McCarroll v. McCarroll

701 So. 2d 1280, 1997 WL 644612
Supreme Court of Louisiana·Decided October 21, 1997·No. 96-C-2700·Published·Cited by 81 cases

Opinion

701 So.2d 1280 (1997)

Margarette McCARROLL
v.
Donald McCARROLL.

No. 96-C-2700.

Supreme Court of Louisiana.

October 21, 1997.

*1281 Lila T. Hogan, Hogan & Hogan, Hammond, Harry A. Johnson, III, Phelps Dunbar, Shreveport, for Applicant.

Reginald J. McIntyre, Hammond, for Respondent.

KNOLL, Justice.

Even though lesion in an extrajudicial partition is the setting for this community property litigation, the central issue before us concerns the assessment of fair rental value for a spouse's use of the family residence. La.R.S. 9:374(C).[1] Plaintiff, Margarette McCarroll, seeks to rescind an extrajudicial partition of community property on account of lesion under La.Civ.Code art. 814.[2] The lower courts found the partition was not lesionary because plaintiff had received the exclusive use of the community home for the years leading up to and following the partition, and that the rental value of the family home should be counted as consideration received by plaintiff in the partition. McCarroll v. McCarroll, 95-1972 (La.App. 1 Cir. 6/28/96), 680 So.2d 681. There is a split among the circuits over the assessment of fair rental value of the family residence pending termination of the marriage or partition of the community property. We granted writs to determine whether the rental value of the family home should have been assessed against Mrs. McCarroll for purposes of determining whether the partition was lesionary. McCarroll v. McCarroll, 96-2700 (La.1/24/97), 686 So.2d 852. Our treatment of this issue will resolve the conflict among the circuits.

Finding that the fair rental value should not have been assessed against Mrs. McCarroll to the extent employed, we reverse the rulings of the lower courts, find that the partition was lesionary under La.Civ.Code art. 814, and remand for a judicial partition of the community assets.

FACTS

Margarette McCarroll and Donald McCarroll were married on July 25, 1958. The McCarrolls were legally separated on November 16, 1976, and after a period of reconciliation in 1977, a judgment of divorce was entered in favor of Mrs. McCarroll on January 28, 1980. At the time of their divorce, one of their children was over the age of eighteen and two were still minors, living at home. Partition of the community property *1282 was discussed by the parties, and Mr. McCarroll attempted to have a written settlement executed on several occasions. However, the community property regime which existed between the parties during their eighteen-year marriage was not partitioned until March 3, 1990, when the parties entered into a community property settlement. The settlement, which was in the form of an authentic act, stated:

COMMUNITY PROPERTY SETTLEMENT BETWEEN DONALD McCARROLL AND MARGUERITE MARTIN McCARROLL
BEFORE ME, the undersigned authority, personally came and appeared DONALD McCARROLL and MARGUERITE MARTIN McCARROLL, who being first sworn, deposed and said they were formerly married, and said marriage ended in divorce in the Twenty First Judicial District Court for the Parish of Tangipahoa, State of Louisiana, on the 28th day of January, 1980, and that they do by these presents enter into the following settlement of the community of acquets and gains which formerly existed between the parties.
DONALD McCARROLL takes as his part, and MARGUERITE MARTIN McCARROLL does hereby transfer to DONALD McCARROLL, all of her right, title and interest in and to:
1. A lot 218 feet on the North side of Highway 190 by a depth of 131 feet in Section 23, Township 6 South, Range 6 East, being the property purchased from Holland heirs in COB 182, Page 332 of the Livingston Parish Clerk and Recorder's Office.
2. Any and all movable property in the name of DONALD McCARROLL or in his possession that was acquired during the community of acquets and gains.
MARGUERITE MARTIN McCARROLL further acknowledges that she has received the sum of $5,000.00 in cash.
MARGUERITE MARTIN McCARROLL takes as her part, and DONALD McCARROLL does hereby transfer to MARGUERITE MARTIN McCARROLL, in addition to the $5,000 previously mentioned, all right, title and interest in and to Any and all movable property in the name of MARGUERITE MARTIN McCARROLL or in her possession.
The remaining property belonging to the parties shall be held in indivision.

Three months after this agreement was signed, on July 31, 1990, Donald McCarroll retired from his job at Chevron after nearly 35 years. Upon his retirement, he received a substantial retirement package and profitsharing/stock benefit plan, having a combined value in excess of $300,000. The record reflects that Mrs. McCarroll did not know the value of the retirement package at the time she signed the settlement agreement. She later discovered this information after Mr. McCarroll's Paine Weber statement was mistakenly mailed to her home.[3]

On June 10, 1992, Mrs. McCarroll filed a petition to partition the community property, including the family home and the community portion of Donald McCarroll's retirement benefits. Donald McCarroll answered the petition, asserting that the retirement benefits had already been partitioned pursuant to *1283 the March 3, 1990, settlement executed by the parties. Donald argued that since the retirement benefits were "movable property in his name and possession," they were partitioned in the settlement agreement. Mrs. McCarroll amended her petition, seeking to rescind the March 3, 1990 settlement based on lesion.

The trial court bifurcated the issue of lesion from the actual partition of the community property. Initially the trial court noted that the March 3, 1990, settlement was ambiguous as to whether the parties intended to include the Chevron retirement package in the settlement. A hearing was held to determine the intent of the parties as to Mr. McCarroll's retirement.

At the hearing, Mr. McCarroll's brother, Wendall McCarroll, and his sister, Joan Perilloux, testified that they each had loaned Mr. McCarroll $2,500 in 1979 so that Mr. McCarroll could settle the community property. Mrs. Perilloux testified that she met Mr. McCarroll and Mrs. McCarroll at her mother's house in 1979, and that in a verbal agreement, Mrs. McCarroll exchanged her rights to the Chevron retirement in exchange for $5,000, the furniture in the house, for the use of the family residence until the children were grown. Wendall McCarroll acknowledged being at the house when the agreement was made, but stated that he did not know the terms of the agreement. Although Margarette McCarroll denied that this 1979 transaction took place, shortly thereafter Mr. McCarroll moved out of and Mrs. McCarroll moved into the family home with two of the children.

Hobart Pardue, the attorney who prepared the March 3, 1990, settlement agreement, testified that he had explained to both parties that the settlement would include "monies, claims, or anything they might have," but that he was not informed of the existence of the retirement benefits. Mr. Pardue also testified that it was his understanding that Mrs. McCarroll would have use of the family home.

The trial court concluded that the parties intended to part

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