Kevin J. St. Marie v. Lisa M. Roy

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-953

KEVEN J. ST. MARIE

VERSUS

LISA M. ROY

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. C-2006-2339-D
HONORABLE EDWARD D. RUBIN, DISTRICT JUDGE

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JOHN D. SAUNDERS
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, John D. Saunders, and
James T. Genovese, Judges.

AFFIRMED.

L. Lane Roy
Alyse Richard
Preis & Roy
P. O. Drawer 94-C
Lafayette, LA 70509
(337) 237-6062
Counsel for Defendant/Appellant:
Lisa M. Roy

Richard D. Mere
Richard D. Mere, Ltd.
P. O. Box 3301
Lafayette, LA 70502-3301
(337) 269-5555
Counsel for Plaintiff/Appellee:
Keven J. St. Marie

SAUNDERS, Judge.

This community property partition case involves the burden of proof under

La.Civ.Code art. 2368 with respect to an owning spouse. Neither party disputes that

the claimant spouse met her burden under La.Civ.Code art. 2368, but the claimant

spouse disputes whether the trial court correctly applied the burden of proof of the

owning spouse.

The trial court found that the owning spouse had proven that part of the

increase in value of his separate property was solely due to factors other than the

uncompensated or undercompensated labor of one of the spouses. Thus, the trial

court awarded the claimant spouse one-half of that enhancement in value that was not

solely due to those other factors. The claimant spouse appealed this judgment,

alleging one assignment of error. We affirm.

FACTS AND PROCEDURAL HISTORY:

Keven St. Marie (St. Marie) purchased a home located in Lafayette, Louisiana,

in May 2004 for $151,000.00. The home had been appraised just before the purchase

for $155,000.00. At the time, St. Marie was engaged to Lisa M. Roy (Roy). The

couple moved into the home and performed some improvements to the home for

which their labor was uncompensated. The couple married on October 23, 2004.

On July 25, 2005, St. Marie had an appraisal done of the home in order to

obtain a second mortgage. The home appraised for $162,000.00. The home was

again appraised on April 2, 2006. At this time, the home appraised for $193,000.00.

On May 10, 2006, St. Marie filed a petition for divorce from Roy. On February

21, 2007, a judgment of divorce was rendered. The judgment ordered that the

community of acquets and gains be terminated retroactively to the date of filing the

petition for divorce. On April 7, 2008, Roy filed a petition for judicial partition of

community property, praying for partition of the former community in accordance

with La.R.S. 9:2801. She attached to the petition a sworn, detailed, descriptive list

of property which, in particular, set forth as a community asset the increased value

of the home, located in the Lafayette area, at a fair market value of $39,000.00.

On May 23, 2008, St. Marie answered the petition and made a reconventional

demand, seeking a partition of the former community of acquets and gains in

accordance with La.R.S. 9:2801. He attached to his answer a sworn, detailed,

descriptive list that listed the increase in value of his separate property as $0.00.

Both parties submitted memoranda in support of their positions in the matter

and accompanying exhibits. On February 25, 2009, a hearing was held on the petition

and reconventional demand for judicial partition of community property. The parties

stipulated to the value of reimbursement and to possession of each item before the

court, except for Roy’s claim for reimbursement under La.Civ.Code art. 2368.

The parties agreed that the home was the separate property of St. Marie.

Further, St. Marie stipulated that he owed reimbursement to Roy for materials they

purchased with community funds and used to make improvements on the home. The

parties also stipulated that the home increased in value during the existence of the

community. However, the parties disputed how and why the home increased in value.

The trial court found that Roy was entitled to compensation under La.Civ.Code

art. 2368. The court used the initial appraisal of the value of the home, approximately

$155,000.00, and the July 25, 2005 appraisal of the value of the home, approximately

$162,000.00, as the basis for measuring the increase in value to the home from the

uncompensated labor of the spouses. The trial court found that St. Marie had carried

his burden of proving that the remaining increase in value of the home was solely due

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to the increase in demand attributable to Hurricanes Katrina and Rita. As such, the

trial court found that Roy was entitled to one-half of approximately $6,000.00 under

La.Civ.Code art. 2368. Roy appealed this judgment, raising one assignment of error.

DISCUSSION OF THE MERITS:

In her sole assignment of error, Roy argues that the trial court erred in

disregarding the burden of proof of the owning spouse, St. Marie, which required him

to rebut evidence that reimbursement was due under La.Civ.Code art. 2368 by

showing that the increase in value to his separate property was due only to market

conditions, and not at all from the common labor of the spouses. We find no merit

in this assignment.

Louisiana Civil Code Article 2368 states:

If the separate property of a spouse has increased in value as a
result of the uncompensated common labor or industry of the spouses,
the other spouse is entitled to be reimbursed from the spouse whose
property has increased in value one-half of the increase attributed to the
common labor.

Our Louisiana Supreme Court, in Salley v. Salley, 95-387, p. 3 (La. 10/16/95),

661 So.2d 437, 438-39, stated:

[A] claimant spouse under Article 2368 has the burden of proving: (1)
the property is separate, (2) the property increased in value, and (3) the
increase in value was based on the uncompensated or undercompensated
labor of the other spouse; the burden then shifts to the other spouse to
prove that the increase in value was due to factors other than the
uncompensated or undercompensated labor.

In the case before us, the trial court found that Roy met her burden of proof

under La.Civ.Code art. 2368. St. Marie does not dispute this finding. The trial court

then found that St. Marie met his burden of proof under La.Civ.Code art. 2368 by

showing that some of the increase in value of the separate property was due solely to

factors other than the labor of either spouse. As a result, the trial court awarded Roy

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one-half of the increase in value of the separate property that was not solely due to

the increase in demand, and, thus, shortage of supply, of housing in the Lafayette area

after Hurricanes Katrina and Rita.

Roy argues that this was an incorrect application of the law because the

jurisprudence under former La.Civ.Code art. 2408, of which current La.Civ.Code art.

2368 is based upon, was such that the recovery by a claimant spouse was “an all or

nothing proposition.” Deliberto v. Deliberto, 400 So.2d 1096, 1101 (La.App. 1 Cir.

1981). As such, Roy argues that because she met her burden of proving that the value

of the separate property increased due to either the uncompensated or

undercompensated labor of either spouse, she was entitled to one-half of the increase

in value of the separate property, in its entirety, regardless of the “hurricane effect,”

unless St. Marie could show that the entire increase in value was due solely to factors

other than that labor.

Roy attempts to bolster her argument by first citing Krielow v. Krielow, 93-

2539 (La. 4/11/94), 635 So.2d 180. In Krielow, our supreme court stated, “[b]y

enacting Art. 2368, the legislature did not intend to overrule the jurisprudence

interpreting Art. 2408. We shall continue to follow the standard pronounced by this

court in Abraham [v. Abraham, 230 La. 78, 87 So.2d 735 (La.1956)].” Id. at 184.

The standard at issue in Krielow was whether the trial court had applied the

correct burden of proof under La.Civ.Code art. 2368 with respect to the claimant

spouse. The trial court in Krielow, after finding that the claimant spouse had proved

that the owning spouse’s separate property had increased in value, denied

reimbursement because it found that the claimant spouse had failed to show that the

increase in value was because of the owning spouse’s labor and not a result of other

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factors. The appellate court in Krielow found that the trial court had applied the

correct burden of proof. Our supreme court reversed, taking offense to the language

the trial court used referring to the necessity that the claimant spouse show that the

increase in value was not due to factors other than the labor of the spouses. Thus, the

central issue in Krielow was the correct application of the burden of proof under

La.Civ.Code art. 2368 with respect to the claimant spouse. Here, the issue raised by

Roy relates to the burden of proof with respect to the owning spouse once the

claimant spouse has met his or her burden of proof. At no time in the Krielow

opinion did our supreme court address the specific issue raised by Roy. However,

when dispensing the case, our supreme court stated:

Because Lynn Krielow has established on this record that Carl’s
undercompensated community labor for KBI enhanced or increased
Carl’s separately owned stock, the burden shifts to Carl, as the owner of
the separate property, to prove that some or all of the enhancement
occurred because of other factors. It is Carl who has failed to meet his
burden of proof.

Krielow, 635 So.2d at 185(emphasis added).

This language in Krielow indicates that the owner spouse can show that some

of the enhancement occurred solely due to factors other than undercompensated or

uncompensated labor in order to have that increase in value not be included in the

claimant spouse’s reimbursement claim. It is true that the Krielow court does not

explicitly state that should the owner spouse show that some of the value

enhancement occurred solely because of a factor other than the undercompensated or

uncompensated labor of one of the spouses, the claimant spouse’s reimbursement

claim does not include that value. However, this court cannot find any reason why

our supreme court would use the language cited above and have it be superfluous, nor

why such a showing is irrelevant, as suggested by Roy’s argument that this is the

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result that the law mandates.

Moreover, the language of La.Civ.Code art. 2368 dictates that when an owning

spouse can show that part of the enhanced value of an asset is solely due to a factor

other than the undercompensated or uncompensated labor of a spouse, that value is

not part of the claimant spouse’s reimbursement claim. Louisiana Civil Code Article

2368 states, “the other spouse is entitled to be reimbursed from the spouse whose

property has increased in value one-half of the increase attributed to the common

labor (emphasis added).” While our supreme court did state in Krielow that

La.Civ.Code art. 2368 did not change the standard or overrule the jurisprudence

interpreting former Article 2408, the clear language of La.Civ.Code art. 2368 is that

when the owning spouse can prove that part of the increase in value is not due to the

uncompensated or undercompensated labor of the spouses, the claimant spouse’s

reimbursement claim does not include that amount.

Roy also cites Abraham, 87 So.2d 735 for her contention that the trial court

erred incorrectly applied the law concerning St. Marie’s burden of proof.

Specifically, Roy cites the following language from Abraham, 87 So.2d at 739

(emphasis in original):

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

Roy contends that this language unequivocally supports her position that she

is entitled to one-half of the entire increase in value of St. Marie’s separate property

because he did not prove that the entire increase in value of the property was solely

due to other factors. We do not agree with Roy’s interpretation of this language.

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Rather, we find this language unclear as to whether the owning spouse, when

attempting to carry his or her burden, must show that all of the increase in value in

the property, in its entirety, was due solely to the ordinary course of things, etc.

Alternatively, the language could be interpreted to mean that the owning spouse can

show that a part of the increase in value of the property was due solely to the ordinary

course of things, etc. and have that increase in value removed from what the claimant

spouse can recover in reimbursement. We find guidance at Abraham, 87 So.2d at

739, fn. 4, where the court stated, “[i]t is well settled that, where community funds are

used to improve the separate property of one of the spouses, the other spouse is

entitled to recover one-half of the enhanced value of the property resulting from the

use of community funds under Article 2408 of the Civil Code (emphasis added).”

This language suggests that it is plausible for the increase in value of separate

property to be analyzed to determine whether part of the increase is solely due to

other factors. Further, Abraham, 87 So.2d at 739, fn. 4, intimates that if it is possible

for parts of the increase in value to be analyzed individually, each part of the increase

is deemed part of the reimbursement claim after the initial burden is carried by the

spouse claiming reimbursement. However, if the owning spouse can carry his or her

burden of proof by showing that an individual part of the increase is only due to

factors other than the undercompensated or uncompensated labor of one of the

spouses, then that part of the increase in value is removed from the reimbursement

claim.

Further, in Salley, 661 So.2d at 439 (emphasis added), our supreme court

stated, “because a spouse’s compensation in return for his labor or industry is

community property, La.Civ.Code art. 2338, to the extent that the spouse’s

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uncompensated or undercompensated labor increases the value of his separate

property, the community has a claim against him.” Again, this language implies that

should the owning spouse be able to show that an individual part of the increase in

value of the separate property is attributable solely to factors other than the

uncompensated or undercompensated labor, the claimant spouse’s reimbursement

claim does not include that value.

Finally, Roy cites Bordelon v. Bordelon, 06-537 (La.App. 3 Cir. 11/2/06), 942

So.2d 708, writ denied, 06-2824 (La. 2/2/07), 948 So.2d 1080, for the proposition that

she should be awarded a one-half share in the full increase in the value of the

property. Bordelon is distinguishable from the case before us. In Bordelon, the

owning spouse had a plot of land that was his separate property. After marriage, the

couple constructed a home on the property for which the owning spouse’s labor was

not fully compensated. Twelve years after the marriage was initiated, the couple

divorced, and the property was sold. The value of the house was found to be

$115,000.00. This court awarded the claimant spouse one-half of that amount, which

was reduced due to other calculations not relevant to this case. Here, the record has

an appraisal done after the improvements were made on the house, while the

Bordelon court did not have such an appraisal that was made directly after the house

was built. Second, the marriage in this case lasted less than two years, while the

marriage in the Bordelon case lasted over twelve years. Thus, the effort necessary to

maintain any improvements on the separate property was significantly greater, given

a much longer period of time transpiring, as opposed to the brief time in the case

before us. Finally, in the Bordelon case, the evidence presented by the owning

spouse of factors other than undercompensated or uncompensated labor of either

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spouse was in dispute; however, the evidence of those factors in the case before us,

the increase in demand after Hurricanes Katrina and Rita is uncontradicted.

Therefore, we decline to follow our sister court’s ruling in Deliberto that

reimbursement claims such as the one before us is “an all or nothing proposition.”Id

at 1101. Rather, we choose to follow the language of our supreme court cited above

in Salley and in Abraham, 87 So.2d at 739, fn. 4. Once a claimant spouse has met his

or her burden of proof, as stated in Salley, the claimant spouse is entitled to one-half

of the entire increase in value of the separate property in full. However, once that

spouse meets that burden of proof, the burden then is shifted to the owning spouse to

prove that part of the increase in value of the separate property was due solely to

factors other than the uncompensated or undercompensated labor of one of the

spouses. If that burden is met, then that part of the increase in value is not part of the

claimant spouse’s reimbursement claim. Therefore, in the case before us, we find that

the trial court correctly addressed the burdens of proof in La.Civ.Code art. 2368; and,

therefore we find no merit to Roy’s assignment of error.

ANCILLARY MATTER:

Although Roy did not specifically raise an assignment of error regarding the

technique used by the trial court to value the property, she argued in brief that the trial

court was manifestly erroneous in how it reached its decision as to the value of the

separate property. Thus, in an effort to fully adjudicate the issues raised by Roy, we

will address this issue.

This court, in Alford v. Alford, 94-1464, p.7 (La.App. 3 Cir. 4/5/95) 653 So.2d

133, 136, stated:

It is well settled that, in valuing assets, the trial court is not
required to accept, at face value, the valuation placed on assets by either

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spouse. If the trial court’s valuations are reasonably supported by the
record and do not constitute an abuse of discretion, its determinations
should be affirmed.

We find that the trial court’s calculations with regard to the value of the

separate property is supported by the record. St. Marie bought the property in May

2004 for $151,000.00. At that time, the property’s appraised value was $155,000.00.

After performing some improvements on the property, in July 2005, for the purpose

of obtaining a second mortgage on the property, St. Marie had the property appraised.

The property appraised at that time for $162,000.00. Then, according to the

testimony of J.R. Frank, a real estate agent familiar with area wherein the property is

located, the property’s value increased significantly solely due to a shortage in

housing supply resulting from a large increase in demand by the public after

Hurricanes Katrina and Rita. The following is an excerpt of Frank’s testimony:

Q What occurred that changed real estate values in this area in
August of 2005?

A Would have been the Katrina and Rita storms that took place, and
that drove up a lot of property demand and sales of properties.

Q Did you see an across-the-board increase in appreciation values
of the homes in Lafayette Parish?

A Yes, we did.

Q Was that increase startling, a very large increase?

A Very large increase, a large demand.

Q And if I then told you that a house that appraised in July of 2005
for a hundred and sixty-two thousand ($162,000) was then sold
in July of 2006 for a hundred and ninety-five thousand
($195,000), would that be keeping in line with the appreciation
due to the two (2) hurricanes?

A Yes, it would.

Q Would that be a full explanation, since there were no other

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improvements between July of 2005 and July 2006?

A Yeah, it would due to the storms and the high demand of
properties at that time. Because of the storms and an influx of
people coming to the Lafayette area, it put a large demand on
properties, and that caused a lot of builders to have to go out and
build more properties, because the supply wasn’t there, so the
demand was there. So it drove up the price of - - the price of
properties up.

Frank’s testimony provides a basis for the trial court to find that St. Marie met

his burden of proving that the increase in value of the property from approximately

$162,000.00 to $193,000.00 from July of 2005 to July of 2006 was solely due to

factors other than the undercompensated or uncompensated labor of either of the

spouses, namely the rise in demand resulting from Hurricanes Katrina and Rita.

Therefore, we find that the trial court did not abuse its discretion in reaching its result.

CONCLUSION:

Roy raised one assignment of error, that the trial court erred in misapplying the

burden of proof of St. Marie, which required him to rebut evidence that

reimbursement was due under La.Civ.Code art. 2368 by showing that the increase in

value to his separate property was due only to market conditions, and not at all from

the common labor of the spouses. We found no merit in this assignment of error. We

also addressed whether the trial court abused its discretion in valuing St. Marie’s

separate property. We found support for the trial court’s judgment in the record.

Accordingly, we affirm the trial court’s judgment. All costs of these proceedings are

assessed to Roy.

AFFIRMED.

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