Case Name: Joseph S. VUSKOVICH v. Geraldine V. THORNE, Executrix of the Succession of Vincent Vuskovich, et al.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1986-11-24
Citations: 498 So. 2d 1072
Docket Number: No. 85-C-1008
Parties: Joseph S. VUSKOVICH v. Geraldine V. THORNE, Executrix of the Succession of Vincent Vuskovich, et al.
Judges: DENNIS, J., dissents with reasons.
Reporter: Southern Reporter, Second Series
Volume: 498
Pages: 1072–1081

Head Matter:
Joseph S. VUSKOVICH v. Geraldine V. THORNE, Executrix of the Succession of Vincent Vuskovich, et al.
No. 85-C-1008.
Supreme Court of Louisiana.
Nov. 24, 1986.
Roy M. Bowes, Gretna, Mack E. Barham, Robert E. Arceneaux, Barham & Churchill, New Orleans, for defendant-applicants.
Peter Butler, Aubrey Hirsch, Jr., M. Shawn McMurray, Butler, Heebe & Hirsch, New Orleans, for plaintiff-respondent.

Opinion:
LEMMON, Justice.
This is an action for partition by licitation of Lot C-7 of Oakdale Subdivision in Jefferson Parish. The lot sought to be partitioned is one of several lots subdivided from the Vuskovich family estate and is presently owned in two equal proportions by Joseph Vuskovich and by the succession of Joseph's deceased brother. The principal issues include (1) whether La.C.C. Art. 1303, which prohibits partition under certain circumstances, is applicable directly or by analogy, and (2) whether Joseph's right of partition between co-owners should be denied on the basis of his alleged abuse of right or breach of fiduciary duty as trustee of the trust established by his brother. Facts
Lot C-7 and the surrounding lots are shown on the following map:
In 1970, Visko's, Inc., a corporation whose stock was owned by Joseph and Vincent Vuskovich, opened a seafood restaurant in the building on Lot C-7. In 1974, a fire destroyed the building on Lot C-7. The two brothers purchased the lot in their individual names and built a new building.
In 1975, the two brothers leased the lot and building to Visko's, Inc. for operation of a restaurant. The ten-year lease contained an option to purchase at any time during the term of the lease at "CAB value".
Since the building covered almost the entirety of Lot C-7, Visko's, Inc. provided parking for the restaurant customers on Lot C-9, which was owned by MATO-V Enterprise, Inc. (MATO-V), a corporation whose stock was owned entirely by the Vuskovich family. However, Visko's, Inc. had no written or verbal lease or other formal agreement regarding the use of Lot C-9.
In July, 1975, Vincent sold all of his shares in Visko's, Inc. to his brother, Joseph, for value. At the time of the sale, Vincent was aware that his life expectancy was short because of a serious heart condition.
Vincent died on May 13,1977. In his last will and testament, he made certain special bequests and left the remainder of the estate (including his interest in Lot C-7) in trust to his minor son. The will established the trust and named Joseph and a sister, Geraldine V. Thorne, as co-trustees. Although Joseph neither accepted the appointment nor performed any acts in the capacity of a trustee, he did not expressly renounce the appointment until 1982 (after this action was filed).
In May, 1978 (between Vincent's death and the time Joseph renounced his appointment as trustee), Joseph purchased Lot C-9 for $143,680 from MATO-V and paved the lot for parking use. In January, 1979, Joseph purchased Lot C-8 from other members of the Vuskovich family. The building on Lot C-8 had been used by Joseph for the operation of an adjunct seafood restaurant called the Steamroom, and the two restaurants were joined by a covered walkway. Vincent also purchased Lot C-3-A in March, 1981 and leased Lot C-3-B in January, 1982.
In April, 1982, Joseph filed this action against Vincent's minor son and the executrix of Vincent's succession, seeking a partition by licitation of Lot C-7. Defendants filed an exception of no cause of action which asserted that Joseph held the legal title to the entirety of Lot C-7, one-half in his own right and one-half as trustee. Joseph immediately executed a formal renunciation of his appointment as co-trustee.
After the exception was overruled, defendants filed an answer which asserted that Joseph's breach of his fiduciary duty to the minor precluded his right to a partition. The answer also alleged that Joseph had purchased and leased the surrounding properties to deprive the restaurant building on Lot C-7 of almost all parking area and thus to eliminate the possibility of competitive bidding in a public sale of Lot C-7, and that Joseph had withheld payments to the Succession of the purchase prices of Lot C-8 and C-3-A and the rent on Lot C-3-B.
After a trial on the merits, the trial court rejected Joseph's request for a partition by licitation on the basis of La.C.C. Art. 1303. The judge noted that the buildings on Lots C-7 and C-8 were connected by a covered walkway and concluded that the peculiar configuration of these lots made them de-pendant on one another for ingress, egress and usage. Accordingly, the judge ruled that La.C.C. Art. 1303 was applicable and prohibited a partition.
On appeal, the intermediate court reversed. 466 So.2d 619. The court interpreted Article 1303 literally and held it was applicable only to "coheirs". Because Joseph acquired Lot C-7 by purchase and not by inheritance, he and the succession were not "coheirs", but were coproprietors with respect to the property sought to be partitioned. The court therefore ordered a partition by licitation with a minimum bid price. We granted certiorari. 472 So.2d 24.
Applicability of Article 1303
Article 1303 has never been judicially interpreted. The article by its terms requires two elements: (1) the property sought to be partitioned must be owned in common, and (2) the common ownership must be indispensable to the enjoyment of other properties by the co-owners.
As noted earlier, the court of appeal held Article 1303 was applicable only to the partition of succession property. Article 1303 arguably applies to coproprietors as well as coheirs, since La.C.C. Art. 1290 makes the succession articles on partition applicable to partitions among coproprie-tors. Nevertheless, even if the term "coheirs" encompasses coproprietors, the essential elements of Article 1303 are not present in this case.
The trial judge's decision to apply Article 1303 was based on the theory that the common use of Lot C-7, C-8 and C-9, because of the peculiar configuration of the lots, was indispensable to the coproprietors. However, Lots C-7, C-8 and C-9 were not owned in common, Lots C-8 and C-9 being owned solely by Joseph, and the requirement of common ownership, necessary for a determination of indivisibility of a tract composed of Lot C-7, C-8 and C-9, was missing.
If Article 1303 is applicable to Lot C-7, the only property owned in common, the result is forced indivisión in perpetuity. However, forced indivisión is intended for things which are destined to the common use of several pieces of property. See M. Planiol, Traité Élémentaire de Droit Civil § 2501 (Louisiana State Law Institute trans.1959). When co-owned property is an indispensable accessory for two or more principal estates so that the principal estates are substantially less useful without the common use of the accessory property, the co-owned accessory property cannot be partitioned. 2 Aubry & Rau, Droit Civil Francais § 221(3) (7th ed. 1961, Louisiana State Law Institute trans.). Therefore, in order for Article 1303 to be deemed a bar to the partition of Lot C-7, the perpetual indivisibility of Lot C-7 must be indispensable to the co-owners to enable them to enjoy or to derive an advantage from other property. Here, Lot C-7 does not constitute accessory property which is indispensable to the enjoyment of two or more principal estates, and Article 1303 is not applicable.
Furthermore, Article 1303 was intended as only a minor restriction on the right to partition. See Comment, Ownership in Indivisión in Louisiana, 22 Tul.L. Rev. 611 (1948). Similar to the limitations on partition for fixed periods of time, the limitation expressed in Article 1303 should be strictly construed.
Breach of Fiduciary Duty and Abuse of Right
Defendants contend that Joseph should be denied the right to partition the property because he breached his fiduciary duty as trustee by dealing with trust property for his own interest while delaying rejection of his appointment as trustee. Defendants argue that Joseph violated his obligation to the trust by purchasing Lot C-9 for himself individually, from himself as trustee for one of the owners, in an obvious conflict of interest between his position as buyer and his fiduciary position for one of the sellers.
Even if we accept for purpose of argument defendants' assertion that we should disregard the corporate entity and treat the shareholders as owners of the property, that piercing of the corporate veil would be significant primarily in a suit to set aside Joseph's purchase of Lot C-9. Defendants' argument that Joseph purchased Lot C-9 from himself as trustee appears to have only marginal relevance as a defense in an action for partition by licitation of Lot C-7
The crucial problem which prompted our granting certiorari was the possibility that Joseph bought Lot C-9 (no matter whether that lot was owned by the trust or by a third party) while he deliberately delayed renouncing his appointment as trustee and prevented anyone from acting on behalf of the trust to compete for the property or to seek joint acquisition. Such a breach of fiduciary duty, if proved, could perhaps give rise to a claim for damages, or to an action to set aside the sale of Lot C-9, or to construing the purchase of Lot C-9 as an acquisition for the joint benefit of the minor. However, defendants did not seek any such relief in this action. Any breach of fiduciary duty which may have been suggested in this record did not constitute a defense in this action for partition by licitation of Lot C-7.
Defendants also contend that Joseph's right to partition should be denied because his "severance of Lot C-9 from its former owners and from its relationship with Lot C-7, combined with the recorded lease and its purchase option", constituted an abuse of right. One may not exercise rights for the exclusive purpose of harming another or without serious and legitimate interest. See generally Cueto-Rua, Abuse of Rights, 35 La.L.Rev. 965 (1975). However, Joseph's exercise of his right to partition in this case is far different from a landowner's building an extraordinarily high spiked fence adjacent to a narrow landing strip for dirigibles for the purpose of forcing the strip owner to buy the adjacent land at an unreasonable price. Judgment of August 3, 1915, Cass, req., Fr., 1917 Recueil Periodique et Critique I 79.
Here, defendants are in the situation of being an owner in indivisión of property, which the co-owner seeks to have partitioned by licitation at a judicial sale at which no third party is likely to bid an amount near the appraised value of the property (when considered with a parking lot). This situation was created, however, when Joseph and Vincent spent substantial sums purchasing land and constructing a building without securing the use of Lot C-9 by purchase or long-term lease for use as a parking lot. If either co-owner immediately after the construction had sued for partition, the other co-owner would have found himself in exactly the same position, facing a judicial sale at which no third party would be likely to bid an amount approaching the value to the owners. The basic problem is that Lot C-7, then and now, is not nearly as valuable without the parking lot. That difference in value was created by the action of Joseph and Vincent in 1975, not by Joseph's purchase of Lot C-9 in 1979. Defendants' situation did not change when Joseph acquired Lot C-9, because defendants never had any right of control as to the use of Lot C-9 (although the trust held ten per cent of the stock in the corporation which owned the property).
Partition by licitation often results in harsh consequences to the co-owner in the less favorable economic position. Any possible abuse in this case, however, appears to be in relation to the circumstances surrounding the acquisition of Lot C-9, as discussed above, rather than to Joseph's exercise of his long-standing right to partition Lot C-7. Loss from that abuse may perhaps be the proper subject of a damage action, but does not constitute a ground for denial of the right to partition.
For these reasons, the judgment of the court of appeal is affirmed.
DENNIS, J., dissents with reasons.
Blanche, J., retired, participated in this case ad hoc in place of Cole, J., the matter having been heard and submitted before Justice Cole replaced Justice Blanche on the Court.
Judge Felix H. Savoie, Jr. of the Court of Appeal, First Circuit, participated in this decision as Associate Justice ad hoc in place of Justice Watson, who was recused.
. Joseph expressly assumed certain debts of Vincent and Visko's, Inc. in the amount of $194,000. Vincent agreed to remain as manager of the restaurant for two years.
. Evidence at trial established that the appraised value of Lot C-9 was $134,000.
. The sale of the interest owned by the Succession of Vincent was signed by Geraldine as administratrix, pursuant to court authority.
.La.C.C. Art. 1303 provides:
"There can be no partition, when the use of the thing held in common is indispensable to the coheirs, to enable them to enjoy, or to derive an advantage from the portion of the effects of the succession falling to them, such as an entry which serves as a passage to several houses, or a way common to several estates, and other things of the same kind."
. This article has been cited in dicta in a mineral law case, Gulf Refining Co. of Louisiana v. Hayne, 138 La. 555, 70 So. 509 (1915).
. Lot C-7 was clearly not indivisible by nature when Joseph and Vincent built a new building on virtually the entire lot without concern about the absence of any parking area under their control.
. As noted above, the record establishes that the value of Lot C-9 at the time of the sale was slightly less than the purchase price.
. Counsel informed the court in oral argument that a tort suit was pending in the district court.
. The appraiser assigned a seventy per cent decrease in the value of Lot C-7 and the building if parking is not available.