Salley v. Salley

647 So. 2d 1164, 1994 WL 659419
CourtLouisiana Court of Appeal
DecidedNovember 23, 1994
Docket94-418
StatusPublished
Cited by10 cases

This text of 647 So. 2d 1164 (Salley v. Salley) 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
Salley v. Salley, 647 So. 2d 1164, 1994 WL 659419 (La. Ct. App. 1994).

Opinion

647 So.2d 1164 (1994)

Sheila SALLEY, Plaintiff-Appellant,
v.
Richard SALLEY, Defendant-Appellee.

No. 94-418.

Court of Appeal of Louisiana, Third Circuit.

November 23, 1994.
Rehearing Denied January 18, 1995.

*1165 W. Bernard Kramer, for Sheila Salley.

Steven Patrick Mansour, for Richard Salley.

Before THIBODEAUX, COOKS and SAUNDERS, JJ.

SAUNDERS, Judge.

The plaintiff-appellant, Sheila Salley, appeals the trial court's ruling that proceeds from the redemption of her former husband's, Richard Salley, stock donated to him by his father was his separate property. Additionally, plaintiff contends that the trial court erred when it held that defendant's purchase of certificates of deposit, an automobile, and twenty acres of land from the funds generated by that stock redemption were his separate property. Appellant also contends that the trial court erred in finding that the stock did not increase in value during the existence of the community regime. Appellant also argues as an assignment of error that the trial court erred in finding that the life insurance policy purchased by Richard Salley prior to his marriage to Sheila Salley was his separate property. Finally, appellant argues that the trial court erred in finding that Richard Salley should be reimbursed for paying debts of the community.

*1166 For the following reasons, we affirm the trial court's rulings.

Issues Presented

1) Whether the trial court erred in finding that the former wife of defendant was not entitled to one half (½) of the enhanced value of stock in the corporation owned by him as his separate property. 2) Whether the proceeds from the redemption of stock is the separate property of defendant. 3) Whether defendant commingled the proceeds from the stock redemption into the community regime. 4) Whether purchase of a 1987 Jeep and twenty (20) acres of land paid for from the proceeds of the stock redemption are part of the community property of the Salleys. 5) Whether the trial court erred in holding that the life insurance policy purchased by defendant prior to the establishment of the community property regime was the separate property of defendant.

We pretermit a discussion of plaintiff-appellant's assignment of error number eight (8) because that legal issue is resolved in our finding that the stock and the proceeds from the redemption of that stock was the separate property of Richard Salley. Assignments six (6), seven (7), and nine (9), are combined and addressed by this court's discussion of Issue III.

Facts

Sheila Salley, plaintiff-appellant, married Richard Salley, defendant-appellee, on November 24, 1973. The couple separated on May 17, 1991, and filed for divorce on May 21, 1991. Subsequently, the trial court rendered a judgment of divorce on January 6, 1992.

Richard Salley's parents, James W. Salley, Sr. and Mildred Salley, owned and operated Salley's Food Store, Inc. From December 24, 1973, to 1982, Richard Salley's parents donated to him a total of 370 shares in the corporation.

In 1986, Richard Salley and his father redeemed their stock back to the corporation. As a result of the redemption of his shares, Richard Salley received $814,000.00. Richard Salley made several purchases with the funds earned in the redemption, including immovable property, two cars, a large diamond ring, an automobile, and a variety of securities. At trial, the parties stipulated that the shares and proceeds earned from the redemption of those shares were the separate property of Richard Salley.

The principle issue contested was whether the proceeds from the redemption of those shares were commingled with the community, and thus, became a part of the community property of Richard and Sheila Salley. Additionally, whether the items purchased by Richard with the proceeds from the stock redemption were donated to his former wife Sheila.

Issue I

Whether the trial court erred in finding that the former wife of defendant was not entitled to one half (½) of the enhanced value of stock in the corporation owned by him as his separate property.

Sheila Salley claims that the provisions of La.C.C. art. 2368 entitle her to one half (½) of the increase in value of her former husband's shares in Salley's Food Store, Inc. that he owned as separate property. Specifically, La.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. (Emphasis added.)

The trial court ruled that Sheila Salley failed to prove that the separate property, i.e., 370 shares of Salley's Food Store, Inc., of her former husband had increased in value during the existence of the community property, and thus, implicitly ruled that La.C.C. art. 2368 did not apply.[1]

*1167 The Louisiana Supreme Court recently addressed similar issues raised in the case sub judice:

"When it is shown that community labor, expenses or industry has provided an increase to the separate property, the burden shifts to the owner of that separate property to rebut this proof and affirmatively establish that the increase is due only to the ordinary course of things, rise in values or chances of trade."

Krielow v. Krielow, 635 So.2d 180, 183 (La. 1994) (citing Abraham v. Abraham, 230 La. 78, 87 So.2d 735, 739 (1956)). In Krielow, supra, the Louisiana Supreme Court cleared up the jurisprudential inconsistencies among the courts of appeal and unequivocally established that the spouse claiming ownership in his or her former spouse's separate property carries the burden of proving 1) an increase in the value of a former spouse's separate property during the existence of the community property regime and 2) that the increase was due to the uncompensated or undercompensated labor of either spouse. Once the claimant spouse establishes a prima facie case of the increase in value and the requisite cause for the increase in value, the burden then shifts to the spouse owning the separate property to rebut that proof and affirmatively establish that the increase was due solely to the ordinary course of things, rise in values or chances of trade. Krielow, supra.[2]

The trial court ended its legal analysis on that issue raised by the plaintiff, when it ruled that Sheila Salley failed to carry the first part of the burden of proof that the law imposes on her, i.e., the separate property of her husband increased in value during the existence of their community property regime. We find that claimant spouse, Sheila Salley, arguably established that her former husband's stock in Salley's Food Store, Inc., increased in value during the existence of the community property regime.[3] We find nothing in the record, however, that even remotely suggests that the increase in the value of the stock was due to Richard's uncompensated or undercompensated labor nor do we find any evidence in the record that suggests Sheila Salley contributed in any way to the increase in the value of the stock in the store. Plaintiff failed to present any evidence establishing that the community endured any hardship or inequities or made any sacrifices that contributed to the increased value in Richard Salley's stock.

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Cite This Page — Counsel Stack

Bluebook (online)
647 So. 2d 1164, 1994 WL 659419, Counsel Stack Legal Research, https://law.counselstack.com/opinion/salley-v-salley-lactapp-1994.