Opinion ID: 1856655
Heading Depth: 1
Heading Rank: 5

Heading: La R.S. 9:374(C)

Text: La.R.S. 9:374(C) provides for the award of rental payments for a spouse's occupancy of the family residence pending partition of the community: A spouse who uses and occupies or is awarded by the court the use and occupancy of the family residence pending either the termination of the marriage or the partition of the community property in accordance with the provision of R.S. 9:374(A) or (B) shall not be liable to the other spouse for rental for the use and occupancy, unless otherwise agreed by the spouses or ordered by the court. (Emphasis added). The circuit courts of appeal of this state have differing views on the issue of whether an assessment of rent may be made retroactively for a spouse's occupation of the family home pending partition of the community property. In interpreting the above statute, the First and Second Circuit Courts of Appeal have relied upon principles of co-ownership in holding that a spouse who has exclusive use of the matrimonial domicile is not liable to the other spouse for rental payments unless ordered to pay rental by the trial court or agreed by the parties at the time of occupancy. Wochomurka, 552 So.2d 405, disallowed a retroactive award of rent to a co-owning spouse. The court stated: [T]he Louisiana legislature intended that a spouse who is awarded the use and occupancy of the marital home pending the judicial partition, shall not be liable to the other spouse for rental payments on the home unless ordered to pay by the trial court at the time of the award of use and occupancy.       The general rule of law that a co-owner has the right to use the common property without the payment of rent is controlling in this case. Wochomurka, 552 So.2d at 406. See also, McElwee v. McElwee, 93-1010 (La.App. 1 Cir. 8/17/94), 649 So.2d 975; Bolden v. Bolden, 524 So.2d 10 (La.App. 1 Cir.1988); Williams v. Williams, 509 So.2d 77 (La.App. 1 Cir.1987). The Second Circuit Court of Appeal, in McConathy v. McConathy, 25,542 (La.App. 2 Cir. 2/23/94), 632 So.2d 1200, amplified the holding in Wochomurka, stating: Once the community of acquets and gains has been dissolved by separation, the spouses become co-owners, or owners in indivision of the marital home. As such, the spouses are entitled to the use, enjoyment, and disposition of the property. LSA-C.C. Arts. 477 and 480. A corollary right permits the use and occupancy of the property by the co-owner without the payment of rent. Pursuant to LSA-R.S. 9:374, the trial court may order rental payments on the family home. However, the order must also be made at the time of the award of use and occupancy. This court reasoned in the Jones case that: We do not believe the legislature intended to give a trial court blanket discretion to order rental payments at the time of partition, which might be years after the use and occupancy award. McConathy, 632 So.2d at 1207-08, (citations omitted), citing Jones v. Jones, 605 So.2d 689, 693 (La.App. 2 Cir.1992), writ den'd, 607 So.2d 571 (La.1992). The Third and Fourth and Fifth Circuit Courts of Appeal interpret La.R.S. 9:374(C) as an authorization for the trial courts to award rental value at any time, including retroactively. In Nichols v. Nichols, 95-1290 (La.App. 3 Cir. 3/20/96), 671 So.2d 1069, the Third Circuit Court of Appeal affirmed the retroactive assessment of 112 months rent, stating: Consistently this court has ruled that, under La.R.S. 9:374(C), the decision to award rent to a non-occupant spouse rests soundly within the trial court's discretion. Rozier v. Rozier, 583 So.2d 87 (La.App. 3 Cir. 1991); LeBlanc v. LeBlanc, 490 So.2d 763 (La.App. 3 Cir.), writ denied, 494 So.2d 332 (La.1986). Moreover, where the facts so warrant, the trial court enjoys vast discretion to devise rental assessments under La.R.S. 9:374(C). Nichols, 671 So.2d at 1072. This Court previously addressed this issue in a per curiam opinion, Bodenheimer v. Freitag, 94-2573 (La.1/6/95), 651 So.2d 251, but failed to resolve the split in the circuits. [9] Finding the issue now squarely before us, we hold that rental payments may not be retroactively assessed under La.R.S. 9:374(C) unless otherwise agreed by the spouses or ordered by the court. After carefully scrutinizing the appellate court decisions, we find that the First and Second Circuits were correct in their application of principles of co-ownership in making their determination. La.Civ.Code art. 2369.1 provides, in pertinent part: After termination of the community property regime, the provisions governing coownership apply to former community property, unless otherwise provided by law or by juridical act. The use and management of a thing held in indivision is determined by agreement of all the co-owners. La.Civ.Code art. 801. A co-owner is entitled to use the thing held in indivision according to its destination, but he cannot prevent another co-owner from making such use of it. La.Civ.Code art. 802. Nevertheless, it is well established that a co-owner need not pay rent to another coowner for his exclusive use of the co-owned property. In Juneau v. Laborde, 228 La. 410, 82 So.2d 693 (La.1955), this Court stated: This claim cannot be sanctioned, for defendant was a co-owner of the property and was entitled, as such, to occupy it without becoming liable to plaintiffs for rent. Becnel v. Becnel, 23 La.Ann. 150; Balfour's Heirs v. Balfour, 33 La.Ann. 297; Toler v. Bunch, 34 La.Ann. 997 and Perez v. Guitard, 14 Orleans App. 191. In determining the amount due and recoverable by a coowner out of possession from his co-owner in possession, a clear distinction should be drawn between the personal occupancy, use and enjoyment of property by the possessor and the rents and revenues derived by him therefrom, either from a lease or by his own industry or exploitation. As to the latter, he must account to his co-owner for all rents and revenues he has received because, in obtaining these fruits, he acts not only for himself but also as the agent of his co-owner for the latter's just proportion.       On the other hand, the co-owner who takes possession of the common property does not have to account to his coproprietor, because the right of occupancy is vested in him by virtue of his ownership. Article 494, Civil Code. This right of co-owners to possession of the property being equal and coextensive, neither becomes indebted to the other for his personal occupancy and enjoyment, save, probably, that a co-owner, who has been deprived of the right of possession by reason of his co-owner's exclusive occupancy, may claim damages from the date upon which he has demanded occupancy and has been refused by the possessor. But, even in these instances, the co-owner in possession cannot be enjoined from occupying the property or cultivating it. The remedy of the co-owner out of possession is, as stated in Moreira v. Schwan, 113 La. 643, 37 So. 542, 543, `   by suit for a partition and settlement of accounts, or for a division of profits, if any.' Juneau, 82 So.2d at 695-96. (Footnotes omitted). Under the principles enunciated in Juneau, a co-owner in exclusive possession may be liable for rent, but only beginning on the date another co-owner has demanded occupancy and has been refused. This underlying principle amply supports the requirement that for the assessment of rent under La.R.S. 9:374(C), there must be an agreement between the spouses or a court order for rent contemporaneous with the award of occupancy. If the parties cannot reach an agreement, either spouse may petition the court for the occupancy of the family home under La.Civ. Code art. 105, and the determination of occupancy and rent is governed by La.R.S. 9:374. At the time occupancy is awarded under La.R.S. 9:374(B), the trial court has the opportunity to weigh the arguments of both spouses on the rent issue at a contradictory hearing. [10] La.R.S. 9:374(B) provides that the trial court shall consider the relative economic status of the parties, the needs of the children, and the effect of the award of the occupancy on alimony and child support. La. R.S. 9:374, when read as a whole, contemplates that any award of rent shall be made in conjunction with the determination of occupancy and in light of the factors in La.R.S. 9:374(B). Public policy also weighs heavily against the retroactive award of rent under La.R.S. 9:374(C). As is plainly illustrated by the case sub judice, when the community is not partitioned for many years, the retroactive assessment of rent is extremely prejudicial to the occupying spouse. Such retroactive assessment deprives the occupying spouse of the ability to make an informed and meaningful decision regarding his or her finances and housing budget. There is no corollary prejudice to the non-occupying spouse under this interpretation of the statute, since that spouse has the ability to invoke a court proceeding to determine occupancy and rent at any time. La.Civ.Code art. 105. In addressing the propriety of the trial court's ruling, the court of appeal noted that under the jurisprudence of its own circuit, where there is no prior agreement between the parties, the occupying spouse cannot be retroactively assessed rent for the occupancy of the family home. Nevertheless, the court of appeal distinguished the instant case from the prior cases since it found that the record reflected that there was a prior agreement between the parties with respect to rent. The court of appeal found that Mrs. McCarroll's agreement to waive her rights to the community portion of the retirement benefits constituted a verbal agreement between the parties that justified the trial court's award of retroactive rent under La.R.S. 9:374(C). It therefore affirmed the trial court's determination that the rental value should be included in the lesion analysis. We agree, but as found herein above, the agreement among the parties regarding Mrs. McCarroll's exclusive use of the family residence did not extend beyond 1984. Thus, finding that there was an agreement between the parties whereby Mrs. McCarroll waived her rights to the benefits, and Mr. McCarroll agreed to her occupancy of the family home until the children were eighteen years of age, we find that agreement could have been properly considered as in-kind value for purposes of determining whether the March 3, 1990, agreement was lesionary.