Cabral v. Cabral

543 So. 2d 952, 1989 WL 36941
CourtLouisiana Court of Appeal
DecidedApril 12, 1989
Docket88-CA-850
StatusPublished
Cited by9 cases

This text of 543 So. 2d 952 (Cabral v. Cabral) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cabral v. Cabral, 543 So. 2d 952, 1989 WL 36941 (La. Ct. App. 1989).

Opinion

543 So.2d 952 (1989)

Harry R. CABRAL, Jr.
v.
Barbara Ann Ward, Divorced Wife of Harry R. CABRAL, Jr.

No. 88-CA-850.

Court of Appeal of Louisiana, Fifth Circuit.

April 12, 1989.
Rehearing Denied May 17, 1989.

*953 Harry R. Cabral, Jr., Metairie, pro se.

Floyd J. Reed, New Orleans, for defendant-appellant.

Before KLIEBERT, BOWES and DUFRESNE, JJ.

DUFRESNE, Judge.

This is an appeal by Barbara Ann Ward Cabral, defendant-appellant, from two judgments rendered in this divorce proceeding. In the first, Mrs. Cabral was adjudged to owe Harry R. Cabral, Jr., her former husband and plaintiff-appellee, the sum of $329.535.51, after the partition of community assets and liability; in the second, she was denied permanent alimony.

As to the monetary award, we find that the judgment resulted from legal error, and therefore reduce it to zero in accordance with the provisions of La.Civ. Code arts. 2365, and 2367. Under these articles, if the separate property of a spouse has been used to satisfy a community obligation, or for the use, improvement, or benefit of community property, that spouse is entitled to reimbursement of one-half of the amount of separate property so used to the extent of the community. Article 2365 further provides that the other spouse can only be liable for amounts exceeding community assets if the separate property was used for ordinary and customary expenses of the marriage, or for support, maintenance, and education of children. It has further been held that the reimbursement of one-half of the separate property used for community purposes is to be made from the other spouse's one-half interest in the community, rather than from the total mass of community property, Williams v. Williams, 509 So.2d 77 (La.App. 1st Cir.1987).

In the present case, the trial court summarized his disposition of the community as follows:

COMMUNITY ASSETS AND LIABILITIES ALLOCATED TO MR. CABRAL:

All Assets                      $827,917.00
All Liabilities                 (724,110.48)
                                ____________
Net Allocation to Mr. Cabral
                                $103,806.52
Net Allocation to Mrs. Cabral
                                      -0-
Equalizing sum owed to
Mrs. Cabral before reimbursement  $51,903.26
Reimbursements owed to
Mrs. Cabral from Mr.
Cabral                            $67,385.81

*954
Reimbursements owed to
  Mr. Cabral from Mrs.
  Cabral                          $448,824.58
Total amount owed to Mr.
  Cabral from Mrs. Cabral
Net reimbursement owed
  to Mr. Cabral of $448,824.58
  - $67,385.81 =
  $381,438.77 less equalizing
  sum owed to Mrs.
  Cabral before reimbursement
  of $51,903.26                   $329,535.51
                                  ===========

The most significant figure in this accounting is the $448,824.58 reimbursement owed to Mr. Cabral, which represents one-half of his separate funds used to satisfy community obligations and preserve community assets. Mrs. Cabral urges that this figure should be reduced to $26,456.58, because most of the funds were expended for obligations which should have been ruled to be Mr. Cabral's separate debts. She further urges that the figures for total community assets and liabilities should also be adjusted, and after so doing she should be awarded $146,120.37, as her share of the community. She alleges, in support of this result some fifteen errors in the trial judge's accounting, but as will appear below, we need only address two of these.

The major contested issue is the status of a piece of property at 8870 Chef Menteur Highway in Orleans Parish. This property was purchased by both parties in 1979, during the existence of the marriage. A commercial building was erected on the site and leased to West Building Materials for a fixed rental of $78,000 per year for thirty years. Mr. Cabral testified that although this investment appeared sound at the outset, two major problems soon developed. The first was that the $200,000 estimated cost of the building was too low by half and the eventual cost was $400,000. The second was that the original interest on the mortgage was 2% above prime, and when interest reached 23% in the early 1980's, the fixed rent lease did not generate enough funds to cover interest. Because other funds were not available to service the loan, the accumulating interest increased the total note to $1.3 million dollars by mid-1983. In June of that year, Mr. Cabral sold a piece of his separate property and realized a profit of $566,390. This entire amount was applied to the Chef property note. In January 1984, while the parties were still married, the remaining portion of the note was renegotiated for some $520,000. This new account bears the names "Mr. and Mrs. Harry R. Cabral, Jr". Further evidence showed that at the time of trial the balance on this note was $507,629.51, and the property had an appraised value, including the lease, of $408,000. Between the parties separation and partition of the community, Mr. Cabral also paid from his separate funds some $134,000, in interest on this mortgage.

Mrs. Cabral urged at trial, and re-urges here, that the Chef property venture was a separate obligation of Mr. Cabral and alternatively that even were it a community obligation, Mr. Cabral is liable to the community because the loss was occasioned by fraud or bad faith. We, like the trial judge, reject both assertions.

As to the first, La.Civ.Code Art. 2361, provides that obligations incurred by a spouse during the existence of the community are presumed to be community obligations. There is no dispute that the property was acquired during the community and that Mrs. Cabral was a party to the act of sale by which the property was acquired. In the absence of further evidence to rebut the presumption of community, and given the clear evidence that this was a community venture, we can only conclude that the trial judge properly adjudged it to be such. Although it is further argued that this venture was not originally undertaken for the benefit of the community and is thus a separate property obligation under La.Civ. Code Art. 2363, there was absolutely no proof to show that the community would not have reaped the profits of the investment had it been successful. There is thus no reason to hold that the community should not be liable for the unfortunate loss. We also note here that although the net loss is that of the community, this obligation was neither for the ordinary expenses of the marriage nor for support of children.

*955 Similarly, there is a complete absence of proof to show that Mr. Cabral committed fraud or acted in bad faith in his management of this venture. Although he admitted that he might have been more attentive in managing the project, the trial judge correctly noted that Mr. Cabral also invested during the marriage substantial separate funds to reduce the extreme difficulty into which the community had fallen because of the high interest rates prevailing at the time. We further agree with the trial judge's conclusion that there was simply no evidence to show that Mr. Cabral continued to impoverish the community or to take advantage of it in any way. We therefore reject this argument as well.

To summarize the above discussion, we conclude that Mr.

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Bluebook (online)
543 So. 2d 952, 1989 WL 36941, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cabral-v-cabral-lactapp-1989.