# Van Loan v. Van Loan

> Arizona Supreme Court · July 22, 1977 · 116 Ariz. 272

URL: https://www.frixlaw.com/law-library/cases/9580713

## Case

- **Full name:** Jack Linwood VAN LOAN, Appellant, v. Verna Evelyn VAN LOAN, Appellee
- **Court:** Arizona Supreme Court
- **Decided:** July 22, 1977
- **Citations:** 116 Ariz. 272; 569 P.2d 214; 1977 Ariz. LEXIS 356
- **Precedential status:** Published
- **Opinion:** Dissent by Holohan
- **Judges:** Hays, Holohan, Cameron, Struckmeyer, Gordon
- **Cited by:** 143 later opinions in the Frix Law Library

## Citator (automated)

- **Red flag:** Overruled on other grounds by McCarty v. McCarty, 453 U.S. 210 (1981).
- Negative treatments: 1
- Distinguished by: 1
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9580713

## How later opinions describe it (automated extraction)

- rejecting “the proposition that an employee has no more than a mere ‘expectancy’ prior to the maturation of his pension rights,” and citing with approval case law holding that “the 12 HOWIE v. HOWIE Decision of the Court community’s interest” in “an employee’s unvested right t…
- holding that to the extent a spouse acquires unvested pension benefits from community efforts, that property right is divisible upon dissolution
- rejecting employee-spouse’s contention that the community had only “a mere expectancy” in his pension benefits because he had not yet acquired a “vested right” to the benefits at the time of dissolution
- finding “[t]he failure to raise an issue either at the trial level or in briefs on appeal constitutes a waiver of the issue”

## Opinion text

HOLOHAN, Justice,
dissenting.
The decision by the majority today condones a judgment of the Superior Court which amounts to the confiscation of the appellant’s separate property. It has been the law of this state from statehood that in a divorce action the Superior Court may not divest the parties of their separate property. This is confirmed in the current statute. A.R.S. § 25-318. The formula used by the Superior Court to provide a division of the appellant’s military retirement is fundamentally wrong and results in the loss of the appellant’s separate property.
The majority seek to ignore this important question on the basis that it was not an issue raised on appeal. Conceding for the purpose of argument that such is the case this does not end the matter. It has been the law of this state since 1892 that this court will notice and review on appeal matters of fundamental error. Keyser v. Shute, 3 Ariz. 336 , 29 P. 386 (1892); State Consolidated Publishing Company v. Hill, 39 Ariz. 163 , 4 P.2d 668 (1931); Wagner v. Coronet Motel, 10 Ariz.App. 296 , 458 P.2d 390 (1969).
The appellant has resisted the setting aside of any amount of his military retirement benefits to the appellee because, as he argued, there was no property right in a noncontributory, nonvested pension, citing: Lumpkins v. Lumpkins, 519 S.W.2d 491 (Tex.Civ.App.1975) and French v. French, 17 Cal.2d 775 , 112 P.2d 235 (1941). The theory upon which these cases proceeded was that nonvested pensions were a mere expectancy and thus not a community asset subject to division upon dissolution of marriage. Subsequent to the trial of this action the California Supreme Court overruled French v. French and ruled that there could be a property right in noncontributory, non-vested pensions. In re Marriage of Brown, 15 Cal.3d 838 , 126 Cal.Rptr. 633 , 544 P.2d 561 (1976). The Supreme Court of Texas has overruled Lumpkins in Cearley v. Cearley, 544 S.W.2d 661 (Tex.1976) and adopted the position of the California Supreme Court in the Brown case.
In oral argument before the Court of Appeals counsel for appellant pointed out to the court the error in the formula used by the trial court. In the motion for rehearing following the decision of the Court of Appeals the appellant again pointed out the error by the trial court which amounted to confiscation of his separate property. There is no doubt in my mind that the error of the trial court was fundamental and this court had a duty to notice the error and review the matter.
There is also a question whether the appellant failed to raise the issue properly in the appellate court. There is a rule that questions necessarily involved in issues raised and litigated in the trial court are open for consideration on appeal even though they were not specifically raised below. Arrington v. United Royalty Co., 188 Ark. 270 , 65 S.W.2d 36 (1933); Pine Grove Nevada Coal Mining Co. v. Freeman, 63 Nev. 357 , 171 P.2d 366 (1946); 5 Am. Jur.2d Appeal and Error § 548. The appellant was attacking any division to be made by the Superior Court of his military retirement. It would seem reasonable that this would also include an objection to the actual amount set aside to the appellee.
The question presented by this case is an issue of first impression in this jurisdiction. It would have been appropriate for the court to address itself to the matter in far greater detail than was done in this case. A number of jurisdictions have wrestled with the problems associated with the division of nonvested pension rights. The court has given little guidance to the trial courts of this state, and it certainly did not help the situation by refusing to condemn the patently incorrect formula used by the Superior Court judge in this case.
*276 It would have been helpful if this court had suggested or approved some of the methods that have been used in other jurisdictions to solve the problem of making a division of property which has not yet come into being. It is particularly difficult because the property may never come into being. In the case of the military, death, resignation, discharge, reduction in force and other factors may occur before the military benefits have matured. Any division of the community interest in the retirement benefits must provide for the contingency that there may be no benefits through no fault of the parties.
In the instant ease the appellant was continuing his military career. From the date of divorce all subsequent increases in pension rights were separate property. Promotions in rank, increases in pay for length of service, and other factors necessarily increased the value of appellant’s pension rights. These increases are separate property. The Superior Court ignored the future increases and arbitrarily fixed appellee’s share as a percentage of what appellant would later receive. By this action the trial court divested the appellant of a portion of his retirement which was separate property. The development of a percentage division is a proper method if it is applied correctly. See DeRevere v. DeRevere, 5 Wash.App. 741 , 491 P.2d 249 (1971). When the benefits of the retirement are subject to increases because of the efforts of employee after the dissolution of the community, the Superior Court has the duty to establish a formula which does not take from the employee that which is separate property. One solution of the problem in this case is that approved in Wilder v. Wilder, 85 Wash.2d 364, 534 P.2d 1355 (1975). The detailed order of the trial court in Wilder appears to be a good method of providing a division of military pension benefits for a serviceman who is eligible for retirement but intends to continue on active duty.
My dissent in this ease applies to the results of the trial court’s division of property. I agree with the majority that there is a property right for community property purposes in a noncontributory pension before the same has vested. I would, however, reverse the case and remand it to the trial court for the application of a formula which did not divest the appellant of his separate property.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9580713. Public record. Not legal advice.