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Brady v. Pirner

Court of Appeals of Louisiana, Fourth Circuit

December 5, 2018

KAREN L. BRADY WIFE OF DAVID A. PIRNER
v.
DAVID A. PIRNER

          APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2015-05124, DIVISION "K" Honorable Bernadette D'Souza, Judge

          Suzette Marie Smith LOWE STEIN HOFFMAN ALLWEISS & HAUVER, LLP COUNSEL FOR PLAINTIFF/APPELLEE

          Martha J. Maher Attorney at Law Deborah M. Henson THE LAW OFFICE OF DEBORAH M. HENSON, LLC COUNSEL FOR DEFENDANT/APPELLANT

          Court composed of Chief Judge James F. McKay, III, Judge Roland L. Belsome, Judge Paula A. Brown

          PAULA A. BROWN JUDGE

         This is a declaratory judgment action arising out of the validity of an Agreement Before Marriage (the "Agreement") entered into by Appellant, David A. Pirner ("Mr. Pirner") and Appellee, Karen L. Brady ("Ms. Brady").[1] Following their marriage, the couple filed for a divorce. In turn, Ms. Brady filed two separate petitions seeking declaratory judgments regarding the Agreement. The district court rendered two separate judgments in favor of Ms. Brady-one on July 29, 2016 and the other on February 6, 2018. Mr. Pirner seeks appellate review of the district court's February 6, 2018 judgment. Ms. Brady filed a motion to dismiss the appeal. For the reasons set forth below, we deny the motion to dismiss appeal and affirm the district court's February 6, 2018 judgment.

         FACTS AND PROCEDURAL HISTORY

         At the time the Agreement was executed by the couple, Mr. Pirner resided in Minneapolis, Minnesota, and Ms. Brady resided in New Orleans, Louisiana. The Agreement stated that the couple was entering the Agreement "in consideration of their marriage and life together." The Agreement provided in pertinent part:

2. Separate Property to Remain Separate.
2.1 Each of [sic] DAVID and KAREN hereby acknowledges and agrees that all of the assets listed on the attached Schedule A, including all of KAREN'S and DAVID'S copyrights, royalties, and any property acquired by bequest, devise, descent or gift, and the appreciation thereof and the income and proceeds derived therefrom are, and shall remain, the separate property (hereinafter referred to as the "Separate Property") of DAVID and KAREN, as the case may be. Each of [sic] DAVID and KAREN shall keep and retain sole ownership, control and enjoyment of all such property and expectancies. The income, appreciation, and proceeds of such Separate Property derived therefrom, shall remain the Separate Property of DAVID or KAREN, as the case may be, whether or not due to the other's direct or indirect contributions or efforts of others, including DAVID or KAREN, or to inflation or market conditions. At any time, DAVID or KAREN shall be free to sell, exchange, transfer or otherwise dispose of all or any part of his or her Separate Property, as he or she may determine, as effectively as though he or she were unmarried. Upon such sale, exchange, transfer or other disposition, any proceeds or property resulting therefrom, whether maintained in separate accounts or commingled with other property, shall remain his or her Separate Property. Without limiting the foregoing in any way, DAVID and KAREN hereby expressly renounce, waive, relinquish and release any right to claim any Separate Property of the other, or any interest in such property under any equitable distribution, special equity, community property, quasi-community property, dower, curtesy, or similar law or rule of any jurisdiction, domestic or foreign.
2.2 Any property acquired by either or both of the Parties following their date of marriage, excluding any copyrights and royalties from such copyrights and Separate Property as defined in this Agreement, shall be deemed to be Marital Property. Any property, including Separate Property, transferred to the parties jointly, or used to purchase property in joint names shall be Marital Property, unless expressly agreed by DAVID and KAREN otherwise.
2.3 The earnings, other income and future copyrights of each party shall be and remain his or her Separate Property. Neither one will at any time or under any circumstances make a claim against the earnings or other income of the other.
3.Debt.
Neither party shall assume or become responsible for the payment of the other's premarital debts . . . .
4. Rights Upon Termination of Marriage.
* * *
4.2 In the event an action for termination of the marriage is commenced after the date of the marriage by either DAVID and KAREN or by both of them jointly, then DAVID and KAREN specifically waive any right, claim, or interest to or in real or personal Separate Property that each of them now owns and in property that either of them may hereafter acquire held or owned singly [sic] in the name of either DAVID or KAREN. Neither DAVID nor KAREN shall seek spousal support or temporary spousal support or any award of property, maintenance, "equitable distribution" distributive award, alimony or other order concerning the division of their property. Any Property acquired jointly during the marriage shall be distributed as DAVID and KAREN may agree; and if no agreement has been made previously, or if none can be reached on termination of the marriage, then such jointly owned property shall be distributed equally to DAVID and KAREN.
4.2.1 If, after one full "calendar year", as hereinafter defined, of DAVID and KAREN'S marriage, a court of competent jurisdiction enters a final decree of divorce dissolving DAVID and KAREN'S marriage, from which no further appeal can be taken, then within thirty (30) days of the entry of said decree, DAVID shall pay to KAREN such sum as described in Schedule C annexed hereto. Any payment made in accordance with this provision shall not be designated as a payment which is not includible in income under Section 71 of the Internal Revenue Service Code, or allowable as a deduction under Section 215 of the Internal Revenue Service Code, as permitted. Upon the payment of such sum to KAREN, DAVID shall have no further obligation to pay any maintenance, spousal support or transfer any other property whatsoever to KAREN . . . .
5. Occupancy of the Existing Premises.
* * *
5.3 DAVID and KAREN are presently the owners of the premises located at 1331 Pine Street, New Orleans, Louisiana 70118 (hereinafter referred to as the "Jointly Owned Premises"). The provisions of this Article 5 shall apply to the Minneapolis Premises, New Orleans Premises and Jointly Owned Premises.
* * *
5.5 KAREN and DAVID agree that upon the occurrence of a Termination Event, the Jointly Owned Premises shall be sold within a reasonable period of time. Upon the sale of the Jointly Owned Premises, DAVID shall be reimbursed for the full down payment he had made in the amount of One Hundred Sixty-Two Thousand Five Hundred and Eight Dollars ($162, 508), which was contributed by DAVID towards the purchase of the Jointly Owned Premises. After the deduction of the outstanding mortgage and usual closing costs, the balance of the net proceeds, if any, shall be divided equally between DAVID and KAREN.

         The Agreement had a severability clause which provided "[i]f any provision of this Agreement should hereafter be determined to be wholly or partially unenforceable, it shall not affect the validity or enforceability of the balance of this Agreement . . . ." The Agreement further provided that any dispute regarding the Agreement should be brought in a Minnesota Court and be construed by Minnesota law.

         On June 16, 2015, Ms. Brady filed, in the district court, a Petition for Declaratory Judgment (the "First Petition") alleging the Agreement "establishing a regime of separation of property and reservation of fruits and revenues as separate property is invalid and ineffective due to lack of form and lack of filing for registry."[2]

         On September 17, 2015, Mr. Pirner filed a Declinatory Exception of Improper Venue as to the First Petition asserting that the parties had agreed, as set forth in the Agreement, that the State of Minnesota would interpret the Agreement. On November 3, 2015, the district court overruled the exception on the ground it was untimely filed. Mr. Pirner did not seek review of the district court's judgment.

         On July 29, 2016, a hearing was held on the First Petition, and the district court rendered judgment in favor of Ms. Brady. The July 29, 2016 judgment provided that the portion of the Agreement "purporting to establish a regime of separation of property between the parties" and "to reserve the fruits and revenues of separate property" was invalid as to form; thus, a community of acquets and gains existed between Ms. Brady and Mr. Pirner during their marriage. Mr. Pirner did not seek review of the July 29, 2016 judgment.

         On March 28, 2017, Ms. Brady filed, in the district court, a Petition for Declaratory Judgment or Alternatively, to Establish Final Spousal Support (the "Second Petition") requesting a judgment declaring that certain provisions of Agreement were valid and enforceable including Mr. Pirner paying Ms. Brady a sum of $175, 000, and the property located at 1331 Pine Street, New Orleans, Louisiana, be sold.

         The couple agreed to submit the Second Petition on memorandum only to the district court.[3] The district court, on February 6, 2018, rendered judgment finding the Agreement was "a valid and enforceable contract between the parties in accordance with Louisiana law-except as provided for within the July 29, 2016 Judgment . . . ." The district court issued written reasons which provided in pertinent part:[4]

Karen L. Brady argues that the Agreement-while invalid in form as a matrimonial agreement and reservation of fruits-remains an enforceable contract in accordance with Louisiana law. In opposition, David A. Pirner contends that the entire Agreement comprises a matrimonial agreement, which has been deemed null by this Court, and thus is unenforceable. In particular, [David] retorts that the nullity of the contract as a matrimonial agreement and reservation of fruits vitiates his consent-one of the requirements for the formation of a contract under Louisiana law. Under Louisiana Civil Code Article 1831, the burden of proof on this issue is twofold. First, ...

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