Radcliffe 10, L.L.C. v. Burger

• Decision Date: 25 January 2017
• Docket Number: No. 2016–C–0768,2016–C–0768
• Citation: 219 So.3d 296
• Court: Louisiana Supreme Court
• Parties: RADCLIFFE 10, L.L.C. v. Ronald G. BURGER and Lynda O. Burger

219 So.3d 296

RADCLIFFE 10, L.L.C.

v.Ronald G. BURGER and Lynda O. Burger

No. 2016–C–0768

Supreme Court of Louisiana.

January 25, 2017

DEUTSCH KERRIGAN, LLP, Raymond Lewis, Joseph L. McReynolds ; RODEL, PARSONS & KOCH, Ross Anthony Dooley, for Applicant.

TALLEY, ANTHONY, HUGHES & KNIGHT, LLC, Craig Joseph Robichaux, for Respondent.

WEIMER, Justice¹

This action for nullity was brought by a judgment creditor against a judgment debtor and his wife. At issue is whether the spouses' failure to file a codally-required joint petition to commence the termination of their community property regime, pursuant to La. C.C. art. 2329, results in an absolute nullity or a relative nullity. Because the failure to file a joint petition results in a relative nullity as defined by La. C.C. art. 2031, the trial court judgment is reversed, and judgment is rendered in favor of Ronald and Lynda Burger.

FACTS AND PROCEDURAL HISTORY

A judgment creditor, Radcliffe 10, L.L.C., filed a revocatory action pursuant to La. C.C. art. 2036 against a judgment debtor, Ronald Burger, and his wife, Lynda Burger, seeking to have the spouses' post-marital matrimonial agreement and/or the related judgment declared null.² The Burgers' matrimonial agreement, which terminated their legal property regime and established a separate property regime, received court approval in an action pursuant to La. C.C. art. 2329.³ In this agreement, the Burgers also "settle[d] all claims, rights, and obligation[s] resulting from their community property regime" and partitioned their property. The matrimonial agreement and the judgment approving the matrimonial agreement were entered into and signed after Radcliffe's judgment, which exceeded $3.4 million, was rendered against Mr. Burger, but before Radcliffe's judgment was signed by the court.

In a motion for summary judgment filed in its revocatory action, Radcliffe urged that the Burgers' "matrimonial agreement approved by the court's Termination Judgment is void" for failure to comply with the form requirements of Article 2329, in that the Burgers' Article 2329 action was not commenced by the required joint petition. The trial court found "that the joint petition basis upon which counsel relies does not warrant the granting of a summary judgment" and denied Radcliffe's motion for summary judgment. The instant matter then proceeded to trial.

With a successor judge presiding,⁴ Radcliffe re-urged the issue determined in its prior motion for summary judgment, that is, the Burgers' "judgment [in the Article 2329 action] is a nullity and the matrimonial agreement is void ab initio " for failure to strictly comply with the requirements of Article 2329. The case was submitted to the trial court on written briefs "in lieu of live testimony."

Contrary to the prior ruling on Radcliffe's motion for summary judgment, the successor judge revoked the judgment terminating the Burgers' community regime "ab initio for failure to follow the procedural requirements" of Article 2329, finding that the "judgment was null and void and of no legal effect at any time." Radcliffe was given "the right to have any recordation of [the Burgers' termination of their community property regime] judgment Y cancelled."

On appeal, an en banc panel of ten judges⁵ was unable to reach a majority decision in this matter; therefore, the trial court's judgment was upheld. The appellate court judges split on the issue of whether the Burgers' failure to file a joint petition as required by La. C.C. art. 2329 resulted in an absolutely null or a relatively null matrimonial agreement and judgment approving the matrimonial agreement. See Radcliffe 10, L.L.C. v. Burger, 14–0347 (La.App. 1 Cir. 3/28/16), 191 So.3d 79. The Burgers' subsequent writ application was granted by this court for determination of whether the spouses' failure to file a joint petition in the Article 2329 action resulted in an absolutely null or a relatively null matrimonial agreement and/or judgment in the Article 2329 action. See Radcliffe 10, L.L.C. v. Burger, 16–0768 (La. 9/6/16), 204 So.3d 998.

DISCUSSION

The Burgers had a legal regime, and were free during their marriage to modify or terminate their legal regime. See La. C.C. art. 2328 ("A matrimonial agreement is a contract establishing a regime of separation of property or modifying or terminating the legal regime."). As contracts, matrimonial agreements are governed by the general rules of conventional obligations, La. C.C. arts. 1906, et seq.See La. C.C. art. 1915. Because matrimonial agreements are "given a special designation" in the civil code, they are nominate contracts, subject also to the special rules in the title on matrimonial regimes, La. C.C. arts. 2325, et seq.⁶ See La. C.C. arts. 1914 & 1916.

Acting under the authority afforded by La. C.C. art. 2328, the Burgers (during their marriage) entered into a matrimonial agreement to terminate their legal regime, create a separate property regime, and partition their property. The Burgers' matrimonial agreement was made by authentic act in accordance with the form requirements of Article 2331.⁷ However, also relevant to the Burgers' termination of their legal regime is La. C.C. art. 2329, which in relevant part provides:

Spouses may enter into a matrimonial agreement before or during marriage as to all matters that are not prohibited by public policy.

Spouses may enter into a matrimonial agreement that modifies or terminates a matrimonial regime during marriage only upon joint petition and a finding by the court that this serves their best interests and that they understand the governing principles and rules. They may, however, subject themselves to the legal regime by a matrimonial agreement at any time without court approval.

The words of Article 2329 are clear and unambiguous. "[T]he spouse's ability to implement" a matrimonial agreement during the marriage is subject to the procedural limitations imposed by Article 2329.⁸ This article clearly requires a joint petition by the spouses to terminate a matrimonial regime. Compliance with Article 2329 in this regard bears on the validity and enforceability of the matrimonial agreement.⁹

The petition that commenced the Burgers' Article 2329 proceeding named Mrs. Burger as a defendant rather than a joint petitioner. Thus, the Burgers' Article 2329 action was indisputably not commenced by joint petition as codally required for the implementation of their matrimonial agreement. For this reason, the trial court revoked the Burgers' judgment in the Article 2329 action ab initio and declared that judgment to be "null and void and of no legal effect at any time." Five members of the en banc panel of ten hearing this matter on appeal agreed.

Although Article 2329 requires the filing of a joint petition, this codal provision does not provide an express remedy for a proceeding to terminate a matrimonial regime that is flawed because it was not commenced by a joint petition.¹⁰ Therefore, other codal provisions must be examined to determine the legal effect of a failure to file a joint petition.

"A contract is null when the requirements for its formation have not been met." La. C.C. art. 2029. Because the "requirements [set forth in Article 2329 ] for [the] formation" and implementation of the Burgers' matrimonial agreement were not satisfied, the matrimonial agreement is null, giving rise to the issue of what type of nullity applies. The two types of nullities provided for in the civil code are absolute nullities, governed by La. C.C. art. 2030, and relative nullities, governed by La. C.C. art. 2031. Therefore, at issue here is whether the Burgers' failure to file a joint petition to commence the Article 2329 action renders their matrimonial agreement absolutely null or relatively null as defined in the following codal provisions.

Article 2030 provides:

A contract is absolutely null when it violates a rule of public order, as when the object of a contract is illicit or immoral. A contract that is absolutely null may not be confirmed.

Absolute nullity may be invoked by any person or may be declared by the court on its own initiative.

Article 2031 provides:

A contract is relatively null when it violates a rule intended for the protection of private parties, as when a party lacked capacity or did not give free consent at the time the contract was made. A contract that is only relatively null may be confirmed.

Relative nullity may be invoked only by those persons for whose interest the ground for nullity was established, and may not be declared by the court on its own initiative.

Accordingly, classification of the nullity involved here depends on whether Article 2329 provides a "rule of public order" intended to protect a large class of persons or whether it simply provides a rule "intended for the protection of private parties." See La. C.C. arts. 2030 & 2031. Resolution of this threshold issue determines whether Radcliffe has a right to invoke the nullity of the Burgers' matrimonial agreement for failure to file a joint petition. See id.

The record is devoid of an express determination by the trial court of this issue; however, the trial court's judgment implies that the failure to file a joint petition to commence an Article 2329 action results in an absolute nullity. As previously indicated, the appellate court judges evenly split on the nullity classification issue. Whether Article 2329 provides "a rule of public order" or "a rule intended for the protection of private parties" has not been expressly addressed by this court or any appellate court in prior cases.

However, the court in Matter of Boyer recognized that "[t]he probable goal of the [procedural] limitations [in Article 2329 ] appears to be the legislature's attempt to protect the less worldly spouse and to prevent that spouse from entering into disadvantageous agreements that the spouse did not fully understand." Id., 616 So.2d 730, 732 (La.App. 1 Cir. 1993), writ denied , 620 So.2d 882 (La. 1993) (cit...