Hansel v. Holyfield

• Decision Date: 27 December 2000
• Docket Number: No. 2000-CA-0062.,2000-CA-0062.
• Citation: 779 So.2d 939
• Parties: Stephen A. HANSEL v. Sarah HOLYFIELD, Wife of Stephen A. Hansel.
• Court: Court of Appeal of Louisiana — District of US

779 So.2d 939

Stephen A. HANSEL v. Sarah HOLYFIELD, Wife of Stephen A. Hansel.

No. 2000-CA-0062.

Court of Appeal of Louisiana, Fourth Circuit.

December 27, 2000.

Writs Denied April 12, 2001.

COPYRIGHT MATERIAL OMITTED

Edith H. Morris, Law Office of Edith H. Morris, New Orleans, LA, and Suzette Marie Smith, Metairie, LA, and Ira Middleberg, Ernestine Anderson-Trahan, Middleberg, Riddle & Gianna, New Orleans, LA, Attorneys for Plaintiff/Appellant.

Shelly Hammond Provosty, Montgomery, Barnett, Brown, Read, Hammond &amp Mintz, L.L.P., New Orleans, LA, and Michael A. McNulty, Jr., McNulty & O'Connor, New Orleans, LA, and Gwendolyn Hanhart, Ladouceur & Ladouceur, New Orleans, LA, Attorneys for Defendant/Appellee.

Court composed of Judge ARMSTRONG, Judge McKAY, Judge CIACCIO, Pro Tempore.

McKAY, Judge.

Stephen Arthur Hansel and Sarah Holy-field Hansel were married in Florida on November 16, 1985. At the time of the marriage, both Mr. and Mrs. Hansel were employed by Barnett Bank in Jacksonville, Florida. Mrs. Hansel left her employment with Barnett the year following the marriage in order to stay home and help raise Mr. Hansel's children from a previous marriage.¹

In January of 1992, Barnett terminated Mr. Hansel's employment. Shortly thereafter, Mr. Hansel went through the interview process with Hibernia Bank in New Orleans and was subsequently hired. On March 25, 1992, Mr. Hansel moved to New Orleans and on March 26, 1992, he began his employment as Hibernia's president and chief executive officer. Mrs. Hansel did not move to New Orleans until the summer of 1992, so that one of Mr. Hansel's children from his prior marriage could finish school in Jacksonville. Upon Mrs. Hansel's move to New Orleans, the couple purchased a residence at 1907 Palmer Avenue.

In November of 1996, Mr. Hansel decided that he wanted to leave the marriage and he moved out of the Palmer Avenue residence. On November 7, 1996, Mr. Hansel filed for divorce which the trial court granted in June of 1997. Later, Mrs. Hansel filed a petition to partition the community property. During the Hansels' eleven year marriage, they amassed a considerable amount of property; this included stock in and stock options for both Barnett and Hibernia banks as well as the family home at 1907 Palmer Avenue. The partition trial took place over nine days from April 13, 1998 to May 11, 1998. On June 16, 1998, the matter was submitted on post-trial memoranda by counsel for the parties. The trial court rendered its judgment along with incorporated reasons for judgment on January 25, 1999. The trial court found that the legal regime of acquets and gains between the Hansels existed from March 25, 1992 until its termination on November 7, 1996. The trial court further found that the Hansels' community was worth 531,758,051.00. The trial court allocated community assets worth $25,673,272² to Mr. Hansel and allocated community assets worth $5,135,856 to Mrs. Hansel. The trial court then offset each party's claims for reimbursement, determining that Mr. Hansel was due $909,672, and found that an equalizing payment of $9,359,036 was due Mrs. Hansel. Mr. Hansel appeals this judgment and raises eleven assignments of error. Mrs. Hansel answered the appeal and raises thirteen assignments of error.

DISCUSSION

On appeal, Mr. Hansel raises the following assignments of error: 1) the trial court erred in exceeding the maximum delay for rendering judgment in a case taken under advisement; 2) the trial court erred in valuing the Hibernia stock options based on values over nine months old by the time it rendered judgment and in refusing to grant a new trial to allow the introduction of newly discovered evidence (namely, the substantial decrease in the value of the Hibernia stock and Hibernia stock options between the time of trial and rendition of judgment; 3) the trial court erred in failing to consider the income taxes that must be paid for the Hibernia stock options to be exercised; 4) given the change in the stock price and the trial court's refusal to consider the acquisition costs of taxes, it erred in allocating all of the Hibernia stock options to Mr. Hansel, while Mrs. Hansel received approximately six million dollars in community assets plus a $9,358,036 cash equalizing payment from Mr. Hansel because that created a totally inequitable division of the community; 5) the trial court erred in determining that the Hibernia stock options were earned over time rather than on the date upon which they vested; 6) the trial court erred in determining that the Hansel's community of acquets and gains was established in March of 1992 before both spouses had moved to Louisiana; 7) the trial court erred in valuing 1907 Palmer Avenue as of the trial date when that date was not reasonably proximate to the allocation of the assets and liabilities of the former community; 8) the trial court erred in valuing and allocating community assets (71,640 Hibernia Incentive Stock Options) which had already been judicially partitioned with the consent of the parties; 9) the trial court erred in failing to consider the strike price (the price per share which must be paid to exercise the option) in its valuation of the 25,672 unvested Hibernia Stock Opptions; 10) the trial court erred in its computation of the value of the Barnett Bank/Nations Bank stock; and 11) the trial court erred in determining that Mr. Hansel owed Mrs. Hansel an equalizing cash payment of $9,359,036.

In her answer to the appeal, Mrs. Hansel raises the following specifications of error: 1) the trial court erred in failing to find all the Barnett Bank stock at issue as community property; 2) alternatively, the trial court erred in failing to award a reimbursement claim in favor of Mrs. Hansel for one-half of the community funds used to purchase the Barnett Bank stock, in light of the finding that part of the stock was the separate property of Mr. Hansel; 3) the trial court erred in allocating the Barnett Bank stock to Mrs. Hansel without requiring Mr. Hansel to withdraw the stock from pledge of a separate debt; 4) the trial court erred in failing to find all of the Hibernia stock options granted during the community as community property; 5) alternatively, the trial court erred in computing the formula that it used to pro-rate the Hibernia stock options into community and separate property; 6) the trial court erred in failing to find the 1997 Hibernia stock option grant to be community property; 7) the trial court erred in failing to accept the testimony of Ron Christner regarding the Black-Sholes method in valuing the unvested stock options; 8) the trial court erred in applying a twenty-three percent (23%) discount factor instead of a ten percent (10%) discount factor in its valuation of the restricted Hibernia stock; 9) the trial court erred in failing to award legal interest in favor of Mrs. Hansel on the equalizing payment from the date of judgment; 10) the trial court erred in the award of the reimbursement claim in favor of Mr. Hansel re: Scott Mill Road property; 11) the trial court erred in failing to secure the equalizing payment awarded to Mrs. Hansel with community assets allocated to Mr. Hansel and/or separate assets of Mr. Hansel; 12) the trial court erred in the award of the reimbursement claim in favor of Mr. Hansel re: expenditures on the Amelia Island property; and 13) the trial court erred in the amount awarded to Mrs. Hansel for reimbursement for dividends paid on Barnett Bank stock.

APPELLANT'S ASSIGNMENT OF ERROR No. 1

Although La. R.S. 13:4207 provides that a trial court shall render judgment on a case within thirty days of its submission, the failure of the trial judge to render judgment within that time frame does not make the judgment invalid. Dragon v. Schultz, 97-664 (La.App. 5 Cir. 1/14/98), 707 So.2d 1274. The instant case is quite complex because of the nature of some of the community assets involved. The trial court took its time and rendered a very thoughtful judgment, as evidenced by its detailed reasons for judgment. In this situation, the trial court's delay in rendering judgment was not unreasonable. Accordingly, we find no merit in this assignment of error.

APPELLANT'S ASSIGNMENT OF ERROR No. 2

Under La. C.C.P. art. 1972(2), a party is entitled to a new trial if the party has discovered new evidence that he could not have obtained before trial. In the instant case, Mr. Hansel filed his motion for a new trial, seeking re-valuation of the Hibernia stock and stock options because the price of the stock decreased after trial. This does not qualify as new evidence under La. C.C.P. art. 1972(2). Newly discovered evidence" has been held to be evidence which existed at the time of trial, but was only discovered after the conclusion of the trial. Williams v. Liberty Mutual Ins. Co., 327 So.2d 462 (La.App. 3 Cir.1976). Clearly the decreased stock prices were a later development and did not exist at the time of trial. Furthermore, La. R.S. 9:2801(4)(a) provides that the "court shall value the assets at the time of trial on the merits, determine the liabilities, and adjudicate the claims of the parties." Accordingly, the trial court did not err in refusing to grant Mr. Hansel a new trial.

APPELLANT'S ASSIGNMENT OF ERROR No. 3

The trial court refused to consider the income taxes which must be paid when the Hibernia stock options are exercised. Mr. Hansel contends that it is inequitable to value the stock without taking into account the tax liability. We agree.

At some point, Mr. Hansel will have to exercise each stock option grant or he will lose the right to do so. When Mr. Hansel exercises a stock option grant, any amount over the exercise price which Mr. Hansel receives for the stock will be recognized as ordinary income for tax purposes. As ordinary income the money which Mr. Hansel receives is subject to state and federal income taxes. The trial court disallowed tax consequences not...