Krielow v. Krielow

622 So. 2d 732, 1993 WL 264650
CourtLouisiana Court of Appeal
DecidedSeptember 2, 1993
Docket92-644
StatusPublished
Cited by7 cases

This text of 622 So. 2d 732 (Krielow v. Krielow) 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
Krielow v. Krielow, 622 So. 2d 732, 1993 WL 264650 (La. Ct. App. 1993).

Opinion

622 So.2d 732 (1993)

Carl J. KRIELOW, Plaintiff-Appellee,
v.
Lynn Naebers KRIELOW, Defendant-Appellant.

No. 92-644.

Court of Appeal of Louisiana, Third Circuit.

July 14, 1993.
Opinion Amending Decision on Denial of Rehearing September 2, 1993.

*734 Philip Collins Kobetz, Lafayette, for Carl J. Krielow.

Larry S. Bankston, Amy Elizabeth Counce, Baton Rouge, for Lynn N. Krielow.

Before GUIDRY, KNOLL and WOODARD, JJ.

KNOLL, Judge.

Lynn N. Krielow appeals the trial court's partition of community property following her divorce from Carl J. Krielow. The trial court divided the assets and liabilities and ordered Lynn to execute an unsecured promissory note to Carl for $25,463.21 payable over 60 months at 8% interest.

Lynn appeals the trial court's judgment, asserting that the trial court erred in: (1) holding that Lynn bears the burden of proving that the increase in value of Carl's separate property was not due to the natural course of events; (2) finding the Mack truck and trailer and the corresponding debt to be community, failing to award lost rental value of the equipment, and failing to find that Carl breached his fiduciary duty while the equipment was exclusively in his control; (3) classifying the bank debt incurred by Concept Computer, Inc. to be a community liability; (4) classifying the Benoit property as separate; (5) holding that alleged loans made by Krielow Brothers, Inc. to Carl were community obligations; (6) classifying cash proceeds from a second mortgage signed by both Lynn and Carl as a separate obligation; (7) holding that Lynn's payment of certain community debts was not recoverable due to the insolvency of the community; (8) allowing recovery by Carl for education and training contributions under LSA-C.C. Art. 161; and, (9) allowing Carl's claim that certain community debts had been paid with community dividends received after the divorce.

For reasons which follow, we amend and affirm the judgment of the trial court.

FACTS

Lynn and Carl married on June 20, 1980. The community terminated in November of 1988 with the filing of the petition for legal separation. A judgment of divorce followed in November of 1989. Carl filed a petition for partition of the community property on August 1, 1989. Both parties filed various detailed descriptive lists. After a trial on the merits, the trial court, on November 15, 1991, rendered 22 pages of written reasons, which it subsequently supplemented on December 19, 1991, to correct an error in calculation.

The trial court entered judgment on March 18, 1992, partitioning the community property. In lengthy written reasons, it found the community insolvent, with a net value of -$10,801.14. The trial court allocated $30,750.03 of community movable assets to Lynn and $56,975 of community movable assets to Carl. The trial court deemed Carl responsible for payment of all community liabilities, which totaled $98,526.17.

The trial court further found Lynn entitled to reimbursement from Carl in the amount of $1,839.88 for community funds used in payment of principal on Carl's separate house note; $7,686.50 for dividends received by Carl on community stock after deducting payments he made on community debts; and $4,211.01 for improvements made to Carl's house, his separate property. The trial court awarded Carl $3,050 in reimbursement for financial contributions made to Lynn's education and training. However, the trial court denied other reimbursement *735 claims to Carl and Lynn because of the community's insolvency.

The judgment ordered Lynn to return to Carl certain property in her possession belonging to his separate estate. The trial court deemed all stock in Krielow Brothers, Inc. and the Benoit farm to be Carl's separate property. The trial court denied Lynn reimbursement on her claim that the value of the stock increased during the marriage as a result of Carl's uncompensated labor and industry. To effectuate its rulings, the trial court ordered Lynn to execute an unsecured promissory note in the amount of $25,463.21 payable to Carl in 60 monthly installments at 8% interest.

ENHANCEMENT OF CARL'S SEPARATE PROPERTY

First, Lynn contends that the trial court erred in allocating to her the burden of proving that the increase in value of Carl's separate property was not due to the natural course of things.

LSA-C.C. Art. 2368 provides:

"If the separate property of a spouse has increased in value as a result of the uncompensated common labor or industry of the spouses, the other spouse is entitled to be reimbursed from the spouse whose property has increased in value one-half of the increase attributed to the common labor."

A complete review of jurisprudence interpreting this statute leads us to conclude that the trial court applied the proper standard: Lynn, the claimant spouse, has the initial burden of proving that the increase in value of Carl's separate property is the result of the uncompensated common labor and industry of the spouses; then, if Lynn meets her burden of proof, the burden shifts to Carl to prove that any increase in the value of his separate property is due to the ordinary course of things, rise in value, or chances of trade. Hartfield v. Hartfield, 602 So.2d 179 (La.App. 3rd Cir.1992); Pellerin v. Pellerin, 550 So.2d 1250 (La. App. 4th Cir.1989); 16 K. Spaht & W. Hargrave, Louisiana Civil Law Treatise: Matrimonial Regimes, sec. 7.18 (West 1989 & Supp.1992). The record shows that the trial court properly followed this jurisprudence and placed the initial burden of proof on Lynn.

Lynn relied upon her expert witness, Gregory Ellis, who was a CPA, to prove that Carl's separate property was increased in value by Carl's uncompensated labor. Concerning the increase in value, the best Mr. Ellis could say was:

"A: I don't know what caused the growth.

Q: You don't have any idea what caused that company to grow. You just said that didn't you?

A: The personnel, the management personnel in the company.

* * * * * *

A: [Y]ou get competent people, the officers and management, and that's what makes a company grow."

The record shows that Carl devoted much of his time to Krielow Brothers, Inc., acted as vice-president, and passed the Louisiana Contracting License Board exam to qualify the corporation for heavy construction work. However, Mr. Ellis testified that the majority of the corporation's growth occurred between 1984 and 1988, during which time Carl owned a minority 3.3% interest, and his mother, Maxine Krielow, owned a controlling majority interest. Mr. Ellis admitted that Carl's stock increased from $32,000 to $320,000 during this time solely as a result of Maxine's action as majority shareholder in causing the corporation to repurchase treasury stock. Also, Mr. Ellis could not establish the value of the stock at the inception of the community in 1980.

We find that Mr. Ellis' testimony and other record evidence is not sufficient to meet Lynn's burden of proving that the value of Carl's separate property was increased by his uncompensated labor. We have reviewed the record carefully, and in light of the evidence presented, we cannot say that the findings of the trial court are manifestly erroneous. Rosell v. ESCO, 549 So.2d 840 (La.1989).

*736 CLASSIFICATION OF MACK TRUCK, TRAILER, AND DEBT

Secondly, Lynn argues that the trial court erred in finding the 1981 Mack truck and 1975 Hobbs trailer and their corresponding debt community.

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