Taylor v. Taylor

772 So. 2d 891, 2000 WL 1634180
Louisiana Court of Appeal·Decided November 1, 2000·No. 33,959-CA·Published·Cited by 5 cases

Opinion

772 So.2d 891 (2000)

Elise Chance TAYLOR, Plaintiff-Appellee,
v.
Richard David TAYLOR, Defendant-Appellant.

No. 33,959-CA.

Court of Appeal of Louisiana, Second Circuit.

November 1, 2000.
Rehearing Denied November 30, 2000.

*892 S. Lynn Walker, Shreveport, Counsel for Appellant.

William G. Nader, Shreveport, Counsel for Appellee.

Before NORRIS, C.J., and WILLIAMS and CARAWAY, JJ.

NORRIS, Chief Judge.

Former husband asserted a claim of lesion against a voluntary community property *893 settlement which included an obligation of contractual spousal support; the district court rejected this claim and ordered him to comply with the terms of the agreement. Finding the agreement lesionary, we reverse.

Factual Background

On February 7, 1998 Richard and Elise Taylor were married. Approximately eight months later, on October 24, 1998, Elise left the matrimonial domicile; she filed her original petition for divorce on November 4, 1998. On November 12, 1998, the parties signed an "Act of Partition and Community Property Settlement" which, among other things, granted Elise spousal support of $2,000.00 a month for life, and half of any future proceeds from certain oil and gas leases held by Sandstone Exploration, LLC, Richard's company. Although the document was never filed into the divorce suit record, it was filed into the conveyance records of Bienville Parish.

Subsequently, in the first week of December, 1998, Richard announced his intention not to abide by the terms of the agreement, claiming that misrepresentations were made by Elise during negotiations and that the agreement was lesionary. Accordingly, he filed a Petition for Rescission on December 29, 1998; Elise answered and reconvened, claiming that Richard breached the contract and also seeking attorney fees. The parties were ultimately divorced on June 3, 1999, with the former community regime being terminated retroactive to November 4, 1998. Trial on the Petition for Rescission was held on September 23-24, 1999. In a judgment dated October 18, 1999, the district court granted Elise's motion for involuntary dismissal, dismissing Richard's Petition for Rescission and ruling in favor of Elise on her reconventional demand, ordering Richard to comply with the terms of the original agreement and pay accrued spousal support. Attorney fees of $3,000.00 were also awarded to Elise. This appeal followed.

Law and Analysis

On appeal, Richard initially argues that the trial court erred in determining that oil and gas leases[1] belonging to Sandstone Exploration, LLC, a business he owned prior to the marriage, were community property. The district court made this finding despite the uncontroverted evidence adduced at trial that Sandstone was formed in October, 1997, and the parties were married on February 7, 1998; in fact, counsel for Elise stipulated at trial as to the corporation's separate nature. (Record p. 250, ln. 17-20)

Under Louisiana law, property of married persons is generally characterized as either community or separate. La.C.C. art. 2335. The classification of property as separate or community is fixed at the time of its acquisition. Gay v. Gay, 31,974 (La. App.2d Cir. 6/16/99), 741 So.2d 149, 153. It is axiomatic that community property comprises property acquired during the existence of the matrimonial regime. La. C.C. art. 2338. Likewise, separate property is that property acquired prior to the establishment of the community property regime and is the exclusive property of whichever spouse owned it prior to the marriage. La. C.C. art. 2341.

At trial, Richard testified that the leases were acquired in Sandstone's name. His responsibility on behalf of Sandstone was to locate and convince "ground floor" investors to provide funding for a lease block of certain properties to be held by Sandstone. Then, his responsibility on behalf of Sandstone was to locate and sell the *894 oil/gas prospect to other industry investors. As consideration for the sale, Sandstone would receive the profit as well as an overriding royalty from the production achieved from the lease.

Although the district court was presented with the evidence and stipulations of counsel that the leases were the property of Sandstone and that Sandstone was the separate property of Richard, the district court apparently felt that because the leases themselves were executed during the existence of the marriage, they were community property. The court made this finding despite Richard's testimony that no community funds were used in this business enterprise, that the leases were the property of Sandstone, that Sandstone currently had no overriding royalty from the leases, and that Sandstone had not conveyed the interests in those leases to himself or anyone else. As such, since the leases were the incorporeal immovable property of Sandstone, the district court was in error, for under the Civil Code, Mrs. Taylor would not be entitled to one-half of the leases' value, but rather only to reimbursement for one-half of the expenditure of community services in this case, the value of Mr. Taylor's labors-used to enhance his separate property. La. C.C. art. 2366; see also, Brehm v. Brehm, 00-201 (La.App.5th Cir 6/27/00), 762 So.2d 1259 (matrimonial domicile built on husband's separate property did not become community property by use of community funds to construct home and subsequent improvements); Panzico v. Panzico, 30,760 (La.App.2d Cir. 8/19/98), 716 So.2d 505. In fact, during the existence of the marriage, Sandstone lost money. Additionally, the record is devoid of any evidence that Mrs. Taylor pierced the "corporate veil" to show that Sandstone is indistinguishable from Richard or that Richard individually had the right to assign Sandstone's holdings. Based on the record before us, the district court was clearly wrong in concluding that the leases executed by Sandstone were community property; this assignment has merit.[2]

Richard's third assignment of error contends that the district court erred in dismissing his petition for rescission based on lesion. We agree.

An extrajudicial partition may be rescinded on account of lesion if the value of the part received by a co-owner is less by more than one-fourth of the fair market value of the portion he should have received. La.C.C. art. 814. Lesion cannot be waived. Harmon v. Harmon, 508 So.2d 616, 620-21 (La.App. 2d Cir.), writ denied, 513 So.2d 1210 (La.1987); Picard v. Picard, 97-1258 (La.App. 3d Cir. 4/1/98), 708 So.2d 1292, 1295.

The proper method of establishing lesion beyond one-fourth is twofold: (1) the community property's true value (net value) must be ascertained; and (2) it must then be determined from the property acquired whether a party received value less than ¾ of ½ share of the true value of the property partitioned. McCarroll v. McCarroll, 96-2700 (La.10/21/97), 701 So.2d 1280, 1285; Cowling v. Cowling, 486 So.2d 1060 (La.App. 2d Cir.1986); La. C.C. art. 2590; La. C.C. art. 814 comment (b). The party claiming this remedy has the burden of proving lesion beyond one-fourth and must establish the claim by clear and convincing evidence. King v. King, 493 So.2d 679, 681 (La.App. 2d Cir. 1986); Ozane v. Ozane, 392 So.2d 774, 777 (La.App. 3d Cir.1980).

From the record, we note that the community had a gross value of $46,380.51 and a net value of $40,542.68. According to the agreement, $ 42, 452.13 of the community assets were conveyed to E

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