Cohen v. Cohen

• Decision Date: 13 October 2021
• Docket Number: C/W 21-CA-187,NO. 20-CA-352,20-CA-352
• Parties: Jo Ellen COHEN v. Michael Baruch COHEN
• Court: Court of Appeal of Louisiana — District of US

329 So.3d 1057

Jo Ellen COHEN

v.Michael Baruch COHEN

NO. 20-CA-352

C/W 21-CA-187

Court of Appeal of Louisiana, Fifth Circuit.

October 13, 2021

COUNSEL FOR PLAINTIFF/APPELLEE, JO ELLEN COHEN, Yvette A. D'Aunoy, Marianne Garvey, New Orleans

COUNSEL FOR DEFENDANT/APPELLANT, MICHAEL BARUCH COHEN, Alexandra E. Faia, Steven J. Lane, New Orleans

Panel composed of Judges Marc E. Johnson, Stephen J. Windhorst, and Hans J. Liljeberg

LILJEBERG, J.

Dr. Michael Cohen seeks review of the trial court's judgment denying his motion to terminate or, in the alternative, to reduce the amount of the death benefit on a life insurance policy he agreed to maintain as part of his divorce settlement with his former spouse, Ms. Jo Ellen Cohen. He also seeks review of the judgment granting the rule for contempt and damages filed by Ms. Cohen. As part of their divorce proceedings in January 1994, the parties agreed that Dr. Cohen would "maintain and [would] not cancel the $1.3 million dollar death benefit on his life insurance policy." The irrevocable beneficiaries of the insurance policy at issue are Dr. Cohen's adult children, Zachary and Joshua Cohen,¹ as well as Ms. Cohen. In addition to denying Dr. Cohen's request to terminate or reduce the amount of the death benefit, the trial court also ordered that if Dr. Cohen did not maintain the $1.3 million dollar life insurance policy, he was required to provide his former spouse and adult children with assets valued at $1.3 million. The trial court also granted Ms. Cohen's rule for contempt and awarded her damages in the form of the attorney fees and court costs she incurred due to Dr. Cohen's failure to maintain the insurance policy as agreed to by the parties.

Upon our review of the record on appeal, we find that the parties’ children, Zachary and Joshua Cohen — who are no longer minors — must be joined as parties to these proceedings, because as irrevocable beneficiaries of the life insurance policy, they have an interest in the policy and are needed to adjudicate complete relief among the parties as contemplated under La. C.C.P. art. 641.² Accordingly, we raise the peremptory exception of nonjoinder of a party under La. C.C.P. art. 641, vacate the trial court's February 1, 2021 judgment, and remand this matter to the trial court for joinder of Zachary Cohen and Joshua Cohen as parties to these proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

On April 27, 1992, Ms. Cohen filed a Petition for Divorce in the 24th Judicial District Court, which the trial court granted on January 10, 1994. On that same date, the parties entered into a "Consent Judgment of Partition of Community Property" ("Partition Judgment") and a Judgment of Child Custody, Spousal Support and Child Support ("Support Judgment"). In the Partition Judgment, Dr. Cohen agreed to maintain a life insurance policy with Ms. Cohen and his children as irrevocable beneficiaries as follows:

Michael B. Cohen will maintain and will not cancel the $1.3 million dollar death benefit on his insurance policy. Michael B. Cohen will irrevocably name the plaintiff, Jo Ellen Cohen as sole beneficiary to one-half of the death benefit and to irrevocably name the children as the only beneficiaries to the other one-half of the death benefit. Jo Ellen Cohen will remain as beneficiary to one-half of the death benefit, if she remarries, only if she executes a Prenuptial Agreement or a Declaration of Separateness declaring the funds from the insurance policy to be her separate property.

On November 15, 1996, Dr. Cohen filed a motion seeking to clarify the paragraph cited above in the Partition Judgment. Dr. Cohen argued that this paragraph was "unclear, ambiguous and would lead to absurd consequences," because it failed to provide a time period within which the provision would remain in effect. He argued that the policy at issue was originally purchased as an estate planning tool to be placed in trust for Ms. Cohen and the children and the trust was to terminate when the children reached the age of 26. He argued the policy was intended to provide for his children's support and education in the event he died, and that after they reached 26 years of age, there would have been no need for the policy. The record does not contain any indication that the trial court ever heard or ruled on Dr. Cohen's motion to clarify the terms of the Partition Judgment.

Over twenty years later, on January 29, 2019, Dr. Cohen filed the motion to terminate or, in the alternative, to reduce the amount of the death benefit he must maintain on a life insurance policy. In his motion, Dr. Cohen alleged that his obligation to maintain the $1.3 million dollar death benefit was part of his support obligations to his former spouse and children. He argued that the Partition and Support Judgments must be read and applied together as they both addressed his support obligations. He explained that in the Support Judgment, the parties agreed that his support obligations were premised on his ability to work, and that if he became disabled, this would constitute a change in circumstances that would entitle him to a modification of any spousal and child support he was obligated to pay.

Dr. Cohen further argued that in the 25 years since the parties entered into these judgments, several changes in circumstances justified the termination of his obligation to maintain life insurance in favor of his former spouse and children, including: 1) the deterioration of his health which caused him to be physically unable to work as an obstetrician-gynecologist thereby resulting in a substantial reduction in his income; 2) the extinguishment of his obligation to pay child support after his children became adults; 3) the obligation to maintain the policy in favor of Ms. Cohen was part of her spousal support and no longer payable due to the change in circumstances with Dr. Cohen's health; and 4) Dr. Cohen's financial inability to maintain the insurance policy as the premium was anticipated to increase from $2,500.00 to approximately $72,000.00 annually.

Ms. Cohen opposed Dr. Cohen's motion to terminate or reduce the death benefit by arguing that Dr. Cohen's agreement to maintain the life insurance policy was not part of his support obligations. Rather, she argued that she waived several of her community property interests, including her interests in Dr. Cohen's medical practice, in exchange for his agreement to maintain the death benefit on his life insurance policy. She argued that a community property partition could not be altered 25 years later based on an alleged change in circumstances. Ms. Cohen also stated in her opposition that if the trial court granted Dr. Cohen's request, it could potentially alter the rights of their children and therefore, they needed to be joined as parties to the proceedings.³ She further explained in her testimony at the hearing that the parties intended for the life insurance policy to be an inheritance for their children. She stated that she did not retain or obtain her own life insurance policy because she believed the children would receive the proceeds from the life insurance policy at issue.

Ms. Cohen also included a motion for contempt and for damages with her opposition to Dr. Cohen's motion to terminate the life insurance policy. She alleged that Dr. Cohen was in contempt because he did not maintain the life insurance policy with a death benefit of $1.3 million. She further argued at the hearing that Dr. Cohen violated the terms of the Partition Judgment because it required him to maintain a universal whole life policy acquired during the marriage, but he terminated the policy without her permission or the permission of the trial court and obtained a term life policy with a lower death benefit.⁴ Ms. Cohen sought damages due to Dr. Cohen's alleged violation of the terms of the Partition Judgment, as well as separate attorney fees and costs associated with the motion for contempt and for damages.

Following an evidentiary hearing on November 26, 2019, the trial court issued a written judgment on February 3, 2020, denying Dr. Cohen's motion to terminate or reduce the death benefit, and further ordering Dr. Cohen to maintain a life insurance policy with a $1.3 million dollar death benefit with Ms. Cohen and their children as irrevocable beneficiaries in accordance with the terms of the parties’ Partition Judgment. The trial court alternatively ordered that if Dr. Cohen did not maintain the $1.3 million dollar benefit on his insurance policy, he would have to provide assets of an equivalent value to Ms. Cohen and their two children. The trial court judgment also granted Ms. Cohen's motion for contempt and awarded Ms. Cohen attorney fees and court costs as damages.

Dr. Cohen filed a suspensive appeal and this Court remanded the matter for the trial court to establish the amount of the attorney fees and court costs the trial court intended to award as damages for the contempt of court. On February 1, 2021, the trial court issued an amended judgment that awarded Ms. Cohen $7,446.20 for attorney fees, $195.00 for court costs, and $3.60 for mailing costs. Dr. Cohen filed a second suspensive appeal from the amended judgment, which we consolidated with his first appeal.

LAW AND DISCUSSION

On appeal, Dr. Cohen contends the trial court erred in denying his motion to terminate or reduce the amount of the death benefit and by granting Ms. Cohen's rule for contempt and damages. Dr. Cohen also argues that the trial court exceeded the scope of its authority and changed the terms of the Partition Judgment by granting rights to the children, who are not parties to the lawsuit, with an award of $650,000 in assets if he does not maintain a $1,300,000 death benefit on his life insurance policy. He contends the only issue before the trial court was to determine whether he could terminate the life insurance policy or reduce the amount of the death benefit. Dr. Cohen asks this Court to reverse the trial...