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Maxwell v. Maxwell

Court of Appeals of Louisiana, Second Circuit

April 5, 2017

MACK BUDDY MAXWELL, JR. Plaintiff-Appellant

         Appealed from the Twenty-Sixth Judicial District Court for the Parish of Bossier, Louisiana Lower Court Case No. 136, 588-F, Honorable A. Parker Self, Jr., Judge.

          A. RICHARD SNELL Counsel for Appellant.

          SEAN D. MILLER Counsel for Appellee.

          Before WILLIAMS, MOORE, and PITMAN, JJ.

          PITMAN, J.

         Plaintiff-Appellant Mack Buddy Maxwell, Jr., appeals the trial court's judgment of partition in favor of Defendant-Appellee Brooke Pauline Bennett Maxwell. For the following reasons, we affirm.


         On July 21, 2011, Mr. Maxwell filed a petition for divorce pursuant to La. C.C. arts. 102 and 103.1(2). He stated that he and Mrs. Maxwell married on October 14, 2001, and separated on June 14, 2011. On March 16, 2012, the trial court filed a judgment retroactively terminating the Maxwells' community of acquets and gains to July 21, 2011. On May 10, 2012, a judgment of divorce was granted. On February 27, 2013, Mrs. Maxwell filed a petition to partition community property.

         A trial on the partition began on July 20, 2015.[1] The parties introduced into evidence a joint detailed descriptive list. They stipulated as to the value of the six pieces of immovable property and established the value and ownership of movables.

         The trial continued on October 28, 2015. The parties discussed the Ouachita Independent Bank Money Market Checking Account #3550 (the "OIB Account"). Mr. Maxwell argued that this account, which contained $15, 020.29, was his separate property. He testified that he opened the OIB Account in his name in September 2010 with a $10, 000 deposit. He stated that the deposit came from a retirement account he closed, and he noted that he had the retirement account prior to his marriage. He explained that he first deposited these funds into a joint account because he did not have a separate account and then he wrote a check from the joint account to open the OIB Account. Mrs. Maxwell testified that Mr. Maxwell had the retirement account prior to their marriage and that it was "his separate stuff." The trial court noted that the funds to open the OIB Account were channeled through a joint account, which is akin to commingling. It stated that Mr. Maxwell did not overcome the presumption that property in the possession of a spouse during the community property regime is community property and determined that the OIB Account is community property.

         The parties then discussed the mortgage debt on their home located at 1919 Landau Lane in Bossier City (the "Landau property"). Mr. Maxwell testified that he purchased the Landau property in July 2001, several months before his October 2001 marriage to Mrs. Maxwell. He stated that the original mortgage (i.e., the "Chase Mortgage") was for approximately $139, 000, and then he refinanced it in 2002. He stated that, after 2002, Mrs. Maxwell never assumed the debt with him on the Chase Mortgage, noting that she did not refinance the mortgage with him, that she was not added as a borrower on the mortgage and that she "had to sign off on it as saying it was separate property." He further stated that he was not asking the trial court to declare the Chase Mortgage a community debt, but noted that Mrs. Maxwell is on a second mortgage on the Landau property.

         Mr. Maxwell further testified that, prior to his marriage to Mrs. Maxwell, he was in the mortgage business and also purchased and sold real estate. He stated that he used a line of credit with Regions Bank (the "Regions Debt") to purchase real estate and continued to use his separate line of credit after the marriage because Mrs. Maxwell had poor credit and could not qualify for any type of mortgage. He explained that he purchased properties on his line of credit in his name and then refinanced them and added Mrs. Maxwell to the title so she was a joint owner, but he was responsible for the mortgage. He stated that they did this for three or four property purchases until Mrs. Maxwell's credit improved. In December 2006, they opened a joint line of credit with OIB to purchase homes (the "OIB Line"), and the Landau property was collateralized on the OIB Line. He noted that Mrs. Maxwell worked in the mortgage and real estate business with him. They purchased 13 properties during the marriage, and the income from the sales of the properties was put into a joint Certificate of Deposit (the "CD"). In September 2004, Mr. Maxwell entered into an agreement with Mrs. Maxwell to donate to her a one-half interest in the equity of the Landau property. He testified that, in the summer of 2009, he developed liver failure and was not expected to survive. He noted that Mrs. Maxwell drew on the OIB Line to keep their businesses going. During this time, he donated additional property to Mrs. Maxwell (the "2009 donation"). He contended that this asset donation was subject to the debts associated with the property and read the following from the 2009 donation, which stated: "The property donated herein shall be subject to any debt on any outstanding mortgages and liens." He noted that some of the property was used as collateral on debts, including the Regions Debt. He stated that Mrs. Maxwell was fully aware of the debt that existed because she worked with him in the real estate business. He testified that he received a liver transplant, and then Mrs. Maxwell donated back to him a one-half interest in some properties and a full interest in other properties. He further testified that, on January 3, 2011, he made a draw on the OIB Line for $209, 000, which he used to pay off his Regions Debt. He noted that, prior to this transfer, he and Mrs. Maxwell owed approximately $23, 000 on the OIB Line. The next month OIB redeemed the CD to pay down the OIB Line balance.

         The parties then discussed the expenses associated with rental income. Counsel for Mr. Maxwell noted that they had previously established the amount of the income, but had not yet presented evidence as to the expenses associated with the rental property. Counsel for Mrs. Maxwell contended that such evidence was not timely produced and that it consisted of handwritten ledgers, but no receipts for expenses or proof of payments. The trial court allowed Mr. Maxwell to submit additional documents ("Exhibit M-13"), and Mrs. Maxwell objected.

         The parties also discussed Mr. Maxwell's premarital debt and Mrs. Maxwell's corresponding reimbursement claim. Mrs. Maxwell's counsel contended that this reimbursement claim hinged on the trial court's ruling regarding the classification of the Chase Mortgage. Counsel noted that, if it is classified as Mr. Maxwell's separate debt, Mrs. Maxwell may be precluded from receiving the reimbursement claim because she lived in the Landau property with Mr. Maxwell. Counsel for Mr. Maxwell argued that, although the debt began as a separate debt, it evolved into a community debt.

         On December 11, 2015, the trial court filed its ruling. It admitted into evidence Exhibit M-13 for the purpose of determining the credit owed to Mr. Maxwell for the expenses used for the preservation of community assets. It found that the Chase Mortgage is a separate debt and obligation of Mr. Maxwell. Regarding the OIB Line, it found that the evidence demonstrated the existence of a premarital debt and post-marital separate debt incurred by Mr. Maxwell and that certain funds were utilized to satisfy these obligations. Accordingly, it awarded reimbursement to Mrs. Maxwell for her half of the community funds utilized to satisfy the separate obligations of Mr. Maxwell.

         On March 17, 2016, arguments were held for the purpose of allocating six pieces of immovable property and one mortgage debt so that equalization and reimbursement could be calculated and a written judgment prepared. On April 20, 2016, the trial court filed a ruling in which it allocated the six pieces of immovable property-assigning three to each party. It also determined the equalization payment owed and the reimbursements owed.

         On June 16, 2016, the trial court filed a judgment to partition community property. Relevant to this appeal, the judgment stated that Exhibit M-13 was admitted as to give credit to Mr. Maxwell for payment of tax, insurance and repairs directly related to a community asset; that the Chase Mortgage was the separate debt of Mr. Maxwell; and that the OIB Line was the separate debt of Mr. Maxwell.

         On June 16, 2016, Mr. Maxwell filed a motion for new trial. Following a hearing, the trial court ...

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