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MATRIMONIAL REGIMES

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					                                                          MATRIMONIAL REGIMES
                                                             Professor Rigby
                                                                Fall 2006

I. INTRODUCTION

1.1 HISTORY AND
1.2 AMERICAN LAW INSTITUTE’S PRINCIPLES OF FAMILY DISSOLUTION

        A. Matrimonial Regimes
                 1. Definition
                                     CC 2325: Matrimonial Regime. A matrimonial regime is a system of principles and rules governing the
                              ownership and management of the property of married persons as between themselves and toward third persons.
                                     Rigby: A system of rules governing the ownership and management of property of married persons.
                                     CC 2326. Kinds of Matrimonial Regimes. A matrimonial regime may be legal, contractual, or partly
                              legal and partly contractual.

                  2. Types:
                       4 different sets of rules (regimes) constitute matrimonial regimes:
                             1) Legal (community property)
                             2) Separation of property
                             3) Contractual
                             4) Partly legal and partly contractual
                             a. Legal
                                        Regime that law provides through legislation or case law
                                        CC 2327. Legal Regime. The legal regime is the community of acquets and gains established in Chapter
                               2 of this title.
                                        Rigby: There is one set of rules for things acquired and gained (community property) and another set of
                               rules for separation of property.
                                        First must identify the thing (property) as community property of the couple or the separate property of one
                               of the spouses.
                                        In Louisiana if a thing is classified as community property then the spouses own and manage it equally
                               during the marriage and it is separated (distributed) equally at the termination of the marriage.
                                        In other words, Louisiana has rejected the equitable distribution doctrine followed in the other 8
                               community property states. However, a few Louisiana cases follow this doctrine.
                                        Equitable distribution doctrine in community property states - During marriage the spouses
                               own/manage community property equally but courts have discretion to distribute the property unequally at the
                               termination of the marriage. Particular items of community property and obligations are allocated or assigned
                               equitably according to the discretion of the courts.
                                        In Louisiana there is equal distribution upon termination of marriage through divorce and upon death of a
                               spouse.

                              b. Separation of Property
                               C.C. 2370. Separation of Property Regime. A regime of separation of property is established by a
                              matrimonial agreement that excludes the legal regime of community of acquets and gains or by a judgment
                              decreeing separation of property.
                               Individualization of property- Anything I earn/bring in belongs to me. Anything I buy with the money I earn
                              belongs to me.
                               This is distinguished from the community property regime in which spouses share equally everything that
                              comes into the marriage.
                               Equitable distribution doctrine in separate property states- During marriage there is unequal
                              management of things with each spouse owning/managing those things which he or she brought into the marriage
                              but upon termination the courts have discretion to distribute the things equitably. This is the basic policy of the
                              other 41 states.

                              c. Contractual
                                      Regime that parties come up with themselves through a contract. Rigby: The spouses make their own
                              rules as to who owns what and how it is managed during the marriage.
                                      Parties here refers to the spouses only
                                      A contractual matrimonial regime can only be b/t spouses.
                                      If the spouses come up with a contract for the management of the marriage, then the courts will follow it,
                              unless it violates public policy.
                                                                                                                                                    1
                                         If parties do not come up with a contract, then they have a legal regime.
                                         The legal regime is the default. If you do nothing, then you have a legal regime.
                                         If you want to get around the legal regime, then contracting for the management of the marriage is the only
                                  way to do this.
                                         CC 2328. Contractual Regime; matrimonial agreement.
                                                      A matrimonial agreement is a contract establishing a regime of separation of property or
                                  modifying or terminating the legal regime. Spouses are free to establish by matrimonial agreement a regime of
                                  separation of property OR modify the legal regime as provided by law.
                                          The provisions of the legal regime that have not been excluded OR modified by agreement retain their
                                  force and effect.

                               d. Partly legal, partly contractual
                                         This occurs when you write a contract that addresses some things, but not everything.
                                         The legal regime steps in and fills in the ―gaps‖ (things you don‘t cover)

                     3. Organization of Matrimonial Regimes Statutory Provisions
                                 CC Book III, Title VI Matrimonial Regimes
                                            o Chapter 1: General principles that apply to ant type of Mat. Regime- Arts 2325 to 2333
                                            o Chapter 2: The Legal Regime of Community of Acquets and Gains- Arts 2334-2369.8. Note:
                                                 2369.1-2369.8 deals with post-legal regime.
                                            o Chapter 3: Separation of Property Regime- Arts 2370- 2376
                                            o Chapter 4: Marital Portion- Arts 2432-2437
                                CC Book II, Title VII Ownership in Indivision- Arts 797-818
                                Revised Statutes, Chapter 1 Partition of Community Property- Sections 9: 2801-9: 2802
                                Must identify the regime and then apply the appropriate rules.
                                These rules are not interchangeable.
                     4. General Principles that apply to all Mat. Regimes Articles 2325-2333
CC 2325: Matrimonial Regime. A matrimonial regime is a system of principles and rules governing the ownership and management of the
property of married persons as between themselves and toward third persons.

CC 2326. Kinds of Matrimonial Regimes A matrimonial regime may be legal, contractual, or partly legal and partly contractual.

CC 2327. Legal Regime. The legal regime is the community of acquets and gains established in Chapter 2 of this title.

CC 2328. Contractual Regime; matrimonial agreement.
A matrimonial agreement is a contract establishing a regime of separation of property or modifying or terminating the legal regime. Spouses are
free to establish by matrimonial agreement a regime of separation of property OR modify the legal regime as provided by law.            The
provisions of the legal regime that have not been excluded OR modified by agreement retain their force and effect.

CC. 2329. Exclusion or modification of matrimonial regime.
           Spouses may enter into a matrimonial agreement before or during marriage as to all matters that are not prohibited by public policy.
           Spouses may enter into a matrimonial agreement that modifies or terminates a matrimonial regime during marriage only upon joint
petition and a finding by the court that this serves their best interests and that they understand the governing principles and rules. They may,
however, subject themselves to the legal regime by a matrimonial agreement at any time without court approval.
           During the first year after moving into and acquiring a domicile in this state, spouses may enter into a matrimonial agreement without court
approval.

CC. 2330. Limits of contractual freedom.
           Spouses may not by agreement before or during marriage, renounce or alter the marital portion or the established order of succession.
Nor may the spouses limit with respect to third persons the right that one spouse alone has under the legal regime to obligate the community or to
alienate, encumber, or lease community property.

Art. 2331. Form of matrimonial agreement.
          A matrimonial agreement may be executed by the spouses before or during marriage. It shall be made by authentic act or by an act
under private signature duly acknowledged by the spouses.

Art. 2332. Effect toward third persons.
           A matrimonial agreement, or a judgment establishing a regime of separation of property is effective toward third persons as to immovable
property, when filed for registry in the conveyance records of the parish in which the property is situated and as to movables when filed for registry
in the parish or parishes in which the spouses are domiciled.

Art. 2333. Minors

                                                                                                                                                     2
           Unless fully emancipated, a minor may not enter into a matrimonial agreement w/out the written concurrence of his father and mother, or
of the parent having his legal custody, or of the tutor of his person.

Art. 2334. Persons; scope of application of the legal regime.
          The legal regime of community of acquets and gains applies to spouses domiciled in this state, regardless of their domicile at the time of
marriage or the place of celebration of the marriage.

Art. 2335. Classification of property
          Property of married persons is either community or separate, except as provided in Article 2341.1.

          B. The Community Property Regime
                   1. Historical Basis
                              a. Introduction
                                        The first written recognition of community property is in the Fuero Juzgo; not the Roman law.
                                        Unlike every other society, Germanic tribes thought of women as major contributors to the household in
                                every way. They were considered to be on equal footing with the men.
                              b. Historical Basis in Louisiana
                                        Introduced by the Fuero Juzgo, became law of Spain in 17th century.
                                        La. was under Spanish control. We imported the notion of community property from them.
                                        Prior to January 1, 1980 the husband was the head and master of the community. He was the sole
                                manager of the community assets and obligations during marriage. The wife could not acquire or dispose of
                                community assets. Federal Courts said this violated the US Constitution.
                                        The Legislature passed an act in 1979 that became effective on January 1, 1980 requiring equal
                                management of community property by spouses. This act also made major changes in how community property
                                is divided upon termination of the marriage.
                                        The 1979 act made minor changes in how assets and obligations were classified as either community
                                property of both spouses or the separate property of one spouse.

                     2. Modern Subscribers
                              9 (8 including Louisiana) states have community property today
                              8 states with community property:
                              (1) Louisiana;
                              (2) Arizona;
                              (3) California;
                              (4) Nevada;
                              (5) New Mexico;
                              (6) Idaho;
                              (7) Washington; &
                              (8) Texas.
                              The common thread between all 8 of these states is that all either were under Spanish control for a period of time or
                       the product of significant Spanish influence.
                              (9) Wisconsin. Wisconsin is different/unique, in that it adopted the Uniform Martial Property Act “UMPA” in 1986.
                       This was an idea for a uniformed law; only law if the states adopt it. Principles considered to be common property.

                     3. Essential Attributes
                               a. An undivided ownership interest in a community
                                      C.C. 2336. Ownership of Community Property.
                                         Each spouse owns a present undivided one half interest in the
                               community property. Nevertheless, neither the community nor things of the community may be judicially portioned
                               prior to the termination of the regime.
                                         During the existence of the community property regime, the spouses may, without court approval, voluntarily
                               partition the community property in whole or in part. In such a case, the things that each spouse acquires are
                               separate property. The partition is effective toward third persons when filed for registry in the manner provided by
                               Article 2332.

                                          i. Distinguished from Co-ownership
                                          o Partition Rules
                                                o Co-owners and spouses in the community property regime can divide property voluntarily
                                                     (w/out permission of the court.)
                                                o The difference is in “judicial partition.”
                                                o The rule does not mention judicial partition. A contrario- If it does not mention it, then it is not
                                                     allowed.
                                                                                                                                                         3
                                                o    Spouses during marriage cannot seek judicial partition until regime is over.
                                                o    Specifically, there is a spousal bar to suit (RS 9:921)
                                                o    Policy: We don‘t want the courts getting involved in every spat b/t the spouses.

                                          o     Transfer Rules
                                                o C.C. 2337. Disposition of Undivided Interest.
                                                    A spouse may not alienate, encumber, or lease to a third person his undivided interest in the
                                                community or in particular things of the community prior to the termination of the regime.
                                                o In co-ownership, you can alienate, encumber, or lease your undivided ½ interest of house at
                                                    any time. Spouses can’t.
                                                o Policy: We don‘t want spouse to have to co-owned property w/ a stranger.

             4. Critical Analysis of Its Continued Necessity
                    Community property regime takes into account all of the contributions of the spouses.
                    Example: We have a husband and a wife. Husband goes out and works and makes 100k/year. The wife stays home and
              takes care of the children. They amass 100k in property. In the Community Property system, it is shared property. They will split it
              50/50 in Louisiana. Suppose we have the exact same situation in a separate property regime. They wife will get nothing. But, the
              money was all the husband‘s. She just keeps what she brought in. (This is also known as the ―feminist‖ argument in favor of the
              Community Property Regime.)
                    70‘s and 80‘s: Every Separate Property State adopted the equitable distribution doctrine.
                    Example: We give wives compensation for their contributions. Court makes determination of what is equitable. This undercuts
              the notion of ―what you bring in to the marriage, you take out.‖

         5. In Practice
                    1. Each party will get equal net values of the property
                    2. CP uses an item partition.
                               a. Divorced spouses will NOT share a house, car, etc. .
                    3. Hypo: Andrea and Taylor get a divorce. If they have a                                                house in LA and MS, a
VW, an Acura, 2 jetskis
                                              a. They‘d probably divvy it up w/Andrea getting a house, the VW (cheaper car), and jetskis; Taylor
                                                   would get a house, his AcuraEQUAL value
                                              b. They‘d each get their own separate property.
                    4. Community property does not really help when the two spouses are working, but it hurts them in the cases of debt. With
                    society today, community is just another creditor protection device.
                    5. Why keep it? Well, dual wage earners is not something that is necessarily the standard in America. Keep regime for non-
                    dual wage earners, and those spouses that do not earn in parity w/ e/o.

II. What is Property and How is it Classified?

2.1 In General

     A. In General (Rigby Analysis)
     1. What is the thing at issue? In civil law use ―thing‖ instead of ―property.‖
     2. Is it a thing capable of being managed under the rules of mat. regimes? That is, can it be classified? Can it be divided?
            o Does it have value? Concept of value different in civil law than in common law.
            o      In common law a thing does not have value if it is not marketable in any way.
            o The LA CC does not require a thing to have monetary value or be marketable in any way to be classified for purposes of mat.
                  regimes.
     3. Classification- Is it community property or separate property?
     4. What flows from the thing? Natural or civil fruits?
     B. Classification In General
     1. CC Art. 2338 Community Property
            The community property comprises: property acquired during the existence of the legal regime through the effort, skill or industry of either
            spouse; property acquired with community things or with community and separate things, unless classified as separate property under
            Article 2341; property donated to the spouses jointly; natural and civil fruits of community property; damages awarded for loss or injury to
            a thing belonging to the community; and all other property not classified by law as separate property.
     2. 2338 Analysis
            a. When was the thing acquired? During the existence of the legal regime?
            b. How was it acquired? See list of ―hows‖ in 2338.
            c. Upon acquisition, the intent of the spouse to classify it as community or separate does not matter. When and how the property is
            acquired is determinative.
            d. All effort, skill, or industry of either spouse belongs to the community and anything acquired through e/s/i is community property.
                      Concept of real subrogation
                                                                                                                                                       4
                              o         In civil law ―real‖ = property. Unlike in common law in which ―real‖ = real estate. Subrogation in obligations=
                                        substitution of one obligor for another obligor.
                                 o Real Subrogation in mat. regimes= substitution of one thing for another thing.
                                 o       The consequence of real subrogation in mat. regimes is that the thing acquired by another thing takes the
                                        classification of the thing by which it is acquired.
                                 o Ex: A spouse acquires a car by her labor during the existence of the community. Her labor is classified as
                                        community property. The car takes the classification of her labor; therefore, the car is classified as community
                                        property.
           e. Natural and civil fruits of community property and unreserved fruits of separate property are community property.
                      CC Art. 551 Kinds of Fruits
                            Fruits are things that are produced by or derived from another thing without diminution of its substance. There are two kinds
                            of fruits; natural fruits and civil fruits. Natural fruits are products of the earth or of animals. Civil fruits are revenues derived
                            from a thing by operation of law or by reason of a juridical act, such as rentals, interest, and certain corporate distribution.
                      CC Art 2339 Fruits and revenues of separate property (in part)
                            The natural and civil fruits of the separate property of a spouse, minerals produced from or attributable to a separate asset,
                            and bonuses, delay rentals, royalties, and shut-in payments arising from mineral leases are community property. UNLESS a
                            spouse reserves them as his separate property in proper form- See 2339 below.
           f. Last clause of 2338= a residual clause. If can‘t classify it as community property under 2338 or separate property under 2341 then
           falls into this residual category of community property.

      3.   CC Art 2340 Presumption of Community
           Things in possession of a spouse during the existence of a regime of community of acquets and gains are presumed to be community,
           but either spouse may prove that they are separate property.
      4. CC Art. 2341 Separate Property
           The separate property of the spouse is his exclusively. It comprises: property acquired by a spouse prior to the establishment of a
           community property regime; property acquired by a spouse with separate things or with separate and community things when the value of
           the community things is inconsequential in comparison with the value of the separate things used; property acquired by a spouse by
           inheritance or donation to him individually; damages awarded to a spouse in an action for breach of contract against the other spouse or
           for the loss sustained as a result of fraud or bad faith in the management of community property by the other spouse; damages or other
           indemnity awarded to a spouse in connection with the management of his separate property; and things acquired by a spouse as a result
           of a voluntary partition of the community during the existence of a community property regime.
      5. CC Art 2339 Fruits and revenues of separate property
                      The natural and civil fruits of the separate property of a spouse, minerals produced from or attributable to a separate asset, and
           bonuses, delay rentals, royalties, and shut-in payments arising from mineral leases are community property. Nevertheless, a spouse may
           reserve them as his separate property by a declaration made in an authentic act or in an act under private signature duly acknowledged.
                      As to the fruits and revenues of immovables, the declaration is effective when filed for registry in the conveyance records of the
           parish in which the immovable property is located. As to fruits of movables, the declaration is effective when filed for registry in the
           conveyance records of the parish in which the declarant is domiciled.
      C. Chapter 2: What is “Property”?

2.1        In General

           a. Before classifying a thing it must be determined if the thing is subject to being
           shared at all. If it can be shared then it can probably be managed in the community.
           b. 2 kinds of rights:
                i. Extrapatrimonial rights- interests that cannot be expressed in currency because there is no market offering a current price for
                     them. Examples: personal rights that cannot be shared such as civil rights; Government benefits and entitlements, the
                     intellectual right of an author to a work of art.
                ii. Patrimonial rights- those susceptible of pecuniary valuation; anything you can put a dollar value on; those which can be
                     disposed. The total mass of assets and liabilities attached to a person for the satisfaction of his economic needs.
                                 o General Rule: IF it is susceptible of pecuniary valuation, the articles on community property will apply.
           c. The LA CC does not require a thing to have monetary value or be marketable in any way to be classified for purposes of mat.
                regimes.
           d. DUE´ v. DUE´ (LASC 1977, Tate) p. 28
                 Issue: Are a lawyer husband‘s contingency fee contracts (paper acquired by H during marriage) as of the date of termination to
                     be included in the accounting of community property between spouses?
                 Facts:
                          A contingency fee contract is one in which the lawyer gets nothing if he loses, but gets some percentage of recovery
                                 if the suit is won.
                          H: Such a K should not be included in the community because it creates no property right prior to the completion of the
                                 attorney‘s work after termination of the marriage. 1) Such a K is an aleatory K, depending on an uncertain event
                                 (winning the case) and there is no obligation until that event happens; 2) Even if such a K is a conditional obligation
                                 creating a contemporaneous right to enforce it upon the happening of the condition, the right allows only for specific
                                                                                                                                                               5
                   enforcement, not retroactive to the creation of the K; and 3) Such a K is not part of H‘s patrimony at the time of
                   termination because it has no ascertainable value prior to successful completion of the work.
      Law: 2338 Community property; RS 27:218 A contingency fee K creates in the attorney an enforceable right to share in the
         proceeds eventually recovered.
      Holding: Even though it is theoretical in nature, the contingency fee K creates in the H a patrimonial asset acquired during
         marriage if produced by his l/s/I during the marriage as in this case. Therefore, the contingency fee Ks existing at the time of
         the termination are community property.
      Rationale/Rules:
             Intent of CC is that all property acquired during the marriage is to form part of the community. Property, in its broad
                  sense, denotes all patrimonial rights. Contingency fee Ks have pecuniary value and are part of patrimony.
             Broad definition of patrimony: total mass of existing or potential rights and liabilities attached to a person for the
                  satisfaction of his economic needs.
             The right created in the attorney is subject to a suspensive condition that he will win. Suspensive or resolutory
                   conditions to which a right or obligation is subjective have no effect on classification.
             The right to participate in the recovery proceeded from Ks acquired during marriage and are therefore community
                   property. ―The simple possibility of the realization of the condition constitutes a chance which is already considered an
                   asset or liability.‖
             The court pro-rated the right on the value of the attorney‘s services during the legal regime, not according to the
                   amount of time spent on these Ks before or after the regime.
            Carroll Outline:
             Arguments about what property is for our purposes:
                            Intangibles can be property! Intangibles can be put on the list
                            Does the right have to be vested (certain, as opposed to conditional) to be property (absolutely certain to
                            receive)? NO
                            Does the item have to have to have an ascertainable value at the time of the divorce? NO.
              If we have to do equal division, how do we do it when we have no clue what the value will be? Possibilities:
                            Based on expert testimony, apply probabilities and assign value right now. (If we say worth 60k, then we
                                  award to husband, and offset it on wife‘s side. What if we were wrong?)
                            Court could say this is shared property (Community) if all working during marriage, court can hold the thing
                                  in indivision until the contingency is realized, and then say half goes to each spouse. Court does this with
                                  pension rights as well. They are property rights and court holds in indivision.
          Fact that we don‘t know the value at the moment of termination because it is conditional or has no ascertainable value at
               all does not matter.
e.   Michel v. Michel (La. App. 1st Cir. 1986) p. 32
      Issues:
          Classification of future royalties that may or may not be received by W for one book not yet completed at termination and
               one for which she had only written down notes at the time of termination.
          If the royalties are things susceptible of division, how should they be valued and divided? How is a right to share pro-
               rated?
          Classification of overriding commissions received by H insurance salesman after termination when the commissions
               resulted from employee training he conducted during the marriage.
      Facts: Wife says it is nothing yet, it is just an intangible, and we have no clue if it will have any value. At this time, the wife had
         not even gotten a publishing contract or copyright. Argues not property at all.
      Law: 2338 Community property
      Holding: Classifies the right to participate or share in royalties that may or may not happen as community property. Court
         picked a percentage by which to pro-rate the right to share. They randomly picked 50%.
          Again, this is an obligation with a suspensive condition. Such conditions have no effect on classification.
          A thing that is an expectancy or even just a hope can still be community property to the extent that it resulted from l/s/I
               during the community.
          Husband‘s commissions: Community property due to rule of real subrogation. The commissions take the same
               classification of the thing by which they were acquired. They were acquired by his L/s/I during the marriage which is
               community property. Therefore, the commissions are community property. When you earn something, not when you
               receive it is determinative of classification.
      Rigby: What if spouse, through his l/s/I comes up with idea for an invention during the marriage but does not act on that idea
         that is in his head until after termination? When does a thing become a thing? When does an idea become a thing? A line must
         be drawn somewhere but the courts have not yet drawn the line with the exception of the value of certificate and degrees and
         the value of spousal support. See below discussion.

f.   Lanza v. Lanza (LASC 2005) p. 35
     o Issues: 1) Whether a State farm Agency is community property subject to partition and, if not, 2) whether an ex-spouse is
         entitled to any portion of renewal commissions or ―service compensation‖ received by the insurance agent spouse after
         termination of the community on insurance policies written during the community.

                                                                                                                                            6
              Facts: W argues that the Agency is a thing because it has pecuniary value and therefore is a patrimonial asset to be partitioned
               as community property. W then argues that the Agency is a community enterprise and that she is entitled to share in the co-
               owned income generated by it. As to the commissions, W argues that they are civil fruits of the H‘s l/s/I during marriage and are
               therefore community property (Ross)
              Law: 2338 Community Property;
               CC Art. 2369.3 Duty to preserve; standard of care
                          A spouse has a duty to preserve and 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.
              Holding: The State Farm Agency is a non-entity and not a thing and therefore, it bears not civil fruits and is not community
               property subject to partition. W is entitled to the portion of renewal commissions received after termination to the extent that
               these commissions were the result of l/s/I of the insurance agent spouse during the community.
              Rationale:
                Every thing is not a thing for purposes of matrimonial regimes. Whether an asset is patrimonial in the broad sense is not
                    determinative, each asset must be considered according to policy, how it functions, and how it is produced. In order to be
                    community property a thing must not only be patrimonial but must also be classified as community by legislation.
                The Agency is not community property because: H has no ownership interest in it; all monies except service
                    compensation are the property of State Farm; Once the agency relationship ends, State Farm owns all clients, client info.
                    and income. Since the Agency is not ―property‖ under community property laws, it cannot qualify as a community
                    enterprise and 2369.3 does not apply.
                Rigby: Examples of community enterprise: trade names, a sole proprietorship whether it is community or separate
                    property.
                The Court says the commissions are community property not because they are civil fruits but because they are
                    compensation for work done during the community. When the work is done is determinative not when the compensation
                    for that work was received.
                Rigby: H acquired the right to recover if in fact the policies are renewed and a commission comes about. He acquired this
                    right during the marriage through his L/s/i. This is real subrogation and is similar to DUE and Michel.
                Rigby: Plausible alternative holding is that the Agency is a thing subject to community property rules as proven that there
                    are pre and post termination management rules. If it were not at thing and a community thing there would not be 2
                    management rules concerning it.
                Good summary of Ross.

2.2 Degrees and Licenses

2. Degrees and Licenses
     a. Louisiana created special rules to deal with the situation in which a spouse works to put the other spouse through school and
         termination follows soon after graduation. Louisiana felt that the supporting spouse rightfully expected to share in the other spouse‘s
         increased earnings.
          Louisiana reacted legislatively to In Re Sullivan (California): The Court reversed the lower court‘s holding that the doctor‘s
               earning capacity was a thing that should be classified as community property and its award of half of that future earning
               capacity to the supporting spouse. Using common law concepts, the Court said that earning capacity was not a thing because it
               had no value and wasn‘t marketable. Supporting spouse gets nothing.
     b. CC Articles 121-124
         Art. 121 Claim for contributions to education or training, authority of court
               In a proceeding for divorce or thereafter, the court may award a party for his financial contributions made during the marriage to
         education or training of his spouse that increased his spouse‘s earning power, to the extent that the claimant did not benefit during
         the marriage from the increased earning power.
               The sum awarded may be in addition to a sum for support and to the property received in the partition of community property.

          Art. 122 Nature of Action
                The claim for contributions made to the education or training of a spouse is strictly personal to each party.

          Art. 123 Form of award; effect of remarriage or death
                The sum awarded for contributions made to the education or training of a spouse may be a sum certain payable in installments.
                The award should not terminate upon the remarriage or death of either party.

          Art. 124 Prescription of spousal claim for contribution
                The action for contributions to the education or training of a spouse prescribes in three years from the date of the signing of
          judgment of divorce or declaration of nullity of the marriage.

              Comments

                                                                                                                                                  7
                         Discretionary character of the remedy. This cause of action is not based on the rules of matrimonial regimes. So, the
                          classification of an education or training as community property is irrelevant.
                         The cause of action is not subject to the same factors as spousal support. So, lack of need does not destroy the claim.
                         Fault on the part of either spouse that contributed to the breakdown of the marriage is not relevant to a claim for
                          contributions to the education or training of a spouse.
                         ―Financial contributions‖ include direct educational or training expenses such as tuition, books, and school fees and living
                          expenses of the supported spouse.
                         Under Art. 121, a spouse who contributed financially to the education or training of the other spouse in a marriage of
                          significant duration may have already benefited during the existence of the marriage by an improved standard of living or
                          an accumulation of community property.
                         This claim may be asserted only after an action to dissolve the marriage has been filed.
                         Art. 123 allows awards to be structured in a way to shift some of the cost of the judgment debtor‘s early working years to
                          his later, more productive years.

               b.   Shewbridge v. Shewbridge (La. App. 2nd Cir. 1998) p. 43
                     RIGBY DID NOT DISCUSS IN CLASS.
                     Carroll Outline:
                         During marriage, husband was in college studying aviation science. Wife had two jobs while hubby was in school.
                            She gave up her nursing degree. Agreement was that he would let her go back afterwards. He gets his degree in
                            August 1992, and they divorced in 1993. Court: applies formula for figuring out payment. 121 does not require
                            formula. He is trying to say that W did not really contribute to attainment of his degree.]Factors to look at. CC has
                            special rules that might allow spouse to get some kind of contributions. Degree awarded in August of 92, and
                            divorced in 93‘. Not all courts use formula.
                            Shewbridge factors:
                                 the claimants expectation of shared benefit when the contributions were made
                                                  Look at what the degree earning spouse is getting… his pilot‘s license, so probably expected
                                             him to get a job as a pilot and make money. She put him through school for this. Is the expectation
                                             of a reasonable person
                                                  Shared benefit? Yes. She would never expect to get divorced right after the degree awarded
                                 degree of detriment suffered by the claimant in making the contributions, and
                         She quit nursing school and worked two jobs
                                 the magnitude of the benefit received by the other spouse.
                                                  Was this pilot‘s license a big benefit to him? Yeah, probably so.
                                                  He tries to argue that this one is not met, b/c his income was only $14,000 something the year
                                             after the degree was awarded.
                                                  Court: The focus of this article is on increased earning power and not increased earnings.
                                             Potential to make more in the future is the issue.

          d.   Santistevan v. Santistevan (La. App. 5th Cir. 2000) p. 47
                RIGBY DID NOT DISCUSS IN CLASS.

2.3 Increase in Value of Separate Assets

     3. Increases in Value of Separate Assets
           a. Pellerin v. Pellerin (La. App. 4th Cir.) p. 49
                Issues: 1)Whether the W is entitled to credit to the community for the increases in H‘s controlling interest in his family
                    corporation which occurred during the marriage; and 2) whether the corporation unreasonably withheld dividends on the
                    company‘s stock which would have been part of the community during marriage.
                Rigby: Must determine if the thing (increase in value of separate property) is ―property‖ to be partitioned as community or if it
                    instead it is a reimbursement thing. A thing can give rise to a claim for reimbursement under Art. 2368 (below).
                Facts: Prior to marriage H was donated 25% of the family company. He gained a controlling interest after marriage. W argues
                    that the H‘s increased interest in the company is property that H acquired as compensation for his services during the marriage.
                    H says the increased ownership interest was not compensation because he was compensated by salary and bonuses.
                Law: 2338 Community property
                    Art. 2368 Increase of the value of separate property
                                If the separate property of a spouse has increased in value as a result of the uncompensated 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.
                     Comment: To the extent that the spouse is compensated for his labor, no reimbursement is due.
                Rules:
                     Louisiana courts have recognized intangible rights resulting from a spouse‘s labor and industry as community assets.


                                                                                                                                                     8
                         In commercial business, goodwill is a property right which can exist as an asset in itself, which can be included in the
                          valuation of community property.
                     Taylor (La. App. 4th Cir. 1985): Although stock in an association represented the capability of future earnings, it is not a
                          community asset to be partitioned but a factor in determining permanent alimony.
                     Guarisco (La. App. 1st Cir. 1988): The party claiming reimbursement for enhancement of value of community property
                          upon termination has the burden of proving that the increase in value is the result of uncompensated common labor and
                          industry of the spouses.
                     Rigby:
                           Characterization of a thing as separate or community property is determined at the moment of acquisition.
                           Basic Rule of 2368: A spouse cannot attend to his separate affairs to the detriment of the community unless he is
                               adequately compensated for it. If he is adequately compensated for it then it is part of community property.
                           To satisfy 2368 to get reimbursement, it must be shown that 1) common labor was used to increase separate
                               property and 2) the spouse was uncompensated or under-compensated for the labor resulting in an increase in his
                               separate property.
                           Can have a reimbursement claim in the following 5 situations:
                               1. Community property used to pay separate obligation.
                               2. Community property used to improve separate property.
                               3. Separate property used to pay a community obligation.
                               4. Separate property used to improve community property.
                               5. 2368: Community labor is used to improve a separate thing and that labor is uncompensated or under-
                                     compensated.
                   Holding: The community was adequately compensated for H‘s labor and industry by his salary and bonuses. Any increase in
                    controlling interest that H acquired benefited the community. Therefore, no reimbursement is due. W failed to carry her burden
                    of proof that H was not adequately compensated or that there was an increase in the stock as a result of uncompensated labor.
                    She also failed to show that the company capriciously refused to pay dividends to deprive the community.

          b.   Curtis (LASC) Not in book, mentioned in class.
                Issue: Does Louisiana pro-rate classification to show percentage of separate property and community property used to pay for
                    or improve community property?
                Facts: W made down payment on house with separate funds but the mortgage payments were made with community funds.
                    The Court of Appeals pro-rated.
                Law: 2338, 2341 and 2368
                Holding:
                     Louisiana does not allow pro-rated or split title between community and separate property. The property of married
                         persons is either community or separate. Classification is determined at the moment of acquisition. However, to offset the
                         inequity of this rule, Art. 2368 allows a reimbursement claim to arise for one-half the value of community property used to
                         pay for or improve the separate property of one spouse.
                     Also, eliminated the rule that, in the case of credit purchases, the W had to prove her ability to accumulate separate funds
                         in the future to pay the price in order to overcome the presumption of community.

2.4 Goodwill

     4. Goodwill
          a. Masinter, Professional Goodwill in Louisiana: An Analysis of its Classification, Valuation, and Partition, 43 La. Law Rev. 119 (1982)
             p. 53
              Defines goodwill as an incorporeal asset that represents the value of the professional practice beyond the value of the
                   practice‘s corporeal and other incorporeal assets.
              Traditionally, courts didn‘t consider professional goodwill as a property right; they considered it to be an inseparable part of the
                   person of the professional.
              All but one of the community property states recognize goodwill as property.
              ―Property‖ in Louisiana and how goodwill fits:
                    Louisiana courts have adopted a broad concept of property.
                    Yiannopolous definition of property: ―all rights that are susceptible of pecuniary evaluation are property in the sense that
                        they are guaranteed by the legal order and form a part of a person‘s patrimony.‖
                    Due definition of property: ―Property in its broad sense denotes all patrimonial rights. The civil law concept of patrimony
                        includes the total mass of existing and potential rights and liabilities attached to a person for the satisfaction of his
                        economic needs.‖
                    Louisiana follows the civilian theory that property is a term used to designate those things, both corporeal and incorporeal,
                        in which people have rights.
                    According to Masinter, professional goodwill meets the test of a patrimonial asset or ―property‖ because it is an existing
                        right and it is analogous to other incorporeals that Louisiana courts have said are susceptible of pecuniary value such as
                        retirement plans and pensions and profit sharing plans.

                                                                                                                                                   9
              Professional goodwill can be classified in two ways each having very different consequences in valuation:
               1. If it is considered as a distinct property right, goodwill individually would be classified and, after valuation, would be
                    partitioned as community property at termination.
               2. If it is not considered as distinct from the practice but solely as a factor contributing to the value of the practice, its
                    classification would depend on the classification of the practice. The professional spouse‘s interest in the practice
                    would be classified, valued, and portioned as community property upon termination; the non-professional spouse‘s
                    compensation for the enhancement of the practice through goodwill would be limited to reimbursement. Masinter
                    thinks this is not fair.

b.   Depner v. Depner (La. App. 1st Cir. 1985) p. 55
      Issue: Whether goodwill is property to be included in the valuation of community property.
      Facts: H incorporated his medical practice before marriage; thus, it is separate property. W thinks earning capacity or goodwill
          of corporation should be valued as community property.
      Law: 2338
      Holding:
           Definition of goodwill in Louisiana: ―the chance or probability that custom will be had at a certain place of business in
                consequence of the way that business has been conducted.‖
           Goodwill is not property distinct from the business and/or from the professional to which it adheres. In this case, it is
                distinct from the corporation but is not distinct from the professional. Therefore it is not an asset of the corporation. Since
                goodwill is not property it cannot be classified as community property.
      Rationale:
           Since goodwill must adhere to some principal property or right, it is therefore dependent upon the property or right of
                either the corporation or the professional or both.
                 A patient follows a doctor not a corporation. Goodwill is personal to the doctor (his reputation and capacity).
                 Exception: When a patient is sent to a certain clinic instead of a certain doctor.
           Goodwill does not form a part of the corporate assets in the case of a sole practitioner such as a doctor or
                attorney.
           Professional goodwill may not be classified as an earned or vested right or one which fixes any benefit in any sum at any
                future time. That it would have value in the future is no more than expectancy, wholly dependent on the continuation of
                existing circumstances. Rigby: Goodwill is just one element of the value of a thing.
           Rigby: Court correctly rejects the view that goodwill is distinct from the business or professional to which it adheres.
c.   McGehee v. McGehee (La. App. 1st Cir. 1989) p. 59
      Issue: Whether an insurance agency‘s ―book of business‖ is goodwill. Is yes, should that goodwill be included in the value of the
          insurance agency to be partitioned as community property?
      Facts: Insurance agency formed during the marriage and is therefore community property. W argues that the lower court valued
          the agency too low because it did not include the value of the goodwill of the agency which she says consists of the agency‘s
          ―book of business‖.
      Holding: The goodwill consisting of the ―book of business‖ should be valued and included in the valuation of the community
          business. Thus, the goodwill is an asset to be included in the value of the business to which it adheres.
      Distinguished from/reconciled with Depner:
                 Professional v. Commercial distinction: Depner concerned with the goodwill of a sole practitioner. The goodwill could
                      not be valued separately from the doctor. McGehee is concerned with the good will of a commercial entity that could
                      continue operation without the presence of the insurance agent.
                 Unlike traditional goodwill, the ―book of business‖ is marketable, has a pecuniary value.
d.   Ellington v. Ellington (La. App. 2d Cir 2003) p. 61
      Issue: Classification of goodwill of a commercial business with strong extra-patrimonial links.
      Facts: Business formed during the marriage. Although the W worked at the business, the success of the business was closely
          linked with the goodwill (reputation) of the H. Thus, the value of the business‘ goodwill is dependent on which spouse gets the
          business in the division. If W gets the business, the value of its goodwill is significantly less than it would be if the H was
          awarded the business.
      Problem for the Court is that since the goodwill of a commercial entity is at issue, McGehee says that goodwill should be
          valued and included as an element of the value of the business for purposes of the partitioning of community property.
          However, the goodwill of the business is strongly linked with him personally as in the case of a sole practitioner. Arguably,
          equity would require the goodwill to be treated as inseparable from the H; therefore, according to Depner, not included as an
          asset of the business.
     Holding: Goodwill is because of H. If he left, even though it is a commercial business, there would be no business. But, we have to
          respect this Depner/McGehee distinction, so we have to include value of goodwill in the value of the business to be partitioned
          as community property.
e.   The Louisiana Legislature responded to Ellington by passing the following legislation that extends professional goodwill to the
     goodwill of a commercial entity.
     LA RS 9:2801.2 Community property; valuation of goodwill


                                                                                                                                            10
                   In a proceeding to partition the community, the court may include, in the valuation of a community commercial business, the
                   goodwill of the business. Goodwill shall not be included in the valuation a business when goodwill results solely from the
                   identity, reputation or qualifications of the owner or from his relationship with customers of the business. (2003)
               LA RS 9:2801.2 Community property; valuation of goodwill
                   In a proceeding to partition the community, the court may include, in the valuation of a community-owned corporate,
                   commercial, or professional business, the goodwill of the business. However, that portion of the goodwill attributable to any
                   personal quality of the spouse awarded the business should not included in the valuation of the business. (2004)

    D.   Chapter 3: The Presumption of Community
    1.   In General
         a. CC Art 2340 Presumption of Community
         Things in possession of a spouse during the existence of a regime of community of acquets and gains are presumed to be community,
         but either spouse may prove that they are separate property.
         b. Introduction p. 69
                The 1980 revisions to Louisiana‘s Mat. Regime laws, suppressed pre-1980 requirements of the jurisprudential rules of double
                    declaration.
                Under these rules, a husband (but not a wife) was precluded from proving that an immovable was his separate property if the
                    act of declaration did not contain a declaration that 1) the asset was acquired with separate funds, and 2) that he intended it to
                    be his separate property.
                Pre-1980, a wife could overcome the presumption of community without a double declaration, but she had to prove 1) the use
                    of separate funds, 2) that the W administered those funds; 3) that the funds were invested by her; and 4) in the case of credit
                    purchases, the ability to accumulate separate funds in the future to pay the price.
                Art 2340 allows both husband and wife flexibility to use any means of proof to establish that an asset is not community
                    property.
    2.   Tullier v. Tullier (LASC 1985) p. 69
          Issues: 1) Is the Article 2340 presumption of community retroactive, and 2) has the husband met the burden of proof to overcome
               the presumption and so has to have declared separate 3 tracts of immovable property he acquired during marriage from his mother
               as a part of a succession settlement?
          Law: 2340
          Holding: 1) 2340 which eliminated the double declaration rules is retroactive, and 2) H met his burden of proof to overcome the
               presumption of community.
          Rationale/Rules:
                2340 creates a rebuttable presumption and is therefore procedural in nature. Thus, it does not vest a spouse of vested rights
                    and can be applied retroactively. 2340 applies to all property regardless of when it was acquired.
                Curtis Rule (LASC 1981): Under 2340, the party asserting the separate nature of the property has the burden of overcoming
                    the strong presumption of community. Notice: the Court did not comment on the burden of proof necessary to overcome the
                    presumption.
    3.   Talbot v. Talbot (LASC 2003) p. 73
          Issue: What is the burden of proof necessary to overcome the 2340 presumption of community?
          Facts: Before this case, courts required a clear and convincing burden of proof.
          Holding: As a matter of public policy and in the interest of fairness, the presumption of community is rebuttable by either spouse
               upon on showing by the preponderance of the evidence the separate nature of the property brought into the community.
          Rationale/Rules:
                2340 broadened to presumption of community to all property possessed by either spouse during the community regime-
                    regardless of the time of acquisition.
                2340 subjects property which is clearly separate property at the time of acquisition and prior to marriage, to a community
                    classification potentially effecting a legal change in the nature of the property upon marriage.
                Due to the potential unfair consequences of 2340, the Court declines to require the clear and convincing standard of proof to
                    overcome the presumption of community.
    4.   Ford Motor Credit Co. v. Corbello (La. App. 3rd Cir. 1986) p. 79
          Issue: Use of separate property to satisfy the debt incurred by a spouse.
          Facts: H signed promissory note to buy car from Ford. When H did not make the payments. Ford seized a car that was the separate
               property of W.
          Law: CC Art. 2345 Satisfaction of obligation during community
               A separate or community obligation may be satisfied during the community property regime from community property and from the
               separate property of the spouse who incurred the obligation.
          Holding: H was the only obligor on the promissory note. Thus, W‘s separate property could not be seized to satisfy the debt.

    E. Chapter 4: Classification of Assets

4.1 Earnings


                                                                                                                                                   11
1.   Earnings

     a.   Introduction p. 83
          The 1980 revision dealt primarily with equal management and made few changes to the classification of assets. Modern innovations
          such as the pro-rata classifications of pensions and other incorporeal assets as partly community and partly separate, have come
          from jurisprudence.

     b.  Chance v. Chance (La. App 2nd Cir. 1997) p. 83
          Issue: Classification of H‘s 20 % interest in a medical practice, the accounts receivable of the medical practice, and distributions
         from a partnership of which the H‘s medical practice was a partner.
          Facts:
               Wife argues that the value of H‘s interest in the medical interest should included valued holding and components and a
                    capitalization of future earnings. H argues that this is goodwill.
               W then challenges the trial courts valuations of the medical practice‘s accounts receivable.
               Partnership distributes profits according to ownership percentages and these distributions eventually flow to the
                    physicians based on their productivity/work performance. W says the monies received by H from partnership, even after
                    termination, are the civil fruits of a community investment and are therefore community property.
          Laws: 2338, 2339 Fruits and revenues of separate property
              LA RS 9:2801(4)(c): In valuating and allocating assets and liabilities to partition community property, the trial court shall act
              within its broad discretion to consider the source and nature of each asset and liability, the financial situation of each spouse,
              and any other relevant circumstances.
          Holding:
               Wife seeks goodwill of husband‘s medical practice. In Louisiana, goodwill does not form a part of the corporate assets of a
                    medical practice. The court rejects the capitalization method favored by W.
               The trial court did not err in discounting the accounts receivable figure by the cost of collection. Court previously ruled that
                    the use of average collection ratios in valuing accounts receivable was permissible.
               The post- termination income from the partnership was the H‘s separate property. If income is the fruit of a professional‘s
                    professional skill and effort that income is the professional‘s separate property.
               It is important that the income H received from the partnership was based on his productivity/work performance. Ogden
                    Rule (La. App. 1st Cir. 1976): The profit from a partnership is community profit if the division of the partnership profit is not
                    dependent on the partner‘s work performance.
     c. Hansel v. Holyfield (La. App. 4th Cir. 2000) p. 85
          Issue: How should vested and unvested stock options be classified and valued? With regard to Hibernia stock options that had
              not vested before termination, are they separate property rights acquired by H during the community, or acquired by him during
              the community as a result of his l/s/I during the community?
          Facts: H received stock options from his former employer Barnett Bank and from his current employer Hibernia Bank.
          Holdings:
               The income taxes which must be paid when the Hibernia stock options are exercised should be taken into account when
                    the stock options are valued. Recognizing the speculative value of a stock option but refusing to recognize the speculative
                    rate of taxation on the value of those options is simply inequitable.
               With regard to Hibernia stock options that had not vested before termination, the determinative factor is whether work
                    performed during the existence of the community was taken into consideration in granting the option. Trial court not wrong
                    to pro-rate the stock options, regardless of vest date, as partly separate and partly community based on the amount of
                    time between the grant date and the vesting date that took place during the community. The court said the same principle
                    that applies to pension rights should apply to stock options- that part earned before or after marriage is the employee‘s
                    separate property while that part earned during marriage is community.
               The strike price should be deducted from the value of unvested stock options.
               H was the sole obligor on a note to acquire the Barnett stock. Thus, that portion of the stock which resulted from H‘s
                    separate Barnett stock options was his separate property, as they were exercised by his separate obligation.
          An alternative to valuing the options would have been simpler-to divide them in kind between the spouses. Also, this would
         allow them to share equally in the risk of fluctuation of the value of the options as the value of the underlying stock price fluctuates.
     d. Kees v. Kees (La. App. 1st Cir. 1987) p. 89
          Issue: Classification of severance pay received by H ten years after divorce.
          Facts: Divorce June 1975. Proceeding to partition community property May 17, 1985. H receives severance pay upon being
              laid off May 31, 1985.
          Holding: Severance pay, unlike retirement and pension plan monies, is given in place of future wages and not as payment for
              past services. One must look to the nature of the wages the employee would have received at the time of severance had he
              not been severed from employment. If the wages would have been separate property, then the severance pay must be
              considered separate.
     e. Lachney v. Lachney (La. App. 3rd Cir. 1988) p. 92



                                                                                                                                                 12
                     Issue: Classification of monthly disability benefit payments received by a former spouse after divorce when the former spouse
                      qualified for and began receiving the payments prior to termination. Are disability payments deferred compensation and
                      therefore, community property? Are they gratuities or a substitute for future wages and, therefore, separate property?
                   Facts: W wants half of past and future disability payments of H.
                   Holding: Rejects W‘s argument that disability payments are analogous to retirement/pension plans. Also, the payments are not
                      gratuities. Instead, the Court analogizes to classification of tort/workers‘ comp. benefits. W does not get half of past and future
                      disability payments.
                   Rationale/Rules:
                       Analysis:
                            o First, are disability payments gratuities and therefore separate property? No, payment of disability benefits is not a
                                  purely gratuitous act because the company expected to get something in return, namely, employees staying with the
                                  company. It is of no consequence that the H paid no premiums or made no contributions.
                            o Second, was the disability insurance policy bought by the employer intended to provide a source of retirement or
                                  pension income or was it meant to compensate an injured employee for lost earnings in the event the employee was
                                  incapacitated due to serious injury or injury? The Court found the latter.
                       Retirement/pensions plans are deferred compensation and are community property if they are payments for work done
                            during the marriage.
                       In contrast, the Court treats disability payments as a substitute for lost income attributable to the disability and classifies
                            these payments as separate property of the injured spouse after dissolution of the marriage.
                       Court adopts the pro-rata method used to classify tort damages/pension payments:
                            o Court what part of the payments is separate and what part is community based on the time of acquisition.
                            o In classifying such an incorporeal, no one single event determines classification; instead, the focus is on the nature
                                  of the property rights over time. This allows court to pro-rate the payments.
                            o Like tort damages/workers comp. payments disability payments are community property to the extent attributable to
                                  community expenses or lost community earnings and as separate property to the extent they represent
                                  compensation for a particular injury.
             f.   Bordes v. Bordes (LASC 1999) p. 97
                   Issue: Classification of disability retirement benefits paid by the Parochial Employees‘ Retirement System of Louisiana.
                   Facts:
                      o H‘s employment began during the marriage. He was not declared disabled and did not begin receiving disability retirement
                            benefits until after termination. H‘s disability retirement benefits were drawn from an annuity savings account that was
                            comprised at least in part by community funds.
                      o Trial Court: Benefits are community property because they are deferred compensation for work done during the
                            community; based on total years of service and the maximum salary earned during a certain period of employment.
                   Holding: Reverses trial court; H‘s disability retirement benefits are H‘s separate property.
                   Rationale/Rules:
                      o It is fair to base classification of benefits on the purpose of the benefits. When a divorced employee spouse receives
                            benefits because of disability, the benefits are paid as a substitution of the lost future wages that would otherwise be the
                            injured employee‘s separate property.
                      o If W does not recoup her contribution to the annuity saving plan when H reaches normal retirement age, the court
                            reserves her right to reimbursement.

4.2 Fruits

     2.      Fruits
             a. Paxton v. Bramlette (La. App. 3rd Cir. 1969) p. 102
                   Issue: Whether corporate distributions to W were community salary or separate dividends.
                   Facts: Wife received money from 2 corporation consisting of transferred assets form a corporation formed by her former
                    deceased husband. She received a salary from the corporation before and after she filed an affidavit to reserve the fruits of her
                    separate property.
                   Law: 2339 Fruits and revenues of separate property
                   Holding: Funds are community earnings since the wife contributed ―substantial services‖ to 2 corporations from which she
                    received funds.
                   Rationale/Rule: Test for fruit v. earnings: The ratio of labor to capital is a criterion for classifying income as fruits or earnings.
                    If the revenue received was the result of substantial capital investment and relatively little labor, it would be a fruit; but if the
                    revenue represents the return on substantial labor with relatively little capital investment, it would be community earnings.
             b. Ross v. Ross (LASC 2003) p. 105
                   Issue: Classification of renewal commissions of insurance agent H received during the marriage on insurance policies issued
                    before the marriage. Are they the result of H‘s l/s/I during the marriage, and thus, community property or are they the civil fruit
                    of H‘s separate property?
                   Facts:
                     Days after marriage he reserved his rights to civil or natural fruits from his separate property.

                                                                                                                                                       13
              Trial court pro-rated value of the commissions, and classified those on policies issued before the marriage as H‘s separate
               property. The trial court followed holding of Michel and other jurisprudence that supports pro-rating incorporeal property
               such as renewal commissions.
          Trial court also said that W had burden of proving she was entitled to a pro-rata share of the renewals received from the
               date of marriage to the date of reservation of fruits.
      Law: 2339
      Holding: Court used a completely different analysis to determine that the renewal commissions were the result of H‘s l/s/I during
         the marriage, and were therefore community property.
      Rationale:
          Court uses fruits analysis: Is there a fruit producing thing or asset and is the thing being classified fruits or earnings?
          Court rejects W‘s argument that neither the policies or the agency contract are owned by H and therefore cannot be things
               which produce fruits. The Court says the individual insurance policies are juridical acts from which a civil fruit may be
               derived. Furthermore, ownership of the fruit producing thing is not required to derive fruits from that thing.
          Uses the Paxton v. Bramlette test to find that the commissions were not civil fruits of separate property but the results of
               l/s/I during marriage.
          H exerted substantial effort to generate the renewal commissions. Because the renewals were received during the
               marriage, H should bear the burden of proving that they were not community property.
c. Reynolds v. Reynolds (LASC 1980) p. 118
      Issue: Classification of funds from 2 trust funds left to W in will of grandmother, one of which is distributed and the other is
         undistributed.
      Facts: W did not reserve the fruits (income distributed from trust funds) of her separate property. W received distributed income
         during marriage and deposited it in a checking account that was under her exclusive control. She used it for personal items for
         herself and her children and for household expenses. W owned an interest in the undistributed trust fund when the marriage
         was terminated. Trustee actually owned the undistributed income kept in the trust fund.
      Law: 2339
      Holding on rehearing: W did not own the trust funds which produced the civil fruit of income, but she did have an interest in the
         trust funds. This beneficial interest in the trust was part of her separate property. The distributed income was a civil fruit of the
         trust. Since she did not reserve her right to the fruits of her separate property, the distributed income is community property.
         She has no claim for reimbursement since the funds were under her exclusive control and never delivered to the community for
         its use. However, the undistributed income of the other trust fund is the W‘s separate property because she did own the trust
         and did not acquire ownership of the undistributed income during the marriage.
d. Delahaye v. Delahaye (La. App. 1st Cir. 2005) p. 120
      Issue: 1) Were payments received by insurance agent H from his employer ―renewal commissions‖ or salary requiring H‘s
         continued employment? 2) If the payments are community property, should they be pro-rated to reflect H‘s separate labor and
         costs in keeping the policies in effect? 3) Are the future increases on the payments attributable to policies written during the
         marriage community property?
      Facts: The payments are received from a contractual incentive plan. The amount of the payments is based on years of service
         and the amount of policies sold by the agent that remain in force. In return for these payments the company expects the agent
         to stay with the company and remain loyal to it, comply with the terms of the plan and sell a certain dollar amount of new
         insurance policies.
      Holding: 1) The payments are not compensation for post-termination services performed by H. Instead, H acquired the right to
         receive the payments based on l/s/I exerted during the marriage. Therefore, the payments are compensation for work done
         during the marriage and are community property. 2) Except for the payments attributable to policies sold prior to marriage, the
         payments are not to be pro-rated but divided equally. 3) To the extent that any portion of the future increases were attributable
         to H‘s post-termination efforts and costs in servicing the community policies, he would be entitled to deduct that amount from
         the community payments. However, he failed to meet the burden of proof to overcome the presumption of community. 4) Court
         remanded so that lower court could decide if the test was met so that W could receive payments at issue at the same time she
         is receiving part of H‘s retirement benefits. (See below)
      Rationale/Rules:
          Michel: The fact that H was required to continue working for the company post-termination to receive the renewal
               commissions did not defeat the community nature of the commissions
          It is not required that a right be vested before it can be classified as community property subject to partition.
          General rule: A non-employee spouse is entitled to receive retirement plan benefits if and when the payments become
               payable to the employee spouse.

               Test: To depart from this rule, the following 5 requirements must be met:
                1. The number of creditable years of service under the plan can be determined;
                2. The final average earnings figure of the employee spouse can be computed;
                3. The employee spouse is entitled to retire;
                4. The non-employee spouse is willing to waive the right to future increases in order to receive immediate benefits;
                5. The court is able to structure the QDRO so that the non-employee spouse will receive no greater benefits than she
                     would receive if required to wait until the employee spouse retires.

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4.3 Inheritance & Donations

     3.   Inheritance and Donations
          a. Introduction
                Often cases involve inter vivos manual donations to one or both of the spouses.
                Manual gifts have the following characteristics:
                     Giving of corporeal movable effects
                     accompanied by real delivery
                     not subject to formality (1539)
                     acceptance is proved by possession (1541)
                Succession of Broussard Rule (La. App. 3rd Cir. 1975):
                     Donor‘s intent controls- must prove the donor‘s intent to donate and to whom he intended to donate.
                     Donee has the burden of proving the alleged donation.
                If donor intended to donate to an individual spouse the gift is separate property but if he intended to donate to both spouses the
                    gift is community property.
                CC Art 1523 refers to 3 kinds of donations inter vivos:
                     The donation that is purely gratuitous, or that which is made without condition and merely from liberality;
                     The onerous donation, or that which is burdened with charges imposed on the donee;
                     The remunerative donation, or that the object of which is to recompense for services rendered.
          b. Hamilton v. Hamilton (La App. 1st Cir. 1979) p. 127
                Issue: Classification of shower gifts.
                Holding/Rule: The intent of the donor(s) controls the identity of the donee(s) and therefore the ownership of the gift. If there is
                    no proof of the donor‘s intent, there is a presumption that shower gifts are jointly owned and therefore, community property.
          c. Allbritton v. Allbritton (La. App. 3rd Cir. 1990) p. 128
                Issue: Are gifts of movable property given by the W‘s family community property or the W‘s separate property?
                Holding: W, the spouse claiming property is separate did not meet burden of proving the granny/donor‘s intent to give to W
                    separately, therefore, the gifts from granny are community property. Due to dad‘s testimony that he intended to donate cash
                    separately to his daughter/W, the gift is the separate property of W.
                Rules:
                     Hamilton: In absence of proof of donor‘s intent, the nature of the property is relevant in determining whether property is
                           separate or community. Example: Cash gift at issue was acquired during the marriage and used to benefit the community.
                     Absent proof of the donor‘s intent, when a cash gift was given to pay a community debt, the presumption of community is
                           not overcome by the fact that a cash gift via check was made payable to one spouse only.
                     When there is proof of the donor‘s intent to give to an individual spouse, the gift can be the separate property of that
                           spouse even though it was used by the donee spouse for the benefit of the community.
          d. Campo v. Campo (La. App. 4th Cir. 1979) Note Case p. 132
                Shrimp boat case
                Rule: A more flexible approach in which there a presumption that the donee intended to make the donation to the spouse to
                    whom delivery was made unless the donor make express his intention to give it to both spouses.
                Relationship with donor/in-law should be taken into account when deciding the intent of the donor,
                State of marriage and nature of relationship with donor at time of donation are factors in determining the intent of the donor.
          e. Noel v. Noel (La. App. 4th Cir. 2004) p. 132
                Issue: 1) Are partnership distributions community property or a donation to H individually and as such his separate property? 2)
                    Are the lottery ticket and the right to receive it proceeds incorporeals that require a notorial act for validity of their donation
                    under CC 1536? 3) Are the lottery proceeds acquired by H post termination the fruits of his separate interest in the partnership
                    that was acquired during marriage?
                Facts: H‘s parents won the lottery and formed a partnership through which the lottery proceeds passed to the member children
                    including H. H‘s mom testified that it was her intent to give to her son, not the spouses jointly, his portion of the lottery
                    proceeds. However, H‘s mom did not execute an Act of Donation or file a gift tax return.
                Holding:
                     1) The property at issue was not the product of H‘s l/s/I during marriage but was a gift from H‘s parents to him and as such
                           are his separate property. 2) W has no right of action to assert the invalidity as to form of donation. Only H, his
                           parents/donors, or his creditors have this right under certain circumstances. 3) The future payment of lottery proceeds are
                           not community property just because H acquired the right to such proceeds the moment his mom claimed the prize during
                           the marriage.
                Analysis/Rules:
                     Is it community property under 2338? No, because it was not a result of H‘s l/s/I during marriage.
                     Is it separate property under 2341? Yes, IF it is an inheritance or donation to H individually.
                     Is it a donation? See CC Art. 1523 Is it a manual gift? See 4 characteristics in Introduction above.
                     The donor‘s intent controls.

                                                                                                                                                   15
                       The spouse claiming that the property is separate has the burden of proving by a preponderance of the evidence that the
                        property is separate and the 2340 presumption of community does not apply.
                   New Rule: The 2340 presumption of community does not extend to a presumption of donative intent to both spouses.
         f.   Gonzales v. Graffeo (La. App. 4th Cir. 1991) p. 137
               Issue: Classification of a bank account comprised of funds acquired by H prior to marriage when the H put W‘s name on
                  account shortly after marriage. By putting W‘s name on account, did H transfer his separate property to the community.
               Facts: H removed daughter‘s name from account and replaced it with W‘s name shortly after marriage. Account comprised only
                  of funds acquired by H before marriage.
               Law: CC Art. 2343.1 Transfer of separate property to the community
                  The transfer by a spouse to the other spouse of a thing forming part of his separate property, with the stipulation that it shall be
                  part of the community, transforms the thing into community property. As to both movables and immovables, a transfer by
                  onerous title must be made in writing and a transfer by gratuitous title must be made by authentic act.
               Holding: The bank account is community property. Merely placing the W‘s name on the account is enough to transform the
                  account from separate to community property. The Court said that its holding is specific to the facts of this case.
               This case is criticized by Spaht and Hargrave and Rigby. See class notes.

4.4 Real Subrogation

    4.   Real Subrogation
         a. In General
               Subrogation is substituting one thing for another. Real subrogation is substituting one property for another. In mat. regimes. this
                  means the product of a thing takes on the classification of the thing from which it is derived.
               Allows a spouse with separate assets to manage and replace those assets as a patrimonial mass independent of the
                  community. 2341 continues this rule.
               The 2340 presumption of community still must be overcome.
               Real subrogation applies whether the conversion of the asset from one form to the other is involuntary, as in expropriation or a
                  corporate liquidation, or is the result of an intentional juridical act.
               Real subrogation also extends to keeping the products, not the fruits, of a separate asset as separate property.
               Examples: 1) The proceeds from clearing of timber. 2) Additional shares of stock resulting from stock splits since the splits do
                  not produce fruits. 3) A partnership interest owned prior to marriage remains separate property even if the equity position is
                  replaced with a similar equity interest in a succeeding partnership or corporation.
               Exception: Oil and gas proceeds as the products of land owned or leased are considered community property if a spouse does
                  not reserve them as his separate property.
         b. Succession of Guercio (La. App. 4th Cir. 1978) Note Case p. 139
               A H‘s separate partnership interest was converted into stock of a corporation. The stock was held to be community, under the
                  theory that the underlying assets of the partnership were commingled with later acquired community assets.

4.5 Real Subrogation

    5.   Damage Awards
         a. Introduction p. 139
            i. CC reflects real subrogation principles in classifying damage awards
            ii. Damage to Property
                  CC Art 2338: Sums of money awarded to compensate for damage to community property are classified as community.
                  CC Art. 2341: Sums of money awarded to compensate for damage to separate property are classified as separate.
            iii. Personal Injury
                  Post 1980 Basic Principle-CC Art 2344 Offenses and Quasi-Offenses; damages as community or separate property:
                      ―damages due to personal injuries sustained during the existence of the community by a spouse are separate property.‖
                        o EXCEPTION: lost wages and awards to pay community expenses
                        o Retroactive reclassification of lost wages in some circumstances
                 Problem of partitioning a lump sum award that does not designate the various elements of damages. These elements include
                   pain and suffering v. loss of earnings.
                        o CC 2344 offers no guidance
                        o CC 2354 can be invoked when a spouse about to receive a personal injury damages award manipulates its
                              designation to the detriment of the other spouse. 2354 allows a spouse to be compensated for harm suffered by
                              the other spouse‘s ―fraud or bad faith in the management of the community property.‖
         b. Young v. Young (La. App. 3rd Cir. 1989) p. 140
             Issue: Whether the proceeds from 3 separate personal injury settlements to H were his separate property?
             Facts: The 1st accident was 4 mos. before marriage. The other 2 accidents occurred during marriage.
             Law: CC Art 2344 is applicable to damages sustained during marriage but not to damages incurred before marriage.


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          Holding: Adopted the rule from Broussard (LASC 1976): Damage awards received during marriage resulting from a pre-
           marriage injury are the separate property of the injured spouse. The non-injured spouse is not even entitled to that part of the
           damages awarded to compensate for future loss of earnings (even though that loss of earnings occurs during marriage).
      Rationale: A damage award for a pre-marriage injury to a spouse is classified as the separate property of the injured spouse
           and that classification does not change just because the cause of action is settled or enforced during marriage. None of the
           personal injury award/settlement for a pre-marriage injury is the product of the labor, skill, or industry of both husband and wife.
c.   Ellithorp v. Ellithorp (La. App. 1st Cir. 1987) p. 141
      Issue: How to divide among former spouses the proceeds of a personal injury settlement received by H during the existence of
           the community for injuries sustained during the community?
               Particularly, how to divide the portion of the settlement awarded for both past and future loss of income from the date of
                    injury through work life expectancy?
               How to calculate that part of the award that is for loss of earnings for the period beginning at the date of settlement and
                    ending at the date of termination of the community, that portion being community property?
      Facts: H deposited settlement proceeds into a community checking account and the parties used the proceeds indiscriminately.
           Community terminated 4 months after deposit of settlement proceeds.
      Law: CC Art 2344: Damages for personal injuries constitute separate property of the injured spouse. Damages to compensate
           for diminished earning capacity, aka future loss of earnings, constitute the injured spouse‘s separate property to the extent the
           ―future loss‖ is deemed to be attributable to a time after termination of the community property regime.
      Holding: The trial court was correct in ruling that the settlement proceeds consisted of both separate property of H and
           community property of H and W. Damages for pain and suffering were separate property of the injured spouse. Special
           damages (those award for loss of earnings) were partly the separate property of H and partly the community property of both
           spouses.
               The trial court was correct to ―uncomingle‖ or separate the damage awards to the H from the pre-settlement community
                    property and to then apportion the awards so that W received a portion of the damages awarded for lost earnings when
                    the earnings were lost during the marriage.
               The Court affirmed the trial courts method:
                           Used the wage scale of the H at time of injury to determine the gross loss of past income from the date of
                               injury to the date of settlement and reduced that amount by the amount of workers‘ compensation benefits
                               received during the same period and then further deducted the amount of any other earnings of the injured
                               spouse during that period.
                           Then, the court determined the portion of future loss of income award to be classified as community property
                               by calculating the loss of income for the period of time beginning with the date of settlement and ending with
                               the date of termination of the community. The court calculated this amount by subtracting from the total of
                               special damages the amount of loss income from the date of injury to the date of settlement (see above
                               explanation), resulting in a net special damages award. This net special damages award was then divided by
                               the work expectancy of the injured spouse (in years). This figure was then amortized (multiplied by a
                               percentage) to get an estimated monthly income constituting loss earnings. The court then multiplied this
                               estimated monthly loss in earnings by the # of months between the date of settlement and the date of
                               termination of the community.
                           The court deducted attorney‘s fees as appropriate.
d.   Thomas v. Thomas (La. App. 4th Cir. 1989) Note case p. 144
      Issue: How to divide among former spouses damage awards to compensate for loss of earnings during the community?
      Facts: Similar to those in Ellithorp except that the damage award was a lump sum and the amount attributable to special
           damages such as loss of earnings was not specified. Also, workers‘ comp. payments to injured spouse were not reduced by
           attorneys‘ fees and the insurer did not seek reimbursement from the plaintiff upon settlement/award.
      Law: Same as in Ellithorp.
      Holding: Method used by court to determine the amount of the award to be classified as community property:
               Determined lost wages from time of injury to the time of termination of the community based on the wage scale of
                    injured spouse at the time of injury.
               To court refused to determine what portion of the special damage award was attributable to loss of earnings through
                    the testimony of the attorney who negotiated the settlement for the injured spouse because this procedure was too
                    speculative. Instead the calculated the amount based on the injured spouse‘s current salary level.
               Both spouses received half of the workers‘ comp. windfall.
               The court rejected with that part of Ellithorp dealing with workers comp. payments received by the injured spouse
                    during the community ―insofar as it can be interpreted to allow workers‘ comp. benefits received as damages in
                    compensation for the loss of community earnings to either (1) be deducted from the total of lost community earnings to
                    reduce that loss [Ex: total salary lost minus workers‘ comp payments received] as done in Ellithorp, or (2) be deducted
                    from the portion of damages received in compensation of the loss of community earnings [Ex: Gross special damage
                    award minus workers‘ comp payments received. This is a more direct method of subtracting such payments.].
e.   Egan v. Egan (La. App. 4th Cir. 1999) p. 146



                                                                                                                                           17
                 Issue: Whether workers‘ compensation benefits received after the dissolution of the community constitute community property
                  when during the marriage an injured spouse makes an election to receive them rather than benefits from a retirement/disability
                  fund which would be classified as community property?
               Facts: The trial court classified the workers comp bens. As community property, saying they were analogous to the disability
                  payments deemed community property in Johnson (La. App. Cir. 1991)
               Law: 2338 Community property and 2344 (classification of personal injury damages)
               Holding: The workers‘ com. Bens at issue are not analogous to the disability payments in Johnson because they did not flow
                  from a fund made up of contributions from community funds and were not based on the years of service on the job completed
                  during the community. The workers‘ comp benefits did not flow from a community endeavor but from injury on the job. The
                  workers compensation benefits received by the husband are analogous to 2 things, both classified as separate property:
                          1. Salary because they compensate the injured spouse not only for lost wages but also for reduced or lost earning
                          capacity. Post-termination salary of a spouse is separate property and so are workers‘ comp. bens received post-
                          termination.
                          2. Damages for personal injury which are classified as separate property of the injured spouse by 2344.
         f.   Morris v. Morris (La. App. 3rd Cir. 1997) p. 148
               Issues: Whether a punitive damages award to H is separate or community property? Whether a compensatory damage award
                  to W, or a portion of it, is community property?
               Law/Rules: CC Art 2340 (Presumption of community), 2338 residual clause, 2341 (Separate property) and 2344 (classification
                  of personal injury dams).
                           CC Art 2340 (Presumption of community)
                                 Hebert (La. App. 3rd Cir. 1995) RULE: The burden of overcoming the community presumption falls on the party
                                 who asserts that the disputed property is separate. To meet the burden, the party is generally required to present
                                 proof that is clear, positive, and legally certain that the property was separate and not community.
               Holding:
                           Punitive damages received by H during marriage are community property. CC Art 2344 is not applicable because
                                it addresses compensatory damages for personal injury. Punitive damages are not awarded to compensate for
                                injury but to punish the tortfeasor (CC Art 2315.1). Punitive damages fall under the 2338 residual clause and are
                                therefore community property.
                           W successfully overcame the presumption of community to prove that the compensatory damages she received
                                for a personal injury sustained during the marriage were separate property.


4.6 Acquisitions with Separate and Community Property

        Lambert v. Lambert (p. 151)
             o Issue in this case is whether a camera purchased with part community funds, part separate funds of the wife is community
                   property. ($9000 total = $6000 separate funds + $3000 community funds)
                         Art. 2341: (separate property is) ....property acquired by a spouse with separate things or with separate and
                              community things when the value of the community things is inconsequential in comparison with the value of the
                              separate things used.
             o In this case, the court held that the $3000 was not inconsequential and the camera was in fact community property.

        McMorris v. McMorris (p. 151)
            o The main issue in this case is commingling
            o Couple in this case has one account that all money is deposited into.
            o If you cannot distinguish which funds are separate and which are community, the presumption is that they are community
                        Art. 2340: Things in the possession of a spouse during the existence of a regime of community of acquets and
                            gains are presumed to be community, but either spouse may prove that they are separate property
            o The burden of proving property is separate is on the spouse claiming that it is separate.
            o Jurisprudence has formed another presumption: If funds are commingled, the first funds removed are separate funds.
            o Commingling is mostly a problem of proof.

4.7 Assets Acquired Over Time: Credit Sales & Similar Devices
(Skipped Longo Case)

        ―Note‖ after Longo Case (p. 156) READ THIS NOTE
              o Jones v. Jones
                          This case involved the purchase of a house prior to marriage by husband for very cheap. The husband and (then
                             fiancé) wife, worked on the house and remodeled it and at the termination of the marriage it was worth 10x what
                             husband purchased for.
                          The court used the following rationale to make the house community property:


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                                         A separate asset became a community asset by operation of law because of the use of community funds
                                          and common labor to improve the asset.
                                         However, no civil code article supports this proposition.
                                         This can be very problematic



4.8 Assets Acquired Over Time: Insurance

Life Insurance
       Jurisprudence established a rule that the beneficiary always gets the money – not subject to the rules of Matrimonial regimes.
       Life Benefits are governed by Mat regimes until the insured dies – this is the contract – What does this mean?
               o a policy may be issued before during or after a legal regime
               o If the contract was entered into prior to the legal regime, the contract is the separate property of the owner of the contract
               o If the contract is entered into during the regime, the contract is community property.
               o What is the policy worth during the existence of the regime?
                         May be whole life – a policy that has cash values that accumulate, always in terms of a percentage of the face value
                             of the policy. (tabular cash value)
                         Or may be term life - no cash value, someone must die for there to be a benefit

         Kambur v. Kambur (p.163)
             o Issue is whether or not ownership of life insurance policies is subject to community property rules
             o Court in this case held that the ownership is subject to community property rules.
             o The trial court applied 9:2801 in reaching its decision
                        9:2801(4): (summary)... the court has the discretion to divide community assets and liabilities equally

         Succession of Jackson (p. 167)
              o The trial court first notes that there is a distinction between the ownership of the policy and the ownership of the proceeds of the
                   policy.
              o There is a settled jurisprudential rule that if there is a valid, named beneficiary of a life insurance policy, the beneficiary is the
                   owner of the proceeds. (This is not subject to the rules of matrimonial regimes)
              o In this case, the first wife was the owner of the policy, but the 2nd wife was the named beneficiary and the owner of the
                   proceeds.
              o The court also found that the first wife was not entitled to reimbursement for the community assets used to pay the premiums
                   because the community is only entitled to reimbursement for the value at the time of dissolution of the community. This was a
                   term life policy that had no cash surrender value.

         Fowler v. Fowler (p. 171)
              o Issue in this case is whether proceeds of a life insurance policy paid during the community regime are the separate property of
                    the beneficiary spouse or community property.
              o Wife was sole beneficiary and received proceeds from the son‘s insurance policy during the regime and later divorced the
                    husband. Husband wanted a portion of proceeds.
              o The court held that life insurance proceeds are sui generis and are not subject to the community property rules.

Types of Retirement Plans (Handout)

         Defined Contribution Plan: a plan in which the document itself is primarily focused on the contributions of the plan such has how much
          and by who.
                o Contributory Plan – both the employer and the employee contribute to the plan.
                o Non contributory Plan – only the employer contributes to the plan.
                o Contributions are usually in some kind of formula. Either a percentage of employee‘s earnings or percentage of employers net
                    earnings. Each employees interest in the plan is a sum of money day by day or week by week. Employee can find out what
                    his interest is worth at any point of the day or week. Plan has no provision for a periodic payment when the employee retires.
                    It is worth a certain dollar amount when he retires. He has options on how to take it. He can take it as an annuity over a
                    lifetime. Another option is over a lifetime with a survivorship benefit. The lifetime benefit will be reduced to compensate for the
                    survivor benefit. Usually the survivor benefit will be some percentage of the retirement benefit (ex. 50%)
         Defined Benefit Plan: the plan defines the benefits to be received upon retirement. Usually in the form of a formula of some kind related
          to the employees earnings at some stage of retirement.
                o May be contributory or non contributory
                o Examples:
                            50% of highest annual earnings in last 5 years of employment
                            50% of average of highest 3 years earnings in last 5 years of employment

                                                                                                                                                    19
                          Formula involving number of years of service and earnings
        Qualified v. Non Qualified Plans:
               o A qualified plan is one that has been approved by the IRS
                          Permits employer to deduct as a business expense the employers contributions to the plan.
               o A non qualified plan is one that has not been approved by the IRS
                          Employer cannot deduct as a business expense his contributions to the plan.
                          All public pension plans are non qualified plans.
        Profit Sharing v. Pension Plans:
               o Profit Sharing plan is one where a percentage of net earnings of the employer is contributed to the plan
               o Pension Plan is one where either a fixed amount or a percentage of employee‘s earnings is contributed to the plan by the
                    employer or by the employer and employee.
               o These can be either benefit or contribution

4.9 Assets Acquired Over Time: Pension Benefits


        Sims v. Sims (p. 176)
             o This plan is a Defined Benefit, Non Qualified Public Plan
             o The thing we are classifying is the Right to Share in the Retirement Plan.
             o The issue in this case is whether the wife is entitled to a portion of her husbands pension rights acquired during the matrimonial
                   regime.
                          Art. 2338: Community property comprises: property (when) acquired during the existence of the legal regime
                             through (how) the effort, skill or industry of either spouse.
             o This case establishes a formula for allotting the portion of the retirement benefits each spouse is entitled to according to the
                   time the working spouse was employed during the regime.
             o This formula is used only in a Defined Benefit Plan
             o Formula:
                             Portion of Pension attributable to creditable
                             Service during existence of community
                             ----------------------------------------------- x ½ x annunity (lump sum)
                             Pension attributable to total creditable
                             service

        Johnson v. Wetherspoon (p. 182)
             o This issue in this case is whether survivor benefits belong to the surviving spouse in full ownership or whether the surviving
                  spouse must account to a former spouse in community if receipt of said benefits violates the former spouses community
                  ownership rights.
             o The court held that the beneficiary (2nd Wife) cannot affect the rights of a former spouse (1st wife) in community.
             o The former spouse is entitled to her portion of the survivorship benefits according to the Sims Formula.

        Bailey v. Bailey (p. 189)
              o The issue in this case is a DROP account and the classification of the funds in the account.
              o The wife contends that she gets half of his entire DROP account because the funds were earned during the existence of the
                    community.
              o The court held that the wife was entitled to half of her proportionate share of the full amount of funds in the DROP account
                    because all of the money that was in the account was fully earned during the existence of the community.

4.10 Federal Entitlements

        Boggs v. Boggs (p. 192)
             o The issue in this case is whether a retirement benefit or survivorship benefit can be willed or signed.
             o This is a private qualified plan governed by federal law
             o The court held that it was the intention of Congress in enacting ERISA that the beneficiary receives all of the money. No
                  exceptions.
             o Individual state laws cannot opt out of this.
             o Only two ways to alienate under federal law:
                       With a quadro – this alienates an interest in the retirement benefit in the case of a divorce.
                       Survivorship designation – ―I designate my wife to receive the survivor benefits when I die‖
             o Vehicle by which the benefits are distributed is called a quadro.
                       Survivorship designation: The participant designates the survivor.
                       Federal preemption applies both before the benefits have been distributed and after the benefits have been
                            distributed.
                       In some instances, a portion of a federal statute will preempt a portion of a state statute or the entire state statute.
                                                                                                                                                20
LOOK AT THIS STATUTE FOR THE EXAM ..... DOES IT SUCCESSFULLY AVOID FEDERAL PREEMPTION? (RIGBY THINKS NO)
    Title 9:2801.1:
       When federal law or the provisions of a statutory pension or retirement plan, state or federal, preempt or preclude community
       classification of property that would have been classified as community property under the principles of the Civil Code, the spouse of the
       person entitled to such property shall be allocated or assigned the ownership of community property equal in value to such property prior
       to the division of the rest of the community property.
       Nevertheless, if such property consists of a spouse's right to receive social security benefits or the benefits themselves, then the court in
       its discretion may allocate or assign other community property equal in value to the other spouse.


         Yiatchos v. Yiatchos, Executrix, Et Al. (p. 202)
               o Court said that federal preemption applies to US Savings Bonds.
               o States cannot interfere with these bonds.

         Succession of Egan (p. 209)
               o The issues in this case are whether a beneficiary designation transfers a decedents separate property and community interest
                    in his IRA and whether his beneficiary is required to reimburse the decedents separate and community estates, to the benefit of
                    his surviving major children for the contributions made to those IRA accounts.
               o An IRA is like a retirement plan and the deceased can designate a sole beneficiary, therefore no one is entitled to
                    reimbursement.
               o The federal statute that deals with IRA accounts provides that ―the IRA is for the exclusive benefit of the individual or his
                    beneficiaries.‖
               o This statute preempts any state community property laws – therefore a surviving spouse is not considered to have inherited the
                    IRA.
         Rodrigue v. Rodrigue (p. 212)
               o The issue in this case is whether a spouse is entitled to receive half of the proceeds from intellectual property copyrighted by
                    the other spouse during the community regime.
               o The spouse with the copyright contends that the federal copyright law preempts the state community property law.
               o The court in this case disagrees and states that preemption only occurs when there is a direct and irreconcilable clash between
                    a state law and a federal law.
               o The court resolves this issue by giving the holding spouse the sole right to control the copyright and gives the other spouse ½
                    of the proceeds from the copyright.

4.11 Federal Military Pensions

              United States Code, Title 10 § 1408 – Payment of retired pay in compliance with court orders
                    o (c) Authority for the court to treat retired pay as property of the member and the spouse – (1) Subject to the limitations of
                        this section, a court may treat disposable retired pay payable to a member for pay periods beginning after June 25, 1981,
                        either as property solely of the member or as property of the member and his spouse in accordance with the law of the
                        jurisdiction of such court. A court may not treat retired pay as property in any proceeding to divide or partition an amount
                        of tretired pay of a member as the property of the member and member‘s spouse or former spouse if a final decree of
                        divorce, dissolution, annulment, or legal separation (including a court ordered, ratified or approved property settlement
                        incident to such decree) affecting the member and the members spouse or former spouse (a) was issued before June 25,
                        1981 and (b) did not treat (or reserve jurisdiction to treat) any amount of retired pay of the member as property of the
                        member and the members spouse or former spouse.

(This statute allows for states to apply jurisdictional community property laws to disposable retired pay – avoids federal preemption)

              Russell v. Russell (p. 220)
                   o The issue in this case is whether military disability retirement benefits are community or separate property.
                   o In this case, the husband retired from the military under disability just shy of retirement (20 years)
                   o The wife argues that these benefits are community property just like all other retirement benefits.
                   o Court held that military disability benefits do not fall under ―disposable retired pay‖ in § 1408 and are not covered in the
                         above statute.
                   o Therefore, the compensation for disability is the separate property of the husband. However, any amount paid over
                         disability compensation would be disposable retired pay and would be community property subject to division based on
                         the years they were in the community regime.
CHAPTER 5       MANAGEMENT OF COMMUNITY ASSETS

Handout: Management
    1. General Rule: either may (CC 2346, 2349)
    Then look to exceptions:
                                                                                                                                                    21
     2.   Both May (CC 2347, 2349, 2350)
     3.   This one must (2350, 2351, 2352)
     4.   Renunciation of right to concur ( CC 2348)
     5.   Judicial authorization to act w/o concurrence (CC 2355)

5.1 In General

General Rule: ―Either May‖ – EITHER SPOUSE MAY MANAGE, CONTROL OR DISPOSE OF COMMUNITY PROPERTY

Art. 2346 Management of Community Property
Each spouse acting alone may manage, control, or dispose of community property unless otherwise provided by law.

         If you don‘t find a both must or a certain spouse must rule, then you operate under the general either may rule.
         Ex. If couple owns an apartment building, both signatures are needed to sell under 2347, but either may authorize the repair of the
          building under 2346.
         Note that the type of the community property will determine which of the rules apply. Ex. Either may alienate, encumber or lease some
          community movables.
         In order to determine if the general rule applies – look to the type of management and the type of property

Art. 2347 Alienation of Community Property; concurrence of other spouse
The concurrence of both spouses is required for the alienation, encumbrance, or lease of community immovables, standing, cut or fallen timber,
furniture or furnishings while located in the family home, all or substantially all of the assets of a community enterprise, and movables issued or
registered as provided by law in the names of the spouses jointly.

Art. 2348 Renunciation of right to concur
A spouse may expressly renousnce the right to concur in the alienation, encumbrance, or lease of a community immovable or some or all of the
community immovables, or community immovables which may be acquired in the future, or all or substantially all of a community enterprise. He
may also renounce the right to participate in the management of a community enterprise. The renunciation may be irrevocable for a stated term not
to exceed 3 years. Further, any renunciation of the right to concur in the alienation, encumbrance, or lease of a community immovable, or some or
all of the community immovablees or community immovables which may be acquired in the future, or all or substantially all of a community
enterprise which was proper in form and effective under the law at the time it was made shall continue in effect for the stated term not to exceed
three years or if there was no term stated, then until it was revoked.

                Concurrence
                     o Concurrence simply means agreement
                              Does not have to be written
                              When dealing with immovables, it may require some ―act‖, maybe not authentic act but at least some act is
                                required
                              This doesn‘t mean that both spouses have to be vendors or mortgagors or lessors
                              One spouse may still act and the other simply has to agree with it.
                              This is significant because only the acting spouse is liable for damages resulting from his/her negligence as
                                mortgagor, vendor or lessor.

Art. 2349 Donation of community property; concurrence of other spouse
The donation of community property to a third person requires the concurrence of the spouses, but a spouse, acting alone, may make a usual or
customary gift of a value commensurate with the economic position of the spouses at the time of the donation.

Art. 2350 Alienation of movable assets of business
The spouse who is the sole manager of a community enterprise has the exclusive right to alienate, encumber or lease its movables, unless the
movables are issued in the name of the other spouse or the concurrence of the other spouse is required by law.

Art. 2351 Alienation of Registered Movables
A spouse has the exclusive right to manage, alienate, encumber, or lease movables issued or registered in his name as provided by law.

Art. 2352 Management and disposition of partnership and limited liability company interest
A spouse who is a partner has the exclusive right to manage, alienate, encumber, or lease the partnership interest.
A spouse who is a member has the exclusive right to manage, alienate, encumber, or lease the limited liability company interest.

Art. 2353 Unauthorized alienation of community property
When the concurrence of the spouses is required by law, the alienation, encumbrance, or lease of community property by a spouse is relatively null
unless the other spouse has renounced the right to concur. Also, the alienation, encumbrance, or lease of the assets of a community enterprise by
the non manager spouse is relatively null.

                                                                                                                                                      22
        In the case of a relative nullity, the act is valid until a court declares an act to be null. Third parties can rely on the act until it is declared
         null.
        Proper device for curing a relative nullity is confirmation – (not ratification)

5.2 One Spouse Acting Alone

             Magnon v. Leger (p. 230)
                  o The issue in this case is whether one spouse can alienate a community movable to a third party in consideration of an
                      obligation without the concurrence of the other spouse.
                             Art. 2337 – A spouse may not alienate, encumber, or lease to a third person his undivided interest in the
                                 community or in particular things of the community prior to the termination of the regime.
                             Art. 2345 – A separate or community obligation may be satisfied during the community property regime from
                                 community property and from the separate property of the spouse who incurred the obligation.
                             CC art 2346 – Each spouse acting alone may manage, control, or dispose of community property unless
                                 otherwise provided by law.
                  o The rule is generally either spouse can manage community property.
                  o Exceptions: (1) must look at the kind of community property (movable or immovable) that constitutes the exception and
                      (2) the type of management by the spouse that constitutes the exception
                  o The court concluded in this case that one spouse may dispose of movable community property acting alone to satisfy a
                      community obligation.

5.3 Exclusive Management by One Spouse

             Canale v. Gus Mayer, Co., Limited (p. 237)
                  o The issue in this case is whether the husband had the authority to manage these movables alone.
                  o It is not clear by the case whether or not the coats are community or separate property
                  o Assume they are separate property: The husband has no right to do anything with them
                  o Assume they are community property: the general rule applies – Either has the right to manage. Not an act of alienation,
                        encumbering, leasing, simply an act of management.
                  o In this case, the coats were not only managed, they were alienated.
                  o Look to article 2347 – may not fit under this because these are movables and are probably not registered.
                  o However, may be able to use art. 2349. A donation can only be made without the concurrence of both spouses if it is
                        commensurate with the economic position of the community.
                  o These were very expensive jackets and may have needed concurrence of both spouses to donate.
                  o The court ruled in favor of Canale and hold Gus Mayer responsible for breach of contract.

5.4 Concurrence of Both Spouses

             South Central Bell v. Eisman (p. 241)
                  o The issue in this case is whether a personal servitude granted by one spouse is good, or if the concurrence of both
                       spouses was needed.
                  o This servitude is an encumbrance
                              Art. 2347: The concurrence of both spouses is required for the alienation, encumbrance or lease of community
                                    immovables….
                              Art. 2353: When the concurrence of both spouses is required by law, the alienation, encumbrance or lease of
                                    community property is relatively null….
                  o The court found that this servitude was relatively null because this is an encumbrance and the wife‘s concurrence was
                       needed in order to grant the servitude.

             Cajun Capital, Inc. v. Bourque (p. 244)
                  o The issue in this case is whether the requirement of concurrence applies to an exclusive listing agreement to sell all or
                      substantially all of the assets of a community enterprise.
                  o This listing agreement is not considered an encumbrance, it is simply an act of management.
                  o Since Art. 2347 does not apply, the court ruled that the act was not a nullity because the general rule is that either may
                      manage.

5.5 Effect of Lack of Concurrence

        Webb v. Pioneer Bank and Trust Co. (p. 249)
            o The issue in this case is whether one spouse can put a mortgage on community property without the concurrence of the other
                  spouse.


                                                                                                                                                            23
               o    Under the management rules, the husband cannot mortgage the community immovable without the wife‘s concurrence. Either
                    spouse may mortgage the community immovable. (2346) However, the concurrence of both spouses is needed to encumber
                    (kind of act) the community immovable (kind of community property). (2347) The mortgage is a relatively null because the
                    wife did not concur.
               o    Therefore, this mortgage is a relative nullity.

LA CCP = Louisiana Code of Civil Procedure (green box)
LA CC = Louisiana Civil Code (pink box)
LA RS = Louisiana Revised Statutes (yellow box)

CHAPTER 5: MANAGEMENT OF COMMUNITY ASSETS

          5.6 FRAUD OR BAD FAITH MANAGEMENT

LA CC Art. 2354 Liability for fraud or bad faith.
         A spouse is liable for any loss or damage caused by fraud or bad faith in the management of the community property.

     A.   Remedy for an action based on 2354 is damages.
     B.   The spouse is authorized, so there is relative nullity in these cases. Not talking about validity, but remedy.
     C.   Skipped Thigpen v. Thigpen-pre 1980 case
     D.   Auger v. Auger (2nd 1980)
                             i. This is an old ‗head and master‘ case.
                            ii. Issue: Is a fraudulent transfer of community property remedied by setting aside the transaction or by damages.
                                Answer-she‘s not allowed to set aside the transaction.
                           iii. H made conveyances of several tracts of land which W contends were made to him prior to their separation with the
                                intent to defraud W of her community interest in the properties.
                           iv. H claims that the conveyances were made to his father and brother to settle indebtedness he had to his father b/f his
                                property got tangled up in divorce.
                            v. C/A confirms judgment of trial court finding that there was a prima facie case for fraud. The trial court considered the
                                following factors:
                                                 o Parties had been separated for days and had experienced marital difficulties
                                                 o Filing of a suit for legal separation was imminent.
                                                 o Vendees in the deed were H‘s closest relatives and business associates
                                                 o Cash consideration recited in the deeds was admittedly never paid to H
                                                 o No attempt was made to reduce to writing any understanding among parties as to what specific
                                                      indebtedness was to be credited with the amounts shown in the deeds
                                                 o It appeared that the arbitrary ‗round figures‘ were placed in the deeds as the expressed
                                                      consideration
                                                 o Single most valuable property interest was conveyed to Don Juan Auger alone, who never
                                                      testified concerning the manner in which the recited cash consideration of $11,000 was to be
                                                      paid.
     E.   Lousy judgments are not fraud or bad faith.
     F.   2354 does not impose an affirmative duty to manage community property well. It imposes a negative duty not to be fraudulent.
     G.   Generally it turns on whether or not it was done with the intention of hurting the other spouse.
     H.   Aymond v. Aymond (3rd 2000)
                             i. Issue: whether the wife fraudulently managed community property.
                            ii. The wife prematurely cashed in CD‘s before they matured.
                           iii. Under CC Art. 2346, either spouse had the authority to manage the community property-so, is this a valid act of
                                management?
                           iv. Court said that the wife cashing in the CDs was not bad faith or fraudulent b/c she needed the money to support
                                herself.
                                                 o Example: If you have a 5 yr CD in husband‘s name, and he cashes out prematurely, he has the
                                                      right to do that b/c it is an incorporeal movable in his name-no relative nullity.
                            v. Look at the intention of the spouse.
          5.7 Estoppel

LA CC Art. 2341. Separate property.
          The separate property of a spouse is his exclusively. It comprises: property acquired by a spouse prior to the establishment of a
community property regime; property acquired by a spouse with separate things or with separate and community things when the value of the
community things is inconsequential in comparison with the value of the separate things used; property acquired by a spouse by inheritance or


                                                                                                                                                    24
donation to him individually; damages awarded to a spouse in an action for breach of contract against the other spouse or for the loss sustained as
a result of fraud or bad faith in the management of community property by the other spouse; damages or other indemnity awarded to a spouse in
connection with the management of his separate property; and things acquired by a spouse as a result of a voluntary partition of the community
during the existence of a community property regime.



LA CC Art. 2342. Declaration of acquisition of separate property
            A. A declaration in an act of acquisition that things are acquired with separate funds as the separate property of a spouse may be
controverted by the other spouse unless he concurred in the act. It may also be controverted by the forced heirs and the creditors of the spouses,
despite the concurrence by the other spouse.
            B. Nevertheless, when there has been such a declaration, an alienation, encumbrance, or lease of the thing by onerous title, during the
community regime or thereafter, may not be set aside on the ground of the falsity of the declaration.
            C.(1) The provision of this Article that prohibits setting aside an alienation, encumbrance, or lease on the ground of the falsity of the
declaration of separate property is hereby made retroactive to any such alienation, encumbrance, or lease prior to July 21, 1982.
            (2) A person who has a right to set aside such transactions on the ground of the falsity of the declaration, which right is not prescribed or
otherwise extinguished or barred upon July 21, 1982, and who is adversely affected by the provisions of this Article, shall have six months from July
21, 1982, to initiate proceedings to set aside such transactions or otherwise be forever barred from exercising such right or cause of action. Nothing
contained in this Article shall be construed to limit or prescribe any action or proceeding which may arise between spouses under the provisions of
this Article.


      A.    McElwee v. McElwee (2nd 1972)
                             i. Document produced by W signed by H to the effect that a tract of land was her separate property was enough to
                                rebut the presumption of community.
                            ii. Deals w/ CC Art. 2342, which carries forward a rule prior to 1980.
                           iii. The concurrence doesn‘t have to be in the act of acquisition. The document can be executed at the time of
                                acquisition or later. The effect of this CC article does not make the property the separate property of the one
                                acquiring property. It simply stops the other spouse from claiming the property as community.
                           iv. This declaration is not binding on the creditors or forced heirs of the parties. It is only binding on the declaring
                                spouse.
      B.    Sucession of Norwood (2nd 1988)
                             i. Same issue as McElwee.
                            ii. Person claiming it is separate property bears the burden of rebutting the presumption that he funds in her separate
                                checking account and the property acquired w/ funds therefrom during the marriage was part of the community
                                estate. Here they fail to do so.
                           iii. Only thing to note here is that there was a misstatement of the court. It says ‗heirs are not bound‘, were it should say
                                ‗forced heirs are not bound‘. Referring to the declaration of H and W that purchase of various properties were W‘s
                                separate funds, the forced heirs were not bound by this declaration and can controvert it according to CC 2342.

            5.8 Public Records

      A.    This only applies to immovables
      B.    Camel v. Waller (LA SC 1988)
                               i. Issue: Whether a third party dealing with immovable real estate can rely on what is in the public records or rely on
                                  only what is NOT in the public records?
                              ii. Ex-H bought the property near the time the community was dissolving, but still during the existence of the
                                  community.
                             iii. He records the deed.
                            iv. After community is dissolved, he ends up selling the property.
                              v. H claims that they were judicially separated, but a judgment of separation was not recorded at the courthouse. His
                                  acquisition deed is the only thing in the public records.
                            vi. So, W claims it was community, H claims he was single at time of acquisition, and the purchaser of land said that he
                                  relied on public records.
                            vii. Nothing in the public records shows W‘s interest.
                           viii. What can I rely on and what can I not rely on in this recitation of the acquisition deed?


                                                                                                                                                        25
                            ix. In this case, the SC says that the public records doctrine trumps and since it is not recorded that W has interest in
                                 the property she is SOL b/c the third party purchaser is protected.
                             x. W could have recorded her interest to put 3rd party purchaser on notice.
                            xi. ANSWER: You can rely on what is NOT in public records.
                           xii. This is a clash of rules protecting third party purchasers relying on the public records against rules protecting
                                 spouses from their spouses.
                           xiii. So, third parties cannot rely on the fact that the public records say the party is not married. However, third parties can
                                 rely on the fact that it doesn‘t say that a party is married. Can rely on the absence of info in the public records. Here,
                                 there is no claim of the wife showing her interest in the records.
                                       1. What is in the records: that he is separated.
                                       2. What is not in the records: what her interests are.
                                                  o Rigby was taught to rely on what is in the public records.
                                                  o Now we have to rely on what is NOT in the public records.
                                                  o Now, we have LA RS 35:11-legislatively overruled Camel v. Waller, but the SC has not ruled on
                                                         this yet. SC did not consider 35:11 in this decision b/c the events occurred b/f statute was
                                                         passed.

LA RS 35:11 Marital status of parties to be given
           A. Whenever notaries pass any acts they shall give the marital status of all parties to the act, viz: If either or any party or parties are
men, they shall be described as single, married, or widower. If married or widower the christian and family name of wife shall be given. If either or
any party or parties are women, they shall be described as single, married or widow. If married or widow, their christian and family name shall be
given, adding that she is the wife of or widow of . . . the husband's name.
           B. A declaration as to one's marital status in an acquisition of immovable property by the person acquiring the property creates a
presumption that the marital status as declared in the act of acquisition is correct and, except as provided in Subsection C of this Section, any
subsequent alienation, encumbrance, or lease of the immovable by onerous title shall not be attacked on the ground that the marital status was not
as stated in the declaration.
           C. Any person may file an action to attack the subsequent alienation, encumbrance, or lease on the ground that the marital status of the
party as stated in the initial act of acquisition is false and incorrect; however, such action to attack the alienation, encumbrance, or lease shall not
affect any right or rights acquired by a third person acting in good faith.
           D. The presumption provided in Subsection B of this Section is hereby declared to be remedial and made retroactive to any alienation,
encumbrance, or lease made prior to September 1, 1987. Any person who has a right as provided in Subsection C of this Section, which right has
not prescribed or otherwise been extinguished or barred upon September 1, 1987 and who is adversely affected by the provisions of Subsection C
of this Section shall have six months from September 1, 1987 to initiate an action to attack the transaction or otherwise be forever barred from
exercising his right or cause of action.


                                                                  oSo, 35:11 now creates the presumption that we can rely on the public records.
                                                                  oIf in good faith you do not know that the declaration is false than it will not affect
                                                                   you.
                                                             o When the SC revisits this issue:
                                                                           You can only rely on what is in the public records for adverse claims.
                                                                           Can rely on declaration of marital status; but this can be attacked if
                                                                               you don‘t know this is false and you are in good faith.
                                                                                      Camel did not overrule the James case but did not follow it.
     C. Uniform Marital Property Act-Protection of Bona Fide Purchasers
     Protection of Bona Fide Purchasers Dealing with spouses
     a) In this section:
                                   1. Bona Fide Purchaser means a purchaswer of property for value who:
                                                          i. Has not knowingly been a party to fraud or illegality affecting the interest of the
                                                             spouses or other parties to the transaction;
                                                         ii. Does not have notice of an adverse claim by a spouse; and
                                                        iii. Has acted in the transaction in good faith.
                                   2. Purchase means to acquire property by sale, lease, discount, negotiation, mortgage, pledge, or lien or
                                        otherwise to deal with property in a voluntary transaction other than a gift
                                   3. A purchaser gives ‗value‘ for property acquired;
                                                          i. In return for a binding commitment to extend credit.

                                                                                                                                                           26
                                                            ii. As security for or in total or partial satisfaction of a pre-existing claim.
                                                           iii. By accepting delivery pursuant to a pre-existing k for purchase; or
                                                           iv. Generally, in return for any other consideration sufficient to support a simple k.
     b)   Notice of the existence of a marital property agreement, a marriage, or the termination of a marriage does not affect the status of a
          purchaser as a bona fide purchaser.
     c)   Marital property purchased by a bona fide purchaser from a spouse having the right to manage and control the property under Section 5
          is acquired free of any claim of the other spouse. The effect of this subsection may not be varied by a marital property agreement.

CHAPTER 6: DEBTS OF THE SPOUSES

          6.1 Pre-1980 Regime: Contractual and Delictual Obligations

NEW MANTRA: WHEN AND WHY??
   A. Before 1980, the only statutory provision which directly governed debts was Civil Code Article 2403.
                          i. Declared that debts contracted during the existence of a community regime must be acquitted out of the common
                             fund and those contracted after termination of the regime from the separate property of the incurring spouse. –No
                             distinction as to who contracted the debt.
   B. CC Art. 2404 recognized the husband as the head and master of the community of gains with the power to administer its effects and
       dispose of the revenues and assets by onerous title, w/o the consent of his wife.
                          i. Thus, if husband incurred a debt, his creditors could seek satisfaction from the community property and his separate
                             property.
                         ii. The wife, on the other hand, had a patrimony which consisted of her separate property and, as of 1975, her
                             earnings. Thus, a creditor of the wife could seize her separate property and her earnings (community property) in
                             satisfaction of his debt.
   C. Jurisprudence recognized that the wife by her actions could sometimes bind the husband:
                          i. Public merchant: If wife is one, then obligations related to her trade would bind the husband if there is a community
                             of property b/w them. (later jurisprudence held so even if the husband did not consent, b/c the wife‘s earnings were
                             CP).
                         ii. If the wife were acting as her husband‘s mandatory, by virtue of an express or implied mandate. On the other hand,
                             the wife, as mandatory was only bound if she indicated the intention to be bound.
                        iii. Customary mandate b/w husband and wife such that she could contract for necessaries and bind him if he failed to
                             provide them.
                       iv. If the husband knew of the wife‘s transactions and did nothing to repudiate them, he was deemed to have ratified her
                             acts.
   D. The ―Community Mission‖ Doctrine:
                          i. If the husband expressly or impliedly authorized the act by the wife which ultimately caused the damage in a tort, the
                             husband was liable to the victim if the wife was on a community mission.
                                         o ―Community Mission‖: the legitimate pursuits of the wife, whether for wholesale recreation and
                                              pleasure or for other purposes consonant with the intangible and imponderable obligations of the
                                              marital relationship.
                                                    Sort of like vicarious liability for employer/employee in course and scope.

          6.2: Post-1980 Regime: Contractual Obligations

LA CCP 686: Marital Community
           Either spouse is the proper plaintiff, during the existence of the martial community, to sue to enforce a community right; however, if one
spouse is the managing spouse with respect to the community right sought to be enforced, then that spouse is the proper plaintiff to bring an action
to enforce the right.
           When doubt exists whether the right sought to be enforced is a community right or is the separate right of the plaintiff spouse, that spouse
may sue in the alternative to enforce the right.
           When only one spouse sues to enforce a community right, the other spouse is a necessary party. Where the failure to join the other
spouse may result in an injustice to that spouse, the trial court may order the joinder of that spouse on its own motion.

LA CCP 735: Marital Community
       Either spouse is the proper defendant, during the existence of the marital community, in an action to enforce an obligation against community
property; however, if one spouse is the managing spouse with respect to the obligation sought to be enforced against the community property, then
that spouse is the proper defendant in an action to enforce the obligation.
       When doubt exists whether the obligation sought to be enforced is a community obligation or the separate obligation of the defendant spouse,
that spouse may be sued in the alternative.
        When only one spouse is sued to enforce an obligation against community property, the other spouse is a necessary party. Where the failure
to join the other spouse may result in an injustice to that spouse, the trial court may order the joinder of that spouse on its own motion.


                                                                                                                                                    27
LA CC Art. 2356: Causes of Termination
          The legal regime of community property is terminated by the death or judgment of declaration of death of a spouse, declaration of nullity
of marriage, judgment of divorce or separation of property, or matrimonial agreement that terminates the community


LA CC Art. 2359: Obligations; community or separate
           An obligation incurred by a spouse may be either a community obligation or a separate obligation.
*There is an exception to this hard and fast rule
**Jurisprudential exceptions and a statutory exception – 2nd paragraph art 2363 – an obligation incurred for the separate property of a spouse to the
extent that it does not benefit the community, the family, or the spouse, is likewise a separate obligation. (the obligation was incurred prior to the
marriage and therefore it is a separate obligation; he uses community money to satisfy the separate obligation – then there will be a claim by the
other spouse for reimbursement for ½ of the payments made with community money; by decreasing his obligations, he is increasing the value of his
separate property; but the family is getting the benefit of the separate obligation since it is living in the house that the spouse bought for the
community regime – obligation is partly separate and partly community because it benefits the spouse with the separate obligation as well as the
community)

LA CC Art. 2360: Community Obligation
            An obligation incurred by a spouse during the existence of a community property regime for the common interest of the spouses of for the
interest of the other spouse is a community obligation.
*This is the statutory classification of a community obligation; when incurred – during the existence of the legal regime and why incurred – (1) for the
common interest of the spouses (2) the interests of the other spouse (the non-incurring spouse)
*A community obligation is not for the benefit of the community even though this language is used in the cases (cannot incur an obligation for the
benefit of a system of rules & a system of rules cannot owe an obligation such as a debt)
*The ―why‖ relates to people – either for our benefit or her/his benefit (why not how)

LA CC Art. 2361: Obligations incurred during marriage; presumption
         Except as provided in Article 2363, all obligations incurred by a spouse during the existence of a community property regime are
presumed to be community obligations.
*We always start with the presumption. The presumption can be overcome.

LA CC Art. 2362: Alimentary Obligation
            An alimentary obligation imposed by law on a spouse is deemed to be a community obligation.
*By definition, an alimentary obligation cannot be an obligation of the current community. An alimentary obligation is an obligation of a former
community that is enforced during the current regime (spousal support; child support).

LA CC Art. 2362.1: Obligation incurred in an action for divorce
           An obligation for attorney‘s fees and costs in an action for divorce incurred before the date of the judgment of divorce that terminates the
community property regime is a community obligation of that regime.
*There are 2 implications: (1) what is the classification of an intentional tort committed for the benefit of the community & (2) does it mean that all
unintentional torts (negligence) are community obligations
*The courts have interpreted this article to mean that all negligent acts are community obligations – community obligations because the obligation is
not a separate obligation and all obligations that are not separate obligations are presumed to be community obligations
*The second phrase of the second paragraph goes back to conventional obligations (see 2359 above)

LA CC Art. 2363: Separate obligations (2nd paragraph)
        An obligation resulting from an intentional wrong not perpetrated for the benefit of the community, or an obligation incurred for the
        separate property of a spouse to the extent that it does not benefit the community, the family, or the spouse, is likewise a separate
        obligation.

                                     o    What is an intentional wrong not perpretated for the benefit of the community?
                                     a.   If the spouse incurs an obligation b/c he or she committed an intentional tort.
                                     o    Converse is also true: if the obligation was incurred as a result of an intentional wrong for the benefit of
                                          community, then that obligation would be community.
                                     a.   That raises more questions. What about negligence?
                                     b.   Statutory interpretation as whether negligence is a community or a separate obligation.
                                                            i. Wife involved in an auto accident:
                                                                      1. One analysis:
                                                                      -2360: presumption of community
                                                                      -2363: Does not classify as separate obligation
                                                                       So the presumption persists and its community obligation.

                                                                                                                                                         28
                                                                             Still another analysis is that negligence is a separate obligation b/c it
                                                                        does not benefit community.
                                     c.    Jurisprudence on negligence:
                                                               i. Jurisprudence treats negligent injury as if it is a community obligation; incurred during
                                                                  the existence of the community.
                                                              ii. Rigby thinks this is a carry over from pre 1980 mandate, b/c to make the husband
                                                                  and the community liable was the only way to get payment. Basically letting wife use
                                                                  car, for example, was the H ratifying the act.
                                                             iii. Community Mission Doctrine (see pre-1980s rules)
                                     d.    Classification of obligation as community or separate does not tell us anything about who is liable for it.
                                     e.    Just b/c you are married does not mean you are liable, but the community may be liable.

LA CC Art. 2365: Satisfaction of community obligation with separate property
           If separate property of a spouse has been used to satisfy a community obligation, that spouse upon termination of the community property
regime, is entitled to reimbursement for one-half of the amount or value that the property had at the time it was used. The liability of a spouse who
owes reimbursement is limited to the value of his share in the community after deduction of all community obligations.
           Nevertheless, if the community obligations was incurred for the ordinary and customary expenses of the marriage, or for the support,
maintenance, and education of children of either spouse in keeping with the economic condition of the community, the spouse is entitled to
reimbursement from the other spouse regardless of the value of that spouse‘s share of the community.

LA CC Art. 2345: Satisfaction of obligation during community.
           A separate or community obligation may be satisfied during the community property regime from community property and from the
separate property of the spouse who incurred the obligation.
*The article does not define which party incurred the obligation. However, the obligation cannot be satisfied through the property of the non-
incurring spouse
*Spouses are not personally liable for the other spouse‘s debt – however, community property can be used to satisfy a separate debt

HYPOS:
                                           o    Professor Rigby takes his wife out to dinner.
                                                     o When? During the existence of community (at least the presumption)
                                                     o Why? To benefit both of them.
                                           o    Rigby buys his wife a ring as a gift.
                                                     o When? Presumption is during the existence of the community.
                                                     o Why? Benefit of community.
                                                                But what about when he gives it to her?
                                                                            Then it becomes a manual donation; her separate property.

A. First Security Bank and Trust Company v. Dooley (LA C/A 2nd 1985)****CASE WAS WRONGLY DECIDED.
                               ix. Issue: Is a spouse liable for an obligation incurred by the other spouse.
                                             o Subissue: Whether an obligation incurred by a spouse w/o the knowledge or consent of the other
                                                  spouse is a community or separate obligation.
                            ii. Does the sub issue make a difference?
                           iii. The wife borrowed (signed two promissiory notes to bank) during the existence of the regime to fix up the house and
                                  help pay for son‘s college.
                           iv. It is presumed that this is a community obligation b/c it was incurred during the existence of the community for the
                                  common interest of the spouses or the interest of the other spouse. (CC Art. 2360-always start with the presumption)
                                             o C/A rules that Husband fails to overcome this presumption.
                                             o TEST: Was it for the common interest??
                            v. Why is it classified as community? B/c it was to fix up their home therefore it was for the benefit of the community-
                                  common interest.
                           vi. H argues that he did not consent.
                                             o Argument is not valid b/c under CC Art. 2346 either spouse can manage the community.
                          vii. During the existence of the community, CP and the separate property of the spouse who incurred the obligation may
                                  be used to satisfy the obligation.
                         viii. The bank could seize the CP or W‘s separate property. But the bank could not seize the separate property of Mr.
                                  Dooley b/c he was not personally liable.
                           ix. 2nd circuit found H to be personally liable to the extent of his interest in the CP pursuant to CC Art. 2357. They could
                                  not take H‘s separate property- b/c he was not the spouse that incurred the debt. Only the former CP and the sep
                                  prop of the spouse that incurred the debt.

LA CC Art. 2357: Satisfaction of obligation after termination of regime.


                                                                                                                                                       29
             An obligation incurred by a spouse b/f or during the CP regime may be satisfied after termination of the regime from the property of the
former community and from the separate property of the spouse who incurred the obligation. The same rule applies to an obligation for attorney‘s
fees and costs in an action for divorce incurred by a spouse b/w the date the petition for divorce was filed and the date of the judgment of divorce
that terminates the communityh regime.
             If a spouse disposes of property of the former community for a purpose other than the satisfaction of community obligations, he is liable
for all obligations incurred by the other spouse up to the value of that CP.
             A spouse may by written act assume responsibility for one-half of each community obligation incurred by the other spouse. In such case,
the assuming spouse may dispose of community property w/o incurring further responsibility for the obligations incurred by the other spouse.

B. What have we learned so far from the cases and the Code?
                                                      i. i. Spouses are not personally liable for the debts their spouses incur just b/c they are married.
                                                     ii. ii. The incurring spouse is liable to the debts that he or she incurs to the creditor.
                                                    iii. iii. Creditor may use all of the community property, or former community property, and all of
                                                         the separate property of the incurring spouse to satisfy the debts.
                                                    iv. iv. Creditor may not go against the property of the non-incurring spouse.
C. Ways that the non-incurring spouse makes himself liable for the debt:
                             i. After termination of community regime, spouse disposes of community property for any reason other than the
                             satisfaction of community obligations-only liable up to the amount of disposed of property.
                             ii. Conventional agreement: when non incurring spouse agrees to be liable.
D. Bridges v. Osborne (1st Cir. 1988)

                                                    v. Issue: Whether H was liable for the debt owed from the house being painted when the wife
                                                         was the one that agreed to the house being painted. The wife sued the Osbornes.
                                                   vi. The duplex was wife‘s SEPARATE property. – it was acquired b/f their marriage.
                                                  vii. Court concluded there was a community obligation b/c H received benefit from the duplex
                                                         being painted. The common interest of the spouses was benefited. And b/c the rent received
                                                         is community property.
                                                  viii. Court says that H was personally liable for the obligation (incorrect statement of law b/c H
                                                         was not personally liable for the obligation incurred by W-see 2357).
                                                   ix. 2 errors by the court:
                                                       1. Assumption that if an obligation is a community obligation then both spouses are
                                                            responsible for it-only the spouse that incurred the obligation is liable for it
                                                       2. That is makes any difference in the liability to the creditors whether the obligation is
                                                            separate obligation of one spouse or a community obligation-this doesn‘t make any
                                                            difference.
     E.   Lawson v. Lawson (2nd 1988)
                            i. Issue: Can a creditor seize the non-debtor spouses separate property to satisfy the obligation of the other spouse?
                           ii. Article 2345 says that creditors can seize the community property and the separate property of the spouse that
                                 incurred the debt.
                          iii. This case fixed the screw up in the 2nd circuit. Rigby argued in this case that all the cases in the 2nd circuit were
                                 wrong on this matter.
                          iv. The wife‘s first husband owed his mother $70k. The wife was remarried. Mother in law wanted access to wife‘s new
                                 community (she‘d married a rich man) There was a community obligation, owing $70k to her former mother-in-law.
                                 This obligation was a community obligation of Mrs. Lawson‘s second community. The first community was insolvent
                                 and therefore the mother-in-law wanted to get the obligation from the second community.
                           v. HOW was the debt incurred? Promissory note was signed by Mr. Lawson (1st H).
                          vi. The Second Circuit applied the correct rule: Mrs. Lawson was not liable for the debt incurred by her husband since
                                 her first husband incurred the debt.
                         vii. There are only 2 situations in which a spouse can become liable for the debts incurred by the other spouse.
                                             1. If a spouse disposes of property of the former community for a purpose other than the satisfaction of
                                 community obligations, he is liable for all obligations incurred by the other spouse up to the value of that community
                                 property. (2nd paragraph of CC art 2357)
                                             2. A spouse may by written act assume responsibility for one-half of each community obligation incurred
                                 by the other spouse. In such case, the assuming spouse may dispose of community property without incurring further
                                 responsibility for the obligations incurred by the other spouse. (3rd paragraph of CC art 2357)
                         viii. The problem was that the courts were applying the second paragraph of 2357 to the first paragraph situations. The
                                 Second Circuit is now straightened out.
                          ix. This case correctly outlines a lot of the rules
                           x. Compare the two cases, which is right:
                              1. Dooley: Non-incurring spouse is personally liable to the creditor up to his interest in the community.
                              2. Lawson: Non-incurring spouse is not liable for the debts the other spouse incurred.
                              LAWSON IS RIGHT. SPOUSES ARE NOT LIABLE FOR THE DEBTS THE OTHER SPOUSE INCURS.
     F.   Boellert v. Lumpkin (3rd 1993)
                                                                                                                                                      30
                        i.Same issue: Is the spouse liable for the debts incurred by the other spouse?
                       ii.Attorney sues ex H and W for collection of his fees that were unpaid.
                      iii.Attorney‘s detailed records show only the H‘s name and also refers to his ‗client‘ and not ‗cleints‘.
                      iv. Evidence presented by H is not enough to overcome ruling of trial court that H‘s debt is his separate obligation or an
                          obligation of the community. Either way, the separate property of the wife is not liable.
G. Alessi v. Belanger (1st 1994)
                       i. Not discussed in class
                      ii. Argument as to whether Plaintiff sold the ring to defendant or to D‘s fiancé. Trial court ruled that the ring was actually
                          sold to D‘s fiancé.
                     iii. Issue does not come up as to who has to pay the outstanding balance; but presumably it would be separate
                          obligation of fiancé, except that it is an engagement ring, so that might be for the benefit of both. However, case
                          doesn‘t even discuss if they actually got married or not….etc. Don‘t know why it is in here really.
H. Ford Motor Credit v. Epps (3rd 1998)
                       i. Analysis and statements by the court is wrong, but the decision is right.
                      ii. Issue: Is a spouse liable for the debts fraudulently incurred by the other spouse?
                     iii. Wife signed a car note w/ her signature; also forged her husband‘s signature.
                    iv. Court held that the husband‘s signature on k was not binding b/c of fraud, what the wife did was essentially sign her
                          name twice.
                      v. However, husband did not rebut the presumption that the car purchased was for the benefit of the community.
                    vi. Court held that both husband and wife were liable for wife‘s debt as members of the community of acquets and gains
                          (they were married and are still married).
                    vii. WHAT IS WRONG WITH THIS CASE?
                                o Court says that under CP laws, H is liable.
                                o They are liable in solido. Under LA contract law, there is no solidary liability unless provided by law (stated
                                       in the k).
                                             o Court confused the rule for proper party defendant and liability.
                                                          i. LA CCP Art. 735 says that either party is the correct party to sue on a community
                                                             obligation that affects community property. However, this is a procedural rule not a
                                                             substantive one. Doesn‘t have anything to do with who is liable.
                                                         ii. There is no liability at all for Mr. Epps, much less an insolido obligation.
                                                        iii. So I think the conclusion is that Mr. Epps is liable only in sofar as the community is
                                                             liable b/c he failed to rebut the presumption that the car benefited the community.
                                                             This is the conclusion the court reached, but they were wrong in stating he was
                                                             personally liable and liable in solido.
I. Intent is what classifies the property as community or separate
                       i. This classification as community or separate doesn‘t determine who is liable for the debt to the creditor. This is
                          simply cuz spouses are not responsible for the debt incurred by the other spouse.
                      ii. Liability for the debt is not b/w the spouses. It is b/w the spouse and the creditor.
                     iii. What if only one spouse gets sued and the court executes a judgment against the other spouse which has a
                          community interest? Ex-Delictual Obligations: courts won‘t impute liability for negligence from one spouse to another.
                          B/c spouses are not liable for obligations of other spouses.
J. Carpenter v. Carpenter (1st 2001)
                       i. Not discussed in class.
6.3 Post-1980 Regime: Delictual Obligations

A.   Thomas v. Champagne (1st 1994)
                    i. Issue is: whether negligence can be imputed onto the other spouse?
                   ii. Mrs. C agreed to drive her husband to a business meeting in Lafayette. He worked for Lawson. Wreck. There was no
                       direct relationship b/w Lawson and Mrs. C.
                  iii. P argues that Mrs. C is liable b/c of the head and master rule, and the community mission doctrine. Court rightly
                       concludes that the head and master rule is out as of 1980. And while if they were on a community mission, this
                       means it might be a community obligation, doesn‘t mean that negligence can be imputed to Mrs. C.
                  iv. P also argues that this was a joint venture. Court says no b/c Mr. C had no control over vehicle.
                   v. Rules don‘t change for obligations that arise from delicts.

6.4 Due Process Concerns
***None of the cases below were talked about in class, but I just outlined them from the book.-skip this until I find out if we need to know these.
A. Who do you sue on a community obligation and what protection does the other spouse have?
                      ii. Either party is a proper party under LA CCP Art. 735, unless it involves an ‗only this one may obligate‘.
                     iii. The other party is a necessary party
                     iv. We don‘t have , except here, necessary parties in the civil code
                      v. Regardless of the obligation, if hubby incurs and ex-delictual obligation, the courts can seize his separate property
                          then go after community.
                                                                                                                                                31
                         vi. Do you have to join both spouses to get it? No, but Mennonite case requires that you give notice to spouse.
                                   o Mennonite Rule (US SC): Notice ought to be given by creditor b/f judgment so that the non-incurring
                                        spouse can defend before their community property is seized. Even though state law permits you to sue
                                        one spouse on a community debt, you sue the spouse that incurred the obligation b/c that is the spouse
                                        that is liable; the other spouse is entitled to some kind of notice b/f the property can be seized to satisfy
                                        the debts of the other spouse so the non-incurring spouse has the chance to contest the seizure and
                                        defend their interest.
                                              o The non-incurring spouse owns ½ interest in what is being seized; so notice must be given
                                              o Due process = notice and opportunity to defend
                                              o After judgment is rendered, If other spouse has a defense, they can‘t use it b/c a judgment has
                                                     already been rendered.
     B.   Jackson v. Galan (E.D. La. 1986)
                          i. Ask about the rest of these cases.

CHAPTER 7: TERMINATION OF THE COMMUNITY

          7.1 Causes

     A.   Look at the causes for the termination of the legal regime or the community regime. A legal regime of CP is terminated by the death or by
          declaration of death of the spouse.
     B.   If the marriage is an absolute nullity, then there was no legal regime and therefore it cannot be terminated.
     C.   A judgment of a divorce terminates the legal regime.

     CC Art. 101: Termination of Marriage
          Marriage Terminates upon:
     -The death of either spouse
     -Divorce
     -A judicial declaration of its nullity, when the marriage is relatively null.
     -The issuance of a court order authorizing the spouse of a person presumed dead to remarry, as provided by law.


CC Art. 102: Judgment of divorce; living apart one hundred eighty days prior to rule
           Except in the case of a covenant marriage, a divorce shall be granted upon motion of a spouse when either spouse has filed a petition for
divorce and upon proof that one hundred eighty days have elapsed from the service of the petition, or from the execution of written waiver of the
service, and that the spouses have lived separate and apart continuously for at least one hundred eighty days prior to the filing of the rule to show
cause.
           The motion shall be a rule to show cause filed after all such delays have elapsed.


CC Art. 103: Judgment of divorce; other grounds
          Except in the case of a covenant marriage, a divorce shall be granted on the petition of a spouse upon proof that:
                                                                   1. The spouses have been living separate and apart continuously for a period
                                                                         of 6 months or more on the date the petition is filed;
                                                                   2. The other spouse has committed adultery
                                                                   3. The other spouse has committed the felony and has been sentenced to
                                                                         death or imprisonment at hard labor.

CC Art. 2356: Causes of Termination
             The legal regime of community property is terminated by the death or judgment of declaration of death of a spouse, declaration of the
nullity of the marriage, judgment of divorce or separation of property, or matrimonial agreement that terminates the community.

CC Art. 159: Effect of divorce on community property regime
           A judgment of divorce terminates a community property regime retroactively to the date of filing of the petition in the action in which the
judgment of divorce is rendered. The retroactive termination of the community shall be w/o prejudice to rights of third parties validly acquired in the
interim b/w the filing of the petition and recordation of the judgment.

     D.   Thomason v. Thomason (3rd 2000)
                         i. Issue: when do the civil effects of the putative marriage terminate? Or, when does the legal regime terminate in a
                            good faith putative marriage?
                        ii. H and W were never actually married, but court found that W‘s testimony was more credible, and that she actually
                            believed that they were married. Therefore, she is entitled to the civil benefits of marriage as putative spouse.

                                                                                                                                                     32
                      iii. Rule: Putative marriage exists as long as the spouse is in good faith. Once the spouse learns that he or she is not
                             married b/c of some impediment, the putative marriage ends. The consequence of that is that putative marriage
                             carries the civil effects of a valid marriage.
                                                     o One exception: when the cause of the nullity is one party‘s prior undissolved marriage. CC
                                                           Art. 96-this exception is allowed b/c the putative spouse cannot do anything about the
                                                           nullity.
                      iv. So, when does the legal regime terminate?
                       v. According to CC Article 159: Effect of divorce on CP regime. Provides that the judgment of divorce terminates the
                             existence of the community, but it terminates it retroactively.
                vi.       At the moment of acquisition, each spouse owns a 1/2 interest in that thing. However, it is subject to the management
                          rules. At the termination of the community, the general rule is that a spouse is entitled to possession of the thing(s) he
                          or she owns.
                          Exception: If community is terminated by death of a spouse, then governed by succession rules. In a succession, the
                          interest of the surviving spouse and the heirs are subject to the rules of succession and subject to management by the
                          succession representative.
                      vi. Here, there will be no judgment of divorce. So the Court held that W was in good faith( and therefore entitled to the
                             civil effects of marriage) until H filed his answer to her petition of divorce.
E.   Naquin v. Naquin (5th 1990)
                        i. When is the legal regime of community property terminated?
                       ii. With the filing of the petition for the judgment of divorce. See CC Art. 159 above.
                      iii. Always have the judgment cite on what grounds the divorce was rendered or have the judgment say that the
                             judgment is retroactive to the date that the petition was instituted-always indicate the manner in which the community
                             was terminated.
                      iv. Wait until after Jan 1 to file b/c then Christmas bonuses are not included.
F.   Certified Security Systems v. Ward (4th 1990)
                        i. Company argued on appeal that the obligation was a community obligation incurred for the benefit of both spouses
                             during the interim b/w filing suit and the judgment of separation. Relying on CC Art. 155: the company contended
                             that the retroactive effect of the judgment of separation could not prejudice the rights of the company validly acquired
                             in the interim. The court of appeal concluded that the company was not prejudiced b/c it was put on notice that the
                             parties were separated and contemplating the divorce. Therefore, the obligation was a separate obligation of the H
                             under Cc Art. 2263 and only his share of the community assets and his separate property could be seized in
                             satisfaction of the debt.
G.   Succession of Moss (3rd 2000)
                        i. Issues:
                                    1. Does wife inherit half of stock held by H‘s succession and does she inherit ½ interest in the stock acquired
                                         by the succession after the death of H.
                                    2. Is the ownership subject to the restrictions set forth in the Shareholder‘s Agreement.
                       ii. Husband, Mr. Moss, and partner, Mr. Coury started a corporation to sell cars. They entered into an agreement
                             where Moss would own 25% of stock and Coury would own 75%, with Moss to buy 2/3 of Coury‘s ownership over
                             the next few years by making payments. Transfer went as agreed for a few years, then Coury refused to sell any
                             more stock and said that Moss had breached agreement. Moss died. Litigation continued with succession and
                             Court ruled that Moss was entitled to remaining stock. This suit was over the partition of the community between
                             Moss‘s. Wife wanted half interest in the corporation in her individual capacity.
                      iii. Shareholder‘s Agreement provided that upon death of Coury or Moss, 75% of their stock must be transferred back
                             to the corporation so that the other one could purchase it. Wife had to transfer part of the stock she owned and the
                             stock owned by her husband‘s succession back to the corporation.
                      iv. Court held:
                                    1. Yes, the wife is entitled to ½ interest in the stock. It was community property, even though husband was
                                         sole manager of the stock. It was subject to partition at the end of the regime which was terminated by the
                                         death of the husband. Succession was to acquire 200 more shares upon payment. Court said that the wife
                                         was entitled to ½ the stock but had to pay half the debt in her individual capacity.
                                    2. Yes, wife is bound by Shareholder‘s Agreement. Although she owns ½ of the stock, she must transfer
                                         back part of her stock as provided in the agreement upon the death of either Coury or Moss.
                       v. What is the nature of the spouse‘s ownership interest in a community property regime terminated by debt? Each
                             have a ½ interest in the entire thing.
                      vi. Testamentary executor for a number of years for surviving spouse and children. Wife owns ½ of community. She
                             ‗joins in‘ any sale, etc. But, he can administer both halves of the property IF succession of Durham is right (see
                             Durham), but why take the chance, he should go ahead and get the signature.
                     vii. Subject to 2 things:
                                    1. Rules of succession-exception to general rule, b/c when marriage is terminated by death, subj to rules of
                                         succession.
                                    2. Limitations placed on by the spouse who had the authority to make the limitations


                                                                                                                                                 33
          7.2 Separation of Property

LA CC Art. 2370: Separation of property regime
          A regime of separation of property is established by matrimonial agreement that excludes the legal regime of community of acquets and
gains or by a judgment decreeing separation of property.

LA CC Art. 2371: Management of property
         Under the regime of separation of property each spouse acting alone uses, enjoys, and disposes of his property w/o the consent or
concurrence of the other spouse.

LA CC Art. 2372: Necessaries
         A spouse is solidarily liable with the other spouse who incurs an obligation for necessaries for himself or the family.

LA CC Art. 2373: Expenses of the marriage
         Each spouse contributes to the expenses of the marriage as provided in the matrimonial agreement. In the absence of such a provision,
each spouse contributes in proportion to his means.

LA CC Art. 2374: Judgment of separation of property
                                                                A.    When the interest of a spouse in a community property regime is threatened to
                                                                      be diminished by fraud, fault, neglect, or incompetence of the other spouse, or
                                                                      by the disorder of the affairs of the other spouse, he may obtain a judgment
                                                                      decreeing separation of property.
                                                                B.    When a spouse is an absent person, the other spouse is entitled to a judgment
                                                                      decreeing separation of property.
                                                                C.    When a petition for divorce has been filed, either spouse may obtain a judgment
                                                                      decreeing separation of property, by a rule to show cause and upon proof that
                                                                      the spouses have been living separate and apart w/o reconciliation for at least
                                                                      30 days from the date of, or prior to, the filing of the petition for divorce and have
                                                                      not reconciled.
                                                                D.    When the spouses have lived separate and apart continuously for a period of six
                                                                      months, a judgment decreeing separation of property shall be granted on the
                                                                      petition of either spouse.

LA CC Art. 2375: Effect of judgment
         A. Except as provided in Paragraph C of this Article, a judgment decreeing separation of property terminates the regime of community
              property retroactively to the day of the filing of the petition or motion therefor, w/o prejudice to rights validly acquired in the interim
              b/w filing of the petition or motion and rendition of judgment.
         B. If a judgment has been rendered on the ground that the spouses have lived separate and apart either after the filing of a petition for
              divorce w/o having reconciled or for 6 months, a reconciliation reestablishes the regime of CP b/w the spouses retroactively to the
              date of filing of the motion or petition therefore, unless prior to the reconciliation the spouses execute a matrimonial agreement to the
              contrary. This agreement need not be approved by the court and is effective toward third persons when filed for registry in the
              manner provided by Article 2332. The reestablishment of the community is effective to third persons when a notice thereof is filed for
              registry in the same manner.
         C. If a judgment is rendered on the ground that the spouses were living separate and apart after the filing of the petition for divorce w/o
              having reconciled, the judgment shall be effective retroactively to the date the original petition for divorce was filed, w/o prejudice to
              rights validly acquired in the interim b/w filing of the petition or motion and rendition of judgment. All subsequent pleadings or
              motions involving matters incidental to the divorce must be filed in the first filed suit.

LA CC Art. 2376: Rights of creditors
            The creditors of a spouse, by intervention in the proceeding, may object to the separation of property or modification of their matrimonial
regime as being in fraud of their rights. They also may sue to annul a judgment of separation of property w/in one year from the date of the rendition
of the final judgment. After execution of the judgment, they may assert nullity only to the extent that they have been prejudiced.

     A.   Pan American Import Company v. Buck (LA SC 1984)
                          i. Issue: Whether a creditor can object to the termination of a legal regime and the establishment of a separation of
                             property regime and if so, on what grounds.
                         ii. W, before she was married, was fired for embezzling funds. So she had the debt b/f she got married. Now after they
                             are married they are under the CP regime.



                                                                                                                                                        34
                            iii. Pan-Am was garnishing husband‘s wages. This is permissible b/c it was a CP regime and his wages were CP. The
                                 creditor can take the separate property of the spouse that incurred the debt (in this case the W) and the CP of both
                                 spouses.
                            iv. Husband then obtained a judgment of separation of property (See CC Art. 2374)
                             v. Then, the parties were under a separation of property regime.
                            vi. Under 2376, creditor can intervene in this separation of property judgment if there is fraud that affects the creditor‘s
                                 rights and present injury. Revocatory action.
                           vii. Court interpreted phrase ―in fraud of their rights‖ in 2376 in the same way as revocatory action. CC 1970 allows
                                 creditor to pursue revocatory action when a k is made in fraud of the creditor‘s rights. Court said that this fraud has
                                 two elements: bad faith and injury to the creditor. Injury to the creditor must be present injury, a future injury will not
                                 suffice.
                          viii. Court found that Pan Am did not suffer present injury by being deprived the right to garnish Jerry‘s salary b/c that
                                 salary constituted future property against which Pan Am had no repsent right of execution.
     B.   Brar v. Brar (3rd 2001)
                              i. Issue: what is the retroactive date that the court should apply to the separation of property?
                             ii. Put it to the date of the petition of the separation of property instead of the date of the divorce?
                            iii. Effective date of terminating the legal regime and establishing the separation of property regime; a divorce judgment
                                 terminating the legal regime establishes the separation of property regime retroactive to filing the petition. So under
                                 this exception, the original petition for divorce is the date that terminates the legal regime, whether or not the petition
                                 was successful.
                                                         o Exception: CC art 2375c
                                                         o If a judgment is rendered on the ground that the spouses were living separate and apart
                                                             after the filing of the petition for divorce w/o having reconciled, the judgment shall be
                                                             effective retroactively to the date the original petition for divorce was filed, w/o prejudice to
                                                             rights validly acquired in the interim b/w filing of the petition or motion and rendition of
                                                             judgment. All subsequent pleadings or motions involving matters incidental to the divorce
                                                             must be filed in the first filed suit.


                                                            7.3 Prohibition of Acts of Disposition and Other Provisional Relief

La. R.S. 9:371 Injunction against alienation or encumbrance; spouse‘s right to demand.
         In a proceeding for divorce, a spouse may obtain an injunction restraining or prohibiting the disposition or encumbrance of community
property until further order of the court.

LA CCP Art. 3601 Injunction, grounds for issuance; preliminary injunction; temporary restraining order.
    A. An injunction shall be issued in cases where irreparable injury, loss or damage may otherwise result to the applicant, or in the other cases
        specifically provided by law; provided, however, that no court shall have jurisdiction to issue, or cause to be issued, any temporary
        restraining order, preliminary injunction, or permanent against any state department, board or agency, or any officer, administrator or
        head thereof, or any officer of the State of LA in any suit involving the expenditure of public funds under any statute or law of this state to
        compel the expenditure of state funds when the director of such department, board or agency, or the governor shall certify that the
        expenditure of such funds would have the effect of creating a deficit in the funds of said agency or be in violation of the requirements
        placed upon the expenditure of such funds by the legislature.
    B. ****
    C. During the pendency of the action for an injunction the court may issue a temporary restraining order, a preliminary injunction, or both,
        except in cases where prohibited, in accordance with the provisions of this Chapter.
    D. Except as otherwise provided by law, an application for injunctive relief shall be by petition.

LA CCP Art. 3604 Form, Contents, and Duration of Restraining Order
    A. A temporary restraining order shall be endorsed with the date and hour of issuance; shall be filed in the clerk‘s office and entered of
        record; shall state why the order was granted w/o notice or hearing; and shall expire by it terms w/in such time after entry, not to exceed
        ten days, as the court prescribes. A restraining order, for good cause shown, and at any time before its expiration, may be extended by
        the court for one or more periods not exceeding ten days each. The party against whom the order is directed may consent that it be
        extended for a longer period.
    B. Nevertheless, a temporary restraining order issued in conjunction with a rule to show cause for a preliminary injunction prohibiting a
        spouse from:
                                   1. Disposing of or encumbering community property
                                   2. Harming the other spouse or a child; or
                                   3. Removing a child from the jurisdiction of the court, in a suit for divorce shall remain in force until a hearing
                                        is held on the rule for the preliminary injunction.


                                                                                                                                                           35
LA CCP Art. 3944. Injunctive relief in divorce actions; bond not required in certain cases
           Either party to an action for divorce may obtain injunctive relief as provided in Part V of Chapter 1 of Code Title V of Code Book I of Title 9
(R.S. 9:371 et seq.) of the Revised Statutes without bond


LA RS 9:374 Possession and use of family residence or community movables or immovables.
            A. When the family residence is the separate property of either spouse, after the filing of a petition for divorce or in conjunction therewith,
the spouse who has physical custody or has been awarded temporary custody of the minor children of the marriage may petition for, and a court
may award to that spouse, after a contradictory hearing, the use and occupancy of the family residence pending the partition of the community
property or one hundred eighty days after termination of the marriage, whichever occurs first. In these cases, the court shall inquire into the relative
economic status of the spouses, including both community and separate property, and the needs of the children, and shall award the use and
occupancy of the family residence to the spouse in accordance with the best interest of the family. The court shall consider the granting of the
occupancy of the family home in awarding spousal support.
            B. When the family residence is community property or the spouses own community movables or immovables, after or in conjunction with
the filing of a petition for divorce or for separation of property in accordance with Civil Code Article 2374, either spouse may petition for, and a court
may award to one of the spouses, after a contradictory hearing, the use and occupancy of the family residence and use of community movables or
immovables to either of the spouses pending further order of the court. In these cases, the court shall inquire into the relative economic status of the
spouses, including both community and separate property, and the needs of the children, if any, and shall award the use and occupancy of the
family residence and the use of any community movables or immovables to the spouse in accordance with the best interest of the family. If
applicable, the court shall consider the granting of the occupancy of the family home and the use of community movables or immovables in
awarding spousal support.
            C. A spouse who uses and occupies or is awarded by the court the use and occupancy of the family residence pending either the
termination of the marriage or the partition of the community property in accordance with the provisions of R.S. 9:374(A) or (B) shall not be liable to
the other spouse for rental for the use and occupancy, except as hereafter provided. If the court awards use and occupancy to a spouse, it shall at
that time determine whether or not to award rental for the use and occupancy and, if so, the amount of the rent. The parties may agree to defer the
rental issue for decision in the partition proceedings. If the parties agreed at the time of the award of use and occupancy to defer the rental issue,
the court may make an award of rental retroactive to the date of the award of use and occupancy.
            D. The court may determine whether the family home is separate or community property in the contradictory hearing authorized under
the provisions of this Section.
            E.(1) In a proceeding for divorce or thereafter, upon request of either party, where a community property regime existed, a summary
proceeding may be undertaken by the trial court within sixty days of filing, allocating the use of community property, including monetary assets, bank
accounts, savings plans, and other divisible movable property pending formal partition proceeding, pursuant to R.S. 9:2801.
            (2) Upon court order, each spouse shall provide the other a complete accounting of all community assets subsequent to said allocation
and in compliance with Civil Code Article 2369.3, providing the duty to preserve and prudently manage community property.
            (3) The court shall determine allocation of community assets after considering:
            (a) The custody of the children and exclusive possession of the house.
            (b) The total community assets.
            (c) The need of one spouse for funds to maintain a household prior to formal partition.
            (d) The need of a spouse to receive legal representation during the course of the divorce proceeding.



LA RS 9:308 Separation from bed and board in covenant marriage; suit against spouse; jurisdiction, procedure, and incidental relief.
D. In a proceeding for a separation from bed and board in a covenant marriage or thereafter, a court may award a spouse all incidental relief
afforded in a proceeding for divorce, including but not limited to spousal support, claims for contributions to education, child custody, visitation rights,
child support, injunctive relief and possession and use of a family residence or community movables or immovables.

A. McCarroll v. McCarroll (LA SC1997)
                            i. Issue: Under what circumstance may there be an assessment of fair rental value for one spouse‘s use of family
                               home?



                                                                                                                                                        36
                      ii. Only if there was a court order providing for exclusive use or there must be an agreement by the spouses. It can‘t be
                          done years later and applied retroactively unless there was an agreement by spouses. So, an assessment of rental
                          value can be made for one spouse‘s use of the family home when:
                                1. There is a court order
                                2. Agreement by the spouses.
                                           o If the court is going to award the nonpossessory spouse use and occupancy, the award must be
                                                made at the time of use and occupancy. It cannot be done later unless the parties have agreed
                                                to defer the issue to a later time.
                     iii. Policy reasons for this ruling: spouses are co-owners. Each co-owner is entitled to use the whole property. Only
                          when the other co-owner demands the use of the thing at the same time, can there be a claim for rental.
                          Superimposed on the co-owner rules is LA RS 9:374 which allows the Court to award the exclusive use by one
                          spouse.
                     iv. H and W divorced. Spouses are co-owners. 10 years after divorce there was an agreement by the spouses to
                          partition property. W got $7000 and none of retirement b/c she had exclusive use of the home. Spouses verbally
                          agreed that wife would forego interest in the retirement for the use of the home. Court said until the time of the
                          agreement, husband had no claim for rent. So settlement agreement was lesionary b/c it included all of the time wife
                          occupied home from original separation. If rent was wanted, it should have been set at time agreement was made.

         7.4 Rights of Pre-Termination Creditors

A.   Stewart Title v. Kiefer (E.D. La 1997)
                       i. Issues:

                                   1. Classification of the obligations
                                   2. Remedy of the creditor
                          -After the termination of the community with regard to those obligations.
                       ii. Rigby says a lot of the language in this case is not conceptually correct
                      iii. Facts: W diverted $100,000 of community money into her separate account. Security Title is claiming it is entitled to
                             seize the money.
                     iv. Holding in Lawson: Regardless of debt‘s classification as a debt incurred during the existence of the community, the
                             assets of the former community are liable for the debt w/o regard to which spouse has possession of them. And non-
                             incurring spouse is not personally liable unless he or she has disposed of the property of the former community for
                             any purpose other than to extinguish community obligations.
                       v. To be a community obligation, it must have occurred during the existence of the community and it must have been
                             incurred for the interests of the spouses or the interest of the other spouse.
                     vi. The classification of the obligation is determined by the intent and purpose of incurring the obligation- not how the
                             obligation turns out-not the result.
                     vii. In this case, court held that it didn‘t matter whether it was a community or separate obligation, the debt was incurred
                             during the existence of the community regime and community assets can be used to satisfy the debt. Court said wife
                             was not personally liable. But if she made community assets no longer available to creditor, she is personally liable
                             up to the value of the amount no longer available to creditor.

       7.5 Voluntary Partition

A.   A voluntary partition of community property is a conventional act creating conventional obligations, i.e. a contract.
B.   Hoover v. Hoover (LA SC 2002)
                        i. Is claim of lesion available when parties entered into community property settlement? Is an extrajudicial community
                           property partition, a transaction or compromise?
                       ii. Parties entered into a community property settlement. Wife later sued seeking to invalidate settlement based on
                           claim of lesion b/c agreement didn‘t contain partition of husband‘s contingency fee on a big case.
                      iii. A compromise is an agreement to terminate litigation. A compromise or a transaction is not subject to lesion. If I
                           compromise my claim, I can‘t come back and attempt to have my compromise set aside on lesion.
                     iv. Court held that the settlement is an extra judicial partition and CC Art. 814 provides for a claim of lesion. Although the
                           community property partition has some aspects of transaction or compromise, it is not and thus is subject to claim of
                           lesion.
C.   Ransome v. Ransome (1st 2002)
                        i. Issue: Does an extra-judicial partition become a transaction or compromise when the parties include the resolution of
                           incidental matters?
                       ii. Here, the agreement was entered w/o any manner of court approval.
                      iii. Thus, the agreement is extra-judicial as opposed to judicial. Under Hoover, it would be subject to lesion if it were just
                           a community property partition.



                                                                                                                                                37
                             iv. Court held that just b/c child or spousal support were included in the agreement and it had some characteristics of a
                                  compromise or transaction, it was primarily for partition of community property; therefore it is subject to a claim of
                                  lesion.
     D.   Millet v. Millet (5th 2004)
                               i. Issue: can a consent judgment be set aside for fraud?
                              ii. This case was not discussed in class.
                             iii. Parties entered into a consent judgment on the same day as their divorce. Where they agreed to divide up the
                                  community property.
                             iv. A consent judgment is a transaction or compromise b/w parties who prevent or put an end to a lawsuit by adjusting
                                  their differences by mutual consent balancing the hope of gain against the fear of loss.
                              v. W argues that the CJ was amended w/o her agreement, and she did not get half of the property.
                             vi. Court holds that wife fails to prove that H was aware of any mistake or miscommunication in the ‗confection or
                                  execution‘ of the CJ, or that he committed fraud about which she could not have ascertained the truth without
                                  difficulty, inconvenience, or special skill.
     E.   Roy v. Landry (1st 1986)
                               i. Issue: If a thing is omitted from a conventional partition agreement, what is the effect?
                              ii. If the asset is in fact omitted from the partition agreement, the remedy is not setting aside the agreement. The
                                  remedy is a supplemental partition of the things/asset that was omitted.
                             iii. Look at the factual issue and then turn to the intent of the parties: whether they intended to leave it out, whether it
                                  was inadvertently omitted (didn‘t know it was CP).
                             iv. H and W entered into voluntary community property partition where H‘s retirement benefits were listed as a small
                                  lump sum amount, in reality, he had much more vested in retirement plan. That was simply the amount he would
                                  have received if he drew all of the money out on the date of the agreement. Wife was entitled to further partition of
                                  property after H received the retirement benefits.
     F.   Jennings v. Turner (LA SC 2001)
                               i. Issue: Does general diverstiture language in a community property settlement agreement preclude the non-employee
                                  spouse from subsequently asserting his or her rights in the employee spouse‘s pension?
                              ii. Court held that no, not necessarily. It depends on the intent of the parties. i.e, did they intend the pension to be
                                  included in the agreement. (Holding in Robinson v. Robinson)
                             iii. If you talked about it, and then it was not in the agreement, then you probably intended to leave it out.
                             iv. If it wasn‘t discussed in the negotiations, then the law will presume that it was left out. A lesson to be learned is, if
                                  you are negotiating CP settlement agreements, you document everything you talked about.
                              v. Here, the agreement was signed, and there is no evidence to indicate that the parties intended to include the
                                  pension benefits in the agreement.
                                                    o Notes following:
                                                                 Doctrinal writing suggests that error of law is not a ground for dissolution.
                                                                 Rigby disagrees; see CC art. 1950: specifically provides that a contract may be nullified
                                                                     for error of law.
                                                                 Errof of law is not a vice of consent, ignorance is.
     G.   Adams v. Adams (2nd 1987)-REDO
                               i. Issue: What is the remedy for a conventional partition and what are the vices of consent?
                              ii. H and W were separated and entered into a community property settlement contract. They failed to attach a list of
                                  immovable property that was to be conveyed to H, also failed to include a tract of land neither knew they owned.
                             iii. H tried to force W to sign an amendment to the k, W answered by trying to get the whole k set aside due to failure of
                                  consent thru error (about a tract of land neither knew they owned), and fraud and duress. Court says no to all these
                                  things.
                             iv. Rules that a conventional partition (private agreement b/w the parties) is a k and is subject to all of the vices of
                                  consent to which all obligations are subject to-remedy is supplemental partition, not recission of original conventional
                                  partition.
                              v. Skimmed over-but see treatise for this one
     H.   Taylor v. Taylor (2nd 2000)
                               i. Issue: is a judicial partition subject to a vice of consent or lesion?
                              ii. A judicial partition is not subject to a claim of lesion or the vices of consent. However, a judicial partition is subject to
                                  the defenses of the annulment of a judgment under the CCP.

LA CC Art. 814 Recission of partition for lesion
        An extra judicial 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 FMV of the portion he should have received.

                           iii. Proper method for establishing lesion:
                                    1. The community property‘s true net value must be ascertained
                                    2. It must then be determined whether a party received value less than ¾ of ½ share of the true value of the
                                         property partitioned.
                                                                                                                                                           38
                                     3.     The party claiming lesion has the burden of proving lesion beyond ¼ and must establish the claim by clear
                                            and convincing evidence.
                         iv. In a community property regime, the parties each own ½ interest in the community property. If a party does not
                               receive ¾ of his ½ interest or 37.5% of the whole, the partition is lesionary.
                           v. The remedy here is recission of the partition.
                         vi. Rigby thinks that if the Court does it, then the Code is saying that it is not subject to lesion.
     I.   Junca v. Junca (1st 1999)
                            i. Issue: In a judicial partition, are lesion rules applicable to that partition? No.
                           ii. This is the distinction b/w conventional and judicial partition. Any judgment that becomes final is final. You may not
                               attack a final judgment b/c the court made an error of fact or law. There are specified reasons for nullifying a
                               judgment, but lesion is not one of them.
                          iii. This case presents an issue that has not been resolved. If parties agreed to a portion of the partition, sign and submit
                               for approval and it either approves it or adopts it for judgment, then is it subject to the rules of lesion? This kind of a
                               partition in a consent judgment is not really a judicial partition. The rules for attacking a judgment on lesion is when
                               the court does all the findings, etc. not when someone simply submits it for approval.
                         iv. A consent judgment is k b/w the parties, not a court action. No hearing on it, no adversarial proceeding. Court said it
                               was not subject to lesion rules. Rigby thinks this is wrong.
                           v. ****Did we get a handout on partitions??? If so, put it in. See last notes in other outline.
     J.   Partitions:
                            i. LA R.S. 9:2801. Before this was adopted, the method of judicially dividing was public auction (husband would get it).
                               Property was divided by item theory-furniture, dishes, etc-see if it could be divided in kind. If not, then the only
                               remedy was public auction by sheriff to hightest bidder. 99.9% of the time, he either had the money or could borrow
                               the money.
                           ii. Aggregate theory: Court allocates each item of property and obligation. Each files a detailed descriptive list of assets,
                               liabilities and financial demands against each other. If #s don‘t match, have to appraise, don‘t worry about
                               uncontested issues.
                          iii. One party files a petition for the partition of community property and a settlement of the claims b/w the parties arising
                               out of the mat regime. Each party files a list of what he claims is what are the community assets and their net value
                               and lists the reimbursement claims of one party against the other.
                         iv. You have to identify what things are community, only dividing up the community things. Court also needs to establish
                               the value of the things. Court also needs to determine what community obligations are outstanding and what the
                               values on those obligations are. Then court has to determine the reimbursement claims and what are the amounts of
                               those claims.
                                      1. If community money has been used to pay a separate obligation, it brings about a reimbursement claim; or
                                            if separate money is used to pay for a community obligation, the spouse can bring a reimbursement claim;
                                            or if separate property is used to improve community or if CP is use dto improve separate property; the
                                            claim is for ½ of the value of the thing used.
                                                   a. Different rule for 5th type of reimbursement claim-uncompensated labor of spouse is a
                                                        community thing that is used to improve the value of a separate thing-claim for reimbursement
                                                        occurse, the claim is for ½ in the increase of the value of the separate thing as a result of the
                                                        community labor improving the thing.
                                                   b. This is difference b/c it is easier to place a value on the improved thing rather than the
                                                        uncompensated labor.


7.6 JUDICIAL PARTITION

A.        Court divides community property by judicial partition when:
$                    parties don‘t enter voluntary partition after termination of mat. regime, or
$                    in settlement of claims between spouses arising either from the mat. regime or from the co-ownership of community property

B.        Governing Statute:

          La. R.S. 9:2801. Partition of community property and settlement claims arising from matrimonial regimes and co-ownership of former
          community property
          *note this statute does not apply to co-owned separate property
          (A)        Either party can file for partition either as incident to divorce or some time later after termination of mat. regime. in accordance
                     with following rules
                     (1)(a)     Each party must file a sworn detailed descriptive list listing all community property; fair market value and location of
                                every asset; and all community debts.
                     (2)        Each party shall either (traverse) disagree or concur with the other party‘s inclusion/exclusion and valuation of
                                community assets list. At trial on disputed items, CT determines community assets and liabilities. Valuation will be
                                determined at trial on merits.
                                                                                                                                                      39
                   (3)        Ct may appoint experts as it deems proper to assist court in settlement
                   (4)        The Court shall partition according to following rules:
                              (a)       Value assets as of time of trial on the merits, determine liabilities and adjudicate claims of parties
                              (b)       Court shall divide comm. assets and liabilities so that each spouse receives property of an equal net
                                        value
                              (c)       Court shall allocate or assign all comm. assets and liabilities. Ct may divide a particular asset or liability
                                        equally or unequally or may allocate it in its entirety to one of spouses (list of factors to consider).
                                        Allocation of liability to one spouse means that spouse is responsible for debt, but does not affect rights of
                                        creditors.
                              (d)       if the allocation from (c) above resulted in unequal net distribution, the court shall order equalizing
                                        payment

C.       Cases
         Pitre v. Pitre (1987)
         Case is wrong per Rigby. It says liabilities are valued as of time of termination of community. Rigby says NO, both assets and liabilities
         are valued as of time of trial on partition.

         Hare v. Hodgins (1991)
         Supreme Court gives modification to SIMS formula - Present Cash Value
         Present cash value – Ct calculates present cash value of community assets, including pension rights, and awards to non-employee
         spouse his share in lump sum or equivalent property to be used in valuation of pension plan, when the increase in retirement benefits is
         due to extra effort of working spouse after termination of community.
                    (*note: regular promotions and increases do not qualify.)

         Didn‘t cover the rest of cases in class. He says they are just application of rules.

         Blanchard v. Blanchard (1999)
         Supreme Court said trial ct erred in using Hare Present Cash Value to value wife‘s pension plan and gave her that and gave husband the
         entire house. Ct. said it was not an equitable use of Hare formula b/c husband could sell house immediately and get his money. Wife
         would have to wait until retirement and value could change based on life expectancy, etc.

7.7      ACCOUNTING
A.       CC art 2369 says that a spouse owes accounting to other spouse for community property under a spouse’s control at the termination
         of the community
         1.        Affirmative duty: duty to account (different from 2354)
                   a.         spouse must satisfactorily explain what you did with it
                   b.         either come up with it or pay for it (if you don‘t have it anymore)
         2.        Duty arises at a point in time – the date when the community terminates
                   a.         actually at the exact moment when the community terminates, may be relevant what time of day if something else
                              occurs later or before
         3.        3 year prescription
                   a.         If it‘s been more than 3 years, this doesn‘t mean that one spouse can‘t claim that the thing existed but now the
                              burden of proof is on that spouse. Can‘t force the other spouse to explain
B.       During the legal regime –CC art 2354 governs and each spouse has negative duty: duty not to commit fraud or be in bad faith.
         1.        No affirmative duty to manage well.
         2.        law assumes married couple will unite in the best interest of both

B.       Roberts v. Roberts
         Wife didn‘t have to account for money she used from community account during time between separation and termination of community.

7.8     Co-Ownership of Former Community Property
A.      CC arts. 2369.1 - 2369.8 cover co-ownership of former community property
* Remember there are 3 duties of spouses regarding community property which do not overlap. Summary of Duties of Spouse:
        (1)        during existence of legal regime:
                   (a)        spouse has negative duty – not to act in bad faith or to commit fraud
        (2)        after termination, if property is under one spouse‘s control:
                   (a)        spouse has affirmative duty to account (2369)
                   (b)        spouse has duty to preserve and to manage prudently (2369.3)

B.       CC art. 2369.1. Application of co-ownership provisions - if the legal regime terminates for any reason other than death:
         (1)       look to see if there is a special rule
         (2)       if you don‘t find special rule, then go to ordinary co-ownership articles (797-814)
C.       CC art. 2369.2. Ownership Interest. Each spouse owns an undivided 1/2 interest in former community property and its fruits and
                                                                                                                                                  40
     products.
D.   CC art. 2369.3. Duty to preserve. Each spouse has a duty to preserve and to manage prudently former comm. property under his control,
     including community enterprise, in a manner consistent with the mode of use of that property immediately prior to termination
     (1)        Each spouse has affirmative duty to perserve and manage
     (2)        Spouse‘s duty is to manage the comm. property that his under his control prudently in the same way it was being managed
                immediately prior to the termination of the community
                (a)         so if husband was maintaining a vacant lot before termination which consisted of paying taxes and having the grass
                            cut this is the only duty he has. he does not have a duty to lease the property, or to develop it, etc
     (3)        Limited to property under spouse‘s control
                (a)         what if that spouse says I don‘t want to do it anymore, other spouse you do it - no, the spouse managing has an
                            affirmative duty so they can‘t abandon responsibility
E.   CC art. 2369.4. Alienation, encumbrance, or lease prohibited. Provides general post termination rule that spouses must concur in order to
     alienate, encumber, or lease any community property. Exceptions listed in following articles.
     (1)        Exactly opposite from the general rule during the existence of the community that either spouse may alienate, encumber, or
                lease the community property.
     (2)        Article says that in the absence of concurrence, the alienation, encumbrance, or lease is a relative nullity.
F.   CC art 2369.5 Alienation of registered movables: A spouse may alienate, encumber, or lease a movable issued or registered in his name
     as provided by law.
     (1)        same rule as during the existence of legal regime
     (2)        the reason for this: if a car is in your name, third party ought not have to find out if you are still married or not
G.   CC art 2369.6 Alienation, encumbrance, or lease of movable assets of former community enterprise: The spouse who is the sole manager
     of a former community enterprise may alienate, encumber, or lease its movables in the regular course of business.
     (1)        limited to the regular course of business
     (2)        remember during existence of legal regime, the manager of the community enterprise may sell, encumber, or lease its movable
                assets, not immovables or things registered or titled in the name of other spouse – but cannot encumber, lease all or
                substantially all of assets
H.   CC art 2369.7 Court authorization to act alone: Court can authorize one spouse to act without the concurrence of the other spouse.
     (1)        Spouse must show all of the following:
                (1)         The action is necessary
                            (2)          The action is in the best interest of the petitioning spouse and not detrimental to the interest of the
                            nonconcurring spouse.
                (3)         The other spouse is an absent person or arbitrarily refuses to concur, or is unable to concur due to physical
                            incapacity, mental incompetence, commitment, imprisonment, or temporary absence.
     (2)        What is different between this article and CC art. 2355 which allows for judicial authorization w/out concurrence during
                existence of community.
                (a)         2355 only requires spouse to show that action is in best interest of family and absence in the same manner as
                            2369.7(3)
                (b)         seems to be same except you don‘t have to show ―necessary‖ during comm.
I.   CC art 2369.8. Right to partition. Either spouse has the right to demand partition of former community property at any time. If the
     spouses can‘t agree, look to R.S. 9:2801.

E.   Cases
     1.         Classification of debts as community or separate and effect on reimbursement claim
     Albritton v. Albritton
     CT held that husband‘s debt for atty fees for DWI defense may have been a community debt if it benefitted the community
                          wrong language by court – should have said ―benefitted the spouses‖
                          (**pet peeve of Rigby‘s saying ―benefit of community‖ community is a system of rules, not a legal entity)
     McGee v. McGee
     Husband and wife both signed mortgage but it was secured by husband‘s separate property. Ct. classified mtg as community obligation
     that wife obligated to pay. But she was entitled to reimbursement for community funds used to build the house.

     2.         Interest on reimbursement claims
     Palmer v. Palmer
     Wife was awarded payments on mineral rights in community property partition. Trial Ct. awarded her legal interest on the funds from the
     time of receipt by the husband. Husband argues interest not due because money wasn‘t payable until Judgment. 2nd Cir. Ct affirms and
     says husband should have given her her share immediately upon his receipt.
                Delahaye v. Delahaye. New case that refuses to follow 2nd circuit in Palmer on this interest issue. That case cited Reinhart
                which is Supreme Court case that says that interest doesn‘t start running until judgment by trial court on equalizing payments

     3.        Duties of the Spouses

     Rogue v. Tate

                                                                                                                                            41
      Husband moved into community home and lived there after divorce. He paid the mortgage with his separate funds and fixed up the
      house. Now they are partitioning community property. Husband seeks reimbursement for 1/2 of his separate money paid on mortgage all
      these years. Ct. orders wife to pay.

      Wife then claims she is entitled to an offset under CC art 806 because husband got the exclusive use and occupancy. CC art 806 which is
      ordinary co-ownership article allows reduction in reimbursement payment in proportion to the value of the co-owner‘s enjoyment. For
      three types of expenses: (1) necessary expenses; (2) expense for ordinary maintenance and repairs; or (3) necessary management
      expenses paid to a 3rd party
      Ct. says the issue turns on whether or not mortgage payments were necessary expenses and determines that mtg payments not
      necessary expenses, so wife not entitled to offset.
                         Rigby thinks the CT misconstrues the issue here. He thinks the mortgage is not a necessary expense. But the
                          husband incurred the necessary expense of discharging a private burden and 806(2) should apply.
                          (He wrote law review article on why this case is wrong)

      Gibson v. Gibson
      Husband withdrew money from retirement and had to pay 20% in taxes without ex-wife‘s concurrence. Wife sought reimbursement for
      her loss of money paid in taxes. Issue: what was duty of husband in co-ownership? Ordinary co-ownership rules (arts 797, et seq) don‘t
      apply because 2369.3 is special rule. It imposes affirmative duty (1) to preserve and (2) to manage prudently such property. Husband
      violated these duties. did not manage consist with mode of use immediately prior to the termination of community
      Husband violated his duties under 2369.3 and it resulted in damages (loss of money to taxes)

      NORMAN v. NORMAN
      Spouse has a duty to maintain under 2369.3. Spouse still has duty to maintain even if there is no community money to do it with - use
      your separate funds

7.9   REIMBURSEMENT CLAIMS
A.    CC arts. 2364 – 2368 provide 5 types of reimbursement claims
      *Note: 4 have measure of reimbursement as value of thing used; only one has increased value as measure of reimbursement (2368)
      (1)        2364 – satisfaction of separate obligation with community property
      (2)        2365 – satisfaction of community obligation with separate property
      (3)        2366 – use of community property for benefit of separate property used for acquisition, use or improvement to benefit the
                 separate property of a spouse (community money spent to repair a separate house – person is entitled to get 1/2 of comm.
                 money spent)
      (4)        2367 – use of separate property for benefit of community property
      (5)        2368 – uses old way of reimbursement (increase in value) - if a spouse has separate property and during legal regime that
                 spouse or one spouse or both increases value of that property then that spouse has a claim for reimbursement for one half of
                 increased value for the common labor (either one)
                 (a)       POLICY: b/c the labor of spouses during community is a community thing used to increase value of separate thing
B.    Cases
      1. Value used in reimbursement claims
      Parker v. Parker (1st Cir. 1987)
      Reimbursement claim by wife for her 1/2 of community money used to pay mortgage on husband‘s separate property. Wife wants
      reimbursement for the actual money spent by the community. Court says new laws changed measure of calculation from value of the
      thing to value of the thing used. Reimbursement is for one half of the TOTAL amount of community funds used to satisfy a separate
      obligation

      Williams v. Williams (1st Cir. 1987)
      Reimbursement claim by husband for use of his separate money to pay mtg payments on community debt. CC art. 2365 situation. Ct
      said he was entitled to the full amount out of the community assets or they can divide community assets and then have wife reimburse out
      of her estate.
                             The issue was: is it claim against the other spouse or claim against the community? Because Gaches rule which
                 said that if it is claim against community, then it will reduce his recovery by 1/4 because he is liable for 1/2 of community. Ct did
                 not apply Gaches rule and reached the right conclusion.

      Oliver v. Oliver (2d Cir.1990)
      (*Rigby‘s case where he got 2d Cir. to overrule 4 previous cases)
      Gaches rule applied here and gave Mr. Oliver ¼ of what he paid and not ½ of what he paid
      Rigby convinced 2nd Circuit they were wrong and they overruled previous cases.
                 Reimbursement claims flow between spouses; not the community

      Munson v. Munson (3rd Cir. 2000)
      Trial Ct. granted wife reimbursement for actual amount of money paid by the community on the husband‘s separate property mortgage.
      Husband argued under Major-Longo jurisprudence, that the amount of reimbursement should have been only for principal paid on
                                                                                                                                                  42
          mortgage.
          3rd Circuit affirmed Trial Ct. finding an exception when the separate property did not benefit the community as in this case.
                     CC art. 2364 provides that spouse is entitled to reimbursement for one-half of the amount or value that the property had at the
                     time it was used. So clearly the use of “or‖ provides for the actual value of the used community property to serve as a
                     restitution measure.

          2.        Uncompensated/undercompensation of one spouse for community labor

          Dillenkoffer v. Dillenkoffer (5th Cir. 1986)
          The issue is whether the measure of reimbursement was under CC art 2366 or 2368
          CC art 2366 – applicable when community money is used for the construction of the building
          CC art 2368 – applicable when uncompensated community labor is used for the construction of the building on separate property
          If you use money and labor then both articles apply (1/2 value of the thing at the time it was used; ½ of the enhanced value of the
          separate thing). It is easier to value the enhanced value of the property than to value the spouse‘s uncompensated labor.

          Krielow v. Krielow (La. 1994)
          CC art. 2368 provides that labor is community thing.
          Formula for measure or reimbursement for the increase in value of a separate thing due to the uncompensated or undercompensated
          labor of a spouse:
                     Preferably, an estimate should be placed on the value of the separate property if it were unimproved at the time of
                     the marriage or an estimate should be made of the value at the time of dissolution.
          BOP: Claimant spouse has to make a prima facie case showing that the increase in value is a result of the uncompensated labor and
          industry of the spouse, then the burden shifts to the other spouse to say that it was due to other things.

          3. Classification
          Brehm v. Brehm
          Use of community funds will not change classification of separate property.
          Even when community funds are used to construct and make improvements. Does not change the classification of the property, because
          the prop is classified at the moment of acquisition.

CHAPTER 8 – MATRIMONIAL AGREEMENT
8.1 Separation of Property Regime
A.       Separation of Property Regime governed by CC arts 2370 -2376
         *Notice there are no reimbursement claims in separation of property regime
         *Be careful not to apply rules from ―community property regime‖

          CC art 2370. Separation of property regime: A regime of separation of property is established by a matrimonial agreement
          that excludes the legal regime of community of acquets and gains or by a judgment decreeing separation of property.
          CC art 2371. Management of property: Under the regime of separation of property each spouse acting alone uses, enjoys,
          and disposes of his property without the consent or concurrence of the other spouse.
          CC art 2372. Necessaries: A spouse is solidarily liable with the other spouse who incurs an obligation for necessaries for
          himself or the family.
          CC art 2373. Expenses of the marriage: Each spouse contributes to the expenses of the marriage as provided in the
          matrimonial agreement. In the absence of such a provision, each spouse contributes in proportion to his means.
          CC art 2374. Judgment of separation of property:
          A.          When the interest of a spouse in a community property regime is threatened to be diminished by the fraud, fault,
                      neglect, or incompetence of the other spouse, or by the disorder of the affairs of the other spouse, he may obtain a
                      judgment decreeing separation of property.
          B.          When a spouse is an absent person, the other spouse is entitled to a judgment decreeing separation of property.
          C.          When a petition for divorce has been filed, either spouse may obtain a judgment decreeing separation of property, by
                      a rule to show cause and upon proof that the spouses have lived separate and apart without reconciliation for at
                      least thirty days from the date of, or prior to, the filing of the petition for divorce and have not reconciled.
            D.        When the spouses have lived separate and apart continuously for a period of six months, a judgment decreeing
                      separation of property shall be granted on the petition of either spouse.
          CC art 2375. Effect of judgment:
          A. Except as provided in Paragraph C of this Article, a judgment decreeing separation of property terminates the regime of
          community property retroactively to the day of the filing of the petition or motion therefor, without prejudice to rights validly
          acquired in the interim between filing of the petition or motion and rendition of judgment.
          B. If a judgment has been rendered on the ground that the spouses have lived separate and apart either after the filing of a
          petition for divorce without having reconciled or for six months, a reconciliation reestablishes the regime of community property
          between the spouses retroactively to the day of the filing of the motion or petition therefor, unless prior to the reconciliation the
          spouses execute a matrimonial agreement to the contrary. This agreement need not be approved by the court and is effective

                                                                                                                                                  43
          toward third persons when filed for registry in the manner provided by Article 2332. The reestablishment of the community is
          effective toward third persons when a notice thereof is filed for registry in the same manner.
          C. If a judgment is rendered on the ground that the spouses were living separate and apart after the filing of a petition for
          divorce without having reconciled, the judgment shall be effective retroactively to the date the original petition for divorce was
          filed, without prejudice to rights validly acquired in the interim between filing of the petition or motion and rendition of judgment.
          All subsequent pleadings or motions involving matters incidental to the divorce must be filed in the first filed suit.
          CC art 2376. Rights of creditors:
          The creditors of a spouse, by intervention in the proceeding, may object to the separation of property or modification of their
          matrimonial regime as being in fraud of their rights. They also may sue to annul a judgment of separation of property within one
          year from the date of the rendition of the final judgment. After execution of the judgment, they may assert nullity only to the
          extent that they have been prejudiced.

B.        Three management rules in separation of property regime: 2371, 2372, 2373
          1.       Each acting alone uses, enjoys, and disposes of his property without the consent or concurrence of the other spouse (2371)
          2.       Solidary liability for debts incurred to provide necessities for himself or the family. T his is the only time that one spouse can be
                   personally liable to a creditor for a debt incurred by the other spouse. (2372)
          3.       Each spouse has to contribute to the expenses of the marriage in proportion to his means. (unless otherwise stated in
                   matrimonial agreement)
                               (a)        what does ―means‖ include? income and the assets of the spouse.
                                            no jurisprudence on this particular issue, but in child support                         cases, this is how it‘s
                                    been interpreted

8.2-not discussed in class


8.3 Matrimonial Agreement - Form, Procedure, Consent
          CC art. 2328. Contractual regime; matrimonial agreement
          A matrimonial agreement is a contract establishing a regime of separation of property or modifying or terminating the legal
          regime. Spouses are free to establish by matrimonial agreement a regime of separation of property or modify the legal regime
          as provided by law. The provisions of the legal regime that have not been excluded or modified by agreement retain their force
          and effect.
          CC art 2329. Exclusion or modification of matrimonial regime: Spouses may enter into a matrimonial agreement before or
          during marriage as to all matters that are not prohibited by public policy.
          Spouses may enter into a matrimonial agreement that modifies or terminates a matrimonial regime during marriage only upon
          joint petition and a finding by the court that this serves their best interests and that they understand the governing principles
          and rules. They may, however, subject themselves to the legal regime by a matrimonial agreement at any time without court
          approval.‘
          During the first year after moving into and acquiring a domicile in this state, spouses may enter into a matrimonial agreement
          without court approval.
          CC art 2330. Limits of contractual freedom: Spouses may not be agreement before or during marriage, renounce or alter the
          marital portion or the established order of succession. Nor may the spouses limit with respect to third persons the right that one
          spouse alone has under the legal regime to obligate the community or to alienate, encumber, or lease community property.
          CC art 2331. Form of matrimonial agreement: A matrimonial agreement may be executed by the spouses before or during
          marriage. It shall be made by authentic act or by an act under private signature duly acknowledged by the spouses.
          CC art 2332. Effect toward third persons: A matrimonial agreement, or a judgment establishing a regime of separation of
          property is effective toward third persons as to immovable property, when filed for registry in the conveyance records of the
          parish in which the property is situated and as to movables when filed for registry in the parish or parishes in which the spouses
          are domiciled.
          CC art 2333. Minors: Unless fully emancipated, a minor may not enter into a matrimonial agreement without the written
          concurrence of his father and mother, or of the parent having his legal custody, or of the tutor of his person.

A.        Rigby Def‘n of Mat. A: Contract changing any rule of any matrimonial regime
          (a)       An agreement that affects a matrimonial regime, that either: modifies a particular system of rules or terminates a particular
                    system of rules and substitutes another system of rules

B.        Matrimonial agreement is a contract.
          (a)      one species of interspousal contract
                   (1)        Rigby says there is some disagreement as to this. Materials suggest that there are 2 categories: matrimonial
                              agreements and interspousal contracts.
                                           * Rigby says not logical because of form requirements, etc
          (b)      subject to all of the rules of contracts
          (c)      Spouses have right to enter into any contract with each other, with a few exceptions

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                    (1)       This is complete reversal of prior law. Prior to 1980, all contracts between spouses were prohibited, with a few
                              exceptions.
C.        Form Requirements for Interspousal Contracts (in general)
          (a)     all other form requirements for contracts apply
                  (1)         cause, consent, capacity
                  (2)         if the form of K requires it to be written, or recorded, etc
                                          i.e., if it‘s a lease, all requirements for lease must be met

D.        Additional requirements for interspousal K which are matrimonial agreements
          (1)        CC 2331 says mat. agreement may be executed before or during marriage. Must be made:
                     (a)      by authentic act or
                     (b)      act under private signature duly acknowledged by the spouses

E.        If matrimonial agreement is entered during the marriage:
          (1)       CC 2329 applies when parties intend to modify or terminate an existing matrimonial regime
                    (a)         Must Jointly petition the Court. Court must find:
                                (1)       agreement serves their best interest(S)
                                (2)       both understand governing rules and principles
          (2)       Policy reason behind strict form requirements is to protect a woman from being forced by her husband to enter agreement. So
                    Ct. req. to determine if both parties understand the rules and principles AND that it is in both spouses best interest
          (3)       Presumption: If spouses already living under SOP regime and they want to opt into a comm. property regime, then judicial
                    finding is not required because the parties are not modifying or terminating an existing matrimonial regime


                           →→→Continued (Chapter 8.3 – Matrimonial Agreements – Form, Consent, Procedure)

I. Sphat & Samuel, Equal Management Revisited

     1.   There are significant differences in Act 627 and Act 709 concerning the spouses freedom to make matrimonial agreements
              a. Act 627
                             i. This act permitted the spouses to make or modify matrimonial agreements before or during the marriage
                            ii. This contractual freedom is outweighed the danger of one spouse taking advantage of the other
                           iii. The danger of one spouse taking advantage of the other was lessened because, under this act, matrimonial
                                agreements could, like any contract, be avoided for a vice of consent and the spouses could not alter the marital
                                portion
                           iv. Creditors were thought to be protected by Act 627s requirement of recordation of matrimonial agreements and by
                                actions already given them by the Civil Code to set aside prejudicial contracts to their debtors
                            v. Forced heirs were not threatened either because they retained their right to reduce any excessive donations
                                contained in te matrimonial agreements
              b. Act 709
                             i. In contrast to 627, Act 709 places procedural limitations upon the making or the modification of a matrimonial regime
                                contract during marriage and adds limitations on the content of these agreements, whether executed prior to or
                                during marriage
                            ii. Article 2329 of Act 709 contains the procedural limitation: ―Spouses may modify or terminate a matrimonial regime
                                during marriage only upon joint petition and a finding by the court that this serves their best interests and that they
                                understand the governing principles and rules‖
                           iii. The requirement for court approval did not appear in the original 627
                           iv. The council reconsidered this on a motion
                            v. This motion made clear that the concern in allowing spouses to enter into matrimonial agreement was solely for the
                                purpose for the welfare of the spouse whose contributions to the marriage were largely non-economic and not for the
                                interest of the creditors or forced heirs.
                           vi. The result of this motion was the Law Institute‘s final recommendation (Which was rejected)
                          vii. The enacted version of 2329 required court approval for contractual changes to a matrimonial regime during
                                marriage from another regime to the legal regime was exempted from this court approval requirement
              c. Judicial Approval sometimes.
                             i. Potential necessity for getting court to approve your agreement for validity. Rule is 2329 second paragraph
                            ii. General Rule you need judicial approval if you enter into matrimonial agreement during marriage. If you enter
                                before, you never need judicial approval
                                      1. Act 709 Exemptions:
                                                 a. Exempts prospective spouses altogether from the requirement of court approval as regards
                                                       their antenuptial matrimonial agreement
                                                 b. Exempts spouses married out of state form the court approval requirement as regards a
                                                       matrimonial agreement made within a year of moving to LA
                                                                                                                                                   45
                                                c.   Exempts spouses who married and established the legal regime prior to January 1, 1980 from
                                                     the necessity of court approval for matrimonial agreements made prior to January 1, 1980
                                               d. Exempts from the court approval requirement spouses changing to the legal regime by
                                                     matrimonial agreement
                                   2. What else does Act 709 permit?
                                               a. It permits matrimonial agreements to be made by an act under private signature duly
                                                     acknowledged by the spouses, as well as by an authentic act, whereas Act 627 required solemn
                                                     formalities
                                               b. Difference in authentic act and acknowledgement is that an acknowledgement for not entail the
                                                     customary reading by the notary of the act‘s contents and therefore the acknowledgement is not
                                                     as likely as an authentic act to alert a spouse to the seriousness of what he is doing
                                   3. What is necessary for renunciation?
                                               a. Neither court approval nor any formality whatsoever is necessary for the renunciation of a
                                                     spouse of the right to concur in transactions for which the legal regime requires concurrence or
                                                     for the renunciation by a spouse of the right to participate in a community business
                                               b. Although a renunciation only covers particular property, it still may constitute a significant
                                                     alteration of a spouse‘s rights – nonetheless no supervision is required under 709
               d.   What must court find to give judicial approval?
                          i. 2329 court must find
                                   1. serves spouses best interest
                                               a. the judge should not reject an agreement solely because it is financially lopsided, if he is
                                                     otherwise satisfied that the spouse who is making the financial sacrifice or taking the risk is
                                                     doing so of his own free will in the spirit of helping his spouse
                                               b. What if on its face, the agreement provides equal opportunity for each spouse to gain or lose,
                                                     but because of actual earning situation effect will be in favor of one spouse? If the spouse
                                                     understands how the regime will work as applied to her and if her consent was freely given,
                                                     then the judges should permit the wife to be generous, since the agreement, by promoting
                                                     family harmony, is in the spouses best interest
                                               c. LA judge need not be concerned with the adverse financial effect of 2329 on children of
                                                     spouses because they are protected in other places in the law
                                               d. Since the judicial inquiry must focus on the spouses, they also should not have to prove that no
                                                     harm will accrue to their creditors as a result of a proposed agreement. Creditors like forced
                                                     heirs are protected in other areas of the law
                                   2. spouses understand the principles and rules governing the matrimonial regime
                                               a. judge can give an exam to test this
                                               b. as long as the judge is satisfied that the spouse who lacks thorough understanding of the
                                                     agreement has not been imposed upon by the other spouse, he should approve the agreement
                         ii. Effect of judicial approval
                                   1. the effect of judicial approval of a matrimonial agreement under article 2329 of Act 709 is unclear
                        iii. Sound nice in theory, but in practice, weak standard. First of all, how does find this? Case in materials called in re
                             Voyer—court does not have to hold hearing to find this crap.
                        iv. You don‘t have to meet with the parties either. In the In Re Voyer case, the court just looks at the documents of the
                             parties in the joint motion and finds that both requirements are met.
                         v. Best interest must be in THEIR best interest if spouse is getting less than what they would under legal regime,
                             you would reject as noin best interest. However, court rejects this saying the interest is not only economic, but also
                             emotional.
                        vi. Langley v Langley
                                   1. wife filed for divorce a week after the spouses signed ―Joint Stipulations‖ dividing community assets and
                                         debts between them and that husband would pay $1000 in permanent alimony
                                   2. HELD: valid interspousal agreement rather than an agreement terminating the community regime
                                   3. The court pointed out that the agreement dealt with existing assets and debts and did not purport to affect
                                         classification of future property
                                   4. Termination of the regime would happen automatically upon signing the divorce decree
II. Case Law
      1. Poirier v Poirier
               a. Issue:
                             i. This case concerns the validity of a community property settlement between Mrs. And Mr. Poirier which they
                                executed in contemplation of a divorce
               b.   Facts
                              i. 10-4-89 – They signed a ―community Property Partition‖ which divides various properties between the parties and
                                 contains a clause purporting to ―discharge each other further accounting of community property‖
                             ii. 10-20-89 – default judgment granting divorce states ―the community property partition executed herein between the
                                 parties on October 4, 1989, be confirmed and made final.‖
                                                                                                                                                 46
                      iii. 12-17-90 – She files suit to annul partition and have community partitioned in accordance with 9:2801
                      iv. Mr. Poirier motion for summary judgment was denied twice so he brings this appeal
           c. Discussion and Holding
                        i. Is the Community Property Partition valid?
                       ii. NO – If the agreement between them was only intended to partition existing community property, then under Article
                           2336 it could be valid without fulfilling the formalities of Article 2329.
                      iii. However, this agreement was intended to terminate the matrimonial regime and therefore it is null and void for want
                           of compliance with 2329 (did not file a joint petition and allow a judge to decide if 1) both parties understood the
                           governing principles and rules and 2) each party best interest was being served
2.   In Re Boyer
           a. Issue:
                        i. The issue in this suit to have a matrimonial regime agreement terminating the legal regime declared null is whether
                           the failure of the trial court to hold a hearing with the parties and the signing of the agreement before it was approved
                           by the court rendered the agreement an absolute nullity
           b. Facts
                        i. A matrimonial agreement terminating the community of acquets and gains that existed b/t the parties was executed
                           before a notary and 2 witnesses, in compliance with Civil Code Article 2331
                       ii. The parties submitted a joint petition for establishment of separate property regime and an affidavit executed by the
                           Mr. and Mrs. That said they had sought legal counsel, read the petition, the agreement nad they understood the
                           rules and principles involved and that the agreement was in their best interest – neither party requested a hearing
                           before the court
                      iii. Court approved the agreement
                      iv. Subsequently, the Mrs. Filed a suit for declaratory judgment seeking to have the matrimonial agreement and the
                           contemporaneously executed partition declared null and void because 1) she signed under duress and 2) the
                           procedure followed to obtain court approval was defective
           c. Discussion and Holding
                        i. Here the agreement and the joint petition are very clear on the purpose of the documents, which is to terminate the
                           matrimonial regime
                       ii. There is no requirement in 2329 for a hearing before the court can grant approval
                      iii. Therefore since court approved and all procedural steps were followed the agreement is not null and void
3.   Williams v Williams
           a. Issue:
                        i. The husband is appealing a judgment of the trial court which upheld a post-nuptial agreement that was entered into
                           by the couple
           b. Facts:
                        i. Agreement signed in front of notary and 2 witnesses to terminate community property regime and in event of
                           separation or divorce, Michael would pay Iona $2,500 per month and all insurance coverage for life
                       ii. Filed joint petition and represented to trial court they wanted to terminate community property regime
                      iii. Trial court approved
                      iv. Michael appeals on the grounds that the trial court committed error in not finding the agreement invalid due to the
                           fact that it did not comply with 2329 procedure
           c. Discussion and Holding
                        i. This agreement was entered into DURING the marriage and so it required judicial approval
                       ii. Therefore the trial court must have made the twofold determination that
                                 1. joint petition to terminate the matrimonial regime is in best interest of the parties
                                 2. the parties understand the governing rules and principles
                      iii. Held: There is no indication that the procedure was followed in this case; only a joint petition was filed
                      iv. 2329 not met therefore null and void as far as it pertains to modification or termination of matrimonial regime of the
                           parties
4.   Knighten v Knighten
           a. Issue:
                        i. Whether the matrimonial agreement is invalid for lack of consideration or for lesion
           b. Facts:
                        i. Accident left man severely injured
                       ii. At time of this accident, he was legally married, but had been living separate from wife for over one year
                      iii. Community of acquets and gains was still in effect since neither party had filed separation or divorce proceedings
                      iv. There was an agreement made by ex-wife that she would accept $50,000 in cash and $50,000 payable in
                           installments in order to give up any future claims against the estate of her former husband
                       v. The agreement was signed by a judge after he assured himself that the P and curatrix understood the nature of his
                           action and after determining it was in the spouses best interest to do so
           c. Discussion and Holding
                        i. The curatrix contends that when the P who voluntarily terminated the community her share of the personal injury
                           settlement was limited to one-half of what would be considered community property under 2344
                                                                                                                                                47
                            ii. HELD:
                                    1.    P would not have terminated the community except for the provisions of the matrimonial agreement
                                          wherein she received the $100,000
                                    2. P gave up the opportunity to leave the community in effect and claim a much larger sum of money that she
                                          actually received by agreeing to terminate the community
                                    3. Having found that the separation of property was not lesionary, it follows that we also find it was supported
                                          by valid consideration --- the right which P brought to an end in the matrimonial agreement was a valuable
                                          property right and the surrender of it was adequate consideration for the money she received
                d.   Brumfield v Brumfield
                            i. Issue
                                    1. This case concerns the validity of the pre-nuptial agreement
                           ii. Facts
                                    1. A woman was marrying an attorney and a prenup was signed saying that their property was to be
                                          separate
                                    2. Their stories are very different on when and how the document was signed
                                                a. He says: Prenup signed in his office with 2 witnesses and a notary present (his witnesses
                                                      corrborate)
                                                b. She says: He came to her home while she was ill and demanded that she sign it and told her
                                                      that it was to protect their community property and keep it community in case the laws changed
                                                      (her witnesses corroborate)
                                    3. Went to jury and they believed her (P) and declared the pre-nup null and void and restored her right to
                                          community property regime
                                    4. He appeals and says that the jury‘s finding of fraud is contrary to the law and evidence
                          iii. Discussion and Holding
                                    1. D contends that a review of the entire record cannot support a finding of fraud
                                    2. Court held that D‘s contention was not correct
                                    3. The court held that testimony is evidence and that the record contains sufficient testimony for conclusive
                                          proof of fraud, assuming the testimony can be believed
                                    4. since there was sufficient testimony to believe P‘s case, the question was whether or not it can be
                                          believed --- a verdict will not be disturbed on questions of fact involving the credibility of witnesses unless
                                          that verdict is manifestly erroneous

                                                 8.4 Matrimonial Agreements Limits on Substance

I. Sphat & Samuel, Equal Management Revisited
     1. Article 2330 of Act 709 provides: ― Nor may the spouses limit with respect to third persons the right that one spouse alone has under the
          legal regime to obligate the community or to alienate, encumber or lease community property.‖
     2. This prohibition is applicable only to 3rd persons and not between the spouses
     3. The purpose of this prohibition is to assure a third person dealing with one spouse alone that that spouse has at least all of the powers a
          legal regime gives to a spouse acting alone
     4. Article 2330 does not prohibit the matrimonial agreement from giving a spouse more power to act alone than the legal regime would give
          him
     5. Article 2330 thus prohibits, insofar as the effect on third persons is concerned, the spouses from contractually establishing any community
          regime that distributes management authority in such a way as to give one of the spouses less authority to act alone that would be given
          by the legal regime. It prohibits total management of the community by a designated spouse.
     6. Article 2330 also precludes spouses from contractually establishing as to third persons a ―two funds‖ management system whereby each
          spouse manages and obligates the community property he would have managed and owned if single
     7. There is little security for a third party in knowing that the spouse with whom he is dealing has the power to obligate the community
          property, if by matrimonial agreement there is no community
     8. The prohibition of 2330 has little merit; it offers no definitive protection to third parties and prohibits the spouses from usefully taior-making
          their management system except indirectly by drastic deviations from the legal regime in the ownership of their marital property
     9. Determine whether the agreement is a matrimonial agreement on an interspousal agreement
     10. Rigby: all agreements between spouses are interspousal agreements; matrimonial agreements are a special type of interspousal
          agreements that has form requirements in addition to the general form requirements

II. McAlpine v McAlpine
      1. Issue:
               a. Whether alimony after divorce is a ―law enacted for the public interest‖ such tat any waiver would be an absolute nullity
      2. Held
               a. Antenuptial agreements are enforceable, but are subject to the same grounds for rescission as other contracts
               b. Permanent alimony was not enacted to protect the public‘s interest, but for the benefit of individuals
               c. Further, if protection of the public interest was ever a proper consideration for permanent alimony, that day has long since past
      3. Reasons
                                                                                                                                                      48
               a.   Commentators and courts have based the proposition that permanent alimony was enacted to keep divorced spouses from
                    becoming wards of the state on statements that were NOT LAW
               b.   It is more probable that the legislature in originally providing for permanent alimony did it not to keep needy ex-wives off public
                    support, but to attempt to rectify the loss suffered by an innocent wife at the hands of an at-fault husband
               c.   If preventing divorced spouses form becoming a public burden was really a law enacted for the public interest it probably would
                    have applied to all wives (now spouses), innocent or not

III. Parquin v Finch
                a. Held:
                        a.    The district court erred in declaring void that part of the marriage contract which grants to the husband the whole of
                              the community on the contingencies of having no children by the marriage and surviving his wife
               b.   Reasons
                        a. Judge had expressed an opinion that the above stipulation in the marriage contract was illegal and void
                        b. The referees adjusted and settled the accounts of the parties and made their return accordingly: on which final
                            judgment was rendered, from which the defendant appealed
                        c. But in this case we find a bill of exceptions to the opinion of the judge a quo by which he declared null and void the
                            stipulation in the marriage contract
                        d. This the P insists, is an exception to the final judgment, which the court has repeatedly decided can not be taken with
                            effect
                        e. Here there was no final judgment rendered until the return of the referees, whose business it was to examine the
                            facts of the case, under instructions of the judge
                        f. Any opinion given on such points, before final judgment is thought to be a fair and legitimate subject for a bill of
                            exceptions

IV. Succession of Alfred Moran
     a. Facts and procedural history
              a. P had intervened in the succession of Alfred Jay Moran, claiming rights under a marriage contract with t edefendnat signed
                   shortly before their marriage on 2/1/80
              b. Paragraph in the marriage K that said that he would make a will and will his wife his entire estate
              c. He apparently never carried out this will
              d. P filed this petition to assert a claim as a creditor of succession
              e. TC held that no cause of action
              f. Appeals reversed relying on LSA CC art. 1888 which stated that in 1980 when the antenuptial contract confected that ―A future
                   succession may become the object of an antenuptial agreement‖; this court held that Moran‘s promise to change his will was
                   against public policy
     b. HELD:
              a. When Alfred Moran received a judgment of divorce, the bonds of matrimony between the parties were dissolved and they were
                   placed ―I the same situation with respect to each other as if no marriage had ever been contracted between them‖
              b. Under articles 156 and 159, the party against whom the divorce was pronounced lost all the advantages ―conferred by the
                   marriage contract‖
              c. Since marriage contract of Morans was no longer in effect after their divorce, it could not govern their future affairs
              d. P was entitled to benefits conferred by marriage contract, but those benefits did not include an intervivos donation of
                   succession rights
              e. Moran‘s potestative promise to make an irrevocable will in his wife‘s favor has no legal effect

                                                           8.5 Matrimonial Agreements
                                                               Possible Provisions

I. O’Krepki v. O’Krepki (5th Cir. 1988)
 Issue
                 o The issue is whether or not a judgment recognizing that the parties 1986 matrimonial agreement modified their antenuptial
                     agreement such that a community of acquets and gains was established and existed between the parties from the date of their
                     marriage is correct
 Facts
                 o 9/25/84 – Parties entered into an antenuptial agreement in which they stipulated that there would be no community of acquets
                     and gains during the existence of their contemplated marriage, choosing to remain separate in property
                 o 10/31/84 – Parties are married
                 o 9/8/86 – parties entered into a marriage agreement by authentic act that jointly re-established the community of acquets and
                     gains, as though they had not taken any action previous to the marriage (no antenuptial agreement)
                 o 1987 – P instituted action for separation of bed and board
                 o D appeals and argues that the judgment adversely effects the partie‘s rights and those of third persons, in that it permits a
                     reclassification of wach party‘s previously acquired property without the proper manner and form under 2329
 HELD:
                                                                                                                                                    49
               o    While they were married, they re-established the community of acquets and gains – this is a matrimonial agreement
               o    If we find that they met form and manner requirements under 2329 then judgment is not erroneous because it is not against
                    public policy (will nto affect rights of 3rd parties b/c recordation takes care of this) and the parties clearly meant to adopt the
                    legal regime of acquets and gains retroactively by use of the word ―re-establish‖
                           Form requirements for this matrimonial agreement: authentic act or act under private signature duly acknowledged
                                by both spouses but they do not need court approval under CC art 2329 since they are entering the legal regime
                                during mar

II. Tinsley v. Sharpe (4th Cir. 1989)
 Facts:
                 o Married in 1980
                 o Prior to marriage entered into premarital contract that established that they would maintain separate property in marriage and
                      not adopt the community property regime
                 o After the legal separation, D sought return of the funds he allegedly ―loaned‖ his former wife (she says they were repayments)
                 o TC held that this premarital K precluded all claims as between the parties except those which constituted post separation or
                      divorce tort claims
 Issue
                 o Richard Sharpe argues that the trial court erred in interpreting the premarital contract so as to preclude his recovery of sums
                      allegedly loaned and for damages, atty fees and costs for P‘s failure to comply with discovery
 Held:
                 o The clear terms of the K barred ―all claims relating to all reimbursements, even those predating the marriage or the date the
                      contract was signed
                 o So all claims relating to the termination of the marriage are likewise barred
                 o Only post separation or divorce claims may be enforced
                 o Also the term ―economic claim‖ is not ambiguous
                 o To the extent that the separate immovable property was improved by Mr Sharp‘s money, Ms. Tinsley owes no reimbursement
                      to Mr. Sharp and the claim is barred by premarital contract

III. Fielding v. Van Geffen (1st Cir. 1985)
 Issue:
                  o The issue is whether a premarital contract is enforceable where husband promised to pay wife $200k upon divorce if she
                      agreed to a separation of property agreement. Is this a valid enforceable agreement or is it onerous?
 Facts:
                  o Husband and wife contracted prior to marriage that husband would pay wife $200,000 in monthly installments if she agreed to
                      sign a marriage contract stating that they would maintain separate property and not enter into the community property regime
                  o Trial court said not valid because onerous K
 Held:
                  o The court found that this was a valid agreement because there was cause for the agreement. The cause was the
                      relinquishment of community property regimes – agreeing that there would not be a community property regime but rather a
                      separation of property regime in exchange for $200k – so this is a valid commutative contract based on valid consideration

IV. Hanley v. Drumm (1879)
 The issue is vwhether a contract was valid that modified a community property regime into the amount of property each spouse owned
 A couple may modify a legal regime – it becomes partly legal and partly contractual; contractual – spouses will own this property and income
     60/40 rather than 50/50

Limitations on Spouses’ Rights to Contract
CC art 7 – prohibition against contracts violating public policy
 Parties may not by juridical act derogate from laws that protect the public interest

CC art 2329 – prohibition against a matrimonial agreement violating public policy
 Spouses may enter into a matrimonial agreement before or during marriage as to all matters that are not prohibited by public policy.

CC art 2330 – prohibition against an interspousal contract for different things
 Spouses may not renounce or alter the marital portion or the established order of succession (either in a matrimonial agreement or
    interspousal agreement
 Nor may the spouses limit with respect to third persons the right that one spouse alone has under the legal regime to obligate the community or
    to alienate, encumber, or lease community property.
               o 2nd part of article 2330 should probably be in CC art 2329 because it is a proscription of a matrimonial agreement
               o Comment A – spouses may not by matrimonial agreement renounce or alter the marital portion; marital portion is not part of
                    matrimonial regimes rules so not a matrimonial agreement
               o Comment D – for example, the spouses may by matrimonial agreement provide for expenses of the marriage

                                                                                                                                                      50
                                                             8.6 Interspousal contracts

    Darce on Interspousal Contracts
           o Rigby Says what he says on matrimonial agreement here is wrong
           o Rigby says All K are interspousal K and a matrimonial agreement is a kind of species of an interspousal K
    Transmutation of property: in many states, including the other community property states, the classification of marital property or
     community/separate property may change during the marriage caused by contributions of money to thing or labor to the thing
    LA has rejected the doctrine of transmutation of property; jurisprudence has made exceptions to the codal scheme of things – property
     acquired is either community or separate at the moment of acquisition and it doesn‘t change
    LA SC ruled that with regard to immovable property, the rule of classification at acquisition always applies
    Incorporeal movables – courts have in penchant and retirement cases and other cases which involve rights to something have actually applied
     the principal of transmutation because a retirement plan in existence during marriage can become partly separate and partly community
    The courts have attempted to mitigate this by saying that in penchant cases, the classification of pensions is not changing but the right to
     receive the penchant is being classified – the right is acquired while the worker is working – all we are doing is dividing up the benefit with the
     time the benefit was acquired


                                                                   CHAPTER 9
                                                               CONFLICTS OF LAWS
                                          (Rigby says call it “CHOICE OF LAWS;” not a conflict of laws

                                                                     9.1 Legislation
I. La C. C. Art. 3515 – Determination of the applicable law; general and residual rule:
           Except as otherwise provided in this Book, an issue in a case having contacts with other states is governed by the law of the state whose
policies would be most          seriously impaired if its law were not applied to that issue.

           That state is determined by evaluating the strength and pertinence of the relevant policies of all involved states in the light of: (1) the
relationship of each state to               the parties and the dispute; and (2) the policies and needs of the interstate and    international systems,
including the policies of upholding the justified expectations of parties and of minimizing the adverse consequences that might follow from
           subjecting a party to the law of more than one state.

                1.   Class comments on 3515:
                          a. If another article applies then you use that article over 3515; if no other article applies then you apply 3515; hence it
                              is a residual article
                          b. 2515 establishes the general overriding principle, but is subject to specific principle if there is one governing
                          c. Therefore 3515 is both residual and general
                          d. Choose the state whose policies would be more impaired and apply that states law
                          e. An article will state a rule of classification and that rule chooses the law of the state that classifies the property (a
                              thing) during marriage in LA
                          f. This rule of classification may be a rule of distribution (which is whose law applies when we distribute property to
                              spouses at termination of the marriage
                          g. We may apply X‘s law for the purpose of classifying a thing during marriage; but then apply LA law in distributing that
                              thing to the parties after it is classified under X‘s law
                          h. Rule of classification is whose law we choose to classify a thing during marriage
                          i. Rule of distribution – whose law we choose to distribute this thing upon termination of the community

II. La C. C. Art. 3523 – Movables
           Except as otherwise provided in this Title, the rights and obligations of spouses with regard to movables, wherever situated, acquired by
           either spouse during marriage are governed by the law of the domicile of the acquiring spouse at the time of acquisition. (RULE OF
           CLASSIFICATION OF MOVABLES)

                1.   Class Comments
                          a. Rule of classification of Movables -- Rights and obligations with reference of movables are determined during
                              marriage under the law of the domicile of the acquiring spouse

II. La. C. C. Art. 3524 – Immovables situated in this state
            Except as otherwise provided in this Title, the rights and obligations of spouses with regard to immovables situated in this state are
            governed by the law of this state. Whether such immovables are community or separate property is determined in accordance with the
            law of this state, regardless of the domicile of the acquiring spouse at the time of acquisition.

                          a.    Class Notes
                                     a. This is the RULE OF CLASSIFICATION OF IMMOVABLES
                                                                                                                                                     51
                                     b.   Here location of immovable determines our choice of law

III. La. C. C. art. 3525 – Termination of community; immovables in another state acquired by a spouse while domiciled in this state
            Upon the termination of the community between spouses, either of whom is domiciled in this state, their rights and obligations with regard
            to immovables situated in another state acquired during marriage by either spouse while domiciled in this state, which would be
            community property if situated in this state, shall be determined in accordance with the law of this state. This provision may be enforced
            by a judgment recognizing the spouse's right to a portion of the immovable or its value.

          Revision Comments – 1991
               a) Scope
               b) Application
               c) This article applies only when the termination of the community occurs while at least one of the spouses is domiciled in this
                    state and there exists jurisdiction over the other spouse
               d) Potential enforcement problems: 1) Divorce in LA and 2) Probate Proceedings in LA
               e) The Acquiring spouse’s own half

IV. La. C. C. art. 3526 – Termination of community; movables and Louisiana immovables acquired by a spouse while domiciled in another state
(RULE OF DISTRIBUTION FOR MOVABLES & IMMOVABLES)

          Upon termination of the community, or dissolution by death or by divorce of the marriage of spouses either of whom is domiciled in this
          state, their respective rights and obligations with regard to immovables situated in this state and movables, wherever situated, that were
          acquired during the marriage by either spouse while domiciled in another state shall be determined as follows:

          (1) Property that is classified as community property under the law of this state shall be treated as community property under that law; and
          (RULE OF DISTRIBUTION FOR MOVABLES)

          (2) Property that is not classified as community property under the law of this state shall be treated as the separate property of the
          acquiring spouse. However, the other spouse shall be entitled, in value only, to the same rights with regard to this property as would be
          granted by the law of the state in which the acquiring spouse was domiciled at the time of acquisition.

                          a.   Class Comments:
                                    a. Rule of Distribution is displayed here
                                    b. Parties domiciled in many different states and acquired movables in many other states; one spouse
                                        moved to LA; files divorce; divorce is final; must divvy up property –
                                    c. We use LA law to determine if commuity or separate

V. La. C. C. art. 3527 – Louisiana immovables acquired by a spouse while domiciled in another state; death of the acquiring spouse while domiciled
in another state

          Upon the death of a spouse domiciled outside this state, that spouse's immovables situated in this state and acquired by that spouse
          while domiciled outside this state, which are not community property under the law of this state, are subject to the same rights, in value
          only, in favor of the surviving spouse as provided by the law of the domicile of the deceased at the time of death.

               a.    Class comments:
                          a. Governs a LA IMMOVABLE and relates only to termination of community on death of a spouse
                          b. Underlined part says: A LA court cannot distribute immovable property located in another state; but the court can
                              grant the surviving spouse such rights, in value only, as provided by the law of the domicile of the spouse at the time
                              of death (if lived in state and purchased immovable out of state while alive)

V. What the Comments to these articles tell us:
              a. These articles are established for movables and immovables
              b. If the rule of classification is surplanted by a rule of distribution then you apply the rule of distribution to the property of the
                 spouses and NOT to the management of the property of the spouses during the marriage
              c. Know about movables – very important:
                       a. Rule of classification
                       b. 90% of cases deal with movables
                       c. Example - 2533 – movable – we look to law of state where acquiring spouse was domiciled at time of acquisition
                       d. If neither spouse is domiciled in LA at time of significant event (ending community property regime), then 3526 does
                             not apply
                       e. If all factors of 3526 are present to cause the significant event (one domiciled in state and acquired by one spouse
                             while in another state) then we look to LA law to determine how the thing will be distributed (not classified)



                                                                                                                                                       52
                                                                  9.2 Regime

a)   Meissner v Meissner
         a. Facts:
                       i. Married in N.O in 1983
                      ii. Since married before this, also obtained a Brizilian divorce after the 1983 marriage and then a second weeding
                          ceremony in Brazil in 1988 to make sure there wedding is recognized
                     iii. Soon after NO, marriage they moved to Brazil where they established their matrimonial domicile
                     iv. 1991 – marie files for divorce in LA – dismissed on exceptions
                      v. 1993 – William files for divorce in Brazil; AND in 1995 he filed in LA
                     vi. 1995 – Brazilian court rendered a judgment and William then dismissed his LA suit and filed an exception of res
                          judicata to Marie‘s reconventional demand in LA proceedings
         b. Issue:
                       i. The issue is whether or not Brazilian law applies to all proceedings – partition of marital property, does Brazilian or
                          LA law apply (only movables are involved here)
         c. Held:
                       i. The court correctly applies the distribution rules of 3526 supplanting the classification rules of 3523 w/ respect to
                          movable property
                      ii. Held that although partition of the community is an incident to the dissolution of a marriage, the right to partition, if
                          not exercised at the time of the divorce, survives the divorce – so an action for the petition is not abated by the
                          divorce
                     iii. Brazilian law does not apply to the of the classification and distribution of the parties former marital property: The
                          ―triggering event‖ of article 3526 is present and LA has personal jurisdiction over the parties and ―adjudicatory‖
                          jurisdiction over this controversy
b)   Hansel v Holyfield
         a. Facts:
                       i. Hansel was president on Barnett Bank in FL and moved to LA to be president of NO Bank
                      ii. Wife and chidren did not move to LA for several months
                     iii. Hansel had stock options in FL that matured in this period of time
         b. Issue:
                       i. when did the legal regime commence between mr and mrs Hansel (when he moved to LA or when both he and the
                          wife had moved to LA)?
         c. Discussion and Holding
                       i. LA SC held in 2000 that trial court did not err and community regime began at time mr Hansel moved to LA
                      ii. The rule is in 2329 and 2334
                                1. 2329 – Exclusion or modification of matrimonial regime
                                           a. Spouses may enter into a matrimonial agreement before or during marriage as to all matters
                                                 that are not prohibited by public policy
                                           b. Spouses may enter into a matrimonial afreement that modifies or terminates a matrimonial
                                                 regime during marriage only upon joint petition and a finding of the court that this serves their
                                                 best interests and that they understand the governing rules and principles. They may, however,
                                                 subject themselves to the legal regime by a matrimonial agreement at any time without court
                                                 approval
                                           c. During the first year after moving into and acquiring a domicile in this state, spouses may enter
                                                 into a matrimonial agreement at any time without court approval
                                2. 2334- Persons; Scope of application of the legal regime
                                           a. The legal regime of community of acquets and gains applies to spouses domiciled in this state,
                                                 regardless of their domicile at the time of marriage or the place of celebration of the marriage
                     iii. Held that legal regime commenced when mr Hansel had moved to estab domicile in LA
                     iv. But then SC had Hand v Hand
c)   Hand v Hand
         a. Issue – when is legal regime established – when one spouse has domicile in LA or both estab domicile in LA?
         b. Held that legal regime not estab until both spouses had legal regime estab in LA
         c. Note that 2329 and 2334 use the word ―spouses‖ and NOT spouse
         d. This court held different then Hansel v Holyfield – go with Hand because more recent
         e. RULE IN LA – THE LEGAL REGIME IS ESTABLISHED BETWEEN THE SPOUSES WHEN BOTH SPOUSES ARE
               DOMICILED IN LA

                                                                 9.3 Movables

a)   Gilbert v Gilbert
          a. Issue:
                         i. who‘s law applies to the distribution to the retirement benefits – Georgia‘s or LA‘s?
                                                                                                                                                53
          b.   Facts
                     i.       Married; living in Georgia
                    ii.       He acquired pension benefits upon retirement
                   iii.       They moved to LA and lived there until divorce
                   iv.        He argues that since he acquired in Georgia, they are subject to Georgia law
                    v.        Wife contend that LA law applies
          c.   HELD
                     i.       Applied Georgia law because that is where he was domiciled when he acquired pension benefits
                    ii.       Court applied this Georgia law --- Georgia will distribute the separate property of the spouse (marital and non-marital
                              property)
                       iii.   They did not talk about rule of classification or rule of distribution because this case came out in 1983 and the
                              conflicts rule came into being in 1991 so we did not have conflict of law rules when this case came out
                       iv.    3523 applies to classifications of benefits; 3523 factors are here: incorporeal movable, acquired while he was in
                              Georgia so under 3523, we look to Georgia law
                       v.     There is no classification issue here; it is a distribution issue
                       vi.    Does a distribution rule surplant the rule of classification? Yes, 3526 – apply this by meeting 2 tests of 3526 – under
                              LA law if he had lived in LA when he acquired the retirement, it would be community property under LA law so we
                              treat it as community property under LA law even though the property is in Georgia and she would get ½ (apply the
                              SIMS formula)
          d.   RULE
                      i. If it would be community property under LA law then we play like it is community property under LA law and we treat
                         it as if it were community property under LA law and we distribute it as community property as LA law; so court would
                         apply first paragraph and the SIMS formula
b)   Mahmud v Mahmud
                      i. Issue:
                                1. Whether a car acquired in Pennsylvania, prior to the parties establishing their domicile in LA, is community
                                      or separate property
                     ii. Facts:
                                1. Husband buys a car in Penn
                                2. then he and wife moves to LA and after that divorce
                    iii. Discussion
                                1. What about the classification of the property? under 3523 we look to Penn law because acquiring spouse
                                      was domiciled in Penn when he acquired the property
                                2. What about the distribution of the property?
                                3. 3523 says ―except as otherwise provided‖ so there may be another rule of distribution that will supercede
                                      3523 (the general rule)
                                4. 3526 supercedes; but what does it take to trigger 3526?
                                            a. Termination of the community – which has happened
                                            b. One of the spouses must be domiciled in the state (LA) at time of partition – this is met
                                            c. Under 3526, we look to see if car is community property in LA and if so we treat it as community
                                                property
                                            d. Acquisition during the marriage in LA triggers a Presumption of community property
                                            e. Husband required this auto while married; LA law applies; since we do not know how he
                                                acquired it (just know during marriage), how do we classify it under LA law? As community
                                                property because of the presumption and the presumption has not been rebutted
c)   Meissner v Meissner
         a. See above!!
d)   Robinson v Robinson
         a. Overview:
                      i. Apply the law of the state whose policies would be most impaired
         b. Issue:
                      i. Here court is called upon to determine whether or not the choice of law provision in the partition agreement by the
                         spouses is against public policy of LA
                     ii. To what extent you can agree law of particular state governs law of K
                    iii. NOTE: May have forum and choice of law provision in a K and these are enforceable unless they contravene public
                         policy (in this case, LA public‘s policy)
         c. Facts:
                      i. They live in LA; hubby moves to NC
                     ii. K has a choice of law provision which gives NC jurisdiction
                    iii. Parties have right to choose within the limits of this article which law applies to the interpretation of this K – to the
                         extent that public policy is not contravened
         d. HELD


                                                                                                                                                  54
                  i. His choice of law provision is against public policy of LA and that public policy is the community property regime
                     (keeps her from getting ½ in this case)
                 ii. To be valid the state who has been chosen to govern K, must have some kind of relationship with the K or the
                     parties --- must be a substantial connection b/t state whose law is governing a K for choice of law provision to be
                     binding on the parties
                iii. Here, the SC is not deciding that NC or LA law should apply to this K; it is deciding when parties agree that law of
                     particular state shall govern is it a valid and binding agreement or invalid because against public policy in LA
                iv. CAN ARGUE EITHER WAY b/c SC has not decided on this

                                             9.4 Immovables Outside Louisiana

a)   Palmer v Palmer
         a. DID NOT GO OVER THIS CASE!




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