both spouses upon separation on the same basis.
The major emphasis in Addison and In re Marriage of Bouquet was placed upon the fact that the retroactive legislation developed from an appreciation of the rank injustice of the former law. In Addison the retroactive legislation resulted in a divestiture of the husband’s property rights, while in Marriage of Bouquet such legislation caused a divestiture of the wife’s property rights. “The state’s interest in the equitable dissolution of the marital relationship supports this use of the police power to abrogate rights in marital property that derived from the patently unfair former law.” (In re Marriage of Bouquet, supra, 16 Cal.3d 583, 594.)
The compelling reasons for upholding the validity of the retroactive legislation dealt with in Addison and In re Marriage of Bouquet are not present in the case at bench. The majority points out that the retroactive application of Civil Code section 5116 to defendant’s community earnings does not change the character of her property or deprive the defendant wife of any interest in the property as between her and her husband. This is an irrelevant consideration.
We are here concerned with the rights to a species of community property—the wife’s earnings—as between the husband’s creditor and the defendant wife. The principle set forth in Addison and In re Marriage of Bouquet that the state has a paramount interest in the equitable dissolution of the marital relationship which permits the Legislature to *372abrogate rights in marital property that derive from manifestly unfair former legislative law cannot be applied in the instant case to justify giving the husband’s creditor a right to a wife’s community earnings when he bargained solely with the husband in becoming the husband’s creditor with full knowledge that by reason of Civil Code section 5117, he would be unable to reach the wife’s community earnings to satisfy the husband’s debt.
In In re Marriage of Bouquet, the Supreme Court set forth the following as the guiding principles for making a determination of whether a retroactive law contravenes a party’s due process rights. The court said: “In determining whether a retroactive law contravenes the due process clause, we consider such factors as the significance of the state interest served by the law, the importance of the retroactive application of the law to the effectuation of that interest, the extent of reliance upon the former law, the legitimacy of that reliance, the extent of actions taken on the basis of that reliance, and the extent to which the retroactive application of the new law would disrupt those actions.” (In re Marriage of Bouquet, supra, 16 Cal.3d 583, 592.)
By applying these principles set forth in Marriage of Bouquet, the conclusion is compelling that Civil Code section 5116, by its retroactive application to defendant in the instant case, constitutes a clear violation of defendant’s constitutional due process rights.
I consider first the factors of (1) “the significance of the state interest servéd by the law,” and (2) “the importance of the retroactive application of the law to the effectuation of that interest.” I see absolutely no legitimate state interest that is served by the retroactive application of Civil Code section 5116. This legislation simply gives a husband’s creditor a windfall which he does not deserve. I do not consider that it is a legitimate state interest for the Legislature to look around for property to give to a creditor for payment of a husband’s debt when the creditor had no potential or expectation of realizing collection from such a source when he became a creditor of the husband.
If the courts are willing to say that it is a legitimate state interest to enlarge the sources of property from which creditors may collect their debts, irrespective of their expectations, the only way such a state interest may be advanced fairly would be through legislation which would eliminate all exemptions from execution. I am unable to see any .legitimate state interest which leaves all other exemptions intact from
*373retroactive legislation but takes away from the wife, retroactively, the exemption of her community property earnings. In addition to the due process violation, I consider that the retroactive application of Civil Code section 5116 to the defendant wife in the case before us constitutes a denial to her of her constitutional right to equal protection of the laws.
I consider next the factors of (1) “the extent of reliance upon the former law,” (2) “the legitimacy of that reliance,” (3) “the extent of actions taken on the basis of that reliance,” and (4) “the extent to which the retroactive application of the new law would disrupt those actions.” A consideration of this second set of factors set forth in In re Marriage of Bouquet leads me to conclude that these factors are present to a substantial degree and constitute weighty considerations to support the conclusion that the retroactive application of Civil Code section 5116 constitutes a denial to defendant of her constitutional due process and equal protection rights.
Here we have a situation in which the defendant wife sought to protect herself by keeping her community earnings separate and apart from the earnings of her husband with the realization that if she did not do so, the husband’s business ventures and debt-creating activities might well result in the loss and evaporation of all of their joint accumulations. This is a legitimate reliance by the defendant upon the provisions of Civil Code section 5117—seeking to protect a portion of her community property interests against the debt-making actions of a possible profligate husband.
It is the essence of unfairness for the courts to condone legislative action which has the effect of stating that a wife’s reliance upon the exemption laws set forth in Civil Code section 5117 and her efforts to obtain some security are null and void because, as between her interests and that of her husband’s creditor, the Legislature deems the creditor’s interest paramount. Civil Code section 5116 makes the creditor’s interest paramount even though it must be recognized that the creditor bargained with defendant’s husband with full knowledge that if the deal went sour, the plaintiff creditor before us was unable to look to the wife’s community earnings for payment of the debt.
It is my view that the case at bench presents a convincing example of a situation in which the defendant wife relied upon the former law of Civil Code section 5117. There can be no question of the legitimacy of that reliance. Her actions were meaningfully taken on the basis of that *374reliance and, the retroactive application of the new law, Civil Code section 5116, would not only disrupt her actions but completely nullify them. Under these circumstances, the retroactive application of section 5116 to defendant in the case at bench ought to be deemed a violation of defendant’s constitutional due process and equal protection rights.
I would therefore modify the judgment rendered by the trial court by adding to the modification made by the majority a further modification that would exclude from defendant’s liability her community earnings and any property that is traceable to her community earnings.
A petition for a rehearing was denied February 21, 1978. Jefferson (Bernard), J., was of the opinion that the petition should be granted. Appellant’s petition for a hearing by the Supreme Court was denied May 1, 1978. Bird, C. J., Mosk, J., and Manuel, J., were of the opinion that the petition should be granted.