Succession of Kathryn Andrews Lambert

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

CA 07-630

SUCCESSION OF KATHRYN ANDREWS LAMBERT

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APPEAL FROM THE
TENTH JUDICIAL DISTRICT COURT
PARISH OF NATCHITOCHES, NO. 11849
HONORABLE ERIC ROGER HARRINGTON, DISTRICT JUDGE

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BILLY HOWARD EZELL
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and
Billy Howard Ezell, Judges.

AFFIRMED IN PART, AND REMANDED.

John Edward Fitz-Gerald
Attorney at Law
One Lakeshore Drive, Suite 1460
Lake Charles, LA 70629
Counsel for Appellant:
Michael Glenn Lambert

Charles Raymond Whitehead, Jr.
Whitehead Law Offices
P. O. Box 697
Natchitoches, LA 71458-0697
(318) 352-6481
Counsel for Appellant:
Julie Boudreaux

Jeffrey Howerton Thomas
Thomas & Thomas Law Firm
P. O. Drawer 548
Natchitoches, LA 71458-0548
(318) 352-6455
Counsel for Appellee:
Jerry Glenn Lambert

William Alan Pesnell
The Pesnell Law Firm
P. O. Box 1794
Shreveport, LA 71166-1794
(318) 226-5577
Counsel for Appellee:
Jerry Glenn Lambert

EZELL, JUDGE.

In this succession matter, Julie Lambert Boudreaux and Michael Lambert

appeal the decision of the trial court finding that their father retained a legal usufruct

over community funds bequeathed them by their deceased mother, Kathryn Lambert.

Their father, Jerry Lambert, also appeals the decision of the trial court, claiming that

the funds should not have been included in the succession or should now be his

separate property. For the following reasons, we affirm the decision of the trial court

in part, and remand.

Jerry and Kathryn Lambert were married and had two children, Julie and

Michael. During the marriage, Jerry worked at Texaco and accumulated a substantial

retirement pension. There is no dispute that the pension was a community asset. In

June of 1989, Jerry and Kathryn elected to receive a lump sum payment of

$320,851.76 from the pension in lieu of an annuity. This money was rolled over into

an IRA with Main Stay mutual funds. The record is devoid of any evidence as to the

pay status of the IRA at that time. In 1992, Kathryn executed a last will and

testament, leaving all her property to Julie and Michael, subject to a usufruct in favor

of Jerry until his death or remarriage. Kathryn died in May of 1994. At the time of

Kathryn’s death, the IRA had a value of $560,229.11.

After her death, but prior to the opening of Kathryn’s succession, Jerry rolled

the Main Stay funds over to yet another IRA, run by Edward D. Jones. When the

succession of Kathryn Lambert was opened in April of 1995, the detailed descriptive

list included the account as community property. A subsequent judgment of

possession recognized Julie and Michael as naked owners of Kathryn’s one-half

interest in the account, subject to the usufruct defined by Kathryn’s will.

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Jerry remarried in 1997, prompting Julie and Michael to demand their mother’s

one-half interest in the account. Jerry responded by seeking to re-open the succession

and have the IRA removed from the list of community assets. After much legal

wrangling, the trial court ultimately decided that the IRA was derived from

community funds and was, therefore, a community asset to be included in the

succession. However, he found that La.R.S. 9:1426 applied, creating a legal usufruct

in favor of Jerry to run until his death, despite the terms of Kathryn’s will. From this

decision, all parties appeal.

Jerry asserts two assignments of error on appeal. He claims that the IRA

should have been a non-probate item and not a part of the succession, or that,

alternatively, it should have been classified as his separate property. Julie and

Michael assert three assignments of error that essentially amount to two: that the trial

court erred in applying La.R.S. 9:1426 rather than La.R.S. 9:2440 and 2441, thereby

creating a continuing usufruct, and that the trial court erred in failing to recognize

Jerry’s obligation to pay to Kathryn’s estate one-half the value of the Main Stay IRA.

We will address Jerry’s assignments of error first and will address them

together. In Smith v. Smith, 311 So.2d 514, 524 (La.App. 3 Cir.1974), writ denied,

313 So.2d 840 (La.1975)(citations omitted), we stated:

Property acquired during the existence of the community of
acquets and gains is presumed to be community property. The burden
of overcoming this presumption rests upon the party asserting the
separate and paraphernal nature of the property. To overcome this
heavy burden, the proof must be clear, positive and of a legally certain
nature that the property for some reason did not become a part of the
community.

Thus, Jerry bears the heavy burden of proving the IRA was not a community

property interest. The trial court correctly and succinctly addressed Jerry’s claims in

its reasons for judgment, noting:

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The case cited by [Jerry], Boggs v. Boggs, 520 U.S. 833, 117
S.Ct. 1754 (1997), is not applicable to this case. In that case, the
employee/husband withdrew the money from his pension plan and rolled
it over into an IRA after his first wife died. The Supreme Court held
that ERISA preempted the children’s Louisiana community property law
rights in the IRA. ERISA mandates that retirees own pension plan
benefits free of any community property rights of a spouse or child.
However, in that case, the children sought a community property interest
in benefits that were undistributed at the time of [their mother’s] death.
In the present case, the pension was distributed and rolled over into an
IRA while Mrs. Lambert was alive. This exact scenario was left open
by the Boggs Court:

This case does not present the question whether
ERISA would permit a non-participant spouse to obtain a
devisable community property interest in benefits paid out
during the existence of the community between the
participant and that spouse.

Id. at 845 (emphasis added). . . .

We agree with the trial court’s analysis of this issue and find Boggs to be

distinguishable, as the Texaco ERISA retirement plan was emptied out during the

existence of the community. The Lambert’s account was accumulated as a result of

community labor, and was, therefore, a community asset when it was rolled over into

the Main Stay account. There is no question that community funds were used to open

the IRA. There, it remained a community asset. See Hannan v. Hannan, 99-842

(La.App. 1 Cir. 5/12/00), 761 So.2d 700, writ denied, 00-1723 (La. 9/29/00), 770

So.2d 349. Hence, we conclude that the community of acquets and gains owned a

sum of money equivalent to the value of the IRA at the time of decedent’s death.

Succession of McVay v. McVay, 476 So.2d 1070 (La.App. 3 Cir. 1985). Jerry’s

assignments of error are without merit, and the trial court’s decisions on these issues

are hereby affirmed.

Julie claims that the trial court erred in failing to recognize Jerry’s obligation

to pay to Kathryn’s estate one-half the value of the Main Stay IRA, should we find

the account to be Jerry’s separate property. Because we have found that the account

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is, indeed, community property, this assignment of error need not be addressed. Julie

and Michael both claim that the trial court erred in applying La.R.S. 9:1426 to

continue the usufruct in favor of Jerry, rather than La.R.S. 9:2440 and 9:2441. We

also disagree with this assertion.

Louisiana Revised Statutes 9:1426 states:

A. (1) If a recurring payment is being made from a public or
private pension or retirement plan, an annuity policy or plan, an
individual retirement account, a Keogh plan, a simplified employee plan,
or any other similar retirement plan, to one partner or to both partners of
a marriage, and the payment constitutes community property, and one
spouse dies, the surviving spouse shall enjoy a legal usufruct over any
portion of the continuing recurring payment which was the deceased
spouse’s share of their community property, provided the source of the
benefit is due to payments made by or on behalf of the survivor.

(2) This usufruct shall exist despite any provision to the contrary
contained in a testament of the deceased spouse.

B. The usufruct granted by this Section shall be treated as a legal
usufruct and is not an impingement upon the legitime and a naked owner
shall not have a right to demand security.

Louisiana Revised Statutes 9:2440 states, “A testament, testamentary provision,

legacy, or other appointment executed prior to January 1, 1998, and valid under the

law and jurisprudence prior to that date, when executed, is not invalidated by the

passage of Acts 1997, No. 1421.” Louisiana Revised Statutes 9:2441 reads, “When

a testament executed prior to June 18, 1996, leaves a usufruct to the surviving spouse

without specifying its duration, the law in effect at the time the testament was

executed shall govern the duration of the usufruct.”

Julie and Michael claim that these statutes should somehow negate La.R.S.

9:1426. However, that statute was the law in existence at the time Kathryn wrote her

will, although it was, at the time, designated as La.Civ.Code art. 890.1. Therefore,

the legal usufruct created by La.R.S. 9:1426 would unquestionably exist if a recurring

payment was being made from the Main Stay IRA at the time of Kathryn’s death.

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However, while the record contains evidence of recurring payments from the

irrelevant Edward Jones IRA formed after Kathryn’s death, there is no evidence in the

record as to the pay status of the Main Stay IRA. Jerry alleges that it was

unchallenged at the trial court level that the IRA in question was in pay status at the

time of Kathryn’s death, and he did claim the IRA was in pay status in pleadings filed

in the court below. He further asserts that the issue of whether recurring payments

were being made was not raised until the present appeal. Accordingly, he filed a

motion to remand to have the record supplemented with the alleged payment

information. Because the issue of whether recurring payments were being received

from the Main Stay IRA during Kathryn’s life is not only material to the

determination of the rights of the parties involved, but completely dispositive of this

matter, we find that, in the interest of justice, we must remand this case to the trial

court for supplementation of the record on this narrow issue.

The decisions of the trial court as to the community property status of the Main

Stay IRA and its place in the succession of Kathryn Lambert are hereby affirmed. We

remand this matter to the trial court so that the record may be supplemented by the

introduction of evidence as to the pay status of the Main Stay IRA at the time of

Kathryn Lambert’s death. Costs of this appeal are to be divided between Jerry, Julie,

and Michael Lambert.

AFFIRMED IN PART; AND REMANDED.

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