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01/17/01

SUPREME COURT OF LOUISIANA No. 99-C-3097 JUNE COLEMAN, WIFE OF LESLIE LEON ROBINSON, JR. versus LESLIE LEON ROBINSON, JR. ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FOURTH CIRCUIT, PARISH OF ORLEANS

JOHNSON, J.* We granted writ of certiorari in this case to determine whether an agreement to partition community property must be construed using North Carolina law, as provided in the contract, or whether Louisiana has a more compelling interest in applying its own law. We also address whether a husband is obligated to designate his former wife as beneficiary of the survivor's annuity once his obligation to pay alimony has terminated. After a considered review of the record, applicable law, and both Louisiana and North Carolina jurisprudence, we reverse the decisions of the lower courts and remand. FACTS AND PROCEDURAL HISTORY Plaintiff, June Coleman, and defendant, Leslie L. Robinson, Jr., were married on June 30, 1955. Mr. Robinson was employed by the federal government as an administrative law judge and was transferred on several occasions. The parties were domiciled in the states of Wyoming, Texas, California and Virginia for various periods of their marriage, but spent the majority of their marriage in Louisiana. When the parties separated in January of 1986, they had been living in Louisiana since 1978. Ms. Coleman filed a Petition for Separation based on abandonment in the Orleans Parish Civil District Court on February 14, 1986 and a judgment was rendered in her favor on March 26, 1986. It was at this point that their community of acquets and gains was terminated. The parties divided the movables manually and sold the former matrimonial domicile. The revenue from that sale was equally

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Marcus, J. (now retired), not on panel. See Rule IV, Part 2, Sec. 3.

divided between them. There was never an itemization of any assets or liabilities, and no values were ever assigned to any property in the partition. Mr. Robinson subsequently established a residence in North Carolina, while Ms. Coleman remained in Louisiana. In December of 1986, Mr. Robinson filed for divorce in the Orleans Parish Civil District Court. After months of correspondence between the parties, it became clear that Ms. Coleman was hesitant to move to final judgment. In a letter dated April 24, 1987, addressed to Ms. Coleman, Mr. Robinson wrote: After talking to you today I have given a good deal of thought to the difficulty in getting this divorce finalized. I realize you do not want to have to go to Court and do this and I suppose I understand that. At the same time, I do not want to have to return to New Orleans in order to get it done. . . . Therefore in order to give you an alternative, I have contacted an attorney here who is willing to handle the matter. He is going to file a divorce action here and forward the papers to your attorney. You will not need to do anything other than sign a few papers. The property settlement and alimony settlements will remain the same and will be attached to the judgment [sic]. Instead of pursuing the Louisiana divorce to a conclusion, Mr. Robinson filed for divorce in Mecklenberg County, North Carolina and obtained a default judgment on July 20, 1987. Robinson v. Robinson, No. 87-5782, slip op. (N.C. Dist.Ct. 1987). One month after the judgment, the parties entered into the Separation, Support, and Property Settlement Agreement ("Agreement") drafted by North Carolina counsel for Mr. Robinson.2 Unlike the previous "New Orleans draft," the Agreement did not mention any community property which previously had been divided between the parties and

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By letter, the defendant urged his former wife to sign the Agreement as soon as possible, pointing out that the parties had nothing binding regarding his agreement to pay alimony and to designate her as recipient of the survivor benefits. Ms. Coleman asserts that she felt considerable pressure to finalize the proposed settlement hastily because she was unemployed and solely dependent upon income from the proposed alimony agreement.

substituted North Carolina law for Louisiana law to control the agreement.2 The Agreement contained the following relevant provisions: Paragraph 3. The Wife, for herself, her heirs, executors, administrators, and assigns, hereby releases and relinquishes unto the Husband, his heirs, executors, administrators, and assigns, all right of future support, all right of dower, inheritance, descent, and distribution, and right to dissent from his will, and any and all other rights arising out of their marriage relationship, and to any and all property or interest in property, real, personal, and mixed, now owned or hereafter acquired by Husband, and hereby agrees that Husband henceforth may acquire, hold, manage, alienate, lease, and convey his property without her knowledge, further consent, or joinder, in accordance with the provisions of law, the same as if she never had been married to him, and further does hereby release, relinquish, and renounce any and all right to administer upon his estate. *** Paragraph 7. Husband and Wife have accomplished a complete liquidation and division of their property in full settlement of all of their property rights, whether arising out of the equitable distribution statute (N.C.G.S. 50-20, etc.) or under the community of acquets and gains laws in the State of Louisiana, or any other provision of the law of any other jurisdiction, statutory or otherwise, and hereby ratify the division of such property, and agree that the same amounts to an equitable division of their property. *** Paragraph 13. This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina. This agreement shall continue in full force and effect even though one of the parties hereto may secure an absolute divorce from the other party subject only to the contingencies and limitations specifically enumerated herein. Following the signing of the Agreement, the parties' legal relationship ended without further contact concerning the community. Ms. Coleman remarried in 1988 and Mr. Robinson remarried in 1989. Mr. Robinson retired in December, 1992 and began receiving his retirement benefits in 1993. Under the pension plan, his present wife is the designated beneficiary of the survivor benefits. In

The New Orleans draft contained several paragraphs that differed from the North Carolina Agreement. Those, of relevance, are: 1. Husband and Wife sold the former matrimonial domicile belonging to the community of acquets and gains formerly existing between the parties and proceeds were divided equally. *** 4. Each of the parties is to keep what is presently in their possession. The parties also acknowledge that Leslie L. Robinson, Jr. has separate property which property is to remain in his possession and that all household goods which were located in the former community existing between the parties are the property of June Coleman Robinson. *** 7. Husband and Wife further agree that they have hereby accomplished a complete liquidation of the community of acquets and gains formerly existing between them, and they do accordingly hereby mutually release and forever discharge each other from any and all further claims and demands and any and all further accounting between them. It is the intention of the parties that henceforth there shall be, as between them, only such right and obligations as are specifically provided for in this Agreement, and the parties acknowledge that the allocation made to them has resulted in each party's receiving an equal share of the community property. *** 9. This Agreement shall be construed in accordance with the laws of the State of Louisiana, entirely independent of the law as of any forum where it may subsequently be the subject of judicial construction or enforcement. . . .

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December of 1993, defendant filed a complaint in the North Carolina court seeking a declaratory judgment that plaintiff had no rights in his pension benefits. The complaint was dismissed by the North Carolina trial court for lack of personal jurisdiction, and affirmed by the North Carolina Court of Appeals. Robinson v. Hinckley, 458 S.E.2d 715 (N.C. Ct. App. 1995). On January 18, 1994, Ms. Coleman filed a Petition for Supplemental Partition, seeking a division of her former husband's pension benefits that were not partitioned in the property settlement. She followed her original petition with supplemental petitions seeking: (1) enforcement of the provision of the agreement in which defendant agreed to designate plaintiff as recipient of the survivor benefit, plus attorney's fees provided for in the agreement; and (2) a determination that defendant's actions and silence amounted to fraud, bad faith, and a breach of fiduciary duty, entitling plaintiff to damages and attorney fees and, alternatively, to a recision of the partition based on fraud. Mr. Robinson answered the petition and filed a Motion for Declaratory Judgment, Motion for Summary Judgment, and a Memorandum in Support for Summary Judgment. A hearing was held in Civil District Court on December 1 and December 2, 1997, on the Motions for Declaratory Judgment and Summary Judgment filed by defendant and plaintiff's demand for supplemental partition. On December 15, 1997, the trial court rendered judgment in favor of the defendant, granting his Motion for Declaratory Judgment. The court found that "North Carolina governs any and all issues involving the Separation, Support, and Property Settlement Agreement ("Agreement") executed by the parties on August 27, 1987." On February 5, 1998, the trial court rendered judgment with reasons, dismissing plaintiff's petition for supplemental partition with prejudice.3 Plaintiff filed a Motion for New Trial that was argued on March 25, 1998. Ms. Coleman argued that the court failed to rule on her request for enforcement of the agreement with respect to the survivor's annuity. On April 1, 1998, the court rendered an amended judgment that denied Ms. Coleman's petition. Ms. Coleman appealed to the Fourth Circuit Court of Appeal. Coleman v. Robinson, 98-1874 (La. App. 4 Cir. 9/1/99); 746 So. 2d 65. The court of appeal affirmed the ruling of the trial judge,

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Defendant also sought and obtained a judgment to recover $25,000 he had loaned Ms. Coleman at the time of the Agreement, but that had not been timely repaid. The court denied legal interest on this debt.

finding that "[t]he contractual choice of law is expressly set forth in the agreement. By the clear and unambiguous language of the Separation, Support, and Property Settlement Agreement, the parties agreed that North Carolina law would apply to the interpretation of the agreement." Accordingly, the court of appeal concluded that the trial court did not err in determining that North Carolina law controlled the agreement, nor did it err in its construction and application of North Carolina law. The court of appeal upheld the decision denying supplemental partition of defendant's pension plan. The court also denied plaintiff relief on her claim seeking to have defendant name her as beneficiary of his annuity because the court reasoned, "the purpose of Mr. Robinson having to choose Option B was to provide his former wife with some sort of income to replace the alimony she would lose should he predecease her. When plaintiff remarried, however, defendant was no longer required to chose Option B of the retirement plan." Finally, the court of appeal upheld the trial court's finding that there was no fraud, bad faith, or breach of duty on the part of Mr. Robinson. Judge Katz, dissenting, would have reversed the decision of the trial court as it relates to the partition of the federal pension benefits. Plaintiff seeks review of this decision and assigns four errors. They are: 1. The lower courts erred in giving effect to the North Carolina choice of law provision in the agreement and further erred in their construction and application of North Carolina law to the agreement. 2. The Court of Appeal erred in affirming the trial court's denial of [plaintiff's] right to be designated as beneficiary of the survivor annuity, as clearly provided for in the Agreement. 3. The lower courts erred in failing to find that [defendant] breached his fiduciary duty to [plaintiff] and that his silence and actions amounted to fraud and bad faith entitling [plaintiff] to damages and attorney's fees. 4. The lower court erred procedurally in granting a declaratory judgment. We granted this writ of certiorari to determine whether Louisiana or North Carolina law should be applied to determine the ownership rights in this pension plan. Coleman v. Robinson, 99-3097 (La. 1/14/00); 752 So. 2d 877. Specifically, we must decide whether using general divestiture language in a partition settlement agreement has the effect of transferring one spouse's interest in a pension plan to the other where the pension was not specifically divided in the Agreement; and whether termination of alimony affects a husband's obligation to designate his former wife as beneficiary of the survivor's annuity.

DISCUSSION PART I: LOUISIANA COMMUNITY PROPERTY LAW Louisiana Civil Code article 2325 defines the matrimonial regime as "a system of principles and rules governing the ownership and management of the property of married persons as between themselves and toward third persons." A matrimonial regime may be legal, contractual, or partly legal and partly contractual. La. Civ. Code art. 2326. There is a presumption in the law that all married persons living in Louisiana are under the legal regime of acquets and gains (community property). Our community property laws apply to spouses domiciled in this state, regardless of their domicile at the time of marriage or the place of celebration of the marriage. La. Civ. Code art. 2334. However, married persons are also given the opportunity to establish another regime other than the legal regime of acquets and gains during the first year after moving into and acquiring a domicile in this state, spouses may enter into a matrimonial agreement without court approval. La. Civ. Code art. 2328. Spouses are also free to establish by matrimonial agreement4 a regime of separation of property or modify the legal regime as provided by law. Id. Moreover, spouses may enter into a matrimonial agreement before or during marriage as to all matters that are not prohibited by public policy. La. Civ. Code art. 2329. Under Louisiana law, property is characterized as either community or separate. La. Civ.Code art. 2335. Property acquired during the existence of the community is presumed to be community, but either spouse may rebut the presumption and prove the separate nature of said property. La. Civ.Code art. 2340. The classification of property as separate or community is fixed at the time of its acquisition. Smith v. Smith, 95-0913 (La.App. 1st Cir. 12/20/96), 685 So.2d 649. Pursuant to La. Civ.Code art. 2338, community property is comprised of: property acquired during the existence of the legal regime through the effort, skill, or industry of either spouse; property acquired with community things or with community and separate

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Matrimonial agreement is a contract establishing a regime of separation of property or modifying or terminating the legal regime. LA. CIV. CODE ART. 2328.

things, unless classified as separate property under Article 2341; property donated to the spouses jointly; natural and civil fruits of community property; damages awarded for loss or injury to a thing belonging to the community; and all other property not classified by law as separate property. Conversely, La. Civ.Code art. 2341 provides, in pertinent part, that a person's separate estate is comprised of: property acquired by a spouse prior to the establishment of a community property regime; property acquired by a spouse with separate things or with separate and community things when the value of the community things is inconsequential in comparison with the value of the separate things used; property acquired by a spouse by inheritance or donation to him individually; damages awarded to a spouse in an action for breach of contract against the other spouse or for the loss sustained as a result of fraud or bad faith in the management of community property by the other spouse; damages or other indemnity awarded to a spouse in connection with the management of his separate property; and things acquired by a spouse as a result of a voluntary partition of the community during the existence of a community property regime. In the present case, Ms. Coleman, and Mr. Robinson were domiciled in Wyoming, Texas, California and Virginia for various periods of their marriage. However, the majority of their marriage was spent in Louisiana. When they moved to Louisiana they had a period of one year to declare a legal regime. The record indicates that the couple failed to establish any legal regime by matrimonial agreement. Thus, Ms. Coleman and Mr. Robinson subjected themselves to the laws of community of acquets and gains or community property. CLASSIFYING PENSION RIGHTS AS COMMUNITY OR SEPARATE PROPERTY The main inquiry in this case is whether Ms. Coleman is entitled to a portion of the pension benefits of her ex-husband Mr. Robinson. The pension benefits must be correctly identified before we can determine Ms. Coleman's rights, if any. Before an asset can be classified as community or separate, it must first be identified as "property." K. Spaht and L. Hargrave, Matrimonial Regimes, 16 Civil Law Treatise

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