Opinion
2022 CA 1099
05-25-2023
JOFFRE JOHN CROUERE, JR. v. SIMONE VINOT BRUNI
Joseph R. McMahon, III Metairie, Louisiana Counsel for Plaintiff/Appellant, Joffre John Crouere, Jr. Frank P. Tranchina, Jr. Devin P. Maney Covington, Louisiana Counsel for Defendant/Appellee, Simone Vinot Bruni
NOT DESIGNATED FOR PUBLICATION
Appealed from the 22nd Judicial District Court In and for the Parish of St. Tammany State of Louisiana Docket No. 2019-15977 The Honorable Dawn Amacker, Judge Presiding
Joseph R. McMahon, III Metairie, Louisiana Counsel for Plaintiff/Appellant, Joffre John Crouere, Jr.
Frank P. Tranchina, Jr. Devin P. Maney Covington, Louisiana Counsel for Defendant/Appellee, Simone Vinot Bruni
BEFORE: GUIDRY, C.J., WOLFE, AND MILLER, JJ.
MILLER, J.
This appeal is taken from a judgment partitioning the community of acquets and gains formerly existing between plaintiff/appellant, Joffre John Crouere, Jr,, and defendant/appellee, Simone Vinot Bruni, For the following reasons, we affirm in part, reverse in part, and remand to the trial court with instructions.
FACTUAL AND PROCEDURAL HISTORY
Joffre John Crouere, Jr. ("Crouere") and Simone Vinot Bruni ("Bruni") were married on April 12, 2014. Crouere filed a petition for divorce on November 19, 2019, and the divorce was granted on July 23, 2020. Prior to the marriage, Bruni owned Demo Diva, LLC ("Demo Diva"), which is her separate property. During the marriage, they acquired additional assets including a home, movables, and Reclaimed Diva, LLC ("Reclaimed Diva"). Reclaimed Diva has been managed exclusively by Bruni. The company acquires salvaged building materials and sells them to builders, renovators, and individuals.
Before a trial to partition the community property was held, the issues were narrowed to address only the value of the community home, the value of Reclaimed Diva, the allocation of Reclaimed Diva, and any equalizing payment due. This appeal concerns the value and allocation of Reclaimed Diva and the equalizing payment. At the trial, two accounting experts testified regarding the value of Reclaimed Diva. Crouere's expert in the field of certified public accounting was Gary Radelat, CPA, and Bruni's expert in the field of forensic accounting was Gregory Verges, CPA. The trial court determined that the value of Reclaimed Diva was negative $ 82,444. 00, and it assessed one- half of the negative value to Crouere. Crouere was ordered to make an equalizing payment of 19, 865. 00, and the trial court allocated Reclaimed Diva to Bruni. A judgment to that effect was signed on May 10, 2022. It is from this judgment that Crouere appeals.
During the trial, the parties stipulated that Gary Radelat, CPA, is an expert in the field of certified public accounting and that Gregory Verges, CPA, is an expert in the field of forensic accounting.
ASSIGNMENTS OF ERROR
Crouere contends that (1) the trial court erred in its valuation of Reclaimed Diva; (2) the trial court erred by accepting the testimony of Bruni's expert over the testimony of Crouere's expert; and (3) the trial court erred by assessing one-half of the negative value of Reclaimed Diva to Crouere, requiring Crouere to make an equalizing payment to Bruni, and allocating Reclaimed Diva to Bruni.
STANDARD OF REVIEW
The trial court's allocation or assigning of assets and liabilities in the partition of community property is reviewed under the abuse of discretion standard. Abreo v. Abreo, 2021-0528 (La.App. 1st Cir. 12/22/21), 2021 WL 6069448, *3. In community property partitions, the trial court is granted much discretion in valuing and allocating assets and liabilities and is required to consider the source and nature of each asset or liability, the financial situation of each spouse, and any other relevant circumstances. See La. R.S. 9:2801 et seq.', Berthelot v. Berthelot, 2017-1055 (La.App. 1st Cir. 7/18/18), 254 So.3d 800, 808. Given this great discretion, the trial court is not required to accept at face value a spouse's valuation of assets or debts, or claims against the community. Id. at 816.
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. Cosman v. Cosman, 20220694 (La.App. 1st Cir. 1/10/23), ___ So.3d ___, ___, 2023 WL 142435, *3, writ denied, 2023-00299 (La. 5/2/23), ___ So.3d ___, 2023 WL 3195120. However, where one or more legal errors by the trial court interdict the fact-finding process, the manifest error standard is no longer applicable. The standard of review for mistakes of law by the trial court requires the appellate court to engage in a de novo review of the entire record and render a judgment on the merits. Berthelot, 254 So.3d at 807.
DISCUSSION
In his first assignment of error, Crouere contends that the trial court erred in its valuation of Reclaimed Diva. Crouere's contention is two-fold. He alleges that the trial court erred in valuing Reclaimed Diva by using its book value rather than its fair market value and that the trial court erred in including the amount of Bruni's personal guarantee of Demo Diva's line of credit in the value of Reclaimed Diva.
Fair market value should be used in valuing community property during a community property partition. See La. R.S. 9:2801(A)(4)(c); see also Fair v. Fair. 2021-1047 (La.App. 1st Cir. 7/19/22), 2022 WL 2812892, writ denied, 202201272 (La. 11/8/22), 349 So.3d 576. Louisiana Revised Statutes 9:2801 states that each party shall file a sworn detailed descriptive list of all community property, the fair market value and location of each asset, and all community liabilities. Fair market value is the price that a seller is willing to accept and a buyer is willing to pay on the open market and in an arm's-length transaction. See Shopf v. Marina Del Ray Partnership, 549 So.2d 833, 839 (La. 1989); Black's Law Dictionary (11thed. 2019).
At the trial, Crouere's expert, Radelat, indicated that he could not provide a value of Reclaimed Diva with the information he was provided. On the other hand, Bruni's expert, Verges, opined that the book value of Reclaimed Diva was negative $82,444.00. Verges testified that the fair market value of Reclaimed Diva could not be determined because Demo Diva loaned money to Reclaimed Diva through a line of credit that was personally guaranteed by Bruni. The guarantee was not introduced into evidence, but pursuant to Verges's testimony, it appears as though Bruni personally guaranteed Demo Diva's line of credit. Verges indicated that Bruni's personal guarantee makes the amount loaned from Demo Diva to Reclaimed Diva a community obligation that would have to be repaid. However, he also testified that if Bruni's personal guarantee was not considered, the fair market value of Reclaimed Diva would be $0. The trial court valued Reclaimed Diva at negative $82,444.00.
The evidence pertaining to Reclaimed Diva that was introduced includes profit and loss statements, balance sheets, and tax documents.
We find that the trial court abused its discretion in valuing Reclaimed Diva at negative $82,444.00, which is not the fair market value. The trial court relied on a legal conclusion from Verges - that Bruni's personal guarantee was a community debt - without further evidence to support that conclusion. There was no evidence as to when Bruni's personal guarantee began; what was guaranteed; or how the money traveled from the lender, to Demo Diva, to Reclaimed Diva. Further, there was no evidence introduced to show the full amount of the loan, the payments made on the loan, the maturity date on the loan, whether the loan was ever put in default, or what the loan was intended for. In short, there was insufficient evidence to characterize the loan as a community obligation.
Further, we note that this court has determined that there are unique legal consequences specific to money lent to an LLC. See Orv v. Russell, 2018-1491 (La.App. 1st Cir. 11/12/19), 289 So.3d 1151, 1155. In Pry, Lee Russell and Amanda Russel were divorced. Lee was the sole member of Versatile Fab, LLC. During the marriage, Versatile Fab was loaned money. Lee acknowledged that he personally guaranteed the debts of Versatile Fab. However, Amanda denied that she personally guaranteed Versatile Fab's debts. The lender argued that the obligation was a community obligation because it was incurred during the existence of the community property regime. This court found that the debt was incurred by Versatile Fab, not Lee. Pry, 289 So.3d at 1156. The parties agreed that Amanda had no interest in the company, and there was no proof of the personal guarantee. Therefore, this court found that any personal guarantee or acknowledgment of the debt by Lee did not create an obligation for which Amanda was liable. Ory, 289 So.3d at 1157.
Here, there does not appear to be a personal guarantee of the loan from Demo Diva to Reclaimed Diva. If Bruni guaranteed a loan to Demo Diva, her separate LLC, it would not be a community obligation. As mentioned above, there is insufficient information in the record to conclude that Bruni's personal guarantee is somehow a community obligation and further, why that amount should be factored into the fair market value of Reclaimed Diva. Therefore, we remand this matter to the trial court with instructions to determine the fair market value of Reclaimed Diva.
In his second assignment of error, Crouere contends that the trial court erred by accepting the testimony of Bruni's expert, Verges, over the testimony of Crouere's expert, Radelat. Where expert testimony differs, it is the trier of fact who must determine the more credible evidence, and factual findings based upon that determination may not be overturned unless manifest error appears in the record. The trier of fact is entitled to assess the credibility and accept the opinion of an expert just as with other witnesses, unless the stated reasons of the expert are patently unsound. Cosman, 2023 WL 142435, *6. The effect and weight to be given such expert testimony depends upon the underlying facts and rests within the broad discretion of the trial court. Id. However, as we are remanding the matter for further proceedings, the trial court will be free to accept or reject the expert opinions rendered consistent with this opinion.
We note that the court may appoint such experts pursuant to La. C.C.P. art. 192 and 373 as it deems proper to assist the court in the settlement of the community and partition of community property, including the classification of assets as community or separate, the appraisal of community assets, the settlement of the claims of the parties, and the allocation of assets and liabilities to the parties. La. R.S. 9:2801(A)(3). Further, in making its valuation determinations with regard to community assets, the trial court is not bound to accept one expert's opinion to the exclusion of the opinion of other experts and witnesses. Ellington v, Ellington. 36,943 (La.App. 2nd Cir. 3/18/03), 842 So.2d 1160,1166, writ denied. 2003-1092 (La. 6/27/03), 847 So.2d 1269.
In his third assignment of error, Crouere contends that the trial court erred by assessing one-half of the negative value of Reclaimed Diva to Crouere, requiring Crouere to make an equalizing payment to Bruni, and allocating Reclaimed Diva to Bruni. In a community property partition, the court shall divide the community assets and liabilities so that each spouse receives property of an equal net value. La. R.S, 9:280 l(4)(b). 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. La. R.S. 9:2801 (4)(d). The court may order the execution of notes, mortgages, or other documents as it deems necessary, or may impose a mortgage or lien on either community or separate property, movable or immovable, as security. Id.
After the trial court made its ruling, it discussed preparing a spreadsheet with the parties. It appears from the record that counsel for the parties created a judgment that provided the allocations and equalizing payment for the trial court to sign. However, the trial court did not order a sum certain equalizing payment when it made its ruling. Despite this, the judgment provides:
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Joffre John Crouere, Jr. shall pay to Simone Vinot Bruni the sum of nineteen thousand eight hundred sixty-five ($19,865) dollars as an equalizing payment, which payment shall be made no later than thirty (30) days from the signing of this Judgment by the Court.
There is no information in the record which would allow us to determine how the equalizing payment was calculated. We further note that Exhibit A, a spreadsheet labeled "FOR SETTLEMENT PURPOSES ONLY/' was filed with the judgment but not admitted as evidence at the trial. Additionally, because we found above that the value of Reclaimed Diva must be redetermined by the trial court, the equalizing payment must also be recalculated. Thus, on remand, the trial court must determine whether an equalizing payment is due and if so, the amount due.
Last, Crouere contends that the trial court erred in its allocation of Reclaimed Diva. The trial court shall allocate to the respective spouses all of the community assets and liabilities. La. R.S. 9:2801(4)(c), The trial court may divide a particular asset or liability equally or unequally or may allocate it in its entirety to one of the spouses. Id. The court shall consider the nature and source of the asset or liability, the economic condition of each spouse, and any other circumstances that the court deems relevant. Id. For instance, in situations where one of the spouses has controlled and managed a family business, which the evidence indicates the other spouse is incapable of operating, it may be both more practical and equitable to allocate the business to the spouse more capable of operating it. Corkem v. Corkem, 2005-2297 (La.App. 1st Cir. 11/3/06), 950 So.2d 780, 784, writ denied, 2006-2844 (La. 2/2/07), 948 So.2d 1083.
The trial court allocated Reclaimed Diva to Bruni. It is evident from the record that the parties agreed that Reclaimed Diva would be allocated to Bruni. That is provided for in the detailed descriptive list and was stated at trial. Further, Bruni controlled and managed Reclaimed Diva, making it more practical and equitable for the trial court to allocate it to her. Thus, the trial court did not abuse its discretion in allocating Reclaimed Diva to Bruni.
CONCLUSION
The portion of the May 10, 2022 judgment of the trial court that allocated Reclaimed Diva to Simone Vinot Bruni is affirmed. The portion of the May 10, 2022 judgment of the trial court that valued Reclaimed Diva at negative $82,444.00 and ordered an equalizing payment of $19,865.00 by Joffre John Crouere, Jr. is reversed and the matter is remanded to the trial court to determine the fair market value of Reclaimed Diva and to recalculate the equalizing payment if one is due. Costs of this appeal are assessed one-half to Joffre John Crouere, Jr. and one-half to Simone Vinot Bruni.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED WITH INSTRUCTIONS.