Wife’s Interests Not Represented by Attorney in Pre-Divorce Collusion

Officers of the Court are expected to follow a specific level of professionalism and truthfulness that trumps any personal feelings they have on a case. One unfortunate case highlighted today involves the dissolution of a 22-year marriage and the unfortunate deceitful behavior of the husband and his attorney. Unbeknownst to the wife, the husband filed a petition for divorce on August 9, 2006. On that same day, the husband convinced his wife to meet at his attorney’s office to discuss a settlement of the community property. The wife was under the impression that the attorney was a neutral party, helping the couple come to a fair division of their property. However, things were not as they appeared.

The husband and wife signed an agreement partitioning their community property at the meeting along with a quitclaim deed for their real estate. A few days later, the couple returned to the attorney’s office and re-executed the documents in the presence of two witnesses for formality purposes.

When the wife became aware of the scheming on the part of her husband and the attorney, she immediately filed a suit in the trial court to rescind the agreement based on error, fraud, duress and lesion. The trial court rendered a judgment in favor of the husband and the wife appealed, bringing us to the case-at-hand.

The appeal was based primarily on fraud. Fraud is a willful tort action defined by Black’s Law Dictionary as “a knowing misrepresentation of the trust or concealment of a material fact to induce another to act to his or her detriment.”

The appeals court found that the trial court imposed an improper burden of proof regarding the fraud claim and the only fair result is to rescind the agreement based on fraud. The general rule is that an appellate court may set aside a trial court’s finding of fact based on manifest error or if the decision was clearly wrong. Here, the evidence did not exhibit a reasonable factual basis for the finding of the trial court.

The trial court erroneously applied the incorrect burden of proof. The wife was required to prove her claims by clear and convincing evidence, which inappropriately involved a detailed discussion of the valuation of the community property. Such discussions were obviously not
pertinent to the fraud claim. The correct burden of proof in this instance for a fraud claim is by a
preponderance of the evidence.

In order for an act to constitute fraud, “it must be calculated to produce a misleading effect.” The evidence is clear that the husband misrepresented the situation and the roles of the parties involved with the intent to mislead his wife. Fraud was evident in the record and overlooked. The husband clearly misrepresented the situation and suppressed the truth of the role of the attorney and the pending divorce proceedings. The wife did not have a clear picture of what was actually occurring, as she believed she was in the presence of fairness.

The most questionable and despicable behavior in this case was by the attorney, who did not uphold his standards of ethics as an officer of the court. The agreement clearly stated that neither party was represented by the attorney, despite the fact that the attorney had filed a
divorce petition for the husband that very same day. Even more so, the attorney was a family
friend of the couple and the wife did not suspect that the two were conniving or deceiving her.

The appeals court found the dual fraud by the husband and attorney clear from the record and established by the wife by a preponderance of the evidence. Therefore, the agreement was rescinded.

Lastly, the wife also sought attorney’s fees in this case. La. C.C. art. 1958 states “[t]he
party against whom rescission is granted because of fraud is liable for damages and attorneys
fees.” While the court hinted that the wife would be entitled to attorney’s fees, she did not
submit the requested amount. Said issue was remanded to the trial court for a determination.
This case not only highlights the need to be careful when legal issues are at stake but also the need for a dedicated and competent attorney.