Appealed from the Twenty-Sixth Judicial District Court for
the Parish of Bossier, Louisiana Trial Court No. 143502;
19639 Honorable Jefferson R. Thompson, Judge
& HUCKABAY, LTD. Charles Kammer, III Counsel for
L. WHITE Counsel for Appellee.
BROWN, WILLIAMS, and McCALLUM, JJ.
consolidated cases arise out of the Twenty-Sixth Judicial
District Court, Bossier Parish. Plaintiff, Kimberly Reagan,
appeals from a property partition judgment between herself
and defendant, Melvin Reagan. For the following reasons we
affirm in part, amend in part and as amended, affirm, and
reverse and remand with instructions in part.
AND PROCEDURAL HISTORY
Kimberly Reagan ("Kimberly"), and defendant, Melvin
Howard Reagan ("Melvin"), were married on May 25,
2009, and physically separated on December 23, 2013. There
were no children of the marriage. Kimberly filed a petition
of divorce under La. C.C. art. 102 on January 3, 2014. A
judgment of divorce was rendered on November 13, 2014,
retroactively terminating the community of acquets and gains
on January 3, 2014. Melvin died on June 30, 2015. Kimberly
filed a petition to partition the community property on
September 11, 2015. Mavis Reagan, the executrix of
Melvin's Succession ("executrix"), was
substituted for Melvin by an ex parte order signed on
September 23, 2015.
their marriage, the parties lived in Bossier Parish at a
house at Hunters Hollow owned by Melvin prior to the
marriage. Throughout the marriage, Melvin was the sole member
of MHR Land Services, LLC, a business entity he formed before
the marriage. This LLC was Melvin's main source of
income. Kimberly was not employed during the marriage.
partition proceedings ensued over several months and numerous
court dates. The parties filed many Sworn Detailed
Descriptive Lists and Traversals, along with a joint list of
the contested and uncontested issues. A trial was held, and
certain assets were auctioned. Kimberly took possession of
the items she won. The court issued a partial judgment
reflecting the same. The matter was continued and eventually
reset for trial. On that date, and after a pretrial
conference, the court decided that the parties should submit
briefs to determine which items were community assets or
obligations, with a written judgment to follow from the
court. The trial court then filed a "Judgment With
Reasons." Kimberly appeals from that judgment and
assigned the following errors on appeal:
1. Item 17: Is the $325, 000, Multiple Indebtedness Loan a
separate obligation of Melvin's when incurred during the
community, but in his name only and borrowed on his separate
property for his benefit only?
2. Item 19: Is Kimberly entitled to a reimbursement claim for
the use of community funds to pay off Melvin's premarital
3. Items 24, 33, 34 and 39: Is the court required to offset
Melvin's membership interest in First Eagle, LLC, a
community asset, by awarding Kimberly an equalization claim
in other community assets?
4. Items 23 and 40: Is the court required to offset
Melvin's membership interest in MHR Holdings, LLC, a
community asset, by awarding Kimberly an equalization claim
in other community assets?
5. Item 41: Is Melvin required to account for the former
community property in his possession on the termination date,
resulting in Kimberly receiving an equalization claim for
one-half of the funds held by Melvin in the Morgan Stanley
Active Assets account?
6. Items 38, 44 and 45: Is the court able to place a value on
the remaining furnishings, furniture, guns and other contents
of the house and garages located at Hunters Hollow without
any basis to support the valuation?
7. Item 46: Is Kimberly entitled to a reimbursement claim for
the amount of community funds used for the benefit of
Melvin's separate property?
8. Item 52: Is the property located at 6125 Bostwick Road a
community or separate asset?
9. Item 56: Is there a reimbursement claim owed on the Bass
Pro Credit Card Number 7889?
10. Item 68: Is Melvin entitled to a reimbursement claim for
funds spent gambling by Kimberly when he not only allowed and
consented to her activities, but gave her and paid off the
credit cards each month?
11. Item 78: Is Kimberly entitled to seek a reimbursement
claim on the uncompensated labor of a spouse for accounts
receivables earned during the marriage, but received shortly
after the termination of the community property regime?
12. Item 66: is Melvin entitled to a reimbursement claim on
Lot 76, Kings Pointe Subdivision, Phase 2 for a mortgage that
executrix answered the appeal and asked the trial court's
judgment be modified as follows:
13. Item 67: Melvin shows that he should have been awarded a
reimbursement claim against Kimberly in the amount of $6,
545.00 for payments made from the community property for
breast surgery for Kimberly.
14. Item 68: The District Court miscalculated the amount of
the reimbursement due to Melvin for Kimberly's gambling
debts. The correct amount should have been $12, 056.50
instead of the District Court's award of $6, 028.25.
court has much discretion in valuing and allocating assets
and liabilities in community property partitions and must
consider the source and nature of each asset or liability,
the financial situation of the other spouse and any other
relevant circumstances. Maxwell v. Maxwell, 51, 335
(La.App. 2d Cir. 04/05/17), 217 So.3d 1227, writ
denied, 17-0958 (La. 10/9/17), 227 So.3d 830. A trial
court's factual findings and credibility determinations
made in the course of valuing and allocating assets and
liabilities in the partition of community property may not be
set aside absent manifest error. Clemons v. Clemons,
42, 129 (La.App. 2d Cir. 05/09/07), 960 So.2d 1068, writ
denied, 07-1652 (La. 10/26/07), 966 So.2d 583.
Item 17: $325, 000 Multiple Indebtedness Line of Credit
trial court, in its reasons for judgment, found that the
$325, 000 line of credit secured by Melvin's separate
property was a community obligation because the loan was
established during the existence of the community. The court
reduced the balance of the loan by $134, 000, since that
portion of the funds was used to buy a house for Kimberly.
Kimberly was then debited $95, 500, one-half of the net
balance on the loan.
argues that the Multiple Indebtedness Line of Credit should
be classified as Melvin's separate obligation. She urges
that it should be classified as such because the loan was
secured by the home the two shared at 331 Hunters Hollow,
which was purchased by Melvin prior to the marriage. Kimberly
did not sign as a borrower on the line of credit, and she was
unable to borrow on it. Kimberly also argues the debt was not
for the common interest of the spouses because all but one of
the withdrawals went to MHR Land Services, LLC ("MHR
Land"), a limited liability company Melvin created prior
to the marriage. Therefore, the loan was used to benefit
Melvin's separate property.
executrix argues that the loan was incurred during Melvin and
Kimberly's marriage and should therefore be classified as
a community obligation. MHR Land was the main source of
income for the parties during the marriage, so the loan
proceeds were used for the Reagans' living expenses. The
executrix also asserts that $134, 000 from the line of credit
was used to purchase a home for Kimberly, which the trial
court deducted from the loan balance, requiring Kimberly to
reimburse the former community $95, 500, half of the net
balance on the loan.
obligation incurred by a spouse may be either a community
obligation or a separate obligation. La. C.C. art. 2359. An
obligation incurred by a spouse during the existence of a
community property regime for the common interest of the
spouse or for the interest of the other spouse is a community
obligation. La. C.C. art. 2360. Except as provided in La.
C.C. art. 2363, all obligations incurred by a spouse during
the existence of the community property regime are presumed
to be community obligations. La. C.C. art. 2361. According to
La. C.C. art. 2363, a separate obligation of a spouse
includes one incurred during the existence of a community
property regime though not for the common interest of the
spouses or for the interest of the other spouse. Once it is
shown that a debt arose during the existence of the
community, the presumption set forth in Article 2361 may be
rebutted only by facts proving the indebtedness to be a
separate obligation as defined in Article 2363. Nesbitt
v. Nesbitt, 40, 442 (La.App. 2d Cir. 01/13/06), 920
So.2d 326, writ denied, 06-0720 (La. 06/02/06), 929
argument, Kimberly cites Maxwell, supra, in support
of her argument that the loan was in Melvin's name only
and was secured by his separate property, making it a
separate obligation. The particular debt in Maxwell
was one incurred by the husband prior to the
marriage and secured by his separate property. The loan
was later refinanced during the marriage and half of the
property securing the loan was donated to the wife. However,
the wife never specifically assumed the debt at issue in
Maxwell. Therefore, the debt remained a separate
obligation of the husband's. Id.
case, the debt was incurred during the marriage.
Therefore, the presumption from La. C.C. art. 2361, that the
loan is a community obligation, is applicable. It is
irrelevant what property secured the loan. A significant
portion of the loan went to MHR Land, which was the
spouses' main source of income during the marriage.
Hence, the debt, ultimately, was for the common interest of
the spouses. Furthermore, a substantial portion of the loan
($134, 000) went to buy Kimberly a new home, which shows that
she benefitted from the obligation. Kimberly failed to assert
facts showing that this obligation is Melvin's separate
obligation. The trial court did not commit manifest error in
the classification of this obligation as community.
Item 19: Kimberly's Reimbursement for Use of Community
Funds to Pay Melvin's Premarital Tax Liability
reasons for judgment, the trial court found that the tax
liability was Melvin's separate obligation since it
existed prior to the marriage. The court noted that the check
used to pay the liability had a high check number (#7442),
showing that the account it was drawn on was not new. The
trial court also noted that the account was in Melvin's
name and existed prior to the marriage. The court finally
stated that there was no evidence the funds were community
funds generated during the first ten days of the parties'
marriage, and there was no evidence of commingling of
community and separate funds in that account.
argues that approximately ten days after the parties were
married in May 2009, Melvin wrote a check in the amount of
$26, 273.46 to pay for his 2007 tax liability. Kimberly
claims that Melvin used community funds to pay this liability
and she is entitled to a reimbursement for one-half of the
value the community property had at the time that it was
executrix argues that the funds used to pay the liability
were not community funds because the tax liability payment
came from an account in Melvin's name that existed prior
to the marriage. Also, the tax liability was paid just ten
days after the parties were married, and there was no
evidence presented to prove that the $26, 273.46 was earned
in those ten days.
community property has been used during the existence of the
community property regime … to satisfy a separate
obligation of a spouse, the other spouse is entitled to
reimbursement for one-half of the amount or value that the
property had at the time it was used. La. C.C. art. 2364.
Things in possession of a spouse during the existence of a
regime are presumed to be community, but either spouse may
prove that they are separate property. La. ...