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Villarrubia v. Villarrubia

Court of Appeals of Louisiana, Fifth Circuit

December 27, 2018

TODD M. VILLARRUBIA
v.
HEATHER G. VILLARRUBIA

          ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 739-281, DIVISION "O" HONORABLE DANYELLE M. TAYLOR, JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLANT, TODD M. VILLARRUBIA Robert C. Lowe, Suzette M. Smith

          COUNSEL FOR DEFENDANT/APPELLEE, HEATHER G. VILLARRUBIA Steven J. Lane, John S. Creevy, Alexandra E. Faia

          Panel composed of Judges Fredericka Homberg Wicker, Jude G. Gravois, and Marc E. Johnson

          JUDE G. GRAVOIS, JUDGE

         AFFIRMED

         JGG

         FHW

         MEJ

         In this community property partition suit between former spouses Heather Grace Villarrubia and Todd Villarrubia, Todd suspensively appeals a trial court judgment rendered on April 10, 2018 and amended on June 13, 2018, finding that the contested "BP fees" were community property and awarding Heather $782, 766.83 as her one-half interest in the "BP fees." For the following reasons, we affirm.

         FACTS AND PROCEDURAL HISTORY

         In 2001, prior to the parties' marriage in 2002, Todd, an attorney, formed a professional law corporation, Todd M. Villarrubia, PLC d/b/a Wealth Planning Law Group ("the PLC"), a Subchapter S corporation, for his law practice, of which he was 100 per cent owner, the sole member, and where he was employed throughout the marriage and after his filing of the petition for divorce.[1] Following the BP Deepwater Horizon oil spill, the PLC entered into contingency fee contracts for the adjustment of BP claims of many of the PLC's clients. Todd performed work on the BP files both before and after the filing of the petition for divorce for which settlement proceeds were mostly received after the petition for divorce was filed. In the community property partition proceeding, a dispute arose concerning the amount of Todd's compensation for the work he performed on the BP contracts during the time of the marriage, which Heather claimed was community property and for which she sought her statutory share of the BP settlement proceeds held by the PLC. Heather also claimed that the value of the PLC was enhanced, during the marriage, by the uncompensated or undercompensated labor of Todd, which could form the basis of a reimbursement claim in her favor pursuant to La. C.C. art. 2368. Todd claimed that he was compensated during the community by a salary and that all fees received from the contingency fee contracts were the property of the PLC, a juridical entity separate from him which is also his separate property.

         On December 8, 2014, the PLC intervened in the community property partition proceeding, claiming that intervention was necessary to protect the PLC's rights and property, noting that discovery had been propounded by Heather to Todd individually, seeking records and information from the PLC regarding the BP contracts, as well as other contingency fee contracts, and information relative to Todd's income and compensation during the marriage. The PLC claimed ownership of all of the BP fees being held in its IOLTA account.[2] All other matters in the partition suit were resolved by a consent judgment dated March, 29, 2016. In that judgment, however, the claims regarding "the valuation, enhancement and/or reimbursement claims affecting or relating to the Professional Law Corporation, including but not limited to any BP or Deepwater Horizon claims" were expressly reserved.

         Following ongoing discovery, on November 17, 2017, Heather reurged exceptions of no right of action and no cause of action to the PLC's intervention. Her exceptions were granted on January 22, 2018, and ultimately the PLC was dismissed from the suit.[3] The partition trial on the BP claims occurred on January 29, 2018, with the trial court issuing a written judgment on April 10, 2018, finding the "BP fees" to be community property, and awarding Heather $782, 766.83 as her one-half interest in the "BP fees."

         Todd filed a motion for a new trial, arguing that the trial court erred in not taking into account the PLC's overhead and taxes, and attaching documentary evidence generated from the PLC's business records regarding those claimed offsets. In a judgment issued on June 13, 2018, the trial court denied the motion for a new trial except to amend the April 10, 2018 judgment to order that Todd personally pay Heather within five business days of the amended judgment. Todd timely filed a suspensive appeal.

         On appeal, Todd assigns two errors of the trial court. First, he argues that the trial court legally erred in determining that the BP fees paid exclusively to a separately owned entity, the PLC, after the community terminated, for work performed on contingency fee contracts solely owned by the PLC, are community property. Second, he argues that the trial court legally erred in awarding Heather $782, 766.83 as her one-half interest in the BP fees earned by ...


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