WILLIAMS, J.
In this community property partition litigation, William Scott Carroll ("Scott") appeals a trial court's decision, awarding Lisa Kay Carroll nee Tippen ("Lisa") reimbursement in the amount of $50,000 for community funds expended to make improvements to Scott's separate property. Scott also appeals the denial of his claims for reimbursement for the use of community funds to pay the mortgage on Lisa's separate property, Lisa's "mismanagement" of Scott's separate property, and utilizing his separate funds to pay community tax obligations. Additionally, Scott appeals the trial court's determination that Lisa was owed an equalizing payment in the amount of $5,000.
For the following reasons, we reverse the court's denial of Scott's reimbursement claim for the payment of the community tax obligation with separate funds, and we award Scott reimbursement in the amount of $4,651. We also amend the court's calculation of the equalizing payment due to Lisa to reflect that Scott owes an equalizing payment to Lisa in the amount of $2,500. All other aspects of the judgment are hereby affirmed.
Scott and Lisa were married on March 19, 2001. One child, William Scott Carroll, Jr., was born during the marriage. On August 9, 2005, Lisa filed a petition for divorce. Subsequently, a judgment of divorce was granted, terminating the community of acquets and gains retroactive to the date of filing the petition for divorce.
On July 16, 2007, Lisa filed a petition for partition of the parties' community property, along with a detailed descriptive list of the assets of the community. Thereafter, Lisa filed a supplemental and amending sworn detailed descriptive list, setting forth multiple reimbursement claims. Subsequently, Scott also filed a sworn detailed descriptive list and made numerous claims for reimbursement.
On March 2, 2010, a preliminary hearing was held to determine the parties' community property and reimbursement claims. The hearing officer prepared a report and made recommendations, to which both parties objected. Consequently, a trial was held on July 1, 2010. After hearing the testimony and reviewing the hearing officer's recommendations, as well as the evidence presented at trial, the trial court found that the net value of the community was $78,504. The court allocated the community property as follows:
The court concluded that net community payment due to Lisa was $41,752 ($36,752 + $5,000). The court also granted various reimbursement claims urged by both Scott and Lisa. After balancing and offsetting the claims, the court awarded Lisa reimbursement in the amount of $32,414.75. The court further ordered $12,533.62, from Scott's portion of proceeds from the sale of the house, to be held in escrow to "catch up support arrearages." The court ordered the remainder of Scott's portion of the proceeds from the sale of the house "to be paid out of the escrow community funds to Lisa forthwith." Scott was also ordered to pay the balance due to Lisa, $33,216.75, plus interest, within 60 days.
As stated above, the court also granted some of the parties' claims for reimbursement and denied others. Namely, the court awarded Lisa reimbursement in the amount of $50,000 for community property funds expended to purchase land and erect a building owned by Chassis, Inc. (Scott's separate property); denied Scott's reimbursement claim for the use of his separate funds to pay community tax obligations; denied Scott's reimbursement claim for the use of community funds to pay the mortgage on a house owned by Lisa (Lisa's separate property) for approximately 15 months during the marriage; and denied Scott's reimbursement claim for Lisa's "mismanagement" of property owned by Chassis, Inc.
Subsequently, the trial court denied Scott's motion for new trial. Scott appeals.
Scott contends the trial court erred in awarding Lisa reimbursement in the amount of $50,000, for community property funds expended to purchase land and erect a building owned by Chassis, Inc. (a company Scott owned prior to his marriage to Lisa). Scott concedes that he made certain improvements, including the construction
LSA-R.S. 9:2801 provides, in pertinent part:
Generally, the property of married persons domiciled in Louisiana is either community or separate. LSA-C.C. art. 2335. The community property comprises: property acquired during the existence of the legal regime through the effort, skill, or industry of either spouse; property acquired with community things or with community and separate things, unless classified as separate property under Article 2341; property donated to the spouses jointly; natural and civil fruits of community property; damages awarded for loss or injury to a thing belonging to the community; and all other property not classified by law as separate property. LSA-C.C. art. 2338. Wages are the premier community asset acquired through the effort, skill or industry of either spouse. Ross v. Ross, 2002-2984 (La.10/21/03), 857 So.2d 384;
LSA-C.C. art. 2341 provides:
It is well settled that a trial court has broad discretion in adjudicating issues raised by divorce and partition of the community. Clemons v. Clemons, 42,129 (La. App.2d Cir.5/9/07), 960 So.2d 1068, writ denied, 2007-1652 (La.10/26/07), 966 So.2d 583; Mason v. Mason, 40,804 (La.App.2d Cir.4/19/06), 927 So.2d 1235, writ denied, 2006-1524 (La.10/13/06), 939 So.2d 366. A trial judge is afforded a great deal of latitude in arriving at an equitable distribution of the assets between the spouses. Id. 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, supra. However, the allocation or assigning of assets and liabilities in the partition of community property is reviewed under the abuse of discretion standard. Benoit v. Benoit, 2011-0376 (La. App. 1st Cir.3/8/12), 91 So.3d 1015; Legaux-Barrow v. Barrow, 2008-530 (La. App. 5th Cir. 1/27/09), 8 So.3d 87, writ not considered, 2009-0447 (La.4/13/09), 5 So.3d 152.
LSA-C.C. art. 2366 provides:
As stated above, Scott owned Chassis, Inc., before he married Lisa. However, it is undisputed that the land was purchased and the building was constructed during the marriage. Scott testified that he paid $100,000 for the land and that funds were obtained from the sale of his separate property (a race car and other "racing stuff"). Although the record indicates that Scott/Chassis, Inc., obtained construction loans to erect the building, Scott testified that he invested approximately $100,000 "in cash" in the building. He stated that he kept the $100,000 locked in his shop; he never deposited any of the funds in his business account or his personal accounts. Other than his testimony, Scott offered no evidence as to the source
We agree. We have reviewed this record in its entirety. As the trial court noted, Scott produced documents to prove that a portion of the costs of the improvements to his separate property was paid with funds from a construction loan. However, no documents were presented to overcome the presumption that the $100,000 invested in the building was community property. Accordingly, we find that the trial court did not err in concluding that Lisa was entitled to reimbursement in the amount of $50,000 for the use of community funds for improvements made to Scott's separate property. This assignment lacks merit.
Scott also contends the trial court erred in denying his reimbursement claim, in the amount of $9,870, for the use of community funds to pay the mortgage on a house owned by Lisa (Lisa's separate property) during the marriage. He argues that the mortgage on the house, approximately $658 per month, was paid with community funds for a period of 15 months. Thus, he is entitled to reimbursement in the amount of $4,935 of the $9,870 paid).
A separate obligation of a spouse is one incurred by that spouse prior to the establishment of a community property regime, or 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. LSA-C.C. art. 2363. If community property has been used during the existence of the community property regime or former community property has been used thereafter 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. LSA-C.C. art. 2364.
In the instant case, Scott testified he "spent some money on [the house owned by Lisa]." He stated that community funds, in the amount of $658 per month, for a period of 15 months, were used to pay the mortgage on that house. To support his claim, Scott introduced into evidence a copy of one cancelled check, dated March 5, 2002, in the amount of $658.35; the check was made payable to the company which held the mortgage to the house.
Our review of the testimony reveals that Lisa, Scott, their son and Lisa's three daughters from her first marriage lived in the house from March, 2001, until approximately November, 2002. The documents and testimony indicate that Scott and Lisa maintained separate bank accounts, in addition to one joint checking account. Lisa and Scott testified that Scott routinely gave her approximately $2,800 in cash per month to "pay the bills." However, Lisa, who stopped working in 2002, testified that the amount given to her by Scott was insufficient to meet the community obligations. Therefore, Lisa frequently deposited her separate funds into the joint account to meet the obligations of the community.
Next, Scott contends the trial court erred in denying his reimbursement claim for Lisa's improper release of property from Chassis, Inc., and the mismanagement of property owned by the company. Scott argues that he is entitled to reimbursement in the amount of $64,764.
Scott testified that while he was in jail and/or an inpatient drug rehabilitation treatment program, Lisa, without his knowledge or authorization, entered Chassis, Inc. He stated that while there, Lisa released three vehicles to customers, and she released equipment and parts from the company without fully collecting the amounts owed. He also stated that Lisa collected $17,525.28 from the customers, when the amount owed totaled $64,764. Further, Scott testified that Lisa deposited only $8,014.28, into Scott's business account, without accounting for the remainder.
A spouse owes an accounting to the other spouse for community property under his control at the termination of the community property regime. LSA-C.C. art. 2369. A spouse has a duty to preserve and to manage prudently former community property under his or her control, including a former community enterprise, in a manner consistent with the mode of use of that property immediately prior to termination of the community regime. He or she is answerable for any damage caused by his or her fault, default, or neglect. LSA-C.C. art. 2369.3.
To support his reimbursement claim, Scott introduced into evidence a typed document, dated July 27, 2005, entitled, "Cars Lisa Released from Chassis, Inc." The document was not signed; therefore, the source of the document is unknown. Scott also introduced into evidence an undated typed document, generated by Lisa, which stated that she collected $17,525.28 from customers and "paid out" $4,865 for various business expenses. The document included the following statement:
After reviewing the documents, the hearing officer stated:
The trial court denied Scott's claim "for the reasons stated by the hearing officer."
We agree. The personality of a corporation is distinct from that of its members. See, LSA-C.C. art. 24. Only the corporation, not its members, may sue
Based on this record, we find that Chassis, Inc., is the proper party to bring the action against Lisa for any alleged wrongs committed against the corporation. Accordingly, the trial court did not err in denying Scott's claim for reimbursement.
Scott also contends the trial court erred in denying his reimbursement claim for the use of his separate funds to pay community tax obligations for the 2002 and 2003 tax years. He argues that $10,635.61 of his separate funds were used to pay the community income taxes; therefore, he is entitled to reimbursement in the amount of $5,317.80.
If separate property of a spouse has been used either during the existence of the community property regime or thereafter to satisfy a community obligation, that spouse is entitled to reimbursement for one-half of the amount or value that the property had at the time it was used. LSA-C.C. art. 2365. The burden of proof is on the party claiming reimbursement to show that separate funds existed and were used to satisfy the community obligation. Dupree v. Dupree, 41,572 (La.App.2d Cir. 12/20/06), 948 So.2d 254; Ward v. Ward, 32,617 (La.App.2d Cir.12/10/99), 748 So.2d 619.
Scott did not introduce any of the tax returns into evidence. However, to support his reimbursement claim, Scott testified that his income tax refunds were seized to pay community tax debts. Lisa admitted that she did not pay any of the community tax obligations.
Additionally, Scott introduced into evidence letters from the Department of the Treasury, Internal Revenue Service ("IRS"), which indicate that his income tax refunds from his 2007 and 2008 tax returns were seized and applied to unpaid balances "of other federal taxes which our records show you owe."
Where We Applied Your Overpayment
Forms(s) Tax Period(s) Amount(s) Applied
1040 December 31, 2002 $1,820.00
Balance Remaining
$5,038.78
Where We Applied Your Overpayment
Forms(s) Tax Period(s) Amount(s) Applied
1040 December 31, 2002 $300.00
Balance Remaining
$4,743.18
Another document, which does not bear a date,
Tax Forms(s) Tax Period(s) Amount Applied 1040 December 31, 2002 $4,117.00 Balance Remaining $784.08
The next letter, dated October 26, 2009, states, in pertinent part:
Where We Applied Your Overpayment
Forms(s) Tax Period(s) Amount(s) Applied
1040 December 31, 2003 $2,671.17
1040 December 31, 2004 $394.05
Although Scott did not submit the tax returns, the language from the documents clearly indicates that Scott's income tax refunds were applied to tax debts owed for 2002, 2003 and 2004 tax periods. It is undisputed that Scott and Lisa were married during the tax periods listed in the IRS documents. Additionally, as stated above, Lisa admitted that she did not pay any of the tax debt owed, other than the amount withheld from sale of the house.
After reviewing the record and supporting documents, we find that Scott satisfied his burden of proving that $9,302 of his separate funds (his income tax refunds) were used to satisfy the community income tax obligation. Therefore, we find that, pursuant to LSA-C.C. art. 2365, Scott is
Scott also contends the trial court erred "in its mathematical calculation in determining the equalizing payment due from Scott Carroll to Lisa Carroll." Scott argues that the court failed to divide the difference between each party.
In the event that the allocation of assets and liabilities results in an unequal net distribution, the court shall order the payment of an equalizing sum of money, either cash or deferred, secured or unsecured, upon such terms and conditions as the court shall direct. LSA-R.S. 9:2801(A)(4)(d).
In the instant case, the court determined that Scott's net portion of the community property allocation was $41,752; the court calculated that Lisa's net portion was $36,752. The court correctly calculated the difference to be $5,000. However, the court incorrectly awarded the entire $5,000 difference to Lisa, thereby awarding Lisa a net portion of $41,752, and Scott $36,752. Thus, we find that the equalizing payment due to Lisa was incorrectly calculated. Accordingly, we amend the trial court's judgment to reflect that Scott owes an equalizing payment to Lisa in the amount of $2,500.
For reasons set forth herein, we reverse the court's denial of Scott's reimbursement claim for the payment of the community tax obligation with separate funds, and we order Scott's reimbursement in the amount of $4,651. We also amend the court's calculation of the equalizing payment due to Lisa to reflect that Scott owes an equalizing payment to Lisa in the amount of $2,500. All other aspects of the judgment are hereby affirmed. Costs of this appeal are assessed equally to the parties, William Scott Carroll, Sr. and Lisa Kay Carroll nee Tippen.
REVERSED IN PART; AMENDED IN PART; AND AFFIRMED AS AMENDED.
