165 So. 3d 181
La. Ct. App.2014Background
- Adrienne G. Wood (plaintiff) and Glen D. Wood (defendant) divorced in 2007. They had earlier formed Woody’s Collision Specialist, LLC, which was not partitioned in a 2008 partial partition of community property.
- Plaintiff sued in 2013 alleging defendant, as the party operating the business, mismanaged and diverted LLC funds, converted business opportunities, and otherwise breached duties in relation to Woody’s Collision.
- Defendant filed exceptions of prescription, no cause of action, and vagueness, and moved for summary judgment arguing La. C.C. art. 2369.3 did not apply and plaintiff’s petition lacked factual specificity.
- The Domestic Commissioner initially overruled the exceptions and denied summary judgment; the trial court later granted the exceptions and summary judgment, but then partially granted a new trial motion; plaintiff appealed.
- The appellate court reviewed (de novo for legal issues, manifest error for vagueness) and considered whether La. C.C. art. 2369.3 (duty of a spouse to preserve former community property) applies to former spouses and to property remaining unpartitioned after divorce, and whether genuine factual disputes exist.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of La. C.C. art. 2369.3 (spouse duty) | Article applies to former spouses holding former community property pending partition | Article applies only to current spouses; not to former spouses | Article applies to former spouses; statute's use of “spouse” includes former spouses (reversed trial court) |
| Whether unpartitioned business is "former community property" subject to art. 2369.3 | Business not partitioned after divorce is former community property and covered by art. 2369.3 | Because business was not partitioned but building was partitioned, preservation duty no longer applies | Unpartitioned business is former community property; art. 2369.3 applies until partition (reversed trial court) |
| Exception of no cause of action (sufficiency of pleadings) | Petition pleads specific factual allegations of siphoning, mismanagement, conversion sufficient to state a cause of action under art. 2369.3 | Petition contains conclusions and lacks material facts to support claims | Petition states sufficient facts to allege mismanagement under art. 2369.3; no-cause exception wrongly granted |
| Exception of vagueness (fair notice) | Pleading gives enough factual detail (salary increase, withdrawals, transfers, formation of new entity) to inform defense | Pleading lacks who/what/when/where; too conclusory | Petition sufficiently informs defendant and allows preparation of a defense; vagueness exception wrongly granted |
| Motion for summary judgment (no genuine issue of material fact) | Plaintiff's affidavit and allegations raise factual disputes about management both pre- and post-partition | Defendant relied on partial partition and argued it could not preserve the business consistent with prior mode of use; submitted minimal evidence | Genuine issues of material fact exist about ability/duty to preserve and about mismanagement; summary judgment improperly granted |
Key Cases Cited
- Scheffler v. Adams and Reese, LLP, 950 So.2d 641 (La. 2007) (standard and de novo review for exception of no cause of action)
- Ramey v. DeCaire, 869 So.2d 114 (La. 2004) (legal sufficiency of pleadings principles)
- City of New Orleans v. Board of Commissioners of Orleans Levee District, 640 So.2d 237 (La. 1994) (presumption that well-pleaded facts are true on exception)
- Becnel v. Becnel, 70 So.3d 20 (La. App. 5 Cir. 2011) (applying art. 2369.3 to former spouses)
- Granger v. Granger, 967 So.2d 540 (La. App. 3 Cir. 2007) (application of art. 2369.3 post-divorce pending partition)
- Murphy v. L & L Marine Transp., Inc., 695 So.2d 1045 (La. App. 5 Cir. 1997) (procedures and standards for summary judgment)
- Zeringue v. O’Brien Transp., Inc., 931 So.2d 377 (La. App. 5 Cir. 2006) (summary judgment standard)