Holland v. Holland

• Decision Date: 02 November 2017
• Docket Number: 17-231
• Parties: KATHRYN ELIZABETH HOLLAND v. PAUL SCOTT HOLLAND
• Court: Court of Appeal of Louisiana — District of US

KATHRYN ELIZABETH HOLLAND v. PAUL SCOTT HOLLAND

17-231

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

November 2, 2017

NOT DESIGNATED FOR PUBLICATION

APPEAL FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2006 6134

HONORABLE LILYNN ANNETTE CUTRER, DISTRICT JUDGE

ELIZABETH A. PICKETT JUDGE

Court composed of Elizabeth A. Pickett, John E. Conery, and Candyce G. Perret, Judges.

AFFIRMED.

Donald Carl Hodge, Jr.

Attorney at Law

4148 Palm St.

Baton Rouge, LA 70808

(337) 794-8873

COUNSEL FOR INTERVENORS-APPELLANTS:

Donald Carl Hodge, Jr.

Evia Hodge

Rachel Hodge

Chance Deramus

William J. Cutrera

Attorney at Law

910 Ford St.

Lake Charles, LA 70602-3273

(337) 433-1414

COUNSEL FOR PLAINTIFF-APPELLEE:

Kathryn Elizabeth Holland

Jonathan Johnson

Johnson & Vercher, LLC

P. O. Box 849

Lake Charles, LA 70602

(337) 433-1414

COUNSEL FOR DEFENDANT-APPELLEE:

Paul Scott Holland

PICKETT, Judge.

The intervenors, Chance DeRamus, Evia Hodge, Donald Hodge, and Rachel Hodge, (collectively "the creditors") appeal a judgment of the trial court sustaining the peremptory exception of prescription filed by Kathryn Holland and Paul Holland.

FACTS

Chance DeRamus and David Hodge filed suit against Paul Holland in Cameron Parish on August 22, 2005, alleging that Mr. Holland committed a sexual battery against each of them. Pertinent to the issues before us, the sexual battery occurred while Mr. Holland was married to Kathryn. During the pendency of that litigation, David Hodge died. On December 6, 2010, the trial court in Cameron Parish rendered a judgment in favor of Mr. DeRamus and the Estate of David Hodge, and awarded damages of $100,000.00 each.

While that suit was pending, on October 26, 2006, Mr. Holland pled guilty to three counts of sexual battery. Soon thereafter, he was sentenced to serve twenty-two years in prison.

On November 12, 2006, Mr. and Ms. Holland entered into a separation of property agreement, seeking termination of the community of acquets and gains in Calcasieu Parish. In a conveyance dated November 12, 2006, filed in the conveyance records of Calcasieu Parish, Mr. Holland donated, and Ms. Holland accepted, his interest in the community home to Ms. Holland. The trial court in Calcasieu Parish ratified this agreement in a judgment dated December 11, 2006. On December 21, 2006, Ms. Holland filed a petition for divorce from Mr. Holland in Calcasieu Parish based on the fact that he had been convicted of a felony and had been sentenced to imprisonment at hard labor. The judgment of divorce was granted on March 28, 2007.

On August 8, 2012, Mr. DeRamus and the heirs of David Hodge, Evia Hodge, Donald Hodge, and Rachel Hodge, filed a Motion to Intervene by Creditors and Judicial Partition of the Community Regime in the divorce proceeding. They sought to collect the damages awarded in Cameron Parish. In their intervention, they allege:

Paul Scott Holland and Kathryn Elizabeth Holland knew of the existence of the civil lawsuits pending against Paul Scott Holland in the 38^th Judicial District Court at the time of the divorce and upon information and belief, began to sell and donate assets and also fraudulently sold the community home in an attempt to avoid payment of the specific creditors, David Craig Hodge and Chance Earl DeRamus, to their detriment.

Ms. Holland filed a peremptory exception of no cause of action and no right of action. The trial court found that because there was no partition of property pending in the trial court, the creditors failed to state a cause of action. The creditors appealed to this court.

On appeal, this court found that the creditors had stated a cause of action:

There are no pending proceedings to partition former community property nor were any ever filed in conjunction with the divorce judgment. The divorce judgment was filed on March 28, 2007. The trial court found that because no partition was pending, there was nothing in which the Creditors could intervene. We agree, however, the Creditors have stated a cause of action as discussed below.

Louisiana Code of Civil Procedure Article 1091 provides (emphasis added):

A third person having an interest therein may intervene in a pending action to enforce a right related to or connected with the object of the pending action against one or more of the parties thereto by:

(1) Joining with plaintiff in demanding the same or similar relief against the defendant;

(2) Uniting with defendant in resisting the plaintiff's demand; or

(3) Opposing both plaintiff and defendant.

Pursuant to La.Civ.Code art. 2376, a creditor does have certain rights in relation to a spouse's attempt to terminate a community property regime (emphasis added):

The creditors of a spouse, by intervention in the proceeding, may object to the separation of property or modification of their matrimonial regime as being in fraud of their rights. They also may sue to annul a judgment of separation of property within one year from the date of the rendition of the final judgment. After execution of the judgment, they may assert nullity only to the extent that they have been prejudiced.

The Creditors argue that this was an impossibility because the judgment in their favor was not rendered until December 2010, nearly four years after the community property regime was terminated. The Creditors further argue that the liabilities were incurred during the existence of the community, i.e., at the time that Paul sexually battered the two victims, he and Kathryn were still under a community property regime. Also, the Creditors point out that their civil suit was filed in August 2005, well before the termination of the community of acquets and gains in December 2006.

It is well settled that a tortfeasor's debt owed to the victim accrues at the time the injury is sustained, not on the date that suit is filed or judgment is obtained. Holland v. Gross, 195 So. 828 (La.App. 2 Cir.1940), Perigoni v. McNiece, 307 So.2d 407 (La.App. 4 Cir.1975); Thomassie v. Savoie, 581 So.2d 1031 (La.App. 1 Cir.), writ denied, 589 So.2d 493 (La.1991); LeBlanc v. American Emp'rs Ins. Co., 364 So.2d 263 (La.App. 3 Cir.1978), writs denied, 366 So.2d 911, 916, 917 (La.1979). In Dugas v. Dugas, 01-669, p. 5 (La.App. 3 Cir. 12/26/01), 804 So.2d 878, 881, writ denied, 02-652 (La.5/24/02), 816 So.2d 307 (footnote omitted), we stated:

Louisiana public policy does not permit a potential debtor to transfer property to someone else in order to secrete it from potential creditors, in essence, for an illicit purpose. This applies to transfers made at the time that a cause of action accrues before a potential creditor files a suit or obtains a judgment. Jurisprudence, even, gives a potential creditor standing and a cause of action to set the illicit transfer aside.

"The filing of suit merely seeks recognition of a pre-existing delictual obligation." LeBlanc, 364 So.2d at 266. The Creditors' rights vested from the initial sexual batteries of Chance DeRamus and David Craig Hodge.

Thus, the Creditors have a valid cause of action. Although the Motion to Intervene does not list the specifics of the fraudulenttransfers in derogation of their rights, the allegation in paragraph five is sufficient to move forward. "A contract is absolutely null when it violates a rule of public order, as when the object of a contract is illicit or immoral." La.Civ.Code art. 2030. "An obligee has a right to annul an act of the obligor, or the result of a failure to act of the obligor, made or effected after the right of the obligee arose, that causes or increases the obligor's insolvency." La.Civ.Code art. 2036; See Pan Am. Import Co., Inc. v. Buck, 452 So.2d 1167 (La.1984). Spouses cannot deprive creditors of their rights by filing extrajudicial partitions of their community property. See La.Civ.Code art. 2357. The Creditors' petition states a cause of action—a revocatory action—thus the trial court erred in granting the Hollands' exception of no cause of action.

Holland v. Holland, 13-636, pp. 3-6 (La.App. 3 Cir. 12/11/13), 129 So.3d 844, 847-848.

On remand, the creditors filed a motion seeking a judicial partition of the community property. The trial court found that the creditors did not have the right to demand a judicial partition of the Hollands' former community property in a judgment signed on April 9, 2014. The creditors filed an application for supervisory writs with this court, which was denied. Holland v. Holland, an unpublished writ disposition bearing docket number 14-434 (La.App. 3 Cir. 6/26/14).

On September 23, 2014, the creditors filed a Motion to Set Aside Separation of Property Agreement, Donation of Home, and Recognition of Community Debt to Creditors. In that motion, the creditors argued that the proper procedure was not followed in executing the separation of property agreement, and therefore it should be nullified. Further, they argued that Mr. Holland fraudulently donated his interest in the family home to Ms. Holland, and that Ms. Holland was complicit in the fraud when she accepted the donation fully aware that he intended to defraud the creditors. Because both were complicit in the fraud, the transfer should be revoked and the community should be held liable to the creditors.

On September 22, 2015, Mr. and Ms. Holland jointly filed an Exception of Prescription, arguing that the creditors' cause of action was a revocatory action based on La.Civ.Code art. 2036, and the time period within which a party could bring a revocatory action had expired, based on La.Civ.Code art. 2041, which states:

The action of the obligee must be brought within one year from the time he learned or should have learned of the act, or the result of the failure to act, of the obligor that the obligee seeks to annul, but never after three years from the date of that act or result.

The three year period provided in this Article shall not apply in cases of fraud.¹

The trial court held a hearing and found that either prescription or peremption had run. The trial court issued a judgment on ...