DERING v. DERING (2023)

Writ application granted. See per curiam.

Writ granted. These former spouses executed a Community Property Partition Agreement on June 16, 1981, just prior to their August 6, 1981 divorce. In opposition to a Petition to Partition Co-Owned Immovable Property, filed by the applicant on January 9, 2020, respondent filed a motion for summary judgment, alleging that she was granted a lifetime usufruct over the home pursuant to their agreement. In a cross motion for summary judgment, the applicant argued that the agreement merely granted respondent a right of habitation that terminated when their children reached the age of majority.

The agreement executed by the parties provides that: “[t]he parties hereto further declare that they shall remain owners in indivision, each owning an undivided one-half (1/212) interest” in the property on which their former family home is located. As such, the parties stated that they both “remain jointly and solidarity liable to pay the unpaid balance” of the note secured by the mortgage on the home. The agreement further provides as follows:

The parties further agree that the aforementioned immovable property may remain in the care of KAY DERING, born Watson, as residence for the two minor children born of the marriage, for whom KAY DERING, born Watson, has the temporary and finally the permanent care, custody, and control, namely JAMES TROY DERING and JEREMY PAUL DERING. This agreement remains valid for as long as KAY DERING, born Watson, chooses to reside there, with the stipulation that KAY DERING, born Watson, maintains the present condition of said property and continues payment of the monthly notes due on said property which note totals $137.00 per month; and for as long as KAY DERING, born Watson, does not remarry or set up household with another male while the minor children remain in her custody.

Upon the sale of said property, KAY DERING, born Watson, will be credited for the principal amount which she has applied to the mortgage described herein, and the remaining balance, if any, will be equally divided between the parties herein.

The general rules of contract interpretation are set forth in the Louisiana Civil Code. See LSA-C.C. art. 2045, et seq. Contracts have the effect of law for the parties and the interpretation of a contract is the determination of the parties’ common intent. Clovelly Oil Co., LLC v. Midstates Petroleum Co., LLC, 12-2055 (La. 3/19/13), 112 So.3d 187, 192 (citing Marin v. Exxon Mobil Corp., 09-2368 (La. 10/19/10), 48 So.3d 234, 258; LSA-C.C. arts. 1983 and 2045). “When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent.” LSA-C.C. art. 2046. “The words of a contract must be given their generally prevailing meaning,” and “[w]ords susceptible of different meanings must be interpreted as having the meaning that best conforms to the object of the contract.” LSA-C.C. arts. 2047 & 2048. Further, “a provision” in a contract that is “susceptible of different meanings must be interpreted with a meaning that renders it effective and not with one that renders it ineffective.” LSA-C.C. art. 2049. Additionally, “[e]ach provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole.” LS A-C.C. art. 2050.

Pursuant to the clear and unambiguous language of the contract in this case, the parties agreed to remain co-owners in indivision, each owning an undivided 1/212 interest in the home. The parties further agreed that the home would remain in respondent's care to use as a residence for their minor children. The agreement further clarifies that respondent would retain the right to exclusive use and occupancy of the home as a residence for the children as long as she wanted to live there, and as long as she met certain specified conditions (i.e., maintained the property, kept current with the payment of the note, and did not remarry or move another male into the home.) The agreement of the parties is clearly tied to the needs of the couple's minor children and contemplates the eventual sale of the property. It does not contain the words “lifetime” or “usufruct.” As such, the summary judgment rendered in favor of the respondent is reversed, summary judgment is rendered in favor of the applicant, and this matter is remanded for further proceedings.

REVERSED, RENDERED, and REMANDED.

The issue presented in this case is whether a Community Property Partition Agreement executed by former spouses, William Dering and Kay Dering, created a right to reside in the former family home in favor of Kay, for as long as she “chooses to reside there.” The district court granted Kay's motion for summary judgment, thereby recognizing her right to reside in the home. The court of appeal affirmed, interpreting the provisions of the agreement as more closely resembling a usufruct than a mere right of habitation. In reversing these rulings, the majority fails to give proper consideration to the clear and unambiguous conditions set forth in the contractual agreement.

The lower courts and the majority err, in my view, in attempting to shoe horn the agreement into some “legal pigeonhole” as opposed to applying the language of the Partition Agreement as written by the parties. Regardless of whether the Partition Agreement created a lifetime usufruct in favor of Kay, the contractual language directly addresses Kay's right to continue residing in the home. The majority correctly sets forth the law on contract interpretation, but I must respectfully dissent from the ultimate application. Although I agree with the majority that the Partition Agreement was tied to the needs of the minor children when it was executed in 1981, the Partition Agreement does not provide that Kay's right to use the property terminated when the children reached majority status. The contractual language in the Partition Agreement provides that the parties will remain co-owners in indivision and that the property remains in Kay's care. Importantly, the contractual language provides that this agreement will remain valid “for as long as [Kay] chooses to reside there, with the stipulation that [Kay] maintains the present condition of said property and continues payment of the monthly notes ․ and for as long as [Kay] does not remarry or set up household with another male while the minor children remain in her custody.”

I interpret the above language to create a right in favor of Kay to remain on the property for a long as she chooses to reside there, subject to the stated stipulations. William and Kay were free to create any agreement contractually, as long as it did not violate public policy. See La. C.C. art. 1971; Louisiana Smoked Products, Inc. v. Savoie's Sausage & Food Products, Inc., 96-1716, 96-1727, p. 14 (La. 7/1/97), 696 So. 2d 1373, 1380-81. This court has long recognized that the freedom to contract is an important public policy, and the parties’ right to contract can only be restricted if the proposed bargain is found to have some deleterious effect on the public or to contravene some other matter of public policy. Shelter Mut. Ins. Co. v. Rimkus Consulting Group, Inc. of Louisiana, 13-1977, p. 17 (La. 7/1/14), 148 So.3d 871, 881-82. Notably, even framing the issue solely as whether the language of the Partition Agreement created a lifetime usufruct in favor of Kay, our Civil Code does not require use of the words “usufruct” or “lifetime usufruct” to validly create one. See La. C.C. art. 544. Parties have contractual freedom to establish a term or set forth conditions in creating the usufruct. See La. C.C. art. 545 (“Usufruct may be established for a term or under a condition, and subject to any modification consistent with the nature of usufruct. The rights and obligations of the usufructuary and of the naked owner may be modified by agreement unless modification is prohibited by law or by the grantor in the act establishing the usufruct.”)

The parties here were free to contract as they wished. Kay was granted the right to stay in the house as long as she “chooses to reside there” provided she maintain the property and pay the note, and provided she did not remarry or cohabitate with another male while the minor children were in her custody. It is undisputed that Kay has chosen to live in the home since the Partition Agreement was executed, paid the note, paid the taxes, and maintained the property. There is no allegation she remarried or lived with another male while the children were minors. Kay has performed all of the conditions stipulated in the agreement.

Signatures to an agreement are not mere ornaments. Tweedel v. Brasseaux, 433 So.2d 133, 137 (La. 1983). Courts are bound to give force and effect to that which is written and not modify the agreement because it is perceived one made a bad bargain or expressed their agreement inarticulately. Any suggestion the language is ambiguous is undermined by the fact the lower courts ruled in favor of Kay. The language is explicit and clear–Kay can stay in the home for as long as she “chooses to reside there” as long as she meets the stipulations.

I would deny the writ application because the ultimate judgments of the lower courts correctly reflect the agreement of the parties.

Respectfully, in furtherance of an equitable solution the majority reads between the lines of the contractual agreement rather than enforce it as written. Validity of the agreement is only contingent on the stipulations that Kay maintains the property, pays the monthly note, and did not remarry or set up another household with another male while the minor children remained in her custody. As observed by Chief Justice Weimer, the agreement does not provide that Kay's right to use the property necessarily terminated when the children reached majority status. Accordingly, I would enforce the agreement according to its plain language and affirm. “It is not the province of the courts to relieve a party of a bad bargain, no matter how harsh.” Bergeron v. Andersen, 22-0150 (La. 4/5/22), 335 So.3d 243 (quoting Gibbs Const. Co., Inc. v. Thomas, 500 So.2d 764, 768 (La. 1987)).

Weimer, C.J., dissents and assigns reasons. Griffin, J., dissents for the reasons assigned by Chief Justice Weimer and assigns additional reasons.