Opinion
NOT TO BE PUBLISHED
Marin County Super. Ct. No. FL117629
NEEDHAM, J.
Robert Spaulding (Robert) appeals from a post-judgment order that he must pay his former wife, respondent Wilgefort Spaulding Boutwell (Vicky), a monthly sum to make up for amounts the Army pays him as military disability pay in lieu of retirement pay, in which Vicky would have shared under the parties’ prior division of property. Robert contends that the court erred in interpreting the judgment that set forth their agreed property division and a subsequent stipulation that modified the judgment. We will affirm the order.
For the sake of simplicity and without intending any disrespect, we refer to the parties by their first names.
I. FACTS AND PROCEDURAL HISTORY
Robert and Vicky married in 1960 while Robert was in the Army. Robert retired from the Army in 1981. In 1982, he began receiving veterans’ disability pay based on a diagnosis of tinnitus and a determination by the Department of Veterans Affairs (VA) that he was 10 percent disabled as a result of his military service.
Robert and Vicky separated and in December 1984 the court entered judgment terminating the marriage but reserving jurisdiction over other issues. The parties thereafter agreed upon the division of their property, and in December 1985 the court entered a supplemental judgment on reserved issues setting forth their agreement.
A. The 1985 Supplemental Judgment
At the time of the supplemental judgment, Robert was receiving both military retired pay and VA disability pay. Retirement funds are paid by the Army Accounting and Finance Center under title 10 of the United States Code. (See, e.g., 10 U.S.C. §§ 1400 et seq., 3911, 3929.) Disability pay is handled by the VA and paid pursuant to title 38 of the United States Code. (See, e.g., 38 U.S.C. §§ 1110, 1131.) A veteran generally can receive disability pay only if he or she waives a corresponding amount of retirement pay. (10 U.S.C. § 1414; 38 U.S.C. § 5305; see In re Marriage of Smith (2007) 148 Cal.App.4th 1115, 1119-1120 (Smith).)
The supplemental judgment provided that 86.35 percent of Robert’s military retired pay was community property. Vicky was to receive half, or 43.175 percent of Robert’s “gross retired pay including periodic increments and cost of living increases,” (italics added) commencing December 1, 1985. The supplemental judgment did not explicitly mention Robert’s VA disability pay.
Paragraph 6 of the supplemental judgment provided as follows: “[Robert] shall not make, and the Army Finance and Accounting Center shall not accept, any elections, choices or other actions which in any way alter his retirement rights and cause a reduction of the dollar amount of [Vicky’s] interest in the United States of America military retired pay by exercising any right, option or election otherwise available to him by law that would reduce [Vicky’s] gross share.” (Italics added.)
Paragraph D1 of the supplemental judgment required Robert to pay Vicky $1,200 per month in spousal support, commencing December 1, 1985, until she died, remarried, or began to receive “43.175% of [Robert’s] gross military retired pay” or until further court order. Upon commencement of her actual receipt of 43.175 percent of his gross military retired pay, spousal support would be reduced to $585 monthly.
By letter dated April 4, 1986, Robert told the Department of the Army, “I would like to request that the Army withhold 43.175 percent of my gross retired pay and insure [sic] income taxes are withed [sic] from each portion separately.” (Underlining in original.) The Army Finance and Accounting Center, however, paid Vicky based on Robert’s net retired pay, after deducting his 10 percent VA disability pay, life insurance, and other items.
B. The 1987 Modification to the Supplemental Judgment
By January 1987, it was apparent that the Army would pay Vicky 43.175 percent only on Robert’s net retired pay after adjusting for items including his 10 percent disability. Also by this time, Robert was in arrears in his spousal support payments, although the parties disputed the amount.
In early 1987, the parties entered into a stipulation and order for modification of spousal support and for fixing of arrearages, which was filed on March 2, 1987. Paragraph 1 of the stipulated modification reduced Robert’s monthly spousal support obligation from $585, as required under the supplemental judgment, to $386.50. Paragraph 2—central to this appeal—provided as follows: “[Robert] shall continue to pay amount [sic] necessary to ensure that [Vicky] receives 43.175% of [Robert’s] gross retired pay, excluding all disability pay, and shall pay directly to [Vicky] her prorata share of any cost of [] living increase in his military retired pay which the Army does not pay to her directly on a monthly basis.” (Italics added.) In paragraph 4, the parties stipulated that Robert was in arrears on spousal support in the amount of $3,000, which he would pay before the filing of the stipulation. There were, therefore, two modifications to the 1985 supplemental judgment: Robert would thereafter pay Vicky less in monthly spousal support, but he would ensure that she receive her community property share of his “gross retired pay, excluding all disability pay,” (italics added) just as the Army had been doing.
Between 1987 and 2003, the VA continued to reevaluate Robert’s disability on an annual basis. Depending in part on the VA’s reevaluation, Robert’s disability pay fluctuated from year to year, which caused an inverse increase or decrease in his retired pay, and thus an increase or decrease in the amount Vicky received. By 2003, the VA had increased Robert’s disability rating from 10 percent to 20 percent. Vicky did not complain to Robert or take any court action concerning the fluctuation (including reductions) in her payments.
C. Disability Rating Change to 100 Percent
In 2003, Robert was diagnosed with prostate cancer and underwent a radical prostatectomy in August 2003. He reported his condition to the VA. In light of his cancer, which had resulted from his exposure to Agent Orange during his service in Vietnam, the VA changed his disability rating to 100 percent. The 100 percent disability rating made him eligible for a full range of veterans’ health plan benefits, but it also meant that he would no longer receive retired pay.
The VA’s rating decision, dated November 24, 2003, referred to a “new claim” Robert “filed,” which the VA had received on August 27, 2003.
In 2004, Vicky became aware that her share of Robert’s military retirement pay had been significantly reduced when she was informed by a letter from the Army that any “missed payments that accrue will automatically be paid to you when the member begins to receive retired/retainer pay again.” (Italics omitted.) In October 2004, Vicky followed up on this notice with the Defense Finance and Accounting Service and was advised that she could not recover any portion of Robert’s military pay benefits because Robert was receiving disability benefits in lieu of retirement benefits. By a letter from the Defense Financing and Accounting Service dated September 7, 2005, Vicky was informed that payments to her were being terminated.
D. Vicky’s Motion
On January 13, 2006, Vicky filed a motion for an order compelling Robert or the VA to make monthly payments of 43.175 percent of what would have been Robert’s gross military retired pay but for elections or actions he took to reduce his retired pay or to receive VA disability pay. Vicky contended that paragraph 6 of the 1985 supplemental judgment precluded Robert from doing anything that would reduce her payments from his retired pay.
Robert opposed the motion on two grounds. He contended that he had not taken any action to increase his disability pay within the meaning of paragraph 6: the VA had increased his disability pay after he merely informed the VA, as he was required to do, of his prostate cancer. Robert also argued that the 1987 modification expressly excluded all disability pay from the retired pay in which Vicky was entitled to share, and Vicky had thus agreed that her interest in Robert’s military retirement pay could be eliminated by an increase in disability pay at any time.
In her reply, Vicky responded that the 1987 modification excluded Robert’s VA disability pay in calculating her interest in his retired pay only to the extent of the 10 percent disability payment Robert was receiving when the parties agreed to the modification. She denied agreeing that her payments could be reduced or eliminated if the VA rated his disability higher in the future.
On March 14, 2006, the court heard oral argument on the motion and issued its ruling. Robert was ordered to pay Vicky retirement benefit arrearages of $14,315.34. He was also ordered to pay Vicky $1,072.89 monthly, commencing April 1, 2006, by automatic withdrawal from his checking account; the amount represented 43.175 percent of what his retirement benefit would have been less a 10 percent VA “waiver.” The waiver reflected the amount of his retirement benefit he would be obligated to waive if his disability rating was 10 percent as it was when the parties executed the 1987 modification.
The court adopted its tentative ruling of February 28, 2006, in all other respects. The tentative ruling provided: “Respondent/Wife’s motion for payment of 43.17% of military pay that would have been paid but for Petitioner’s/Husband’s election to receive disability pay is granted. Pursuant to the terms of the parties’ Marital Settlement Agreement, Wife is entitled to 43.17% of Husband’s retirement pay. Husband agreed not to make any ‘elections, choices or other options’ which would alter his retirement pay. Husband’s pursuit of a 100% disability rating constitutes an ‘election, choice or other option’ which has altered his retirement pay, and, in fact, has effectively eliminated Wife’s 43.17% property interest.”
This appeal followed.
II. DISCUSSION
Robert contends that the court erred in ordering him to pay Vicky 43.175 percent of what his retirement benefit would have been, less a 10 percent deduction for his disability rating as of the time of the 1987 modification. We begin with a review of the legal framework for military retired pay and disability pay.
Members of the Armed Forces who serve for a specified period of time may retire and receive retired pay. (See, e.g., 10 U.S.C. §§ 3911, 3929.) Veterans who become disabled as a result of military service are eligible for disability benefits. (38 U.S.C. §§ 1110, 1131.)
Under the federal Uniformed Services Former Spouses’ Protection Act (FUSFSPA), state courts may treat the veteran’s disposable retired pay as community property. (10 U.S.C. § 1408, subd. (c)(1).) In Casas v. Thompson (1986) 42 Cal.3d 131, 151 (Casas), the California Supreme Court held that the FUSFSPA did not prohibit states from treating a military spouse’s gross retirement pay (i.e., disability payments as well) as a “community asset subject to equal division.”
In 1989, however, the United States Supreme Court held otherwise. (Mansell v. Mansell (1989) 490 U.S. 581, 594-595 (Mansell).) Since the FUSFSPA expressly excluded disability benefits from the definition of disposable retired pay (10 U.S.C., § 1408, subd. (a)(4)(B)), the court concluded, retired pay that has been waived to receive disability benefits may not be treated as community property. (Mansell, supra, at pp. 594-595.)
Thus, where a veteran receives both disability benefits and retired pay at the time of dissolution, under current law the retired pay may be divided as community property, but the disability benefits may not. (Mansell, supra, 490 U.S. at pp. 594-595; Smith, supra, 148 Cal.App.4th at pp. 1120-1121.)
With certain exceptions, a veteran may receive disability benefits only to the extent that he or she waives a corresponding amount of retired pay. (38 U.S.C. § 5305; 10 U.S.C. § 1414; Mansell, supra, 490 U.S. at p. 583; Smith, supra, 148 Cal.App.4th at p. 1119.) It is often to the advantage of the veteran to do so: disability benefits are tax-free to the recipient veteran, while retirement pay is taxable; and disability benefits are not subject to community property division, while retirement pay is. (See, e.g., 10 U.S.C. § 1403; Mansell, supra, at pp. 583-584; Smith, supra, at p. 1119.) As a result, California courts have considered how to address situations where a divorced veteran has obtained disability payments and waived a corresponding portion of his retirement pay. (See, e.g., In re Marriage of Krempin (1999) 70 Cal.App.4th 1008 (Krempin).)
The question as framed in this appeal, however, is not dependent on whether disability pay may be deemed a community asset under current law, but on the meaning of the parties’ 1985 and 1987 agreements as to the payments Vicky would receive. At the core of this case is the meaning of paragraph 6 of the 1985 supplemental judgment, precluding Robert from acting in a manner that reduces the dollar amount of Vicky’s interest in Robert’s retired pay, and paragraph 2 of the parties’ 1987 modification, by which Robert ensured Vicky’s receipt of 43.175 percent of his gross retirement pay, exclusive of “all” disability pay. Specifically, the issue is how those provisions apply to Robert’s report to the VA of his cancer, and the resulting VA determination of 100 percent disability and the elimination of Robert’s retirement pay: whether it constituted an action by Robert that reduced Vicky’s share of his retirement pay in contravention of paragraph 6 of the supplemental judgment, or whether paragraph 2 of the 1987 modification barred Vicky from obtaining any retirement pay if Robert’s disability was later increased to 100 percent.
Although the non-military spouse has no community property interest in the portion of gross retired pay attributed to disability pay at the time of dissolution (see Mansell, supra, 490 U.S. at pp. 594-595), there is no violation of federal law in enforcing the parties’ agreement that the veteran will indemnify his former spouse for any share of retired pay she would have received but for the veteran’s post-dissolution election to receive disability pay. (Krempin, supra, 70 Cal.App.4th at p. 1015; Smith, supra, 148 Cal.App.4th at pp. 1121, 1124 [postjudgment order providing that if husband elects to receive disability in lieu of retirement in the future, he will indemnify wife for his unilateral reduction of the retirement asset, thereby insuring that wife will receive the benefit of the bargain she made at dissolution].)
A. Rules of Construction and Standard of Review
In interpreting the 1985 supplemental judgment (which set forth the parties’ marital settlement agreement) and the parties’ 1987 stipulation modifying the supplemental judgment, we give effect to the mutual intention of the parties at the time of contracting. (Civ. Code, § 1636; Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.) If possible, their intention “is to be ascertained from the writing alone,” subject to other statutory rules of construction. (Civ. Code, § 1639.)
We independently construe a written agreement when the trial court’s interpretation rested solely on the language of the agreement without considering extrinsic evidence, or where the extrinsic evidence was not in conflict or not competent. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865 (Parsons).) In this matter, extrinsic evidence was submitted by the parties, but it is unclear whether the court relied on it in reaching its decision. In the following analysis, we first conduct an independent legal review to ascertain the plain meaning of the parties’ agreements incorporated in the 1985 supplemental judgment and the 1987 stipulated modification. To the extent we also address the parties’ arguments that conflicting extrinsic evidence is relevant to discern the parties’ intent, we consider whether substantial evidence supports the conclusion that the parties intended the interpretation reached by the trial court.
B. Paragraph 6 of the 1985 Supplemental Judgment
The 1985 supplemental judgment provided that Vicky would receive 43.175 percent of Robert’s gross retired pay, without any mention of his disability pay. Paragraph 6 of the supplemental judgment further provided that Robert “shall not make . . . any elections, choices or other actions which in any way alter his retirement rights and cause a reduction of the dollar amount of [Vicky’s] interest in the United States of America military retired pay by exercising any right, option or election otherwise available to him by law that would reduce [Vicky’s] gross share.”
The intent of the parties with respect to paragraph 6 of the 1985 supplemental judgment is not really in dispute. Robert acknowledges that this “language, standing alone, would have prevented Robert from receiving VA disability pay that would reduce Vicky’s payments.” The plain meaning of paragraph 6 is that Robert could take no action that would reduce the dollar amount of Vicky’s share of his gross retirement pay (or, more precisely, that he would be responsible for the effect such an action would have on Vicky’s share). As we shall explain post, because Robert applied for benefits in August 2003 while disclosing that he had cancer, he took an “action[]” that “cause[d] a reduction of the dollar amount” of Vicky’s payments. This action was precluded by paragraph 6 of the 1985 supplemental judgment.
Robert’s contention that the language was effectively changed by the 1987 modification of the supplemental judgment is addressed in our discussion of the 1987 modification, post.
Robert argues that his report to the VA concerning his cancer was not an “election[], choice[] or other action[] which in any way alter[ed] his retirement rights and cause[d] a reduction of the dollar amount” of Vicky’s interest in his retired pay “by exercising any right, option or election otherwise available to him by law that would reduce [Vicky’s] gross share.” He contends that he did no more than what the VA requires: periodically re-certify his eligibility for benefits and update his health and other information.
To obtain VA disability benefits, a veteran submits a claim (38 U.S.C. § 5101, subd. (a); 38 C.F.R. § 3.151, subd. (a)), and the VA determines if the individual is disabled and, if so, rates the disability. (See 38 C.F.R. § 3.321.) Thereafter the veteran must certify periodically “that any or all of the eligibility factors which established entitlement to the benefit being paid continue to exist.” (38 C.F.R. § 3.652, subd. (a).) Upon receipt of this certification, the VA re-evaluates the veteran’s condition and adjusts the disability benefits accordingly. (38 C.F.R. § 3.652, subd. (b).) On this basis, Robert claims that he had no choice but to submit the certification to the VA and had no control over the VA’s changing his disability rating to 100 percent.
Furthermore, Robert argues, Vicky did not present any competent evidence that Robert did exercise any right, election, or choice that led the VA to increase his disability pay. He contends that Vicky lacked personal knowledge of whether Robert actually applied to increase his disability pay, or whether, as Robert stated in his declaration, the VA decreased his disability pay in response to the information about his current medical condition that 38 Code of Federal Regulations section 3.652 required him to provide. And, although Vicky asserted that she was “informed and believe[d]” that Robert elected to receive disability pay in lieu of retired pay and that the termination of Robert’s retired pay occurred as a result of his election to receive disability benefits, Robert argues that statements on information and belief do not constitute substantial evidence. (Star Motor Imports, Inc. v. Superior Court (1979) 88 Cal.App.3d 201, 204-205.)
Contrary to Robert’s suggestion, Vicky did provide documentary evidence that Robert submitted a “claim” to the VA resulting in his 100 percent disability rating. The VA’s rating decision of November 24, 2003, which increased Robert’s disability to 100 percent, referred to a “new claim for benefits” that Robert had “filed” and which the VA received on August 27, 2003. The VA’s cover letter also referred to a “claim,” received from Robert on August 27, 2003, for an increase in compensation. In addition, a July 2004 letter from the VA confirmed Robert’s 100 percent disability rating and referred to a “claim” the VA received from him in April 2004 (which, in Vicky’s view, indicated that Robert had continued to advance his claims for disability). These documents provide substantial evidence that Robert had acted in a manner that resulted in the reduction of Vicky’s benefits, by submitting a “claim” for increased disability benefits which, as Robert knew, would reduce his retirement pay in which Vicky shared.
Vicky contends that she could not provide a copy of the actual “claim” Robert purportedly submitted on August 27, 2003, because Robert had not included it in discovery or in his opposition to Vicky’s motion. She therefore submitted a blank VA Form 21-526 entitled Veteran’s Application for Compensation and/or Pension. Robert counters that he did not have such a document in his possession when responding to discovery.
In any event, whether Robert actually submitted a “claim” or—as he asserts—merely provided information to the VA, he still took an action that reduced the dollar amount of Vicky’s portion of Robert’s retirement pay. Robert himself asserted in his declaration opposing Vicky’s motion: “After I applied for benefits following my diagnosis with cancer . . . the [VA] changed my rating to 100% disabled. As a result of this rating change by the [VA], the Army Finance Center was required to reallocate all of my military retirement pay as disability pay.” (Italics added.) Robert’s admission that he applied for benefits provided substantial evidence that he took an action that reduced her share of his retired pay. Even just reporting his cancer to the VA, as Robert characterizes it, is an “action[]” which “alter[ed] his retirement rights and cause[d] a reduction of the dollar amount” of Vicky’s interest in his retired pay. Furthermore, by waiving his right to retired pay in order to receive disability pay, Robert exercised a “right, option or election otherwise available to him by law that would reduce [Vicky’s] gross share,” precluded by paragraph 6.
Robert argues: “Any reading of the MSA [incorporated in the supplemental judgment] that would require Robert to withhold medical information from the VA would render that portion of the agreement invalid and contrary to public policy.” However, we do not conclude that paragraph 6 requires Robert to withhold medical information from the VA. The paragraph does not limit the information Robert was to provide, but negates the effect on Vicky if such information resulted in a reduction in the amount she received.
Therefore, the reduction in Vicky’s payments resulting from Robert’s application for benefits in August 2003 and election to receive 100 percent disability pay was in violation of paragraph 6 of the 1985 supplemental judgment. We turn to the 1987 modification to see if its terms change the result.
C. The 1987 Modification
Paragraph 2 of the 1987 modification provided that Robert “shall continue to pay amount [sic] necessary to ensure that [Vicky] receives 43.175% of [Robert’s] gross retired pay, excluding all disability pay, and shall pay directly to [Vicky] her prorata share of any cost [] of living increase in his military retired pay which the Army does not pay to her directly on a monthly basis.” (Italics added.) Robert contends that the express exclusion of “all disability pay” modified paragraph 6 of the supplemental judgment, such that Vicky was entitled to only 43.175 percent of Robert’s net retirement pay, no matter how much his disability rating increased and his net retirement pay decreased in the future. We disagree.
1. Plain Meaning of Paragraph 2
The 1987 modification excludes from the retired pay (of which Vicky would get a share) “all” disability pay. The question, however, is whether “all disability pay” refers to (1) the entirety of the disability pay as of the time of the 1987 modification, or (2) the entirety of disability pay, whatever it might be at any time in the future.
Robert contends that Vicky, who knew that Robert’s disability pay fluctuated, gave up any claim to the amount of retired pay diminished by “all” of Robert’s disability pay, whatever the VA’s disability rating turned out to be—whether 10 percent (at the time of the 1985 and 1987 agreements), 20 percent (in 2003) or 100 percent (beginning in September 2003). Vicky, on the other hand, contends that paragraph 2 did not exclude “all” disability pay as it might become in the future, but was intended only to exclude the minimal disability payments Robert was receiving at a 10 percent disability rating when the modification was executed in January and February 1987. From the language of paragraph 2, both interpretations may be tenable. Viewing the parties’ written agreements as a whole, however, only Vicky’s interpretation is reasonable.
In ascertaining the meaning of paragraph 2, we must consider its language in light of the stipulated 1987 modification as a whole (Civ. Code, §§ 1641, 1650) and in light of the 1985 supplemental judgment as well (Civ. Code, § 1642). The 1987 modification changed the supplemental judgment in two ways: it reduced Robert’s spousal support obligation; and it required Robert to ensure that Vicky’s share of retirement pay, less disability pay, would be paid to her. It did not remove the language that Robert would refrain from taking any action to cause the disability pay to increase. The logical inference is that Vicky agreed to receive less in monthly spousal support because she would be assured of continuing to get her existing share of Robert’s monthly retirement pay, not that she might lose the existing retirement pay altogether. In this context, the language in paragraph 2 that Robert “shall continue to pay amount [sic] necessary to ensure that [Vicky] receives 43.175% of [Robert’s] gross retired pay, excluding all disability pay,” (italics added) indicates that Robert would make up any difference between the amount she was receiving at the time of the 1987 modification and what she might actually receive from the Army.
Robert’s construction of paragraph 2, on the other hand, is unreasonable. In his view, paragraph 2 permitted the elimination of Vicky’s 43.175 percent interest in Robert’s retirement pay. The plain language of the parties’ agreements discloses no reason Vicky would agree to this, particularly since she was agreeing to a reduction in her monthly spousal support payments.
Robert points out that paragraph 2 does not explicitly exclude from Robert’s retirement pay only the disability pay Robert was receiving at the time; nor does it expressly state that Vicky would always receive the same amount she had received previously. But neither does paragraph 2 explicitly provide that all disability pay Robert might receive in the future would be excluded, even if it would entirely wipe out Vicky’s monthly payment. Indeed, the premise of Robert’s argument is that the 1987 modification excluded from the calculation of Vicky’s payments all disability pay that “Robert may receive” (italics added)—as Robert puts it in his appellate brief—at any time. Paragraph 2, however, makes no reference to what Robert “may receive” in the future.
In the final analysis, the plain meaning of paragraph 2 of the 1987 modification was that Robert would ensure that Vicky receive a 43.175 percent share of his retirement pay less the percentage of disability pay at the time of the 1987 modification. Accordingly, the trial court did not err.
2. Extrinsic Evidence of Parties’ Intent
Although we resolve the appeal based on the plain meaning of paragraph 2, we nevertheless consider the parties’ arguments concerning the extrinsic evidence submitted to the trial court. (See Parsons, supra, 62 Cal.2d at p. 865 [extrinsic evidence admissible to interpret the contract, but not to give it a meaning to which it is not reasonably susceptible].) Because the extrinsic evidence is in conflict on the issue of the parties’ mutual intent, we determine only whether there is substantial evidence to support the interpretation espoused by Vicky. (Ibid.)
Vicky and Robert each submitted extrinsic evidence of their intent in their declarations supporting or opposing Vicky’s motion. In her declaration, Vicky described the circumstances of the 1987 modification as follows: “Our intention was always that my military retirement benefits would be preserved. In 1987, ROBERT and I agreed that we would modify the spousal support that I was receiving from him. This was in furtherance of the provisions in the December 2, 1985 Judgment that provided that spousal support should be adjusted once I began to receive my share of retired pay from the military. The reduced amount of spousal support was lower than specified in the Judgment. We also had discovered that the Army would not send me 43.175% of the $66 (and cost of living increases to this sum) in Veteran’s pay that ROBERT was receiving directly from the Department of Veterans Affairs (DVA). This Veteran’s pay based on ROBERT’s 10% disability rating was to be excluded from my 43.175% interest. I did not object to excluding disability pay based on ROBERT’s then 10% rating. I never agreed that ROBERT could wipe out my community property share of his retirement by filing . . . for increased Veterans Administration benefits and waiving his right to military retired pay which I have since learned that he did in 2003.” (Italics added.)
Robert provided the following description of the stipulated 1987 modification: “This agreement was heavily negotiated, as I was not in agreement with [Vicky] that I owed the amount of arrearages that she alleged. The negotiated agreement we eventually reached modified the prior Judgment by: (1) determining an agreed upon amount as and for arrearages; and (2) specifically and expressly excluding all disability pay from the calculation of [Vicky’s] portion of my military retirement pay.” (Underscoring omitted.) Robert’s explanation ignores the fact that the 1987 modification also amended the supplemental judgment by reducing his monthly spousal support obligation.
Substantial evidence supports the conclusion that the parties intended paragraph 2 to preserve the amount Vicky was then receiving as her share of Robert’s retirement pay. The undisputed context of the 1987 modification was spousal support, because Robert was behind in his support payments. In addition to resolving the dispute over the amount of the arrearage, Vicky gave up some of the monthly spousal support to which she was entitled under the supplemental judgment, and received the assurance of paragraph 2. From this it may reasonably be inferred that Vicky and Robert intended for Vicky to continue receiving the payments she was getting based on Robert’s 10 percent disability rating; given her agreement to a reduction in monthly spousal support, it is patently inconsistent with a mutual intent for her to lose the retirement payments even if Robert became 100 percent disabled. In fact, while Robert asserts generally in his declaration that paragraph 2 was intended to exclude “all disability pay,” he does not state that it was his intention or understanding that paragraph 2 could wipe out the payment Vicky was then receiving as her share of his net retirement pay.
As Vicky suggests in her declaration, the change made by the 1987 modification to paragraph 6 of the 1985 supplemental judgment—entitling Vicky to 43.175 percent of Robert’s “gross retired pay, excluding all disability pay” rather than his “gross retired pay”—merely acknowledges how the Army was treating the disability component of Robert’s compensation already. Notwithstanding Robert’s direction to pay Vicky 43.175 percent of his gross retired pay, the Army paid Vicky 43.175 percent of his net retired pay. Furthermore, the change from “retired pay” to “gross retired pay, excluding all disability pay” does not suggest that the parties had concluded that disability payments were not community property, because at the time of the 1987 modification California law provided that a military spouse’s gross retirement pay, including disability payments, could be treated as community property. (Casas, supra, 42 Cal.3d at p. 151.)
Robert points to evidence that Vicky knew Robert’s disability rating and pay fluctuated over time. However, as of the time the parties agreed to the 1987 modification, those fluctuations had not been particularly significant. In December 1985, when the supplemental judgment was entered, Robert had a 10 percent disability rating and received just $66 a month in disability pay. His disability rating was still at 10 percent when the parties stipulated to the 1987 modification. Moreover, even if Vicky knew there could be some fluctuation in Robert’s disability rating, she also knew that paragraph 6 of the supplemental judgment barred Robert from taking action to increase his disability pay and reduce her right to receive his retirement pay. There is no indication that Vicky, or even Robert, intended paragraph 2 to obliterate this protection.
Robert also contends that Vicky’s evidence of the parties’ intent was not competent. Specifically, he argues, Vicky’s evidence of her own intent is immaterial because there is no indication that she disclosed such intent to Robert, and her assertion that “[o]ur intention was always that my military retirement benefits would be preserved” is a mere conclusion of law. (See Hoover Community Hotel Development Corp. v. Thomson (1985) 167 Cal.App.3d 1130, 1137 [bare conclusion insufficient to support motion for summary judgment or create triable issue of fact].)
Vicky’s evidence was admissible and sufficient. Upon personal knowledge, Vicky declared not only her own intent, but also the circumstances of the parties’ negotiation of the 1987 modification. Those circumstances included a dispute over the amount of Robert’s spousal support arrearage and the reduction in spousal support payments in apparent exchange for Robert’s assurance in paragraph 2. It is reasonable to conclude from these circumstances that Robert, like Vicky, understood that only the existing 10 percent disability would be excluded from the retired pay in which Vicky would share. Thus, while Vicky provided no direct evidence of Robert’s intent, she presented circumstantial evidence from which his intent may be inferred. Moreover, even if Vicky’s evidence was inadmissible or unpersuasive, Robert still failed to prove that paragraph 2 meant what he now says it means, since he presented no evidence that either party communicated an intent for the paragraph to apply in that way.
3. Practical Construction
Citing additional extrinsic evidence, Robert argues that Vicky’s conduct after the 1987 modification shows that paragraph 2 was intended to exclude all disability pay, whatever it might later turn out to be, in calculating what Vicky was to be paid. (See WYDA Associates v. Merner (1996) 42 Cal.App.4th 1702, 1713 [construction given a contract by the parties in their conduct, before a controversy arose as to its meaning, is entitled to great weight].) Vicky knew that Robert’s disability payments reduced his retired pay, agreed in 1987 to exclude disability pay in calculating her payments, and although her payments thereafter varied considerably as the VA re-evaluated Robert’s disability, she never complained or took any action to dispute the reductions in her payments. Robert urges that Vicky thus knew that under the 1987 modification her payments would be reduced if Robert’s disability payments increased in any amount at any time in the future.
The evidence, however, was that Vicky did not notice that her payments were reduced until 2004. In February of that year her payments decreased almost 60 percent and continued at the reduced level for the rest of the year (except for October, when she received no payment). She also received a notice that retirement payments were suspended but that any “missed payments that accrue will automatically be paid to you when the member begins to receive retired/retainer pay again.” (Italics omitted.) When she received no payment in October 2004, she followed up and was advised that her payments were based on “disposable” pay, which was defined as “gross pay minus any deductions allowable under federal law.” (Italics omitted.) She contacted the Defense Finance and Accounting Service, who advised by letter of September 7, 2005: “we are terminating your payments under the Uniformed Services Former Spouses’ Protection Act from the retired/retainer pay of ROBERT E. SPAULDING.” After she learned that all payments were being made to Robert through the VA, which led her to conclude that Robert had taken action that would eliminate her share of his retired pay contrary to the supplemental judgment, Vicky filed her motion.
This evidence may be subject to different inferences, but one reasonable inference is that Vicky took steps over two years to investigate and correct her loss of her promised share of Robert’s retired pay. In our review for substantial evidence, we do not reweigh the evidence, assess the credibility of witnesses, or choose between competing inferences. Substantial evidence supports the conclusion that Vicky and Robert intended that Vicky would receive 43.175 percent of Robert’s retired pay, less the 10 percent waiver for Robert’s disability pay.
Robert has failed to establish that the trial court erred.
III. DISPOSITION
The order is affirmed.
We concur. JONES, P. J., SIMONS, J.