Caballero v. Caballero
| Decision Date | 27 April 2016 |
| Docket Number | 2015 CA 1119 |
| Parties | TERESA WALLNER CABALLERO v. DAVID FERNANDO CABALLERO |
| Court | Court of Appeal of Louisiana — District of US |
NOT DESIGNATED FOR PUBLICATION
On Appeal from the The Family Court In and for the Parish of East Baton Rouge State of Louisiana
Trial Court No. 172009, Div. A
The Honorable Pamela M. Baker, Judge Presiding
Robert C. Lowe
David M. Prados
Melanie C. Lockett
New Orleans, Louisiana
Attorneys for Appellant,
David F. Caballero
R. Ray Orrill, Jr.
W. Christopher Beary
Alex L. M. Ducros
New Orleans, Louisiana
and
David Fernando Caballero (Caballero) appeals a judgment partitioning the community property of his marriage to Teresa Wallner Caballero (Wallner). For the following reasons, we affirm the judgment of the trial court.
Caballero and Wallner were married on March 20, 2004, and their community property regime was terminated on December 11, 2009, as a consequence of their divorce. Prior to the marriage, Caballero owned, as separate property, a 100% interest in Prime Acquisitions, L.L.C. (Prime).1 During the existence of the community regime, on November 9, 2004, Caballero formed Home Servicing, L.L.C. (Home). The initial members of Home were Manhattan Capital Advisors, Inc. (Manhattan), Southshore Capital Company, Inc. (Southshore), and Prime. Caballero testified that Home was formed because two of his investor friends, David Tobin of Manhattan and Joe Runk of Southshore, wanted him to exclusively devote his time, knowledge, and skill to investing their money. The trial court noted in its written reasons dated September 23, 2014, "there would have been no distributions, earnings, or otherwise [from Home] without Mr. Caballero." Brenda Catalanatto, the certified public accountant who performed the accounting functions for Wallner and Caballero, personally, and Home between 2004 and 2009, testified that 99% of Caballero's time between 2004 and 2008 was devoted to the generation of revenue for Home.
First, Wallner asserted a reimbursement claim for one-half of the increase in the value of Prime, which she alleged was attributable to Caballero's uncompensated labor during the community.2 Caballero argues that he could nothave been undercompensated because Prime received distributions from Home in the amount of $1,822,352.00 during the marriage and he was paid $499,000.00 in salary from Home.3 Caballero claims that he used his labor, industry, and skill to generate profits through Prime, and also received a salary from Home, 56.80% of which was owned by Prime. Caballero claims that his income consisted of both distributions from Prime and a salary from Home.
Wallner claims that profits disbursed by Home were distributed to Prime, its member, based on its percentage of ownership as per Home's operating agreement, not based on Caballero's labor, industry, and skill, and that Caballero received a management level salary from Home for only two of the five years of the community totaling $499,000.00. She asserts that the salary Caballero received was below the market average. Therefore, Wallner made a claim for reimbursement owed the community for the undercompensation of Caballero.
Second, Caballero asserted a claim for reimbursement based on sale proceeds of his separate property, which he claims were used to satisfy community obligations. Prime initially owned a 50% interest in Home. Prime's ownership in Home fluctuated between 2007 and 2008. In 2007, Prime and Manhattan redeemed Southshore's 25% interest for $100.00 plus distributions of $477,000.00. Thereafter, Prime owned 66.67%) of Home and Manhattan owned 33.33%. In 2008, Prime sold a 5% ownership interest in Home to Stratedge, Inc. (Stratedge), a Florida corporation, for $20,000.00 per share or $100,000.00 and a 4.87%ownership interest to Michael Cawthon for $60,000.00 per share or $292,000.00.4 As a result, Prime's ownership interest in Home was reduced from 66.67% to 56.80%. Caballero claims that the $100,000.00 received from the Stratedge sale was distributed to him and used to satisfy community obligations. He also claims that the funds received from the Cawthon sale was used for community obligations.
Third, Caballero claims reimbursement for a fund, Home Performing Fund I (Home Performing), that he asserts is his separate property, rather than community property as classified by the trial court. Caballero claims that after Prime received $292,121.00 in sales proceeds from the Cawthon sale, Prime loaned $200,000.00 to Home and received a promissory note. Caballero claims the loan was repaid to Prime. Prime issued a $100,000.00 check to Caballero on July 24, 2008. On July 24, 2008, there was a $100,000 deposit into the personal checking account of Caballero and Wallner. On July 24, 2008, Caballero wrote a $100,000.00 check to Home Performing. Caballero claims that the remainder of the Cawthon funds, $92,000.00, were distributed to the community and used to benefit the community. Caballero asserts that the community benefitted greatly from the ownership of his separate property, Prime, which he claims supports his assertion that he was not undercompensated.
Finally, at issue is a series of draws Caballero made from the community's home equity line of credit (HELOC) in the amount of $343,494.53, including $90,000.00 in loans made to his brother, Rick Caballero, which Wallner claimswas used for separate obligations of Caballero.5 Caballero claims this money was paid back to the community, and Wallner claims there is no evidence of such repayment.6 Therefore, Wallner asserted reimbursement claims from the HELOC totaling $343,494.53, after stipulating that $30,000.00 of the $90,000.00 in loans to Rick Caballero had been repaid.
The trial court held a partition proceeding on October 13-16, 2013. After the parties submitted post-trial memoranda, the trial court took the matter under advisement, issuing its written reasons on February 28, 2014. The written reasons specified the following, in pertinent part:
On April 8, 2014, the trial court rendered its judgment (Original Judgment), which also included the stipulations of the parties as to certain property andordered Caballero to pay Wallner $65,358.41, which took into consideration all the reimbursement claims.
Wallner filed a timely motion for partial new trial, claiming that the trial court inappropriately held that distributions to Caballero from Prime, which the trial court held was his separate property, were included in the trial court's calculation of Caballero's compensation from Home. Wallner also asserted that even if the $499,000.00 salary Caballero received over five years was taken into consideration, he was undercompensated. A hearing on the motion for new trial was held on July 8, 2014, wherein the trial court granted the motion and orally assigned reasons. The trial court also issued written reasons on September 23, 1014, finding that Caballero's undercompensated labor caused his separate property to increase in value entitling Wallner to reimbursement. On October 10, 2014, the trial court issued an amendment to the written reasons (not the judgment) correcting a typographical error as to the value of Home on December 31, 2009, as $2,991,041.00. The trial court issued an amended judgment to its Original Judgment, ordering Caballero to reimburse Wallner on her undercompensation claim pursuant to La. C.C. art. 2368 in the amount of one-half of the value that his undercompensated labor caused his separate property to increase in the sum of $1,495,520.50. (Amended Judgment). Caballero appeals the Original Judgment and the Amended Judgment.
Caballero claims that the trial court erred in granting Wallner's claim for reimbursement for undercompensation from Home, since he asserts that Home was not his separate property but was owned by Prime; that the trial court incorrectly found that Home had increased in value rather than inquiring whether Prime had increased in value; and that the trial court incorrectly valued Home because Caballero's personal goodwill should have been excluded from the valuation.
Caballero also claims that the trial court erred in denying his claims for reimbursement for one-half of the Stratedge and Cawthon sale proceeds used to satisfy community obligations, since the distributions were proceeds of the sale of assets, not fruit.
Caballero claims that the trial court erred in classifying Home Performing as community property and denying his claim for reimbursement of one-half of his return of principal since Home Performing was acquired with his separate property.
Caballero claims that the trial court erred in awarding Wallner reimbursement for draws on the HELOC because the funds at issue were repaid to the community and that the trial court erred in the calculation of these funds.
Caballero claims that the trial court erred in including $60,000.00 in receivables on loans to Rick Caballero as a community asset and allocating that asset to Caballero because the $60,000.00 had already been...
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