Young v. Young

• Decision Date: 31 May 2006
• Docket Number: No. 06-77.,06-77.
• Citation: 931 So.2d 541
• Parties: Connie Durant YOUNG v. Stephen Hardy YOUNG.
• Court: Court of Appeal of Louisiana — District of US

931 So.2d 541

Connie Durant YOUNG v. Stephen Hardy YOUNG.

No. 06-77.

Court of Appeal of Louisiana, Third Circuit.

May 31, 2006.

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Kenneth Perrell Fuselier, Oakdale, LA, Kelly Perrodin Tate, Mamou, LA, for Defendant/Appellant — Stephen Hardy Young.

John Craig Jones, Oakdale, LA, for Plaintiff/Appellee — Connie Durant Young.

Court composed of ULYSSES GENE THIBODEAUX, Chief Judge, MARC T. AMY, and MICHAEL G. SULLIVAN, Judges.

THIBODEAUX, Chief Judge.

Defendant, Stephen Hardy Young (Mr. Young), appeals the trial court's judgment in this community property partition dispute which classified Mr. Young's social security disability benefits as community property, and not his separate property. Mr. Young also appeals the trial court's order that Plaintiff, Connie Durant Young (Mrs. Young), receive reimbursement from Mr. Young to equalize an unequal net distribution of assets and liabilities in the form of allocations of moveable property, instead of ordering him to pay her an equalizing sum of money. Lastly, Mr. Young appeals the trial court's classification of a majority of the monies in a Hibernia bank account as community property. For the following reasons, we reverse and remand in part, and affirm in part the trial court's judgment. Social security disability benefits are the separate property of Mr. Young based on the Supremacy Clause of the United States Constitution and the anti-attachment provision contained with the Federal Social Security Act, 42 U.S.C. §§ 402 et seq.; La.R.S. 9:2801 requires an equalizing sum of money, not a transfer of ownership of other tangible property, to equalize an unequal distribution of community assets; and, the characterization of the Hibernia savings account as community property was a factual determination which was well-supported by the trial court.

I. ISSUE

There are three main issues raised in this appeal:

1. whether federal social security disability benefits are the separate property of the recipient;

2. whether under La.R.S. 9:2801(A)(4)(d) an unequal distribution of assets and liabilities in a community property partition can be cured by ordering anything other than an "equalizing sum of money;" and,

3. whether the trial court committed manifest error by characterizing most of the funds in a savings account which Mr. Young claimed was created solely with his separate monies as community property.

II. FACTS

Following a divorce, Mr. and Mrs. Young, pursuant to a petition to partition community property, submitted detailed descriptive lists to each other and to the trial court.

Hearings on the partition petition were held. While the former spouses agreed on the classification of most of the assets listed by each of them in their descriptive lists, Mr. Young disagreed that social security disability benefits were assets belonging to the community, and not his separate property. When the trial court divided the assets and liabilities of the former community, there was an imbalance in terms of the valuation of the property allocated to each former spouse in favor of Mr. Young. There was also disagreement on the characterization of funds in a savings account at Hibernia Bank.

The trial court first determined that social security disability benefits in the amount of $17,386.00 that were paid to Mr. Young in 1996 were to compensate him for lost wages, and were therefore assets belonging to the community, not to Mr. Young separately. Then, after allocating all of the assets, the trial court found that the property assigned to Mr. Young was worth $18,999.99 more than the property allocated to Mrs. Young. The trial court determined that in order to equalize this unequal distribution, the ownership of three items of Mr. Young's separate property should be transferred to Mrs. Young. Those items were a camp located in Tioga, Louisiana valued at $6,000.00, a Pontiac Grand Am valued at $1,500.00, and a `four-wheeler' valued at $2,000.00. The trial court then ordered Mr. Young to execute whatever documents were necessary to accomplish the transfer of ownership of these items. Finally, the trial court also determined that $15,613.54 of the $17,042.95 deposited in a Hibernia Bank savings account was community property, not the separate property of Mr. Young.

III.

LAW AND DISCUSSION

Standard of Review

Appellate courts review trial court findings of fact under the manifest error, clearly wrong standard. Rosell v. ESCO, 549 So.2d 840 (La.1989). Unless the trial court committed manifest error or was clearly wrong in its findings of fact, those findings will not be disturbed on appeal. Aymond v. Aymond, 99-1372 (La. App. 3 Cir. 3/1/00), 758 So.2d 886. Determinations of what is community versus what is separate property are findings of fact. Biondo v. Biondo, 99-890 (La.App. 1 Cir. 7/31/00), 769 So.2d 94. The standard of review for mistakes of law by the trial court requires the appellate court to engage in a de novo review of the entire record. Rosell, 549 So.2d 840.

Appellate review of a question of law is simply a decision as to whether the lower court's decision is legally correct or incorrect. Phoenix Assur. Co. v. Shell Oil Co., 611 So.2d 709 (La.App. 4 Cir.1992). If the trial court's decision was based on its erroneous application of law, rather than on a valid exercise of discretion, the trial court's decision is not entitled to deference by the reviewing court. Kem Search, Inc., v. Sheffield, 434 So.2d 1067 (La.1983).

Ducote v. City of Alexandria, 95-1269, p. 2 (La.App. 3 Cir. 7/17/96), 677 So.2d 1118, 1120.

Therefore, when the trial court has made an error in the interpretation or application of law, the appellate court must review the record in its entirety de novo and render a judgment on the merits. Rosell, 549 So.2d at 850 n. 2.

Does the Supremacy Clause of the United States Constitution Bar a State Court from Characterizing Social Security Disability Benefits as Community Property Based on the Anti-Attachment Provisions Found in the Federal Social Security Act, 42 U.S.C. §§ 402 et seq.?

A state court's characterization of community property is based on that court's interpretation and application of state law. However, the anti-attachment provisions of the federal law governing social security disability benefits supersede state law, making the state court judgment a legal issue subject to de novo review by an appellate court.

"Where one or more trial court legal errors interdict the fact finding process, the manifest error standard is no longer applicable, and, if the record is otherwise complete, the reviewing court should make its own independent de novo review and assessment of the record." Campo v. Correa, 01-2707, p. 10 (La.2002), 828 So.2d 502, 510 (citing Ferrell v. Fireman's Fund Ins. Co., 94-1252 (La.2/20/95), 650 So.2d 742, 746-47).

Rivera-Santos v. Rivera-Santos, 03-667, p. 5 (La.App. 3 Cir. 12/10/03), 862 So.2d 480, 483.

Article VI, Paragraph 2 of the United States Constitution is known as the Supremacy Clause. It states:

This Constitution, and the laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the authority of the United States, shall be Supreme Law of the land; and the Judges in every state shall be bound thereby, anything in the Constitution or Laws of any state to the contrary notwithstanding.

U.S. CONST. art. VI, cl. 2.

The Supremacy Clause establishes the Constitution, federal statutes, and United States treaties as "the supreme law of the land." It requires state judges to uphold federal laws, even if state laws or constitutions are in conflict with those federal laws or the Constitution. Hisquierdo v. Hisquierdo, 439 U.S. 572, 99 S.Ct. 802, 59 L.Ed.2d 1 (1979), Philpott v. Essex County Welfare Bd., 409 U.S. 413, 93 S.Ct. 590, 34 L.Ed.2d 608 (1973).

While federal law generally steers clear of attempting to control the arena of family law, when a state's family statute conflicts with a federal statute, the Supremacy Clause is the basis for determining whether Congress intended for state law to be pre-empted. Hisquierdo, 439 U.S. 572, 99 S.Ct. 802. The United States Supreme Court has narrowed down the inquiry to two questions, "whether the [state] right as asserted conflicts with the express terms of federal law and whether its consequences sufficiently injure the objectives of the federal program to require nonrecognition." Id. at 583, 99 S.Ct. 802.

The Social Security Act contains what is called an anti-attachment clause which prevents the attachment of monies meant to aid the beneficiary receiving them. The anti-attachment provision goes further than just prohibiting the attachment of social security disability benefits; it also protects these benefits from garnishment, levy, bankruptcy, insolvency, or other legal processes:

Section 407. Assignment; amendment of section

(a) The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

42 U.S.C. § 407 (2002) (emphasis added).

In Hisquierdo, the United States Supreme Court determined that Railroad Retirement Act of 1974 benefits may not be divided under state community property laws. Hisquierdo, 439 U.S. 572, 99 S.Ct. 802. The decision was based on an analysis of the anti-attachment provisions of the Railroad Retirement Act, which uses language that is identical to the anti-attachment provision of the Social Security Act. Compare 45 U.S.C. § 231m, and 42 U.S.C. § 407. The Court stated that one of the main reasons for pre-emption was that the federal statute was for "a specified beneficiary protected by a flat prohibition against attachment. . . ." Hisquierdo, 439 U.S. at 582, 99 S.Ct. 802.

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