Hansel v. Holyfield
2000 WL 1879429, 779 So. 2d 939 (2000)
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Rule of Law:
Under Louisiana law, a community property regime commences when one spouse establishes domicile in the state with the shared intent for the family to relocate there, even if the other spouse moves later. In partitioning community property, courts must account for the inevitable tax consequences associated with assets like stock options to ensure an equitable division.
Facts:
- Stephen A. Hansel and Sarah Holyfield were married in Florida on November 16, 1985.
- In 1986, Holyfield left her job to stay home and help raise Hansel's children from a previous marriage.
- In January 1992, Hansel's employment in Florida was terminated, and he was subsequently hired as president and CEO of Hibernia Bank in New Orleans, Louisiana.
- On March 25, 1992, Hansel moved to New Orleans to begin his new job, with the intent that his family would join him.
- Holyfield and one of Hansel's children remained in Florida until the summer of 1992 to allow the child to finish high school.
- After Holyfield and the child moved to New Orleans in the summer of 1992, the couple purchased a home together.
- In November 1996, Hansel decided to leave the marriage and moved out of the family residence.
Procedural Posture:
- Stephen A. Hansel filed for divorce against Sarah Holyfield in a Louisiana trial court.
- The trial court granted the divorce in June of 1997.
- Sarah Holyfield subsequently filed a petition in the same court to partition the community property.
- The trial court conducted a nine-day trial on the partition in the spring of 1998.
- On January 25, 1999, the trial court rendered its judgment, finding the community began in March 1992, valuing the community assets, and ordering Stephen Hansel to make an equalizing payment of $9,359,036 to Sarah Holyfield.
- Stephen Hansel, as plaintiff/appellant, appealed this judgment to the Court of Appeal of Louisiana, Fourth Circuit.
- Sarah Holyfield, as defendant/appellee, answered the appeal, also assigning errors to the trial court's judgment.
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Issue:
Does a community property regime in Louisiana begin when one spouse moves to the state with the intent for the family to relocate there, even if the other spouse and children move several months later for practical reasons?
Opinions:
Majority - McKay, Judge
Yes, a community property regime begins when the first spouse establishes domicile in Louisiana with the intent for the family to follow. Louisiana's community property regime applies to spouses domiciled in the state. Domicile is a question of fact determined by intent, and the facts show that it was always the Hansels' intention for the entire family to move to Louisiana; Holyfield's delayed move was for practical reasons. Given the state's strong public policy favoring the existence of a community property regime, the trial court did not err in finding that the community commenced when Mr. Hansel moved in March 1992. The court also held that failing to consider the tax liability inherent in stock options is inequitable, as the tax rate is no more speculative than the value of the options themselves. Finally, the court affirmed that assets must be valued as of the date of the partition trial, and a post-trial decline in value does not constitute 'newly discovered evidence' justifying a new trial.
Concurring - Armstrong, Judge
Concurs in the result.
Analysis:
This case provides a key clarification on the establishment of domicile for community property purposes, emphasizing that shared intent to relocate to Louisiana can establish the community regime even before both spouses are physically present. It sets an important precedent by requiring Louisiana courts to factor in non-speculative, inherent tax liabilities when valuing assets like stock options, moving away from a practice of ignoring such consequences. This promotes a more equitable and realistic division of complex financial assets in community property partitions. The decision also reinforces the statutory rule that asset valuation is fixed at the time of trial, providing finality and insulating judgments from post-trial market fluctuations.
