Statham v. Statham
2008 WL 2357353, 986 So.2d 894 (2008)
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Rule of Law:
Property acquired during a marriage is presumed to be community property. The spouse seeking to classify an item as separate property bears the burden of proof, and this burden is not met when the spouses provide conflicting, equally credible testimony about the nature of the acquisition.
Facts:
- Marsha Jo 'Jody' Statham and Harry Rufus 'Butch' Statham were married in 1970.
- Around the time of Jody's birthday in 2002, a diamond ring valued at over $15,000 was purchased.
- Jody signed the check for the ring, which was drawn from a joint account.
- Jody testified that the ring was a birthday gift from Butch, an assertion supported by her friends and mother.
- Butch testified that the ring was not a birthday gift. He claimed that after receiving insurance proceeds from a cancer policy, he and Jody each agreed to buy an expensive item; she chose the ring, and he chose a four-wheeler.
- Butch claimed his birthday gift to Jody that year was a portrait of their son displayed on a billboard, an assertion corroborated by his friend.
- During the marriage, Butch operated an insurance brokerage company, P & S Benefits Consultants, Inc.
- The couple divorced in 2005, triggering the need to partition their community property.
Procedural Posture:
- Marsha Jo Statham filed a petition for divorce, terminating the community on February 16, 2005.
- A hearing officer conference in June 2007 recommended that a diamond ring be classified as Jody's separate property.
- Butch Statham filed an objection in the trial court to the hearing officer's conclusion regarding the ring.
- Jody Statham filed objections to the hearing officer's findings on the valuation of the community business and the classification of Butch's post-termination income.
- A bench trial was held in the Louisiana state trial court to resolve the contested issues of the community property partition.
- The trial court ruled in favor of Butch, classifying the ring as community property, valuing the business at $34,000, and classifying post-termination distributions as his separate property.
- Marsha Jo Statham (Plaintiff-Appellant) appealed the trial court's judgment to the Court of Appeal of Louisiana, Second Circuit.
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Issue:
Does a spouse overcome the legal presumption that an asset acquired during the marriage is community property when the spouses offer conflicting, yet equally credible, testimony as to whether the asset was a gift?
Opinions:
Majority - Gaskins, J.
No. A spouse does not overcome the presumption that property acquired during marriage is community property when the trial court finds the conflicting testimonies of both spouses to be equally credible. The court held that property in a spouse's possession during the marriage is presumed to be community property under La. C.C. art. 2340, and the spouse claiming it is separate bears the burden of proof. The trial court found the testimony of Jody and Butch regarding the ring to be equally persuasive. Because Jody failed to carry her burden of rebutting the presumption, the trial court's classification of the ring as community property was not a manifest error. Similarly, the court affirmed the valuation of the husband's business, deferring to the trial court's acceptance of an expert who properly excluded the value of personal goodwill as required by La. R.S. 9:2801.2. Finally, post-termination distributions to Butch were correctly classified as his separate property because they resulted from his effort, skill, and industry after the community had ended.
Analysis:
This case strongly reaffirms the power of the community property presumption in Louisiana family law. It establishes that in a 'he said, she said' scenario where a trial court finds both spouses equally credible, the legal presumption will prevail. This holding underscores the high evidentiary bar for a spouse attempting to prove an asset is a separate gift. Furthermore, the court's decision on the business valuation solidifies the importance of distinguishing personal goodwill from enterprise goodwill, allowing a significant portion of a business's value tied to a spouse's personal skills and relationships to be classified as separate property, thereby protecting it from division.
