Seiwald v. Irias

Filed 9/28/26 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FIVE LISA SEIWALD, Plaintiff and Respondent, A174691 v. (City & County of San Francisco NICHOLAS IRIAS, Super. Ct. Nos. FDI-20-793928, CGC-22-599972) Defendant and Appellant. In this consolidated civil and divorce proceeding, defendant Nicholas Irias appeals from the trial court’s order finding that, under Marvin v. Marvin (1976) 18 Cal.3d 660 (Marvin), plaintiff Lisa Seiwald, his wife, is entitled to half of his government pension benefits that accrued during an almost 10-year period before they married (the Marvin period). We granted Irias’s motion to appeal this interlocutory order solely to address the issue of whether Public Utilities Code section 12337 prohibits Seiwald from sharing in the pension benefits accrued by Irias during that period. 1 We conclude that it does not because Seiwald acquired an ownership interest in Irias’s pension under the parties’ Marvin agreement. We therefore affirm. 1 All further statutory references are to the Public Utilities Code unless otherwise specified. 1  I. BACKGROUND Our summary of the facts is limited to those relevant to the narrow legal question before us. Irias was employed at East Bay Municipal Utility District (EBMUD) from 1987 to 2018. During his time there, both he and his employer contributed to his pension every year. In 1992, Irias and Seiwald began dating and moved in together the following year. In December 1993, the parties executed an affidavit of domestic partnership so Seiwald could obtain medical and dental benefits through Irias’s employer. In 1994, the couple purchased a home together in San Francisco and eventually married in February 2003. In September 2020, Seiwald filed a petition for legal separation. She subsequently filed a civil action for breach of contract against Irias, and the trial court consolidated the two proceedings. In her civil action, Seiwald alleged that when she and Irias moved in together in May 1993, they entered into an oral Marvin agreement that was in effect until they married in February 2003. Under that agreement, the parties allegedly agreed to “combine their skills, efforts, labor, and earnings” and to “equally share any and all property acquired and accumulated as a result of such skills, efforts, labor, and earnings.” Seiwald alleged that Irias breached this agreement after she filed for dissolution of the marriage. Specifically, Irias “refused to acknowledge the parties’ agreement” and “prevent[ed] [Seiwald] from receiving any interest in his retirement when they were together” during the Marvin period. The trial court bifurcated the proceedings, trying the Marvin claims first, followed by the marital dissolution issues and damages second. Following a five-day trial as to the Marvin claims, the court issued a proposed statement of decision, concluding that “[t]he parties had an implied- 2 in-fact agreement” during the Marvin period to “combine their skills, efforts, labors, and earnings,” and to “equally share any and all property acquired and accumulated” as a result of this combined effort. Accordingly, the court held that “each party is entitled to an equal share of such property.” Irias filed a motion to clarify that the implied-in-fact agreement does not include his EBMUD pension, as any pension benefits he received were “ ‘unassignable’ ” and “ ‘exempt from execution or any other process’ ” under section 12337. Seiwald opposed, arguing that her interest in the pension under the Marvin agreement should be recognized and that even if the pension was not “directly assignable,” the trial court could still require that Irias pay her “the equivalent value through other assets and/or offsets.” Following oral argument, the trial court concluded that even if it could not “order EBMUD to distribute pension benefits . . . directly to [Seiwald],” the court could still find, under Marvin, that Seiwald “is entitled to half of [Irias’s] EBMUD pension benefits which accrued during the Marvin period.” (Italics added.) It continued that it could order Irias to pay Seiwald “50% of all pension benefits once those payments have been actually received by [him]” or alternatively, “order an actuarial valuation of the pension benefits and order payment to [Seiwald] for her share of the pension via other means.” The court subsequently issued a final statement of decision, holding that Seiwald was entitled to an equal share of Irias’s EBMUD contributions and accumulations during the Marvin period. The trial court granted Irias’s unopposed motion for an order certifying its interlocutory decision for immediate appellate review. Irias then filed a motion seeking review of whether “an implied-in-fact agreement enforceable under Marvin ever existed” and if so, whether Seiwald was entitled to a share of Irias’s pension benefits under that agreement. We granted the motion only 3 as to the second issue—whether “section 12337 precludes . . . Seiwald from receiving a share of Irias’[s] pension contributions and accumulations during their period of cohabitation governed by [their Marvin] agreement.” II. DISCUSSION A. Law and Standard of Review California has a policy “which favors the enforceability of clauses protecting retirement benefits from the claims of creditors.” (Thomas v. Thomas (1961) 192 Cal.App.2d 771, 780.) In addition to protecting the interests of pension holders, “[p]ension administrators too have a substantial and abiding interest in maintaining the integrity of their funds and assuring eventual security against profligacy and misfortune.” (Ogle v. Heim (1968) 69 Cal.2d 7, 13 (Ogle).) As relevant here, Public Utilities Code section 12337 provides that “[a]ll money received by any person as [a] . . . pension . . . from the retirement system, and all contributions and interest thereon returned to any member of the retirement system, whether in the actual possession of such person or deposited, loaned, or invested by him, is unassignable, and is exempt from execution or any other process except to the extent permitted by [s]ection 704.110 of the Code of Civil Procedure.” (Italics added.) Code of Civil Procedure section 704.110, in turn, sets forth limited exceptions to Public Utilities Code section 12337 for child, family, or spousal support judgments against the pension holder. (Code Civ. Proc., § 704.110, subd. (c).) Other statutes governing the pension rights of public employees include provisions similar to the non-execution and non-assignability provisions found in Public Utilities Code section 12337. (See, e.g., Gov. Code, §§ 21255 [public employees], 31452 [county employees], 31913 [county peace officers] & 32210 [county fire service].) 4  Our standard of review is de novo where, as here, only a pure question of law is raised “concerning the application of legal principles to undisputed facts.” (Timney v. Lin (2003) 106 Cal.App.4th 1121, 1126.) B. Analysis Irias contends that section 12337 precludes Seiwald from receiving a share of any EBMUD pension benefits that accrued during the Marvin period because they are “unassignable.” We disagree. Pursuant to the terms of the parties’ Marvin agreement as determined by the trial court, Seiwald has an ownership interest in Irias’s pension and is not claiming a right to that pension as a creditor or an assignee under section 12337. To protect the interests of both the pension holder and employer, pension rights are, as a general rule, not only “exempt but also ‘unassignable,’ thereby restricting voluntary as well as involuntary alienation.” (Ogle, supra, 69 Cal.2d at p. 13.) Like the exemption, the unassignability of pension benefits “operates as a defense against creditors” (ibid.) and “prevent[s] the transfer to third parties of any rights held by the beneficiary of the plan” (City of San Jose v. Forsythe (1968) 261 Cal.App.2d 114, 117). Despite this general rule, Seiwald, as Irias acknowledges, is entitled to a portion of the pension contributions and benefits that accrued during the parties’ marriage. Just like the “salary earned by an employee during marriage . . ., both retirement contributions withdrawn from that salary and employer contributions added in consideration of employee services constitute community property.” (Phillipson v. Board of Administration (1970) 3 Cal.3d 32, 40 (Phillipson), disapproved on another ground in In re 5 Marriage of Brown (1976) 15 Cal.3d 838, 851, fn. 14 (Brown).) 2 Put another way, “the community owns all pension rights attributable to employment during the marriage.” (Brown, at p. 844.) Therefore, in a divorce proceeding, the spouse of an employee “claims not as a creditor, but as an owner with a ‘present, existing, and equal interest’ ” in the employee’s pension. (Phillipson, at p. 44, italics added.) And this “ownership claim cannot be described as the levy of execution, garnishment, attachment or assignment of property.” (Ibid.) Of course, “[t]he provisions of the Family Law Act [(Civ. Code, § 4000 et seq.)] do not govern the distribution of property acquired during a nonmarital relationship.” (Kroopf v. Guffey (1986) 183 Cal.App.3d 1351, 1357.) Nonetheless, partners in a nonmarital relationship “may agree to pool their earnings and to hold all property acquired during the relationship in accord with the law governing community property . . . .” (Marvin, supra, 18 Cal.3d at p. 674, italics added.) Property rights acquired under such an agreement, known as a Marvin agreement, are “derive[d] from an express or implied contract or equitable principles.” (Kroopf, at pp. 1357–1358.) Thus, parties to a Marvin agreement may “order their economic affairs as they choose, and no policy precludes the courts from enforcing such agreements” so long as they “[do] not rest upon illicit meretricious consideration.” (Marvin, at p. 674.) Here, the trial court found that Irias and Seiwald entered into a Marvin agreement from December 1993 to February 2003. Specifically, the court found they agreed “that like married persons, they would combine their 2 The Family Law Act likewise provides that the trial court “shall make whatever orders are necessary or appropriate to ensure that each party receives the party’s full community property share in any retirement plan, whether public or private.” (Fam. Code, § 2610, subd. (a).) 6 skills, efforts, labors, and earnings, and would equally share any and all property acquired and accumulated as a result of such skills, efforts, labors and earnings.” 3 (Italics added.) Implying, as we must, “ ‘ “every factual finding necessary to support” ’ ” the court’s ruling (County of Los Angeles v. Niblett (2025) 116 Cal.App.5th 454, 463), we construe this finding to mean that the parties agreed to hold all property acquired during the Marvin period as community property in accordance with the Family Law Act (In re Brace (2020) 9 Cal.5th 903, 914 [community property reflects “the ‘ “general theory . . . that the property acquired during the marriage by the labor or skill of either belongs to both” ’ ”]). Thus, Seiwald is not claiming a share of Irias’s pension as a creditor (nor could she, as there is no judgment to enforce or execute at this stage of the proceedings). Instead, she is claiming her ownership interest in the contributions that Irias made to his pension pursuant to their Marvin agreement, which “cannot be described as . . . [an] assignment of property.” (Phillipson, supra, 3 Cal.3d at p. 44.) Because both the contributions of Irias and the added contributions of his employer constitute community property under the Family Law Act, she may receive a share of Irias’s pension under the Marvin agreement notwithstanding section 12337. (Phillipson, at p. 40.) Indeed, as Seiwald’s counsel pointed out during oral argument, the employer contributions were the result of Irias’s labor during the Marvin period and therefore constituted community property. Accordingly, the trial court did not err in holding that Seiwald is entitled to an equal share of Irias’s pension, including his contributions, his 3 In granting Irias’s motion to appeal in part, we declined to review the trial court’s finding that a Marvin agreement existed and therefore accept this finding as true solely for purposes of this appeal. 7 employer’s contributions, and any benefits accrued from those contributions, during the Marvin period. Nor did the court err in finding that it could order Irias to pay Seiwald an equal share of his pension benefits once he received them or “via other means” following an “actuarial valuation of the pension benefits.” Indeed, the trial court’s latter finding appears to comport with Crossan v. Crossan (1939) 35 Cal.App.2d 39, 40. In that case, the Court of Appeal held that “[t]he money which has been paid into [a state] [r]etirement [f]und by [the employee] was community property” and that “the amount which will be payable [to him] will represent earnings.” The Court of Appeal continued that because this interest was “purchased with community funds,” it was proper “to award to [the employee’s ex-spouse] other community property equivalent in value to that interest.” (Ibid., italics added.) We see no reason why the court cannot do the same here. In reaching this conclusion, we reject Irias’s contention that in making Irias’s EBMUD “pension assignable to an unmarried cohabitant,” the trial court created an improper exception to the prohibitions in section 12337. Under the Marvin agreement in which the parties agreed to abide by California’s community property laws, “the community”—i.e., Irias and Seiwald—“owns all pension rights attributable to” Irias’s employment during the Marvin period. (Brown, supra, 15 Cal.3d at p. 844.) Thus, the court, by awarding Seiwald her ownership interest in the pension in accordance with those laws, did not assign any “money received by” Irias “as [a] . . . pension.” (§ 12337.) Ogle, supra, 69 Cal.2d 7, the main case relied upon by Irias, does not compel a contrary conclusion. In that case, a wife sought to execute a judgment for child support by obtaining the retirement benefits of her ex- 8 husband. (Id. at p. 8.) At that time, the statutes protecting public pensions from execution or attachment, including section 12337, did not include an exception for child or family support. (Ogle, at p. 9 & fn. 1.) Because “[n]ot one of the pension exemption statutes contain[ed] any suggestion that dependents are to be treated differently from other creditors,” our high court concluded that the pension was exempt from execution. (Id. at p. 9.) The wife did not, however, claim any ownership interest in her husband’s pension, much less an ownership interest based on a Marvin agreement to abide by California’s community property laws. Instead, she only sought to enforce a child support judgment as a creditor. By contrast, Seiwald is not a creditor seeking to execute on Irias’s pension benefits based on a judgment. Rather, she is a part owner of that pension under the parties’ Marvin agreement to treat all property acquired during the Marvin period as community property. Section 12337’s prohibitions against execution and assignment therefore do not apply. Equally unpersuasive are Byrne v. Laura (1997) 52 Cal.App.4th 1054 and Allen v. Stoddard (2013) 212 Cal.App.4th 807, two cases that Irias raised for the first time at oral argument. 4 In both cases, the plaintiffs sought to enforce Marvin agreements in probate proceedings by filing “a creditor’s claim” against the decedent’s estate. (Byrne, at p. 1062; Allen, at p. 811, italics added.) Because the plaintiffs in Byrne and Allen were labeled creditors, Irias argues that Seiwald, who also seeks to enforce a Marvin agreement, should be deemed a creditor like the plaintiff in Ogle. But in probate proceedings, “ ‘[c]reditor’ means [any] person who may have a claim 4 Although Irias’s counsel alerted Seiwald’s counsel that he would be arguing these two cases at oral argument, he did not alert this court. Nonetheless, we consider them here. 9 against estate property.” (Prob. Code, § 9000, subd. (c).) Thus, being a creditor in a probate proceeding says nothing about whether that creditor’s claim is based on a debt owed or an ownership interest. Moreover, neither Byrne nor Allen involved a Marvin agreement to abide by California’s community property laws like the agreement at issue here. (See Byrne, at pp. 1063, 1067 [Marvin agreements to take care of the claimant and to give the claimant “all of his property . . . in the event of his death”]; Allen, at p. 810 [Marvin agreement to take care of the claimant].) Admittedly, “the purpose of” section 12337 “is to save debtors and their families from want by reason of misfortune or improvidence.” (Ogle, supra, 69 Cal.2d at p. 9.) And our ruling here today may be somewhat at odds with that purpose. But our high court recognized long ago that the transmutation of an employee’s pension into community property does not run afoul of section 12337 (Phillipson, supra, 3 Cal.3d at p. 40), and that partners in a nonmarital relationship may agree to transform any earnings and property acquired during that relationship into community property (Marvin, supra, 18 Cal.3d at p. 674). Following these two well-established precedents, we conclude that Seiwald is entitled to a share of Irias’s pension under their Marvin agreement. 10  III. DISPOSITION The trial court’s order is affirmed. CHOU, J. WE CONCUR. SIMONS, Acting P. J. BURNS, J. 11 A174691/ Seiwald v. Irias Trial Court: Superior Court of the City and County of San Francisco Trial Judge: Russell S. Roeca Counsel: Richards, Watson & Gershon, T. Peter Pierce and Kyle Daly; Gluck Daniel Atkinson and Matthew J. Gluck for Defendant and Appellant. Sucherman - Insalaco, Michelene Insalaco and Janet Simmonds for Plaintiff and Respondent. 12