In re the Succession of Beard

210 So. 3d 310, 2016 La.App. 1 Cir. 0304, 2016 La. App. LEXIS 2365
CourtLouisiana Court of Appeal
DecidedDecember 22, 2016
DocketNO. 2016 CA 0304
StatusPublished

This text of 210 So. 3d 310 (In re the Succession of Beard) 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
In re the Succession of Beard, 210 So. 3d 310, 2016 La.App. 1 Cir. 0304, 2016 La. App. LEXIS 2365 (La. Ct. App. 2016).

Opinion

CRAIN, J.

|2In a previous appeal, this matter was remanded to the trial court for a determination of the appropriate amount and form of security to be posted by a usufructuary. See In re Succession of Beard, 13-1717 (La.App. 1 Cir. 6/6/14), 147 So.3d 753, 765. On remand, the trial court held an eviden-tiary hearing and thereafter signed a judgment fixing the security. A naked owner appealed, and the usufructuary answered the appeal. We amend the judgment and, as amended, affirm.

FACTS AND PROCEDURAL HISTORY

Carole Beard died testate on November 5, 1993. Her surviving husband, Julius Beard Jr., instituted this proceeding and obtained a judgment of possession that, in relevant part, placed him in possession of the usufruct of an undivided one-half interest in most of the couple’s former community property.1 The judgment of possession also vested each of Carole’s four children, two by a prior marriage and two from her marriage with Julius, with an undivided one-eighth interest in the subject property.

[312]*312Approximately fourteen years after the entry of the judgment of possession, one of Carole’s children from her first marriage, Christopher Shows, filed a petition in the proceeding seeking to terminate the usu-fruct or, alternatively, requesting that Julius post security. After a trial on the merits, the trial court denied Christopher’s claims. Christopher appealed, and, in a prior opinion, this court reversed the trial court’s denial of the request for security, holding that under the law applicable at Carole’s death, Julius was obligated to provide security because the petitioner, Christopher, was a child of Carole’s prior marriage. See Succession of Beard, 147 So.3d at 763-64. The matter was remanded to the trial |scourt for a determination of the appropriate amount and form of the security. See In re Succession of Beard, 147 So.3d at 765.

On remand, the trial court held a contradictory hearing where the parties presented a joint stipulation that established the total values for the property interests in the estate. Based upon those values, the property interests subject to the usufruct are as follows:

Movabie Property; $1,924,736.68
Immovable Property: $ 497.500.00
Total: $2,422,236.682

[Editor’s Note: The preceding image contains the reference for footnote2].

Christopher argued that the security should be in the form of a surety bond in the amount of $1,200,000.00, which is the approximate value of the undivided interests in the property held by the two children from Carole’s prior marriage, Christopher and his sister, Molly Shows. Julius countered that Molly’s interest in the property should not be considered because she did not request security. Julius also argued that the value of Christopher’s property interest should be discounted by the value of the outstanding usufruct burdening that interest and should be reduced by expenses reflected in the detailed descriptive list. Applying those deductions, Julius arrived at a figure of $193,475.56, which he suggested should be in the form of a promissory note. Julius also offered to provide periodic reports for an investment account at a financial firm that contained most of the liquid assets subject to the usufruct. Arguing that the cost of a commercial surety bond would be prohibitive, Julius cited evidence indicating that the cost of such a bond is at least 1% of the bond amount on an annual basis.

After taking the matter under advisement, the trial court ordered that Julius post a bond in favor of Christopher and Molly in the amount of $575,000.00, to be |4set forth in a promissory note executed by Julius. The trial court further ordered that the promissory note include an agreement that Julius provide Christopher and Molly an annual accounting of the investment account. The trial court’s ruling was reduced to a judgment signed on November 5, 2015.3

On appeal, Christopher contends the bond should be in the amount of [313]*313$2,422,236.68 and in the form of a surety-bond. Julius answered the appeal and maintains that the bond should only be in favor of Christopher and should not exceed $260,477.98, which he contends is the value of Christopher’s naked ownership in the movable property subject to the usufruct.

DISCUSSION

Pursuant to Louisiana Civil Code article 572, when a usufructuary is obligated to provide security, the security “shall be in the amount of the total value of the property subject to the usufruct.” However, the trial court “may increase or reduce the amount of the security, on proper showing, but the amount shall not be less than the value of the movables subject to the usufruct.” La. Civ. Code art. 572. Within those boundaries, the trial court has discretion in determining the amount of the security. See Succession of Beard, 147 So.3d at 764.

The form of the security is governed by Louisiana Revised Statute 9:1202, which authorizes the court to “order the execution of notes, mortgages, or other documents as it deems necessary” or “impose a mortgage or lien” on the property as security. See also La. Civ. Code art. 1514.4 These provisions allow for whatever kind of security the trial court, in its discretion, deems appropriate. See Trahan, Successions & Donations, 64 La. L. Rev. 315, 329-30 (2004); see also La. Civ. Code art. 572, Revision Comments—1976, Comment (b) (“The rules adopted impose no limitations on the kinds of security that the usufructuary may furnish.”). A trial court’s judgment determining the amount and kind of security will not be disturbed on appeal absent an abuse of discretion. See Succession of Blythe, 576 So.2d 1207, 1208-09 (La. App. 5 Cir.), writ denied, 580 So.2d 385 (La. 1991).

Arguing that the security should be greater, Christopher points out the total value of the property subject to the usu-fruct is $2,422,236.68 and that an “unsecured note offers no security at all.” Conversely, Julius contends that the amount of the security should be reduced to reflect a discount in the value of Christopher’s interest attributable to the outstanding usu-fruct on the property.

At the outset of our analysis, we again note that the obligation to post security in this case arose solely because it was requested by Christopher, a child of Carole’s prior marriage and one of four naked owners holding an undivided interest in the property. In interpreting Article 572 under these circumstances, we are mindful of the language of former Louisiana Code of Civil Procedure article 3154.1, one of two statutory provisions previously cited by this court as the source of Christopher’s right to request the security. See Succession of Beard, 147 So.3d at 763-64.5 Notably, Article 3154.1 directed that the requested security be “in an amount determined by the court as adequate to protect the petitioner’s interest.”

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Related

Pierce Foundations, Inc. v. Jaroy Construction, Inc.
190 So. 3d 298 (Supreme Court of Louisiana, 2016)
In re the Succession of Beard
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Times-Picayune Publishing Co. v. Jacobs
126 So. 741 (Louisiana Court of Appeal, 1930)
Succession of Blythe
576 So. 2d 1207 (Louisiana Court of Appeal, 1991)

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Bluebook (online)
210 So. 3d 310, 2016 La.App. 1 Cir. 0304, 2016 La. App. LEXIS 2365, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-succession-of-beard-lactapp-2016.