Lanza v. Lanza

874 So. 2d 890, 2003 La.App. 4 Cir. 1382, 2004 La. App. LEXIS 1132, 2004 WL 943737
CourtLouisiana Court of Appeal
DecidedApril 28, 2004
DocketNo. 2003-CA-1382
StatusPublished
Cited by1 cases

This text of 874 So. 2d 890 (Lanza v. Lanza) 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
Lanza v. Lanza, 874 So. 2d 890, 2003 La.App. 4 Cir. 1382, 2004 La. App. LEXIS 1132, 2004 WL 943737 (La. Ct. App. 2004).

Opinion

J^EDWIN A. LOMBARD, Judge.

The plaintiff/appellant, Vicki Coudrain Lanza (“Ms. Coudrain”), appeals the trial court judgment of March 7, 2002, which held that the State Farm agency operated by defendant/appellant, Louis Lanza (“Mr. Lanza”), including any income earned after the Petition For Divorce was filed, is neither community property nor property subject to partition. After review of the record, the applicable law, and the arguments of the parties, we affirm the trial court judgment in part and reverse in part, and remand this matter for further proceedings consistent with this opinion. ,

Pertinent Facts

Ms. Coudrain and Mr. Lanza were married on August 1, 1975. On January 23, 1981, Mr. Lanza entered an agreement with State Farm to become a State Farm agent, establishing the “Lou Lanza State Farm Insurance Agency” (“the Agency”). Ms. Coudrain helped Mr. Lanza with the business during the marriage. The couple [891]*891separated in November 1996, and Ms. Coudrain filed the Petition For Divorce on September 11, 1997. After the parties lived apart for the requisite period of time in accordance with La. Civ.Code art. 103(1), a Consent Judgment of Divorce was entered on August 12, 1998. The parties were unable to reach agreement as to the | ¡^partition of the community property, particularly as to whether the Agency was community property or property subject to partition, and, accordingly, a three day trial (over the course of four months) was held by the trial court to determine “whether the State Farm agency managed by Louis Lanza or any benefits derived there from are community property subject to partition.” After finding that “the State Farm agency is a non-entity” and “not a ‘thing’ which is subject to partition,” the trial judge rendered judgment in favor of Mr. Lanza on March 7, 2003, with the decree that the Agency, “including any income earned by Mr. Lanza after the filing of the Petition for Divorce, is not property subject to partition, nor is it community property to which [Ms.] Coudrain holds an ownership interest.” (Emphasis added.) Ms. Coudrain appeals this judgment.

Discussion

Ms. Coudrain raises two assignments of error on appeal: (1) the trial court erred as a matter of law in holding that the Agency was neither property subject to partition nor community property in which Ms. Coudrain holds an ownership interest; and (2) the trial court erred as a matter of law in holding that the income generated by the Agency after the filing of the Petition for Divorce was neither property subject to partition nor community property in which she holds an ownership interest.

Standard of Review

A trial court’s findings regarding the nature of the property as community or separate is a factual determination subject to manifest error review. Ross v. Ross, 2002-2984, p. 18 (La.10/21/03), 857 So.2d 384, 395.

| «Assignment of Error No. 1

First, Ms. Coudrain argues that, pursuant to La. Civ.Code art. 2369.3, the Agency is a community enterprise and, as such, its value and assets are subject to partition as community property. Article 2369.3, entitled “Duty to preserve; standard of care,” provides as follows:

A spouse has a duty to preserve and to manage prudently former community property under his control, including a former community enterprise, in a manner consistent with the mode of use of that property immediately prior to termination of the community regime. He is answerable for any damage caused by his fault, default, or neglect.
A community enterprise is a business that is not a legal entity.

The appellant contends that the term “community enterprise,” as it appears in Article 2369.3, should be broadly interpreted to circumvent the traditional definition of property under the Louisiana Civil Code, as well as the specific terms of the contract between Mr. Lanza and State Farm, to find that the Agency is subject to partition or inclusion in the community property regime in this case. Neither Louisiana jurisprudence nor legislative history supports this novel analysis, however.

Article 2369.3 was enacted in 1995 to impose an affirmative duty on the spouse in control of former community property to preserve and manage it and to create a higher standard of care in managing community property after termination of a community regime when there is no longer an assumption that the spouse in control of the property will act in the best interest of both spouses. As such, this article per[892]*892tains to accountings between spouses as to the community property and application of provisions governing co-ownership of former community property. La. Civ.Code art. 2369.3, commentary (a). Thus, for purposes of imposing this duty and higher standard of care, the article inserted the term “community | ¿enterprise” in recognition of the fact that a “business as a collective of things, although it has no juridical personality, continues after termination of the community regime....” La. Civ.Code art. 2369.3, commentary (b). Accordingly, if it were determined that the Agency was community property or that Ms. Coudrain held an ownership interest in the Agency, Mr. Lanza would be held to a higher standard of care in his management of the Agency after the Petition of Divorce was filed.

In this case, however, although it appears that Ms. Coudrain substantially contributed to building the Agency’s clientele, only Mr. Lanza entered into the contract with State Farm and that contract specifically provides that Mr. Lanza does not own or have any vested interest in the Agency bearing his name. Accordingly, we find no error in the trial judge’s determination that the Agency is a non-entity and not a “thing” under the Louisiana Civil Code subject to partition.

Assignment of Error No. 2

Alternatively, Ms. Coudrain argues that the trial court was erroneous in finding that she was not entitled to an interest in renewal commissions generated after the termination of the community on policies first written during the community’s existence. Based on Ross, supra, issued shortly after the trial judge rendered her decision in this case, we are inclined to agree.

In Ross, the Louisiana Supreme Court addressed the issue of whether renewal commissions received by a State Farm agent on insurance policies written before the existence of the community are the result of labor, skill or industry are “property” from which the State Farm agent derives civil fruits which may fall within the Louisiana community property regime. After an extensive review of the historical background of the concept of “fruits” in Louisiana and the rights of | ^spouses with regard to fruits under the Louisiana community property regime, the Ross Court determined that the renewal of a pre-exist-ing State Farm insurance policy constitutes a juridical act and, thus, a thing under La. Civ.Code art. 551

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Lanza v. Lanza
898 So. 2d 280 (Supreme Court of Louisiana, 2005)

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Bluebook (online)
874 So. 2d 890, 2003 La.App. 4 Cir. 1382, 2004 La. App. LEXIS 1132, 2004 WL 943737, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lanza-v-lanza-lactapp-2004.